ShoWare Center has intrinsic value | Guest op

By Ben Wolters
For the Kent Reporter

Where would we be without the $138 million ShoWare Center has contributed to Kent’s economy?

Whether it’s the operating and construction debt the city has subsidized or the celebration of its two million guests, the ShoWare Center has received a variety of media attention, making the arena a frequent topic of questions and letters to the editor.

With so many successful shows and community events, it’s understandable people want to know why the ShoWare Center isn’t able to cover its operating costs or help pay off its construction bonds.

When city leaders set a goal in 2005 to develop a regional events center, Kent was building off the successful opening of Kent Station. The economy was going well with strong consumer spending nationwide; the entertainment industry was seeing year-over-year growth and Everett’s Xfinity Arena had opened to sellout crowds, rave reviews and profits.

The economic consultant that saw the market potential for Everett’s arena concluded there was similar potential here if a tenant could be found to “anchor” the facility. With that information, the city secured a 30-year lease with the Western Hockey League’s Seattle Thunderbirds and began construction of the ShoWare Center in 2007.

No one could have known the Great Recession – the worst economic collapse since the Great Depression – would change everything.

By the time the ShoWare Center opened just after New Year’s Day in 2009, the recession was in full swing. Private suite sales stopped, promoters cancelled concert tours as ticket sales saw their greatest drop in years, and the Thunderbirds saw lower attendance as fans tightened their wallets after losing jobs or worrying that they could. All of this battered the bottom line for years.

The economy has finally shown real recovery since then, but arenas and event centers across the country find themselves operating in a more competitive environment with fewer big moneymaking events, narrower margins and less operating revenue. According to the State Auditor’s Office, all of the arenas, and events and convention centers in Washington have experienced similar operating losses over the past six years.

The city’s subsidy for the ShoWare Center as a recurring headline has some residents suggesting we close it, convert it to a police station or sell it to become a tribal casino.

While the concern is understandable, especially with the city’s ongoing budget challenges, these suggestions fail to consider our lease obligation to the Thunderbirds, nor do they acknowledge the benefits the ShoWare Center has and continues to generate for the city.

Let’s start with the numbers. According to Community Attributes Inc., a regionally respected economic analysis firm, the ShoWare Center and its collective economic activity pumps an average of $23 million into the local economy each and every year. That’s $138 million since it opened. That economic activity includes ticket and concession sales, rental revenues, event-related spending outside of the ShoWare Center at local businesses and restaurants and the additional business-to-business and employee spending.

The flip side of the economic activity is the city’s contribution of $22.4 million, including $3.7 million to support operations and $18.7 million toward construction debt.

A return of $138 million on a $22.4 million investment is exceptional given the recent economic times. One must ask where Kent and its businesses would be without it.

It’s not just restaurants that have seen the benefit.

Just ask Kevin Byrne at Hand and Stone Massage about the ShoWare Center helping to get their business noticed, and in turn, increasing their number of clients. Derek Thorne at Road Runner Sports will tell you event nights bring in a solid increase of customers to his store.

A go-to place

While the dollars and cents are important, one can’t put a price on the real value the ShoWare Center is contributing to Kent’s quality of life. First and foremost, it is the community gathering place for Kent as it was originally envisioned. Since opening, the ShoWare Center has hosted over 1,100 events, big and small, ranging from the three-day, globally televised Skate America ice skating competition to scores of meetings and conferences for local companies and service organizations.

Families of Kent’s graduating seniors, along with those from other local schools and colleges, can attend graduation close to home and not have to travel to Tacoma or Seattle to see it. The Kent School District’s Tech Expo, Washington FIRST Robotics’ state competition and the Kent International Festival now have a place to hold their events for local kids and families while still drawing visitors from around the state.

Then there are the many concerts, Disney on Ice, (get your “Frozen” tickets now), Harlem Globetrotters, and the Ringling Bros. and Barnum & Bailey Circus. Anchoring these are the Thunderbirds and the excitement they bring to the ice night after night.

The ShoWare Center is the place where the whole community comes together to share, laugh, learn, be inspired and be entertained – more conveniently and less expensively than a ticket or night out elsewhere.

Where does the ShoWare Center go from here? Last year, the mayor and City Council approved a 10-year extension of the city’s contract with SMG, the management firm that has operated the ShoWare Center since it opened. SMG has done a tremendous job establishing the ShoWare Center as a sought-after destination under the most difficult economic circumstances. With the market momentum and relationships SMG has established, there was no reason to fix what wasn’t broken.

SMG and the city are committed to attracting more events and more revenue. In fact, SMG is investing in revenue-enhancing improvements to food concessions and other operations of the building.

The Lodging Tax Advisory Committee, which oversees the use of the city’s hotel/motel tax collections, is exploring ways to attract more events that generate hotel stays in Kent. SMG and the city’s Spotlight Concert Series are also working together to bring a wider array of artists to the ShoWare Center. On the sports front, Kent scored big when we landed the Tacoma Stars soccer team to finish their last season and return for the next one.

We’re building on the progress made by the Thunderbirds to attract new advertisers, sponsors, and businesses to their growing base of fans.

Another priority is the partnership with our building name sponsor, ShoWare Ticketing. Its 10-year, $3 million investment has bolstered our bottom line, and in turn, has helped this dynamic company see tremendous growth in its ShoWare online ticketing service.

So, if you haven’t done so already, come to the ShoWare Center and check out the latest exciting entertainment or rewarding community event. You’ll see why the ShoWare Center and the surrounding downtown Kent is becoming a preferred destination in the Puget Sound.

See you at the Show.

Ben Wolters is director of Economic and Community Development for the city of Kent. Reach him at 253-856-5454 or bwolters@kentwa.gov.