Alerus Center Is Failing To Provide Its Sole Justification For Subsidies

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Written By:
Rob Port

Jul 26, 2011
10:33am

News broke in Grand Forks this week that the Alerus Center, the taxpayer-funded boondoggle of an events center, has come crawling to the city’s taxpayers for a quarter of a million dollar bailout due to what they calling a “slow summer.” Their financial picture is so bad, the Alerus is saying they won’t be able to make payroll without the funds.

VenuWorks, the rent-seeking corporation which has the contract to manage the facility, is “complaining that there just aren’t many artists touring in this region” according to reporting by the Grand Forks Herald.

It’s hard to imagine, in this modern age of travel, that the problem is that few acts are willing to travel to the upper midwest to be paid to perform. I think it has more to do with poor management, as the recent Tim McGraw concert at the Alerus proves. That concert attracted just 7,500 fans in the 21,000 capacity venue, and turned a profit of just $6,000.

But whatever the reason, remember that the taxpayers of Grand Forks were told that the Alerus Center was worth the expenditure of millions upon millions of tax dollars because it would bring in visitors from out of town who would spur economic activity and tax revenues. But with the events center unable to attract even enough visitors to make its own payroll, how can anyone believe that the Alerus is attracting enough visitors to Grand Forks to justify the lavish tax bill and the repeated demands for bailouts?

It was clear from the start that the Alerus Center was a bad idea. There were no private sector investors willing to put up capital to see it built without the taxpayers being put on the hook as well, which should have been enough of a red flag to kill the project.

Now some are asking what can be done to make the Alerus Center turn a profit. I was asked that question by Molly Thorvilson from WDAZ on Twitter last night, and my response was that a facility like the Alerus likely can’t be run for a profit in the Grand Forks market.

Which is why nobody in the private sector would build it on their own.