Chatper Slides

Chatper Slides - i i l 2 Public/Assembly Facility...

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Unformatted text preview: ,, , i i l 2 Public/Assembly Facility Management: Principles and Practices Public assembly facilities (PAFS) have in some respects become the modern day version of the cathedral of middle ages Europe or the hippodrome, stadium, or theatre of ancient Rome and Greece. Many cities and towns build them as the focal point of their communities. Whether or not the huge investment of public funds can be truly cost-justified, government leaders. in most cases, build them simply because they want them. Why? To attract or retain one or more professional sports franchises. To put their city “on—the-map.” To enhance the quality of life. To attract conventions and tradeshows and thus stimulate the local economy. For whatever reason, more and more are being built at an ever increasing cost to the public in the name of competing for sports and entertainment events as well as conventions, tradeshows, meetings and conferences. Public assembly facilities such as arenas, stadiums, civic and convention centers, and theaters evolved out of the need by social communities to build permanent structures for public assembly — for political and commercial activities, religious gatherings, sports spectacles, artistic expression, and for commercial and educational assemblies. On any given day. literally thousands of public assembly facilities worldwide are open and serving the public because their communities responded to the need and/or desire. Very few public assembly facilities operate at a financial surplus or profit, especially when debt service (principal and interest payments on the cost of construction} is calculated. And, many, if not most require some level of operating subsidy. Given the often staggering cost of modern arenas, stadiums, convention centers, and even performing arts venues, it is little wonder that public rather than private financing is necessary to get these facilities built and operational. Governance of a public assembly facility therefore typically involves ownership and management by city, county, or state government. There are also a number of examples where a facility is owned and operated by a private corporation. Examples include Madison Square Garden, Portland’s Rose Garden, the Wachovia Complex in Philadelphia and the American Airlines arenas in both Miami and Dallas. A private non—profit foundation owns the Bradley Center in Milwaukee. Many colleges and universities, both public and private, also own arenas. The vast majority of all PAFs, by pure economic necessity, are owned by government. Government by its very nature often is not well suited to operate what is essentially a sales and marketing oriented enterprise rather than a typical taxpayer service. This is not to say that some governmental entities do not operate in a business-like manner, but for the most part government does have trouble effectively managing a public assembly facility for the following" re asons: Ownership and Governance of Public Assembly Facilities/Chapter l 0 Government provides required services but always in the context of controlling costs to minimize the impact on property taxes. PAFs must spend money to make money and do not easily fit into bureaucratic budget constraints. 0 Taxpayers have no realistic choice with respect to the services provided and their costs except periodically when they vote. PAFs must compete within a broad geographic region for both events and ticketbuyers or attendees. Expenditures of necessary dollars for sales and marketing, advertising and promotion, “wining and dining,” gifts and the like do not go over well in a purely public context, especially when publicized by the media. 0 PAFs cannot usually cope with acrossAthe-board budget cuts, hiring freezes, residency requirements, non-performancebased compensation plans, and other such attempts by government to place a straight-jacket of conformity on a facility that competes daily and sells its uniqueness in the marketplace. This book is intended to help guide all owners and managers and serve as a resource for educators and students on the best principles and practices necessary to protect, preserve, and enhance the public assembly facility. One of the very first steps, of course, is to define the public purpose of the facility. This is necessary in order to establish realistic operating policies, budgets, and overall community expectation levels. Unfortunately, very often there is a lack of definition of the public purpose/mission of the facility. It is a community asset, but is it intended to be a Civic center for community events? Sports and entertainment center? Convention center/ trade show center/attraction? Economic'impact driver? Quality of life enhancement? All of the above? At what cost is the community willing to build and operate a public assembly facility? Is it to be a 0 Net income generator (usually exclusive of debt service and long-term capital improvement fund)? ° Break-even operation? 0 Subsidized operation? Does public policy match the public’s willingness to subsidize? Is there a clear and realistic determination of intentions that provides community leaders with answers to questions on Whether or not to build a facility in the first place and how to govern, manage, and operate them? Each public assembly facility is a partner in the larger industries of sports and entertainment, including the arts as well as meetings, conventions, consumer shows, and trade shows. EEETTEQ To Be: N THE QED THAN "EN THE @tacr‘ As far back as 30 years ago, the IAAM made an observation about the financial performance of public assembly facilities that is as true today as it was then. “For an auditorium to finish its budget year in the red is not at all} embarrassing, if that auditorium has served its community well and? filled a real community need,” noted I Charles Byrnes, then the executive _ director “To be in the red Zis ’notya‘s embarrassing as to be ' I; the black, 0 ' ,0: idle from i nOnuse, ‘ possible by simply becoming a part of the important decisions regard— ing its future and the enjoyment of it by its citizens.” Byrnes’s observation is key to understanding the financial pres- sures that most PAF managers face when explaining a facility’s impor— tance to the community and assist— ing city officers in deciding whether to build or expand. Even if the new facility looks like a money loser in the beginning, it might well become a bargain for the community if it is in constant use for several years. PAP managers have long real~ ized the financial benefit of multi— use facilities. While professional or collegiate sports tenants may provide the bulk of the revenue for most stadiums and arenas, PAF managers rely on nonanchor events to help reach financial goals. Concerts, family shows, and motor sports events are most frequently the attractions by which public assembly facilities increase their diversity of use and finanCial return. _ ‘ spurred a major increase in- the In a recent study, professional stadium managers reported that their facilities drew an average of 31,800 patrons for nonanchor concerts and 33,000 patrons for motor sports events. Professional arena managers reported that they averaged an attendance of 11,700 people for concerts and 8,400 people for family shows such as circuses and ice~skating exhibi— tions. Arenas in the National Collegiate Athletic Association (NCAA) attracted an average of 4,000 people for both concerts and family shows. The trend towards multiuse of facilities is best illustrated in the world of ice hockey. Several gen— erations of PAP managers could tell horror stories about putting down ice sheets in the 19305 and 19408 at their facilities for touring ice hockey and ice-skating exhibi— tions. Once relegated to ice-bound Canadian and northern U.S. corn— munities, today ice hockey has development of, ice sheets for x n‘x‘\\*‘r\ sun”. first rum.th Ommmir‘ o. rrnr'uv’r mvnrr mu m .\ (“Pu .nrnem-Armm but with plans to host the Tulane University Green Wave basketball team and an Arena Football League team as well. Boasting a seating plan that ranges from 13,000 to 19,000 seats, the New Orleans facil— ity was built to also accommodate concerts, festivals, family shows, banquets and other private parties, trade shows and exhibits, Mardi Gras parties, closed—circuit televi— sion presentations, and ancillary activities for major conventions. Sized larger than existing arenas in the region, but smaller and more intimate than the 70,000-seat Superdome, the New Orleans Arena is considered the perfect size for the variety of events planned. Even smaller facilities without a sports team attached can offer enough variety in entertainment to justify the investment made in them. ‘ ' Take, for example, Mississippi’s new 2,000 to 6,000—seat Tunica Arena and Exposition Center. The $20 million center was built to pro- _ vide a wider choice of entertainment in what is becoming a major gaming ‘destination in the United States. Tunica’s 10 casinos entertain close to one [million visitors a year, visi- tors who Wan-t other activities to round out their vacations. The i I county owners of the property also saw the I potential to; draWj-more , . _ conventions to i'their area; Hence, 1 the i Arena and {Exposition 0, i e 'e'an(handleeverything'i'frOrn _ :shévii‘ toj cér Shorts _t07"~‘wdiirff 55(51’ "'a'is rodéos arid fiattof i - i y')y‘t0ic_eshows.ii i i i '0 ...
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This note was uploaded on 02/10/2011 for the course SPTE 203 taught by Professor Kenyon during the Fall '10 term at South Carolina.

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Chatper Slides - i i l 2 Public/Assembly Facility...

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