In the highly competitive hospitality and convention industry, Grand Forks keeps an eye on Fargo's sales tax vote – Grand Forks Herald

GRAND FORKS — When Fargo voters go to the polls Tuesday, they will be asked to approve new taxes that would raise money to renovate the city's aging Fargodome and build a convention center.

Grand Forks Mayor Brandon Bochenski wouldn't mind if Fargo residents just said “no.”

“I would probably rather not let it go through just to eliminate the possibility,” he said.

Eric Hylden/Grand Forks Herald

Specifically, Fargo voters are being asked to approve a 0.25% increase in the sales, use and gross receipts tax, in effect for 20 years, to fund improvements to the Fargodome, home of North Dakota State University football, and others to finance major events. from trade fairs to concerts.

Also on the ballot is an increase in the city's lodging tax by 3% to 6%. If approved, the tax would remain in place for 25 years; The proceeds could be used to build a new convention center.

Similar questions were asked of Fargo voters late last year, but they were combined. The question received 52% approval but needed 60%. Now the questions are asked separately.

The Fargo issue is significant in Grand Forks because Fargo hospitality leaders believe the city is missing out on some of the events taking place in Grand Forks and other area cities.

In an interview with the Grand Forks Herald earlier this year, Fargo Mayor Tim Mahoney acknowledged the competition that exists between Fargo and Grand Forks as both communities try to land lucrative events.

“You know, they (in Grand Forks) are in competition with us. We always want events and things to happen,” he said. “What we’re finding in our community is that they want this to be the destination center. They want this to be the place where they can compete with Sioux Falls, Minneapolis and every major community and produce the top-notch performances that people want to see.”

Mahoney added, “You've done a great job with the Alerus (center) and it's complemented by the city so the model works for you.”

The city-owned Alerus Center rebounded from the COVID-19 pandemic with two major successes. 376 events took place there in 2022; last year there were 372.

It's more than just sports and concerts. The annual UAS Summit and Expo, for example, attracts more than 700 attendees and more than 40 exhibitors, giving Grand Forks national industry attention.

The Alerus Center's numbers last year fell short of budget expectations and the facility ended with an operating loss of nearly $340,000, but the Alerus Center doesn't survive on its event revenue alone. The Alerus Center is funded in part by a 1% hospitality tax, with 0.75% for capital upgrades and improvements to the facility and 0.25% for facility operations.

However, General Manager Anna Rosburg says the facility's success will be measured by its economic impact on the community.

Last year, for example, a handful of tracked events – not all events are tracked – caused an economic impact of more than $16 million, according to data compiled by Visit Greater Grand Forks. And considering that standard alone, the Alerus Center is already having a stellar year in 2024. For example, country star Zach Bryan's back-to-back concerts in late August had an estimated economic impact of $12.3 million.

More than 24,000 spectators were in attendance on the first night of the Bryan doubleheader, setting the all-time record at the Alerus Center.

Alerus Center

Rosburg said the Alerus Center had a year-to-date operating profit of more than $1.2 million as of its September financial report.

Bochenski praised Rosburg and her team at the Alerus Center, but also said the recognition extends beyond the facility and elsewhere in the community.

Part of it, he said, is “the ease of getting to Grand Forks.” It's a safe community, it's easy to get around and we have other amenities. … That’s what the whole city has to offer.”

Julie Rygg, executive director of Visit Greater Grand Forks, said Grand Forks is fortunate to have the Alerus Center because of its flexibility.

“You can organize large and small conferences. They have space for breakout rooms and general meetings and meals,” she said.

The Fargodome hosts numerous big-name concerts and, of course, hosts Bison football. But it lags behind the Alerus Center's ability to host conventions. In October 2023, the Forum of Fargo-Moorhead pointed out the Fargodome's shortcomings and released a report headlined “Tourism advocates say Fargo is missing out by not having its own convention center space.”

Fargo, the report says, “simply does not have the large enough meeting rooms, exhibit space, or combinations of both required by the highly competitive convention industry.” Instead, many sought-after events go to Bismarck and Grand Forks, as well as cities in South Dakota and Minnesota.”

And Grand Forks' offerings extend beyond the Alerus Center. In addition to seating approximately 12,000 for UND hockey games, Ralph Engelstad Arena also offers the ability to host large events such as concerts as well as large meetings, wedding receptions and banquets. The private sector is also increasingly getting involved; For example, The Olive Ann opened its new downtown boutique hotel and convention center late last year.

In Fargo, the goal is to create more fun at the Fargodome, Mahoney said. That means a variety of upgrades, including new seats, more toilets and improved Wi-Fi capabilities.

“Similar to Ralph,” he said, “where there are groups and areas where people can come together to drink and eat and enjoy events.”

If Fargo voters agree, these things could become reality. In Grand Forks, that would mean the hospitality industry “rolling up its sleeves and working a little harder,” Rygg told the Herald.

“Every community will grow and do things to improve. “It would be great for us to have the only convention space of its kind,” she said. “You know, I'm honestly a little surprised that Fargo doesn't have something like this yet. So this has been a long time coming, and whether it happens in this vote or something else in the future, I expect it will happen and we will continue to work to put Grand Forks in the best possible light. ”

Mahoney said hospitality competition along Interstate 29 is friendly. He said he appreciates Grand Forks and what it has to offer guests.

“I love Grand Forks. They help me make our community a place people want to go. You can easily drive an hour, see a great concert and eat at some great restaurants too. We’d love to get the acts you get,” he said. “I’m competitive. I wish we had a hockey program that was as great as your hockey program, but you have to be competitive. What I tell everyone is that the state of North Dakota needs to do things to keep people in our state. We need to create a competitive environment because we are essentially competing with the entire country to get people to come here, work, play and raise their children.

“If we both do well, the whole state does well.”

Rosburg agreed.

“We want to see everything good for North Dakota. Fargo is definitely a competitive market and venue for us. But we would rather see more events in North Dakota overall than fewer,” she said. “It’s still a positive thing – the more events we can bring to the state. But we are extremely competitive in what we do, and my job is to promote Grand Forks.”

Is Rosburg watching the Fargo vote closely?

“Yes,” she said.

Meghan Arbegast/Grand Forks Herald

Bochenski was asked if it was strange to hear that Fargo — with a population more than twice the size of Grand Forks' 59,000 residents — might feel a twinge of envy for Grand Forks' amenities.

“It's not strange, but I think you'll hear this more in the future,” he said.

Delaney Otto of the Herald contributed to this report.