Scott Nishimura snishimura@bizpress.net
With the public’s half of the $450 million cost of a new multipurpose arena at the Will Rogers Memorial Center virtually sewn up, the job of raising the other half is in the hands of a nonprofit with a staff of two that operates from small offices in the old City National Bank in downtown Fort Worth.
“Behind the Razzoo’s,” said Mike Groomer, CEO of Event Facilities Fort Worth, when asked for directions to his office.
Most other nonprofits have glossy annual reports and flashy web sites that highlight accomplishments and make pitches to prospective donors. Event Facilities does not.
The organization, which has spent $43.4 million since 2000 to benefit the Fort Worth Stock Show and added support of a new arena to its mission in 2007, is comfortable with its low profile and the task ahead. Event Facilities Chairman Ed Bass, the Fort Worth investor and benefactor and the arena’s biggest booster, has committed to raising half the arena’s projected cost and capping the public expense at $225 million.
And he doesn’t expect to have to run a broad campaign like the one his family led in building Bass Performance Hall downtown in 1998. Bass expects Event Facilities’ commitment to come from a limited number of foundations, organizations and individuals that have been in on the arena project for two decades, he said in an interview with the Fort Worth Business Press.
Fort Worth voters in November agreed to new taxes on user parking, livestock pens and admissions that will pay for 15 percent of the arena, and an additional 35 percent is projected to come from incremental growth in hotel and mixed-beverage taxes in a radius around the arena.
“I think this sets the stage for very strong support from the private sector,” Bass said.
Event Facilities, the Stock Show and the city have combined to run an unusual partnership that’s pumped millions into Will Rogers with a goal of making it a premiere exhibition center for animal shows, including the nation’s top equestrian center. The arena, they believe, takes that mission further and fills a big lack of venues on the Metroplex’s west side for concerts, basketball and hockey games, ice shows and graduations. The Stock Show would take it over one month out of the year for its rodeo.
The state law that allows Fort Worth to tap hotel and mixed-beverage taxes for a development such as the arena requires at least 40 percent private financing, Bass noted.
“I could tell you no other city in Texas could quality for it, because we’re the only people who do that, it seems,” Bass said.
Brad Barnes, Event Facilities vice president and the Stock Show’s president, says the partnership’s durability is easy to explain.
“When you go downtown with an idea, you take your checkbook with you and you say ‘let’s do this together’,” he said, with an emphasis on “let’s.” “I think that’s the difference.”
“We’re in a real unique position,” said Kirk Slaughter, the city’s Will Rogers manager and a key contact for Event Facilities and the Stock Show. “We have private sector partners, and they’re basically gifting money to the city of Fort Worth.”
Event Facilities was formed in 2000 to buy two pieces of land for the Stock Show, which has never owned real estate. Its board is a Fort Worth who’s who of businesspeople and philanthropists and includes Bass, Barnes, Kelly Hart & Hallman lawyers Dee J. Kelly, William P. Hallman Jr. and Dee Steer, the billionaire oil and gas investor Anne Marion and investor Martin Bowen. Kelly Hart did the legal work for the political action committee that ran the fall campaign for the arena issue on the ballot.
Event Facilities has spent $58.1 million on projects, not including land costs, at Will Rogers since inception, Groomer said in an interview. After reimbursements for money it fronted on various projects, it’s spent a net $43.4 million, Groomer said.
The organization’s 2013 federal tax filing shows $75 million in net assets, including $27.6 million in land and improvements.
Event Facilities participated in the design work for the Western Heritage garage, Gendy Street landscaping, a complex-wide parking study, preliminary design for an equestrian multipurpose building, realignment of Harley Street, construction of security gatehouses on Harley, and planning and design for coming cattle barn improvements.
Event Facilities spent $17 million on remediating and stabilizing an old foundry site and building a 2,000-foot-long retaining wall against the Fort Worth Botanic Garden to keep contaminated soil out. And it’s spent $18 million on preliminary work on the arena plan, Groomer said.
Event Facilities gets its funding from donors that it doesn’t identify.
“No, we don’t have bake sales,” Groomer joked.
The Stock Show, which moved to Will Rogers from Fort Worth’s North Side in 1944, estimates it has spent $50 million in today’s dollars on improvements at the Will Rogers complex, Barnes said.
In recent years, it has participated with the city in building the $17.8 million Burnett Building, $17.8 million Richardson-Bass Building and $11 million Moncrief Building.
And it just completed a $2 million cattle barn electrical upgrade that’s part of a $15.1 million renovation planned for next year to Cattle Barns 1 and 2 that will ease pedestrian flow between the north and south ends of the Will Rogers complex, relocate the milking parlor, and improve ventilation and flexibility in the barns for different kinds of animal shows. The Stock Show is kicking in a total $6.5 million of the cost.
Barnes said the Stock Show won’t be a direct donor to the new arena, as the show is continuing to participate in various other capital improvement projects at Will Rogers.
“However, the Stock Show will be a tenant in the new facility and will participate in the various tax propositions that were recently passed by the citizens of Fort Worth, just as any other tenant or event would participate in the new facility,” he said.
The city, for its part, has spent $72 million on Will Rogers in the last six years, Slaughter said.
“If you’re going to play the game, you play to be the best,” Slaughter said.
The Stock Show expects to move its rodeo into the new arena from the historic Will Rogers Coliseum upon completion, expected in 2019. The arena will be configured with as many as 9,300 seats for rodeo, compared with the coliseum’s 5,800.
The move will allow the Stock Show to use the coliseum for new events such as horse shows, and “it also allows us to start envisioning ways to use the old [Will Rogers] auditorium for our show,” Barnes said.
Reserved parking for rodeo box seat holders, now located on the west side of the coliseum, would be moved to the new arena, at Montgomery Street and Harley Avenue on the southwest side of the complex.
“We’ve never been able to do anything in the auditorium because we didn’t have a place to park all the support vehicles” such as buses and trailers that show promoters would require, Barnes said.
Moving the rodeo to the new arena, he said, will allow the Stock Show to market it to large groups such as seniors who may need disability access, a major shortcoming of the old coliseum.
“A lot of these folks want to go to the rodeo, and we cannot market to them right now,” Barnes said.
Event Facilities will likely finance its share of the arena cost through the debt market over 15 years, Bass said. That allows donors to spread their contributions out at lower cost and doesn’t drain philanthropic dollars from the community, he said.
“Rather than a foundation contributing so many millions of dollars and writing a check Day 1, they write a smaller check every day for 15 years,” Bass said. “It’s an advantageous way to do it. Interest rates on bonds like that are quite low, and it doesn’t draw on the entire resources at once.”
The arena would be owned by the city and managed by a private group, most likely Event Facilities, city officials and Event Facilities agree.
The arena’s flexible seating arrangements would be configured at up to 14,000 seats for concerts, and the building could also hold hockey, graduations, ice shows, circuses and basketball, such as regional collegiate tournaments and major Texas Christian University home games that outstrip the capacity of TCU’s Daniel-Meyer Coliseum.
Promoters, who rent the facility, book acts, and put on the shows, are excited about the arena, said Bass, who’s led the ground work on studying the prospects for the facility.
The arena’s size makes it ideal to snag events that don’t want to go as large as the 20,000-seat American Airlines Center in Dallas and are too big for a venue such as the 6,350-seat Verizon Theatre in Grand Prairie, Bass said. And it will appeal to fans on the west side of the Metroplex who don’t want to travel to Dallas in any case for entertainment, he said.
“It’s the right size for a city such as ours without a major league sports team,” Bass said. “It’s going to open up the market to a whole range of artists who now don’t really have a good place here. AA Center is very large, very expensive. If [the promoter doesn’t] draw enough crowd to buy from the concessions, they have to compensate the concessions out of their pocket.”
In that way, Fort Worth will also have an advantage because its arena will be publicly owned, Bass said.
“We don’t have to put up a profit to the shareholders,” Groomer said.
The goal is to pay for the facility’s operations with 14 to 16 concerts a year and to break even after maintenance, replacement and upgrades, and improvements, Bass and city officials say.
“Basic operating costs are paid from 14 to 16 concerts a year, and you can find that all over the U.S.,” Bass said. “Circuses, ice shows, [there’s] some profit in those,” he said. “You have local high school, college events – really, you don’t make money on those. They’re part of the community service. Minor league sports, we don’t make money on them. But they have fan bases, people learn where we are, how to get here, and they learn this is a really nice place. Then when we have a concert or a basketball game, they come, and they know how to do it.”
What kinds of acts would he envision?
“In Fort Worth, we could fill this arena with Lyle Lovett,” Bass said. But “I’m not sure we’re going to let him go at Bass Hall.”
Who makes up the gap if finances fall short?
“I envision that being a private-sector obligation,” Groomer said.
In the near term, the City Council must vote on a measure related to the hotel and mixed-beverage taxes.
Fully developed design and construction documents will take more than a year, Bass said. “We have to formalize what’s a pretty good understanding right now between the private sector and the city” in a master agreement, he said.
How Event Facilities would ramp up for management of the arena would be determined in the master agreement, Groomer said.
“We’ll work nights,” Groomer joked, adding that he would not ultimately be the staffer managing the arena.
Selling the arena’s naming rights and other sponsorship opportunities inside is also ahead, and the Fort Worth group has spoken extensively to Conventions Sports & Leisure International, a Plano-based advisory and planning firm, Bass said.
Bass said one deal for arena naming rights that is likely comparable to Fort Worth’s situation is Tulsa’s BOK Center, home to the Tulsa Oilers hockey and Tulsa Revolution indoor soccer teams.
Two others that would be comparable to BOK are the Century Link Center in Omaha, Neb., home of Creighton University basketball and University of Nebraska-Omaha hockey; and the Denny Sanford Premier Center in Sioux Falls, S.D., said Bill Rhoda, a CS&L principal.
BOK Center’s deal started in 2008 with the Bank of Oklahoma and has an average annual value of $550,000, Rhoda estimated.
“Assuming inflation of 3 percent, a new BOK deal starting in 2018 would have an average annual value of approximately $740,000,” he said.
The Century Link Center was originally named Qwest Center, but was renamed when Century Link merged with Qwest. The 15-year deal was for a total of $14 million, with an average annual value of $933,333, Rhoda said.
The Denny Sanford Premier Center celebrated its grand opening Sept. 19. Its naming rights were sold for 25 years to First PREMIER Bank and PREMIER Bankcard & Sanford Health. The total value was $18.75 million, or $750,000 annually, with an additional $2 million donation to improve a center-hung scoreboard and video boards, he said.
Beyond the benefit that sponsors receive through on-site signage, promotional and retail marketing and media coverage, Rhoda said, the Fort Worth arena’s appeal will be broader.
“Naming rights cannot be valued on quantitative benefits alone,” he said. “There is significant value companies receive from being associated with premier facilities and the events they host. Naming rights also help to reinforce a company’s commitment to the community and their desire to enhance the quality of life.”