A committee asked to take another look at a $4 million request from the Lancaster Event Center for lodging tax dollars to build out its facilities ahead of the National High School Finals Rodeo coming to Lincoln next year found little to trim from the project’s budget.
The Lancaster County Board of Commissioners later accepted the committee's findings and approved the event center's request for more money to cover cost overruns, despite the concerns of Commissioner Deb Schorr and the objections of a Lincoln hotelier.
Most of the increased costs within the grant application are associated with creating 500 new campsites on the eastern edge of the event center’s property, which rests in a flood plain, said Pinnacle Bank Arena manager Tom Lorenz, who spoke on behalf of the group on Thursday.
Added were the costs associated with building a new 3,500-seat grandstand and purchase rather than rental of other equipment like rodeo arena improvements, lighting and perimeter fencing to be used when the rodeo event is in Lincoln in 2020, 2021, 2026 and 2027.
“In order to perform the event to the expectations of the National High School Finals Rodeo to the extent the contract requires, the request is appropriate in the numbers (the event center) have estimated,” Lorenz told the County Board.
“There is some flexibility, but we didn’t find any massive amount of savings,” he added.
Commissioners previously approved a $3 million grant to the event center in 2016, but following “surprise” overruns to the cost to accommodate the rodeo and keep it in Lancaster County, they were asked to pump $4.05 million more into the event.
With the approval, the event center will receive $7.05 million in lodging tax dollars to meet the requirements of the rodeo, which will bring an estimated 50,000 people to Lincoln from 40 different states, Canada, Mexico and Australia, generating an estimated $16 million in economic activity each time.
Amy Dickerson, managing director of the event center, said the additional funds would serve as a backstop should the center fail to obtain a loan to pay for the improvements before the rodeo kicks off next year.
The grants will help the event center develop 40% of its property that was previously unused, allowing for further use by motorsports and other events beyond the rodeo.
“This is going to enable us to bring in a lot more outside visitors into the county, not just the rodeo, but for lots of events,” Dickerson said.
More than doubling the 2016 grant award was cause for heartburn among some on the Visitors Promotion Committee, however, mostly members who felt using lodging tax dollars for campsite construction was inappropriate.
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In late May, the board appointed a committee, including Lorenz, Dickerson, Lincoln businessman Nick Cusik, county budget director Dennis Meyer and Jeff Maul of the Lincoln Visitors and Convention Bureau to look for ways to bring the costs within the grant application down.
The committee found few places to cut, and instead offered several recommendations for the final grant, including:
* It recommended the committee continue oversight of the construction over the next 13 months leading up to the 2020 rodeo, well before the $600,000 in lodging taxes will begin flowing to the event center annually from 2022 to 2024. The disbursement would increase to $750,000 per year from 2025 to 2027.
* While it is receiving the lodging tax, the committee recommended the event center be required to pay a portion of the profits to the Visitor Promotion Fund to replenish the account.
* The committee also said the Lancaster Event Center should forego any further grant request from the Visitors Promotion Committee until 2027. Dickerson said later Thursday the center was “more than happy to make that commitment.”
* It also suggested the county assign a percentage of all net funding beyond the rodeo to help pay to replenish the promotion fund, but that piece was later removed by commissioners.
Schorr, who unsuccessfully tried to reduce the grant amount to $3 million during the meeting, said the event center's late request was the result of poor planning and warned that in approving the grant, the center would have little incentive to obtain a loan or raise funds to pay for the new construction.
She urged commissioners to not handcuff the future of the Visitor Promotion Fund to the event center’s success through 2027, saying the large grant could cause the county to pass on other requests and potentially miss out on future economic development opportunities.
Schorr also suggested Dickerson used her position as vice chair of the Visitors Promotion Committee to steer the group into supporting the grant; Dickerson said she has recused herself from all business related to the Lancaster Event Center that has come before the committee.
Bryan Sullivan, the general manager of the Embassy Suites in Lincoln, told the County Board that Lincoln's hotels generate $1.9 million to replenish the Visitor Promotion Fund each year — a 2% tax on each stay — based upon year-end data collected by Smith Travel Research.
While rodeo competitors, families and fans are projected to rent 10,700 rooms during the July event, which is traditionally a slow month for Lincoln hotels, Sullivan said 372 such events would need to be hosted to recoup the total amount in lodging tax funds to be distributed to the center.
"I'm not opposed to them hosting the event, I'm opposed to them taking the funds,” Sullivan said. “If they want to orchestrate the event, they put themselves in this situation and I think it's up to them to figure it out.”
Another downtown Lincoln hotelier who serves on the Visitors Promotion Committee and voted in support of the grant said Thursday afternoon it will benefit Lincoln and Lancaster County.
“I believe this is a good investment in the lodging tax funds that will drive significant hotel rooms,” said Susan Madsen, general manager of The Cornhusker Marriott. “Not just from this event but from other events as well.”