The West Fargo City Commission approved giving the nonprofit West Fargo Events about $246,200 in 2021 to continue managing the two city-owned outdoor plazas on Sheyenne Street and the parking garage at The Lights on Sheyenne.
West Fargo Events is operated by a board of directors that includes two city commissioners as well as members from the West Fargo School District. The nonprofit was initially formed with help from EPIC Companies, which is led by developer Todd Berning, who spearheaded the new plazas as part of The Yards on Sheyenne and The Lights on Sheyenne.
The group is now an independent nonprofit that manages the two city plazas, the city-owned parking ramp and the West Fargo Sports Arena, which is owned by West Fargo Public Schools.
According to West Fargo Events' 2021 budget, the school district expects to have about $1.44 million in revenue with about $1.38 million in expenses.
The School District will be asked to chip in about $154,400 for arena operations while the city will pay West Fargo Events $168,000 to manage the MIA/POW Plaza on northern Sheyenne as well as the newest outdoor plaza at The Lights on Sheyenne 32. The city will also pay $78,200 for management of the parking ramp, but starting in 2022, that fee is expected to be reduced by 20%, City Finance Director Jim Larson said.
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By contract, he said, the city must review West Fargo Events budget each year.
While West Fargo Events will also generate revenue through gaming operations, donations, concessions and parking fees, it is still a young organization. As such, it will need more help to meet revenue costs initially, but that will decrease over time.
"In the following years, we will do even better," Larson said.
"I'm glad there could be some cost savings in the management of the parking garage," Commissioner Brad Olson said.
Larson said the funds used to pay West Fargo Events will come from the city's Economic Development Sales Tax fund.
"The use of Economic Development Sales Tax is appropriate, as the activity spurred by WFE increases economic activity from both residents and tourists shopping at surrounding local businesses, therefore creating additional sales tax to feed the same budget that started the activity," he said in a report on the finances.
Larson's analysis predicts West Fargo Events revenues could grow to the point of returning money to the city within the next five years, and the parking ramp costs may be reduced to about $31,000 for the city by 2023.
West Fargo Events' largest expenses come in the form of staff salaries and benefits, which is about $706,000 annually, followed by about $191,000 in annual costs for programming at the two plazas.
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Commissioner Eric Gjerdevig, who has raised concern over the amount the city pays to operate the parking ramp in the past, said he was pleased to see the cost is projected to decrease.
"I'll keep voting for it as long as the numbers go down," he said.
