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Alerus Center to pay city for losses

GRAND FORKS, N.D. - VenuWorks, the management firm that runs Grand Forks' Alerus Center, will likely reimburse the city for losses at the city-owned events center for the first time at the end of this year.

GRAND FORKS, N.D. - VenuWorks, the management firm that runs Grand Forks' Alerus Center, will likely reimburse the city for losses at the city-owned events center for the first time at the end of this year.

Executive Director Steve Hyman projects a $123,000 loss, which he said is conservative. Deeper cuts in expenses, higher attendance at future events and bigger revenues from the hospitality tax, which subsidizes the events center, could bring down the losses, he said.

On the other hand, if it snows as much in December as it did in December 2008, however, losses could worsen.

As of Sept. 30, the events center is in the red by $508,000, the center reported.

By the terms of VenuWorks' contract with the city, whatever losses the Alerus Center incurs on its operational side, the firm has to pay back out of its management fee. The fee is based on revenues not expenses. Last year, it totaled $175,000 and this year it's projected to total $183,000.

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What isn't included in the reimbursements is the concert and contingency fund the Alerus Center withdraws from when it runs short on cash or when taking a risk on a concert.

In June and July, the events center withdrew $225,000, and there have been no deposits to bring that amount down. If there are no deposits, the Alerus Center is expected to pay back into the fund if it can. Then losses would total $348,000.

All that comes out of the city's economic development fund, which is fueled by sales taxes.

Hyman said the contingency fund, for the purposes of the contract, doesn't count as a loss. The $97,000 loss after the Britney Spears concert, he said, is included in the concert fund.

What's behind the losses so far this year is not the Spears concert, Hyman argued, but lower than anticipated University of North Dakota football attendance.

He estimated low attendance will cost the Alerus Center $120,000 by the end of the year.

There have been three home games so far this year, the last two of which saw attendance lower than 8,500. Average attendance was 10,200 in 2008 and 9,900 in 2007.

The Grand Forks Herald and The Forum are both owned by Forum Communications Co.

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