Is the Idaho Center a community asset or a money pit?

Opinions among city officials vary. Some say it’s an investment that pays off in tax revenue and visitor dollars. Others say it should run like a business with no dependence on city taxpayers.

Car dealerships, retail, eateries and hotels line the streets around the venue. Visitors gather from throughout the state — and in some cases, even the country — to attend its events.

But it comes at a price: Event revenues aren’t enough to make it self-sufficient. The city has subsidized the Idaho Center to the tune of more than $1 million each year since 2011.

Mayor Tom Dale calls it a worthwhile investment. It pays off, he said, in the form of increased property tax revenues and visitors coming to Nampa to spend their money.

Indeed, data provided by Nampa’s Department of Economic Development shows a 934 percent increase in property tax revenues and a 749 percent increase in property values in the area, but should the city government be in this business at all?

City Council Member Bob Henry, who is challenging Dale for the mayor’s seat this fall, isn’t so sure. With roads in disrepair throughout Nampa, he questions the wisdom of subsidizing an entertainment venue at taxpayer expense.

Opinions on Idaho Center funding vary

NAMPA — Over the past two decades, the area around Interstate 84 in eastern Nampa has transformed from farmland to a bustling commercial district. When the now-expired North Nampa Urban Renewal Agency aimed to develop the area in the mid-90s, they envisioned an indoor rodeo arena at its core.

That idea eventually grew into the Idaho Center, a multipurpose arena with an accompanying amphitheater and horse park. But it came at a cost — about $50 million in city funds were invested in the complex during the urban renewal zone’s decade-long duration, according to city documents. And event revenues aren’t enough to keep the center running — each year, the city of Nampa supplements its revenue with money from the general fund.

Proponents say it’s an investment that pays off later in economic benefits. Critics contend that the area may have developed on its own, without the aid of urban renewal, and the city has no business subsidizing an entertainment venue.

URBAN RENEWAL

The area immediately surrounding the Idaho Center was Nampa’s first urban renewal district, and the only one so far to run its course and expire.

Urban renewal — created in this state by the Idaho Local Economic Development Act — is a system designed to spur economic growth within a designated area through tax increment financing. The idea is that as property values rise, any increases in property tax revenues within the district go to the designated urban renewal agency to be directly reinvested into the community itself.

When the district expires, as it did around the Idaho Center in 2005, property tax distribution returned to normal, with higher values and more revenue.

Economic Development Director Beth Ineck calls the Idaho Center an urban renewal success story. It did exactly what it was supposed to do — raised property values and tax revenues in the area almost tenfold over the life of the district.

“When you look at the land values, and how they escalated so rapidly and the amount of development that went in around it,” she said. “I think that was part of its criticism was that it was almost too successful, and when you have that much cash coming in without a very defined plan, it’s easy to start every little project. And that’s why with the second district (in downtown Nampa), there’s a much tighter plan.”

Urban renewal critics oppose it on the grounds that it siphons tax revenue away from other entities — including school districts, public safety agencies and the county government — that then must adjust their own rates and levies to compensate.

City Council Member Bob Henry said he’s uncomfortable with the lack of accountability involved. Idaho State Law requires voter approval before an urban renewal agency formed after 2011 can conduct business, but that wasn’t always the case — agencies formed before that date, including the current Nampa Development Corporation, never required voter input.

And while he said he’s not categorically opposed to urban renewal, provided adequate accountability is in place, Henry said he isn’t happy with the way it’s been implemented in Nampa.

“I don’t like it,” Henry said. “You get a board who has no accountability to anything, and they decide what’s the best way to spend tax dollars.”

Nor is he convinced the Idaho Center is the sole driver behind the development just off Interstate-84, he said. While it’s easy to link the success of eateries and retail to an event center, Henry said the flow of business through car dealerships and office buildings is likely less affected.

“That development might have come in spite of the Idaho Center when you look at it,” he said. “I’m not sure that the car lots chose to go there because of the Idaho Center.”

Mayor Tom Dale, however, said that municipal services often aren’t self-supporting, but that doesn’t mean cities shouldn’t fund them. It’s not necessarily about making money, he said, it’s about improving the standard of living in the community.

“Is it worth that investment? I think it is,” Dale said. “It provides a great amenity to the city that we wouldn’t have if we didn’t do that. The parks lose money, the Civic Center loses money, the streets lose money. But we invest money in those things because it adds quality of life to the community.”

ECONOMIC IMPACT

The Idaho Center itself was meant to be a catalyst, Ineck said, and in some ways it was more successful than its original planners anticipated. And that’s the real value of the venue, she said. In communities the size of Nampa, entertainment complexes are expected to lose money.

Typically, Idaho Center Director Craig Baltzer said, venues need to host major events almost every day to turn a profit, and that requires the support of a much larger population.

In a smaller community, Ineck said, the venue’s value comes from being an amenity to the city. She compared it to a park: While it doesn’t directly make money, it adds to the overall value of the community.

“When we have companies that are coming from out of state that are looking at the potential of locating here, we definitely brag about those amenities,” she said. “They show that we’re invested in our community, and we want to have a vibrant community that people want to live in. The fact that we can say the Rolling Stones played in Nampa is definitely a component to that.”

Henry is unconvinced. He’s not sure, he said, that subsidizing an entertainment venue should be high on the city’s list of priorities.

“I don’t think the Idaho Center will ever be self-supporting,” he said. “And I’d like to have some dialog to see if we want to accept that, or if we need to look for ways to generate alternative revenue out there. But I don’t feel comfortable with having the city supplement the Idaho Center … without the hope of seeing some sort of improvement.”

It’s not that he doesn’t see the value to the community, Henry said — he loves attending events at the Idaho Center and looks forward to this year’s Snake River Stampede. But, he said, perhaps the focus should be on road maintenance and public safety.

“It does serve a purpose, but unless the citizens of Nampa are willing to maintain high taxes and high levy rates, we need to look at ways to reduce the size of the government,” he said.

A CONTROVERSIAL DEVELOPMENT

When the Idaho Center was completed, Dale had just been elected to Nampa’s City Council. The high school girls’ state basketball tournament was the first event the facility hosted, and Dale, who served as a basketball official, remembers sweeping dust off the court more than once each quarter.

“The Idaho Center was conceived as an indoor rodeo arena,” Dale recalled. “The original thought process had a dirt floor. It did not have a cement floor. And so for the first events that they had in there, when they wanted a hard surface, they’d bring in tarps and flatten out that dirt.”

It’s a little different now — a permanent cement floor forms the arena’s base layer. When an event — such as the Snake River Stampede — calls for dirt, it’s hauled in and removed afterward.

Dale wasn’t elected to city office until all the decisions regarding the Idaho Center — the venue itself and the urban renewal zone surrounding it — had already been made. He inherited the issues that go along with it, he said, positive and negative.

In the meantime, Dale said, the city looks for ways to keep costs down as much as possible. Within the past week, SMG Worldwide Entertainment, the contractor that manages the Idaho Center for the city — made two layoffs, including Idaho Horse Park manager Rodney Orrison.

Last August, City Council member Stephen Kren cast the only dissenting vote when the Idaho Center needed an additional $315,000 for operating expenses, arguing that it set a bad precedent. The venue can’t keep coming to the City Council, Kren said at the time, every time it finds itself over budget.

“I think it’s time we start to take drastic measures,” Kren said at the meeting. “Unless the city wants to start talking about reducing fund balances, and there’s severe repercussions from doing that, I think it’s time we look at reduction in the overall operations budget.”

CHANGING CLIMATE

The entertainment industry is changing, Baltzer said, and that’s not necessarily a bad thing. But it does present challenges for venues that host touring shows and other events. — seasonal patterns he could once count on, in some ways, no longer entirely apply.

“The industry, like all industries, could use a shake-up every now and then, and that’s a good thing,” the Idaho Center director said. “My June this year was very, very weak, and June is usually a decent month. But my July and my August are absolutely packed. The whole schedule has kind of moved around a little bit.”

In the past, he said, the busiest touring months have been February, March, April, October and November — people often have their own plans during the holidays and over the summer, so traveling shows tend to aim for early spring and fall schedules.

That’s no longer the case, and Baltzer said he isn’t yet quite sure how the industry’s chips will fall.

“We’re seeing a lot more summer activity than we used to. This past year I had a very large concert in January, and no big concerts in March or April,” he said. “I’m not saying it’s bad or good, I’m just saying everything’s kind of rerouted.”

Meanwhile, the Idaho Center faces competition from the Taco Bell Arena and Centurylink Arena — although facilities like the horse park allow Baltzer to accommodate events they can’t.

Many touring shows are specifically designed to be indoor or outdoor shows — it’s not up to the venue or even the promoter. And the Idaho Center, he said, can host both.

The Idaho Horse Park draws a wealthy crowd from throughout the country, Dale said. Horse owners often have money to burn and don’t like to venture far from their animals while on the road.

But even the horse park, Ineck said, isn’t self-sufficient.

“I don’t believe any one component is budget neutral,” she said. “I don’t think the horse park pays for itself compared to the arena or the amphitheater.”

The Nampa Civic Center, another city-owned event center, faces many of the same challenges, although on a smaller scale to go along with its smaller size.

In August 2012, the City Council approved $85,000 from the general fund to keep the conference center afloat. The problem was similar — not enough event revenue to cover operational costs — and so was the opposition: Council member Stephen Kren said at that meeting the taxpayers shouldn’t prop up a facility that can’t support itself.

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