Feasibility Analysis of an Expanded Bismarck Civic Center

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Presented to the: City o f Bismarc k / Bismarc k Ci vi c Center August 13, 2008 DRAFT COPY For Discussion Purposes Only

August 13, 2008

Mr. Charlie Jeske General Manager Bismarck Civic Center 315 South 5th Street Bismarck, North Dakota 58504

Dear Mr. Jeske:

Conventions, Sports & Leisure (“CSL”) has completed a draft report related to a feasibility study of an expanded Bismarck Civic Center (“Center”). The attached report presents our research, analysis and findings and is intended to assist the City of Bismarck (“City”) in evaluating the viability of Center expansion/improvement.

The analysis presented in this report is based on estimates, assumptions and other information developed from industry research, data provided by the City and Center, surveys of potential facility users, discussions with industry participants and analysis of competitive/comparable facilities and communities. The sources of information, the methods employed, and the basis of significant estimates and assumptions are stated in this report. Some assumptions inevitably will not materialize and unanticipated events and circumstances may occur. Therefore, actual results achieved will vary from those described and the variations may be material.

The findings presented herein are based on analysis of present and near-term conditions in the Bismarck area as well as existing interest levels by an expanded Center’s potential base of users and latent demand characteristics. Any significant future changes in the characteristics of the local community, such as growth in population, corporate inventory, competitive inventory and visitor amenities/attractions, could materially impact the key market conclusions developed as a part of this study. As in all studies of this type, the estimated results are based on competent and efficient management of the potential expanded Center and assume that no significant changes in the event markets or assumed immediate and local area market conditions will occur beyond those set forth in this report. Furthermore, all information provided to us by others was not audited or verified and was assumed to be correct.

This report has been prepared for the internal use of the City and Center and should not be relied upon by any other party. The report has been structured to assist City and Center representatives in evaluating event market demand and the potential financial and economic impact characteristics of a potential expanded Bismarck Civic Center and should not be used for any other purpose. This report, its findings or references to CSL may not be included or reproduced in any public offering statement or other financing document.

We sincerely appreciate the assistance and cooperation we have been provided in the compilation of this report and would be pleased to be of further assistance in the interpretation and application of our findings.

Very truly yours,

CSL International

Conventions, Sports & Leisure International 1907 East Wayzata Boulevard, Suite 250 • Wayzata, MN 55391 • Telephone 952.476.5900 • Facsimile 952.476.0005 DRAFT COPY For Discussion Purposes Only

TABLE OF CONTENTS

______

Executive Summary

1.0 Introduction...... 1

2.0 Analysis of Local Market Conditions...... 4

3.0 Analysis of Competitive/Comparable Facilities and Communities ...... 26

4.0 Industry Trends Analysis...... 62

5.0 Market Demand Analysis...... 77

6.0 Development Options and Use Estimates...... 92

7.0 Financial Operations Analysis...... 94

8.0 Economic Impact Analysis and Conclusions...... 98

Appendix: Telephone Survey Open-Ended Question Responses

FEASIBILITY ANALYSIS OF AN EXPANDED BISMARCK CIVIC CENTER TABLE OF CONTENTS

DRAFT COPY For Discussion Purposes Only

EXECUTIVE SUMMARY

This summary highlights the key findings of a feasibility study of a potential expanded/improved Bismarck Civic Center (Center) in Bismarck, North Dakota. Conventions, Sports and Leisure International (CSL) was engaged by the City of Bismarck (City) to conduct the feasibility study. The full report should be reviewed in its entirety to gain an understanding of the study methods, limitations and implications.

Introduction and Background

With original construction completed in 1969, the Bismarck Civic Center has served as an important asset for the Bismarck community and the regional marketplace. A number of expansions and improvement projects have occurred with the Center over the years since its inception, including the addition of a large exhibit hall in 1990 and modernization project in 1999 that added a new south end to the Arena, 1,060 seats, sound and light improvements, a box office, food court and main entrance. These additions and improvements have allowed the Center to remain vital in a changing and increasingly competitive environment. The Center has both served as a critical economic impact generator for the community and public resource for citizens, acting as a gathering point for entertainment, education, social and cultural events. The facility has become a catalyst for past and potential future downtown development projects and initiatives.

In 2008, the City of Bismarck hired CSL to conduct a feasibility study for a potential expansion to the Bismarck Civic Center. An expanded Center, as envisioned, would continue to act as a public resource for the local community through maintaining and growing its ability to attract and accommodate a variety of event types, thereby generating new economic impact in the Bismarck area. Specifically, the City asked that the study focus on evaluating the market and financial feasibility of Alternate 4 as presented in the 2007 Master Plan associated with the Center, which was deemed by the City as the most appropriate Center expansion/improvement concept for further consideration.

The study process consisted of detailed research and analysis, including a comprehensive set of market- specific information derived from the following:

9 Experience garnered through more than 500 event facility projects throughout the country. 9 Local market visit at the outset of the project, including community and site tours. 9 In-person interviews/meetings with Bismarck area individuals. 9 Research and analysis of local market conditions and regional and national trends. 9 Inspection of the Bismarck area hotel market, including the existing lodging supply in the area. 9 Analysis of facility data and interviews conducted with management of approximately 30 regional and comparable convention/civic/event centers. 9 Comparative analysis of socioeconomic data from competitive/regional and comparable facility markets. 9 Completed telephone interviews with 72 state and regional event planners and producers representing more than 100 individual events.

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Local Market Conditions

The Bismarck Civic Center has served as an important asset for the Bismarck community and the regional marketplace for nearly 40 years. A number of expansions and improvement projects have occurred with the Center over the years since its inception that have allowed the Center to remain vital in a changing and increasingly competitive environment. The Civic Center continues to host a wide variety of local and non-local events, including spectator/entertainment events, sports/recreation, conventions, conferences, tradeshows, meetings and other types of events. Event and utilization levels are currently consistent with industry averages; however, utilization of the Center’s Exhibit Hall is presently relatively low. This may suggest an over capacity of exhibit space and/or limitations in the Center’s ability to attract exhibit hall- using business (through physical product deficiencies in other space offerings and/or hotel and pricing issues).

Demographically, Bismarck is similar to other small to mid-sized communities in the Midwest/West region, with relatively sparse population between it and other regional communities. This serves to widen the Center’s drawing ability for events, spectators and attendees into the larger regional area. Further, as it is the State Capital of North Dakota, additional market opportunities exist concerning government-related business and general commerce. From a location standpoint, Bismarck’s centralized location in the state likely provides some important advantages when considering its ability to attract state association business and other types of state-oriented groups.

As a stated purpose of a potential expansion of the Civic Center is to improve its ability to attract non- local conventions and conferences, the characteristics of the local hotel and hospitality industry will be a critical consideration. Overall, Bismarck has fairly large number of total hotel rooms for a community its size; however, some of this inventory is dispersed throughout the community. While there are two traditional full service hotels in the community and both are located downtown, the distance from the hotels to the Center is not considered optimal and may not be advantageous for attracting certain types of groups that may be considering other destinations that have better positioned headquarters hotel products (i.e., attached or adjacent to the event facility).

Competitive and Comparable Facilities

Overall, the analysis of competitive/regional facilities suggests that competition within the Dakotas in terms of event facilities is relatively light. However, state-of-the-industry civic, convention and spectator facility products are located in the largest metropolitan areas (Fargo, Grand Forks, Sioux Falls, etc.) that also have more developed supporting visitor industry infrastructure (i.e., hotels, restaurants, retail, attractions, etc.) than Bismarck. It is believed that these markets will continue to host a significant level of non-local event activity, but the market characteristics of Bismarck and its existing event facilities have demonstrated that Bismarck can compete for a number of these events. In general, relative to the population of rotating/touring events within this region, the level of facility products that an expanded Bismarck Civic Center would be competing with is considered to be average within the industry.

Fourteen comparable facilities were analyzed in order to draw inferences for a potential expanded Bismarck Civic Center. Bismarck generally ranks among the lower tier in terms of several demographic variables; however, limited competition in the region suggests that it is able to draw attendees from further distances to a greater degree than other comparable markets.

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Industry Trends

The market success of any event facility can be partially attributed to the characteristics of the industry as a whole. Broad industry changes, characterized by—sometimes significant—retraction and expansion in event demand have taken place within the industry over the past decade. As the demand for convention and spectator space has continued to grow industry-wide over the long-term, so have the responses to this demand from both the public and private sectors.

However, every community and destination is unique and application of blanket industry-wide, macro assessments of supply and demand phenomena do not consider the uniqueness of individual markets. Like nearly everything in a free market society, individual event facilities operate in a “survival of the fittest” environment. Destination and market appeal is normally the common denominator with successful projects. Event facilities located in the strongest destinations with the strongest amenities and appeal (for conventions, conferences and meetings) and the strongest demographics (for spectator events) tend to be the most successful, while facilities located in destinations with weak appeal and/or deficient visitor amenities/demographics more often struggle or underperform industry averages.

Recognizing that the facility itself is only one piece of a larger puzzle that non-local event planners/producers tend to consider when selecting sites, more and more communities have been focusing on ways to strengthen the appeal of the proximate area surrounding the “box”. This often involves comprehensively master planning a mixed-use or entertainment district containing the event facility, whereby an attractive pedestrian-friendly environment is created to welcome event center attendees, through offerings of restaurants, retail, nightlife, entertainment and attractions. “Connectivity” issues are often addressed that physically and perceptually bring together the district to other nearby attractions and districts. Healthy, vibrant and exciting environs surrounding the event facilities are normally viewed very attractively by event planners/producers and can provide important advantages in marketing a destination and its event facility.

Market Demand

A detailed telephone survey was completed with event planners representing key event segments that could use an expanded Center, with a focus on groups with rotating conventions, conferences, tradeshows and meetings that could use the primary space additions outlined in Alternate 4 of the 2007 Master Plan. Given Bismarck’s local market characteristics and the event profiles of other comparable civic/convention facilities in similar markets, it is believed that the primary non-local event markets for a potentially expanded Center would predominately be events hosted by state and regional groups. Additionally, local events (as in nearly all civic/convention facilities) would be expected to continue to contribute the largest share of facility use (in terms of total number of events).

Survey results indicate strong interest by state and regional event planners in using a potential expanded Bismarck Civic Center. However, the survey also indicated that a significant percentage of these groups have recently held events in Bismarck and, therefore, many of them would not be considered "new" business to the community. In fact, it is estimated that a relatively large percentage of the market can already be accommodated by the space offerings of the Best Western Ramkota and/or Radisson. These findings suggest a somewhat limited opportunity to generate significant "new" non-local event activity through the contemplated Center expansion, particularly if no improvements occur with regard to full service headquarters hotel product closely proximate to the Center.

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Center through functional and aesthetic improvements will likely work to help retain existing events and clientele. Without which, it would be expected that certain existing business could be eroded in future years.

Development Options and Use Estimates

It is important to recognize that the aging Civic Center will need improvements in future years to remain competitive in the regional marketplace. Public and private sector investment in civic, convention and spectator event facilities continues to occur within the region, and to the extent that the state-of-the- industry "model" for these facilities continues to progress, the Bismarck Civic Center will likely be more challenged in retaining and attracting event activity should no investments in the facility be realized in the near to mid-term.

In terms of market supportable facility space additions for the Center, analysis results suggest a more modestly-sized multipurpose ballroom than contemplated in Alternate 4 of the 2007 Master Plan. Specifically, it is believed that a multipurpose ballroom of approximately 20,000 square feet would be sufficient to capture the majority of the non-local state and regional market of the Center. Current exhibit space and meeting space levels at the Center are believed to be consistent with or in excess of market needs.

However, to best position an expanded Center to attract "incremental" non-local business and to maximize resulting economic impacts to the Bismarck community, research strongly suggests that (1) a new full-service hotel attached or adjacent to the Center would be required, and (2) a fundamental "shift" in approach to key policies and procedures is made with regard to the "convention center" component of the Bismarck Civic Center. Presently, the Civic Center is largely operated consistent with most traditional "civic/community centers" where there is a strong emphasis on the financial "bottom line" of the Center and a general lack of policies that give preferential treatment to non-local pieces of business. The result of which is that (as partially evidenced by the BCVB's lost business reports) a number of economic impact generating events are being lost due to cost and/or financial considerations. It is believed that to maximize any investment in an expansion of the Center (for the purpose of enhancing its ability to attract new non-local events), the operating philosophy of the convention components be "de-coupled" from the Arena, through giving Center management more flexibility in discounting rates for important non-local events and first priority in facility bookings, etc. From a practical standpoint, this would result in making the Center and the community more competitive for these non-local events, but also would suggest a widening of the financial operating deficit of the Center (which will be discussed in the subsequent chapter).

Three scenarios were developed for this analysis: • Scenario 1: Existing Civic Center • Scenario 2: Expanded Civic Center • Scenario 3: Expanded Civic Center (plus new hotel)

The assumed Center improvements and the creation of a new multipurpose ballroom would be expected to drive a modest level of new convention and tradeshow activity to the Center over existing levels, while also allowing the Center to accommodate a greater amount of concurrent event activity.

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Financial Operations Analysis

An analysis of existing and potential expanded Civic Center financial operations was conducted. The exhibit below presents a summary of the financial operating results related to the Bismarck Civic Center in fiscal year 2007.

Summary of Fiscal Year 2007 Bismarck Civic Center Financial Operating Results

Operating Revenues Space Rental $699,835 Food Service (gross) 676,489 Contract Services & Other 390,132 Total Operating Revenues $1,766,456

Operating Expenses Salaries, Wages & Benefits $1,076,962 Utilities 335,905 Repair & Maintenance 99,038 General & Administration 59,245 Insurance 7,494 Materials & Supplies 336,824 Professional Fees 45,626 Other 4,608 Total Operating Expenses $1,965,702

Total Operating Deficit ($199,246)

As shown in the exhibit, the Bismarck Civic Center generated an operating deficit in 2007 of approximately $200,000. Based on industry standards, this level of operating deficit is considered low relative to the type and size of facility represented by the Civic Center. Many comparably-sized, publicly- owned and operated event facilities are generating operating deficits two to three times higher than that generated by the Civic Center. It is believed that the Civic Center's financial performance is reflective of its historical approach to rates and policies, which put a strong emphasis on minimization of deficit. It is also believed that this has worked to "shape" the type of event activity that ultimately chooses to use the Center.

Under Scenarios 2 and 3, it has been assumed that, in addition to the expansion and improvement of the Center, fundamental policy and procedure adjustments will be made with regard to the convention center components of the Civic Center to maximize its ability to attract non-local conventions, conferences and tradeshows. The addition of high quality space and these policy adjustments would be expected to significantly increase operating expenses, while not affording commensurate increases in operating revenue. Therefore, under both scenarios 2 and 3, it would be expected that the annual operating deficit for the Center would more than double to approximately $400,000 to $500,000 per year. An annual operating deficit of this level is consistent with other comparable facilities located throughout the country.

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Economic Impact Analysis and Conclusions

The evaluation of the economic benefits generated by event facility projects is typically one of the primary determinants regarding the decision to proceed with public sector investment. The following exhibit summarizes the overall estimated new annual economic impacts within Bismarck associated with estimated levels of potential event activity under all the facility scenarios.

Estimated New Annual Economic Impacts of the Existing and Potential Expanded Bismarck Civic Center (stabilized year of operations, presented in 2008 dollars)

Total Direct Spending Scenario 1: $7,519,412 Scenario 2: $9,080,655 Scenario 3: $10,487,795

Total Output Earnings Employment Scenario 1: $12,031,059 $5,263,588 203 Scenario 2: $14,529,048 $6,356,459 245 Scenario 3: $16,780,472 $7,341,457 283

As outlined above, the estimated level of annual direct new spending associated with a stabilized year of operations for an expanded Bismarck Civic Center (under Scenarios 2 and 3) are estimated to generate between $14.5 million and $16.8 million in total output (total direct, indirect and induced spending), representing between $2.5 million and $4.7 million in annual incremental economic output over existing Civic Center (Scenario 1) levels. Additionally, this spending is estimated to support over $6.4 million and $7.3 million in personal income (or “earnings”), along with 245 and 283 full and part-time jobs in the local Bismarck economy under Scenarios 2 and 3, respectively.

In addition to these direct, quantifiable benefits, there are typically a whole host of intangible benefits that event facilities provide to local communities and their residents. These include issues pertaining to quality of life (through attracting entertainment events that would not otherwise travel to the area and hosting civic and private events), ancillary economic development facilitation, employment opportunities, community pride and other such issues.

In conclusion, it is clear that the Bismarck Civic Center is a critical community asset for Bismarck and the surrounding region. It has hosted thousands of local and non-local events, benefitting residents from both economic and quality of life standpoints. As other communities in the region and throughout the country continue to invest in new and expanded/improved event facility projects, it will be important for the Bismarck community to continue to invest in the Civic Center in future years to maintain competitiveness and market share of events of all types. Investment in improving and enhancing facility aesthetics and functionality should be priorities for future investment. An expansion of the Center to include added event space, such as a multipurpose ballroom, could generate new non-local event activity to Bismarck, but any such decision should be joined with significant consideration of adjustments to Center policies and procedures and new headquarter hotel development in order to best leverage and maximize the community's return on investment from an economic to cost standpoint.

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1.0. INTRODUCTION

Conventions, Sports and Leisure International (CSL) was retained by the City of Bismarck (City) to conduct a feasibility study regarding a potential expansion to the Bismarck Civic Center (Center). This report outlines the key findings associated with the analysis of local market conditions, competitive/regional facilities and host communities, market demand, supportable facility program, event levels, financial operations and economic impacts.

Project Background

In fact, the evolution of the Bismarck Civic Center over the years has been similar to that of many other civic center facilities located in other small and mid-sized communities. A number of civic centers have their origin as “single component” facilities (i.e., focused around a spectator arena or multipurpose space) and are progressively added to and/or improved over the years as funding is available. The existing Bismarck Civic Center’s composition and configuration of individual event and back-of-house spaces developed over time in such a way that was partially dependent on decisions made long ago when facility planners contemplated the original building—a smaller and more focused facility. This has resulted in a unique complex that—like many civic centers of this nature—has certain functional and aesthetic limitations relative to state-of-the-industry event facilities. These issues will be discussed further in this report.

Since the last expansion, several Master Plans have been prepared for the City that have involved the Center, with the latest presented in April 2007. This Master Plan highlighted Center expansion/improvement options, conceptual designs and site/infrastructure improvements. Subsequently, in early 2008, the City issued a Request for Proposals for the purpose of retaining a qualified firm to evaluate the market, financial and economic feasibility of an expanded/improved Center.

In 2008, the City of Bismarck hired CSL to conduct a feasibility study for a potential expansion to the Bismarck Civic Center. An expanded Center, as envisioned, would continue to act as a public resource for the local community through maintaining and growing its ability to attract and accommodate a variety of event types, thereby generating new economic impact in the Bismarck area. Specifically, the City asked that the study focus on evaluating the market and financial feasibility of Alternate 4 as presented in the 2007 Master Plan, which was deemed by the City as the most appropriate expansion/improvement concept for further consideration.

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Summary of Study Methods

The study process, outlined herein, consisted of detailed research and analysis, including a comprehensive set of market-specific information derived from the following:

The overall purpose of this study is to evaluate the feasibility of a potential expansion/improvement of the Bismarck Civic Center. Conclusions of a project’s feasibility can be assessed in various ways, including:

• Market feasibility – the facility’s ability to attract and support levels of event activity and patronization that are consistent with or in excess of industry standards. • Financial feasibility – the ability of the facility to “break-even” or generate an operating profit focusing only on direct facility-related operating revenues and expenses. • Economic spending – the facility’s ability to generate new spending activity in the local community (i.e., direct and indirect spending that is attributable to out-of-town visitors that would not otherwise occur in the local area). • Tax generation – the ability of the facility to generate new tax revenue for the local area (i.e., tax revenue resulting from direct, indirect and induced spending that is attributable to out-of-town visitors that would not otherwise occur in the local area). • Costs/benefits/return on investment – the facility’s ability to generate new revenues (i.e., from taxes, operating income and ancillary facility-related revenues, etc.) in excess of quantifiable facility-related costs (i.e., construction costs, operating costs, marketing costs, public sector contribution, etc.). • Intangible benefits/public good – the ability of the facility to represent an important resource for the local community, regardless of financial or economic concerns. These types of benefits add to the local community’s “quality of life” in the same way that libraries, museums and recreational parks do, without consideration of the economic impacts that the facility might generate.

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When evaluating the feasibility of investment in a public assembly facility, such as a civic center, communities throughout the country have differed in the specific criteria that best reflects the definition of “feasible” for their community. For instance, one community may focus more on the ability of the project to be operationally self-supportive or require below a certain threshold of public sector contribution, rather than the intangible “public good” aspects the project would provide local residents at a higher level of upfront or ongoing public sector participation. The research, data, information and analysis provided through this study is intended to allow the City and other community constituents to draw their own informed conclusions concerning the “feasibility” of an expanded/improved Center in Bismarck.

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2.0. ANALYSIS OF LOCAL MARKET CONDITIONS

The strength of the local market, in terms of its socioeconomic attributes, can provide an indication of a community’s ability to draw and accommodate large numbers of convention, conference, tradeshow, consumer show, meeting, sports, entertainment and other event attendees. A community’s hospitality infrastructure in terms of hotels, restaurants, entertainment, transportation amenities and other such factors contribute heavily to the potential success of an event facility. An analysis of these attributes was conducted as they relate to the proposed expansion of the Bismarck Civic Center. Specifically, the analysis of existing local market conditions addresses the following areas:

• Location and transportation. • Demographics. • Lodging and event facilities. • Attractions. • Lost business. • Bismarck Civic Center. • Local market issues and conclusions.

Location and Transportation

Exhibit 1 illustrates the location of Bismarck and its proximity to other markets in North Dakota.

Exhibit 1 Location & Transportation – Roadways/Nearby Cities

Bismarck

Source: Microsoft MapPoint.

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Exhibit 2 summarizes the approximate driving distance in road miles to select regional markets from Bismarck. As shown, Minot is located 110 miles from Bismarck, while the cities of Fargo and Grand Forks are a three and four hour drive from Bismarck.

Exhibit 2 Location & Transportation – Driving Distance

Driving Distance City, State (in miles) Minot, ND 110 Fargo, ND 196 Grand Forks, ND 272 St. Cloud, MN 364 Minneapolis, MN 427 Sioux Falls, SD 431 Duluth, MN 449 Bozeman, MT 556 Casper, MT 579 Source: Mapquest.com

Exhibit 3 presents a summary of passenger traffic at Bismarck Municipal Airport. The facility has consistently ranked within the top 200 U.S. airports based on the number of passengers boarded. For the past six years, the Bismarck Municipal Airport has seen an increase in enplanements each year, with the biggest increase occurring between 2003 and 2004.

Exhibit 3 Location & Transportation – Bismarck Municipal Airport

Yearly Passenger Boarding 200,000 181,023 174,567 180,000 163,420 160,000 144,821 146,077 131,557 140,000 120,000 100,000 80,000 Passengers 60,000 40,000 20,000 0 2001 2002 2003 2004 2005 2006 Year US Airport Rank: 193 186 187 184 186 180

Source: FAA, 2007.

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Demographics

An important component in assessing the potential success of the expanded Center is the demographic and socioeconomic profile of the local area. Specific demographic and socioeconomic information that can provide an indication of the ability of a market to support added event space includes population, age, household income and corporate base. Promoters/planners of certain events such as public/consumer shows (and other events that tend to draw largely from the local driving area) often consider these factors when selecting the appropriate markets for their events. Likewise, the proximate corporate base to a convention facility is often an important indicator of the ability of a facility to attract corporate event activity.

Exhibit 4 demonstrates the markets and land area captured within 25-, 100- and 200-mile concentric rings around Bismarck. These rings will be utilized throughout the report while analyzing and comparing demographic and socioeconomic variables. For most communities, population residing within 25 miles represents the “primary” market from which to draw spectators and attendees, while population outside of 25 miles up to 200 miles often represents the “tertiary” or “secondary” market base. However, given the characteristics of the Dakotas and the long distances between sizeable communities, Bismarck is estimated to draw much more significantly from further distances than typical communities.

Exhibit 4 Demographics – Geographic Concentric Rings

Bismarck 25-Miles

100-Miles

200-Miles

Source: Microsoft MapPoint.

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Exhibit 5 provides a summary of key demographic characteristics estimated for the city of Bismarck, Bismarck core based statistical area, markets captured in 25-, 100-, and 200- mile concentric rings around Bismarck, the state of North Dakota and a United States benchmark.

Exhibit 5 Demographics – Bismarck Area

City of Bismarck 25-Mile 100-Mile 200-Mile State of Demographic Variable Bismarck CBSA Ring Ring Ring No. Dakota U.S.

Population (1990) 50,546 83,831 77,804 213,797 854,547 638,800 248,709,873 Population (2000) 55,532 94,719 89,095 215,054 853,766 642,200 281,421,906 Population (2007 est.) 56,899 100,959 95,082 212,444 845,562 637,361 301,045,522 % Change (1990-2007) 12.6% 20.4% 22.2% -0.6% -1.1% -0.2% 21.0%

Population (2012 est.) 58,108 105,366 99,288 211,735 841,249 635,330 314,920,978 % Change (2007-2012) 2.1% 4.4% 4.4% -0.3% -0.5% -0.3% 4.6%

Avg. Household Inc. (1990) $33,743 $32,419 $33,157 $28,249 $28,217 $28,619 $38,453 Avg. Household Inc. (2000) $48,863 $48,510 $49,246 $42,872 $43,052 $43,560 $56,644 Avg. Household Inc. (2007 est.) $59,358 $60,214 $61,062 $54,018 $53,631 $54,528 $66,670 % Change (1990-2007) 75.9% 85.7% 84.2% 91.2% 90.1% 90.5% 73.4%

Avg. Household Inc. (2012 est.) $66,627 $68,092 $69,035 $61,696 $60,958 $62,055 $73,741 % Change (2007-2012) 12.2% 13.1% 13.1% 14.2% 13.7% 13.8% 10.6%

Median Age (2007, in years) 38.1 38.5 38.0 41.8 38.6 38.4 36.6

Source: Claritas Inc. 2007; U.S. Census Data 2000.

As shown above, the population of the city of Bismarck was approximately 55,500 in 2000, while future projections based on U.S. Census data estimate Bismarck’s population to be approximately 56,900 and 57,100 in 2007 and 2012.

The estimated current year population within 25 miles of Bismarck was approximately 95,100, while the 100- and 200-mile rings were estimated at 212,400 and 845,600, respectively. Within the 200-mile ring, the figure includes the population residing in the majority of North Dakota and South Dakota and small portions of Montana and Minnesota. Population growth in Bismarck over the past 17 years has been higher than the state of North Dakota as a whole.

Further, the average household income in the city of Bismarck has grown over the last 17 years at a rate slightly lower than the rest of North Dakota. In 1990, the average household income in Bismarck CBSA was approximately $32,400, which was just $4,000 less than the average U.S. household income. Currently, Bismarck’s average household income is estimated to approximate $60,200, which is over still $4,000 less than the average U.S. household income. Compared to the other areas analyzed, the city of Bismarck’s median age of 38.1 is similar to the rest of North Dakota and slightly higher than the United States median age of 36.6.

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In Exhibit 6, the density of population in North Dakota is graphically presented, contrasted by density by zip codes.

Exhibit 6 Demographics – Population Density by Zip Code

Source: Microsoft MapPoint.

As represented in the exhibit, the population within North Dakota is heavily concentrated around the Bismarck/Mandan, Minot and Fargo market areas. Other areas of concentration reside around the cities of Williston, Grand Forks, Jamestown and Dickinson. It should be noted, however, that certain zip code areas within North Dakota have a sizable difference in the land area covered, providing a somewhat deceiving population density indications.

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Exhibit 7 presents a further comparison of demographics, pertaining to the population of the Bismarck area, categorized by ethnicity.

Exhibit 7 Demographics – Bismarck Area

City of Bismarck 25-Mile 100-Mile 200-Mile Demographic Variable Bismarck CBSA Ring Ring Ring

Households by Ethnicity White/Caucasian 52,755 94,305 88,616 193,893 754,634 African American 223 328 324 560 5,422 Hispanic/Latin American 601 977 949 2,422 15,042 Asian 328 524 491 841 5,380 American Indian/AK Native 2,452 3,807 3,749 12,924 55,045 Native Hawaiian/Polynesian 12 17 17 86 334 Other 528 1,001 935 1,720 9,704

Total Households 56,899 100,959 95,081 212,446 845,561

Households by Ethnicity White/Caucasian 92.7% 93.4% 93.2% 91.3% 89.2% African American 0.4% 0.3% 0.3% 0.3% 0.6% Hispanic/Latin American 1.1% 1.0% 1.0% 1.1% 1.8% Asian 0.6% 0.5% 0.5% 0.4% 0.6% American Indian/AK Native 4.3% 3.8% 3.9% 6.1% 6.5% Native Hawaiian/Polynesian 0.0% 0.0% 0.0% 0.0% 0.0% Other 0.9% 1.0% 1.0% 0.8% 1.1%

Source: Claritas Inc. 2007; U.S. Census Data 2000.

As shown, of the 56,900 residents in Bismarck, over 90 percent of them are of White/Caucasian ethnicity. This high percentage is common for the nearby regional area, with all the demographic areas having over 90 percent of their households being of White/Caucasian ethnicity. Following White/Caucasian, the second and third largest categories in terms of percentage of residents in the Bismarck demographic areas are American Indian/Alaskan Native and African American.

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In Exhibit 8, the populations among the Bismarck demographic areas are presented in Exhibit 8, broken apart by age.

Exhibit 8 Demographics – Bismarck Area

City of Bismarck 25-Mile 100-Mile 200-Mile Demographic Variable Bismarck CBSA Ring Ring Ring

Population by Age Younger than 10 6,076 11,294 10,689 10,983 96,075 10-19 6,450 12,594 11,893 27,108 113,700 20-29 9,420 15,531 14,844 28,304 132,600 30-39 7,849 12,961 12,460 22,860 93,809 40-49 8,263 15,356 14,549 32,286 122,432 50-59 7,933 14,620 13,800 31,742 117,389 60-69 4,703 8,422 7,749 20,043 72,167 70-79 3,532 5,975 5,349 15,655 54,781 80 and Older 2,673 4,206 3,744 11,832 42,610

Total Population 56,899 100,959 95,077 200,813 845,563

Population by Age Younger than 10 10.7% 11.2% 11.2% 5.5% 11.4% 10-19 11.3% 12.5% 12.5% 13.5% 13.4% 20-29 16.6% 15.4% 15.6% 14.1% 15.7% 30-39 13.8% 12.8% 13.1% 11.4% 11.1% 40-49 14.5% 15.2% 15.3% 16.1% 14.5% 50-59 13.9% 14.5% 14.5% 15.8% 13.9% 60-69 8.3% 8.3% 8.2% 10.0% 8.5% 70-79 6.2% 5.9% 5.6% 7.8% 6.5% 80 and Older 4.7% 4.2% 3.9% 5.9% 5.0%

Source: Claritas Inc. 2007; U.S. Census Data 2000.

As shown, the majority of population surrounding the Bismarck area is under the age of 60. The age- group with the highest percentage of population in the city of Bismarck, CBSA, 25-mile and 200-mile rings falls between 20 and 29, while the 100-mile ring’s population is mostly between the ages of 40 to 49.

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The number of corporations in a market is an important characteristic to evaluate when determining the viability of an expanded event facility, as it would be expected that a fairly large number of events would represent local event activity such as corporate meetings, banquets, conferences and training, as well as through the purchase of tickets to spectator events, in addition to the facility’s potential advertising and sponsorship opportunities. Indirectly, the size of a local corporate base also tends to be correlated with the level and breadth of supporting community amenities (i.e., hotels, restaurants, transportation infrastructure, etc.), which are relevant when considering non-local events.

Exhibit 9 lists the largest employers in the Bismarck area. As is typical in communities of Bismarck’s size, many of the largest organizations represent public sector (government) organizations. As North Dakota’s Capital city, Bismarck’s largest employer is the State of North Dakota. This has important implications for the opportunity to attract government related event activity under an expanded/improved Center.

Exhibit 9 Demographics –Top Employers

Number of Company Em ployees State of North Dakota 4,321 MedCenter One Health Systems 2,200 St. Alexius Medical Center 2,001 Bismarck Public School District 1,598 North Dakota Federal Offices 1,198 BOBCAT / Ingersoll-Rand 1,006 City of Bismarck 850 MDU Resources Group 822 Aetna 635 Mandan Public School District 549 University of Mary 520 Dan's Supermarkets 500 Missouri Slope Lutheran Care Center 450 Bismarck State College 440 United Tribes Technical College 440 Basin Electric Power Cooperative 436 Burlington Northern Railroad 420 Mid-Dakota Clinic 410 Coventry Health Care, Inc. 403 Wal-Mart South 400

Source: Bismarck Convention & Visitors Bureau, 2008.

Local Hotel and Event Facility Inventory

As previously mentioned, a community’s hospitality infrastructure, in terms of hotels, restaurants, entertainment and other such factors, contributes heavily to the potential success of any event facility. The marketability of convention and civic centers increase when there exists a support of amenities and infrastructure within close proximity.

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This supporting hospitality infrastructure also plays a key role in generating the desired economic impact of added event space—particularly convention space. A paramount component of this hospitality infrastructure is the local inventory of quality hotel properties.

As shown in Exhibit 10, there are 20 lodging properties in the Bismarck area that have more than 50 rooms.

Exhibit 10 Primary Bismarck Hotels

Distance Number of Fac ility to BCC (Miles) Sleeping Rooms Radisson Hotel 0.31 215 Best Western Ramkota Hotel 0.56 306 Expressway Inn 0.76 157 Expressway Suites 0.77 64 Fairfield Inn - South 0.82 63 Candlewood Suites 1.2 88 Kelly Inn 1.96 101 Days Inn 2.14 101 Super 8 Motel 2.23 60 Best Western Doublewood Inn 2.3 143 Select Inn 2.37 92 Comfort Inn 2.75 148 Comfort Suites 2.79 60 Fairfield Inn - North 2.91 63 Country Suites 3.01 76 Holiday Inn Express Hotel & Suites 3.05 74 Hampton 3.09 88 Americinn Lodge & Suites 3.15 46 Ramada Limited 3.82 66 Best Western Sevens Seas 7.74 122

Total Estimated Bismarck Area Hotel Room Inventory = over 2,100 rooms Source: Bismarck Convention & Visitors Bureau, 2007. Note: only hotels with more than 50 rooms are displayed.

The primary Bismarck hotel properties account for 2,100 guestrooms, with the Best Western Ramkota representing the largest property. As shown, there are five properties located within one mile of the Bismarck Civic Center, including the Radisson, Best Western Ramkota, Expressway Inn, Expressway Suites and Fairfield Inn-South. Other than the Radisson and Best Western Ramkota, the remaining properties located in the Bismarck area are considered “limited-service” hotels (i.e., lacking on-site three- meal-a-day restaurant/food service, substantial levels of meeting space, and other amenities typical of “full-service” hotels).

The Radisson and the Best Western are the two closest hotel properties to the Civic Center (and importantly they represent the area’s only two traditional full service properties) and they often function as “headquarters” hotels for the Civic Center. However, neither are considered to be within close walking

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distance. Under an ideal center-hotel situation, a headquarters hotel property would be physically attached to the civic/convention center. The second most desirable scenario would be that the headquarters hotel product would be located adjacent or within close walking distance to the center (i.e., no more than two to three city blocks in distance). In many cases concerning non-local events such as conventions and conferences, the attractiveness of the destination and facility/hotel package is diminished to the extent that the nearest full service hotel product diverges from the most preferred model (attached hotel and event facility). The Bismarck Civic Center’s current lack of an attached, adjacent or very nearby hotel has some important implications for potential event market capture under an expanded/improved Center. This issues will be discussed later in this report.

Exhibit 11 presents the location of Bismarck’s primary lodging inventory in relation to the Bismarck Civic Center.

Exhibit 11 – Hotels Near Bismarck Civic Center gg y 15 18 14 17 16

13 12

9 10 11 1Radisson Hotel 7 8 2 Best Western Ramkota Hotel

3Expressway Inn

4Expressway Suites

5 Fairfield Inn - South

6 Candlewood Suites

7 Kelly Inn

8Days Inn 6 9 Super 8 Motel

10 Best Western Doublewood Inn

11 Select Inn

12 Comfort Inn

1 13 Comfort Suites

14 Fairfield Inn - North

CC 15 Country Suites 16 Holiday Inn Express Hotel & Suites

17 Hampton

5 2 18 Americinn Lodge & Suites 3 4

Source: Microsoft Live Maps; Bismarck Convention and Visitors Bureau, 2008.

As shown, there are two concentrated areas of hotels within Bismarck. The first is at the intersection of State Street and Interstate 94, where Sunset Memorial Gardens and the Gateway Mall are located. The second concentration is located near the Kirkwood Mall along the Bismarck Expressway. The Radisson and the south cluster of hotels are within walking distance of the Civic Center; however, this distance is longer than normally accepted within the industry as “within close walking distance” (i.e., two to three city blocks maximum). While this distance may not be problematic for certain types of groups

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(particularly those that convene during the summer months), the distance is likely viewed unfavorably by other groups due to the inconvenience and the possibility of inclement weather.

Occupancy figures for the Bismarck hotels are presented in Exhibit 12 for the past two years by month.

Exhibit 12 – Primary Bismarck Hotel Occupancy

2006 2007

90%

80%

70%

60%

50%

40%

30% 2006 Average = 67.6% 20% 2007 Average = 70.6% 10%

0% January February March April May June July August September October November December

Source: Bismarck Convention & Visitors Bureau; Smith Travel Research, 2008.

On average, the highest occupancy figures in the Bismarck hotels occurred in the summer and fall months, between June and October, when figures reach levels of around 80 percent. In contrast, the lowest occupancy figures occurred in January and December, when the average occupancy levels were between 50 and 60 percent. Further, over the last two years, the occupancy levels in the Bismarck area has remained fairly consistent, with the yearly averages reaching 68 percent and 71 percent for 2006 and 2007, respectfully. Overall, market-wide occupancy levels are consistent with or in excess of other comparable communities throughout the country.

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The following exhibit demonstrates the monthly averages for the Bismarck area hotel’s average daily rates (ADR) in 2006 and 2007.

Exhibit 13 – Primary Bismarck Average Daily Rate

2006 2007

$80

$70

$60

$50

$40

$30

$20 2006 Average = $60.19 $10 2007 Average = $63.03

$0 January February March April May June July August September October November December

Source: Bismarck Convention & Visitors Bureau; Smith Travel Research, 2008.

As shown, ADR levels in Bismarck have generally fluctuated between $56 and $70 in 2006 and 2007. It also should be noted that overall ADR levels in 2007 were slightly higher than 2006 levels, reflecting a general strengthening of the regional and nationwide hospitality industry. While occupancy levels are relatively strong in Bismarck compared to like markets, ADR levels compare poorly. It is believed that low ADR levels in the market is a major reason why significant new hotel product (particularly full service product) has not entered the local market recently. These low ADR levels are likely a function of a combination of factors, including but not limited to: (1) government rated demand; (2) price sensitivity among key demand segments; and (3) a higher than typical concentration of hotel ownership that is long-term, locally-based (whom typically are less likely to be aggressive in “pushing” rate to maximize short and mid-term profits).

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The number of competitive event facilities in the local market is also an important consideration with respect to the overall viability of an expansion to any event facility. Bismarck currently offers a number of meeting and event facilities, including meeting space within hotel facilities and event space at specialized area facilities. Exhibit 14 presents facilities that offer meeting space in Bismarck.

Exhibit 14 – Bismarck Meeting Facilities

Number Largest Largest of Room Room Meeting Ballroom Exhibit Total Meeting Banquet Square Square Square Square Square Facility Rooms Capacity Feet Feet Feet Feet Feet

Bismarck Civic Center (1) 13 3,240 48,600 17,300 0 48,600 65,900

Best Western Ramkota Hotel 6 1,300 12,000 3,380 16,590 0 19,970

Mandan Community Center 1 806 12,087 1,400 0 12,087 13,487

Best Western Doublewood Inn 7 425 4,050 6,768 4,050 0 10,818

Best Western Sevens Seas 6 500 4,560 10,378 0 0 10,378

Radisson Hotel 7 500 4,020 4,757 4,020 0 8,777

Comfort Inn 4 250 3,008 6,468 0 0 6,468

Kelly Inn 6 2,112 220 4,212 0 0 4,212

Country Suites 1 80 1,984 0 1,984 0 1,984

(1) Bismarck Civic Center square footage numbers do not include the arena. Source: Bismarck Convention & Visitors Bureau, industry publications, facility website information, 2008.

As presented, there are nine primary facilities with meeting space that exist in Bismarck. The Bismarck Civic Center represents the largest event facility in the area, with 65,900 square feet of convention/meeting space (not including the Arena). The Best Western Ramkota, Best Western Doublewood Inn and Best Western Seven Seas also offer a modest amount of space. In general, the meeting space incorporated into area hotels can only effectively compete for small and mid-sized meetings, banquets and conferences. As will be discussed in a subsequent chapter, a large percentage of economic impact-generating events (i.e., conventions, tradeshows and conferences produced by state and regional associations and other organizations) require a larger level of square footage than offered by existing hotel meeting facilities, as well as requiring multiple event spaces concurrently (i.e., exhibit, ballroom and meeting space for exhibition, general assembly, food function and breakout needs).

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The location of the primary local convention and meeting facilities is presented in Exhibit 15.

Exhibit 15 –Location of Primary Event Facilities

6 4

2 Hotels 1 Best Western Ramkota Hotel 5 2 Best Western Doublewood Inn 3 Radisson Hotel 4 Comfort Inn 5 Kelly Inn 6 Country Suites

Source: Microsoft MapPoint; Bismarck Convention and Visitors Bureau, 2008.

Attractions

As a destination, the Bismarck-Mandan area offers a number of attractions and recreational opportunities, including: • Bismarck-Mandan Visitor Center and Steamboat Display • Camp Hancock • Dakota Zoo • Fort Abraham Lincoln State Park • Fort Lincoln Trolley • Fort Mandan • Higher Education (Bismarck State College, University of Mary, United Tribes Technical College, MedCenter One College of Nursing) • Historic Governors’ Mansion • Keelboat Park • Lewis & Clark Interpretive Center • Lewis & Clark Riverboat • North Dakota Heritage Center

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• North Dakota Railroad Museum • North Dakota State Capital • Performing Arts • Raging Rivers Water park and Speedworld Golf and Games • Recreational activities (golf, camping, horseback riding, swimming, snow skiing, tennis, whitewater rafting, etc.)

Tracked Lost Business

Lost business information can be important indicators concerning the need for additional and/or more state-of-the-industry event space in a community. Like many destination marketing organizations (DMOs), the Bismarck Convention & Visitors Bureau (BCVB) maintains a log of lost convention and other non-local event business. While it is important to recognize that the lack of sufficient facility space may have been only one of a number of contributing factors that prevented Bismarck from securing these events and that many pieces of “potential” business never reveal themselves on such lists, lost business lists can provide an important base and “starting point” for an understanding of an expanded Center’s market potential. Exhibit 16 presents the BCVB’s lost business events and corresponding estimated attendance, hotel room nights and estimated value.

Exhibit 16 CVB Tracked Lost Business

No. of Room Reason Events Attendance Nights $ Value Other 18 6,923 7,085 $992,256 BCC Too Expensive 2 5,200 2,000 $374,000 Bought 7 7,950 6,735 $1,446,785 Cancelled 11 7,840 4,412 $768,212 Cancelled - No Funds 1 800 675 $101,925 Center Package 4 6,450 5,124 $856,164 Combined into Another Conference 2 500 432 $91,152 Double Booking 9 3,375 1,700 $337,225 Duplicate Booking 1 200 340 $0 Exact Dates Not Available 1 500 320 $48,320 Facility Problems 12 9,875 8,490 $1,367,415 Going to Moorhead 1 800 1,100 $166,100 Group Tour - Not Enough Participants 17 901 409 $164,534 Insufficient Rooms 9 5,700 11,295 $2,193,245 Number of Meeting Rooms 1 600 890 $124,575 Out Bid 11 4,555 8,055 $1,636,605 Politics 29 22,210 47,997 $7,002,545 Room Rates 3 800 760 $160,230 Rotation 19 8,770 10,640 $1,964,239 Staying in DC 1 400 550 $83,050 Totals 159 94,349 119,009 $19,878,577

Source: Bismarck Convention & Visitors Bureau, 2008.

As shown in the previous exhibit, 159 individual events (over a period of years) have been tracked by the BCVB as lost business. This number is significant; however, it is important to recognize that many do not necessarily relate to facility deficiencies. Specifically, of the 159 events, only 14 (or nine percent) are directly attributable to the inability of the current Civic Center to meet the event’s space requirements. Based on this data, more prevalent reasons for losing business relates to financial/cost considerations (27 events or 17 percent). These issues include event planner stated reasons such as (1) non-competitive Civic Center costs, (2) greater event subsidies provided by other communities, (3) non-competitive discounting of facility and/or hotel room rates and other such issues. This underscores the belief that any public sector investment in Civic Center expansion/improvement for a major purpose of attracting a

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greater level of non-local events must be matching with an optimization of Center policies and procedures, which would include more flexibility and aggressiveness in competing for non-local events through discounting and subsidies (if a particular event is deemed worthwhile to pursue). These issues will be discussed further in a subsequent chapter of this report.

Bismarck Civic Center

Construction on the original Civic Center commenced in 1967 and took two years to complete. Over 20 years later, the exhibit hall was added at a cost of $11.2 million and was funded by a one percent City sales tax. Ten years later, in 2000, the last phase of construction took place adding a new south end to the Arena, 1,060 seats, sound and light improvements, a box office, food court and main entrance.

The Bismarck Civic Center is currently home to the Dakota Wizards, a D-League professional basketball team. In addition to the Wizards’ practices and games, the Center hosts hundreds of other spectator and flat floor events annually. The Center also manages the nearby 833-seat Belle Mehus City Auditorium.

Exhibit 17 presents the current layout of the Bismarck Civic Center.

Exhibit 17 Bismarck Civic Center Characteristics

Current Components Arena: 7,590 fixed seats, 10,100 capacity (concert), 30,096 SF floor space Exhibit: 48,600 SF, can be divided into two unequally-sized halls Meeting: 17,300 SF, 13 rooms Parking: 1,185 spaces

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As shown in the previous exhibit, the Center presently integrates 65,900 square feet of sellable flat floor space (plus 30,100 square feet of Arena floor space), a 7,590-fixed seat Arena and nearly 1,200 spaces for parking. An aerial map of Bismarck is presented below, with the Center and immediately surrounding amenities highlighted.

Exhibit 18 Bismarck Civic Center Site/Location

E Broadway Ave

Radisson Hotel

E Main Ave

E Front Ave

Civic Center E Bowen Ave

E Indiana Ave S 3 S 9 Kirkwood S 7 rd Mall th th St St St

The Center is located between East Front Street and E Bowen Street in Bismarck, one block north from the Kirkwood Mall. The Radisson is located to the north and is physically relatively nearby the Civic Center site; however, the Civic Center’s main entrance is positioned on the south end of the complex, effectively lengthening pedestrian travel among the two facilities.

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To understand existing usage of the Bismarck Center, an analysis was performed concerning 2007 event and utilization characteristics. Based on an analysis of Center operating data relating to the period between January and December 2007, the facility hosted 292 events, accounting for 552 utilization days, the majority of which represent locally-oriented events. Exhibit 19 presents a summary of total events, utilization days (event days plus move-in/out days) and total square footage used.

Exhibit 19 Bismarck Civic Center Event Levels 2007

Utilization Total Total Square Number Utilization Days Square Footage Event Type of Events Days (adjusted) Footage (adjusted) Conventions/Tradeshows 28 62 112 2,110,824 3,812,905 Public/Consumer Shows 13 34 52 1,411,056 2,158,238 Athletic Game or Practice 69 104 104 3,231,720 3,231,720 Meetings/Banquets/Receptions 85 116 116 1,064,808 1,064,808 Concert/Rehearsal/Show 70 128 128 1,231,416 1,231,416 Other 27 40 40 697,392 697,392 Total 292 484 552 9,747,216 12,196,479

Source: Facility Management, 2007

As shown, in 2007, it is estimated that the Center hosted nearly 300 events, comprising over 550 utilization days and occupying 12.2 million square feet of event space. As is typical with facilities of this nature, a large percentage of the total number of events consisted of small meetings/banquets/receptions, athletic games or practices and concerts, rehearsals or shows. The two main components of the Center are the Arena and Exhibit Hall. Exhibit 20 presents the number of event and related characteristics held in each component in 2007.

Exhibit 20 Bismarck Civic Center Event Levels 2007 Total Number Utilization Square Arena / Exhibit Hall of Events Days Footage

Arena 103 185 9,664,070

Exhibit Hall 62 160 7,737,120

Source: Facility Management, 2007

In 2007, the Arena hosted 103 events, accounting for nearly 200 utilization days, while the Exhibit Hall hosted 62 events accounting for 160 utilization days. Despite the fact that the Arena had many more events hosted in it than the Exhibit Hall, the Exhibit Hall hosted events that consisted of more multi-day events, thus creating the more similar utilization and total square footage calculations.

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Exhibit 21 summarizes the event characteristics of the Bismarck Civic Center, categorized by event type.

Exhibit 21 Bismarck Civic Center Event Levels 2007

Total Number of Events Total Utilization Days

9% 10% 8% 13% 24% 4% Conventions/Tradeshows 27% 7% Public/Consumer Shows Athletic Game/Practice Receptions 24% Concert/Rehearsal/Show Other 21% 29% 24%

Total Square Footage Used

7% 13% 22%

11% 14%

33% Source: Facility Management, 2007

As indicated in the exhibit, more than half of the Center’s events and utilization days are associated with local meetings/banquets/receptions and concerts/rehearsals/shows. However, although these types of events have accounted for the majority of the Center events and use days, they have only comprised 11 percent of the total square footage used of the Center. Athletic games and/or practices comprise one- third of the event square footage of the Center. This emphasizes the important differences in the space requirements among event types.

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Exhibit 22 showcases the Arena and Exhibit Hall’s monthly utilization levels for 2007.

Exhibit 22 Arena & Exhibit Hall (Blended Average) Monthly Utilization 2007

Arena Exhibit Hall 100%

90% Arena Average = 51.5% 80% Exhibit Hall Average = 43.8%

70% 60%

50%

40% 30%

20%

10%

0% July May April June March August January October February November December September Source: Facility Management, 2008

As shown in the exhibit, the Arena’s utilization levels ranged from a low of 0 percent in June to 87 percent in March, while the Exhibit Hall’s utilization levels ranged from eight percent in June to 75 percent in January. In general, utilization levels at the Center in 2007 were varied from month to month. The overall utilization for 2007 was 51.5 percent for the Arena and 43.8 percent for the Exhibit Hall. Low utilization is typical during the summer months for facilities of this nature.

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Exhibit 23 breaks down square footage occupancy levels for the Exhibit Hall’s sub-components during 2007, paired with the Arena’s occupancy level as well.

Exhibit 23 2007 Arena & Exhibit Hall Occupancy

100%

90%

80% 66% 70%

60% 50% 50% 38% 40%

30%

20%

10%

0% Exhibit Hall A Exhibit Hall B Arena

Note: Total square footage occupied per available square footage. As is standard in the public assembly industry, total available square footage was reduced by 30 percent to better reflect practical facility space availability. Source: Facility Management, 2008

As shown, the Arena has an occupancy percentage of 66 percent, while Exhibit Halls A and B had occupancy levels of 38 percent and 50 percent, respectfully. It is standard in the industry to consider utilization of a facility’s primary flat floor space to be high when the actual square footage used as a percentage of total available square footage reaches a level of 70 percent. Below 70 percent occupancy, a facility may be holding excess capacity. Above 90 percent occupancy, a facility has effectively reached “practical maximum capacity” and may be turning away significant business. Total available square footage is determined by multiplying the space’s square footage by 365 days by 70 percent. The 70 percent adjustment factor accounts for the reality that a portion of the facility’s total capacity is un- sellable due to holidays, maintenance days and inherent booking inefficiencies that result when events cannot be scheduled immediately back-to-back in the space in question.

Overall, while the Civic Center is hosting a total level of event activity that is comparable with other similar facilities throughout the country, occupancy levels for the Exhibit Hall are presently lower than industry averages. This may suggest an over capacity of exhibit space and/or limitations in the Center’s ability to attract exhibit hall-using business. These issues will be explored further in the Market Demand chapter of this report.

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Local Market Issues and Conclusions

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3.0. COMPETITIVE/COMPARABLE FACILITIES & COMMUNITIES ANALYSIS

This chapter provides a review of the event facility inventory in competitive/regional markets and various physical characteristics and resources of comparable event facilities and host communities. In terms of potential competitive markets, certain inferences can be made by reviewing the event facilities operating in selected competitive markets throughout the region and the information detailed herein will assist in the identification and analysis of event facilities that could provide primary competition to an expanded Bismarck Civic Center. Competition with respect to “local” events is primarily relegated to the existing and planned facilities in the local community or marketplace, and was discussed in the previous chapter. Additionally, a set of comparable facilities was identified and analyzed to obtain insight into the physical and operational characteristics of facilities located in comparable communities.

Competitive/Regional Event Facilities

As a part of this analysis, 13 communities in North and South Dakota were identified that offer event facilities that could compete with an expanded Bismarck Civic Center in respect to one or more key event segments. Exhibit 1 presents the location of each of the competitive/regional markets, while Exhibit 2 on the following page provides a community-wide listing of primary event facilities in each of the competitive/regional markets identified.

Exhibit 1 Competitive/Regional Markets pg

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Exhibit 2 Primary Event Facilities in Competitive/Regional Communities Exhibit/ Arena Meeting Ballroom Total Flat Fixed Total Market Space Space Space Floor Space Seats Seating Aberdeen, SD NSU Wachs Arena 0 0 0 0 8,057 8,057 Ramada Inn 0 2,400 10,500 12,900 0 0 Ramkota Hotel & CC 10,240 264 4,972 15,476 0 0 Bismarck, ND Best Western Ramkota Hotel 0 16,600 3,940 20,540 0 0 Best Western 7 Seas Hotel 0 2,592 7,520 10,112 0 0 Bismarck Civic Center 80,360 20,041 0 100,401 7,590 10,136 Mandan Community Center 14,700 1,400 0 16,100 0 0 Brookings, SD SDSU Frost Arena 0 0 0 0 8,500 8,500 SDSU Stanley Marshall Center 46,400 4,000 0 50,400 0 0 Swiftel Center 30,000 5,800 6,800 42,600 3,200 6,000 Fargo, ND Best Western Doublewood Inn 8,736 2,721 3,240 14,697 0 0 Fargo Civic Center 11,000 0 17,000 28,000 2,800 3,600 Fargodome 100,000 0 0 100,000 19,300 28,300 Holiday Inn of Fargo 0 3,833 17,559 21,392 0 0 NDSU Memorial Union 0 2,000 23,985 25,985 0 0 NDSU Bison Sports Arena 150,639 0 0 150,639 6,000 6,000 Ramada Plaza Suites & CC 0 2,821 20,208 23,029 0 0 Grand Forks, ND Alerus Center 100,000 10,074 25,588 135,662 13,500 22,000 Purpur Arena 0 0 0 0 2,300 2,300 Touch of Magic 0 0 7,500 7,500 0 0 UND Betty Engelstad Sioux Ctr. 24,000 0 0 24,000 2,600 4,000 UND Ralph Engelstad Arena 17,000 0 0 17,000 11,700 13,000 Huron, SD Crossroads Hotel & Huron Event Center 14,000 13,300 11,925 39,225 3,800 5,450 South Dakota State Fairgrounds 15,000 0 0 15,000 0 0 Jamestown, ND Jamestown Civic Center 18,000 4,400 6,250 28,650 5,500 6,500 Minot, ND Grand International 0 5,350 6,950 12,300 0 0 Holiday Inn Riverside 12,100 4,520 10,920 27,540 0 0 Minot Municipal Auditorium 13,200 11,700 0 24,900 4,066 5,066 MSU Dome 44,000 0 0 44,000 5,200 9,642 North Dakota State Fair Center 137,420 36,684 0 174,104 4,650 6,950 North Dakota State Fairgrounds 63,050 4,836 7,000 74,886 5,600 11,400 Sleep Inn & Suites 0 6,160 4,032 10,192 0 0 Mitchell, SD Corn Palace 13,100 0 0 13,100 1,772 3,200 Pepsi-Cola Theater for the Arts 0 600 0 600 397 397 Ramada Inn Convention Center 0 3,500 7,500 11,000 0 0 Davidson County Fairgrounds 15,000 10,500 0 25,500 0 0 Highland Conference Center 0 7,200 6,200 13,400 0 0 Rapid City, SD Best Western Ramkota Hotel 14,760 8,594 13,200 36,554 0 0 Rushmore Thunderdome 0 0 0 0 1,500 1,500 Central States Fairgrounds 14,000 0 0 14,000 6,000 6,000 Rushmore Plaza Civic Center 74,886 14,181 15,264 104,331 6,899 11,799 Sioux Falls, SD Best Western Ramkota Hotel 20,000 7,648 11,000 38,648 0 0 El Riad Mosque Shrine 0 1,848 9,780 11,628 0 0 Holiday Inn City Centre 5,760 3,985 4,300 14,045 0 0 Oaks Hotel & Convention Center 10,000 680 5,760 16,440 0 0 Sioux Empire Fair Association 125,500 0 0 125,500 6,000 9,000 Sioux Falls Convention Center 63,600 11,407 19,200 94,207 4,455 8,000 Vermillion, SD Dakota Dome 145,000 0 0 145,000 6,000 10,000 Watertown, SD Codington Co. Extension Complex 20,000 6,000 0 26,000 0 0 Watertown Civic Arena 16,500 0 0 16,500 3,114 6,214 Watertown Event Center/Ramkota 8,279 1,602 4,000 13,881 0 0 Williston, ND National Guard Armory 0 9,650 0 9,650 0 0 Raymond Family Community Center 20,000 10,000 0 30,000 0 0

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As shown in Exhibit 2, the primary event facilities are listed for each of the 13 competitive/regional communities reviewed, which include hotel/conference centers, convention and civic centers, exhibition facilities, fairgrounds, expo centers, arenas and other indoor athletic facilities. When analyzing competitive markets and event facilities, it is important to consider the level, quality and type of existing event facility space in each community as part of any comparison. In this analysis section, to assist in the evaluation of Bismarck’s event facility needs, a variety of ratios were calculated using a comparison of competitive/regional communities’ population and the characteristics of their event facilities. The results of this analysis can provide general indications of undersupply, oversupply or general equilibrium with respect to various space/seating characteristics in Bismarck’s event facility inventory.

Several of the competitive/regional markets, including Bismarck, offer a variety of event facilities serving community needs. Bismarck currently offers four facilities incorporating either in excess of 7,500 sellable square feet of flat floor event space or a total seating capacity of at least 1,000 (the two primary criteria for inclusion on the facility inventory list). Exhibit 3 presents the total number of primary event facilities in each of the regional/competitive communities that met the flat floor space and seating requirement.

Exhibit 3 Competitive/Regional Markets – Number of Primary Event Facilities

77 7

6 6

55 5

44 4

333 3 No. of Event Facilities

22 2

11 1

0 Minot, ND Fargo, ND Fargo, Huron, SD Huron, Mitchell, SD Williston, ND Bismarck, ND Bismarck, Aberdeen, SD Brookings, SD Vermillion, SD Vermillion, Rapid City, SD City, Rapid Watertown, SD Sioux Falls,SD Jamestown, ND Grand Forks, ND

As outlined in the exhibit, Bismarck ranks near the middle of the competitive/regional markets with four facilities. Markets with more facilities than Bismarck include Fargo, Grand Forks and Minot, North Dakota and Sioux Falls and Mitchell, South Dakota.

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As previously mentioned, many types of facilities were inventoried in this analysis including various convention and exhibition facilities, athletic arenas, spectator venues and fairgrounds. Exhibit 4 presents the total marketwide indoor flat floor event space of each of the competitive/regional communities reviewed.

Exhibit 4 Competitive/Regional Markets – Total Flat Floor Space

400,000

350,000

300,000

250,000

200,000

150,000 Total Flat Floor Space Floor Flat Total

100,000

50,000

0 Minot, ND Minot, Fargo, ND Fargo, Huron, SD Huron, Mitchell, SD Mitchell, Williston, ND Bismarck, ND Aberdeen, SD Brookings, SD Brookings, Vermillion, SD Rapid City, SD Watertown, SD Watertown, Sioux Falls, SD Jamestown, ND Jamestown, Grand Forks, ND Forks, Grand Note: “Space” represents square footage.

The amount of total marketwide flat floor event space offered at the competitive/regional communities reviewed varies widely, averaging 143,500 square feet, with a median of 93,000 square feet, when excluding Bismarck’s marketwide total. Aberdeen, South Dakota offers the least total flat floor space, with approximately 28,400 square feet. The largest market in terms of total flat floor space is Minot, with approximately 367,900 total square feet. Bismarck’s marketwide total of 147,200 ranked sixth among the competitive/regional markets analyzed.

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Exhibit 5 presents a comparison of total exhibit space offered within the competitive/regional communities reviewed.

Exhibit 5 Competitive/Regional Markets – Total Exhibit Space

300,000

250,000

200,000

150,000 Total Exhibit Space 100,000

50,000

0 Minot, ND Minot, Huron, SD Fargo, ND Fargo, Mitchell, SD Williston, ND Bismarck, ND Bismarck, Aberdeen, SD Aberdeen, Brookings, SD Vermillion, SD Rapid City,SD Watertown, SD Sioux Falls, Falls, SD Sioux Jamestown, ND Jamestown, Grand Forks, ND Forks, Grand Note: “Space” represents square footage.

As presented above, Minot and Fargo lead all the competitive communities in terms of exhibit space offered by primary venues marketwide, both with approximately 270,000 square feet. While Minot is one of the smaller markets among the set in terms of population, it is home to the North Dakota State Fairgrounds and Minot State University’s event facilities, which contribute greatly to the amount of event space in the community. Aberdeen, South Dakota incorporates the smallest amount of exhibit space within its community with 10,200 square feet. The average amount of exhibit space offered within the competitive communities is approximately 106,200 square feet and the median square feet of exhibit space among the communities is approximately 76,400 square feet. Bismarck ranked among the middle of the analyzed set with 95,100 square feet of exhibit space.

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Exhibit 6 compares the square footage of marketwide meeting space (i.e., breakout meeting space) offered within the competitive/regional communities.

Exhibit 6 Competitive/Regional Markets – Total Meeting Space 80,000

70,000

60,000

50,000

40,000

Total Meeting Space Meeting Total 30,000

20,000

10,000

0 Minot, NDMinot, Fargo, ND Fargo, Huron, SD Huron, Mitchell, SD Mitchell, Williston, ND Bismarck, ND Bismarck, Aberdeen, SD Aberdeen, Brookings, SD Brookings, Vermillion, SD Rapid City, SD City, Rapid Watertown, SD Watertown, Sioux Falls, SD Falls, Sioux Jamestown, ND Jamestown, Grand Forks, ND Forks, Grand Note: “Space” represents square footage.

As shown in the exhibit above, the level of meeting space ranges from a low of 0 square feet in Vermillion, South Dakota to a high of 69,250 square feet in Minot, North Dakota. The average meeting space offered within the competitive/regional communities is 16,800 square feet, and the median among the competitive markets is 11,400 square feet. Bismarck is ranked second among the competitive set with 40,600 square feet of meeting space, most provided via local hotel properties such as the Ramkota and the Radisson.

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Exhibit 7 compares the total square feet of ballroom (or banquet) space offered within the competitive/regional communities.

Exhibit 7 Competitive/Regional Markets – Total Ballroom Space

90,000

80,000

70,000

60,000

50,000

40,000 Total Ballroom Space Ballroom Total 30,000

20,000

10,000

0 Minot, ND Fargo, ND Huron, SD Huron, Mitchell, SD Williston, ND Williston, Bismarck, ND Bismarck, Aberdeen, SD Brookings, SD Vermillion, SD Rapid City,SD Watertown, SD Sioux Falls, SD Jamestown, ND Grand Forks, ND Note: “Space” represents square footage.

Fargo, North Dakota offers the most ballroom square footage with 82,000, while Williston, North Dakota and Vermillion, South Dakota incorporate no amount of ballroom space. Bismarck currently has 11,500 square feet of ballroom space offered within its event facilities, which is lower than the competitive community average of 21,600 square feet.

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Similar to event space, a comparison of spectator seating capacities can indicate a general undersupply, oversupply or broad equilibrium with respect to Bismarck’s marketwide event facility inventory. Exhibit 8 presents a comparison of the marketwide total of fixed seats offered at primary spectator event venues in the competitive/regional communities.

Exhibit 8 Competitive/Regional Markets – Total Fixed Seating 45,000

40,000

35,000

30,000

25,000

20,000 Total Fixed Seating Total Fixed 15,000

10,000

5,000

0 Minot, ND Fargo, ND Fargo, Huron, SD Mitchell, SDMitchell, Williston, ND Bismarck, ND Bismarck, Aberdeen, SD Aberdeen, Brookings, SD Brookings, Vermillion, SD Rapid City, SD City, Rapid Watertown, SD Watertown, Sioux Falls, SD Sioux Jamestown, ND Jamestown, Grand Forks, Forks, Grand ND

Similar to previous comparisons, the amount of marketwide total fixed seats within the competitive communities reviewed varies widely. Huron, South Dakota has the highest amount of fixed seating in its community with 38,500 seats, while Williston, South Dakota incorporates the lowest amount of fixed seats, with zero. The total fixed seat average among the competitive communities (excluding Bismarck) is 13,700 seats and the median among the community set (excluding Bismarck) is 10,500 seats. Slightly lower than the average, Bismarck’s community facilities have a total of 7,600 fixed seats (all provided via the Bismarck Civic Center).

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As implied with some of the previous exhibits in this chapter, it is also useful to consider event facility space/seating levels within the comparative context of community population. As such, Exhibit 9 displays a summary of eleven individual population to facility space/seating ratio measurements. Specifically, the data shown in the exhibit links metropolitan (or county) population statistics of the competitive/regional communities to such variables as market wide flat floor event space, exhibit, meeting and ballroom space of each community’s largest flat floor event facility and total market wide seating capacity, the largest sports facility seating levels, “quality” convention space square footage and more. In interpreting these figures, a lower score for Bismarck relative to the average infers an oversupply of the space or seating variable (with such figures noted in red), while a higher score relative to the average infers an undersupply of the particular variable in question (with such figures noted in green).

Exhibit 9 Competitive/Regional Markets – Marketwide Ratios

Population Ratios Market High Market Low (excluding Bismarck) Average ND Bismarck,

Marketwide Exhibit Space 3.8 0.1 0.9 1.0 Meeting Space 16.0 0.9 5.7 2.3 Ballroom Space 7.9 1.3 3.3 2.0 Flat Floor Space 1.4 0.1 0.5 0.5 # of Fixed Seats 19.4 0.4 7.0 12.9 Total Seats 12.5 1.3 5.0 9.7

Largest Facility in Market Sellable Space 2.5 0.4 0.9 1.0 Exhibit Space 3.8 0.1 1.3 1.2 Ballroom Space 10.6 1.3 5.2 2.7 # of Fixed Seats 17.1 2.2 10.0 12.9 Total Seats 10.0 1.3 6.4 9.6

Note: “Space” represents square footage.

As presented above, the analysis using average ratios of market-wide population to facility sizing metrics indicate that, while varying slightly, Bismarck’s overall levels are generally consistent with the average competitive/regional market for most types of facility spaces. In some communities, this type of analysis suggests dramatic oversupply or undersupply situations; however, none are suggested with regard to Bismarck.

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Comparable Facilities

Additionally, certain inferences can be made by reviewing civic and convention facilities operating in similar-sized markets throughout the country. The facilities reviewed were selected based on their characteristics, total space offered and the size and location of the markets in which they are located. Exhibit 10 presents a summary of selected comparable facilities and markets analyzed.

Exhibit 10 Comparable Markets and Facilities

Arena Year Capacity Exhibit Ballroom Meeting City, State Facility Built (1) SF (2) SF SF Brookings, SD Swiftel Center 2000 3,200 0 0 6,800 Charleson, WV Charleston Civic Center 1953 13,247 50,086 0 19,427 Council Bluffs, IA Mid-America Center 2002 6,800 24,500 18,500 5,300 Duluth, MN Duluth Entertainment Convention Center 1966 5,400 63,300 38,000 44,600 Fargo, ND Fargodome 1992 19,000 0 0 13,500 Grand Forks, ND Alerus Center 2001 13,500 0 26,000 11,450 La Crosse, MN La Crosse Center 1980 4,880 50,200 6,700 2,700 Mankato, MN Alltel Center 1995 5,280 11,200 2,150 4,000 Rapid City, SD Rushmore Civic Plaza 1977 5,100 40,400 15,300 14,200 Rochester, MN Mayo Civic Center 1984 5,000 25,200 4,150 15,500 Sioux City, SD Sioux City CC / Tyson Event Center 1987 6,700 28,600 5,000 4,300 Sioux Falls, SD Sioux Falls Conv. Center & Arena 1961 4,700 33,600 16,800 11,500 St. Charles, MO St. Charles Convention Center 2005 n/a 35,700 16,200 6,500 St. Cloud, MN St. Cloud Civic Center 1989 n/a 42,000 0 12,600

(1) Fixed seating capacity (2) Does not include arena flat floor space Source: Facility management and industry publications, 2008.

Each of the listed facilities is located in a market that is similar to the Bismarck area, with respect to population size, geographic proximity to larger metropolitan areas and/or facility size/characteristics. Operational data was obtained and analyzed from these facilities and host communities to assist in the understanding of the operational characteristics of an expanded Center. Case studies of the selected facilities are presented on the following pages, highlighting the operational data that was obtained.

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Swiftel Center Brookings, South Dakota

In 2000, the City of Brookings opened the Swiftel Center, a multi-functional facility. Originally known as the Brookings Multiplex, the Center includes a 30,000-square foot arena and 6,800 square feet of meeting space. The City retains Compass, a third party management company to oversee the day-to-day operations of the facility.

The Center was built at a cost of $13.0 million. No taxes were raised to fund the facility’s construction. Two 20-year sales tax revenue bond issues totaling $12.0 million and a $1.0 million contribution from Brookings County were used to fund the project. The County maintains minority ownership of the facility as a result its investment in project funding.

The operations of the Center have historically resulted in a negative cash flow, resulting in a need for an annual operating subsidy from the City. Typically, the subsidy approximates $300,000 per year. According to facility representatives, the City recoups some or all of this annual investment through the tax revenues and economic impacts generated by Center visitors. Events held at the Center include graduations, motorsports, livestock shows, craft fairs, rodeos sports tournaments and various meeting and banquet events.

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Charleston Civic Center Charleston, West Virginia

Located in downtown Charleston, West Virginia, the Charleston Civic Center is situated where the Elk River flows into the Kanawha River. The original structure was constructed in 1953. However, in 1976, the Coliseum was built and the existing arena was converted into flat floor space. Since then, a number of renovations/additions have been completed, including a major renovation in 1994 and minor improvements in 2004.

The facility incorporates a 12,400-seat Coliseum, 50,100-square foot exhibit hall, 738-seat Little Theater and 19,500 square feet of meeting space. Currently, the Center is evaluating the feasibility of expanding the facility, to incorporate a traditional ballroom component.

In 2006, the Center hosted 343 events, including 33 convention/tradeshows that incorporated exhibits, 23 convention/conferences, 20 public/consumer shows, 253 meetings/banquets/receptions and 24 other events. Additionally, in 2006, the Center had 518 utilization days and 6.9 million square feet utilized.

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Mid-America Center Council Bluffs, Iowa

The Mid-America Center is located in Council Bluffs, Iowa, approximately 180 miles south of Sioux Falls, South Dakota. The arena has a capacity of approximately 6,800 for hockey, 7,000 for basketball and up to 7,800 for concerts, and additionally offers 12 luxury suites, 200 club seats and 560 personal seats.

The Center is part of a convention complex that opened in 2002, which incorporates 48,300 square feet of sellable event space, consisting of a 24,500-square foot exhibit hall, 18,500 square feet of ballroom space and 5,300 square feet of meeting space. The complex is owned by the City of Council Bluffs and operated by SMG.

The arena has one tenant, the Omaha Lancers of the USHL, who on average, hosts 30 games in the Mid- America Center each year. Additionally, in 2005, the Complex hosted 270 events, including the USHL games, as well as many other conventions, concerts, meetings, banquets, spectator shows and athletic events.

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Duluth Entertainment Convention Center Duluth, Minnesota

The Duluth Entertainment Convention Center (“DECC”) is located in Duluth, Minnesota, along the waterfront of Lake Superior. Originally called the Duluth Arena Auditorium, and constructed in 1966, the DECC has undergone many renovations and expansions since then, including the addition of Pioneer Hall in 1976, the $30 million convention center in the mid-1990’s, in spring of 1996 the OMNIMAX theater opened, in 2005 a 10-screen movie theater complex was added and in fall 2008, the Center will once again expand to include a new hockey arena for the University of Minnesota – Duluth men’s and women’s teams, and more parking, convention space and seating.

The Center currently incorporates a 5,400-fixed seat arena, 2,400-seat auditorium, 63,300 square feet of exhibit space, 38,000 square feet of ballroom space and 44,600 square feet of meeting space.

The Center hosts hundreds events each year including UMD hockey games, conventions, conferences, consumer and public shows, Broadway touring shows, carnivals, circuses, maritime festivals, symphony and orchestra performances, meetings, weddings and receptions.

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Fargodome Fargo, North Dakota

The Fargodome opened in December 1992, to provide the Fargo/Moorhead region with a new primary indoor event facility. In its first 15 years of operation, the Fargodome has hosted a wide variety of events including concerts, family shows, North Dakota State University football games, flat floor events and various other community and spectator events.

The Fargodome has the capacity to accommodate 27,650 for concerts, 13,410 in an “arena” configuration, 19,300 for football, 10,500 for hockey and 11, 625 for basketball. In addition, the Fargodome offers 13,500 square feet of multipurpose meeting space.

In the past three years, the Fargodome has hosted and average of 94 events. Specifically, 90, 92 and 99 events were held in 2005, 2006 and 2007 respectfully. Further, in 2007, attendance levels reached an all time high with 444,800 people. Amateur sports and flat floor events are the two largest sources of events, while NDSU football games have consistently drawn the largest attendance.

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Alerus Center Grand Forks, North Dakota

The Alerus Center is located in Grand Forks, North Dakota. The Center opened in 2001 and serves as the home of the University of North Dakota football team.

The Center’s 100,000-square foot floor enables it to accommodate a full football field, and also allows it to host large flat floor events. The Center has a capacity of 13,500 for football games, and 22,000 for concerts. In addition to the main arena, the facility features a convention center which offers a 26,000- square foot ballroom and 12 meeting rooms that accounts for nearly 11,500 square feet of meeting space.

In 2007, a $50 million development opened adjacent to the Center, including a 200-room Canad Inn hotel, a gaming lounge, restaurant, bar and 45,000-square foot indoor water park.

The Center has hosted an average of 30 spectator events per year, including six UND football games, eight concerts, two family shows, six high school/amateur sports events and eight other events. Further, the Center has hosted an average of 138 non-spectator events in the past three years, which includes 39 meetings/banquets, 29 consumer shows and 14 conventions.

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La Crosse Center La Crosse, Wisconsin

Located in downtown La Crosse, Wisconsin, the La Crosse Center is nestled along the Mississippi River. The Center opened in 1980, under the ownership and operation of the City of La Crosse. In the spring of 2000, the Center underwent a major $14 million renovation that resulted in nearly twice as much event space.

In addition to the 4,880-fixed seat arena, the Center incorporates nearly 60,000 square feet of sellable event space, including 50,200 square feet of exhibit space, 6,700 square feet of ballroom space and 2,700 square feet of meeting space.

The La Crosse Center has had a number of minor league sports tenants since its opening, including the Bobcats of the Continental Basketball League and the River Rats of the Indoor Football League. At present, the Center does not currently host a major sports tenant. In an average year, the La Crosse Center hosts an estimated 330 events, including approximately 20 state/regional conventions/conferences, 20 public/consumer shows, 12 concerts, 7 family shows and a large number of small meetings.

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Alltel Center Mankato, Minnesota

The Alltel Center (formerly the Midwest Wireless Center) opened in 1995 in Mankato, Minnesota. The facility is owned by the City of Mankato and operated by Compass Facility Management.

Midwest Wireless Center offers a 5,280-seat arena, 11,200 square feet of exhibit space, 2,150 square feet of ballroom space and 4,000 square feet of meeting space.

The Minnesota State University-Mankato men’s hockey team is the Center’s sole sports tenant. According to facility management, the Center hosts approximately 100 events in a typical year, including 20 tenant hockey games, 14 concerts, three to five family shows with a total of approximately 15 performances, eight non-tenant sports events and a variety of trade/consumer shows, community events and other miscellaneous events.

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Rushmore Civic Plaza Rushmore, South Dakota

Located in Rapid City, South Dakota, the Rushmore Plaza Civic Center is a multi-purpose facility offering a 10,000-seat arena, a 1,750-seat theater and approximately 70,000 square feet of event space. The Center opened in October 1977.

The arena has hosted a number of different sporting events including NBA exhibition games, state high school tournaments, and Arena football games, as well as national touring acts such as Garth Brooks, the Eagles and Cher.

The capacity for basketball games is estimated at 8,500 total attendees and at approximately 5,700 attendees for arena football games.

Currently, the Center is in the process of constructing a new arena that will house the Rapid City Rush of the Central Hockey League starting in the 2008-2009 season. Typical events that are hosted at the Center include the Heritage Festival, Carlos Mencia, Partnership for Indian Education, Rapid City Concert Association and Black Hills Symphony Orchestra.

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Mayo Civic Center Rochester, Minnesota

The Mayo Civic Center was originally completed in 1984. Since then, the Center has undergone two major renovations in 1997, adding a 4,150-square foot Grand Ballroom and four Civic Center suites, and 2001, which resulted in the addition of the 25,200-square foot exhibit hall. Additionally, the Center currently incorporates 15,500 square feet of meeting space, the 5,000-seat Taylor Arena, an 11,800- square foot auditorium and a 1,170-seat presentation hall.

Currently, the facility does not host a primary sports tenant. In previous years, the Center hosted a Continental Basketball Association (CBA) franchise and an International Basketball Association (IBA) franchise. Both teams subsequently relocated to other regional markets due to low attendance histories.

The Center does not have the ability to accommodate hockey or indoor football due to size constraints and seating configuration. However, the facility does host a large number of amateur sporting events, with emphasis on high school sports. In 2005, the Center hosted 375 events, including 48 entertainment events and 50 conventions.

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Sioux City Convention Center & Tyson Event Center Sioux City, Iowa

The Sioux City Convention Center opened in 1987 and is located adjacent to the Tyson Events Center and a newly renovated family community recreation facility. The Tyson Events Center was completed in December 2003.

The Arena has a capacity of approximately 6,100 for basketball, 6,800 for hockey and football and up to 10,110 for concerts. The facility has two minor league sports tenants, the Musketeers of the USHL and the Bandits of the NIFL. Together, they hosted 37 events at the Tyson Event Center in a recent year. In addition, the Center hosted 65 additional non-tenant events, including concerts, family shows, motorcycle races, monster truck rallies.

The Center offers 28,600 square feet of exhibit space, 5,000 square feet of ballroom space, and approximately 4,300 square feet of meeting space. The exhibit space is sub-divisible into three equal sections. The venue’s ten meeting rooms are spread over two levels. In a recent year, the Convention Center hosted 306 events, generating nearly 350 utilization days for the facility.

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Sioux Falls Arena & Convention Center Sioux Falls, South Dakota

The Sioux Falls Arena opened in 1961 and serves as the primary sports and entertainment facility in the Sioux Falls area. The Convention Center opened in 1997. The Arena and Convention Center are owned by the City and operated by SMG.

The Convention Center offers nearly 62,000 square feet of sellable event space, while the Arena’s capacity ranges from 4,700 for football and hockey events to 6,100 for basketball and 7,000 for end stage concerts.

The facility hosts a variety of events, including sports events, concerts, family shows, conventions, meetings and banquets. The arena has three tenants: the USHL Stampede, CBA Skyforce and NIFL Storm, who together host nearly 70 events each year. In addition the tenant sporting events, the Arena hosts 70 non-tenant events each year. In total, the Arena welcomes 442,000 attendees each year to its events.

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St. Charles Convention Center St. Charles, Missouri

The Saint Charles Convention Center is a multi-functional facility that opened in April 2005. The Center is owned by the Saint Charles County Convention and Sports Facilities Authority and the City of Saint Charles, while the Center is managed by Global Spectrum.

The Center incorporates 58,400 square feet of sellable event space, comprised of: 35,700 square feet of exhibit space, 6,500 square feet of meeting space and 16,200 square feet of ballroom space.

In 2007 alone, the Center hosted 463 events and attracted 190,000 people who used approximately 20,000 room nights in local hotels. Specifically, the Center hosted 10 conventions, 25 tradeshows, 19 consumer shows, 98 banquets, 287 meetings and 24 miscellaneous events.

There are over 2,100 hotel rooms in the greater St. Charles area. Major properties include a 296-room Embassy Suites Hotel that is attached to the Center, which is owned and operated by John Q. Hammons. The $36 million hotel and convention center unite sales and marketing staff to centralize promotions of both facilities.

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St. Cloud Civic Center St. Cloud, Minnesota

As the largest flat floor event venue in central Minnesota, the St. Cloud Civic Center has served the St. Cloud area for 17 years, attracting a variety of events and sizes. Opened in 1989, the Center serves the convention and meeting space needs of St. Cloud and central Minnesota.

The Center offers 54,600 square feet of event space, including 42,000 square feet of exhibit space and 12,600 square feet of meeting space. The City of St. Cloud has considered expanding the Center for the last few years.

The Center has averaged 375 events and over 600 utilization days over the past 8 years. In 2005, the Center hosted 385 events, the majority of which were local meetings and social events. Total attendance for the Center reached 185,501 people. During 2005, it was estimated that events at the Center generated between $15 and $18 million dollars in economic impact for the St. Cloud economy. Further, the Center generated $1.5 million in operating revenue.

Highlighted events that are held at the Civic Center include: the MN Society of Professional Surveyors, Big Boys Toy’s Show, Sport Show, MN Rural Water tradeshow, CMBA Home Show, MN Chiefs of Police, United Methodist state convention and Women’s Showcase.

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Physical Space Characteristics

The following exhibits provide comparisons of the seating space offerings at the selected comparable facilities, including exhibit, ballroom, breakout meeting and total sellable space.

Fixed Arena Seating

Exhibit 11 outlines a comparison of the total fixed seating offered at the comparable facilities reviewed.

Exhibit 11 Facility Characteristics – Total Fixed Seating

Fargo, ND 19,000

Grand Forks, ND 13,500

Charleson, WV 13,247

Bismarck, ND 7,590

Council Bluffs, IA 6,800

Sioux City, SD 6,700

Duluth, MN 5,400

Mankato, MN 5,280

Rapid City, SD 5,100

Rochester, MN 5,000

La Crosse, WI 4,880

Sioux Falls, SD 4,700 Average (excluding BCC) = 6,629 Brookings, SD 3,200 Median (excluding BCC) = 5,190

St. Cloud, MN 0

St. Charles, MO 0

0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000 20,000 Fixed Arena Seats Source: Facility management and industry publications, 2008.

The amount of total fixed seating offered at the comparable facilities reviewed varies widely, averaging over 6,600, with a median of 5,200 seats. The largest facility in terms of total fixed seats is the Dixie Fargodome, with approximately 19,000. The St. Cloud Civic Center and St. Charles Convention Center are the only facilities that do not offer an arena with fixed seats. Of the remaining facilities that have spectator seating, the Swiftel Center offers the least amount of fixed seats, with 3,200. The Bismarck Civic Center’s Arena has a fixed seating capacity of 7,600, which is higher than the average of the comparable facilities.

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Exhibit Space

Exhibit 12 presents a comparison of total prime exhibit space offered at the comparable facilities reviewed. These space levels do not include Arena flat floor space, which is also sometimes used for exhibit purposes.

Exhibit 12 Facility Characteristics – Prime Exhibit Space

Duluth, MN 63,300

La Crosse, WI 50,200

Charleson, WV 50,086

Bismarck, ND 48,600

St. Cloud, MN 42,000

Rapid City, SD 40,400

St. Charles, MO 35,700

Sioux Falls, SD 33,600

Sioux City, SD 28,600

Rochester, MN 25,200

Council Bluffs, IA 24,500

Mankato, MN 11,200 Average (excluding BCC) = 28,913 Grand Forks, ND 0 Median (excluding BCC) = 31,100

Fargo, ND 0

Brookings, SD 0

0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 Total Exhibit Space Source: Facility management and industry publications, 2008.

As presented, the Duluth Entertainment Convention Center in Duluth, Minnesota incorporates the largest amount of prime exhibit space with approximately 63,300 square feet. Three comparable facilities do not offer any prime exhibit space. The average amount of exhibit space offered at facilities offering prime exhibit space is approximately 28,900 square feet and the median square feet of exhibit space among the facilities offering it is approximately 31,100 square feet. The Bismarck Civic Center has 48,600 square feet of prime exhibit space.

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Meeting/Ballroom Space

Exhibit 13 compares the square feet of ballroom space offered at the comparable facilities.

Exhibit 13 Facility Characteristics – Ballroom Space

Duluth, MN 38,000

Grand Forks, ND 26,000

Council Bluffs, IA 18,500

Sioux Falls, SD 16,800

St. Charles, MO 16,200

Rapid City, SD 15,300

La Crosse, WI 6,700

Sioux City, SD 5,000

Rochester, MN 4,150

Mankato, MN 2,150

Bismarck, ND 0

St. Cloud, MN 0 Average (excluding BCC) = 10,629 Fargo, ND 0 Median (excluding BCC) = 5,850 Charleson, WV 0

Brookings, SD 0

0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 Total Ballroom Space

Source: Facility management and industry publications, 2008.

The Duluth Entertainment Convention Center in Duluth, Minnesota offers the most ballroom square footage with 38,000. Similar to the exhibit space exhibit, there are facilities that do not incorporate ballroom space in their facility, the average ballroom space offered is 10,600 square feet, with a median of 5,850 square feet. As shown, the Bismarck Civic Center does not offer any square feet of ballroom space.

On the following page, Exhibit 14 compares the square footage of meeting space offered among the comparable facilities.

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Exhibit 14 Facility Characteristics – Meeting Space

Duluth, MN 44,600

Charleson, WV 19,427

Bismarck, ND 17,300

Rochester, MN 15,500

Rapid City, SD 14,200

Fargo, ND 13,500

St. Cloud, MN 12,600

Sioux Falls, SD 11,500

Grand Forks, ND 11,450

Brookings, SD 6,800

St. Charles, MO 6,500

Council Bluffs, IA 5,300 Average (excluding BCC) = 12,313 Sioux City, SD 4,300 Median (excluding BCC) = 11,475

Mankato, MN 4,000

La Crosse, WI 2,700

0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000 50,000 Total Meeting Space Source: Facility management and industry publications, 2008.

The level of meeting space ranges from 2,700 square feet in La Crosse, Wisconsin at the La Crosse Center to 44,600 square feet at the Duluth Entertainment Convention Center. The average meeting space offered at the facilities is 12,300 square feet, and the median among the comparable facilities is 11,500 square feet. The Bismarck Civic Center ranks at the high end of the list with 17,300 square feet of meeting space.

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Total Sellable Space

Exhibit 15 outlines a comparison of the total sellable space (i.e., exhibit, ballroom and breakout meeting space) offered at the comparable facilities reviewed. These space levels do not include Arena flat floor space, which is also sometimes used for exhibit purposes.

Exhibit 15 Facility Characteristics – Total Sellable Space

Duluth, MN 145,900

Rapid City, SD 69,900

Charleson, WV 69,513

Bismarck, ND 65,900

Sioux Falls, SD 61,900

La Crosse, WI 59,600

St. Charles, MO 58,400

St. Cloud, MN 54,600

Council Bluffs, IA 48,300

Rochester, MN 44,850

Sioux City, SD 37,900

Grand Forks, ND 37,450 Average (excluding BCC) = 51,855 Mankato, MN 17,350 Median (excluding BCC) = 51,450

Fargo, ND 13,500

Brookings, SD 6,800

0 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 Total Sellable Space Source: Facility management and industry publications, 2008.

The amount of total sellable space (exhibit, ballroom and breakout meeting space) offered at the comparable facilities reviewed varies widely, averaging 51,900 square feet, with a median of 51,450 square feet. The largest facility in terms of total sellable space is the Duluth Entertainment Convention Center, with approximately 145,900 total sellable square feet. The Swiftel Center offers the least total sellable space, with approximately 6,800 square feet. The Bismarck Civic Center offers nearly 66,000 square feet of sellable event space, which is more than the average of the comparable facilities.

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Demographic and Socioeconomic Market Characteristics

A primary component in assessing the potential success an expanded/improved Bismarck Civic Center is the demographic and socioeconomic profile of the local market. To gain an understanding of the relative strength of the Bismarck market area, it is useful to compare various demographic and socioeconomic characteristics among the comparable markets supporting similar venues.

Hotel Rooms

Exhibit 16 presents the estimated total number of hotel rooms offered at each of the comparable markets reviewed.

Exhibit 16 Facility Characteristics – Total Hotel Rooms

Rochester, MN 5,100

Rapid City, SD 4,600

Sioux Falls, SD 4,100

Charleson, WV 3,840

Fargo, ND 3,800

Duluth, MN 2,500

Council Bluffs, IA 2,500

Bismarck, ND 2,350

St. Charles, MO 2,000

St. Cloud, MN 1,700

Grand Forks, ND 1,600

Sioux City, SD 1,300 Average (excluding Bismarck) = 2,556 La Crosse, WI 1,300 Median (excluding Bismarck) = 2,250 Mankato, MN 900

Brookings, SD 550

0 1000 2000 3000 4000 5000 6000 Total Hotel Rooms

Source: CVB websites and industry publications, 2008.

As shown in the exhibit, the highest inventory of hotel rooms within the comparable markets can be found in Rochester, Minnesota, with 5,100 rooms. The 550 rooms offered in Brookings, South Dakota represent the smallest number of rooms offered within the comparable markets reviewed. The Bismarck market offers 2,350 hotel rooms, which ranks eighth of the comparable markets reviewed, and is consistent with the average and median measurements.

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Population

Exhibit 17 presents population statistics among the comparable markets reviewed.

Exhibit 17 Market Characteristics – Total Population

Market City County 25-Mile 100-Mile 200-Mile

St. Charles, MO 62,644 342,895 1,909,472 4,037,237 9,475,093 Council Bluffs, IA 59,901 90,495 770,982 1,777,500 6,692,623 Charleston, WV 50,676 192,005 288,053 2,193,611 19,695,596 St. Cloud, MN 66,482 144,287 230,686 4,139,628 6,751,823 Sioux Falls, SD 141,058 163,742 208,673 869,767 5,815,461 Rochester, MN 94,740 138,130 192,217 4,393,066 9,645,328 Fargo, ND 91,758 133,524 181,747 617,994 2,113,546 Duluth, MN 85,380 194,979 178,611 608,180 5,678,695 La Crosse, WI 49,895 109,601 175,509 1,697,809 14,373,426 Sioux City, IA 82,571 102,170 154,189 1,682,145 4,391,975 Mankato, MN 35,263 58,609 128,012 4,282,984 8,122,940 Rapid City, SD 61,942 94,911 110,116 213,047 598,419 Bismarck, ND 56,899 75,254 95,082 212,444 845,562 Grand Forks, ND 50,066 66,243 86,723 458,598 1,284,489 Brookings, SD 18,687 28,121 40,884 646,678 5,769,876

Average (excluding Bismarck) 67,933 132,837 332,562 1,972,732 7,172,092

Bismarck Rank (out of 15) 10 12 13 15 14

Sorted by: 25-Mile Population Source: Claritas Inc. 2007; U.S. Census Data 2000.

The population of the comparable markets varies widely. Brookings, South Dakota’s population represents the lowest in terms of city population, while Sioux Falls, South Dakota’s city population of 141,100 represents the largest market population. The overall average city population (excluding Bismarck) approximates 67,900. Within a 25-mile radius, the population ranges from a low of 40,900 in Brookings, South Dakota to a high of 1.9 million in St. Charles, Missouri and a market average (excluding Bismarck) of 332,600. Within a 200-mile radius, the population ranges from a low in Rapid City, South Dakota of 598,400 to 19.7 million in Charleston, West Virginia. Nearly 845,600 people reside within 200 miles of Bismarck. The overall average population (excluding Bismarck) within a 200-mile radius approximates 7.2 million.

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Average Household Income

Exhibit 18 shows the average household income within a 25-, 100- and 200-mile radius of the comparable markets.

Exhibit 18 Market Characteristics – Average Household Income

Market City County 25-Mile 100-Mile 200-Mile

Rochester, MN $73,044 $77,937 $74,180 $73,923 $66,771 St. Charles, MO $67,047 $77,995 $68,644 $62,863 $57,101 Council Bluffs, IA $53,863 $59,421 $68,192 $61,666 $61,812 St. Cloud, MN $58,822 $62,677 $64,689 $75,036 $67,735 Sioux Falls, SD $61,540 $61,484 $63,219 $55,878 $67,469 Bismarck, ND $59,358 $61,637 $61,062 $54,018 $53,631 Mankato, MN $51,160 $57,155 $60,250 $75,004 $67,080 Fargo, ND $56,524 $60,436 $59,393 $54,337 $57,772 Sioux City, IA $55,200 $56,608 $58,820 $61,612 $59,562 Rapid City, SD $55,227 $57,530 $58,295 $53,537 $53,511 La Crosse, WI $47,672 $59,233 $58,066 $60,739 $69,366 Charleston, WV $67,143 $56,262 $55,757 $45,441 $56,573 Duluth, MN $52,858 $53,666 $55,054 $53,246 $69,826 Grand Forks, ND $53,769 $54,952 $54,898 $55,090 $53,698 Brookings, SD $51,186 $54,089 $53,375 $55,597 $68,472

Average (excluding Bismarck) $57,504 $60,675 $60,917 $60,284 $62,625

Bismarck Rank (out of 15) 5 4 6 12 14

Sorted by: 25-Mile Avg. Household Income Source: Claritas Inc. 2007; U.S. Census Data 2000.

The comparable markets’ 25-mile average household income ranges from a low of $53,400 in Brookings, South Dakota, to a high of $74,200 in Rochester, Minnesota. The average household income among the comparable markets (excluding Bismarck) in respect to the markets 25-mile household income is $60,900, which is $145 less than Bismarck’s average household income.

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Median Age

Exhibit 19 presents the median age for the selected comparable facility markets.

Exhibit 19 Market Characteristics – Median Age

Market City County 25-Mile 100-Mile 200-Mile

Grand Forks, ND 28.7 29.2 30.5 35.8 39.0 Brookings, SD 24.6 27.4 30.8 38.3 37.1 Fargo, ND 31.4 32.5 32.3 36.9 37.5 St. Cloud, MN 30.6 33.1 32.8 36.4 37.2 Mankato, MN 28.1 30.5 34.1 36.7 37.3 Council Bluffs, IA 36.6 38.5 34.8 36.4 36.9 Sioux Falls, SD 35.0 35.8 35.2 37.8 36.8 Rapid City, SD 35.8 36.3 35.8 36.5 38.7 Sioux City, IA 35.7 36.3 36.2 36.6 37.6 Rochester, MN 36.1 36.6 36.7 36.8 37.4 La Crosse, WI 32.3 35.1 37.2 38.4 37.0 Duluth, MN 36.1 40.4 37.9 40.9 37.2 St. Charles, MO 36.7 35.7 38.0 37.8 37.9 Bismarck, ND 38.1 37.7 38.0 41.8 38.6 Charleston, WV 43.1 42.6 41.8 40.2 38.7

Average (excluding Bismarck) 33.6 35.0 35.3 37.5 37.6

Bismarck Rank (out of 15) 14 12 14 15 12

Sorted by: 25-Mile Median Age Source: Claritas Inc. 2007; U.S. Census Data 2000.

As illustrated, the median age ranges from 27.4 years of age in Brookings, South Dakota, to 42.6 years of age in Charleston, West Virginia, when comparing the market’s county median age. Bismarck’s median age of 37.7 years of age, was higher than the average comparable markets (excluding Bismarck) median age of 35.0 years of age.

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Corporate Inventory

Exhibit 20 presents the number of businesses within the comparable markets analyzed.

Exhibit 20 Market Characteristics – Corporate Inventory

Market City County 25-Mile 100-Mile 200-Mile

St. Charles, MO 3,227 12,316 80,209 166,507 400,567 Council Bluffs, IA 2,059 3,033 29,777 78,299 301,185 Charleston, WV 4,619 9,173 11,857 80,023 770,051 Sioux Falls, SD 7,156 7,849 9,856 43,992 268,597 St. Cloud, MN 3,033 6,572 8,872 173,077 302,262 Fargo, ND 5,501 7,156 8,852 33,374 105,448 Duluth, MN 4,386 9,661 8,557 30,774 247,844 La Crosse, WI 2,726 4,597 7,747 76,298 612,980 Rochester, MN 4,255 5,456 7,672 184,574 429,211 Sioux City, IA 3,521 4,240 6,416 75,919 207,870 Mankato, MN 2,196 3,143 6,038 180,567 360,258 Bismarck, ND 4,236 4,671 5,595 13,231 49,644 Rapid City, SD 3,965 4,965 5,274 10,269 34,494 Grand Forks, ND 2,446 2,960 3,878 24,245 71,057 Brookings, SD 1,034 1,474 2,076 33,764 261,337

Average (excluding Bismarck) 3,580 5,900 14,077 85,120 312,369

Bismarck Rank (out of 15) 6 9 12 14 14

Sorted by: 25-Mile Corporations Source: Claritas Inc. 2007; U.S. Census Data 2000.

St. Charles, Missouri has the highest number of businesses within 25 miles with 80,200, while Brookings’ 25-mile radius only has 2,100 businesses. The average number of businesses among the comparable markets 25-mile radius (excluding Bismarck) is 14,100, which is larger than Bismarck’s 25-mile number of businesses of approximately 5,600. Under the 200-mile ring, Bismarck ranks 14 among the average comparable market, with 49,600 businesses, which is 262,700 less than the comparable market average (excluding Bismarck).

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Facility Space Extrapolation

One method of beginning to evaluate potential size parameters for any expansion of the Bismarck Civic Center is to consider the sizes of comparable facilities relative to their demographic and socioeconomic characteristics. Exhibit 21 presents a market and facility ratio analysis for an expanded Center using the average ratio of total event center sellable space to hotel rooms in the comparable markets.

Exhibit 21 Market/Facility Ratios – Event Facility Sellable Space to Market-wide Hotel Rooms

Duluth, MN 58.36

La Crosse, WI 45.85

St. Cloud, MN 32.12

St. Charles, MO 29.20

Sioux City, SD 29.15

Bismarck, ND 28.04

Grand Forks, ND 23.41

Council Bluffs, IA 19.32

Mankato, MN 19.28

Charleson, WV 18.10

Rapid City, SD 15.20

Sioux Falls, SD 15.10

Brookings, SD 12.36

Rochester, MN 8.79

Fargo, ND 3.55

0.00 10.00 20.00 30.00 40.00 50.00 60.00 70.00

As shown, Fargo, North Dakota has a ratio of 3.55 while the Duluth, Minnesota has a market ratio of 58.36. The average sellable space ratio to hotel rooms is 22.4. Based on the average of the comparable markets, an extrapolation was calculated which indicated an estimated expanded Bismarck Civic Center to be 55,400 square feet of sellable event space, which is 10,000 square feet smaller than the current facility.

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Exhibit 22 presents the comparable markets’ city, county and 25-mile, 100-mile and 200-mile population to total facility sellable space ratios, as well as an extrapolated hypothetical space estimate for a potential expanded Bismarck Civic Center based upon the comparable markets’ average ratio.

Exhibit 22 Market/Facility Ratios – Hypothetical Expanded Bismarck Civic Center Space Extrapolation (in SF)

Extrapolation Based on City County 25-Mile 100-Mile 200-Mile Avg. Metric Exhibit Space to Population 25,064 16,092 13,439 6,720 6,923 13,648 Meeting Space to Population 11,060 7,942 7,429 3,576 3,481 6,698 Ballroom Space to Population 8,931 6,879 5,932 3,537 3,754 5,807 Sellable Space to Population 45,054 30,913 26,801 13,833 14,159 26,152 Fixed Seating to Population 6,435 5,109 4,285 1,858 2,117 3,961

Exhibit Space to Hotel Rooms 31,171 Meeting Space to Hotel Rooms 13,011 Ballroom Space to Hotel Rooms 11,175 Sellable Space to Hotel Rooms 55,357 Fixed Seating to Hotel Rooms 7,653

The market ratios ranged widely within each demographic category. A potential expanded Center’s hypothetical sellable space based upon the comparable market average is 26,200 square feet based upon the comparable averages, and 55,400 square feet square feet based upon the number of hotel rooms within the market. Importantly, this type of hypothetical space level extrapolation is only one of many methods used to understand the market demand and sizing of a potential expanded Bismarck Civic Center. It does not take into consideration the specific demand generators unique to each community. These issues will be analyzed in the subsequent chapter of this report.

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4.0. INDUSTRY TRENDS ANALYSIS

The market success of an event facility can be partially attributed to the characteristics of the industry as a whole. In order to assess the current and future strength of the market with regard to event activity that could utilize a potential expanded Bismarck Civic Center, it is important to evaluate the industry trends from a national and regional perspective. Broad industry changes, characterized by—sometimes significant—retraction and expansion in convention, tradeshow, spectator and concert demand have taken place within the industry over the past two decades. Within this chapter, we present an evaluation of the following areas:

• Industry definitions and characteristics • Convention/tradeshow industry demand and supply issues • Entertainment/spectator event industry trends • Conclusions

Industry Definitions and Characteristics

The public assembly event industries are diverse and dynamic, consisting of a wide variety of events, many of which focus around a collection or gathering of individuals for the purpose of entertainment/recreation and/or face-to-face communication and the transmission of ideas/information. Typical industry event segments include:

• Conventions – Events traditionally held by professional associations of international, national, regional, state or local scope. Many of these groups tend to hold annual events that rotate among various destinations within a particular region. In addition, certain large corporations hold annual conventions. • Conferences – Meetings held by professional associations, non-local corporations and local area companies. While sometimes used interchangeably with the term “convention,” these events tend to be smaller, on average, than conventions and are also less exhibition-focused. • Tradeshows – Events traditionally held by professional associations of international, national, regional, state or local scope, as well as private events hosted by one or more corporations. Some of these groups tend to hold annual events that rotate among various destinations within a particular region, similar to conventions, while others are fixed in specific cities each year. • Consumer Shows – Exhibit-based shows are typically open to the general public and generally draw from the local area. These events tend to charge a nominal fee for entry and typically include events such as home & garden shows, boat shows, auto shows, gun shows, antique shows, career fairs, etc. • SMERF (Social, Military, Educational, Religious, Fraternal) – Events include reunion-type meetings of groups and members, educational conferences and other such events. These events tend to be more sensitive to cost aspects than association and corporate groups. • Meetings/Banquets – Events include functions hosted by local service clubs (Rotary, Shriners, and Elks) intended to share information, generate interest and spur membership. Other

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private events include local corporate meetings/training, exams, wedding receptions, anniversary/birthday parties and private banquets. • Spectator Events – Ticketed and non-ticketed, both athletic and non-athletic entertainment and educational events. Events are most often held in arena or stadium-type facilities with plenary seating. Events include professional/amateur sports, high school/collegiate sports, concerts, family and motor shows and speaking engagements. Many non-sporting spectator events generally require plenary seating, as well as a stage and sound equipment.

Exhibit 1 illustrates a summary of traditional event types along with their key characteristics. Exhibit 1 Summary of Industry Event Types

Key Facility Typical Facility Attendee Event Types Primary Purpose Requirements Used Characteristics

Conventions Information exchange, Exhibit, Ballroom Convention Center, Predominently sales & networking & Meeting space Conference Center non-local

Conferences Information exchange, Ballroom and Conference Center, Depends on scope of sales & networking Meeting space Hotel, Convention group, many are Center meeting space predominently non-local

Tradeshows Sales & Advertising Exhibit space Convention Center, Depends on scope of Exhibition Center, show, can have large Tradeshow Facility percentage non-local

Consumer Shows Sales & Advertising Exhibit space Convention Center, Mostly local Exhibition Center

Social, Military, Information exchange, Meeting, banquet, Civic/Community Ctr., Depends on scope of Educational, Religious, civic, social, networking multipurpose space Exhibition Center, group, some are Fraternal Events Conv./Conf. Center predominently non-local

Meetings / Banquets Information exchange, Meeting and Ballroom Conference Center, Typically local training, incentive Hotel

Spectator Events Entertainment Seating, stage/event floor Arena, Civic Center, Typically local Exhibition Center

A variety of types of public assembly facilities exist in communities across the country that accommodate some or all of these types of events. Certain events tend to possess very specific facility and community requirements. Located on the following page, Exhibit 2 illustrates differences in the physical characteristics and event profiles of traditional event facilities.

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Exhibit 2 Typical Public Assembly Facility Characteristics

Convention Conference Expo Community/ Spectator Equestrian Fairgrounds Center Center Center Civic Center Arena Center Complex

Multiple Indoor Multiple Indoor & Outdoor & Outdoor Exhibit, Exhibit, Spectator Meeting, Multipurpose Facilities, Dirt Facilities, Dirt Type of Space Meeting, Limited Seating, Flat Ballroom Space & Concrete, & Concrete, Ballroom Meeting Floor Space Spectator Spectator Seats Seats Fair, Ag., Conventions, Local Horse, Trade Shows, Conferences, Public Shows, Meetings & Horse, Rodeo, Spectator and Livestock, Typical Events Meetings, Meetings, Trade Shows, Banquets, Ag., Lives tock, Other Events Public Shows, Banquet, Banquets Miscellaneous Recreation, Public Shows Festivals, Public Shows Other Events Other

Adjacent Adjacent Parking, Parking, Parking, Parking, RV Parking, RV Typical Ancillary Headquarters Headquarters Accessibility, Accessibility, Acces s ibility, Hookups, Hookups, Characteristics Hotel Hotel Vis ibility Vis ibility Vis ibility Large Acreage Large Acreage

Economic Impact Limited to Limited to Limited to Limited to High Moderate Moderate Generating Ability Moderate Moderate Moderate Moderate

• Convention centers, under the traditional model, typically incorporate exhibit, meeting and ballroom space. Usually located in medium- to large-sized cities, convention centers tend to focus on attracting non-local economic impact-generating events such as conventions and tradeshows. It is imperative that convention-quality hotel inventory is located close to the center. Convention centers also tend to host a large number of secondary events, such as corporate meetings, public shows and banquets. • Conference centers tend to represent smaller facilities than convention centers, usually containing both flexible and dedicated meeting space, in addition to banquet space. Most traditional conference centers do not incorporate prime exhibit space and instead focus on accommodating local and non-local corporate meetings/conferences along with other local event activity such as private receptions and banquets. Many conference centers are situated within hotel facilities. Conference centers are often broken into several categories related to their type/focus: executive, corporate, resort and college/university. • Expo centers, or exposition/exhibition centers, traditionally consist of large exhibit-focused structures possessing limited or no breakout meeting and banquet space. Expo facilities tend to be lower cost facilities (i.e., construction cost per gross square foot) than convention and conference centers. Most of the events accommodated by traditional expo centers are local in nature and include events such as public/consumer shows, festivals and other large flat floor space using events. • Community/civic centers tend to vary widely in terms of their physical and operational characteristics. Many centers offer multipurpose space that can accommodate a wide variety of events. The large majority of event activity represents events and attendees from the

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local area and, as such, adjacent/nearby hotel inventory does not tend to be a primary concern for most events. Communities tend to develop these types of facilities for the good and benefit of the local community rather than for economic impact generating purposes. • Spectator arenas are plenary seating venues that primarily accommodate spectator events such as sporting events, concerts, family shows and circuses. Some spectator venues have the capability to configure the arena floor and/or retract some or all of its seating areas to accommodate certain types of flat floor events such as graduations, public shows, and recreation activities. • Equestrian centers are typically multi-facility complexes, often located in rural or non-urban settings. Most equestrian centers focus on accommodating horse-related shows, events and exhibitions. Typical equestrian centers include a variety of event, show and stable areas, such as arenas, exhibition facilities, show arenas, warm-up arenas, rodeo arenas, horse barns, livestock barns and other such areas. • Fairgrounds complexes are often similar to equestrian centers, including a variety of indoor and outdoor facilities suitable for equestrian, livestock, agricultural, exhibition and recreational events and activities. The primary role of these facilities is often to play host to an annual fair (i.e., County or State Fairs, etc.). Many fairgrounds complexes also integrate horse racetracks and grandstands for outdoor spectator events.

In a number of small and mid-sized communities across the country, successful event facilities have been developed that are multipurpose in nature, integrating a number of the characteristics of one or more of the facilities described above. As a result, these facilities are able to accommodate the widest variety of events, thereby maximizing their overall usage. Exhibit 3 illustrates a summary of the typical importance of various facility characteristics by event segment.

Exhibit 3 Typical Event Facility Requirements

High Exhibit/ Upscale Nearby Quality Lg. Event Banquet Breakout Spectator Nearby Secondary Visitor Finish Facility Hall Rooms Seating Parking Hotels Facilities Amenities

Conventions HIGH HIGH HIGH HIGH LOW MED HIGH LOW HIGH

Conferences HIGH MED HIGH HIGH LOW MED HIGH LOW HIGH

Meetings HIGH LOW MED HIGH LOW LOW LOW LOW MED

Banquets/Receptions HIGH LOW HIGH MED LOW MED LOW LOW MED

Tradeshows MED HIGH LOW LOW LOW HIGH MED LOW HIGH

Consumer/Public Shows LOW HIGH LOW LOW LOW HIGH LOW LOW MED

Agricultural Shows LOW HIGH LOW LOW LOW HIGH LOW HIGH LOW

Equestrian Events LOW HIGH LOW LOW MED HIGH LOW HIGH LOW

Rodeos LOW HIGH LOW LOW HIGH HIGH LOW MED LOW

Tractor Pulls LOW HIGH LOW LOW HIGH HIGH LOW MED LOW

Sporting Events LOW HIGH LOW LOW HIGH HIGH LOW LOW LOW

Concerts LOW MED LOW LOW HIGH HIGH LOW LOW MED

Festivals LOW HIGH LOW LOW LOW HIGH LOW LOW LOW

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As shown in the exhibit, different types of events can have very different preferences and requirements with regard to facility characteristics. For example, conventions typically place high premiums on high quality finish of event space, adjacent/proximity full-service hotel rooms and other visitor amenities (i.e., restaurants, retail, entertainment, etc.) in close walking distance, while consumer/public shows typically focus predominately on large, low-finish space to accommodate exhibits. Spectator seating levels and configuration is obviously important for sporting and entertainment events.

This discussion begins to lay the groundwork for some important issues that will likely affect the types of events that are or could be attracted to an expanded Civic Center. The type, level of finish, configuration and amenities of the space offered in any existing or potential facility will play a strong role in determining the ability of the facility to attract and accommodate certain types of events.

Convention / Tradeshow Industry Demand & Supply Issues

Over the past 25 years, statistics point to generally stable year-to-year growth within the convention and tradeshow industry. The only periods during which key demand measurements did not experience growth were in the early 1990s during the first Gulf War and related economic recession, and for a recent two to three-year period following the events of 9/11 and subsequent economic downturn.

The most recent industry data suggests that the nationwide convention and tradeshow industry is in the midst of a renewed expansion, with demand levels generally recovering beyond pre-9/11 levels. Exhibit 4 plots the cumulative yearly percentage changes in the largest convention and tradeshow events across the country, since 1988. In addition, change in real Gross Domestic Product is presented to demonstrate the relationship between overall economic performance and the convention and tradeshow industry.

Exhibit 4 Macro Issues – Large Tradeshow Demand Growth 190 Net Square Feet 180 Exhibiting Companies 170 Attendance Real GDP 160

150 Growth Index 1987=100 140 Base Year 130

120

110

100 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Source: Tradeshow Week, 2007; U.S. Department of Commerce, Bureau of Economic Analysis, 2007

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As shown in the exhibit on the previous page, the convention and tradeshow industry has had positive growth each year since 1988, with exception to the economic recessions that occurred in 1991 and 2001- 2002. These nationwide economic recessions resulted in a retraction in the convention and tradeshow industry as companies and associations were cutting back spending on discretionary expenses and attendees were more hesitant to travel.

Additionally, the exhibit demonstrates the connection between the convention and tradeshow industry and the economy as a whole. The convention and tradeshow industry tends to register larger swings in percentage changes each year relative to real GDP. This characteristic can be seen during the economic recessions and booms, as the following years result in sometimes dramatic swings in percentage changes for the convention and tradeshow industry demand characteristics. The dips are exacerbated, as corporate discretionary spending (which convention and tradeshow expenses falls under) is, in general, a primary target for corporate budget reductions. Nevertheless, from a long-term perspective, demand in the convention and tradeshow industry has shown to generally mirror overall national economic growth.

While the previous exhibit demonstrated the industry in terms of the largest conventions and tradeshows across the country, the results do not portray the entire convention and tradeshow industry. In the following several exhibits, the industry characteristics will be provided as determined by the Center for Exhibition Industry Research (“CEIR”). CEIR has conducted extensive research, including the sampling of more than 300 events which represents a broad cross-section of exhibit based events (specifically, events requiring 7,500 square feet or more of exhibit space).

Exhibit 5 Macro Issues – Growths in All Exhibit Event Demand

130

Net Square Feet Exhibitors 120 Attendees

Growth 110 Index 2000=100 Base Year

100

90 2000 2001 2002 2003 2004 2005 2006 2007

Source: CEIR Index Report, 2007

Consistent with the previous exhibits, CEIR data indicate that following the economic recession of 2001 and 2002, the exhibition industry has experienced steady growth over the past four years. However, in

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2007, the growth rate shown in previous years has decreased slightly, indicating a stagnant year for growth. The CEIR data show a more modest reaction to the condition in the early part of the decade. Generally speaking, the larger trade events as measured by TS200 tend to respond more significantly to economic conditions compared to the overall convention and tradeshow industry.

In addition to the CEIR data, an analysis of data contained in a proprietary database maintained by Destination Marketing Association International (formally the International Association of Convention & Visitors Bureaus) suggests similar trends, including a recent strengthening of rotating event activity. The “DMAI” data suggests that the number of industry-wide events has grown since 2004 and the average attendance per event is reaching levels that have not been seen since 2000. Additionally, the data indicates that convention-related hotel room nights are still down; however, tracking of this statistic has become increasingly difficult as a growing number of convention attendees have been booking their hotel rooms independently through online portals rather than through the event’s official block of rooms (which usually represent the only figures recorded). When coupled with the substantial strengthening and growth of the lodging industry (in terms of performance statistics and new construction projects) and an analyzed sampling of convention center occupancy levels, it further provides additional evidence that the convention, exhibitions and meetings industry is in the midst of a recovery following a short period of contraction in the early years of this decade.

Detailed surveys with meeting planners of major rotating national and regional conventions, conferences and tradeshows also support a pattern of modest industry growth. Over the past eight years, CSL International conducted four major telephone surveys of meeting planners that included questions concerning the expected change in their group’s number of events, space needs and attendance levels. It is believed that this data is a strong reflection of the industry’s sentiment and represents an informal outlook concerning the near-term trends affecting the industry.

Exhibit 6 Future Outlook by Meeting Planners Expected Change in Space Requirements Over Next 5 Years

13% 9% 9% Increase Significantly 8% 14%

53% 42% 65% Increase Slightly 51% 43%

29% 40% 24% Remain Constant 37% 38%

5% 2000 Survey 5% 2% Decrease Slightly 3% 2002 Survey 4% 2004 Survey 0% Decrease 3% 2006 Survey 0% 0% 2008 Survey Significantly 1%

0% 10% 20% 30% 40% 50% 60% 70%

Source: CSL International National/Regional Convention Planner Surveys, 2000 – 2008.

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As shown in the exhibit on the previous page, data obtained through the 2000 survey (prior to 9/11 and the economic downturn) show a “bullish” outlook on continued industry growth, with 13 percent of respondents indicating that they expect their group’s space needs to “increase significantly”. In the months following 9/11, the data exhibit a more reserved future outlook, with 40 percent indicating that space needs are expected to “remain constant” and the first incidence of a small percentage indicating that they may “decrease significantly”. In the latest 2006 and 2008 surveys, indications point to varying, yet positive industry growth opinions. Overall, the survey data support a generally positive outlook on future industry growth, with some tentativeness that is likely shaped by the tumultuous events over the past six years and the relatively gradual economic recovery presently underway.

Tradeshow Week produces yearly reports that inventory the supply characteristics of the industry. The data reflect the addition, renovation and removal of exhibit space within facilities nationwide that offer exhibit space. The Tradeshow Week data suggests a general increase in supply each year since 1990 with two exceptions of years in which supply generally remained stagnant (less than one percent decreases). When overlaid with the demand of net square footage required by conventions and tradeshows, the results indicate a supply “echo effect.” Demand in this case reflects data for the TS200, or the largest 200 tradeshows in the industry.

The echo effect demonstrates that when there is an increase in demand and occupancy of existing facilities, communities start planning an increase of space to their markets. However, as there are several years of lag time for planning and construction until the supply comes to fruition, an echo effect between supply and demand takes place. The supply and demand is shown as a cumulative change from year to year in Exhibit 7.

Exhibit 7 Macro Issues – Convention Center Supply vs. Large TS Demand

200

Supply: Venue Exhibit Space 175 Demand: Net Square Feet

Growth 150 Index 1989=100 Base Year 125

100

75 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Source: Tradeshow Week, Tradeshow Week Major Exhibit Hall Directory, 2007.

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The cumulative growth of both supply and demand, presented in the previous exhibit, further demonstrates the echo relationship of industry supply and demand. There is potential concern that the sizable gab between supply and demand in the last few years indicates a general oversupply in the industry. Overall, industry trends have demonstrated that the demand will adjust to meet supply, and vice versa.

Exhibit 8 presents the supply and demand characteristics as tracked by the CEIR data, which represents a greater portion of exhibit-based events and the industry as a whole.

Exhibit 8 Macro Issues – CC Supply vs. All Exhibit Event Demand

140 CEIR Demand Index vs. Tradeshow Week Exhibit Supply Net Square Feet 130 Exhibit Space Supply

120 Growth Index 2000=100 Base Year 110

100

90 2000 2001 2002 2003 2004 2005 2006 2007 Source: CEIR Index Report, 2007; Tradeshow Week Major Exhibit Hall Directory, 2007.

Similar to the previous exhibit focusing on the largest convention and tradeshow events, the above exhibit shows a general lag in demand of exhibit square feet to industry exhibit space supply in the last four years. However, it is more important to note that the sizable supply/demand gap in 2004 and 2005 is less pronounced when considering a broader measure of demand as presented by CEIR.

While it is believed that challenges have and will continue to exist in certain localized markets, every community and destination is unique and application of blanket industry-wide, macro assessments of supply and demand phenomena are often ill-advised. To the contrary, an experienced, thorough approach in measuring the unique demand generators and associated costs and benefits in a specific community is the most effective way in which to evaluate potential development projects requiring public investment, which is the aim of this study.

While much of this chapter has focused on national industry demand and supply trends, it is critical to consider this information in appropriate context. While most relevant for large, top-tier convention

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destinations, most information pertaining to the health of the national convention industry holds little relevance for small and mid-sized destinations. The most important event segments for many of these smaller markets tend to be local events and state and regional events (rather than national events). This is normally reflected in the event profiles of convention facilities operating in these markets. As an illustration, Exhibit 9 presents an aggregated summary of the typical event profiles of a selection of small and mid-sized convention centers versus large convention centers.

Exhibit 9 Macro Issues – Typical Convention/Conference Center Event Mix

Typical Typical Small/Medium Large Center Center

84% 40%

21% 2% 14% 39% National Events State/Regional Events Local/Other Events Source: CSL International analysis of convention center event data, 2007.

Entertainment / Spectator Event Industry Trends

The spectator event industry has similarly been evolving in recent years and is affected by both some of the same forces affecting the convention and tradeshow industry, as well as different ones. Of particular importance relative to the spectator event industry are recent trends related to touring concerts, which can provide facilities with some of their most visible and lucrative events.

Live Concert Economics

The economics of the concert industry have changed substantially over the past several years as acts have demanded higher guarantees, resulting in an upward pressure on tickets prices in order to generate higher gross ticket sales. The upward trend in ticket prices has increased gross ticket sales to record levels, but has negatively impacted the attendance at concert events over the past several years. The result of these trends has produced lower margins for concert promoters and live music venues.

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The graphic to the right illustrates a general Overview of Concert Economics breakdown of the average dollar spent on a concert Flow of Ticket Revenue ticket. Concert ticket revenue is generally allocated between the touring act, show expenses and the promoter. While each deal is unique and can vary considerably from market to market, concert ticket revenue is generally allocated as follows: approximately 60 to 70 percent of the ticket price is paid to the performer as their guarantee; approximately 20 percent pays for show expenses Touring Show Promoter Act Expenses Profit including staffing, utilities, facility rent and other such 60% - 70% 20% 10% - 20% costs, and approximately 10 to 20 percent is retained Note: These percentages can vary substantially from act-to-act and market-to-market. by the promoter.

The venue operator generally receives revenue from rent, facility fees, premium seating, ticket sales rebates, concessions, merchandise, parking and advertising/sponsorships.

An integral component of concert economics is the talent cost paid to the performers. Over the past several years, talent costs have increased substantially, impacting the industry in terms of increased ticket prices and lower operating margins. While there is not a public source of information that tracks talent cost trends, discussions with amphitheatre operators and concert promoters indicate that cost as a percentage of ticket sales was approximately 50 to 55 percent nearly 10 to 12 years ago. Today, talent cost as a percentage of ticket sales, on average, is approximately 60 to 70 percent. Because each deal is unique and varies considerably by act and market, the ranges presented herein are provided as a means of conveying the significant increase in talent costs over the past 10 to 12 years. The result of increased talent costs have generally served to reduce the profitability of live concert venues.

Concert Attendance

Pollstar publishes a concert industry periodical and collects a variety of data related to concert trends, including an annual recap of the top 100 concert tours. Exhibit 10, located on the following page, summarizes average attendance per concert for top 100 touring acts annually from 1998 through 2007, as well as the percentage of tours averaging more than 7,000 attendees.

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Exhibit 10 Average Attendance and Percentage of Tours Averaging More than 7,000 Attendees – Top 100 Tours 1998 - 2007

9,000 100% 7,947 7,873 8,000 7,748 7,278 7,304 7,455 6,861 7,027 6,902 7,000 6,595 80%

6,000 56% 55% 60% 51% 53% 53% 5,000 49% 50% 50% 48% 41% 4,000 40% 3,000

2,000 20% 1,000

0 0% 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Average Attendance % of Tours w/ 7,000+ Average Attendance

Source: Pollstar

As shown, the top 100 drawing touring acts since 1998 have drawn average attendance of approximately 6,600 to 7,950 per show and no more than 56 percent of the top acts averaged more than 7,000 attendees per show. As will be discussed later, this is indicative of a growing trend throughout the concert industry towards a greater number of mid-sized concerts that will generally draw fewer than 8,000 people per event.

When reviewing the top 50 touring acts since 1998, the average attendance per show ranges from approximately 11,000 to 13,000, and when reviewing the top 25 touring acts this attendance range increases to between 13,700 and 16,400 per show. It is important to note that many of the largest tours are held in a variety of venues including stadiums, amphitheaters and arenas. The increased capacity in some of these larger venues significantly increases the average attendance they attract per show.

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In order to further analyze the drawing power of the top 100 touring acts we have analyzed the average number of tickets sold per show for the 2007 calendar year. The following exhibit summarizes the results.

Exhibit 11 Average Tickets Sold Per Show – Top 100 Tours of 2007

70,000

Average: 9,100 60,000 Median: 7,500

50,000

40,000

30,000 Total Tickets Tickets Sold Total 20,000

10,000 7,000

0 Events Source: Pollstar

As shown, of the top 100 tours in 2007, 47 percent averaged fewer than 7,000 attendees per show and 66 percent averaged fewer than 10,000 attendees per show. These shows may choose to play a smaller arena in a market such as Bismarck rather than playing to the large capacity of other larger metropolitan venues. The Bismarck Civic Center currently has 7,600 fixed seats, with a concert capacity of 10,100, which as already mentioned captures nearly 70 percent.

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Concert Ticket Prices Trends

In general, ticket prices are determined by concert promoters and are based on several factors including but not limited to the guarantee/percentage of ticket sales paid to an act, anticipated event expenses, the desired level of promoter profit and the anticipated attendance for the show. Exhibit 12 summarizes the average ticket price of Pollstar’s top 100 concert tours over the past 12 years.

Exhibit 12 Top 100 Concert Tours

$70.00 $61.59 $62.05 $60.00 $56.88 $52.39 $50.35 $50.00 $46.56 $43.86 $40.74 $40.00 $36.84 $32.20 $29.81 $30.00 $25.81

$20.00

$10.00

$0.00 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Average Ticket Price Source: Pollstar

As illustrated, the average ticket price for the top 100 concert tours was $62.05 in 2007, representing a slight increase over the average ticket price in 2006. Over the past 10 years, the average ticket price to the top 100 tours has approximately doubled. It is important to note that these ticket prices do not include additional charges such as convenience or handling charges, facility fees, parking charges, or taxes which can add upwards of $5 to $15 to the cost of a ticket in most markets.

Over the past 12 years, the average annual growth rate in concert ticket prices was approximately 8.3 percent. During this same time period, the Consumer Price Index (CPI) increased at an average annual rate of 2.6 percent. The substantial increase in concert ticket prices is attributed to several factors, including but not limited to:

• Realization by acts and promoters that patrons were willing to purchase tickets for more than face value from ticket brokers/scalpers in order to see their favorite acts; • Increased guarantees demanded by artists as the income from album sales have decreased; • Consolidation in the concert promotion business in which the largest promoters are paying higher guarantees in order to attract acts; and, • The baby boomer generation, with higher disposable incomes, is more price elastic and is more willing to pay top dollar to see certain acts.

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Industry insiders have expressed concerns over the escalation in concert ticket prices for the past several years and believe that many fans are being priced out of the market as evidenced by fewer sellouts and lower attendance trends.

Venues Played

In general, the busiest season for live-performances and concerts spans Memorial Day to Labor Day. A number of artists prefer to book the majority of their shows in the summer months utilizing outdoor venues such as amphitheatres. Most artists and live-entertainment promoters feel there is an excess of competition during the autumn and winter months for the arena-touring circuit due to sporting events being held in conjunction at the arenas. The touring schedule is a very big component to be considered when acts decide on what type of venue to book.

Trends in the industry related to various venues available for acts to perform at have changed over the years. Due to the increasing level of venue development, artists and shows have a number of more options than in times past. Venues ranging from mega-theaters, amphitheatres, arenas, soccer stadiums, clubs and smaller theaters are available. In recent years, the industry has seen a trend towards more small-to-mid sized venues in the range of 3,000 to 7,000 seats.

Conclusions

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5.0. MARKET DEMAND ANALYSIS

The purpose of this chapter is to provide an analysis of the estimated market demand for a potential expansion to the Bismarck Civic Center. To form a basis for the analysis, a variety of techniques were used. Specifically, detailed telephone interviews were completed with convention, tradeshow, conference and meeting planners, representing key event segments that could use an expanded Center. This survey-based technique provides a detailed understanding of potential user needs, their willingness to use the Center, as well as overall perceptions of Bismarck as a potential host community for their event.

The market analysis has also been supplemented with data from previous studies, operating results from competitive/comparable facilities and our review of local market conditions and visitor amenity infrastructure in Bismarck.

Survey Research

The purpose of this section is to provide a summary of the survey research conducted with respect to a potential expansion to the Bismarck Civic Center. Specifically, detailed telephone interviews were completed with event planners representing key event segments that could use an expanded Center, with a focus on groups with rotating conventions, conferences, tradeshows and meetings that could use the primary space additions outlined in Alternate 4 of the 2007 Master Plan. This survey-based technique provides a detailed understanding of potential user needs, their willingness to use an expanded facility, as well as overall perceptions of Bismarck as a potential host community for their event.

Given Bismarck’s local market characteristics and the event profiles of other comparable civic/convention facilities in similar markets, it is believed that the primary non-local event markets for a potentially expanded Center would predominately be events hosted by state and regional groups. Additionally, as will be discussed in a subsequent chapter, local events (as in nearly all civic/convention facilities) would be expected to contribute the largest share of facility use (in terms of total number of events). While local events tend to be the largest users of facilities, they generate little new economic impact for host communities (as opposed to the room nights and new spending generated by non-local event attendees and exhibitors). As such, estimation of the market demand associated with non-local state and regional groups is normally of particular interest for communities evaluating facility development projects.

In order to test the potential event market for an expanded Center, a detailed telephone survey was conducted with planners of state and regional associations. The survey consisted of more than 300 “dialings”, resulting in completed interviews with 72 individual planners, representing more than 100 recurring events. Surveyed groups included professional associations, SMERF (social, military, education, religious, fraternal) groups, corporate, trade and other miscellaneous rotating events.

Relative to other states in the country, the estimated population of state and regional groups in North Dakota with recurring, rotating events is estimated to be lower than the average U.S. state. In general, the population of these groups is often directly correlated to both the resident and corporate population of host states/regions.

A primary objective of the survey of the state and regional organizations was to ascertain their perceived interest in using an expanded Center for one or more future events. The events identified through the state surveys were analyzed in terms of potential for being held in Bismarck and in terms of attributes unique to the individual events. The survey results produced information on the likelihood concerning state and regional organization planners rotating their event(s) to Bismarck, as well as specific event characteristics of those events that represent the potential event markets.

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Survey respondents were asked how many recurring off-site events their organizations produce annually. As presented in Exhibit 1, survey results indicate that 88 percent of the state and regional organizations produce one major off-site event annually, while 11 and one percent hold two and three events annually, respectively. Secondary events, beyond the primary annual event held by all the respondents, tend to be smaller events that are important, nonetheless, to communities through their generation of economic impacts.

Exhibit 1 Telephone Survey – Total Number of Events Produced Annually

One 88%

Two 11%

Three 1%

0% 20% 40% 60% 80% 100%

Source: CSL State & Regional Organization Survey, 2008.

One of the initial questions posed to survey respondents focused on groups’ past experience hosting events in Bismarck. As illustrated in Exhibit 2 on the following page, 85 percent of the state and regional organizations surveyed had used Bismarck as a site for an event in the past. This indicates that a substantial portion of Bismarck’s potential event market is presently being accommodated by existing local event facilities.

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Exhibit 2 Telephone Survey – Past Utilization of Bismarck Area Facilities

Yes 85%

Where have you held your event in Bismarck?

Ramkota, No 51%

15% Bismarck Civic Center, 8%

Radisson, Other, 30% 11% Source: CSL State & Regional Organization Survey, 2008.

Of the respondents that have held an event in the Bismarck area, the majority of respondents (51 percent) indicated they had utilized the Best Western Ramkota for their event, while 11 percent had utilized the Radisson and eight percent the Bismarck Civic Center. This represents a significant percentage of the market, indicating that the Ramkota is able to accommodate a relatively large portion of the rotating event market.

Likelihood of Utilizing an Expanded Bismarck Civic Center

State and regional organization planners were asked to indicate the likelihood of their organization using an expanded Center, assuming it and the area’s hotel inventory meets the needs of their event(s). Responses related to state and regional groups surveyed are presented in Exhibit 3, on the following page.

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Exhibit 3 Telephone Survey – Likelihood of Utilizing an Expanded Bismarck Civic Center

Definitely 22%

Likely 19%

Possibly 38%

Not Likely 14%

Positive Response = 79% Negative Response = 21% Definitely Not 7%

0% 5% 10% 15% 20% 25% 30% 35% 40%

Source: CSL State & Regional Organization Survey, 2008.

The overall positive interest by respondents in rotating one or more events to Bismarck if sufficient facility space and hotel inventory existed is 79 percent. Specifically, 22 percent indicated their group would "definitely" hold an event in Bismarck, 19 percent "likely," 38 percent "possibly," 14 percent "not likely," and seven percent "definitely not." The large concentration of positive interest responses in the “possibly” category is typical in surveys of this nature. Based on other surveys that CSL has completed in recent years, Bismarck’s response is characterized as a moderate to high interest level. However, it is important to remember that a significant portion of those groups surveyed indicated that they have held an event in Bismarck in the past.

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In order to provide a comparative basis (or context) for Bismarck’s measured level of interest, Exhibit 4 presents a summary of interest levels measured through a number of similar state and regional organization telephone surveys recently conducted for comparable CSL studies. Each of the communities listed represents small or medium-sized communities.

Exhibit 4 Telephone Survey –Bismarck Comparison of Interest Levels with Other Similar Studies

Bismarck, ND Bismarck, Richmond, IN Charleston WV , Appleton, WI TX Temple, Stillwater, OK Plainfield, IN Pinehurst, NC Haven,New CT Waterbury, CT VA Arlington, FL Sarasota, Midland, TX Hammond, LA Lansing, MI Boise, ID Grand Junction, CO Provo, UT MO Branson, Braunfels,New TX St. Cloud, MN Carbon County, UT McAllen, TX Boulder, CO (1) Average

Interest Levels: Definitely Use 22% 1% 29% 11% 0% 15% 11% 6% 12% 15% 12% 11% 5% 12% 33% 24% 11% 11% 10% 2% 8% 6% 4% 6% 11% Likely Use 19% 3% 10% 24% 4% 19% 14% 18% 18% 18% 18% 26% 11% 11% 12% 29% 6% 16% 13% 10% 10% 8% 7% 13% 14% Possibly Use 38% 33% 31% 24% 17% 38% 41% 27% 32% 35% 40% 16% 30% 42% 30% 9% 36% 40% 17% 33% 27% 40% 18% 26% 30% Not Likely Use 14% 31% 15% 19% 44% 19% 24% 29% 20% 15% 25% 37% 25% 25% 7% 13% 32% 20% 27% 30% 28% 15% 24% 23% 24% Definitely Not Use 7% 32% 14% 22% 35% 9% 10% 20% 18% 17% 5% 10% 29% 10% 18% 4% 15% 13% 33% 25% 27% 32% 47% 32% 21%

Positive Response 79% 37% 70% 59% 21% 72% 66% 51% 62% 68% 70% 53% 46% 65% 75% 62% 53% 67% 40% 45% 45% 54% 29% 45% 55%

Strength of Interest (2) 3.91 0.91 4.02 2.78 0.54 3.21 2.62 2.04 2.74 3.10 2.90 2.72 1.65 2.59 4.50 4.03 2.12 2.70 1.99 1.36 1.84 1.80 1.11 1.77 2.39

Population Basis (3) 0.51 1.23 0.53 1.24 2.29 0.61 1.23 1.30 0.96 0.96 1.40 1.82 2.29 0.87 1.74 0.61 1.18 0.58 1.10 2.29 1.24 0.58 2.29 1.18 1.28

Demand Index 1.99 1.12 2.13 3.45 1.24 1.96 3.22 2.65 2.63 2.98 4.06 4.95 3.78 2.25 7.83 2.46 2.50 1.57 2.19 3.11 2.28 1.04 2.54 2.09 3.07

Note: Data represented includes all organizations interviewed (1) Average excludes Bismarck (2) Comparative strength rating that applies weighting to positive responses, with higher weight applied to “definitely use” vs. lower weight for “possibly use.” Strongest possible score under this rating equals 10 (i.e., if “definitely use” = 100%) (3) Represents estimated size of state/regional event population (average state = 1.00) Source: Recent CSL International state/regional organization telephone surveys.

As presented in the exhibit, Bismarck’s overall positive response percentage (“definitely,” “likely,” and “possibly”) of 79 percent is significantly higher than the average of the similar study surveys conducted of 55 percent. Further, while the overall positive response percentage is useful in comparatively evaluating the general interest in a particular destination, it is important to recognize differences in the “strength” of specific stated interest. To better assess these variations, a formula was developed to consider the “strength of interest,” whereby a weighting system is applied to positive responses. The highest weight is applied to a “definitely use” response, while the lowest weight is applied to a “possibly use” response. Using this method, Bismarck again measures significantly higher than the average comparable survey in terms of its “strength of interest” score (3.91 versus an average survey score of 2.39), reflecting stronger than average positive response percentages among the highest weighted categories (i.e., “definitely” and “likely”).

As each convention destination has a different population of rotating state/regional events, a “demand index” was formulated. The “demand index” uses the “strength of interest” score for each market and weights it against the estimated population base of rotating events. Specifically, it is estimated that the number of rotating events that have North Dakota within their rotation region is significantly lower than that of the average U.S. state. It is important that this analysis is a characterization of comparative gross

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demand, but does not take into consideration (1) competition from other regional convention/conference facilities, (2) the specific ability of a local community to accommodate this demand through its amenity package and the unique characteristics of the ultimately developed conference center and its site characteristics, and (3) other quantifiable and non-quantifiable cost/benefit justifications for considering facility development. Overall, despite Bismarck's high positive response and strength of interest levels, applying the population basis metric results in a lower figure for Bismarck relative to the other CSL surveys completed. This begins to provide context for subsequent event capture estimates derived partially from the interest responses collected through the survey. This information, combined with the relatively high percentage of surveyed groups indicating that they have used Bismarck facilities in the past, suggest a somewhat limited opportunity to generate significant new non-local event activity through the contemplated Center expansion.

Facility Usage Characteristics

Rotating events typically have specific preferences and/or requirements regarding the months in which their event can occur. Likewise, organization planners typically employ a particular rotational policy that allows the event to return to a specific location only after a certain period of time.

Exhibit 5 presents the seasonality patterns for those state and regional events that represent the potential market demand for a potentially expanded Center.

Exhibit 5 Telephone Survey – Event Seasonality

18% 16% 16% 16%

14% 12% 12% 12% 10% 10%

8% 6% 6% 6% 6% 5% 4% 4% 4% 3%

0% January February March April May June July August September October November December

Note: Of those respondents with a positive interest in Bismarck. Source: CSL State & Regional Organization Survey, 2008.

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Of the 79 percent of interviewees responding with a positive interest toward an expanded Center, it was found that event seasonality tends to peak in the spring (February through April) and late fall months (September and October) and subside in the other summer and winter months of the year. This type of spring and fall seasonality pattern is typical within the industry.

It was also found that the average number of days the facility would be used, per event, among those expressing a positive interest in Bismarck is 3.9 days. Exhibit 6 illustrates the distribution of average estimated move-in, move-out and meeting/event days indicated through the survey via interested respondents.

Exhibit 6 Telephone Survey – Use Characteristics & Requirements

Move-Out Move-In Days, Days, 0.6 1.0

Event Days, 2.3 Note: Of those respondents with a positive interest in Bismarck. Source: CSL State & Regional Organization Survey, 2008.

Hotel Requirements

As discussed throughout this report, one of the most important aspects in attracting conventions and conferences is the availability of committable, convention-quality hotel rooms. “Convention-quality” is a term that varies based on the particular community and type of group considered. Some state and regional organizations with an interest in Bismarck would likely be willing to use a significant portion of the local area’s existing and planned quality properties. However, some state and regional organizations will likely require one or more full-service hotel properties of a quality higher (or a more proximately- located product) than that presently offered in the Bismarck area.

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Although a headquarters hotel may be required, state and regional organization events with a larger membership base may also use additional hotel properties in order to achieve their room blocks. Exhibit 7 presents a summary of the number of hotels that state and regional organization events are willing to use to fill their room blocks.

Exhibit 7 Telephone Survey – Number of Hotel Properties Willing to Use to Fulfill Block

Four or More 12%

Three 7%

Two 24%

One 57%

0% 10% 20% 30% 40% 50% 60%

Note: Of those respondents with a positive interest in Bismarck. Source: CSL State & Regional Organization Survey, 2008.

As shown above, 43 percent of the state and regional organization market would be willing to assemble a room block in more than one hotel property. Generally, groups with a large delegate attendance use multiple hotel properties, while a smaller group will typically only use one or two properties. The majority (57 percent) of respondents indicated that their event is willing to only use a single hotel (the vast majority of which are relatively small to mid-sized events that could reasonably expect to fit in a single hotel property).

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Furthermore, when considering hotel capacity, it is important to realize that the percentage of rooms that any one given hotel property is willing to “block” or “commit” in the future (i.e., as part of a booked convention) is typically less than 100 percent of the available inventory. In many cases, the committable amount ranges between 70 and 80 percent. Exhibit 8 presents a summary of peak night hotel room requirements by events representing the primary market for an expanded Center.

Exhibit 8 Telephone Survey – Total Hotel Rooms Required

1,200

1,000 Average – 145 800 Median – 100

ASSUMED 600 COMMITTABLE ROOMS (1)

400

Peak Hotel Rooms Required Ramkota (215) 200 Radisson (150)

0 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% 55% 60% 65% 70% 75% 80% 85% 90% 95% 100% Percent of Market Captured

(1) Assumed committable rooms represents a hypothetical 70% block of total available rooms per major properties listed Note: Of those respondents with a positive interest in Bismarck. Source: CSL State & Regional Organization Survey, 2008.

As shown, 90 percent of Bismarck’s potential state and regional organization event market requires less than 200 hotel rooms, while 75 percent of potential events require less than 170 peak night rooms. This is a reflection of the mid-sized nature comprising Bismarck’s estimated state and regional market. Currently, Bismarck has two properties that are considered “convention-quality” and are large enough to support room blocks. Both the Ramkota and Radisson have been estimated to have over 150 committable rooms for events, which can accommodate the majority of Bismarck’s potential event market.

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Facility Space Requirements

While conducting interviews with various state/regional organizations, those respondents expressing a positive interest in Bismarck indicated their organization’s approximate need for square footage according to type of facility space. As indicated by the following exhibits, these space requirements are separated into the need for total exhibit space, total meeting space and total ballroom space. State and regional organization planners were first asked whether exhibit space was required for their event, with responses summarized in Exhibit 9.

Exhibit 9 Telephone Survey – Exhibit Space Required No, 38%

Yes, 62%

Note: Of those respondents with a positive interest in Bismarck. Source: CSL State & Regional Organization Survey, 2008.

As shown, 62 percent of surveyed planners responded that their event requires exhibit space. Exhibit 10 summarizes the average exhibit space level associated with the state and regional event market.

Exhibit 10 Telephone Survey – Total Exhibit Space Required

80,000 BCC

70,000 Average – 9,643 sq ft. 60,000 Median – 5,400 sq ft.

50,000

40,000

30,000

20,000 Gross Square Feet of Exhibit Space 10,000 Ramkota

Radisson 0 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% 55% 60% 65% 70% 75% 80% 85% 90% 95% 100% Percent of Market Captured Note: Of those respondents with a positive interest in Bismarck. Source: CSL State & Regional Organization Survey, 2008.

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As shown on the previous page, of the 62 percent of Bismarck’s potential state and regional organization event market that require exhibit space, the average amount of exhibit space required by Bismarck’s state/regional organization market is approximately 9,600 square feet, with 90 percent of Bismarck’s market requiring 13,000 square feet of exhibit space or less. Thirty-eight percent of Bismarck’s market potential does not require exhibit space as their events lack a tradeshow/exhibit component. Additionally, the exhibit demonstrates the Center's current inventory of exhibit space (including the Arena floor), which would meet the needs of virtually 100 percent of Bismarck’s potential event market. The Center's Exhibit Hall alone can accommodate more than 95 percent of the market. Currently, the Best Western Ramkota and Radisson do not offer exhibit space; however, some of these groups are using the facility's ballroom space for its exhibit needs.

Breakout meeting space is a significant portion of a “complete” convention facility. State and regional organization event planners were also asked to estimate the average meeting space levels for their events. Because meeting room space can be used for many different purposes, actual square footage requirements can vary considerably. Responses are summarized below in Exhibit 11.

Exhibit 11 Telephone Survey – Total Meeting Space Required 60,000

50,000 Average – 10,010 sq ft. Median – 6,750 sq ft. 40,000

30,000

20,000 BCC

10,000 Gross Square Feet of Meeting Space Radisson

0 Ramkota 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% 55% 60% 65% 70% 75% 80% 85% 90% 95% 100% Percent of Market Captured Note: Of those respondents with a positive interest in Bismarck. Source: CSL State & Regional Organization Survey, 2008.

As shown, in order to capture approximately 90 percent of Bismarck’s market, more than 24,000 square feet of breakout meeting space is required. It is important to note that other facility space, such as ballroom space (and even exhibit space in some cases) can often be used to accommodate meeting space requirements. Currently, the meeting space levels at the Bismarck Civic Center can accommodate 85 percent of the potential event market.

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Ballroom space is the most versatile space offered in most convention facilities. Ballrooms are regularly subdivided and concurrent events and/or activities are held in them. The Bismarck Civic Center presently does not incorporate any ballroom space. Event planners were also asked to estimate the average amount of ballroom space used for their events. Presented below, Exhibit 12 illustrates that 90 percent of Bismarck’s state and regional organization event market requires 9,000 square feet of dedicated ballroom space or less.

Exhibit 12 Telephone Survey – Total Ballroom Space Required

25,000

Average – 4,390 sq ft. 20,000 Median – 3,000 sq ft. Ramkota

15,000

10,000

5,000 Radisson Gross Square Feet of Ballroom Space

0 BCC 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% 55% 60% 65% 70% 75% 80% 85% 90% 95% 100% Percent of Market Captured Note: Of those respondents with a positive interest in Bismarck. Source: CSL State & Regional Organization Survey, 2008.

As shown, the Radisson has nearly 4,000 square feet of ballroom space which can accommodate 60 percent of the event market and the Best Western Ramkota’s 16,500 square feet of ballroom space can accommodate over 95 percent of the potential event market indicated through the telephone survey of state and regional event planners.

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Many planned conferences, conventions or meetings have seated banquets as part of the event. Exhibit 13 displays event planners’ estimated seated ballroom attendance for their events.

Exhibit 13 Telephone Survey – Average Ballroom Function Attendance

1,500

1,200 Average –283 Median – 200

900

600 Ballroom Attendance Ballroom

300

0 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% 55% 60% 65% 70% 75% 80% 85% 90% 95% 100% Percent of Market Captured Note: Of those respondents with a positive interest in Bismarck. Source: CSL State & Regional Organization Survey, 2008.

In order to capture 90 percent of its state and regional organization event market, an expanded Center would need food function space (ballroom) for nearly 600 attendees. Exhibit 14 summarizes the total sellable space levels associated with the state/regional event market.

Exhibit 14 Telephone Survey –Total Sellable Space Required

150,000

Average – 19,850 sq ft. 120,000 Median – 13,800 sq ft.

BCC 90,000

60,000

30,000 Ramkota Gross Square Feet of Sellable Space

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As shown on the previous page, state and regional groups surveyed require an average of 19,850 square feet and a median of 13,800 square feet of sellable space for their events. In order to capture 90 percent of the Bismarck potential event market, 43,500 square feet of sellable event space would be required. Further, the current space offerings at the Center can theoretically accommodate over 95 percent of the event market (however, types and configuration of space offerings at the existing Center very likely results in a lower capture percentage), while the Ramkota and Radisson can theoretically accommodate 75 and 40 percent, respectfully.

Delegate Attendance

Event planners were asked to estimate the average delegate attendance levels for their events. These figures exclude spouses and guests of the event’s delegates. Responses are summarized in Exhibit 15.

Exhibit 15 Telephone Survey – Average Attendance

Delegate Exhibitor

1,500

1,200

900

600 Delegate Attendance Delegate 300

0 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% 55% 60% 65% 70% 75% 80% 85% 90% 95% Percent of Market Captured Note: Of those respondents with a positive interest in Bismarck. Source: CSL State & Regional Organization Survey, 2008.

This exhibit illustrates the percentage of the potential market represented by various levels of attendees to Bismarck events. As shown, nearly 50 percent of the Bismarck potential state and regional organization event market will have approximately 250 attendees or fewer, while 90 percent possess 1,150 or fewer.

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Conclusions

Nevertheless, there are indications that some potential non-local and local events are not able to be accommodated at the existing Civic Center due to date availability issues. An expansion of the Center would increase the facility's ability to host concurrent events. Additionally, continued investment in the Center through functional and aesthetic improvements will likely work to help retain existing events and clientele. Without which, it would be expected that certain existing business could be eroded in future years.

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6.0. DEVELOPMENT OPTIONS AND USE ESTIMATES

Based on the results of the analysis of local market conditions, competitive/regional facilities and host communities, industry trends and market demand, an evaluation of the supportable facility program and development options was performed for a potential expanded Bismarck Civic Center.

As mentioned in the previous chapter, while there exists an opportunity to capture incremental event activity to Bismarck, that incremental activity appears to be relatively modest. However, the aging Civic Center will need improvements in future years to remain competitive in the regional marketplace. Public and private sector investment in civic, convention and spectator event facilities continues to occur within the region, and to the extent that the state-of-the-industry "model" for these facilities continues to progress, the Bismarck Civic Center will likely be more challenged in retaining and attracting event activity should no investments in the facility be realized in the near to mid-term.

As it is uncertain whether a new headquarters hotel may be developed in the short-term near the Center, three scenarios were developed for this analysis: • Scenario 1: Existing Civic Center • Scenario 2: Expanded Civic Center • Scenario 3: Expanded Civic Center (plus new hotel)

Scenario 1 importantly provides a "baseline" for estimation of the "incremental" level of new activity, financial operating and economic implications of Center expansion.

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Exhibit 1 presents a summary of the number of events estimated under all scenarios during a stabilized year of operation (assumed to occur by the fifth full year of operation following expansion).

Exhibit 1 Estimated Event Levels by Scenario (in a stabilized year of operation)

Scenario 1: Scenario 2: Scenario 3: Existing Expanded Exp Civic Center Civic Center Civic Center & New HQ Hotel

Conventions/tradeshows 28 34 42

Public/consumer shows 13 14 14

Athletic game/practice 69 75 75

Meetings/Banquets/Receptions 85 150 150

Concert/rehearsal/show 70 70 70

Other events 27 30 30

TOTAL 292 373 381

As shown above, it is estimated that event levels at the Bismarck Civic Center during a stabilized year of operations could reach 381 events per annum under Scenario 3 with an expansion and new headquarters hotel and 373 events per annum under Scenario 2 (an expansion and no new hotel). The assumed Center improvements and the creation of a new multipurpose ballroom would be expected to drive a modest level of new convention and tradeshow activity to the Center over existing levels, while also allowing the Center to accommodate a greater amount of concurrent event activity.

While fairly small within the context of the total number of events, the convention/tradeshow category represents the primary economic impact-generating events for the Center and community. They tend to be larger events in terms of attendance and space used, with longer durations. A portion of these events assumed under the latter two scenarios would represent events that are “new” to the community (i.e., not presently hosted at local Bismarck facilities). Similar to other comparable civic and convention center facilities located throughout the country, the large majority of events under both scenarios are estimated to comprise small local events.

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7.0. FINANCIAL OPERATIONS ANALYSIS

The purpose of this chapter is to provide an analysis of the potential operating results that could be generated by a potential expanded/improved Bismarck Civic Center, based on key assumptions and estimates. Building on the conclusions of the previous analyses, estimates were developed concerning the financial operating characteristics of the development scenarios outlined under the previous section.

This financial operating analysis only considers revenues and expenses generated through the operation of the facility itself and does not consider other potential ancillary income that may be related to the Center (such as incremental tax revenue, parking income, admissions surcharges, interest income, etc.), nor does it consider other non-operating costs, such as construction costs. Further, we have not considered the financial operations of the Belle Auditorium (which is presently included in the Civic Center's financial reporting).

This presentation is designed to assist project representatives in assessing the financial effects of the current Center and proposed expansion to the Center and cannot be considered a presentation of expected future results. Accordingly, the analysis of potential financial operating results may not be useful for other purposes. The assumptions disclosed herein are not all inclusive, but are those deemed to be significant. Because events and circumstances frequently do not occur as expected, there usually will be differences between estimated and actual results and these differences may be material.

As with all expansions to civic and convention centers, an initial startup period is assumed before event levels are anticipated to stabilize. Financial operating estimates prepared in this section reflect a 2008 dollars in a stabilized year of operation (assumed to occur by the fifth full year of operation after expansion).

As in all studies of this type, the estimated results are based on competent and efficient facility management and assume that no significant changes in the various event markets will occur beyond those set forth in this report.

Operating Revenues

The primary source of operating revenue for the Center includes building rent, food service, contract service and other revenue. The assumptions regarding the individual revenue components are also based on a review of the operations of the existing Center, comparable facilities throughout the country and industry trend data.

Facility Rent

Building rental revenues include charges for the leasing of facility spaces for event activities. Estimated rental revenues are based on estimates of the number of events within specific event categories, attendance levels, square footage used, assumed future growth rates, rental rates and receipts at comparable facilities, with an emphasis on regional facilities.

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Food Service Revenue

Food service (F&B) revenue consists of the sale of various food and beverage items at the Bismarck Civic Center. Revenue assumptions are based on estimated event and attendance levels and estimated per capita spending for various event types. Estimated food service revenue is presented in terms of gross revenue retained by the facility.

Contract Service and Other Revenue

Contract service and other revenue consists of charges to event management and exhibitors for event- related services, such as providing electrical hook-ups and other utilities, leasing of equipment, providing security and cleaning services, advertising and other miscellaneous revenue items. Estimated service and equipment revenue is based on comparable facility financial operations and estimates of the number of events, attendance, square footage used, assumed future growth rates and receipts at comparable facilities.

Operating Expenses

The primary sources of operating expenses for a potentially expanded Civic Center include employee salaries, wages and benefits, utilities, repair and maintenance, general and administrative, insurance, materials and supplies, professional fees, and other expenses. The estimated operating expenses for a potentially expanded Center are based on historical operating expenses the existing Center, comparable facilities and industry standards. Specifically, comparable facility operating expense data was analyzed on a per square foot basis. Consideration was given to operating efficiencies that could be expected to occur at the Center, as well as cost of goods/services adjustments specific to the Bismarck area and the surrounding region.

In estimating operating expenses, and staffing costs in particular, it is important that high-quality service is provided at a potential facility. Otherwise, the facility will not be in a position to attract and retain its market potential of event activity. The estimates provided in the previous chapter also assume that this quality standard is maintained.

Salaries, Wages and Benefits

Estimated salaries, wages and benefits include compensation for full- and part-time employees. Employee benefits include payments for employee hospitalization programs, unemployment compensation, workers’ compensation, and FICA. This analysis is based on historical results of the Center, the financial operations of comparable and competitive facilities, and a potential facility’s size and event levels.

Utilities

Utilities expenses include costs for electricity, water, gas and telephone. The estimates are based on industry averages and the assumption that the expanded facility will include all the current energy-saving components.

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Repairs and Maintenance

The analysis assumes that the maintenance costs for an expanded Center in the early years of operation are relatively low. It is likely that such costs will increase incrementally over time as the facility depreciates. It is likely that the repairs and maintenance costs could eventually exceed the base-year estimates presented in this analysis. The establishment of a separate repair and maintenance reserve is recommended to fund future major capital projects.

General and Administrative

General and administrative expenses include various day-to-day costs such as subscriptions, staff training, dues, staff travel, staff tuition reimbursement, licenses and permits, bad debt charges and other such items. This category also includes costs related to administrative business-related expenses such as postage, administrative supplies, administrative furniture and fixtures, auto allowances, administrative travel, memberships and maintenance of the administrative space.

Insurance

Costs for property and liability insurance premiums and associated expenses.

Materials and Supplies

Costs for materials and supplies for the proposed expanded Center include those materials, supplies and equipment used for facility operations and its administrative offices. The analysis of materials and supplies expense is based on comparable facility operations and the levels of facility space.

Professional Fees

Professional fees are primarily comprised of costs for services including accounting and legal functions and other non-recurring consulting and advisory services. This also includes contractual services expenses, primarily consisting of costs for professional services including trash removal, cleaning, security and other such items.

Other Expenses

The remaining expenses that have been estimated include bad debt charges, vacation accrual and other miscellaneous operating expenses. In addition, advertising and promotion activities and other similar expenditures have been included in the miscellaneous expenses.

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Summary of Estimated Financial Operations

Financial data corresponding to recent year operations of the Civic Center was provided by the City and analyzed. To isolate the effective financial operating characteristics of the Center itself (and to provide context for comparison with other comparable centers), certain adjustments were made to the raw financial data provided by the City to net out non-operating items and those without direct relation to the Civic Center itself. Exhibit 1 below presents a summary of the financial operating results related to the Bismarck Civic Center in fiscal year 2007.

Exhibit 1 Summary of Fiscal Year 2007 Bismarck Civic Center Financial Operating Results

Operating Revenues Space Rental $699,835 Food Service (gross) 676,489 Contract Services & Other 390,132 Total Operating Revenues $1,766,456

Total Operating Deficit ($199,246)

As shown in the exhibit, the Bismarck Civic Center generated an operating deficit in 2007 of approximately $200,000. Based on industry standards, this level of operating deficit is considered low relative to the type and size of facility represented by the Civic Center. Many comparably-sized, publicly- owned and operated event facilities are generating operating deficits two to three times higher than that generated by the Civic Center. It is believed that the Civic Center's financial performance is reflective of its historical approach to rates and policies, which put a strong emphasis on minimization of deficit. As mentioned in the previous chapter, it is also believed that this has worked to "shape" the type of event activity that ultimately chooses to use the Center.

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8.0. ECONOMIC IMPACT ANALYSIS AND CONCLUSIONS

The purpose of this chapter is to provide an analysis of the potential economic impacts that could be generated by a potential expansion of the Bismarck Civic Center, based on key assumptions described herein. As previously mentioned, the evaluation of the economic benefits generated by convention and civic centers is one of the primary determinants regarding the decision to proceed with projects. This chapter addresses:

• Economic impact concepts. • Annual economic impacts. • Conclusions.

The annual operations of a convention/civic center typically provide significant benefits to an area. Typically, and for purposes of this report, quantifiable effects are characterized in terms of economic impacts. Economic impacts are conveyed through measures of direct spending, total output, personal earnings and employment. These specific terms are defined later in this chapter.

The economic impact analyses contained in this section assume the supportable facility program outlined for all the development scenarios and proximate quality hotel room inventory parameters presented in a previous chapter and an emphasis on attracting and booking new events at the expanded Center that will serve to maximize economic impacts to Bismarck.

Economic Impact Concepts

The impact of a convention/civic center is maximized when out-of-town attendees, exhibitors and/or attendee guests spend money in a community while attending a facility event. This spending by out-of- town attendees represents new money to the community hosting the event. This new money then creates multiplier effects as the initial spending is circulated throughout the local economy.

It is important to note that spending estimates associated with the potentially expanded Center only represent spending that is estimated to be new to the community (net new spending), directly attributable to the operation (and existence) of the facility. The analysis does not consider any assumed displaced spending within the community. For purposes of this analysis, “community” is referring to Bismarck.

The characteristics of economic impact effects are generally discussed in terms of their direct, indirect and induced effects on the area economy:

• Direct effects consist principally of initial purchases made by delegates or attendees at an event who have arrived from out-of-town. This spending typically takes place in local hotels, restaurants, retail establishments and other such businesses. An example of direct spending is when an out-of-town event attendee pays a local hotel for overnight lodging accommodations. • Indirect effects consist of the re-spending of the initial or direct expenditures. An example of indirect spending is when a restaurant purchases additional food and dining supplies as a result of new dining expenditures through increased patronage. A certain portion of these incremental supply expenditures occurs within the local community (i.e., “indirect spending,” the type of which is quantified under this analysis), while another portion leaves the local economy (i.e., “leakage”).

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• Induced effects consist of the positive changes in employment and earnings collections generated by changes in population associated with the direct and indirect expenditures.

The re-spending of dollars in an economy is estimated by using economic multipliers and applying them to the amount of direct, or initial spending. The multiplier effect is estimated in this analysis using a regional economic forecasting model provided by the Minnesota IMPLAN Group, Inc., a private economic modeling company. The IMPLAN system uses an input-output matrix with specific data for multipliers based on regional business patterns from across the country. Financial information for the matrix of multipliers is collected from various sources that include, but are not limited to, the U.S. Department of Labor, as well as state sales and tax reports. The system uses this data to determine the economic independence of specific geographic regions as well as the interdependence that exists between industries in those regions. The systems provide total industry output, personal earnings and employment data for approximately 520 industry groups.

For purposes of this analysis, results of the economic impact analyses are measured in terms of the following categories:

• Total output represents the total direct, indirect and induced spending effects generated by the project. This calculation measures the total dollar change in output that occurs in the local economy for each dollar of output delivered to final demand. • Personal earnings represents the wages and salaries earned by employees of businesses associated with or impacted by the project. In other words, the multiplier measures the total dollar change in earnings of households employed by the affected industries for each additional dollar of output delivered to final demand. • Employment represents the number of full- and part-time jobs. The employment multiplier measures the total change in the number of jobs in the local economy for each additional $1.0 million of output delivered to final demand.

The initial spending of new dollars into an economy begins a series in which the dollars are cycled through the economy. The re-spending of the dollars is estimated by using the economic multipliers discussed above and applying them to the amount of direct, or initial, spending. The multiplier illustrates that spending in a defined economy will lead to additional spending until that dollar has completed its cycle through leakage. Leakage represents the portion of a dollar spent in areas outside the designated economy.

Annual Economic Impacts

One of the primary sources of direct spending involves attracting event attendees from outside the local area to make purchases in area hotels, restaurants and retail establishments.

The analysis of direct spending related to Center activity begins with estimating the number of event attendees that could be attracted to Bismarck. These estimates are based on the event attendance and event-day information developed through the market and event analyses.

Estimates of per-day spending by out-of-town delegates and exhibitors are based on the results of an annual Convention Income Survey performed by Destination Marketing Association International (DMAI), formerly the International Association of Convention and Visitors Bureaus. The survey collected data concerning event related expenditures by delegates, exhibitors, associations and convention service contractors. The results of this survey have been adjusted to 2008 dollars and for cost of living levels and the unique characteristics of Bismarck. The estimates of average daily spending on a per delegate

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basis were applied to estimates of potential future event activity at the expanded Center, based on the results of the overall market analysis. Adjustments were applied to estimated attendance levels for potential future event activity at the Center to segregate estimated levels of potential out-of-town event attendance directly as a result of the expanded center.

Exhibit 1 presents the estimated direct spending associated for the three scenarios analyzed for a potentially expanded Bismarck Civic Center

Exhibit 1 Estimated New Annual Direct Spending by Industry (Stabilized Year of Operations [Yr 5], in 2008 Dollars)

Scenario 1: Scenario 2: Scenario 3: Existing Expanded Exp Civic Center Civic Center Civic Center & New HQ Hotel

Direct Spending by Industry:

Hotel $2,210,504 $2,743,307 $3,292,212 Restaurant 2,670,055 3,183,013 3,606,803 Entertainment 385,894 458,813 517,832 Retail 1,285,358 1,519,818 1,700,977 Auto Rental 539,147 669,099 802,978 Other Local Transit 53,915 66,910 80,298 Other Industries 374,538 439,696 486,695

Total $7,519,412 $9,080,655 $10,487,795

Diff. over Existing -- $1,561,243 $2,968,383 % Diff. over Existing -- 21% 39%

As presented above, total annual direct spending associated with the existing Bismarck Civic Center is estimated at approximately $7.5 million. An expansion/improvement project under Scenario 2 is estimated to result in $9.1 million in direct spending, approximately $1.6 million of which could be considered "incremental" or new to the Bismarck community. Under Scenario 3, the addition of the new headquarters hotel property allows for a greater generation of new non-local activity and spending resulting in total annual spending of approximately $10.5 million, $3.0 million of which would be considered new to Bismarck.

The total estimated direct expenditures generate effects on the economy that extend beyond the initial expenditures. Exhibit 2, presented on the following page, summarizes the overall estimated new annual economic impacts within Bismarck associated with estimated levels of potential event activity under all the facility scenarios, based on the application of the IMPLAN multipliers.

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Exhibit 2 Estimated New Annual Economic Impacts (stabilized year of operations, presented in 2008 dollars)

Total Direct Spending Scenario 1: $7,519,412 Scenario 2: $9,080,655 Scenario 3: $10,487,795

Total Output Earnings Employment Scenario 1: $12,031,059 $5,263,588 203 Scenario 2: $14,529,048 $6,356,459 245 Scenario 3: $16,780,472 $7,341,457 283

As outlined above, the estimated level of annual direct new spending associated with a stabilized year of operations for an expanded Bismarck Civic Center (under Scenarios 2 and 3) are estimated to generate between $14.5 million and $16.8 million in total output (total direct, indirect and induced spending), representing between $2.5 million and $4.7 million in annual incremental economic output over existing Civic Center levels. Additionally, this spending is estimated to support over $6.4 million and $7.3 million in personal income (or “earnings”), along with 245 and 283 full and part-time jobs in the local Bismarck economy under Scenarios 2 and 3, respectively.

Conclusions

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APPENDIX: TELEPHONE SURVEY OPEN-ENDED QUESTION RESPONSES

Q5. What are your impressions of the existing Bismarck Civic Center and its ability to successfully accommodate your event(s)?

• I think I would like to see a kitchen so we can have chefs come in and do the cooking. Other than that, the Civic Center is perfect for large conventions. • I have always had an easy time at the Civic Center and have always wanted a hotel associated with the Civic Center. • The facility was wonderful, but we can't go back there; it had to do with our internal changes. I can't elaborate on that. • The meeting rooms are very nice. • Right now, the Civic Center holds our event, but the sound system is terrible. • It seemed to work fine; there were no problems that I recall.

Q7. Are there any particular reasons why your organization would not be likely to use a potential expanded Bismarck Civic Center? (those who responded negatively towards using an expanded/improved Bismarck Civic Center)

• The Ramkota gives us their facility for free. • Because the Civic Center is too big, and our attendance is too small, and we do not use enough of the Civic Center to justify spending the money. • Pricing; we need state rates and, the Civic Center does not offer state pricing. • The Civic Center is too far away. It's too far to travel to Bismarck. • The Civic Center management is impossible to work with in the way they treat people; we would never go to the Civic Center under the current management. The current management is short with customers. Because we are a smaller group, they were not pricing fairly; they added a fee because we were a smaller group. They did not make us feel welcome at the Civic Center, and that is why we will never use them. • The people are in Fargo, and that’s where they want to go, and that is where the money is that supports our organization. But Bismarck is great for people coming from the west. • Because we do not leave Minot, because this is where most our members are and we like it in Minot. • We do not use Civic Centers because they are too big. • Too far to travel for members of our group. The members all live in the eastern part of the state. • Due to weather and location, our members like to go to a warmer climate in March when our convention is held. • The Civic Center is too large for our needs, and we have used hotels for our meeting and do not see that changing ever.

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• For the size of our group, which is small, we do not need a space that is so big and expensive. • We have a bid process, and our lodge in Bismarck will never bid to the conference and convention in Bismarck, because they don't have the money for these events. • We are a very small group, and the Civic Center is too expensive. And we like using the Ramkota; it fits us perfectly. • It wouldn’t be a good thing to do because of the other eye doctors doing conferences there.

Q18. Can you explain what types of requirements and preferences you have concerning the civic center’s headquarters hotel, in terms of hotel brand or type, size, amenities and distance from the Center?

• We require a state rate and walking distances to the Civic Center, and they should have a restaurant and bar within walking distance, preferably in the hotel. • The hotel needs to be within walking distance and have a professional sound system and catering onsite. • Family friendly, not small rooms, 2 to 3 complimentary rooms for staff, a meeting room in the hotel for people to gather outside the convention. • A place that is comfortable and restaurants close by, and get some free rooms for staff and storage rooms. • It should have the ability to do food functions and be close to the convention site. • Queen size suites for comfort. • The closer, the better; walking distance, or maybe a shuttle to the site. And a good selection of restaurants. • I have no requirements; the block rooms are for staff only. Just as long as they are comfortable. • Everything up to date, built in image projector and good sound system in the meeting rooms. I would also like the hotel close to or attached to the center. It would more than likely bring in more people for conventions if there were malls and other entertainment close in the area. It doesn't really matter the name of the hotel. • Have meetings on one floor so people do not get lost. Have the hotel connect to the Civic Center so people don't have to drive to the function. No specific brand. A pool would be nice within the hotel and a restaurant and bar. • No requirements for the hotel. I can't think of any. • High class, contemporary, really upscale with 5 star dining with an international flair that is reasonable. Cooking classes and activities for spouses while the meeting or convention was going on. • A decent rate, catering at the hotel. Hotel with a lot of guest rooms so all attendees can stay in one place. • Attach the hotel to the Civic Center through a skyway so people do not have to go outside. A Hilton property would be nice. It's a good brand, and their service model caters well to conventions. They know what organizers want from the hotel and Hilton

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can seem to deliver for conventions. A swimming pool and attached restaurant and one that has good food and is affordable. • No requirements for the hotel other than that when we are there, the whole hotel has to be booked to us. No other events or guests in the hotel at that time, so we can get the best service possible and the staff can cater to our group only. • Would have to be an upscale hotel, and have a swimming pool and a restaurant in the hotel. • Close to the Civic Center, or attached if possible. A large hotel that will hold a lot of people. • A flexible chef that can meet a custom menu; we have members that have different dietary needs • No brand preference; no more than 2 miles from the Civic Center, and a fitness center and pool, and a nice restaurant. • No requirements for the hotel. Nonsmoking rooms handicapped accessible rooms and a restaurant. • Attached to the Civic Center so that people can just walk to their meetings. • Upscale, with a full service restaurant. I would like a 3 star hotel, a hotel that is not a family hotel, but a business hotel. • Full service with meeting space, pool, and a restaurant. • Air conditioning, continental breakfast, handicap accessible, a lobby big enough to hold registration, and a restaurant. • I’m not sure. • Would have to be state rate. • Nothing really other than what they already have. Nothing different from what other hotels have, like continental breakfast. • Nice sleeping rooms, comfortable meetings. • Pool facilities, conferences rooms in the hotel, on site restaurant lounge, reasonable rates. • Catering from the hotel. • Central hospitality area. • Pool facility, internet access, and audio and visual. • Have meeting space. We don't really need anything; our attendees are very busy. However, a restaurant would be nice. • Have restaurant and catering. • The Marriott or some other kind of mid-priced hotel with a restaurant. • No preference for the hotel. I can't think of any. • Cost; Civic Centers are expensive. • It would be nice to have a tunnel form the hotel to the convention center, because it gets really windy here. I’d like a little bar or lounge. • Make sure they have electrical equipment, like a screen projector, microphone and podium. Make sure the hotel has catering services.

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• Attached, or a walkway has to be there. Equipment cost has to be low. We need microphones. • It's great if the hotel is connected or has the facility in the hotel. Reasonable rates. • Brand does not matter. At least 250 rooms, free high speed internet, a business class type hotel. It's very much needed in Bismarck; we have outgrown the Ramkota. A restaurant and lounge attached. • I don’t really have any preferences. • Nothing. • Best Western; it's reasonable. Have an in-house restaurant. • We need and upscale dining banquet area, an adequate space for a stage, and we need a social gathering space other than the banquet space. • Value brand as far a price wise, and it needs to be close the convention center. • I don’t know; we use hotels because everything is attached. The cost of the rooms has to be cheap. • Nothing. • The cost of the rooms needs to be affordable, because the conference is for high school kids. • Don’t have anything specific. Rooms need to be lower in cost. • Needs to be close to the Civic Center. Needs to be cheap. • We have a good relationship with the other convention centers, so we probably wouldn’t be looking at the Civic Center. Our events are not normally that size, so we would not be looking at the facility. • Distance; needs to be close to the center. It can't be a flea bag; it has to be decent. • We need to be able to get rooms for state rate since this is for high-schoolers. It should be close to the Civic Center; we don’t want to walk out in the cold. • Needs to be walking distance from the Civic Center. It needs to have computers; that's why we often use schools. We need 15-20 rooms on the same day. • Have internet services.

Q19. Do you have any specific requirements or preferences regarding the expanded Civic Center itself, in terms of its space and amenity offerings and its location and proximity to amenities like supporting hotels, restaurants and shopping?

• Because we do not have a tradeshow; our meetings are based on speakers, so I really don't know what I want. • It would need to have a shuttle to the airport and be close to shopping. • Have a smaller meeting space and a hotel attached. Be close to shopping and family friendly activities. • No, I can't think of any. • No, nothing. I can't think of anything.

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• I just want the Civic Center to have a kitchen to do breakfast, lunch, and dinner. • Have the shopping close by. Having meeting rooms close together. • No comments. I can't think of any. • No requirements. I can't think of any. • No requirements. I can't think of any. • No requirements for the Civic Center. I can't think of any. • Free parking for convention attendees. Shuttle service to hotels. • Just fair rates, big rooms for big groups and expos. Catering onsite with fair rates. • Make sure the pricing is fair. The Civic Center is expensive, and to rent that space is hard for non profits. • No requirements for the Civic Center. Can't think of any. • Room rental would have to be affordable and have on-site catering to save money for food functions. An attached hotel. • Have a package plan for room rental do not itemize individual items make it easier for me as a meeting planner. Instead of pricing out each chair, tablecloth, fork or spoon, just give me a price that includes everything that we will use for the convention. • It should have a shuttle service to hotels, and our member are politically active, and they may want to go the capital, so it would be nice to have a shuttle to go wherever they want, too. • Lots of parking is a must. • No requirements. I cannot think of any. • No requirements. I can't think of any. • The exhibit hall needs to be carpeted and not look like a barn; it's hard for exhibitors; they get tired of standing on concrete floors. • Space for a small trade show meeting rooms. • Good sound system, comfortable chairs, comfortable rooms, temperature control, and water available. • I’m not sure. • A bar. • Nothing. • Comfortable meetings; nice decor. • I have no use for the Civic Center, so no comment. We just will not use a civic center; a hotel would accommodate our needs. • No. • Meeting space close to event space, reasonable meal services, reasonably priced, and adequate staff. • Plenty of good food catered in and good sound throughout the center. • To have breakout rooms. • Have wireless internet access and have the hotel close by.

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• No. I can't think of anything. • New sound system; the current one is bad. An attached the hotel to the Civic Center. • Nothing. • We need a motel close, or we will never book there. • Nothing. I can't think of anything • Location is terrible and parking is terrible what they need to do is arrange parking with all the business that are around there, because they do not allow you to park in the businesses. • Meeting rooms along the same hallway as the ball rooms. I would like to see everything in one main area. • Room for 200 booths, attached to the hotel and the mall, and smaller meeting rooms. • I would say that it would be nice to have it around restaurants. • There needs to be a restaurant and hotel nearby. • I can't think of any. • Shopping is always nice. • Close parking or a decent shuttle service, and the shopping would be a nice feature. • Nothing. Our conference is small. • Nothing. • It's really nice to be around shopping and restaurants. • Separate ballrooms from the meeting rooms. • Nothing. • Nothing. • Nothing. • If we use the hotel, we should not be charged for the meeting rooms like the Ramkota. • We need to be able to have a banquet close by. • Have equipment to use PowerPoint and to have people help set that up.

Q20. What are your overall impressions of Bismarck as a potential host market and location for your event(s)?

• I am limited in hotel selection due to not many of the hotels offering state rates. But it is nice town. • It is a nice city, but I am not sure how it will fit into the rotations we have set until 2012. • I can't give a complete assessment, because we have not been there for a long time. • There is a main airport, and it is a nice city. • Great city, good restaurant selection, and an easy walking city. People can get anywhere on foot; nothing is too far away.

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• It is a great city, because it's the capital, and it's located in the state, so people do not have travel too far. • Great people; they are nice and friendly, and the city is clean. • It is a nice city and has good restaurants. • Great shopping and dining; people like coming to Bismarck. • We like Bismarck, and a lot of our members are here in Bismarck. • It is a good city with nice people and great dining and shopping. • Good. It is a nice city; it is clean, and shopping is good, and it has good dining. • Love Bismarck; it's a great city. Centrally located, so people do not have to travel too far. • Prices are good for dining in Bismarck. • We use Bismarck all the time, and we like it because it is a larger city with good restaurants and shopping. • Very good; it's a major population center for our members, so it is a good city to have the convention, because then the people who live there get a break from traveling. • I think it's great, but we do not have anything bigger than the Ramkota, and it would be nice to have options. The other hotels cannot hold the event sizes that I am looking for. • Well, it's a great city, centrally located, and it is the capital of the state, and during legislative sessions, it is nice to have the meeting in Bismarck. • Perfect; it is central in the state and has the activities and attractions and dining we are looking for our meeting. • Well, it's nice. Easy access by air and has great shopping. • It needs another big hotel that you can hold big meetings at for variety. But it is a nice city with good shopping. • Ideal; Bismarck has a lot to offer. The geographic location, centrally located, and great golf courses. Bismarck is a beautiful place, breathtaking. • Rated high. Centrally located. • We like to come there; it's a beautiful city with good shopping, centrally located a lot of sightseeing, boat riding, and barbeques. • I’ve never held an event there so I really don’t know. • We like it; we go to the Comfort Inn; they are very good. Good hospitality; they have cooked our food. It's unbelievable when it's privately owned. • Good. The capital building is there, and it's centrally located. • I like it. It's centrally located. • Great. Convenient; it's centrally located. • Good. It has the most variety of hotel rooms. • Favorable. It's centrally located, and people are very friendly. • Very positive. It's easy to get around, the hotels are convenient, and the people are very nice. • Very pleased with the accommodation at the Civic Center Radisson.

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• It is a good market, because Bismarck has the proper facility to hold our event, and it is a nice town with good shopping. • Good. It's centrally located in the state and has good restaurants and shopping. • We use Bismarck because we have to rotate the conference to be fair to all our members. It is fine; the town is nice and clean. • It's great; we rotate there every 4 years. Everything is there; it meets our entertainment needs. • Our members scream for it because it is very central; we have our highest turnout there. • It would be great, but I don’t know if we would move, because we are in the Minot area. • It's ideal because it's central to the state. The class B basketball is there, and it has the lowest cost price. • It’s a great location. Our members like to come to Bismarck; it’s centrally located. • The potential there is awesome, especially during legislative years is centrally located. People who come here comment on how small the city is, and it's nice for a small city. • It's perfect - central in the state. I work here and I organize everything. • Good; centrally located. • Bismarck would be a great area. There's a Red Lobster, and there are enough things to do around there, like antique shops. • It's adequate, because it's centrally located, but it is hard to book a date, because there aren't enough facilities. • It would be a choice we would use, and we will schedule one in the future. • We hold the conference every other year there, and I don’t see that changing. • We do fine there. We plan our meeting for the legislative year, also alternating to Minot. • We like to come to Bismarck on a regular basis. • It's an excellent location. • I’m not familiar with the area, so I don’t know. • We get a good response from people when we host in Bismarck. • We're here every 4 years; it's the second best. Sometimes we get a better turnout in Fargo. If they build it, we will come. • We use it now. It's a central location. I wish it could have more hotel rooms so we can get them all in one hotel. • Bismarck has always been a good location; it's centrally located in the state, and we have good supporters in Bismarck. • I would be positive. It's located in the central part of the state; a lot of members are in that area.

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