The Eastern Oregon Trade and Event Center board plans to contract with VenuWorks to run its facility, and the management company believes it can get EOTEC profitable in three years.
The Iowa-based venue-management company operates arenas, conference centers, fairgrounds and other facilities, including Toyota Center and Three Rivers Convention Center in the Tri-Cities
“I totally have confidence in VenuWorks,” board member and hotelier Vijay Patel said. “I’ve seen how they operate in Kennewick ... I can assure you it’s a class A team and they will help us bring in more events than we would otherwise.”
The board unanimously passed a motion directing a subcommittee and interim manager Nate Rivera to negotiate a contract with VenuWorks to vote on at a special Nov. 21 meeting.
During a presentation to the board, Corey Pearson, executive director of the Three Rivers campus in Kennewick, displayed a cost/revenue analysis estimating that under VenuWorks’ management EOTEC would be at a $116,350 loss for the first year of the facility, $93,362 loss for the second year and a $4,968 profit on year three. One reason for that, he said, is that even though VenuWorks would “come out swinging” with its marketing strategy, most conventions and trade shows book their events two or three years out.
“Year one you’re marketing to groups that have already made a commitment somewhere else,” he said.
Under the VenuWorks model, the EOTEC board would still have full control over setting budget and policies for the facility, but VenuWorks would provide recommendations based on their expertise and run day-to-day operations. The company has proposed a base fee of $10,000 per month for services including financial administration, marketing, event production, booking and consulting. Those costs would be in addition to payroll for a general manager, event manager/administrative assistant and two operations staff.
Rivera said EOTEC’s operating costs have been significantly more than budgeted in recent months because labor is being contracted, causing the current year’s budget to look a lot like VenuWorks’ year one projection. If EOTEC doesn’t change how it is operating the facility, he said, the budget will continue to look that way each year. Rivera said he felt Hermiston and Umatilla County taxpayers would rather EOTEC go with the safest option most likely to help the center start turning a profit within a few years.
When board members questioned whether Umatilla County and the city of Hermiston would be willing to cover EOTEC’s projected losses for the first couple of years in addition to the $75,000 per year each had already committed, Mayor David Drotzmann said that the city had expected to have to help subsidize EOTEC for the first few years and he thought the city council would be willing to support the amounts that VenuWorks had estimated.
“We took a leap of faith together knowing there would be some losses in the first year,” he said, calling VenuWorks’ projections of getting EOTEC out of the red by year three “exciting.”
Board members Dan Dorran and Don Miller said they had some reservations going into the discussion, but listening to Pearson’s presentation on behalf of VenuWorks had answered many of their questions and calmed some of their worries.
Former EOTEC board member and current Farm-City Pro Rodeo board member David Bothum said three years ago when the EOTEC board toured the Three Rivers Convention Center in Kennewick run by VenuWorks and the TRAC Center in Pasco run by a general manager not affiliated with a management company, the difference was “night and day.” In 2013 the Tri-City Herald reported that the TRAC Center had lost hundreds of thousands of dollars each year since opening in 1995.
“At the time I thought how could we do anything but go with VenuWorks,” Bothum said.
The EOTEC board plans to consider a finalized contract with VenuWorks on Nov. 21.
The board also discussed continuing donations to the facility, including 3,700 pounds of winter wheat seed from Bracher Farms to help keep dust down, expertise and equipment from the OSU Extension Center to help plant it, and a “very generous” offer of Belmont wheel lines for irrigation from Elmer’s Irrigation.
Contact Jade McDowell at firstname.lastname@example.org or 541-564-4536.