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Wednesday, January 11,2012

What's next for Lansing Center?

On its 25th anniversary, questions about funding the Lansing Center. Mayor Bernero says the city's $800,000 subsidy is 'unsustainable.'

by Andy Balaskovitz

Lansing Mayor Virg Bernero will help lead the invitation-only celebration Thursday night marking the 25th anniversary of the Lansing Center — while also contemplating a way of regionalizing the facility for budgetary reasons.

The city’s roughly $800,000 annual subsidy for operating the center is “unsustainable,” Bernero said in an interview. “I don’t want to shut it down, but we’ve got to come up with a solution.”

Bernero wants to start looking at regionalizing funding for the Lansing Entertainment and Public Facilities Authority, which has managed the convention center since 1996. Bernero argues that the Lansing Center is a regional facility — so why should only city of Lansing taxpayers fund it? It’s a similar argument the city used when it turned over control of Potter Park Zoo in 2006 to the county.

“We’re subsidizing the Lansing Center to the tune of almost $1 million a year. With the zoo, we realized we couldn’t do that. We’re looking for a similar solution for the convention center,” Bernero said last week.

Bernero’s argument comes as the administration begins preparing another fiscal year budget at an anticipated deficit of $8 million to $10 million.

LEPFA also manages the City Market and Cooley Law School Stadium. In this fiscal year, the city is subsidizing those at nearly $40,000 and nearly $305,000, respectively. The administration says those facilities may also be part of the discussion.

“We’re asking: How can we get more bang for our buck? We have to because for the time being we are still talking about tax revenue being pretty inadequate,” Bernero said. “It demands ingenuity.”

Scott Keith, president and CEO of LEPFA, said, “The mayor and I do have discussions” that involve reconfiguring the way the Lansing Center is funded. “It’s one of the things that is certainly a challenge: The Lansing Center is certainly a regional asset. We have a lot of impact on hotels throughout the region. The center as an asset to the region should be viewed that way,” he said, comparing it to the Capital Region International Airport and the Capital Area Transportation Authority.

But not everyone agrees it’s a regional asset in the same vein as the airport, the bus system or Potter Park Zoo.

For one, Ingham County Commissioner Mark Grebner said Monday that the county was against the city’s building the Lansing Center in 1987. Grebner has served as a Democratic commissioner since 1977, with a four-year break in the early 1980s. He’s against any proposal that would involve the county paying for Lansing Center operations.

“You know what people should do with an unsustainable facility? They should close it — isn’t that a shocking idea? It’s almost as good as not having built it,” he said.

 “It was a mistake” to build the convention center in the first place, Grebner said. “It’s been a sucking wound ever since they built it.” 

He also scoffs at the Potter Park Zoo comparison. “People like the zoo and would pay to subsidize it. They passed the zoo millage,” he said, doubting the same would be true for a millage dedicated to the Lansing Center. It’s uncertain whether regionalizing it requires a referendum.

Bernero also suggested getting the Greater Lansing Convention and Visitor’s Bureau involved. The visitor’s bureau is essentially funded from “bed tax” fees from hotels in Ingham County and marketing assessments from Delta, DeWitt and Windsor townships. These collections make up more than 94 percent of the bureau’s annual revenue, which in 2010 was more than $3.7 million, according to its 2010 annual report. The rest of the revenue is made up of membership dues, advertising sales and special events.

Lee Hladki, president and CEO of the bureau, said the Lansing Center could be considered a regional asset — but it needs to grow first. On comparing the Lansing Center and the Potter Park Zoo as regional attractions, Hladki said: “I think it (the Lansing Center) has the potential. I don’t think it’s there yet. There’s potential for it to become a regional asset.” 

He said making that happen would involve attracting larger events, bringing in more people to the greater Lansing area, not just downtown. However, Hladki added that he believes the Lansing Center is a “natural consideration” for regionalized funding. While the bureau does fund some of LEPFA’s “regional marketing direction,” it does not contribute to operations, Hladki said.

Meanwhile, the Lansing Center turns 25 years old this year. The convention center, which offers roughly 120,000 square feet of usable space, according to its website, evolved from the Civic Center, Keith said. The Civic Center was demolished in 1999.

Scott said when the Lansing Center opened in 1987, it employed 20 full-time workers and between 20 and 50 part-time workers, “depending on the season.” LEPFA, which was established in 1996 and also manages the baseball stadium and City Market, has 48 full-time employees and close to 200 part-time workers at times, Keith said.

He added that, based on projections from the visitor’s bureau, the Lansing Center had an overall $60 million economic impact on the city last year, which includes restaurant and hotel spending.

Keith said the Lansing Center has hosted more than 10,000 events and attracted “well over nine million visitors, guests and attendees.”

Bernero’s assertion about regionalizing LEPFA may be the first time he’s done so publicly. 

Hladki said there has been “no official conversations with our board or directly with me” about reconfiguring funding for the Lansing Center. “I would assume if there is conversation about the regionalization of the Lansing Center, certainly we’d want to be part of the conversation.”


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