On August 22, 2023, FARGODOME staff unveiled plans for a Reimagined FARGODOME to benefit our community. This plan, which included a renovated FARGODOME facility and adjacent convention center, was put to a special election public vote on December 5, 2023. 51.8% voted in favor of the proposed projects, but failed to get the 60% majority it needed to implement the new sales tax and lodging tax.
Fargo Dome Authority members and City officials agreed that renovations are still needed to FARGODOME and on August 5, 2024, approved a FARGODOME Sales Tax to be added to the November 5, 2024 general election ballot.
City of Fargo Measure #1, FARGODOME SALES TAX
Shall the city of Fargo’s Home Rule Charter be amended to establish a one-quarter of one percent (1/4%) sales, use and gross receipts tax to extend for twenty (20) years with the funds collected from said tax to be utilized for costs associated with the remodeling of the Fargodome and with ongoing capital improvements, maintenance and operations of the Fargodome, as provided in the Notice of Proposed Home Rule Charter Amendment as published in THE FORUM on the 28th day of August, 2024.
SHALL SUCH AMENDMENT BE APPROVED?
( ) YES
( ) NO
Over 30 years, FARGODOME has hosted over 3,000 events with almost 15 million attendees. However, FARGODOME is in need of improvements (many of which are the direct response to patron comments/complaints and community requests).
The renovations to FARGODOME would be funded through a 20 year, 1/4-cent sales tax along with using approximately $30 million of funds from FARGODOME's Permanent Fund, which currently has a balance of approximately $42 million.
It was important for FARGODOME and City officials to avoid any increases to property taxes when proposing the funding strategy for this multigenerational project to ensure that costs are also paid by visitors (who are major consumers of FARGODOME services).
It is important to note that over the entire history of FARGODOME, it has never needed assistance from the City's General Fund. Its annual inflation-adjusted direct economic impact on our metro community is estimated at $24-$42 million.
An improved and expanded FARGODOME would enhance the patron experience, increase operational efficiency and improve accessibility throughout the facility.
It will increase the number of restrooms for females from the current number of 134 to 262 and the number of restrooms for males from 133 to 190.
The number of accessible and companion seats will rise from 86 to 224 and the number of companion seats will correspondingly increase from 43 to 112.
What Change is the Fargo Dome Authority proposing?
A remodel of the existing 30-year old building to include improved accessible seating, enhancements to better meet patron expectations of a modern entertainment facility, and modifications to address operational efficiencies. Cost is roughly $110 million.
What specifically, and why these projects?
The Fargo Dome Authority’s proposal addresses current and long-term needs of the venue, patrons, and market in one comprehensive plan.
Remodel of the existing 30-year old building is intended for preservation of one of the City’s largest physical assets by keeping the venue relevant far into the future:
- Improve and enhance accessible seating:
- Add more accessible and companion seating, including horizontal and vertical distribution of accessible seating.
- Add additional wheelchair accessibility to the east Press Box.
- Enhancements to address patron expectations and modern venue requirements:
- Add additional restrooms, approximately 95% more female and 43% more male, and new family restrooms convenient to the arena bowl.
- Ease congestion with more circulation space.
- Add approximately 67% more food and beverage stands and points of sale to hasten access to the stands, and also allow for more variety of products offered.
- Add additional seating options, including club seating areas, and additional suites. All stadium seats will be updated along with the addition of cup holders.
- Operational Efficiencies:
- Add elevators and align freight elevator locations with increased spaces for building equipment and storage.
- Reconfigure entrances to create interior space for security and ticketing marshalling, along with greater patron comfort.
Why now?
FARGODOME celebrated a milestone, 30 years since its grand opening in December 1992. While anniversaries are a time to reflect on the past and plan for the future, FARGODOME management and Board members are constantly evaluating opportunities for improvement. The project planning and financing studies have been ongoing for nearly ten years. After a delay due to COVID, the Fargo Dome Authority is ready to move ahead with their comprehensive proposal to posture the venue for success for the next 30 years and beyond.
What is FARGODOME’s history?
FARGODOME was truly a grass-roots effort and pretty revolutionary for its time. In the late 1980s, Fargo’s Park Director Bob “Goose” Johnson had an idea for Fargo. He and a very dedicated steering committee got NDSU on board as a main tenant and rallied the community behind a “Dome in Fargo” project. They were able to garner approval of 60% of a public vote held in December 1988 to authorize a twenty-year, one-half of one percent sales tax for the construction, maintenance, and operations of FARGODOME. At the time of construction, FARGODOME was the largest northern plains venue from Minneapolis to Seattle.
Has FARGODOME been successful?
FARGODOME’s mission statement is to successfully operate a facility that provides a diversity of events, enhancing the quality of life and prosperity of the region.
Any way you look at it, FARGODOME is very successful:
Events/Attendance
Since 1992, FARGODOME has hosted 3,000+ events of all genres with total attendance of nearly 14 million people. Overall, approximately one-half of FARGODOME attendees are non-local; percentages vary by specific event type, with concerts and amateur sports attracting the most non-local attendees.
Economic Impact
Depending upon the annual event mix, FARGODOME’s annual inflation-adjusted direct economic impact (in 2019 $) ranges from $24 million to $42 million per year. Sectors that derive the greatest economic impact are retail, food & beverage, and lodging.
In addition to 27 full-time staff, FARGODOME employs roughly 500 PT staff and contracts with various 3rd party labor companies. Additionally, area non-profit groups earn money for their organizations by staffing food and beverage stands. In 2022, FARGODOME paid out over one-quarter of a million dollars to these non-profit groups.
Operational
Other than COVID-impacted 2020 and 2021 which received Federal Grant Funding to cover deficits, FARGODOME’s annual operating revenues have always exceeded annual operating expenses. FARGODOME has never drawn on the City of Fargo General Fund.
|
ACTUAL
|
ACTUAL
|
ACTUAL
|
ACTUAL
|
ACTUAL
|
|
2022
|
2021
|
2020
|
2019
|
2018
|
EVENT OPERATING INCOME |
3,474,844
|
1,715,718
|
795,619
|
2,968,774
|
2,881,179
|
INDIRECT EXPENSES |
5,107,128
|
4,320,567
|
3,669,033
|
4,220,939
|
4,001,569
|
OTHER INCOME |
1,737,199
|
6,351,232
|
2,102,957
|
1,707,640
|
1,593,387
|
NET OPERATING INCOME |
104,915
|
3,746,383
|
-770,457
|
455,475
|
472,997
|
2021-2022 COVID implications, including insurance proceeds & SVO Grant |
Permanent Fund
During the first 20 years, sales tax revenue in excess of debt obligations, along with annual operating surpluses, were saved to a permanent fund. Through stewardship and careful management the permanent fund balance is currently at $41 million, even after funding the 2000 lobby addition, three new football turfs, two video board upgrades, paving of parking lot G and all other annual capital improvements since 1992.
Additional fun FARGODOME financial facts:
- FARGODOME hires approximately 500 part-time employees to staff events, in addition to contracting with local staffing agencies for specific staff needs.
- FARGODOME hires non-profit organizations to staff their concession stands with payments made toward the organization’s fundraising mission. In 2023, FARGODOME paid over $450,000 to 43 different area non-profits for their efforts.
I’ve heard people say we should just tear down FARGODOME and start over?
FARGODOME is a well-built city asset with a lot of life left in it. Like most things, age has taken a toll: changes to building code, patron expectations, and operational “we should have done it this ways.” But, with a nod to sustainability, the proposed comprehensive project plan addresses these issues within the substantial existing footprint, building skeleton, and HVAC infrastructure. A structurally solid building will be given a modern re-fresh. Additionally, the project is intended to be phased in to ensure no gaps in event scheduling, like that which would result from a demolition and rebuild (think Metrodome & US Bank Stadium).
How will the City pay for the project?
Over the course of several years, FARGODOME staff worked with the City’s financial advisor to model various financing scenarios. In the end, the most feasible option was to look to FARGODOME’s roots. The Fargo Dome Authority is proposing a twenty-year, one-quarter of one percent (1/4%) sales tax. And, FARGODOME will draw around 70% of their permanent fund balance for up to $30+ million in project costs.
The logic of using sales tax for a public venue is that it allows financial participation by out-of-area users of the venue, rather than the cost burden being borne by City residents alone. Economic studies show that approximately 55% of FARGODOME users are out-of-town guests. A review of an average year receipts shows that locals would only contribute 42% of the source of funds.
What does the proposed new sales tax mean to me?
For local residents, an additional ¼% sales tax means an extra quarter on a $100 sales tax applicable invoice. Or, if you purchase a total of $10,000 of sales tax applicable items in a year, you will pay $25 more in sales tax for that year. Remember that certain items like groceries are not subject to sales tax. And, like existing City of Fargo sales taxes, this sales tax will cap at a $2,500 single transaction, so a maximum of $6.25 additional taxes per single transaction. With the additional tax, Fargo’s sales tax rate of 7.75% will remain lower than our neighbors, Moorhead and West Fargo.
In case you wondered, following is a breakdown of Fargo’s current 7.5% sales tax:
5.0% - State
0.5% - County Flood Control (1/1/17-12/31/84)
1.0% - City of Fargo Infrastructure (1/1/2009-12/31/2028)
0.5% - City of Fargo Flood Control (1/1/2010-12/31/84)
0.5% - City of Fargo Flood Control (1/1/2013-12/31/84)
Why a specific 20 years for the sales tax? And, since the financial model assumptions are conservative, what if more money is collected than needed?
The financial assumptions of tax collection growth, bond costs, return on escrow, and expected annual operational revenues are intentionally conservative to ensure a sound plan. A definitive twenty- year sales tax is proposed because the tax revenue collections match up against the twenty-year bond repayment, with adequate cash flow under the conservative financial model assumptions to retire debt, pay ongoing capital expenditures, and rebuild the escrow account.
If tax collection growth exceeds projections and generates cash collections in excess of needs of FARGODOME, political leaders and citizens at that time shall determine the most urgent needs for the City of Fargo at that time. This situation occurred with the initial FARGODOME sales tax. Via a city-wide election, a fraction of the sales tax was reallocated to Fargo City Street repair for six years.
How long will the construction take? Will you close FARGODOME?
Architects estimate the construction will take about three to four years. Because FARGODOME has such a busy event schedule, construction will be done in phases so the building can remain operational throughout the construction period.
How will the remodel affect parking at FARGODOME?
Parking capacity at FARGODOME lots will remain net neutral or slightly increased at approximately 3,900 parking spots. West parking lots E, F, and G will be reconfigured for replacement parking spots.
How will this new tax affect the City’s long-term planning and future city needs?
Through budgeting and ongoing planning, City Commission and City staff keep their focus on future needs of Fargo and available funding mechanisms for those needs. The city has various funding options, and seeks to best match the funding source with the project. FARGODOME is a substantial City asset, with immediate needs to upgrade the venue to comply with laws and standards and comfortably accommodate venue guests with adequate restrooms, concessions, and circulation, while retaining capacity expectations of venue promoters. Sales tax as a funding source allows FARGODOME’s greater than 50% out-of-town patrons to participate in the remodel and expansion costs.
Future City needs will continue be assessed and matched with appropriate funding sources. In addition to a myriad of other alternatives, sales tax remains an option as even with the proposed increase, Fargo’s sales tax rate is in line with, or lower, than neighboring communities.