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Future Funding Problems for the Fort Smith (Arkansas) Convention Center
Creating Uncertainty and May Damage its Reputation

By Ben Boulden, Times Record, Fort Smith, Ark.McClatchy-Tribune Regional News

July 27, 2010--Uncertainty about the Fort Smith Convention Center's future funding and public criticism of its operation are damaging the image and reputation of the facility, Frankie Hamilton said.

"We're just getting a lot of questions, especially the people who have planned weddings," Hamilton, Convention Center director, said Monday. "The (core convention) market seems more up in the air about it. When it comes time to have their event, they're worried that maybe their contract won't be honored. Some have gone so far as to ask if we'll still be here and open. With all the negative media out there, it has gotten people concerned about whether to have their events here."

Dennis Kelly, Fort Smith city administrator, said at the conclusion of a Fort Smith Board of Directors meeting that in the unlikely event the Convention Center is forced to close, the city will do whatever it can to honor any existing contracts for the facility's use.

Hamilton said she isn't aware of any organizers who have canceled previously scheduled events at the center.

She expects 2010 revenue to about equal 2009 revenue, but it's hard to separate the flat-demand from the lingering economic effects from the national recession from the effect of the funding uncertainty.

It has taken a toll on the morale of the Convention Center staff.

"The more negative news they read in the newspaper the more uneasy everyone is," Hamilton said. "I've had some look at moving into other departments but none have left yet. ... There's a lot of discussion whenever anything comes out in the paper. They ask me what I think. They ask, 'What are they really going to do?'

"We really thought that once the Ad Hoc Committee reported back to them, (the board) would be ready to move. When they didn't and put it off to next spring ..., it wears on them."

The Convention Center Ad Hoc Committee -- a temporary city panel set up to look at the facility's future funding -- in late June proposed a 1 percent prepared food tax bet put before voters for approval. That money would bridge a funding gap.

On June 30, the state of Arkansas ceased turning back state tax revenue that supports the operation of the Convention Center. The city-owned center historically has operated with a deficit of between $650,000 and $1.1 million, a financial shortfall that has been made up by the turnback.

Fort Smith city directors likely will call for a special election on the prepared-food tax to be held sometime early next year.

Marshall Sharpe, a candidate for the Ward 4 position on the Board of Directors, said Monday he wondered if Hamilton was the right person to be running the Convention Center.

"It surprises me that someone running for the Board of Directors doesn't understand that the Convention Center is operated by the rules and regulations set up by the board," Hamilton said. "The board made the decision to take about $6 million in revenue that the Convention Center brought in (over several years) and use it on other departments and agencies outside city government."

She said before the Convention Center was expanded in 2001, the board also chose to build only catering kitchens for the use of local caterers instead of commercial kitchens operated by center staff to provide food to events there.

Directors also decided not to allow Convention Center staff to serve alcohol.

"The Convention Centers that have food and alcohol have two huge revenue streams," Hamilton said. "They don't seem to realize that the Convention Center operates by the rules and regulations set down by the board."

Both The Courtyard by Marriott and the Holiday Inn City Center located next to the Convention Center often provide lodging to people from outside Fort Smith who attend conventions and events at the facility.

Bert Haifley, general manager of the Marriott, said the uncertainty surrounding its future operation hasn't yet hurt the hotel for which he's responsible.

"Obviously, it could from the standpoint that we do a substantial amount of group business because of the Convention Center," he said. "I have no idea what to forecast off of right now because there has been no clear direction from the city about what they intend to do. We're just kind of going along with business as usual until they make a decision about what they're going to do with the center."

Although Haifley said he hasn't gotten many calls or questions from clients or guests, but Ronnie Townsend, Holiday Inn general manager, has received some.

He said if the uncertainty continues to drag on into next year, it will begin to hurt business and bookings at the downtown hotel.

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To see more of the Times Record or to subscribe to the newspaper, go to http://www.swtimes.com.

Copyright (c) 2010, Times Record, Fort Smith, Ark.

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