published Monday, November 7th, 2011

Subsidies keep Dalton's Northwest Georgia Trade and Convention Center running

The Northwest Georgia Trade Center in Dalton, Ga., was built in 1991.
The Northwest Georgia Trade Center in Dalton, Ga., was built in 1991.
Photo by Tim Barber.
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BY THE NUMBERS


2009 —2010—2011—2012

Events: N/A—N/A—421—436

Attendance: 103,637—114,968—141,915—149,915

Revenue: $958,452—$1.08 million—$1.01 million—$1.05 million

Expenses: $1.98 million—$2.09 million—$2 million—$1.97 million

Total loss: $1.02 million—$1.01 million—$992,142—$913,629

Source: Northwest Georgia Trade and Convention Center

Poll
Should the Northwest Georgia Trade Center be closed?

DALTON, Ga. -- The Northwest Georgia Trade and Convention Center continues to operate at a loss of about $1 million a year, using city and county government money to subsidize its operations.

But officials who head the often-maligned center say those numbers do not show the true picture.

The trade center, built in 1991 and run jointly by Dalton and Whitfield County until it was turned over to arena management company Global Spectrum in 2009, long has been a controversial recipient of taxpayer dollars. Local residents frequently refer to it as a "white elephant" or "black hole," noting that the city and county each spend about $500,000 a year for operating costs.

During a Whitfield County budget workshop last week, County Commissioner Greg Jones voiced concern that the county has lost too much money in the trade center.

"It needs to step up to the plate or close its doors," Jones said. "Global Spectrum promised big things, but so far I haven't seen it. That is why I say, 'No more.'"

But members on the trade center board of directors say the operation serves as an economic engine for the community, bringing in about $4.1 million every year in money spent on hotels, food, gas and shopping. The trade center hosts more than 400 events a year, such as religious conventions, indoor yard sales, gun shows and concerts, with many of them bringing in out-of-town guests, board members say.

Last year, total lodging tax collected in the city and county was a record $1.035 million, the first time it has exceeded $1 million.

"Our goal is to bring people into town to buy meals and book hotel rooms," said Dan Rogers, chairman of the center's board. "In a perfect world, the trade center would make money, but we are trying to manage it the best we can in these tight economic times. I think it adds a lot to the overall operations in our Dalton and Whitfield County community."

This year, the bonds financing the purchase of the land and construction of the trade center were paid in full, which means the city and county no longer will need to make payments of an additional $500,000 a year.

The trade center also is improving its bottom line, General Manager Shashank Gairola told board members when he presented budget requests for next year. It expects to book 436 events in 2012, a nearly 4 percent increase from this year. Attendance at events has increased from a little more than 100,000 in 2009 to nearly 150,000 expected in 2012.

Gairola also said Global Spectrum has improved the trade center's bottom line since taking over operations three years ago. In 2009, the center lost $1.02 million, but losses in 2012 are expected to be $913,629.

The company has not filled three staff positions that were budgeted for 2011, he said, and continues to cut costs where it can.

"I think it's difficult for trade centers all over the country, and the economic climate is unpredictable," Gairola said.

Global Spectrum receives an annual management fee of $108,000, with additional incentive fees if it reaches certain benchmarks. So far, it has not met those benchmarks.

Earlier this year, the company asked the board to review the benchmarks, saying they had been set in different economic times and were impossible to meet today. The board has agreed to review them.

Whitfield County and Dalton split losses -- which average about $500,000 a year each -- by using lodging taxes and making up any difference from their general operating budgets. The arrangement between the two governments was reached as part of a sales-tax split agreement.

Dalton brought in $862,299 in lodging taxes in 2010, covering all trade center costs. The rest of the money, which must be spent on tourism-related business, went to the Dalton Area Visitors and Convention Bureau and several tourism events, officials said.

There is only one hotel in unincorporated Whitfield County outside Dalton. That operation brought in $200,673 in lodging taxes last year, with $12,038 of that designated for the visitors bureau. That forces the county, which is facing a budget deficit of about $7 million next year, to dip heavily into its general fund to cover the difference.

The trade center has asked the city and county each for $472,000 in operational costs, $112,000 in capital funds and an additional $25,000 to promote events. The new fiscal year begins Jan. 1.

The county tentatively has budgeted $471,000 for the center, the same as this year, but has not voted on a final budget.

The city has not decided if it will give the center more than this year's budget of $471,000, Finance Director Cindy Jackson said.

Rogers said he understands government finances are tight, but not having adequate funding makes it difficult for the trade center to promote and bring in events.

County Commissioner Robby Staten, who also serves on the trade center board, agreed.

"I don't think they can afford such severe cuts," he told commissioners at the budget workshop. "Unless the city is going to pick up the difference, it will be hard for them to operate."

Global Spectrum's contract comes up for renewal in 2013. Rogers said he does not think the city and county should go back to operating the trade center.

"We are not experts in marketing," he said. "Right now it is really difficult with the economy, but we are pleased with our partnership and look forward to improving it over time."

about Mariann Martin...

Mariann Martin covers healthcare in Chattanooga and the surrounding region. She joined the Times Free Press in February 2011, after covering crime and courts for the Jackson (Tenn.) Sun for two years. Mariann was born in Indiana, but grew up in Pennsylvania, Tennessee and Belize. She graduated from Union University in 2005 with degrees in English and history and has master’s degrees in international relations and history from the University of Toronto. While attending Union, ...

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