The Goldilocks Arena

This new $30,000,000 to $40,000,000 arena added to the Fargodome reminds me of an old story.

The Fabulous Fargodome that is paid for is too big.

The recently refurbished (2004) Civic Center that is paid for is too old and too small.

The paid-for Bison Sports Arena is the right size, but it’s not new and doesn’t have seat backs.

The new Urban Plains Arena is just the right size and new, and will have seat backs, but it’s too far away (7 miles from Dome).

Some think this new $30,000,000-$40,000,000 arena added to the dome might be just right.

End of story.

I don’t think adding another arena to the Dome is a high priority and I think that the question should be put to a vote of the people of Fargo before it’s built.
Leaving the projected $29 million escrow fund intact is the taxpayers’ insurance that the dome will be financially self sufficient for the projected 100 year life of the structure, so that we don’t have to go back to taxpayers for more.

If there is any idea that would take principal away from that escrow, including a new arena or a community stewardship fund, the commission should ask for the voters’ approval.

I believe we need to consider and compare projects and their opportunity costs to help make our best public investments. I don’t believe another $30,000,000 to $40,000,000 arena added to the Dome is a high priority, especially while we consider other needed investments for protecting our community.

Protecting Fargo to an adequate level that corresponds with the new FEMA flood levels, which will likely come out this year, could help our residents avoid the high cost of flood insurance. The discussed options for comprehensive flood protection for a 100 year flood range from $50 million to about $200 million. We are also evaluating options for what it will take to protect from a 500 year flood.

Fargo and North Dakota are currently in a strong financial situation, but we have to make decisions on how to best invest our resources in the highest priorities, and to make the most efficient use of current public assets and existing infrastructure and buildings.

To me, the highest priorities for the city are public health and safety, infrastructure of roads, water, dikes and water management.

Recent votes and surveys seem to indicate that our Fargo citizens have certainly not shown a large public demand for spending of millions of public money on another multipurpose arena. We have the best, most versatile, public multipurpose arena in the state with the Fargodome (that’s just about paid for). We have the recently remodeled Civic Auditorium that seats up to 3,000, and we have the Bison Sports Arena that seats between 6,000 and 8,000. The private Urban Plains Arena is being built right now. That private facility would add another 5,000 to 7,500 seat venue to compete for events and concerts with our current public buildings already in our market area like the Dome, Civic, and Alerus, along with the private venues like the Venue, the Englestad, and reservation casinos.

I wonder, if more public funds for another multipurpose arena are such a good idea, what’s the rush? Why not ask the public to see if it’s a high priority for them and put it to a vote?

All I’ve asked from the beginning of this new public arena proposal is to leave the Fargodome money in escrow, to continue to grow that fund like the chart shows, and meanwhile invite the public to weigh in on this opportunity, hear their ideas and priorities, and put any proposal that would use millions of available funds to a public vote.

We had our bond consultant Springstad project out 25 years. All scenarios have the $1 million deducted for the annual dome expense.

The first scenario leaves all $29 million that is estimated to be available by the time the tax expires in less than two years. That scenario is the only one that is sustainable, and the principal actually grows by reinvesting the amount of interest generated over the $1 million needed for the dome expenses annually.

The next three scenarios show what happens to that same fund if the city chooses to take $15 million out to build another multi-purpose arena. Two scenarios run into deficit in the 25 year projection, and the other depletes the fund to $9.8 million with a severe downward trend that will also run into deficit as the interest generated shrinks each year with the $1 million dome expense being more than the interest generated from the diminishing principal.

Here’s the chart. Which one would you invest in for the best long term financial security for the dome, to provide for unforeseen circumstances, and possibly create another sustainable funding source for community needs, without raising any taxes?

At Inflation rate 4.00% & Capital Escrow Investment Rate 7.00%.
Numbered Scenarios at top of column to which they correspond.

Year 1 1A 1B 1C
2007 23.02 23.02 23.02 23.02
2009 29.16 13.86 29.16 28.16
2012 31.64 14.02 29.64 27.39
2017 35.61 12.52 28.84 24.96
2022 39.48 7.39 24.68 19.08
2027 47.53 2.53 21.19 13.18
2032 52.39 -9.7 9.84 -1.55