Visit Fargo Moorhead hires HVS for convention-center market study; Appleton case cited for financing, management lessons

Visit Fargo Moorhead told its advisory group that it has hired consulting firm HVS to prepare a market analysis to accompany a planned request for proposals (RFP) for a convention center and attached hotel, and that the RFP will not be rushed.

The analysis, Visit Fargo Moorhead representatives said at the meeting, will be distributed with the RFP to inform developers and help shape the project. Charlie, Visit Fargo Moorhead, said the consultant’s draft could be available “by around the April maybe by the twentieth.”

The market study and the project’s financing timetable matter because the local lodging-tax mechanism the group is considering will not take effect automatically, Charlie said: “the tax doesn't actually go into effect until this this group recommends and the city commission at a City Commission meeting approves it.” He added that if the project is not selected by 2028, the tax provision would expire under current design.

To help the advisory group evaluate trade-offs, the meeting included a remote presentation from Pam Bridal of the Fox Cities Convention and Visitors Bureau, whose bureau supported the Fox Cities Exhibition Center in Appleton, Wis. Bridal described the Appleton center as roughly a 37,000–40,000-square-foot exhibition hall attached to a large downtown hotel and said the market case there was built over many years of studies and intergovernmental agreements among multiple municipalities.

Bridal summarized how the Fox Cities funded the facility: municipalities formed a tourism zone and set a 10% lodging tax; of that 10%, she said, roughly 3 percentage points were dedicated to the exhibition-center debt, 3 percentage points to a separate indoor sports facility (the Champion Center), 2.85 points to the CVB and 1.15 points retained by municipalities. Bridal said the exhibition center was funded with municipal lease-revenue bonds and opened in January 2018; the adjacent sports facility opened in November 2019.

On operations and management, Bridal said the Paper Valley Hotel (now operated as the Hilton Paper Valley) ran the exhibition center under a management agreement that allowed the hotel to retain any operating profit but also required it to absorb operating losses. She said operating losses in recent years were modest in the context of the regional economy — she cited losses reported near $148,000 and $159,000 in different years — and that the hotel also paid a payment-in-lieu-of-taxes (PILOT) of about $25,000 under the arrangement. Bridal said Appleton was renegotiating its management agreement at the time of the advisory-group call.

Bridal urged the Fargo-Moorhead group to expect that such public assets commonly operate at a loss and to plan for how capital repairs and ongoing operating deficits will be handled. “The agreements from our municipalities, the room tax was funding the construction debt. But these facilities generally operate at a loss,” she said.

On design and operations, Bridal offered specific lessons: prioritize acoustics and carpet (or a durable removable carpet system) for trade shows; provide appropriately sized food-service and plating kitchens because many groups will want meals in the exhibit hall; prefer street-level or grade access for loading and vendor movement rather than sunk, below-grade exhibit floors; include multiple loading docks and a large freight elevator; and weigh the long-term maintenance costs of escalators. “We would look at better at acoustics and carpeting,” she said. “There’s a lot of conveyance. We have two banks of escalators that are very expensive to run, and they break down a lot.”

Advisory-group members asked about management, catering and liquor licensing. Bridal said the hotel holds the liquor license in Appleton and handles bar sales; outside caterers may serve the exhibition center but the hotel’s staff and licensing remain central. On sales and bookings, Bridal said the hotel and CVB share lead-generation and sales responsibilities; Appleton’s hotel had a sales team and the CVB maintained convention sales staff to pursue leads.

The meeting’s presenters reiterated that Visit Fargo Moorhead is seeking proposals through an RFP and wants to “take as long as it takes” to get the RFP right; they declined to commit to an exact RFP release date but noted a target of issuing materials in spring. The advisory group will hear further case studies — including an April 4 presentation by an Overland Park representative — as part of the next meeting.

The discussion combined technical design, financing and operations considerations rather than culminating in any formal vote. The group recorded the HVS engagement and timing details as items to guide the RFP and next steps.