Market study finds mid-size convention center feasible for Fargo but will need public support in early years

Consultants from HVS on Wednesday walked members of Visit Fargo Moorhead through a market analysis for a proposed Fargo convention center that assumes a 40,000-square-foot exhibit hall, a 20,000-square-foot ballroom and about 7,500 square feet of meeting rooms.

The study, presented by Tom Hazinski of HVS, estimated the program would imply roughly a 55,000-square-foot total building area after allowing for kitchens, circulation and pre-function space. Hazinski said the firm modeled an illustrative opening in 2028 and projected a stabilized year with about 205 events and roughly 88,000–89,000 attendees.

The report matters because its findings are intended for inclusion with an RFP to attract developers and to show what market conditions proposers should expect, Charley Johnson, President and CEO of Visit Fargo Moorhead, told the committee.

Hazinski summarized key assumptions: “we assumed a 40,000 square foot, exhibit hall, a 20,000 square foot ballroom, and 7 and a half thousand square feet of meeting space,” and he said adjacency to a 50–200-room hotel was assumed but that HVS did not conduct a separate hotel feasibility study. The consultant said comparable facilities show Fargo would be in the mid-range of similar U.S. communities and that a dedicated exhibit hall would expand the city’s ability to host sports tournaments, trade shows and conventions.

The nut graf: The HVS demand and financial analysis indicates the venue could attract new group room nights and increased visitation, but the center is likely to operate at an annual deficit early on; the report models a recurring public subsidy (modeled as “transfers in,” typically lodging-tax revenues) covering operating shortfalls until utilization stabilizes.

In the body of the presentation, Hazinski outlined demand and revenue modeling: consumer shows and sports events generate high attendance but fewer room nights per attendee than conventions, and the study estimated about 31,000 newly induced room nights by stabilization. HVS modeled revenues and expenses in 2025 dollars with 3% annual inflation, included project-level operating assumptions (management fee at 3% of revenue, modest naming-rights and sponsorship assumptions of $80,000 and $40,000 respectively), and a capital maintenance reserve that grows to about 9% annually over time.

The consultants’ pro forma showed roughly $3.4 million in operating revenue in an opening year growing to about $5.9 million at stabilization, with food-and-beverage accounting for a large share of revenues. Hazinski said the facility would likely run an operating deficit in early years—on the order of “over a half a million dollar operating loss” in year one in the study—covered by transfers in (modeled from lodging-tax proceeds). By stabilization, he said modeled public support declined to roughly $350,000 annually.

City and committee members pressed on several technical points. Joe Raso of the Greater Fargo Moorhead EDC asked whether the HVS assumptions accounted for higher clear heights or additional back-of-house spaces discussed previously; Hazinski said those allowances are included in the overall floor-area estimate, though specific space allocations would change with a physical concept plan.

Eric Johnson, Assistant City Attorney, asked for clarification on “transfers in.” Hazinski described the term as any public resources the city might devote to cover shortfalls—most likely lodging-tax proceeds dedicated to the project but not limited to that source. “It’s any money that we would have left if we saved it out of the building plan from the lodging tax,” Johnson summarized for the group.

Committee members and staff also discussed next steps and required financial modeling. The group agreed to seek updated modeling from financial advisors Baker Tilly; Jim Gilmore (city staff) and others said they expected a Baker Tilly update by the May 9 meeting. Charley Johnson asked committee members to review a proposed set of RFP criteria and to begin discussing weighting for those criteria at upcoming meetings.

Clare Hughes, general manager of the Clubhouse Hotel, spoke to the committee’s ability to cover early-year deficits: “The CVB has adequate reserves to get through the first few years of that without any difficulty I think I can say without reservation,” Hughes said, referring to the convention-and-visitor bureau’s reserves. Several members urged caution in relying on uncertain future revenue streams and recommended that the RFP materials make clear the assumptions around lodging-tax capacity and any developer expectations about hotel room counts.

The presentation included a few items Hazinski said he would correct before the final RFP packet—he noted a chart error affecting the induced room-nights graphic and said he would resend a corrected report. Hazinski also offered to assist with more detailed tax-forecast scenarios if Baker Tilly or city staff requested that work.

Ending: Committee members scheduled follow-up work: committee members will review and weigh proposed RFP criteria, Hazinski will amend and redistribute corrected charts, and Baker Tilly will provide updated fiscal modeling by the May 9 meeting so the group can refine how much lodging-tax revenue is realistically available for bonding or operations support. No formal vote or ordinance was taken at the meeting.