Entertainment complex will have $2.5 million loss due to pandemic, city financial director says; Prior revenues will be used offset loss

KELOLAND.com Original

SIOUX FALLS, S.D. (KELO) — If it were a song, it would likely be one about sadness with a somewhat silver lining.

The Denny Sanford PREMIER Center along with the Sioux Falls Convention Center and Sioux Falls Arena are projected to lose $2.5 million this year because of the coronavirus pandemic, Sioux Falls City Financial Director Shawn Pritchett said in a Sept. 22 city informational meeting.

“For the PREMIER Center, a big piece of that is that concerts just aren’t being held,” Pritchett said.

The other losses are in sponsorships and suite holders, he said.

The silver lining of sorts is that the concert and event venue has had about $5.2 million in earnings prior to the pandemic so the venue will be able to draw from those earnings to offset the $2.5 million loss, Pritchett said.

The city has to make an adjustment in the entertainment complex budget but that does not require city money because it comes from the complex’s earnings, Pritchett said. The council would consider the budget change at an upcoming meeting, he said.

This would be the first loss experienced by the three related facilities in the entertainment complex, Pritchett said.

While the city owns the Sanford PREMIER Center and Convention Center, ASM Global manages it. The city is responsible for repairs and similar expenses while ASM oversees the daily operations and expenses such as utilities, Pritchett said.

A Sept. 22 post from the Denny Sanford PREMIER Center announcing the cancelation of the Oct. 24 Chris Young concert.

So while concerts such as the Oct. 24 Chris Young concert have been cancelled and others such as a Toby Keith concert planned for September have been re-scheduled, it doesn’t mean the PREMIER Center has been closed.

Pritchett said the center still needs heating and cooling and employees are still working. Still, some employees have been laid off, some have been furloughed and some have been working every other week, Pritchett said.

Council member Greg Neitzert said while the city is not using tax dollars for offsetting the $2.5 million loss, technically, ASM Global is still managing the city’s money. Has there been discussions about reducing costs at the PREMIER Center and Convention Center, Neitzert asked.

“We continue to have those conversations,” Pritchett said.

The PREMIER Center and Convention Center operated early on with the premise that both needed to be ready when events returned more to normal, Pritchett said.

“We wanted to be ready when things turned around,” Pritchett said.

Although the number of concerts and events is drastically lower than in 2019, there are events returning to the Convention Center and PREMIER Center, he said.

“We are seeing more events than most venues in the nation right now,” Pritchett said.

One event was the Professional Bull Riding tour held July 10-12 held inside the PREMIER Center.

But events are not returning as quickly as the city and ASM would have hoped, Pritchett said.

The national scene influences concerts and events, Pritchett said. Some musical acts don’t want to tour and some events have stopped because the performers and venues don’t want to face public backlash, Pritchett said.

While the revenue and expenses through operations at the PREMIER Center and Convention Center are not directly tied to the city, the city loses entertainment sales tax money with each lost event, Pritchett said.

The entertainment tax collections were down 7.6% in August. Still that was better than in some prior months were collections were down by as much as 47%.

Neitzert said while ways to save money need to be discussed, the city is also helping to generate revenue.

The city council approved $225,000 to help Experience Sioux Falls market Sioux Falls as a safe place for events and visitors during the pandemic.

The PREMIER Center isn’t the only venue hit hard by the pandemic.

The Washington Pavilion recently announced that its 2020-2021 Broadway series was cancelled and it has had some staff cuts.

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