Shows at DeVos Hall contributed nearly $10 million to the West Michigan economy in 2011, according to an economic impact report given to Convention and Arena Authority officials recently.
A recent report from the Anderson Economic Group shows that the Convention and Arena Authority is a certified player in the local hospitality industry. The report is the first comprehensive look at the role the CAA occupies in drawing people and dollars here since the group was formed a dozen years ago.
The East Lansing research firm and consultant found the three venues the CAA operates had a total of 1.18 million customers last year, with 535,463 coming from outside of Kent County.
As expected, concerts, sporting events and shows at Van Andel Arena sold the most tickets of the three venues at 544,396. Forty-seven percent, or 255,287 tickets, were bought by individuals living outside of the county.
“In the last 14 years, we have continued to be ranked no lower than sixth in the world,” said Rich MacKeigan, SMG regional general manager and CAA executive director, of the arena.
DeVos Place, the city’s convention center, drew 399,811 attendees to the meetings, graduations and consumer and trade shows held in the building last year. Of that attendance figure, 54 percent, or 217,427 individuals, came from locations outside the county.
The 2,400-seat DeVos Performance Hall, home to the city’s four performance-art tenants, sold tickets to 174,113 patrons last year, with 36 percent purchased by those outside the county.
The arena and the performance hall were key hospitality drivers in 2011: The report revealed that 10 percent of all tickets sold at both venues were purchased by those living outside of Michigan — not just outside the county. Ticket sales were made to people living in all 50 states, while Canadians bought 406 tickets.
“It’s a very conservative report and that’s the way we wanted it,” said CAA Chairman Steven Heacock. “We attracted dollars to Kent County.”
The Anderson report, which was commissioned by the CAA, concluded the three venues contributed $32.7 million in new net spending across the county last year. Of that, $8.1 million came from building operations and capital expenditures. Another $24.6 million was originated by attendees and performers playing the buildings. The latter figure included spending for restaurants, hotels, parking and other incidentals.
DeVos Place had the most spending of the three venues last year with county businesses and individuals, at $4.5 million. The arena was next at $3.1 million, and the performance hall chipped in with more than $550,000 in new net spending.
“Again, this is just 2011,” said Heacock. “2011 wasn’t a particularly good year for the CAA.”
Whether or not it was a good year, the total economic impact from the buildings was impressive. The Anderson report calculated that impact at $58.4 million, nearly 700 jobs, and $16.6 million in new earnings for households in the county.
DeVos Place generated $26.1 million of the $58.4 million, offered 314 of the jobs and $6.8 million of the new earnings. The arena’s numbers were $22.2 million, 252 jobs and $6 million in earnings. The performance hall contributed $9.9 million, 132 jobs and $2.6 million in earnings.
“The CAA and its venues have a positive impact on the business climate in downtown Grand Rapids. Their presence helps create a lively downtown atmosphere, contributes to demand for downtown living, attracts a strong work force, and makes the business environment more appealing to entrepreneurs and businesses looking to expand or relocate,” the report concluded.
In the last six years of operation, the economic impact of the venues has totaled $350 million. “This is not their number, it is ours,” said MacKeigan of AEG. “But they stand by that number.”
Heacock recently told county commissioners that Experience Grand Rapids and the West Michigan Sports Commission should be given a nod for the overall positive economic impact the buildings had last year, as both organizations booked events held in the venues.
“We have each of those entities to market our buildings. We have contracts with both. They’re not big contracts,” he said.
But Commissioner Stan Ponstein said he has heard that when SMG is unable to book an event at one of the three buildings it manages for the CAA, the promoters and meeting planners aren’t referred to other venues in the county. “I’m uncomfortable with that,” he said.
MacKeigan said it isn’t the firm’s practice to refer business to other facilities. Commissioner Roger Morgan suggested that another entity, possibly the Grand Rapids Area Chamber of Commerce, should take on that role to keep events here whenever possible.
When asked whether it would be worthwhile to increase the number of seats at the arena in order to accommodate bigger events like the first round of the NCAA Men’s Basketball Tournament, MacKeigan said the building’s south end could be expanded to raise the seating capacity by another 3,000 to 4,000 seats to near 15,000. But he added it would cost from $25 million to $40 million to do that, and the arena would still be at the lower fringe of seats the NCAA requires to host its premier events.
“I don’t think that’s the best investment today,” said MacKeigan.
The CAA has about $20 million in reserve to maintain, repair and expand the buildings, but will need more than that amount as the buildings age. The county has begun thinking about setting aside some of the revenue from its lodging excise tax for that purpose.
Heacock, a former county commissioner and commission chairman, said the county played a pivotal role in making DeVos Place a reality by dedicating a major portion of its income from the hotel-motel tax to the building’s construction and then subsidizing the tax account the last four years with $5.5 million in operating funds when revenue was short of meeting expenditures.
“The whole commission was courageous. It wasn’t an easy thing to do,” said Heacock. “I think the county doesn’t get enough credit for this. That’s because we don’t blow our own horn.”