Mayo Civic Center rebound: More bookings, bigger audiences boost revenue

Feb. 25—ROCHESTER — One of Joe Ward's fondest Mayo Civic Center memories from 2022 was the REO Speedwagon concert, but it had little to do with the musicians on stage.

"It was like this virtual hug from the community, because we were finally together again," the president of Experience Rochester said of the sold-out concert one year ago.

He said attending with roughly 2,500 people in the Civic Center arena was evidence that COVID-19 challenges were being overcome.

Ward was

hired in late 2019

to lead the nonprofit that oversees Civic Center operations, as well as the city's convention and visitor's bureau duties.

With the help of two contractors — ASM Global to run building operations and schedule entertainment and Spectra, which would later be purchased by Oak View Group, to provide food and beverage services — his

mission was to create the merged team

to guide activity in the city-owned building.

The effort that started in January 2020

quickly faced

canceled events

and limitations as the COVID pandemic arrived in Rochester.

Now, as Experience Rochester, ASM and OVG are entering the fourth year of five-year contracts, traditional activity continues to return to the Civic Center.

In 2022, revenue exceeded expectations and nine high-impact events occurred, meaning each multiday event required at least 500 hotel rooms to be reserved.

This year, 16 similar high-impact events are already scheduled, according to Angie Richards, Experience Rochester's vice president of sales.

Local business owners have cited the importance of such events.

"The Tap House saw quite a bit of activity from the United Hardware conference," the business' co-owner, Natalie Victoria reportedly shared in a message to Experience Rochester, which was shared with the Rochester City Council during an annual update. "We filled up Wednesday through Friday evenings with the attendees. ... It was a great boost for downtown, especially at that time (early January). Any conventions at the Civic Center greatly benefit the bar/restaurant scene."

Jacob Malwitz, Experience Rochester's board chairman, said the results are good but lagging when compared to pre-pandemic expectations.

"I think we are a year or so behind where we would ideally be," he said, adding that activity has improved since the convention business and center operations were merged.

"Things are definitely ahead of where they were in the past in a lot of ways, and we are going in the right direction," he said.

Prior to 2020, the former Experience Rochester organization was tasked with marketing the city and booking conventions and other non-entertainment activities at Mayo Civic Center, while city staff oversaw daily center operations and entertainment bookings. The combined effort relied on approximately $5 million from the city's lodging tax in 2019, and the required funding was expected to increase annually.

The five-year Experience Rochester agreement that started in 2020 limits the lodging tax commitment to $3.8 million annually, an amount that dropped to $3.6 million for 2021 to reflect pandemic pressures.

Amid the pressures, staff has been able to accommodate large, last-minute events. When the United Hardware convention left Minneapolis, Experience Rochester got the event into the Mayo Civic Center, and now that event will return with a summer version in June. The Civic Center will also see the return of Jehovah Witness conventions, which will run through July and into August.

On the entertainment front, the Mayo Civic Center has seen significant growth in the number of nationally known comedians scheduling shows and a variety of interest from promoters looking to bring other acts to town.

"Everybody came out of the gate and wanted to travel," Ward said of 2022. "Some artists needed to catch up on their income and such."

He said the challenge will be to keep the momentum moving forward and finding ways to overcome limitations posed by competing entertainment venues in other cities, since many locations require promoters to limit competing nearby shows.

While it means big-name acts that land in the Twin Cities or Treasure Island Casino might not be able to play in Rochester, Ward and Dan Hartman, executive director of the Duluth Entertainment Convention Center, recently exchanged ideas related to collaboration. Since their venues are more than 200 miles apart and unlikely to compete for the same audiences, the two are looking for ways to promote their venues to similar acts.

Ward said it gives promoters options, especially since the Mayo Civic Center can draw people from Minneapolis and St. Paul for the right show.

While a typical show at the Mayo Civic Center sees 15% to 20% of its tickets sold to metro-area residents, Ward said the 2021 Blues Traveler concert drew more than 30% of its audience from the Twin Cities.

"That was eye-opening to me, to show the percentages we were getting," Ward said.

The ability to draw more people from out of town, whether for conventions or concerts, doesn't mean Experience Rochester is abandoning community focus.

Richards said 150 days were scheduled for a total of 56 community-focused events in 2022, from the Night Market to local fundraisers. They drew a combined 78,744 attendees.

"Sometimes, I think people gloss over the amount of civic business we do for our community," she said, pointing out that a typical convention center doesn't see the same level of community activity.

Ward said the recent New Year's Eve community event, which drew approximately 4,800 people, represents the ongoing commitment to community.

"It's the perfect example of that civic side we talk about," he said, adding that plans call for a return of the event at the end of 2023.

Rochester City Administrator Alison Zelms said the community focus was also seen during the height of the pandemic, when the facility helped house residents facing homelessness,

offer vaccinations

and provide space for the Boys and Girls Club efforts to address distance learning needs.

"They were able to be more flexible because they were just starting up, so that was a bit of a blessing and a curse," she said, adding, "They were willing to partner with us."

In addition to maintaining a community connection through activity in the Civic Center, Experience Rochester has sought to improve business relationships.

From offering local food and snack options for event organizers to ensuring businesses know when big events are on the horizon, Ward said efforts continue to address local needs.

Local business owners said they've noticed results.

Seamus Kolb, owner of Carroll's Corn

, said the use of his product on event snack tables has spurred new business, and the snack's appearance at a recent florists' convention led four area florists to start stocking Carroll's Corn as a gift item.

"It's been great exposure for our product," he said.

For Svaar Vinje, owner of Knight's Chamber in the nearby Galleria at University Square, the effort to notify businesses of big gatherings is crucial. For him, that means getting advanced warning of the return of Jehovah Witness conventions, which bring added suit sales.

"I work 46 days straight from the time the conventions start until they are done," he said.

Kolb and Vinje said the added traffic has the potential to boost all businesses in the area, since events draw participants with a variety of interests.

Bill Von Bank, Experience Rochester's vice president of marketing and communications, said outreach efforts are a key part of the Experience Rochester mission to market the city and all it offers, which can sometimes appear to mean competing options, such as entertainment or event venues.

Concerns were voiced when the 2020 operations transitions occurred, especially since the new food and beverage contract ended outside catering access to the Civic Center.

While it meant a change for Powers Ventures, who was the largest caterer of Civic Center events at the time, Joe Powers, who leads the business, said the company has shifted and retained business by partnering for events at the nearby Hilton Hotel.

"We were back online at the Hilton in May," he said, adding that business has fully returned to pre-pandemic levels.

Malwitz said it's all part of what the current model of Experience Rochester was created to support.

"On one side, we need to balance the budget with the Civic Center, so we need to sell space and have that space, but on the other side of it, we have to sell the city," said the board chairman, who is a Mayo Clinic executive producer responsible for helping plan a variety of events for his employer.

"In the perfect world, the Civic Center is full, the Chateau is full, the hotel ballrooms are full," he added. "Each of them have their places."

The goal, he said, is to increase the overall economic impact of the Civic Center and marketing operations.

For 2022, ASM reported the community-wide tourism economic impact a was estimated at $22 million, with hotel revenue returning to 93% of pre-pandemic levels.

Hotel revenue started out strong for 2023, according to a Smith Travel Research lodging report, which showed 95,607 hotel rooms being sold in Rochester last month, setting a January record. The month's hotel revenue was reportedly 98.5% of pre-pandemic levels.

When it comes to financial support for Civic Center operations, Ward said work continues.

"We're definitely improved, and we're definitely on track, when you take into account the pandemic, which was more than a hiccup," he said.

According to Rhonda Henderson, regional director of finance for ASM Global, which oversees building operations, 2022 ended with the Civic Center $90,000 better than budget for the year.

Ward said the result was 2022 Civic Center income that was $900,000 higher than what was reported in 2019, but projections continue to rely on reserves to balance budgets.

The 2023 budget presented to the Rochester City Council in December anticipated revenue of $8.8 million and projected expenses of $9 million for Experience Rochester operations, with continued reliance on the nonprofit's operating reserve funds to balance the books, even as it starts to build a reserve for long-term building maintenance.

"Budget is always going to be a challenge, but I think we are going to get there," Malwitz said. "This is never going to be an extreme money maker, but I think we can get on either side of breaking even, which is way beyond where we were three years ago."

Since the initial agreement with Experience Rochester was inked in 2019, the city has also worked with the nonprofit, as well as the Rochester Arts Center and Rochester Civic Theatre, to adopt a one-roof model.

The new operating structure transfers a variety of responsibilities for the art center and theater spaces to Experience Rochester, with funds previously used to cover utilities, maintenance and other needs in the two city-owned spaces shifted to the nonprofit.

Zelms said it provides an economy of scale with the ultimate goal of reducing costs and improving use and maintenance of city assets, which includes Mayo Park.

In addition to putting oversight of maintenance and security in Experience Rochester hands, the agreement reached in 2021 gives the nonprofit the ability to schedule activities in the art center and theater, when space is available.

It also has OVG overseeing catering functions for all events in the two spaces, with the art center and theater receiving a portion of any revenue.

"For the Civic Theatre, it makes a lot more sense because everything has been streamlined," said Misha Johnson, Rochester Civic Theatre's managing director.

Johnson, along with Rochester Art Center Executive Director Pamela Hugdahl, said the agreement allows the two organizations to put more focus on their missions.

While direct rental and concession revenue is lower, they said costs of providing space and related services are also reduced, since Experience Rochester staff does the work.

"I think it opens us up to a lot more resources than we had before," Hugdahl said, pointing out the art center previously employed a staff member to oversee rentals and other staff lacked specific experience needed for related services.

Johnson and Hugdahl said the agreement has also improved lines of communications between their organizations, leading to sharing equipment and storage space on occasion.

Under the agreement, the art center space has become a go-to location for weddings, as well as reception and meeting space during large conventions, but the Civic Theatre space has largely been occupied by a variety of community partners, including four theater groups and four dance groups, so bookings by Experience Rochester have been limited.

When space is an issue, Johnson and Hugdahl said their organizations have been able to tap into Civic Center space, which wasn't a readily available option in the past.

With COVID challenges waning and new operation models being tweaked as needed, Experience Rochester and the city will need to determine what happens when contracts end after 2024.

Zelms, who serves as a non-voting ex-officio member of the Experience Rochester board, said she expects that agreement will be renewed.

"If we were going to go a different direction, we'd need a lot of time," she said, adding that a new contract could see updates.

When it comes to the contracts with ASM Global and Oak View Group, Malwitz said the Experience Rochester board will be weighing options based on the new activity and what is projected into the future. .

"In the next couple months, it's time to start looking at if that is the right direction," he said, adding: "Without the pandemic in there, we would have had a lot of data to make really solid decisions."