Let fight begin for arena, convention center business

CEDAR RAPIDS - It can be dog-eat-dog in the Corridor.

The Corridor concept, a 15-plus-year-old economic development sales device, has brought with it an aroma of regional affection and mutual cooperation all along the piece of geography connected by Interstate 380, from the Cedar Rapids metro area to the Iowa City metro area and beyond.

But it's not all love.

Cedar Rapids now finds itself a little jittery as Coralville just 25 miles away has proposed to build a 7,000-seat arena, which will compete with Cedar Rapids's newly renovated U.S. Cellular Center arena of similar size. The Cedar Rapids venue holds 7,638 for reserved seating - 9,009 when some patrons stand on the concert floor, according to city figures.

If that's not headache enough, Marion on Cedar Rapids's border is proposing to build a new conference center that will have the potential to grab a piece of the not-always-easy-to-find business destined for Cedar Rapids's new convention center next to its arena.

Both Coralville and Marion are competing with six other Iowa cities for state money in the state's Reinvestment District program to help fund their projects. Marion wants $24 million, while Coralville hopes for $12 million.

Josh Schamberger, president of the Iowa City/Coralville Area Convention and Visitors Bureau, doesn't dodge what he said is the reality that a Coralville arena 'certainly is going to compete in the concert market with Cedar Rapids.”

'There is place for regionalism and how we move forward and promote each other together,” said Schamberger, who worked at the Cedar Rapids Convention and Business Bureau in the past. 'But respective of that, we are still different communities. That's essentially what we have here.

'Competition is a good thing.”

Cedar Rapids Mayor Ron Corbett said he can't 'begrudge” Coralville and Marion for applying for state funds to help along their reinvestment district projects with an arena on the one hand and a convention center on the other hand.

Corbett, too, said competition is good.

But he said state funding support for a new arena and a new convention center nearby to Cedar Rapids comes in a context: Less than two years have passed since Cedar Rapids built and opened its new convention center and renovated both its antiquated arena next door and what had been a bankrupt hotel connected to the arena.

That $146-million project came with the help of federal and state funds and now needs ongoing local tax support to help pay $77 million in outstanding debt and $400,000 in the upcoming year to help with operating costs at the arena and convention center. according to city budget figures.

'I just know how challenging the industry is,” Corbett said of the arena and convention center business.

John Frew, president and chief executive officer of Frew Development Group LLC who was the project manager of Cedar Rapids's hotel, arena and convention center project, said the proposed Coralville arena will 'directly compete” with the Cedar Rapids arena to the detriment of the Cedar Rapids facility.

'I think that would be a very bad outcome,” said Frew, who also is the developer of the Westdale Mall redevelopment project in Cedar Rapids.

Sharon Cummins, executive director for VenuWorks of the U.S. Cellular Center arena and three other Cedar Rapids-owned entertainment venues, doesn't mince words, either. A new, similarly sized arena just down Interstate 380 from Cedar Rapids's arena would take business away from the Cedar Rapids arena even as the presence of the Cedar Rapids venue likely would limit the potential of a Coralville arena, she said.

Cummins said the Coralville arena plan comes just as the Cedar Rapids arena has completed its first full season in 2014 since the arena's renovation and refurbishing.

'So we just really feel like right now we're starting to hit our stride,” she said.

In 2014, 170,497 people attended events in the U.S. Cellular Center, about equal to the annual average from 2005 through 2013 (excluding 2012 when the arena was closed). But the expectation is for the number to increase to 216,000 in 2015, she said.

'So then the question is, what do we think that (a Coralville arena) will do to us?” Cummins said. 'Two arenas in such proximity? Most likely neither one will realize its full potential.”

Cummins, who has more than 25 years of experience in the entertainment business, said 'the reality is” that there is only a finite number of touring acts for similarly sized arenas.

'Just because we have one more arena in the area doesn't mean that it doubles the opportunity for that much more business to come into the market,” she said. '…

The only people who are going to benefit from that are the artists and the promoters. Because pretty soon, like anything else, you kind of get into a bidding war.”

Kelly Hayworth, Coralville's city administrator, and Schamberger said that the new Coralville arena proposal isn't new. Both said that Coralville has had an arena proposal in a master plan that dates to the 1990s.

In the past five years or so, a new Coralville study brought the idea closer to reality when it concluded that a Coralville arena would succeed because it would be in the backyard of 30,000 students at the University of Iowa. Schamberger said he imagined, in fact, that the prospect of a Coralville arena was known as Cedar Rapids made plans to renovate its arena after the city's 2008 flood.

But forget about arenas for a minute - what about convention centers, they asked.

The city of Coralville owns the Marriott Hotel and Conference Center, a $59 million project that opened in late 2006, and the conference center has felt the impact of Cedar Rapids's new city-owned convention center, which opened in 2013, Schamberger said.

'I can understand being concerned with (arena) competition,” Schamberger said. 'But quite honestly, it's no different from when we (already) had a large convention center here in the Corridor. And this isn't a return play by any standards whatsoever.”

Rather, Hayworth and Schamberger said they both talked to Cedar Rapids about Coralville's experience with a city-owned hotel and convention center to help Cedar Rapids plan for the construction of its convention center.

Coralville's arena proposal, Hayworth said, now puts Coralville in the same position as Cedar Rapids. Both cities realize that a city-owned hotel, convention center and arena working together is the best formula to make all three facilities succeed.

‘More aggressive'

In Marion, the city's Central Corridor Reinvestment District plan calls for a new downtown library, an expanded and rejuvenated central square park as well as a new hotel and conference center and other projects.

Lon Pluckhahn, Marion's city manager, said Cedar Rapids's convention center will be three times or so the size of the conference center that Marion is proposing, so he said big groups would still go to the Cedar Rapids facility.

But a new Marion center would be able to handle some of what now goes to Cedar Rapids, he said.

Nick Glew, president of the Marion Economic Development Co., said Marion's ambitious plans for its reinvestment district befit a city that is growing in significance alongside its larger neighbor.

'As a community, we are working to be more aggressive in making sure that were not just the best place to live in and raise a family, but we're the best place to do business in,” Glew said.

Coralville's Iowa River Landing Reinvestment District plan, in part, calls for an Iowa Fitness and Sports Performance Institute to complement a 7,000-seat arena as the arena works to attract athletic events as well as concerts.

The Coralville arena is designed for a sheet of ice, and Hayworth and Schamberger said they are hoping that the club hockey team at the University of Iowa will make the Coralville arena its home. Such an arena will allow the club team to play club teams from Division 1 schools, which Schamberger said one day could help persuade the UI to add hockey as a Big 10 sport.

The U.S. Cellular Center's Cummins also operates Cedar Rapids's ice arena, home to the RoughRiders hockey team in the United States Hockey League. It's not unthinkable, Cummins said, to think that Cedar Rapids might need to offer more to keep the team in Cedar Rapids with the new arena in Coralville.

However, Deanna Trumbull, a consultant to the city of Coralville, said the new Coralville arena is intended to meet the demand from sports teams already in the Coralville area. She said she has not had any recent talks with the RoughRiders or other teams in that league and she said such a team is not being contemplated for the new arena. Someday, perhaps, she said.

Schamberger said that a Coralville arena may not compete that directly with Cedar Rapids's arena for concerts. The Coralville venue, he said, is apt to attract some different concerts because of the university population next door.

Even so, he said Coralville conceivably could hire arena management company Global Spectrum, which also operates the larger Wells Fargo Arena in Des Moines. Global Spectrum's ability to seek acts for Des Moines and Coralville at the same time could provide an advantage over competitor VenuWorks and its Cedar Rapids client, he said.

Cedar Rapids Mayor Corbett said competition can come with some surprises and unwelcome consequences.

In that regard, he said Coral Ridge Mall's opening in 1998 in Coralville, no doubt, contributed to the slow demise of Westdale Mall on Cedar Rapids's south side, about 25 minutes from Coral Ridge Mall. Cedar Rapids now is providing tax incentives to redevelop the property.

'Here we are all these years later trying to deal with the impact of Coral Ridge on Westdale,” Corbett said. 'But we're re-visioning the whole area now. In the long run, the reconfigured area will pay more dividends than having a mall continue to deteriorate.”

Corbett said one disparity bugs him most.

He said potential state funding for a Coralville arena and a Marion conference center will stand in contrast to another state entity, the Iowa Racing and Gaming Commission, which denied a casino license to a private Cedar Rapids casino project in April 2014, saying it would harm existing casinos, particularly the casino in Riverside, 15 miles south of Coralville.

'I find it ironic, the differing messages coming out of the state,” said Corbett, who continues to work to obtain a casino license in Cedar Rapids. 'One says competition is good, the other says competition is bad.”