‘Well done’
Despite challenging economic times and early questions, Wells Fargo Arena operates beyond projections
By Matt Miller
It was Oct. 26, 2005, when more than 14,000 screaming fans packed Wells Fargo Arena to hear the rhythmic rock of former Beatles turned soloist Paul McCartney. The seats were filled, the aisles were alive with music and McCartney had downtown Des Moines rocking. Five years later, “The Well” has become the Des Moines area’s primary venue for concerts, along with sporting and family events. With big-name acts already gracing the stage and more to come, will “The Well” ever run dry?
“We’re thrilled with the entertainment value that we’ve been able to bring to Des Moines,” said General Manager Matt Homan, who oversees daily operational of the Iowa Events Center, the booking of events and the direction of the venue management staff. “Wells Fargo Arena now provides first-class entertainment for the thousands of people who attend event each year. We have a bit of something for everyone, and the best part is that we’re financially operating at a break-even product.”
Since opening in 2005, “The Well” — a 16,980-seat multi-purpose arena — has welcomed 3,071,318 people to nearly 650 events. The arena has greeted the likes of Keith Urban, Coldplay, Bruce Springsteen, Metallica, Jessica Simpson, Des Moines natives Slipknot and many more. Wells Fargo Arena is also home to two minor league sports franchises, including the Iowa Energy (NBA-D League affiliate to the Chicago Bulls and Phoenix Suns) and the Iowa Barnstormers (AF2 football team). The Iowa Events Center — which includes Wells Fargo Arena, Hy-Vee Hall, and the existing Veterans Memorial Auditorium and Polk County Convention Complex (Plex) — also hosts events such as Iowa’s Premier Wine and Food Expo, Variety Club of Iowa Telethon and the Governor’s Conference on Substance Abuse.
“I think the entertainment value that has come to Des Moines is phenomenal,” said Angela Connelly, chairperson of the Polk County Board of Supervisors. “It’s much bigger than we imagined, and that’s a good thing. Overall, it’s been great for the City of Des Moines and the people who visit.”
A look back
Pri
or to Wells Fargo Arena, Des Moines had a handful of entertainment venues, none bigger than Veterans Memorial Auditorium. The cornerstone of Vets was laid in 1954 and the building opened in 1955 and served as the primary venue in the Des Moines area for sporting events and concerts. Soon it became one of the largest arenas and exhibit halls in the country, competing with the leading venues in Chicago, New York and Los Angeles. Many celebrities performed at Vets, including Elvis Presley, Lawrence Welk, AC/DC, Ozzy Osbourne and Neil Diamond.
“I’ve lived in Des Moines all of my life, and Vets certainly served as a great entertainment venue, and it still does today,” Connelly said. “Due to its aging, we knew we needed a more modern facility which Wells Fargo Arena now provides.”
E.J. Giovannetti, who serves on the Board of Supervisors, also recalls Vets being one of the best.
“Prior to Wells Fargo Arena, we basically had the Civic Center and Vets for entertainment,” said Giovannetti, who moved to Des Moines in 1966. “There wasn’t much when I came to Des Moines, but since then, it’s evolved into something really special.”
In 1996, operation of Veterans Memorial Auditorium and the Plex switched from the City of Des Moines to Polk County. Six years later, Polk County began building Wells Fargo Arena and Hy-Vee Hall to provide Des Moines with a state-of-the-art entertainment destination. Funding for the $217 million project — the largest public project in Iowa history — came from Polk County and its cities, private donations, and the Vision Iowa Fund that former Gov. Tom Vilsack signed into law in 2000. But the Board’s decision to build in downtown Des Moines didn’t come without opposition. Polk County reached a project-labor agreement with local labor unions that guaranteed favorable wages and working conditions in exchange for no work stoppages. Consequently, Polk County was sued soon after by right to work supporters who claimed that the use of a project-labor agreement on a public project violated Iowa’s right to work laws. Although the lawsuit brought construction to a standstill for several months, the Iowa Supreme Court ruled in Polk County’s favor in November 2002.
“I think there were a lot of people against the project,” Giovannetti said. “The biggest question heading into it was if we were going to have to subsidize it? And should government be in that type of business? Others argued that if we were going to spend that type of money, citizens should have the right to vote on it. Now that the Iowa Events Center is here, opposition to the project has kind of gone away.”
Moving forward
Since Polk County handed over management in 2004 to Global Spectrum, a Comcast subsidiary of Philadelphia, the organization has helped the Iowa Events Center operate in the black. Since Homan became general manager in 2006, the Iowa Events Center has earned a profit in three out of four years, while also increasing sales by nearly $2.5 million. According to the Polk County Board of Supervisors, the Iowa Events Center has a net income of $84,355 in 2006-07; $211,278 in 2007-08; $71,267 in 2008-09 and $79,104 in 2009-10.
“This is like any other business in that you have to know how to manage multiple facets,” Giovannetti said. “Business is about knowing how to bring in revenue and how to keep expenses down. Global Spectrum has done a great job of that. The last thing you want to do is be sent a bill at the end of the year.”
Global Spectrum was created in 1994 as Globe Facility Services in Tampa, Fla. In January 2000, a majority interest in Globe Facility Services was acquired by Comcast-Spectacor under the leadership of former Global Spectrum President and CEO, Mich Sauers. Today, Global Spectrum is the fastest growing venue management firm in the world.
“Polk County has done a great job of putting this together,” Homan said. “We’re great for the county because the taxpayers aren’t paying anything. The model for success has been perfect.”
Much of the model’s success has come from concerts at Wells Fargo Arena. During the 2008-09 fiscal year (July 1, 2009 to June 30, 2009), concerts made up 47 percent of the net event income. Sporting events made up 32 percent; family shows 16 percent and the remaining 5 percent came from special events, tradeshows and motor sports. In comparison, sports made up 57 percent of attendance at Wells Fargo Arena, while concerts made up 18 percent, followed by family shows at 13 percent. The remaining 12 percent was divvied up among special events, tradeshows and motor sports.
“The question is ‘how are we going to top ourselves next?’” said Homan, 32. “It’s about working with agents and selling tickets. If the shows aren’t successful, then we’re not going to be successful. Whether it’s bringing in AC/DC or Disney on Ice, we have to do what’s going to succeed.”
While concerts have brought in the majority of the Iowa Events Center net income, sporting events also play a large part. The Iowa Events Center took a fiscal hit after the NHL’s Anaheim Ducks dropped its affiliation with the Iowa Chops on May 8. The Ducks stated they dropped their affiliation with the Chops because they were owed a significant amount of money. The Iowa Chops franchise was involuntarily suspended on July 6, 2009, by the American Hockey League’s (AHL) Board of Governors for the 2009-10 season. The loss of the Chops resulted in the city’s third NHL affiliate in four seasons.
Even with the loss of the Iowa Chops, Global Spectrum has been able to keep the money coming in by booking more events. The Iowa Chops played 39 home games during the 2008-09 season.
“Global Spectrum has been able to fill up the difference,” Connelly said. “They’re doing a remarkable job on filling the dates that the Iowa Chops would have played home games.”
Upcoming events at Wells Fargo Arena include Elton John, George Strait and Reba McEntire, AC/DC, Taylor Swift, Star Wars in Concert and the 2010 Miracle Match Tour, featuring Pete Sampras, Andy Roddick, Anna Kournikova and Tracy Austin.
“We’re searching to find a partnership that works will bring professional hockey back to Des Moines,” Homan said. “In the meantime, we’ll continue to fill the calendar with first-class entertainment.”
Prior to Wells Fargo Arena, Vets was home to the Iowa state high school basketball and wrestling championships. Officials moved the tournaments from Vets to the arena in 2006, and many believe the move was a good one.
“It was a very easy transition,” said Budd Legg, information director for the Iowa High School Athletic Association. “From a tournament standpoint, it’s a much more modern arena.”
Legg also believes that although fans aren’t as close to the action as they were in Vets, the sidelines for being able to see the games are much clearer.
“Wells Fargo Arena also has improved security for the teams, and it’s a lot easier for the media to get around on the floor,” he said. “Overall, we’ve had a great experience. People are great to work with, and Iowa is fortunate to have a building to take care of the state tournaments.”
A 13-year review of paid attendance by the Iowa High School Athletic Association showed the average attendance for a boy’s basketball game at Vets Auditorium from 1997-2005 during a Friday night session was 7,608. A Saturday night session was 8,644. A Friday night session at Wells Fargo Arena from 2006-09 averaged to be 6,094 and a Saturday night session averaged 8,446.
While official numbers haven’t been reported for this year’s boys state basketball tournament, Legg said approximately 13,000 tickets were sold for the 3A and 4A games.
“Wells Fargo Arena is a great venue for the state tournaments,” he said. “We look to be there for many years.”
While Wells Fargo Arena only hosts one girls state tournament event, the Iowa Girls High School Athletic Union says the facility is very special.
“Vets was to a point where it needed some major overhaul, and the choice to move it to Wells Fargo Arena was a positive one,” said Mike Dick, executive director of the Iowa Girls High School Athletic Union. “Everything about Wells Fargo Arena is better — there are amenities there that we didn’t have at Vets. There isn’t a bad seat in the house.”
On the bigger stage of college athletics, Wells Fargo Arena was a 2008 women’s basketball site for the first and second round games. Approximately 22,000 people attended the eight games played in Des Moines, making it one of the top attended sporting events in the facility’s history. Although officials bid to host an NCAA men’s Division I first and second round site, the NCAA declined Des Moines as a spot. Homan still has hope that in the near future thousands of fans will be in Des Moines to welcome March Madness.
“I’m going to bid on the tournament until I’m blue in the face,” he said. “We want to prove to people that we can host these types of events.”
Future of Polk County
Veterans Auditorium will receive a major renovation beginning in October with the goal of attracting convention business to the Iowa Events Center. According to the Polk County Board of Supervisors, the renovations to Vets will include approximately 32,875-square-feet of meeting room space, 1,210-square-feet of boardroom space and 28,730-square feet of multipurpose ballroom space. The renovation will include the construction of an additional floor in Vets to accommodate the ballroom level. The remodeling of Vets Auditorium will be paid for by extending the existing debt payment for the Iowa Events Center by four years. The debt is being paid by using gaming revenues from the lease of the Prairie Meadows facility. Construction of the meeting and ballroom space will not exceed $42,750,000.
Homan also cited that by expanding the Iowa Events Center and moving convention business from the Plex to the Iowa Events Center, that operational savings of $500,000 per year could be attained and an additional $1,000,000 per year of new business could be generated.
Global Spectrum officials are also hopeful that a new hotel can be built downtown, possibly attached to the Iowa Events Center.
“We really need another hotel in downtown Des Moines,” Homan said. “It’s tough when there’s only a single, 400-room hotel. There’s enough hotel rooms in the city to support big events, but having one attached to the facility would go a long way for the community.”
In just a few weeks, Wells Fargo Arena will be rockin’ once again when international singer/songwriter and performer Elton John will grace the stage. It will be the first time Elton John has been in Des Moines more than 35 years. And officials say it won’t be the last big act that “The Well” will host.
“I have no reason to think that the future of Polk County won’t be bright,” Giovannetti said. “Unless the bottom of the bucket goes dry and the economy doesn’t get worse, we’ll be just fine.”
Homan reiterated Giovannetti’s point.
“We’ve gone out on a lot of limbs to be able to do this,” Homan said. “I’m going to continue to bid and do something even crazier to make people think ‘we have to give this guy a try.’ We’re not going to make decisions that are going to hurt us, but do something that our competitors aren’t going to do. I guarantee we’ll be in the black for years to come.” CV
Caption: Fans will fill Wells Fargo Arena for Iowa Barnstormers games beginning April 2. Photo courtesy of Iowa Events Center
Caption: Wells Fargo Arena was packed with 15,277 Bon Jovi fans on April 20, 2008, making it the No. 1 attended concert in the arena’s history. Photo courtesy of Iowa Events Center
Caption: The Iowa High School state boys basketball tournament is just one of three state tournaments held at Wells Fargo Arena. Photo courtesy of Iowa Events Center
