Why consultants say a downtown convention center is a good idea
Simplified: A new convention center at the Riverline District would be "feasible" and "supported by the market," a Chicago-based consulting group told the Sioux Falls City Council on Tuesday. Here's a look at their rationale.
Why it matters
- The city earlier this year agreed to pay just over $200,000 to C.H. Johnson Consulting to look at whether Sioux Falls could support a downtown convention center, what the city should do with the existing space and how to fund the whole shebang.
- The report to council on Tuesday addressed only the first component of that agreement, and the conclusion was, essentially, yes. Consultant Charlie Johnson told councilors that it's actually a benefit that Sioux Falls is "a little late in the game for downtown convention centers," because it means the city can enter the market with a brand new product.
- The report shows that the existing convention center is potentially losing out as much as $3 million per year. It's worth noting, though, that the City Council has yet to see what the potential cost would be to construct a brand new facility downtown.
- The land purchase alone is estimated at $8.1 million in next year's proposed budget.
“Johnson Consulting is validating what Experience Sioux Falls hears over and over again from current and prospective clients—our convention center is too small, it’s not walkable to dining and retail experiences, and another full-service hotel is needed to support the convention center,” Teri Schmidt, CEO of Experience Sioux Falls, said in a news release.
How did we get here?
The idea of the Riverline District dates back to 2022, and it was first publicly announced during a packed event in January 2023.
- At that time, discussion focused on the potential for a downtown sports stadium.
- Also around that time, the Sioux Falls Development Foundation and the Friends of the Riverline District teamed up to hire Chicago-based C.H. Johnson Consulting to look at the best use of the land.
Just over a year later, on Feb. 5, 2024, Mayor Paul TenHaken held a press conference – including several dozen kids – talking about the importance of indoor recreation and announcing a vision to bring a convention center to the Riverline District.
A couple weeks after that the Sioux Falls City Council approved a $204,000 contract with Johnson Consulting – now working directly with the city – with a goal to, at least in phase one, "confirm the need for the proposed Riverline Center," and offer suggestions for repurposing the existing convention center.
- Per the contract, this work was scheduled to be completed mid-May.
Tell me more about the consultant's report
C.H. Johnson Consulting presented a detailed analysis of the Sioux Falls market when it comes to the need for convention space. You can find the full draft report here.
Right now, the convention center's exhibit halls and ballrooms are running at an occupancy rate of about 80%.
Their research found that the existing convention center lost out on a potential $3 million in revenue last year.
- A closer look shows that about 13% of that potential revenue (just shy of $400,000) was lost because the convention center did not have enough space. The majority (63%) of projected lost revenue was because dates were not available for those prospective clients/events.
The report also notes that about 14% of events are projected to outgrow the existing convention center space in the next five years.
Additionally, survey feedback showed concerns about the lack of walkable activities, restaurants, hotel rooms and more at the current events center campus.
What happens next?
The consulting group is expected to be back in another three to four weeks to present the next phase of its report.
- That should provide further analysis on how to repurpose the existing convention center – a building Mayor Paul TenHaken has advocated to turn into indoor recreation space.
Once that phase is completed, Johnson Consulting will move on to look at what it would take to fund a new convention center, as well as what a business plan might look like.
For the City Council, the next steps will also include a decision about whether or not to include $8.1 million in the 2025 budget to buy the land that'd host the proposed future convention center.