National Western commits to staying in Denver
By Larry Dreiling
National Western Stock Show leaders, joined by Mayor Michael Hancock and other city officials, announced Nov. 13, 2012, they are committed to keeping the show in Denver.
"Denver has been the Stock Show's beloved home for 106 years, and our complex is a time-honored destination for visitors worldwide," said Paul Andrews, the National Western's president and CEO. "We want to enrich and educate the lives of millions for another century, and we believe our future exists right here where we began. By working with our dedicated city partners, we will find the best option to create a sustainable future for the world's greatest stock show."
The National Western's intention is to remain at its current location in Denver's Elyria-Swansea neighborhood and explore forging stronger partnerships and greater coordination with Art and Venues Denver and Visit Denver.
"We are not moving out of Denver at any time, period," Andrews said. "We are going to work to try to expand on the site."
"For his part, Hancock thanked the National Western for its dedication to the city and those who have supported the show throughout the years.
"The National Western is a cherished cultural and economic asset that enriches our Western heritage," Hancock said. "We stand at the ready to help them find a sustainable model that will deliver long-term success to the complex and the surrounding neighborhood."
Last winter, Hancock requested detailed information from the National Western, including business, financial and facilities plans, to better understand the National Western's current and future needs. Following receipt of those documents, the Mayor asked the Denver Urban Renewal Authority to provide an independent review of the data.
In August, the National Western also created a Business Plan Committee composed of local business and community leaders. The committee's mission is to assist the Stock Show in defining its brand and provide input into plans for the future.
DURA recently submitted to Hancock an analysis of the National Western's plans as well as additional comparative research of similar facilities and programs throughout the country.
The analysis found that with greater coordination and stronger connections to partners such as the city, Visit Denver and Downtown Denver Partnership, the National Western would be better positioned to overcome existing facility and programming challenges, tap new markets and thrive for generations to come.
"Thank you Mayor Hancock for giving DURA the opportunity to provide independent analysis, and thank you to the National Western for working with us to produce a thoughtful and useful evaluation," said Tracy Huggins, executive director of DURA. "It is our hope this report will help inform the next steps in the decision-making process."
In a presentation before NWSS directors and association members, Huggins explained that show organizers need to increase its utilization factor to increase revenue to make further expansion workable.
The complex has several buildings, including the 4,777-seat Events Center, nearly 350,000 square feet of exhibit space, the nearly century-old 6,600-seat Stadium Arena and the nearby Denver Coliseum, built in 1952, which seats 10,500, as well as the historic animal stalls in the stockyards.
Besides the 16 days of the Stock Show, the complex hosts 33 related event days and 53 unrelated event days. (Such events include the circus, Disney on Ice, Denver Native American Pow Wow.) When load-in and load-out days are added to the mix, the complex has a 47.4 percent utilization rate. The four major events net the National Western Association about 61 percent of its income.
The DURA study indicated that while the National Western generates adequate annual operating revenue, is able to make normal repairs and regularly meets requirement per city agreement related to improvements, it is unable to generate the revenue to adequately invest in the complex and has a short-term deferred maintenance need of approximately $14.375 million.
"The association was trying to add $1.5 million into a maintenance fund each year since 1995 to address long-term maintenance, but there have been years where you haven't been able to do that," Huggins said. "The thought was having to go back to the city, as you have in the past, to ask for an infusion of capital to address your needs and move forward."
The questions are, Huggins said, how to fund maintenance or replacement of big-ticket items and what needs improvement.
For example, constraints at the Denver Coliseum--such as lack of corporate skyboxes--prevents raising the committee purse, which in turn discourages top rodeo talent from competition and therefore a great consumer experience.
"Right now, the rodeo falls between 9 and 11 in size of purse, compared with being in the top three in past years," Huggins said. "With a larger facility, you can put more people and generate more revenue. The question is what capacity and configuration of the facility."
Also, unlike major civic competitors in the same business as the National Western, like Houston, San Antonio, Fort Worth, Kansas City, Louisville, and Lexington, there is no year-round revenue stream.
"Denver doesn't have that," Huggins said. "Other cities take advantage of their lodgers tax to use for their short-term maintenance issues. It makes sense, since people travel to use these facilities, why not use the taxes generated from hotels and rental cars for this. The question is not about raising taxes, but about how those taxes are deployed."
Huggins suggested both the city and the National Western take home some of the best practices of the other cities into consideration when making any decisions.
Moving forward in the short term, it was announced the city and county of Denver and Visit Denver will work with the National Western to explore options to overcome challenges and strengthen the National Western Stock Show and Complex's program and facilities. This will include identifying immediate solutions for necessary facilities maintenance as well as long-term plans for a sustainable future for the entire 95-acre complex.
The first step will be to include the Denver Coliseum and the National Western Stock Show Complex in an upcoming feasibility study by Visit Denver and Arts and Venues Denver. This study will evaluate market demand and assess the facility and amenity characteristics needed to accommodate those markets.
"The association has real facilities needs, but the current financial structure doesn't address the core issue of revenue," Huggins said. "The city knows it needs to invest in improved or replaced facilities. What we need to study is how.
"What we need is for all entities to embrace the idea for a collaborative effort seeking to acknowledge, value and maximize the opportunity to create a re-imagined premier center for Western heritage in the Rocky Mountain region," Huggins said.
Larry Dreiling can be reached by phone at 785-628-1117, or by email at firstname.lastname@example.org.