The Minneapolis Convention Center

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ATTRACTING MORE VISITORS TO STATE

The Minneapolis Convention Center plays a vital role in making the City, the metropolitan region and the State of Minnesota a premier destination. Completed in 1991, the center generates economic growth by providing facilities and services for conventions, trade shows, exhibits, cultural and religious meetings and sporting events.

Although the Convention Center is owned by the City, its marketing and sales are contractually provided by the nonprofit organization Meet Minneapolis. Meet Minneapolis handles the center’s event contracts, providing client relationship management as well as event coordination with the local hospitality industry. The City will pay Meet Minneapolis about $7.6 million in 2009 for these services as well as the marketing and sales of the City’s other hospitality and tourism assets.

FUELING THE LOCAL ECONOMY

The Convention Center hosted 530 non-City events in 2008, which is slightly above average. Over the past five years, the facility has had an average occupancy rate of 61 percent. For every dollar received in rental revenue, the center generates roughly an extra $1.50 in ancillary services. It’s estimated that each local, regional, national and international attendee spends more than $1,000 in the Twin Cities.

Attendance has dropped over the past several years due to organizations sending fewer people to conferences and combining related conferences. The total 2008 attendance was around 800,000. In 2007, the non-local attendance was around 141,000, or about 18 percent of total attendance.

FINANCING SUMMARY

In 1986, the State Legislature authorized the City to levy a host of sales taxes in addition to the entertainment tax to pay for the Convention Center and its related facilities. In 2009, the combined anticipated revenue from these taxes is approximately $49.3 million.

2009 local sales taxes (in millions)

0.5% Citywide Sales tax

$29.5

3.0% Downtown Restaurant Tax

$10.0

3.0% Downtown Liquor Tax

$3.8

3.0% Lodging Tax

$6.0

Total Tax Collection

$49.3

All tax proceeds are used primarily to fund the debt related to the construction of the Convention Center and related facilities, as well as to fund the operating deficit. The City also pledges its entertainment tax to pay Convention Center bonds in the event other revenue sources that go toward Convention Center debt service are insufficient. (To date, this has not been needed.)

The Convention Center’s 2009 operating revenues are budgeted at $14.9 million and include charges for non-rental services and space rental. The year’s operating expenses are estimated to be $38.3 million, which includes general operations as well as ongoing equipment/improvement costs. The operating deficit is funded from local sales taxes.

At the end of 2008, outstanding debt for the Convention Center was $213.8 million. Debt service payments for 2009 are $28.7 million. This includes payment on the center as well as its parking facilities.

2009 source of funds (in thousands of dollars)

Taxes

$59,304

Charges for services

$5,475

Rents

$6,435

Other

$5,754

Total

$76,968

2009 use of funds (in thousands of dollars)

Operating

$29,238

Marketing

$7,590

Capital

$9,121

Debt service

$28,661

Other

$11,104

Total

$85,714

MORE INFORMATION

City of Minneapolis Finance Department
City Hall, 350 S. 5th St.,
Minneapolis, MN 55415
(612) 673-2918

Last updated Feb. 7, 2012