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Diamond in the rough?

Diamond In The Rough?

Debate Intensifies Over The Need For A Downtown Arena

Of the diverse elements that make up Project 2000, the Diamond Center is the crown jewel. If Little Rock voters approve on Oct. 8 a half-cent sales tax for capital improvements, $15.725 million of the resulting bond issue will go toward expanding War Memorial Center. Another $15.175 million will be used to expand the Statehouse Convention Center.

But it's no secret what the big-ticket item on the menu is: If the half-cent sales tax is approved, $42.1 million will be used to build a multipurpose special events facility seating about 16,000 people.

Sitting inside one of downtown's high-rise office buildings, the three men who gave birth to Project 2000 -- Wally Allen, Mark Grobmyer and Jim Moses -- exude enthusiasm when talking about the Diamond.

It's not as if they aren't enthusiastic about the stadium, the convention center, the library and the museum. They are.

But their speech patterns change when they talk of the Diamond.

What the Gateway Arch is to St. Louis, the Diamond can be to Little Rock, they believe.

And they clearly don't think 39-year-old Barton Coliseum is a fitting primary arena for the capital city.

"It was built as a rodeo barn," Moses says.

"Barton has served us well," Allen adds. "We're certainly not suggesting that Barton Coliseum be closed. The people out there could end up in better shape because they'll be able to concentrate on what they do best. Barton could pick up livestock events it is losing to places such as Tulsa, Fort Smith and Fort Worth."

John R. "Johnnie" Holmes, executive vice president of the Arkansas Livestock Show Association, indeed looks like a man who could run a successful livestock show. A Texas A&M University graduate and a former radio farm reporter in Iowa, Holmes seems at ease in boots and a cowboy hat as he sits in his office at the state fairgrounds.

Yet Holmes laughs when told that Barton Coliseum is being promoted by Project 2000's founding fathers as strictly a place for rodeos, horse shows and the like.

"We're not going to sit out here and leave dirt on the floor 12 months a year, I'll tell you that much," says the man who runs Barton. "They're blowing smoke if they tell you that. If they build the Diamond, we'll continue to market our facility for all types of events.

"To say we'll just be in the horse and cattle business is bull. I grew up carrying a hoe down cotton rows. It was a competitive environment. I can compete with the folks downtown. And I will."

Holmes' Doubts

Holmes is not actively opposing the tax increase. He simply has doubts about the need for a new arena.

"I live in Little Rock," he says. "I pay taxes here, and I think eventually we'll approve a tax increase for a larger coliseum. I don't know if 1991 is the year we'll do it. Like most Little Rock residents, I'm conservative. I'm concerned about tax rates. And I'm still looking for concrete results from the 1987 bond issue."

In October 1987, Little Rock voters approved a $39.1-million capital improvements package.

"Don't let anybody tell you that out-of-town people will pay for the Diamond," Holmes continues. "I buy my clothes in Little Rock. I eat in Little Rock restaurants. So do my friends."

Grobmyer counters that many entertainment events won't use facilities seating less than 15,000 people.

"Johnnie hosts about 100 events per year at Barton," Grobmyer says. "I'm convinced we can put 140 events per year in the Diamond."

Allen provides potential examples.

"The NBA probably wouldn't consider having any more exhibition games at Barton," he says. "If we had the Diamond, I have no doubt we could get the Dallas Mavericks up here once or twice a year. Because of our location, that kind of thing is a natural for Little Rock if we have the proper facilities.

"Let's be honest. We won't ever get the Rolling Stones to come here. We're not big enough for that. But there are plenty of exciting events we can attract -- the Southeastern Conference basketball tournament, the Southeastern Conference indoor track meet and maybe even an NCAA regional basketball tournament."

The Diamond trio's most ardent supporter doesn't even live in Little Rock. He lives in Fayetteville. And his name is Frank Broyles.

The University of Arkansas athletic director says Little Rock can attract the SEC and NCAA regional basketball tournaments with a facility such as the Diamond

"I'm staring at a letter from Roy Kramer (the SEC commissioner) asking if we are interested in bidding on the 1994, |95 and |96 basketball tournaments," Broyles says in his thick Georgia drawl. "They would never agree to play in Fayetteville. They might come to Little Rock, though. The same holds true for the NCAA. Hundreds of thousands of dollars would be pumped into Little Rock over a period of three or four days."

Broyles, always the enthusiast, always the optimist, reels off a list of cities that have invested heavily in special events facilities.

There's Charlotte, N.C.

Birmingham, Ala.

Indianapolis.

"An emphasis on attracting major sports events has paid dividends for each of those cities," Broyles says. "Hosting nationally televised events could enhance the image of Little Rock to the point it would prosper in ways never thought possible.

"A city's image has a lot to do with its ability to recruit residents and industries. I just don't see any negatives. That message has to go out loud and clear to Little Rock voters between now and October."

The Stephens' Role

If approved by the voters, the Diamond will be built alongside Interstate 30 on the site of the old Coachman's Inn, a famous hostelry and watering hole for the state's politicians that was torn down several years ago by its owners, the Stephens family.

Stephens Inc. President Warren Stephens won't say outright that his family will give the city the land on which the Diamond is to be built, although it is strongly implied by Project 2000 backers.

"There are three options," Stephens says. "We can sign a long-term lease. We can sell. Or we can give the land away. That's not something we're focused on right now. There's no use thinking about it until after the election. If the sales tax is approved, then we'll have something to consider."

Stephens is an unabashed supporter of Project 2000.

"Those guys have done a great job," he says of Allen, Grobmyer and Moses. "It has been frustrating to watch them have to face political roadblocks. At some point, people here have to say, |Let's quit talking and actually do something to make this a better place to live.' The Diamond represents that opportunity."

In addition to the SEC basketball tournament, NCAA regional basketball tournament, SEC indoor track meet and NBA preseason games mentioned by Allen and Broyles, Stephens adds the possibility of:

* A major Christmas basketball tournament hosted by the University of Arkansas.

* More regular-season Razorback basketball games.

* The postseason basketball tournament of the conference that comes out of the merger of the Sun Belt and American South conferences. That new conference will include the University of Arkansas at Little Rock and Arkansas State University.

"Without the Diamond, there won't be Razorback basketball games in Little Rock in three years," Stephens says. "It's a matter of economics for them. Once they have an arena in Fayetteville that can seat 15,000 or so, why come to Barton and play before 8,000 people? Coach Broyles will tell you the university is committed to Little Rock, but Little Rock has an obligation to be committed to the university as well."

Moses describes Little Rock as having become "sleepy and lazy. We think somebody else is going to come in and do something for us. It doesn't work that way."

The Consultants' Report

An extensive study commissioned by the city earlier this year found that seven entities not currently using Barton indicated a willingness to bring events to the Diamond Center.

The seven entities were contacted by consultants from the giant accounting firm Deloitte & Touche. They were:

* The NCAA men's basketball tournament, which requires a minimum capacity of 10,000.

* The NCAA women's basketball tournament, which has average attendances of 4,000 for regional tournaments and 6,000 for the finals.

* MCA, an entertainment and sports promoter.

* The Virginia Slims series of tennis tournaments.

* The World Wrestling Federation, which already uses Mid-South Coliseum at Memphis, Tenn.

* Two concert promoters.

Deloitte & Touche also studied 14 basketball arenas -- eight in the Trans America Athletic Conference that UALR is leaving and six used by schools that last year were members of the Sun Belt Conference. The analysis found that:

* Little Rock has a higher population per arena seat than the average of either conference, indicating the need for an expanded facility. Little Rock's population per arena seat is 61. That compares with 17 at Shreveport, La., which has 10,330-seat Hirsch Coliseum and the 4,000-seat Gold Dome on the Centenary College campus, and 22 at Birmingham, which has four facilities seating a total of 42,505 people.

* The average arena size in the Sun Belt Conference is significantly larger than Barton, but UALR's average attendance is less than the average attendance for schools that were in the Sun Belt last year.

Comparable Markets

An arena analysis also was performed in five markets comparable to Little Rock -- Memphis; Greenville, S.C.; Omaha, Neb.; Knoxville, Tenn.; and Baton Rouge, La.

The number of events in those cities ranged from 52 to 169 per year. Average attendance ranged from 4,676 to 8,750. The consultants found:

* Memphis has 12,000-seat Mid-South Coliseum and will soon have 20,000-seat Great American Pyramid for a population per arena seat of 31. Mid-South hosted 169 events last year with an average attendance of 4,676.

* Greenville has 7,000-seat Memorial Auditorium, which hosted 166 events last year. No average attendance was available. The city's population per arena seat is 46.

* Omaha has 5,200-seat Ak-Sar-Ben Coliseum and 11,518-seat Omaha Civic Center Arena for a population per arena seat of 37. The Civic Center Arena hosted 155 events last year with an average attendance of 4,981.

* Knoxville has 26,155-seat Thompson-Boling Arena on the University of Tennesse campus, 10,000-seat Knoxville Civic Auditorium and 2,400-seat Carter Myers Arena for a population per arena seat of nine. Thompson-Boling Arena hosted 50 events last year with an average attendance of 8,750.

* Baton Rouge has 15,236-seat Pete Maravich Assembly Center on the Louisiana State University campus, 8,500-seat Riverside Complex Arena and 8,377-seat Southern University Arena for a population per arena seat of 16. The Maravich Assembly Center hosted 86 events last year with an average attendance of 5,028.

Barton Coliseum hosted 110 events in 1990 with an average attendance of 4,324. That compares to 98 events in 1989 with an average attendance of 5,108, and 113 events in 1988 with an average attendance of 4,942. The decline in average attendance from 1989 to 1990 was due to fewer religious events being held at the coliseum.

Only a small number of events sell out at Barton each year. In 1988, seven concerts and five Razorback basketball games sold out, representing 11 percent of the events held there. The following year, it was five concerts and five UA basketball games (10 percent). Last year, nine concerts and four Arkansas basketball games sold out (12 percent).

Still, 11 concert promoters who use Barton told the Deloitte & Touche consultants they anticipate a 65 percent increase in the number of events and a 60 percent increase in average attendance if the Diamond is constructed.

The promoters said numerous concerts would sell out a 16,000-seat arena. Razorback basketball games also would sell out at the program's current level of success.

Positive Predictions

Based on their interviews, the consultants predicted:

* UALR attendance will increase by 30 percent in the Diamond.

* Concert attendance will increase by 50 percent, due to a number of concerts selling out.

* An additional 14 concerts annually will come to the Diamond.

* Attendance at family shows such as circuses will increase by 35 percent.

* Wrestling attendance will increase by 25 percent.

* Three special events averaging 8,000 people each will be held per year.

* The Diamond Center will average 105 events per year with a total attendance of 722,950 and an average attendance of 6,885.

* Barton will retain events such as truck pulls, rodeos and horse shows. It will average 25 events per year.

* Using population per arena seat data, if Little Rock met the average of the Sun Belt Conference markets and the five comparable markets surveyed, it could support 20,800 arena seats.

* An arena of 16,000-18,000 seats is an appropriate size range for the Little Rock metropolitan area.

* The Diamond would operate at a surplus of $563,840 after capital replacement in the third year of operations. The figure assumes the rental of luxury suites will provide $541,000 per year.

Project 2000 supporters understandably are ecstatic about the consultants' conclusions.

"If the sales tax passes, we'll have the resources to construct a first-class facility that will make money every year," Grobmyer says.

The Livestock Show Association does separate Barton Coliseum revenues from other revenues on its financial reports.

"Two-thirds of our income is from the Arkansas State Fair, so the Diamond is not going to put us out of business," Holmes says. "The fair supports this entire operation. You can't assume a large coliseum will make money given the current economic climate. Most don't. If it were guaranteed to produce revenue, there would be an infusion of private capital for the Diamond. We haven't seen that. They're instead wanting the taxpayers to foot the bill.

"We need to examine the finances of this before October."

There is so much competition for the entertainment dollar, Holmes says, it is a challenge to "put bodies in the seats" no matter what the event.

"The margins aren't that high," he says. "It takes $25,000 to $30,000 for a promoter to hire stagehands, hire drivers, rent equipment, advertise and pay the food bill. That doesn't include building rental."

Barton's rental fees would be less than those at the Diamond since Barton is a smaller, older arena. Holmes thus thinks he can compete for concerts and other events booked by cost-conscious promoters.

Not only can he compete, he will compete if the Diamond is built.

"We'll continue to make improvements and go head to head with them," Holmes says. "We run a tight ship out here. We're a non-profit organization, and no one on our board receives a dime. I don't want to get in a tinkling contest with the city. But they need to address the issues. I'm afraid everyone has become so enamored with Project 2000 that they haven't covered their backsides financially.

"We've made a large investment out here through the years, and we're going to be around for a long time. We'll do more than put on livestock shows regardless of what happens in October."

PHOTO : THE POLITICAL PALACE: For years, Little Rock's Coachman's Inn was a favorite hangout for the state's politicians. It was torn down in the 1980s, replaced by a vacant lot. If voters decide to build the Diamond Center, the multipurpose events facility will sit where the Coachman's was once located. The question now is if the Stephens family will give the land to the city.

PHOTO : BARTON'S BOSS: In his position as executive vice president of the Arkansas Livestock Show Association, John R. "Johnnie" Holmes runs Barton Coliseum. He also runs the annual Arkansas State Fair and Livestock Show. If the Diamond Center is built, Holmes says he won't be afraid to compete with the downtown facility for events.

Rex Nelson Arkansas Business Staff
COPYRIGHT 1991 Journal Publishing, Inc.
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1991 Gale, Cengage Learning. All rights reserved.

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Title Annotation:debate over the construction of the Diamond Center multipurpose special events facility
Author:Nelson, Rex
Publication:Arkansas Business
Date:Jun 24, 1991
Words:2668
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