Idaho Falls Event Center construction could be on the horizon

The Idaho Falls Auditorium District’s fiscal year 2018 expenses totaled more than a quarter of a million dollars, with professional fees and payroll expenses topping the list, according to a list of expenses obtained by the Post Register through a public records request.

The district is optimistic that it will raise the funding necessary to build the event center. Two of the district’s contractors told the Post Register construction could start as early as this year.

The proposed event center will have 27,000 square feet of arena space and 11,500 square feet of meeting space. The 4,000- to 6,000-seat arena will host sporting and entertainment events and the meeting space will host conferences and trade shows.

The district is a self-funded public board, tasked with raising funds for the proposed Idaho Falls Event Center, a nearly 40,000-square-foot arena to be built at Snake River Landing. The project, if it comes to fruition, will be funded by a “transient room tax,” a 5 percent tax on hotel room bookings, and private fundraising.

The most recent cost estimate of the event center was $62 million. The estimated cost is twice as much as initial estimates, $30 to $35 million, from 2013, and $12 million higher than its estimate from summer 2018, $54 million.

Until the money is raised and construction on the project is given a green light, the board will continue to rack up annual expenses, such as payroll, professional services and marketing. Expenses are paid out of the IFAD general account, which includes hotel room tax revenue, interest revenue and penalties paid by hotel guests for late tax payments.

In 2018 IFAD raised $2.4 million from hotel room taxes. And it spent $261,262.93, or about two months’ worth of hotel room tax collection.

2018 expenses

Professional fees totaled $127,610.34.

Professional fees include monthly or one-time fees paid for professional services, such as legal, accounting, auditing, and a growth and feasibility study.

Of all the professional fees, legal fees were the costliest, totaling $42,326.49 on the year.

Mark Fuller, a partner at Fuller and Beck Law Offices in Idaho Falls, provides IFAD with legal counsel and participates in IFAD board meetings. Fuller charges hourly for his work with the IFAD. Fuller did not respond to a request to disclose his hourly rate before press time.

Fuller is not the only legal counsel for the district.

“In addition to my office, IFAD has hired a bond attorney in Boise and attorneys in Salt Lake City and Denver to assist in contract negotiations and tax matters which are beyond my expertise,” Fuller said in a statement via email.

IFAD budgets for $3,500 per month in legal fees.

Last year, IFAD paid $31,500 for a consultant to complete a growth and feasibility study on the event center, which indicated that the event center is the proper size and could be supported by the greater Idaho Falls community.

IFAD paid $11,033.85 for accounting services and $6,500 for an audit.

A remaining $36,250 in professional fees were paid to firms that provide other services, such as TEG Global, a hiring company that was hired to find IFAD’s former director, and Pathway Associates, the company assisting in securing naming rights for the event center.

Payroll expenses totaled $85,797.95.

Payroll expenses are for employee salaries, including insurance and benefits.

Most of that money was paid to former IFAD director Brian “Chip” Scott, who resigned last month for personal reasons.

IFAD pays a part-time employee to manage the group’s downtown office. IFAD board members — elected positions — are not paid.

Marketing expenses from 2018 totaled $15,843.74. IFAD hired IE Productions, a local marketing firm, in May. The district pays IE Productions $3,500 per month for marketing services.

Board, contractors are optimistic about 2019

The IFAD board and the project’s contractors are optimistic about the district’s 2018 progress and 2019 goals.

In a press conference last month, board chairwoman Terri Gazdik pointed to accomplishments from last year. They included the successful feasibility study, securing land for the event center — which was donated by Ball Ventures — and the start of construction on Event Center Drive, the road that will provide access to the event center.

As of December, the district had $11 million in the bank of the $62 million required for the project.

Gazdik hopes to secure another $10 million this spring through private fundraising, specifically by selling naming rights to the arena with help from Utah-based Pathway Associates.

Once the naming rights are secured, the district will have better standing to begin signing deals with its contractors, which include construction, architecture and facility management partners.

Both the lead architect and construction manager said construction on the event center could start this year.

Mike Clements, CEO of Bateman-Hall, the project’s construction manager, said the search for a naming rights buyer must be going well, since IFAD is getting ready to start the architect back up. Once the naming rights are sold, things should move quickly.

“That’s the trigger for starting,” Clements said. “This project is really starting to roll. They may even try to get started as early as this fall.”

The design for the event center is 35 to 40 percent complete, Clements said. 

“That’s the skeleton, now we have to come back in and fill in all the details,” Clements said.

Kevin DeKold, vice president and senior principal at CRSA, the lead architect on the project, said his firm is in the last portion of the final negotiation of its contract with the district.

“It seems like we’re close,” DeKold said. “We’re hopeful that we’ll be resuming design shortly.”

Gazdik told the Post Register on Friday the district could approve CRSA’s contract at its next meeting.

The last time CRSA worked on the event center design was 2016, DeKold said, and it completed a “mid-level” design of the event center. Once the contract is signed, CRSA can complete the full design, he said.

DeKold also said it’s possible that construction could start this year, although it might be better to wait if prices — on materials, labor, etc. — could become more favorable next year.

Bateman-Hall increased its construction estimates this year by 5.7 percent to account for inflation, labor costs (4 percent) and steel tariffs (1.7 percent).

“With the amount of work coming out of INL (Idaho National Laboratory) there’s going to be a significant labor shortage by the time construction starts,” Clements said.

Every year construction estimates will increase by about 4 percent, Clements said.

CRSA is charging the district a lump sum, so architecture fees will not increase.

Gazdik said Pathway Associates has had “wonderful meetings with companies that are able and interested” to pay for naming rights. Once that funding is secured, more donors are expected to follow.

“In all of the projects they’ve done it’s always the first one that starts the ball rolling,” she said. “When that happens, you get other people on board.”

Beginning construction on the event center at the end of this year is possible, Gazdik said.

“All the components are in place, as long as we can be successful with the naming rights campaign,” she said.