Century II update shows tough decisions could be ahead

WICHITA, Kan. (KSNW) — The company that took over managing Century II last year gave its first update to the Wichita City Council this week. ASM Global has made some improvements, but council members learned they face some future issues that could affect some popular, even beloved, groups and events.

“We’re finally, I feel like, back to a good solid event calendar load,” she said. “We’re seeing that in the industry. We believe the convention center business fully will come back around in ’23.”

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Scheduling conflicts

One of the first things she learned on the job is how difficult it is to bring in money-making national tours when so many Century II dates are already spoken for.

“Some clients, before we got here, have been allowed to hold dates 10 years out,” Whitney said. “That’s proven to be a challenge.”

She said that of the 130 events held at Century II and the Expo Hall last year, probably 50 event organizers want to keep their dates for years to come.

“You’ve got your dance recitals, your dance competitions, your ballet, your gun show, … the swap meet, the Women’s Fair, Holiday Galleria, the bridal fair, you know, Cars for Charity,” Whitney said. “They all have like their particular date, and that’s the date they want for eternity.”

She said she understands why that is important, but the City wants ASM to bring in national touring shows, which must be booked several years in advance.

“When we talk about the $417,000 in lost revenue, this was working with national promoters and agents that were looking to hold dates, put a national touring show here, and we didn’t have the date availability,” Whitney said.

Benefits for tenants

She said that Century II tenants Music Theatre Wichita and Wichita Symphony accounted for eight percent of all event income yet took 45% of Concert Hall’s rental days, making it difficult to book the 2,000-seat theater for other events.

“Music Theatre may have a show with eight days of performances. They block out three weeks prior to that to build the sets and for the rehearsals and whatnot,” Whitney said. “The same with the Symphony. When they have a performance on a Sunday, they’ve booked the entire week leading into that for their rehearsals.”

“They say, when we try to move them to a different location, it’s like, ‘Well if we can’t practice in the space … it makes no sense to rehearse.’ So that has created some challenges.”

Whitney said the tenants are currently under a memorandum of understanding with the City through December 2026.

“They receive significant rental discounts, and they’re on rates that were initially established back in 2012,” she said.

Whitney also said the tenants get priority booking and operate their own ticketing platforms with no revenue sharing with Century II.

“There’s a little bit of disparity,” she said. “So just something to note and the challenges it provides when we’re trying to book these national shows.”

Too many discounts, not enough rent

Whitney said rental rates across Century II and Expo Hall are below market value. She said the average industry rate for a similar convention center is 10 to 15 cents a square foot, meaning Exhibition Hall should have a daily rental of $4,400 instead of its current $1,300.

Then there are all the discounts. She said the multiple discounts given under the existing rate policy totaled $129,000 in 2022.

“There’s discounts given for government entities, for nonprofits, and we talked about the tenants,” she said. “It seemed like everybody that was having a show at Century II was receiving some sort of a discount.”

“Many unwritten discounts and allowances given, such as if they were having an event day, they were given a move-in rate which is substantially different in price,” she said. “A lot of equipment was used without being charged for.”

City Council may have to change policy

Whitney said she has been working with the city manager’s office to remove some discounts without raising rental rates and to create consistency and transparency with each client. She also wants the City Council to change the current booking policy.

“I think we need to look at that policy to just try to create such that some of the events that think this date is their date forever, there needs to be a little bit more flexibility so that those dates become available when we’re chasing those national touring shows.”

Mayor Brandon Whipple asked if Whitney has tried to work with organizers about changing dates. She said the conversations are happening all the time.

“Certainly when we get the inquiries … having this conversation saying, ‘Look, we’ve got somebody that’s interested in this,'” Whitney said. “The challenge is that those current users are saying, ‘No. We don’t want to give up our date, and we’ll go to contract and pay you right now for our date, to keep our date.'”

City Manager Robert Layton said he would be going to the Council about adopting a new booking policy.

“It’s a real balancing act in terms of trying to drive revenue and performance of the facility versus accommodating community groups that have had access to this facility for so long,” he said. “It will not be easy, I think, to balance that, but we will bring something forward for your consideration.”

“That’s my concern,” he said. “I’m not interested in increasing the costs for nonprofits such as Music Theatre of Wichita or to try to negatively impact their program too much. I’d rather a collaborative approach to see where we can find that common ground. It’d be very tough, I think, to have more of a political fix where we come up with a policy that results in a public outcry.”

Whipple said raising rates for tenants will ultimately mean higher ticket prices.

“That’s a concern, so I was hoping we could get ahead of this because I think that a policy fix before a good discussion would be problematic for the public,” he said.

Lindsay Benacka, Wichita’s director of Arts and Cultural Services, pointed out that local organizations and nonprofits that use Century II receive support through the City’s Cultural Arts Funding.

“Similarly, we have a lot of performing arts organizations that are not tenants of Century II and don’t receive the perks of the space that the tenants use, so there’s a misconception, but it’s valid … that we’re providing a sense of favoritism to some organizations over others,” Benacka said.

She pointed out that the nonprofit performing arts sector nationwide is the slowest to recover from the pandemic.

“So, as we’re considering operational changes, booking policy changes, we need to recognize and understand that these organizations are still recovering with their own operations,” Benacka said.

“I consistently say that arts are not a nicety. They are a necessity in our community,” she said.

Tuttle pointed to a study in 2017 that showed the arts generated $94.7 million annually for the Wichita economy and supported 2,841 full-time equivalent jobs.

Which events bring in money?

Century II’s general manager shared a graphic with the City Council showing the percentage of various events versus the percentage of income they generated.

“Really, the building is split 50-50 down the middle — 50% on conventions and trade shows using Expo Hall, Exhibition Hall and Convention Hall and 50% of the building using the two theaters, Concert Hall and Mary Jane Teall,” she said.

She said the “other” category includes concerts, festivals and various city events.

“We follow a cost accounting method for each event, tracking each revenue and expense that’s related to each show by show so that when the manager’s office comes over to review the financial statements, they can see exactly how profitable was a Women’s Fair versus the gun show versus the swap meet,” Whitney said. “You can see down to that level as to what events are profitable and what events aren’t.”

Whitney said it provides the backbone for conversations when there are date conflicts between long-time events and newer events that can bring in substantially more revenue.

“It’s not always about the bottom line, and it’s not always about we make more money on this event versus that event,” she said. “It’s about the quality of life for our residents. But it helps provide solid information to make better decisions.”

New facility fee

Whitney said the City challenged ASM Global with several goals, including reducing the amount of City subsidies for Century II and increasing revenue.

Whitney said ASM has already made progress, reducing subsidies in 2022 by $800,000.

YearSubsidy2019 (Pre-pandemic)$2 million2020 (Pandemic)$2.2 million2021$2 million2022$1.2 million2023 target$850,000Source: ASM Global

She said some first-year costs dealt with transitioning from City computers, copiers, and IT (information technology) to ASM. However, since those were one-time costs, Whitney believes Century II will only need about $850,000 in subsidies this year.

“Being able to add a $1 facility fee on the flat shows, a $4 facility fee on the national touring shows has created a way to have a very minimal cost passed on to the patron who’s using the building and causing the wear and tear without the significant rent increase to the event organizers,” Whitney said.

She said every day is a challenge with an older building so the money will go toward maintenance and repairs.

$5 to park

“It is very successful, and the revenue it’s generating has exceeded my expectations,” Whitney said.

She said she was told to be prepared for an empty lot and people parking elsewhere. But she said it is full for every show.

“The convention center side actually says thank you for doing that because they can get receipts now. They don’t have to run back and forth and feed a meter. The vendors at the trade shows appreciate it. It’s $5 in and out,” she said.

Hoheisel wanted to know if there could be another option for people who do not have smartphones, such as an attendant or a kiosk.

“The reason we went this way is because of the labor shortages and what it costs to put somebody out in a booth taking money,” Whitney said.

She said there are other options for people who do not have smartphones, including metered spots to the north of the old library, a 500-spot free parking garage over at Garvey Center, and free parking to the south, across from the Hyatt.

The roof and other Century II projects

City Manager Robert Layton said the design is complete and is under state review because of tax credits. If the plan is approved, the City will ask companies to bid on the job.

“It was interesting … how many calls I received of opinions of what color we should paint the roof, and it was a mix between, ‘We should paint it blue,’ and ‘We should paint it the city flag,’ and I thought, interesting, OK, I think we’re going with blue,” she said.

2023 Capital Improvement ProjectsBlue dome roof replacement$5 millionElevators/lifts code upgrades$480,000Fire alarm system upgrades$1.18 millionElectrical upgrades$330,515HVAC upgrades$12,656Source: ASM Global

She said there’s an additional $2.9 million in CIP projects that ASM will take the lead on, specifically $1.5 million related to the HVAC upgrades at Expo Hall.

What ASM has learned and done

Century II is busy

“One of the things that I never knew, being a resident of Wichita, was how busy this building was,” Whitney said.

She said Century II and the Expo Hall had 130 events in 2022, translating to 545 rental days and 282 event days. Rental days include move-in, move-out, and any other days clients reserve. Event days are the days the event is open to the public.

For example, this weekend’s Women’s Fair has five rental days for setup and teardown and three event days because it is open to the public on Friday, Saturday and Sunday.

Sharing lobby space can save money

Whitney said ASM has also learned how to decrease costs and increase profits by having events share space. She told the council members about a night when they had events in Mary Jane Teall Theater and in the Concert Hall.

“The concession stand in Concert Hall’s been remodeled. It’s much bigger. It has a larger lobby space than Mary Jane Teall,” she said. “We opened the doors in between the two … and allowed patrons from Mary Jane Teall to flow over into Concert Hall.”

Whitney said it worked because the intermissions were at different times. She said the result was a better guest experience for the Mary Jane Teall audience, and ASM minimized labor costs.

“We were able to keep staff busy the entire duration of the show versus … long dead periods.”

Opportunities to make additional money

ASM is looking at other ways to increase Century II’s revenue. Whitney mentioned things they are putting in place to improve the guest experience.

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“One of the newest things that we’ve rolled out is what we call the balcony lounge,” she said.

“This is just dead space that was not used. We’ve added additional points of sale for food and beverage up there, created a seating area, and opened the doors so that guests can come up the stairs before the house opens.”

Too many people had access to the building

When ASM took over, it noticed some security issues around Century II — vandalism, broken windows, loitering, and general access to the building.

“When I first got there, the building was wide open,” Whitney said. “Just as an employee, I was concerned. So one of the things we did was we went through and identified all of the badges that have access to the basement and shut off over a hundred badge accesses to people that had really no reason to have access, but they just did.”

She said they were trying to keep people from randomly walking through the building.

“You can’t just wander in and do your laundry in the bathroom as we found,” Whitney said.

ASM also locked down Century II on non-event days. It moved the box office to the exterior Concert Hall box office. Ticket sellers serve as receptionists, letting employees know when a guest has arrived.

Mary Jane Teall Theater is underutilized

Whitney said Mary Jane Teall Theater only had about 26% utilization in 2022. There were 20 events in the theater with 98 rental days.

“That space has approximately 600 plus seats, and as we have run into several date availability issues with Concert Hall, we’ve been able to slide shows over into Mary Jane Teall,” she said. “So again, it’s another great space that’s underutilized, so we’re looking to put more content in that space.”

Utilities are expensive

“One of the things that shocked me the most was utilities, how much utilities are running well over budget,” Whitney said. “We saw a $350,000 overspend on utilities, and that’s one of the things I challenged engineering with right out of the gate.”

She said the HVAC (heating, ventilating, and air conditioning) system is old and lacks automation. The Capital Improvement Program includes upgrades that she hopes will reduce costs.

Whitney said the Century II energy plant on the west side of the building also provides service to the old downtown library. She said when there was some kind of issue at the shuttered library over Christmas, it caused Century II’s utility usage to go up.

“It’s something that we certainly will need to work together with figuring that out if and when something happens with that library of how to manage and track utility usage on that side,” she told council members.

Change brings success

Whitney believes many people do not realize there is something happening almost all the time at Century II. So her team has developed a bi-weekly digital newsletter that highlights upcoming events.

“It is important to tell the story and tell it often because there is so much competition for the dollar, for the discretionary dollar,” she said. “We want them to spend it in the Wichita area, and we want them to spend it in our building.”

The newsletter goes to about 82,000 people who have previously bought tickets or who have signed up for the newsletter.

The team is also active on Century II’s social media platforms, getting an 11% increase in followers on Facebook and a 178% increase on Instagram.

The team also implemented email blasts for specific events. The email includes a link to purchase tickets. Whitney said the email blasts resulted in 1,964 purchased tickets for $70,000 in additional ticket revenue.

ASM converted Century II to a new booking software that’s more user-friendly and offers real-time availability.

It also transitioned to Select-A-Seat for ticketing. Whitney said the previous ticketing system was costly, and the change saved them $43,000. Guests can now buy tickets at either Century II or Intrust Bank Arena.

Whitney said Century II switched its concessions company to SAVOR, ASM’s in-house food and beverage division, on Feb. 1, 2022. She said SAVOR generated $575,000 in gross revenue in 11 months compared to the $499,000 from the previous concessionaire in 2019 for a full calendar year.

ASM partnered with third-party vendors for decorations, audio-visual services, security and T-shirts. ASM suggests those vendors to event organizers. When the clients use those companies, Century II gets a percentage. Those partnerships generated $34,000 in additional income in 2022.

Whitney said ASM is working with agents to bring in national touring shows and with local partners to develop new event activity in Expo Hall.

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What is Century II missing?

Council members asked Whitney what Century II might need to get more events. She said the largest book of business missing from the Century II business model is banquets and galas.

“You can do it in Exhibition Hall, but it just kind of has a weird setup,” she said.

“You either have this massive Exhibition Hall or this small Concert Hall lobby area,” she said. “So to host a wedding is very, very difficult, and that’s really where those ballrooms come in or those galas and those fundraisers.”