Community Development Committee - Regular Meeting

Good afternoon. I'll I'll spare you all the gavel. Just say good afternoon. We'll now call the meeting to order. This is, the, Monday, 12/08/2025 meeting of the Eveline Redevelopment Authority Exhibition Center Advisory Committee. Please rise and join me in the Pledge of Allegiance.

Right.

Roll call and membership has been taken. We do have quorum present. We have a couple of members excused today. Maria Van Lanen, Jeff Nguyen, and Marissa Downs are excused. We'll also note that Mike Potts and Mark Ellis are will also mark them excused for the meeting. We have Ryan Batley joining us via Zoom. So he is present on Zoom. So with that, we'll move along to approval of the minutes. This is 20 five-fourteen 89, the minutes of our previous meeting. Is there a motion?

We have a motion and a second to approve. Is there any discussion of the minutes? Hearing none, all those in favor, please signify by saying aye. All right. The ayes have it. The minutes have been approved. All right. And we noticed public participation, but I don't believe we have anybody signed up to speak or interested in speaking on items that appear on the agenda. So we will close public participation. I'll also note we did extend an invitation to representatives of the Hilton Paper Valley, and they indicated that they would not be in attendance today given the ongoing discussions that we're having around the management agreement.

So I kind of understand why they wouldn't attend the meeting today, but just wanted to make a note that an invitation was made. And they did respond that they're going to sit this one out intentionally given the ongoing nature of negotiations. So just want to make note of that. We have no action items before us, so we'll move into information items, first of which is twenty five-fourteen ninety one, update on City Of Appleton American Rescue Plan Act, Fox City's Exhibition Center project, and Convention and Visitors Bureau grant. So I want to just give you a few updates about what's happening.

As you may recall, the Appleton Common Council authorized us to dedicate some of our American Rescue Plan Act funds to improvements at the Fox Cities Exhibition Center related to operations and effectiveness of that facility. So why don't we start there, I'll ask Director Dean Gazza to walk us through where we are on that process. Okay, go ahead. Thank you, Mayor.

We had worked with Joel, Tyler, and Linda to identify some areas that could be approved, where they learned over the first years of operation, they felt were some deficiencies that were holding back some revenue. So some of those things included acoustical improvements, needing carpeting, and also needing a man lift. So I had worked with their staff together, side by side, working on the specifications. So worked with Joel's more so, but Tyler and Linda were involved along the way. What we did is we worked with some vendors to identify a forklift that would be appropriately suited for their floors and came up with a forklift and, in conjunction with that, a man lift to get up to the heights of the ceilings, to hang things, and also to do some cleaning.

So we ordered both of those, and those will both be in by the end of the year. Carpeting we worked with numerous suppliers, and Joel and I had worked doing did considerable research with other convention and exhibition centers to determine what would be the best appropriate product to put down on the floor and how could we put it down and take it up in the most efficient manner possible. So working with them, we ended up ordering carpeting, and that should also be here near the end of the year or soon after. It's a series of pieces that roll up, and they get picked up with the forklift. The forklift has kind of a rod on it, and it picks it up in the center core.

But we we worked with them. They picked out the color, which was suitable to us, and the the weight of the carpeting, and so forth. So hopefully, that way it'll meet their greatest needs. And then the acoustical consultant, we had to do an RFP process to find somebody that would work on facilities as complex and as large as the exhibition center is. And we got some proposals back, worked to narrow that down to one consultant out of Milwaukee.

And coincidentally, they're here actually tomorrow. We worked with Joel basically to come up with a date, and that was the date that worked best based on the events that were taking place and their availability. So working with them, to make sure it meets all their needs and specifications. They've been, working side by side with us. So we thank them for that.

But again, we want to make sure they get exactly what they were expecting and envisioning to meet their needs. Another note I'd like to make is with the ARPA grants, does make it a little bit more challenging to go out and get professional services like consulting, architectural type services. So I applied for a grant through the Visitors and Convention Bureau and was awarded $100,000 which is being used to pay for the consultants and for all the professional services. They, as noted, will be here tomorrow, the acoustical consultant, which we will work with them. They will first identify the needs, interview staff, suggest improvements, and then eventually drop specifications and create drawings that the city can bid out, publicly bid, and then we can have the construction done.

And that all of the work would have to be done by the '6, but we anticipate it would be done much sooner than that. But in that case, then the exhibition space should be fixed of and improved significantly of all the acoustical issues that are kind of holding some of the events back. So we think after making all these improvements and all these improvements were also the same improvements identified as identified by the exhibition center staff over there, really be in a good position to succeed and not really have any deficiencies known that would hold them back from accompanying any event.

Thank you. I just want to make note of the grant from the CVB and express our appreciation for that support because that means we'll have more resource to put toward any improvements that need to be made in the facility. So we appreciate the partnership with the CVB in helping us conduct that analysis. I also want to note I think I may have misspoken at the beginning. Mike Potts is president.

I just want to note that for the record. Sorry about that, Mike. So before we move on from this item, I just want to ask if anyone has questions. Yeah, Nadine, yeah. Which microphone do you have, Nadine?

District 14.

Okay, go ahead.

You mentioned year end '26. Is that the deadline to commit and disperse all ARPA grant funds?

Yes, it would be the deadline to disperse it. It leaves us plenty of time in the event there would be any changes or if there was any other additional things that could be done. But

yes. Thank you.

That is the deadline for spending. So the funds were committed prior to the 12/31/2024 deadline, which was the deadline for commitment of funds. And now they have to be spent by the '6. And I'll say these improvements and investments in the facility are directly responsive to feedback that we've received from the Hilton Paper Valley staff as they've worked on operating and marketing the facility. And we've heard at these meetings in the past from representatives of the hotel some of the challenges that they've dealt with in the space with respect to the nature of events that they book, acoustical challenges in the space, and then also the issue of carpeting as sort of an add on item, which can sometimes be a cost inhibitor for people who are trying to book an event in the space.

So this investment in carpeting, really the intention is for that to become more of the default setting in the space and to reduce that burden on potential events that would book in the space. So all of these are responsive to the feedback that we've received as we want the operator to be able to run this in a way that is profitable for them and also that supports the goals that the building was built with in the first place. Any other discussion on facility improvements? And given that these aren't action items, if something comes up, you want to bounce back to this, please feel free. So with that, we'll move along.

Our next item is 20 92, update on the Fox Cities Exhibition Center Management Agreement. So as we've said before, we were coming to the end of the term on the management agreement that is between the city of Appleton and the Hilton Paper Valley for running the facility. We received notice in July that the ownership group and the hotel entity wished to exercise their right to terminate the existing management agreement and enter into negotiations to create a new management agreement. That process was spelled out in the initial management agreement. And as long as it was received prior to the November 1, then that initiate the process of terminating the current agreement.

We engaged an outside consultant to assist us in the process of developing a new management agreement. A person by the name of Bill Krieger. And Bill what is the name of the CSL? So Bill has consulted on many, many similar spaces and projects in the past and came with high recommendations from industry leaders, sector leaders. And so Bill helped us to sort of understand what's happening in the sector and what some of the common characteristics of these types of management agreements are and assisted us with and has been assisting us with the drafting process as we've moved our way through negotiations.

The process is complicated, as you might imagine. And where we stand right now, we've gone through now a couple of backs and forths between the city of Appleton and the Hilton Paper Valley. And we believed toward the October, we were getting close to an agreement in principle on a memorandum of understanding, which would basically serve as the foundational piece that would then lead into the drafting of a final management agreement. We were met with additional requests and terms from the Hilton Paper Valley and their ownership group following that conversation, that iteration of the MOU drafting, which has raised some additional concerns on our part about whether some of the terms could be met or how. And so we're still in that process of negotiation between the Hilton and the city.

What I'll say is because they've exercised their right to terminate the agreement, as of 01/01/2026, there will be no management agreement in place for the Fox Cities Exhibition Center if we don't have either an agreement in place or we work out an agreement to extend the current terms to allow for additional time for negotiation. So I share that just for the knowledge of this group that that's the current state of things. But I did ask Director Holman just to put together a summary of some of the major provisions that we have put forward to the hotel. And again, these provisions are responsive to the feedback we've received from them about operating the facility. Because when you initially create a management agreement or any contract, in some ways that's speculative.

And actually operating under those terms can be revealing. And so as we've gone through the process, sort of the initial term of the management agreement, some of the challenges have really been laid bare when it comes to the operations of the exhibition center under those terms. And so I've asked Director Holman just to put together a summary of some of the more significant provisions that we've put forward and offered to the hotel in the hopes of getting to a final management agreement.

Right. So if you recall during our last ARA FCC advisory meeting, we talked a lot about the need for the facility to, have the freedom to generate revenue to cover its costs. So I'm gonna walk you through some of the provisions that we offered and agreed to with them in concept, really with the thought of maximizing revenue while at the same time continuing to generate the, tourism activity that the facility was designed for, but also really to protect our asset and protect our taxpayers. So I'm just gonna take them bullet by bullet, but if anyone has questions as I go, feel free to just raise your hand. The first big piece around, ability to generate revenue is right now, the way the current agreement works is any food vendor can provide food and beverage there.

And what we've offered in concept is they would have right of first refusal for food, alcohol, beverage, and AV services and would also have the ability to create a preferred vendor list for in the event they can't provide the service, anyone on that vendor would then, be able to negotiate with the operator to have a percentage of their revenues passed through to them. The second major thing would be they would have freedom in how they would determine the rates for the exhibition center spaces, equipment, and services globally and also on an event by event basis that gives them freedom to respond quickly to inquiries and RFPs and to really land the deal, knowing that they can then, in some cases, make up the revenue on the food and bev. Third major thing that I think is of significant interest to this group is we have agreed that they would no longer be mandated to provide the free municipal days. However, there would be an understanding that we would negotiate and memorialize a rate discount and other scheduling provisions for municipalities that pay into the room tax commission. The fourth major item was we would give them the freedom and ability to sell naming rights to spaces within the exhibition center, pouring rights, branding and use rights, and other revenue sources.

However, we would not allow them to name the facility itself. Currently, the agreement has them paying us a $25,000 payment in lieu of taxes. We've agreed to waive that and eliminate that from a future agreement. We've also agreed that we would invest up to $800,000 and some of that is the work that director Gaza just described for a new forklift, man lift, exhibition center floor carpeting, and making acoustical improvements based on the recommendations of our consultant. We have also indicated that, in the framework of the agreement that we had initially thought we had come to terms with them on, a certain percent of the revenue generated would flow back to the city.

And we have agreed to in concept that the revenue we get in totality, all of it would go into a special fund that would exclusively exclusively be used for capital improvements at the exhibition center. So there's an incentive to generate revenue for them. The portion of the revenue that they share with us goes in full back to the facility, protecting the city, protecting the taxpayers, but also making sure that as the facility continues to age, those big expenses will have a fund that would then take care of them. A commitment to collaborate on expenses that could be mitigated for the operator by leveraging municipal and other government procurement service contracts, something that I believe has been put into play at the Champion Center. And then finally, something that we've negotiated and they had agreed to in principle was enhanced collaboration with the Convention and Visitors Bureau, in particular the sharing of booking calendars.

So again, all of these provisions are responsive to feedback that we've received from the operator. And the city's principal interest in this is really in the long term health of that facility, the maintenance of that facility in the long run, and also protecting City Of Appleton taxpayers from bearing burden as a result of having this facility. So the capital reserve fund is one of the most important aspects because as it currently stands, the facility is still relatively new, but it is depreciating. And over time, we know that there will be maintenance needs capital maintenance needs on that facility. And there really isn't a financial structure in place to account for those expenses.

And so that's really been at the center of our focus as we've gone through the negotiation process. As you can tell from this list, we have been willing to compromise on some of the city's interests when it comes to the payment lieu of taxes, for example, recognizing that for this to be successful, the operator needs to be incentivized financially incentivized to run the facility. So we've recognized that through the process of negotiation. We also, I think, have to recognize that the exhibition center is an enterprise. And it's part of an enterprise through a management agreement.

And so having provisions in that management agreement, like free municipal days, while it's nice to have, it is a cost to the operator. So someone pays for that. And when we're trying to make sure that there's financial viability for the facility, we're hearing from our operator that that's an inhibitor. That's something that we've had to talk about with them through the process. But I am encouraged by their willingness to work out rates for municipal and nonprofit partners that hopefully continue to allow communities and nonprofits to hold events in the space.

So with that, I'll just open it up for questions and discussion. Oh, yep. Go ahead.

The freedom to set rates. Who was setting the rates prior to I mean, who's doing it now?

I believe there was a rate schedule in the existing management agreement. Pam, Yeah. Do you want to speak to that?

There was a rate schedule in the existing management agreement. That was really the first couple of years where there could be some discounts just to ramp up business. I'm not you know, in the last couple of years in booking, we probably have used that as much. There's been a few increases in rates as well. But there was a rate schedule in that first management agreement.

And that they had to stick to that? Yes. Okay.

Others?

And if nobody else does. The free municipal days, how many municipalities were taking advantage of that?

Pam, do you have it looks like you have that off.

I guess just because I've been around as long as that. Are 10 municipalities are funding the bonds, the debt on this. So the 10 municipalities that are committed to funding the debt were offered these free days. And just from discussion, because I had had everybody calls the CBB, I guess what many of the municipalities were doing was sort of giving their day to a local nonprofit because the city of Neenah didn't necessarily need to do something at the exhibit. And that really wasn't the intent or maybe so they were saying, Okay, city of Neenah was giving their free day to a nonprofit XYZ to do some sort of event there.

And I think there was a little bit lost in translation with that, I guess, least from my perspective. Free was meant to be the rental cost for the facility. Yet when that free day was handed over, some of these nonprofits were like, well, I need to pay for food. I need to pay for what do you mean? And it wasn't like, no, no, you understand.

Free was about the cost of renting the facility, not the things that it takes pipe and drape, all the things you know. You got to have people power in there to set up the tables and to set up the pipe and drape. And that's not renting the facility, that's the cost. So there was and that became a bit of a confusing thing. So I think this was I, you know, I would feel very comfortable if, you know, it seems like we would have a rate for a community.

I've been talking let's be honest in talking with some of those nonprofit groups who have contacted us is, you know, if an event is not generating hotelmotel room tax, it's not paying off the debt. The whole point is the facility generates hotelmotel room tax, it pays off its debt. Many of those local events are not room night associated. So it was important, I think, that those groups understood kind of the philosophy, too and I think then there became this understanding of, oh, okay, now I understand that what the intent of those the facility was for. So I think that that was probably a best you know, it was well intentioned but maybe got a little lost in translation about what the intent of those days were.

I appreciate the context. Go ahead.

I just had a question. What type of term, how many years are you talking about on the new agreement?

I believe the initial was five. It was a five year initial term. So it would likely be a five year term. There was an automatic renewal provision in the initial management agreement, so I would expect some sort of similar provision in an updated agreement, of course still allowing either party to terminate within a reasonable period of time. But we don't want to be at this every year.

So when we get to a final management agreement, we want it to last. And I would say on this point of duration of the management agreement, one of the challenges is as we try to create a capital reserve fund for the facility, which is really one of our most important objectives in negotiating the agreement, we have to recognize that there will be a period of time where they'll need to ramp up when it comes to the revenues that they're bringing in to support not only their profitable operation of the facility, but also the disbursements that would be made to this reserve fund. So that's something that we'll have to navigate as we work our way through negotiations. What does that ramp up period look like, and how do we get there? Ultimately, the goal is not to create an additional revenue stream for the city of Appleton.

It is to make sure that there's money in place when it comes time to replace, repair sort of capital items within that facility. So there are industry best practices when it comes to reserve fund amounts, annual reserve fund amounts. And that's something that Bill helped us to understand based on benchmarking with other similar facilities. And so that really lays out the goal from a capital reserve fund perspective. On the other hand, we also have to recognize that businesses are this is a variable business.

There are things that happen. And tying to a specific dollar amount may pose problems for the operator when it comes to meeting expectations with that capital reserve. So that's one of the reasons that as we're looking at this, we're really trying to be pragmatic and understand things from an operator's perspective so that we're not asking for unreasonable things or we're not putting unreasonable provisions inside of a management agreement that could inhibit their ability to be successful. So we're trying to understand where they're coming from and also trying to be clear about our perspective when it comes to what a successful agreement looks like for us. And I would say one of the lines that we're navigating right now is that I'm uncomfortable with asking Appleton taxpayers to provide subsidy through their property taxes to the operation of the facility.

And I would hope my fellow municipal leaders would understand that perspective. And I mentioned before some of the issues that we're trying to work through right now as we negotiate. We're we're bumping up against that issue as we work our way through the management agreement negotiations. So that's just an area where I don't see a lot of room for movement. As a municipal leader, can't ask Appleton taxpayers to subsidize the operations of the facility in a direct way, particularly when that really amounts to improving a margin for an operator.

So we have to navigate our way through these things. And as you'd expect, it is complicated.

Go ahead. Do you have a plan B just in case negotiations aren't successful, such as the city of Appleton taking over the management of the exhibition center?

So at this point, we're still in an active negotiation process with the Hilton Paper Valley. And they've expressed to us their interest in continuing to operate the facility. And we've expressed our interest in having them continue to operate the facility. So while negotiations are ongoing, no, we have not explored the possibility of the city of Appleton taking over management of the facility directly. That's not a business that the city of Appleton is in.

And I would say, from my perspective, that is a much broader conversation than strictly the city of Appleton, because the Fox Cities Exhibition Center is a shared asset among all of the partner communities in the Fox Cities. So we haven't gone down that path of exploration yet. And I would say there will be further conversation needed among explore that kind of path. I would say in the immediate term, this question of what happens beyond December 31 this year is an open one. That is something that we've made clear to the operator that the management agreement, as it currently stands, ends on is no longer in place as of January 1.

So there's a possibility of an extension of of the existing management agreement to allow time for, further negotiation. But while we're still working our way through those negotiations, that that itself is under discussion. Other questions, discussion? Alright. Well I I had I'd been hopeful and maybe optimistic that we'd be able to come to you with a report about at least a memorandum of understanding between us for ultimately creating a new agreement by this meeting.

But I also want to say negotiations are ongoing and active, and we're in communication with the Hilton Paper Valley. As two parties in a negotiation, we're having those discussions. I am being a little bit vague about details at this point because I don't believe that negotiations should be played out in public or in the media. So I don't intend to make further comments about the details of the negotiations at this point. And again, I'm optimistic that we'll be able to work through it.

Arrangement. The exhibition center is a complicated arrangement. And so it is taking some time to work our way through. Any other questions or comments while we're all together? Don't want to cut us short arbitrarily.

Okay. So we will follow-up with the Exhibition Center Advisory Committee as we move along, just to keep you in the loop of any significant developments along the way. And my hope is that before long, we're able to bring back the terms of a memorandum of understanding, at the very least, if not a full management agreement, just to bring you all in the loop. But as always, I appreciate the partnership of all of our communities and look forward to moving this forward in in due time. All right.

Thank you all very much. We have no further items on our agenda, so I'll entertain a motion to adjourn.

Second. We

have a motion and a second to adjourn. All those in favor, please signify by saying aye. Aye. All right. The ayes have it. We are adjourned. Thank you.