R2021-94 Resolution Authorizing Proposal with Hotel & Leisure Advisors, LLC for Highest and Best Use Study of the Decatur Civic Center

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May 13, 2021 TO: Mayor Julie Moore Wolfe & Members of the Decatur City Council FROM: Scot Wrighton, City Manager RE: Consulting Agreement for Determining Best Uses for the Civic Center The city of Decatur subsidizes the operations of the Decatur Civic Center Authority in varying amounts each year—based on their changing annual operating deficit (between $400K and $500K each year).This payment is essentially the city's rent for using the building.The property is owned by the Decatur Civic Center Authority, a governmental entity created by state statute. The Civic Center was dedicated in 1980 and has been in continuous use since then as a municipal office building, event arena, and public theater venue.The Civic Center hosts regional hockey leagues and other hockey-related events,two local community theater troupes, many annual trade and exhibit events, plus other activities that need a large arena or exhibition hall. In the early years of the Decatur Civic Center,the facility enjoyed regular use, and the city did not fund large operating subsidies. But as other event venues became available in the area, and as the needs of local and out-of-town entities for public event, performance and exhibition space changed,the facility has seen reductions in utilization, paying tenants and new bookings. The COVID pandemic made this trend substantially worse.The hockey season was extended in 2020-2021, but the Civic Center has not recovered from the event cancellations brought on by COVID.The question of"what is the highest and best use for the Civic Center," and "what can the city do to increase utilization of the Civic Center?" are questions the city considered prior to the pandemic. Consequently, staff began discussions in 2019 with Hotel & Leisure Associates— a national firm that specializes in determining whether there is demand and market viability for new hotels, leisure destinations, public event venues, and in assessing highest and best use for existing leisure and event arenas. Hotel & Leisure Associates is also familiar with the Decatur market, since they have performed analysis for other area clients.The onset of the pandemic in March 2020 caused staff to pause this evaluation while we waited to see how changing public health considerations would alter an evaluation of Civic Center highest and best uses. The existing tenants and users of the building are happy with the Decatur Civic Center; the facilities management staff of the Civic Center Authority do an excellent job of maintaining the Civic Center, its parking lot, arena grounds; and the Authority provides custodial services to other government buildings on a fee-for-service basis.The building is mostly up-to-date, and in many respects, it does not look like it is 41 years old. But I believe the best time to seriously examine how to more fully utilize a facility like the Civic Center and get closer to its "highest and best use" is when the facility is in good repair and still in active use.The needs of Decatur have changed in 40 years, and the Civic Center may need to adapt with changing trends.