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Spokane, Washington  Est. May 19, 1883

Could Spokane Valley outsource CenterPlace operations? City looks to offset losses from financially ‘hemorrhaging’ events center

The CenterPlace Regional Event Center is photographed in Spokane Valley on Thursday.  (Kathy Plonka/The Spokesman-Review)

Spokane Valley may outsource operations of the CenterPlace Regional Event Center, the city-owned regional event facility south of the river near Mirabeau Park.

On May 10, the Spokane Valley City Council discussed the possibility of hiring a third-party contractor to run CenterPlace after staff explained that the building is underused and losing $400,000 a year.

CenterPlace opened in 2005. It was funded by a massive, voter-approved Spokane Public Facilities District bond that also paid for an expansion to the Convention Center in downtown Spokane and improvements to the Spokane County Fairgrounds.

The building is 54,000 square feet and primarily hosts meetings, but renters can also reserve space for community events, weddings and other activities. The Spokane Valley Senior Center occupies a 15,000-square-foot wing of CenterPlace.

Right now, Spokane Valley runs the event center with city staff. But that might not be the best arrangement, said City Manager John Hohman .

CenterPlace is rarely booked to capacity. Its rental rooms sit empty more than 70% of the time.

Given the low usage, it’s possible hiring a contractor to run the place could make financial sense. A business with more management and marketing experience might be able to find more paying customers to use the facility, which could help reduce the $400,000 annual losses.

“If we can stop that kind of hemorrhaging and have extra money for other uses, that would be awesome,” City Councilwoman Laura Padden said.

But outsourcing operations might change how CenterPlace gets used.

“Is it a community center? Is it a conference center?” Hohman asked the City Council. “What do you want it to be?”

All City Council members said they’re open to learning more about what outsourcing CenterPlace operations could look like. But none expressed an interest in shifting the building to a full-blown conference center just yet.

City Councilman Ben Wick said he believes CenterPlace should be a community center. These types of facilities aren’t supposed to turn a profit, he said.

“I don’t want to turn it into a convention center where you’re trying to earn money from it,” Wick said. “It’s supposed to be for the community.”

City Councilwoman Brandi Peetz agreed, while also noting that managing event centers isn’t the city government’s area of expertise.

“Is that really what business we want to be in?” she asked. “In my opinion, not necessarily. Maybe a third-party vendor would do a better job.”

Multiple council members said they might be interested in a hybrid model, where the city would manage part of CenterPlace and a third party would look after the rest.

“I wouldn’t want to see it completely, solely managed by someone else,” City Councilman Tim Hattenburg said. “I think we could do both.”

Mayor Pam Haley said she also likes the hybrid idea. The city isn’t equipped to properly market the place, and the $400,000 annual loss is a bit extreme, she said.

“It would be awesome if it could be cost neutral, but it would still be great if we could just reduce how much we’re losing,” Haley said.

Hattenburg said he thinks CenterPlace is an amenity for the citizens of Spokane Valley and agreed with Wick that it shouldn’t become a pure convention center. He said he’d like the facility to lose less money, but called the $400,000 number misleading. The event center generates economic activity in the city, which offsets some of the losses and can’t be cleanly quantified, he said.

City Councilman Arne Woodard emphasized that Spokane Valley is a contract city and it wouldn’t be out of character to outsource operations.

The city government has relatively few employees and deliberately outsources various operations that most municipalities handle with in-house staff. Spokane Valley’s contract with the Spokane County Sheriff’s Office for law enforcement is the most obvious example.

Councilman Rod Higgins said council members need to ask themselves how much they’re willing to lose in order to keep CenterPlace more community-focused.

“What pain level are we willing to absorb financially to keep it that way?” Higgins asked. “Sooner or later, CenterPlace might not be the community center we need. We might need something else that brings life into our businesses around here.”