Mayor looking to fix Palace's financial woes
The last five years at the Corn Palace have not been kind to Mitchell's budget, and Mayor Jerry Toomey hopes to reverse that trend. From 2011 to 2015, the Corn Palace operated at a deficit of at least $300,000 each year. After 2015 when expenses ...
The last five years at the Corn Palace have not been kind to Mitchell's budget, and Mayor Jerry Toomey hopes to reverse that trend.
From 2011 to 2015, the Corn Palace operated at a deficit of at least $300,000 each year. After 2015 when expenses topped revenues by $425,541, approximately $100,000 more than the loss in 2014, Toomey is ready to take on the challenge of bridging the gap.
"Any other business that was operating at a deficit like that would put a key in the lock, turn the lock and walk away," Toomey said. "But we can't do that with the Corn Palace."
Despite two slightly profitable events in 2015, the four-concert Corn Palace Festival and an appearance by arena rock tribute band Hairball, the city's multi-purpose facility lost money when hosting the Christian contemporary group Point of Grace in December.
According to City Administrator Stephanie Ellwein, the city made $12,355.56 on the Hairball concert and a total of $2,731.48 for the Corn Palace Festival shows, but lost $10,562.21 on the Point of Grace concert.
No formal decisions have been made, but Toomey has pondered several ideas to lessen the losses at Mitchell's major tourist attraction. One of those ideas could save the city nearly $160,000 every two years.
Toomey suggested the city could save about $157,000, which is the decorating expense for the building in 2015 according to Finance Officer Michelle Bathke, every two years by redecorating the building's murals once every two years instead of annually.
"If we can save that money every other year and apply that toward the bottom line to make us more profitable, I'm asking the question, 'Why not?' " Toomey told The Daily Republic on Wednesday.
Toomey admitted the possibility would likely get mixed reaction, but he said it could help the city avoid having to transfer money from the general fund to help cover the losses at the Corn Palace. Over the last five years, the city had to appropriate at least $375,000 per year to the Corn Palace from the general fund, reaching a total of $2,010,037 from 2011 to 2015.
Toomey said he's brought this proposal to the attention of some other Mitchell residents who argue some visitors make an annual pilgrimage to the city to see the new murals on the Corn Palace, but Toomey isn't buying that argument.
"My personal opinion is I don't believe it," Toomey said. "I think there's a handful of people. You could probably count them on both hands and feet."
Unless he's proven wrong, Toomey said the option to eliminate the murals should be considered.
But Toomey's ideas to make the event center and tourist attraction more profitable do not stop at the murals on the building's exterior. He said the city must look at every aspect of the Corn Palace, from concessions to selection of entertainers.
Toomey suggested adding a facility-use fee to ticket sales and increasing the amount of donation boxes throughout the building. While he's unsure why the losses at the Corn Palace have not been addressed sooner, he said no problem is unsolvable.
Another potential solution Toomey mentioned is raising the rental fees to use the building.
Currently, the city has a contract with Dakota Wesleyan University in which the school pays $11,000 in rental fees for 15 events in the 2015-2016 school year. Any event after its first 15, DWU pays $450 per day for games. The agreement also gives the school access to the Corn Palace for practice.
The city also has a rental agreement with Mitchell Public Schools that covers its first 20 events. Like DWU, Mitchell Public Schools pays $450 per day after its first 20 events. Through the joint-use agreement, the Mitchell Kernels also get access to the facility for practices.
Toomey's quest to make the Corn Palace profitable follows a $4.7 million renovation of the building and the hiring of a new Corn Palace director. He's optimistic the city can turn things around with the Corn Palace, and he thinks he's found the right person for the job in Scott Schmidt.
"I have every confidence in the world that Scott's going to do it," Toomey said. "He's going to get us out of the red."