Dodge Arena turns 5

HIDALGO - It all started because the city wanted a place to host wedding receptions and quinceañeras.

But the dream slowly transformed into the premier events venue in the Rio Grande Valley.

The 6,800-seat Dodge Arena, celebrating its fifth anniversary today, now hosts 150 events each year and is home to three professional sports teams. (Click here to read more about Dodge Arena)

"It was an awesome feeling being there for the first show," said Hidalgo City Manager Joe Vera III of the Alan Jackson concert he attended Oct. 23, 2003. "I might have dreamed, but I never thought I'd see something like that in Hidalgo."

Today, the arena at 2600 N. 10th St. helps provide jobs and a degree of financial stability for Hidalgo, which has allowed the city to largely escape the financial struggles that some of its neighbors suffer.

While the space surrounding the facility is still void of many new developments - heavy-duty equipment rentals and duty-free stores dominate the landscape - that's also starting to change.

HISTORY

Plans for the arena began to take shape in 1995 as the city considered building a civic center.

As city leaders began looking at what other cities were doing with their civic centers, they saw ice being installed at a facility in Shreveport, La., for a hockey team. That helped launch the idea of making the Hidalgo civic center a sporting venue.

As crazy as it sounded - ice hockey in one of the warmest areas of the country - a survey of Valley residents indicated hockey could be popular.

City leaders hooked up with leaders from Arizona-based Global Entertainment Corp, which runs the Central Hockey League. The idea was to launch a team here while interest in the new venue was still fresh among Valley residents.

As the negotiations for a hockey team continued, the civic center morphed into the larger venue it is today.

The construction of the events center was funded with a $7 million loan taken out by the city of Hidalgo and a $14 million loan taken out by the Hidalgo Municipal Facilities Corp., which was established to run and fund the facility.

While the city continues to chip in about $300,000 each year to pay for the arena's maintenance and operations, the facility brings in enough money to pay back the loans.

"It's fortunate in that it's been able to meet its debt service on an annual basis," said James Bricker, Dodge Arena's general manager. This year, the arena is projected to gross $11 million in ticket sales, he said, though most of that money goes to promoters.

The arena is budgeted to spend $1.5 million paying off its debt this year, Bricker said.

The facilities still must pay off $11.1 million of its loan by 2023. The city must pay $4.9 million by 2017.

At the end of 2007, the trade publication Venues Today ranked Dodge Arena 10th among arenas its size in terms of gross revenue.

From Oct. 16, 2006, through Oct. 15, 2007, the venue drew 173,455 guests and made more than $8.3 million in gross revenue at special events, according to numbers reported to Venues Today. The study did not include regular sporting events in its analysis. The stadium has an average annual attendance of 400,000.

Bricker explained that the arena is not designed to directly make a lot of money for the city.

Instead, its goal is to earn enough money to continue paying its debt, provide entertainment and jobs and reinvest any existing money into facilities improvements.

"We're trying to keep this place so it doesn't look five years old," Bricker said.

WEALTH

The arena's impact on the city has come indirectly, namely through the tax revenue it helps generate.

In 2002 - the year before Dodge Arena opened - Hidalgo collected $911,104 in sales tax revenue, based on data from the state comptroller's office. Last year, the city more than doubled that sum to $1.84 million in tax revenue.

Statewide, city sales tax collections increased by 44 percent in that same time period.

The bump can largely be attributed to the sale of tickets, concessions and souvenirs, which - through sales tax - all help put money in the city's coffers.

In that same time period, the assessed property values of the city have grown by 85 percent to almost $312 million. Vera points out the irony that the city would like to purchase land for some projects, but its own arena has boosted Hidalgo property values to the point that it may be too expensive for the city to buy.

The city has also been able to maintain a property tax rate of 35 cents per $100 of appraised valuation, among the lowest rates in the county, for 19 years.

Ultimately, the impact of the stadium can perhaps best be seen on the city's fund balance, a sort of rainy-day reserve that functions as a barometer of a city's financial health.

Since 2002, the year before the arena opened, Hidalgo's fund balance has grown nearly 50 percent to an estimated $6.48 million this year, which represents more than 60 percent of the city's annual budget.

In that same period, the fund balances of larger cities like Weslaco and Pharr have nearly disappeared.

DEVELOPMENT

Today, five years after the arena opened, it is now starting to spur a series of developments in the area.

Before the establishment of the arena, Hidalgo drew visitors through various festivals, but it had never established its niche.

"It was after Dodge Arena ... that people started taking notice of the community," Vera said.

Across 10th Street from the arena, an upscale condominium complex that offers what are being pitched as second homes for wealthy Mexicans is being developed.

Meanwhile, El Paso developer Mimco is completing a 95,000-square-foot retail development featuring stores Bealls, Melrose, Fallas Paredes and Family Dollar at the intersection of 23rd and Coma streets. The first of the stores is scheduled to open later this month.

And next month, a 66-room Best Western hotel is set to open next to the arena.

"We always wanted a hotel near Dodge Arena," said project developer Pete Patel.

Vera said that project is particularly important, since entertainers and road crew members have previously stayed in McAllen hotels, causing Hidalgo to miss out on some potential revenue.

Had it not been for the arena, Vera said, developers would not have been drawn to Hidalgo as quickly as they have been.

"This was a result of Dodge Arena," Vera said as he described the commercial projects.

But more broadly, the arena is "a dream come true" for South Texas, said Bill Summers, who heads the Rio Grande Valley Partnership, a group that promotes business in South Texas.

"We've had so many more entertainers come to the Valley since they started this - entertainers that would have never come to the Valley if it wasn't for Dodge Arena," Summers said.

Though the arena is "the envy of the rest of the Valley," Summers said, its benefits spread beyond Hidalgo, through the money spent by visitors on hotels, shopping and entertainment throughout the region.

"It's been good for McAllen," said McAllen City Manager Mike Perez. "People after the shows stop and eat in our restaurants. It's been good for everybody."

FUTURE

Since 2000, Hidalgo's population has increased by more than 50 percent to 11,623, making it the second-fastest growing city in the county, second to Alton, based on Census figures.

The financial stability provided by Dodge Arena is allowing the city to move forward with plans to meet the needs of its growing populace.

The city plans to expand its park system and build new water and wastewater treatment plants.

Last year, the city doubled the size of its library through an expansion and added a computer lab, and it is currently pursuing plans to renovate Hidalgo Viejo, the historic downtown.

As for the arena, Bricker acknowledges that as the Valley continues to grow, Dodge Arena could face competition.

Former owners of La Villa Real Special Events Center, which closed its doors in McAllen in 2006, have expressed interest in reestablishing the venue in Pharr.

But those plans call for a facility that is smaller than Dodge Arena, and developers have said it will not be a sports venue.

Bricker said Dodge Arena will continue to make improvements to ensure that is always competitive in the market.

The facility is refurbishing the floors of its VIP areas, as well as replacing all of its video screens, a project that will cost several hundred thousands dollars.

"I think as long as we kept it fresh, we're going to be OK," Bricker said. "But it takes a lot of hard work."

Ryan Holeywell covers McAllen, PSJA, the Mid-Valley and general assignments for The Monitor. He can be reached at (956) 683-4446.