Wall repairs are needed at Five Flags Theater in Dubuque.
H.R. Cook, general manager of Five Flags Center, discusses limitations and improvements needed in the top balcony at Five Flags Theater in Dubuque.
Wall repairs are needed at Five Flags Theater in Dubuque.
H.R. Cook, general manager of Five Flags Center, discusses limitations and improvements needed in the top balcony at Five Flags Theater in Dubuque.
As the music stopped and the overhead lights came on during a break in the June 3 concert of country group Home Free, the more than 2,000 attendees in Five Flags Center in Dubuque stirred in their seats. Many made their way for the restrooms and concession stands.
And like at other major events held at the city-owned center, bottlenecks quickly emerged, and the lines for both the bathrooms and for food and drink grew to daunting lengths. Those lines barely diminished during the 15-minute break, and some attendees had to choose between continuing to wait or getting back to their spots before the music started again.
Five Flags General Manager H.R. Cook noted that at particularly well-attended shows, some men resort to urinating in trash cans to avoid the long lines.
Dubuque resident Katy Jones is all too familiar with those lines. A regular attendee of events at Five Flags, she loves the variety of shows that the venue offers, but she knows attending those events requires some patience when trying to grab food and drinks or simply make her way through the crowds.
“It gets pretty intense,” she said. “That’s just the way it usually is.”
While some of the problems faced by Five Flags are readily visible, others are not so apparent to the average attendee.
They don’t see that the roof of the arena leaks on rainy days, prompting staff to attach buckets to the ceiling. They don’t view the foundation of the historic Five Flags Theater buckling and turning to literal dust in the basement.
Staff members attempt to make those problems invisible to attendees, but as the 43-year-old arena continues to age, hiding the increasing list of issues only has become more difficult.
“It’s only getting worse and worse here,” Cook said. “We are very proud of the shows that we can put on here, but it’s far from the ideal experience that we want it to be.”
For the past seven years, city officials and residents have voiced opinions on whether the center should be overhauled or expanded.
Proponents of pursuing a significant overhaul or expansion point to the center’s role as an economic driver and quality-of-life amenity, while opponents argue the tax burden of such an undertaking will be far too substantial on many residents, particularly for a facility still projected to lose hundreds of thousands of dollars per year.
A $92.4 million proposal seemed destined to finally head to voters next spring, but in a sudden shift, Dubuque City Council members unanimously agreed earlier this month not to schedule the vote.
They instead will hold a work session on July 11 to discuss alternative options for making less-costly improvements to the center.
Speaking with the Telegraph Herald over the past week, council members expressed interest in a range of options for Five Flags.
In March 1979, the city completed construction of the $3.7 million Five Flags Center arena connected to the then-recently refurbished historic Five Flags Theater, which was originally constructed in 1911.
In 2004, the city transferred management of the center to SMG Worldwide Entertainment and Convention Venue Management, with the goal of reducing public subsidization for the facility. In 2019, a merger involving SMG formed ASM Global, which continues to operate Five Flags. Cook is an employee of ASM Global.
In fiscal year 2022, the city paid a $105,000 management fee to ASM to run Five Flags Center. That fee is included in the center’s operating expenses.
Over time, the annual taxpayer operating subsidy for the center has grown.
From fiscal years 2002 to 2008, the annual subsidy hovered between $600,000 and $790,000. From 2009 to 2015, annual property tax support started to regularly surpass $800,000. Since fiscal year 2016, the total always has topped $800,000, including two years in which it topped $1 million.
From July 1 to May 1 of this fiscal year, Five Flags had $708,174 in income and $1,250,165 in expenses — a deficit of more than $540,000.
Staff at Five Flags continue to contend with what they see as an outdated facility. Tarps are set up to catch leaking water, makeshift dressing rooms are assembled in the basement, and entire sections of the arena, including those containing concession stands, are closed off during shows to ensure the privacy of performers.
“There are repairs and improvements that need to happen regardless of whether or not we decide to expand the Five Flags,” Cook said. “These things need to be fixed to keep operating it.”
In 2018, it was estimated that those needed repairs and required maintenance upgrades would cost $8.7 million. Leisure Services Manager Marie Ware told the Telegraph Herald that the city did not have an updated cost for that work.
That work includes patching damaged plaster walls, replacing the center’s roof, installing a new fly rail in the theater and an automatic lift for the orchestra pit and putting in a handicapped-accessible elevator.
However, Cook argued that even those repairs and improvements would not address more inherent issues with the facility. He said the concession stands are outdated, the bathrooms are not large enough to accommodate large audiences, and the entire block of West Fifth Street along the center needs to be closed to accommodate the buses and trailers of event acts.
Some efforts have been made to combat these issues. For larger events, staff have brought in portable bathrooms for patrons to use, though they do little to alleviate the long lines. Makeshift concession stands also are set up in the main lobby in order to reduce wait times.
Sales of food and beverages make up nearly one-third of the center’s total revenues. With people waiting in long lines at both the concession stands and the bathrooms, that leaves less time for people to purchase food and drinks.
“People will not stand in a line for concessions if it is 15 people deep,” Cook said. “Every person who decides to go without a drink or something to eat is another missed sale for us.”
Even though the center generates less revenue than expenses, its proponents argue that the economic benefits go beyond direct ticket and concession sales, and that the real value of the venue is its ability to bring in out-of-town guests who spend money at local businesses.
According to a recent study conducted by consultant Conventions, Sports and Leisure International, Five Flags draws about 155,000 attendees annually, of which nearly 34,000 are “non-locals.” Those nonlocal attendees account for more than 4,400 hotel room nights per year.
In 2018, city officials were presented with four scenarios to make improvements to Five Flags. There was the option that included only the basic maintenance and repair of the facility with a cost of $8.7 million. Another incorporated limited renovations and maintenance to the facility at a cost of $23 million, a third option suggested expanding the arena from 4,000 seats to 5,600 for $57.9 million, and a fourth option involved constructing a new, 6,400 seat arena for $85.9 million.
Seeing the potential for the most economic impact, City Council members chose to pursue constructing a new arena, though a hybrid design was called for that would reduce the project’s total cost. In 2019, the cost was updated to $74.3 million, but then the COVID-19 pandemic occurred, derailing plans to have the public vote on the measure.
Earlier this year, as council members examined the proposal again, its estimated cost had climbed to about $92 million.
Proponents of constructing a new arena say the wider benefit to the community will be substantial and point to the feasibility studies paid for by the city predicting that a new Five Flags Center would see a substantial increase in annual attendance and would reduce its overall yearly deficit.
“We saw that option as the best path forward for our future and the downtown area,” said Tyler Daugherty, chair of Dubuque’s Civic Center Commission and vice president of community engagement for Travel Dubuque. “It would have had the greatest positive impact on the center itself and the community.”
In a recent report presented to Dubuque City Council, consultant Conventions, Sports and Leisure International estimated that a new 6,400-seat Five Flags Arena annually would host 220 events, generate $2.2 million in revenue and bring in 375,750 attendees — an about 140% increase from the current attendance. It also estimates that the average annual taxpayer subsidy required for Five Flags would decrease from $856,000 to $252,497.
Conventions, Sports and Leisure International officials did not respond to repeated requests for comment for this story.
While the report appears promising, the accuracy of these predictive models for other proposed civic center projects has been inconsistent, and opponents of a major Five Flags expansion argue that the feasibility studies by consultants for proposed convention center and arena projects exaggerate their predicted performance.
“We don’t have any proof that these studies are accurate,” said Tim Hitzler, the founder of Key City Creative Center in Dubuque and an outspoken opponent of such an expansion. “This is a substantial expense for the city, and we should know if spending that kind of money will actually pay off before we do it.”
Heywood Sanders, a professor of public administration at The University of Texas at San Antonio, has studied more than 20 major convention and civic center projects throughout the U.S. He told the TH that he has never seen the attendance or economic impacts of those centers actually meet the projections listed in feasibility studies.
“I haven’t seen anything that has come close,” Sanders said. “At the very least, one should assume some decided level of uncertainty in a forecast that attempts to project out-of-town attendance for conventions, meetings and even at concerts or other kinds of events.”
Civic center projects in eastern Iowa have seen mixed results compared to the projections laid out in feasibility studies.
In 2013, the City of Cedar Rapids completed its $100.6 million project to renovate an existing hotel and build an adjacent convention center, now named Alliant Energy PowerHouse.
A 2010 study of the project by VenuWorks, based in Ames, Iowa, estimated that the new convention center and hotel would attract 375,000 attendees annually. Another report by HVS, of Chicago, estimated the convention center would bring in 301,925 attendees per year.
According to the city, Alliant Energy PowerHouse hosted a total of 1,153,923 patrons from June 2013 to December 2019 — an average of less than 180,000 attendees per year.
The city said in a press release in late 2020 that the complex “welcomes more than 300,000 guests per year,” which might indicate that attendance had picked up in more recent years prior to the pandemic. Efforts to speak with Cedar Rapids officials were unsuccessful.
The Xtream Arena in Coralville, Iowa, a 5,100-fixed-seat arena that includes a 30,000-square-foot fieldhouse, opened in September 2020. Prior to the pandemic, Johnson Consulting estimated that a 4,216-seat arena in Coralville would have an annual attendance of 311,109 during its first year.
Josh Schamberger, president of Iowa City and Coralville Area Convention and Visitors Bureau, said the arena hosted 82 events and had nearly 44,000 attendees in fiscal year 2021.
In fiscal year 2022, which ends on June 30, the arena already has hosted 126 events and seen attendance increase to 200,868.
While the total attendance remains under the projections offered by Johnson Consulting, Schamberger said he believes the popularity of the arena will continue to grow as people become more willing to attend live events again.
“There were still a lot of people who were not up to going to a show a few months ago,” he said. “If we can continue as an arena, then there will be a larger impact in filling all the area hotels and restaurants.”
However, Sanders argued that attendance might not return to pre-COVID levels as soon as venue managers hope, particularly for conventions. He pointed to many industry conventions going virtual, which is resulting in in-person attendance decreasing.
“Folks in the industry say people love to meet face-to-face, and that things will return to normal at some point,” he said. “I think it’s appropriate to recognize that there may well be a significant shift in convention attendance.”
In May, Dubuque City Council members voted to have city staff issue a resolution setting a referendum in March to ask voters to approve borrowing up to $92.4 million to construct a new Five Flags Center and make repairs to the historic theater.
The project would have significantly increased the property taxes of homeowners if approved. In 2024, the first year that the levy increase would have gone into effect to cover the cost of the project, the average Dubuque homeowner would have seen his or her property taxes increase by $193.28. That tax increase would have fallen slowly over the years, eventually decreasing to $161.59 by 2042.
Two new feasibility studies were provided for the project. Along with CSL’s updated cost assessment, another feasibility study conducted by Johnson Consulting estimated that the larger center would draw 286,948 attendees in its first year, which would increase to 408,932 attendees by year five.
Johnson Consulting officials also did not respond to requests for comment for this story.
Earlier this month, City Council members voted unanimously to not move forward with the March vote and instead scheduled a work session to review the other scenarios first presented to the city in 2018. Council members said they were swayed to change course when it was revealed that if the project is approved, paying for its cost would put the city at 86% of its statutory debt limit and could result in a downgrade of the city’s bond rating.
Reached by the TH during the past week, council members offered a wide variety of suggestions regarding what work should be pursued for Five Flags, though all agreed that whatever option is pursued would require an updated feasibility study and cost analysis.
Council Member Susan Farber said she supports some level of renovation that will allow Five Flags to continue operating, while also not costing too much.
“It’s not bargain shopping, but it’s making it more realistic to manage,” she said. “I do believe that it needs to be improved. We just need to figure out what level of improvement that will be.”
Mayor Brad Cavanagh said he favors paying for an updated cost analysis of the scenario to make limited renovations to Five Flags — previously estimated to cost $23 million — and the scenario to make a smaller expansion of the center, previously estimated at $57.9 million.
“I would like to look back at those options and restart the discussions,” he said. “I would like to know what the costs and the effects on our debt those scenarios would have.”
Council Member Ric Jones said he supports making improvements to the center that would develop it into a “boutique-sized” operation. Such work would make the necessary repairs to the facility and add the needed amenities to attract larger acts.
“That will allow us to bring in some pretty nice shows,” Jones said. “Hopefully, a work session will help us find that right direction.”
Council Member Danny Sprank said he supports the smaller expansion of Five Flags last priced at $57.9 million, though he worries that voters also would not support that option.
“We have to fix the house at some point,” he said. “That scenario would probably be about $65 million now. I don’t know if that would get approved, but that would be the one I lean toward.”
Council Member David Resnick said he does not believe the Five Flags footprint needs to be expanded, arguing instead for a “muscular” renovation and improvement of the existing facility that will bring it up to modern standards.
“I don’t want to close Fifth Street,” he said. “We can do a lot with what we have. I think we can do a muscular design that the whole community can get behind.”
Council Member Laura Roussell said she wants to explore why officials previously chose to forego the other project scenarios before deciding which one she supports. Roussell was not on the council at the time of those discussions.
“It is time to revisit, but there were reasons we didn’t choose those other scenarios,” she said. “I’d like to take time to see why we didn’t choose those options in the first place.”
Molly Grover, president and CEO of Dubuque Area Chamber of Commerce, said the chamber did not take an official position on the proposed referendum, but it supports the city reexploring the project to find a more cost-efficient solution.
“The city exploring more options makes sense,” she said. “We, like everyone, are looking forward to hearing the results from further analysis.”
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