City of Cape May brochure to market Convention Hall.

CAPE MAY — The new Convention Hall will be operating with a $1 million budget through the city’s Tourism Utility.

City Manager Bruce MacLeod at a Jan. 18 meeting of City Council said the city did not have a definitive history to establish a budget for the Tourism Utility and the new Convention Hall.
He said when the Tourism Utility was created, the city closed the dedicated recreation account and the Tourism Commission account. MacLeod said there were balances in both of those accounts as of Dec. 31, 2011, $72,550 in the recreation account and $22,500 in the Tourism Commission account, both of which will be moved into the Tourism Utility.

From there, revenues were earmarked for the Tourism Utility. The city’s room tax on hotel/motel rooms in 2011 collected $1.1 million. For 2012, $80,000 of that fund will be allocated for the Tourism Utility budget.

Prior to this year, mercantile license fees were dedicated to the Tourism Commission. In 2011, mercantile license fees generated about $68,000, said MacLeod. Of that, $65,000 is being anticipated as revenue in 2012 for the Tourism Utility, he said.
The city is anticipated $65,000 in revenue for the utility from one half year’s rent of the two retail store spaces at the front of Convention Hall, said MacLeod.

The city looked at revenue for the Tourism Utility from recreation programs such as camps and Pelican Place pre-school totaling $79,000, fitness and exercise programs estimated at $38,000, swimming programs at $15,000, leagues and swim teams at $30,000 and teen and adult dance programs that will generate $15,000, he said.
Revenue from art and craft shows is estimated at $65,0000, said MacLeod.

He said the city is anticipating eight concerts in Convention Hall based on a rental fee of $2,000 per show for a total of $16,000 in revenue. The city will be implementing a ticketing system for performing arts that would include a fee expected to generate $12,000 for the Tourism Utility, said MacLeod.
Revenue is anticipated from rental fees for Convention Hall for training sessions, banquets and weddings where a group or company rents the building
City sponsored events such as a concert by the Fralinger String Band July 7 at Convention Hall will garner a ticket fee for Tourism Utility.

“We realize a whole new realm is open to us, sponsorships and advertising,” said MacLeod.

On Memorial Day weekend, Convention Hall will open with a gala concert of the Philly Pops Orchestra with Peter Nero. MacLeod said that portions of the event could have a sponsor. He said sale of water and soda at events could also generate income.

“We realize we don’t have precise numbers and targets on those but to allow us to grow this utility, we’re going to anticipate $500,000 as an income stream for those potential items,” said MacLeod. “When you add that $500,000 to the other areas of known income, that’s totals $1 million ($1,075,50).”

The revenue side is driving the spending side in its totality, he said.
On the spending side of the equation, the city looked at the portion of salaries that was previously supported by the recreation program, the director at $80,000, Civic Affairs administrative staff at $115,000 and other recreation leaders and coaches at $130,000, totaling $325,000 said MacLeod.
He said known areas of expenditures were totaled for the new Convention Hall including travel reimbursements for marketing the hall, advertising and promotion and printing.

MacLeod said some programs would be continued that were started by the Tourism Commission such as $5,000 to help support trolley service from the elementary school parking lot, out-of-town travel shows to market Cape May, a billboard near the Walt Whitman Bridge, $25,000 for a ticketing system for Convention Hall and $25,000 to update the city’s website to include Convention Hall.
All told, Other Expenses for the utility total $183,500.

MacLeod said it has been estimated monthly electric and natural gas bills for Convention Hall will total $10,000. Other monthly hall expenses: phone bill= $1,000, fiber optic for Internet and other services= $1,300, cleaning and maintenance estimated at $40,000 per year. Those expenses total $144,550.
From the spending side, $400,000 has been allocated to bring in entertainment which the city will sell tickets as a sponsor, said MacLeod.
Operating expenses for Convention Hall are $750,000 plus $325,000 in wages, for a total of $1,075,50.

Auditor Leon Costello said the Memorial Day weekend gala with the Philly Pops would cost the city $85,000 but produce revenue of $100,000 or more. He said Convention Hall may host five weddings that produce $8,000 each with a cost to the city of $1,000 each.
Costello said the city has the ability to spend money to bring in an event in order to produce revenue.