Fargo's Future: Proposed Convention Center
Fargo Convention Center Vote Passes
51% of Fargo voters approved an increase to the city's lodging tax from 3% to 6% to fund a convention center on November 5, 2024.
The next phase involves the city forming a committee to oversee the Request for Proposal (RFP) process. This committee will determine the requirements for the RFP and then distribute it to interested developers. To allow ample time for review and preparation, we anticipate a response window of at least 90 days. Afterward, the submitted proposals will undergo a thorough vetting process before presenting recommendations to the City Commission for consideration.
Learn About the Lodging Tax Vote and Its Impact
On November 5, 2024, Fargo voters decided to approve a proposal doubling the city's lodging tax from 3% to 6%. The increase intends to generate funding for a future convention center in Fargo. The tax, paid almost entirely by visitors staying in local hotels, aims to create a public-private partnership for developing the convention center, ultimately enhancing Fargo's ability to host large-scale events and attract more visitors.
Why a Convention Center?
Back to Top of ListFargo-Moorhead is missing out on numerous large-scale events and conventions because it lacks the necessary meeting and exhibit spaces to attract these gatherings. Organizations interested in hosting events in Fargo have had to look elsewhere due to the city's insufficient facilities. As a result, Fargo is losing potential economic benefits to nearby cities like Bismarck, Grand Forks, and others in the region.
By providing the appropriate spaces, Fargo could attract a significant portion of the conventions and events it currently misses, leading to increased visitor spending and a boost to the local economy. Adding a convention center would retain local events that have outgrown existing spaces and draw new ones, bringing more business and activity to the area.
The recent November 5th vote in Fargo stems from previous efforts to secure funding for Fargodome upgrades and a new convention center. A significant attempt occurred in December of 2023 when a special election sought to pass a combined measure for both projects. However, this effort fell short, receiving 52% approval, below the 60% threshold needed to pass.
In response to this failure, the groups advocating for these improvements separated the two issues and asked voters to decide on each one individually in the November 2024 election. Fargo voters were asked to approve two separate tax increases: a 20-year, quarter-cent sales tax to fund Fargodome improvements and a doubling of the city's lodgings tax from 3% to 6% for 25 years to help finance a future convention center.
These measures were approved by the Fargo City Commission on August 5, 2024, to be placed on the ballot. The hope is that by providing voters with more information and separating the issues, they will gain the necessary support to pass this time.
The hotel lodging tax increase passed, but Fargodome's 2-year quarter-cent sales tax did not.
How the Lodging Tax Works
Back to Top of ListLodging Tax
What is a Lodging Tax?
A lodging tax is a locally imposed tax that guests pay when they stay at hotels, short-term rentals (such as Airbnb and Vrbo), or other lodging accommodations for less than 30 days. This tax is typically calculated as a percentage of the cost of the stay and is added to the guest's bill at checkout.
How is the Lodging Tax Collected?
The city collects the lodging tax from hotels, motels, and short-term rental hosts. Once collected, these funds support the region's destination marketing organization (DMO), Visit Fargo-Moorhead.
How Are the Funds Used?
The majority of the current lodging tax in Fargo is allocated to Visit Fargo-Moorhead, which promotes the city as an attractive destination for various visitors, including youth sports participants and attendees, convention attendees, and families traveling through the area.
A portion of the existing lodging tax is also used to fund capital projects for local non-profits, such as building or enhancing sports venues, museums, and other attractions that boost tourism and benefit the community.
Economic Benefits of a Convention Center
Back to Top of ListJob Creation
A convention center in Fargo would stimulate job creation by attracting a diverse range of events and visitors. The increased demand for accommodations, dining, transportation, and entertainment services would require additional staffing in local businesses. This influx of visitors would create new employment opportunities across various sectors, from hospitality and retail to event management and transportation, contributing to a more robust local job market.
Business Opportunities
The convention center would provide local business owners with valuable networking opportunities, allowing them to connect with visitors and event organizers. The steady stream of visitors drawn by events would increase business revenue, helping them expand and grow. This sustained economic activity can foster partnerships and collaborations that boost the local economy.
Convention Center Benefits
Enhanced Community Profile
A convention center would elevate Fargo's profile as a destination for large-scale events, positioning the city as a hub for conventions, conferences, and exhibitions. This recognition could attract investments and developments, enhancing the city's infrastructure and amenities. The increased business activity and influx of visitors would contribute to higher property values and a stronger local tax base, ultimately benefiting the community.
Examples from Other Communities
Cities like Rochester, MN, and Madison, WI, have successfully leveraged convention centers to boost local economies. Rochester, MN, has demonstrated how a well-developed convention center can positively impact the local economy. According to STR data, Rochester's hotel industry not only recovered from the pandemic but surpassed pre-pandemic levels in 2023, with total market hotel revenue increasing from $155 million in 2019 to $157 million in 2023. This growth highlights the strength of Rochester's tourism and hospitality sector, driven in part by the city's ability to attract large-scale events through its convention facilities.
Madison, WI, offers another compelling example. When Madison built its 250,000-square-foot convention center, the city booked 30 national events within the first 24 months of operation—this influx of events brought in an additional $4 million in direct visitor spending to the community. If Fargo follows a similar path, it could expect a significant economic boost. Estimates suggest that Fargo could generate an additional $3 million per year in direct visitor spending on top of the conventions already taking place in the city.
Community Impact
Frequently Asked Questions
Back to Top of ListWhy does the city need to pay for the convention center, and why is it funded through taxes?
Private companies rarely build convention centers because they aren't profitable and typically lose money. Public funding is necessary because convention centers stimulate the local economy by attracting visitors who contribute through taxes and spending. The proposed lodging tax increase could generate over $3 million annually, allowing for approximately $40 million to be invested in the project. A portion of the revenue would be reserved for operation and maintenance, particularly in the initial years as the center establishes itself.
What will happen if the convention center doesn't attract enough visitors? Will citizens have to cover the shortfall?
If the convention center doesn't attract enough visitors, the shortfall would be covered by leftover funds from the lodging tax. With the proposed $40 million investment, about half a million dollars would be available annually from the lodging tax to address any shortfall. Additionally, the Visit Fargo-Moorhead board has agreed to use its capital fund if needed, especially in the early years, so it is doubtful that taxpayers would have to cover any deficits unless there were a significant unforeseen event.
Where will the convention center be located, and who will decide?
The location of the convention center has not yet been decided. If the measure passes, the City Commission will form a committee or authority to request developer proposals. From there, developers will submit their plans, including location, amenities, and operational details. After reviewing the proposals, the committee will recommend the best project to the City Commission, making the final decision. Only after the project is approved will the city begin collecting the lodging tax, likely starting at the beginning of a financial quarter.
Why build a convention center when the city already has venues and larger cities are better equipped to host conventions?
While the city has venues, none are ideal for conventions. Existing options either lack attached hotels, have limited meeting space, or are already heavily booked, making it challenging to secure dates for events. A new convention center would provide a dedicated space for large gatherings, making Fargo more competitive with other cities like Sioux Falls and Rochester. Hosting conventions also boosts the local economy, attracts visitors, and plays a role in workforce development, as people often consider relocating to places they visit for business events.
How does this relate to the FARGODOME vote?
The convention center proposal is not directly related to the Fargodome vote. The Fargodome is a separate issue, focusing on potential renovations after 30 years. If the lodging tax passes, the Fargodome Authority could submit a proposal for the convention center's location. Still, other locations would also be considered through the RFP process. Ultimately, voters should make decisions on both issues independently.
What will the lodging tax measure look like on the ballot?
The ballot language for the Fargo Lodging Tax:
Shall the city of Fargo’s Home Rule Charter be amended to establish a three percent (3%) lodging tax on hotel and motel room rentals to extend for twenty five (25) years with the funds collected from said tax to be utilized for costs associated with construction, maintenance and operations of a conference center located within the City of Fargo as provided in the Notice of Proposed Home Rule Charter Amendment as published in THE FORUM on the 28th day of August, 2024.
SHALL SUCH AMENDMENT BE APPROVED?
( ) YES
( ) NO
Get Involved
Back to Top of ListPress Releases
Proposed Convention Center Press Release
Presentation and Open House Press Release
Presentation and Q&A Press Release
Radio & Speaking Engagements
Listen to Understanding The Fargo City Measure to Build a Convention Center on KFGO Afternoons Live with Tyler Axness.
Listen to Charley Johnson on News & Views with Joel Heitkamp discuss the proposed lodging tax to fund a convention center.
Webinar
You can view our recorded webinar, which presented an overview of Fargo's proposed convention center and answered frequently asked questions.
What You Can Do
Back to Top of ListVisit Fargo-Moorhead does not take a position on ballot measures. However, we encourage all residents to stay informed on community issues and to participate in future elections to express their wishes.