Modesto OKs Centre Plaza’s first rent hike in 12 years

It’s going to cost a lot more to hold a business meeting, seminar, trade show, prom or other event at Modesto Centre Plaza, the city’s downtown convention center.

The City Council on Tuesday evening approved increasing the center’s daily rental rates by an average of 48 percent. The first increase, which averages 33 percent, takes place Feb. 1. The second increase, which averages 15 percent, takes place July 1, 2016. The increases also apply to the discounted rates nonprofits pay.

Council members voted 6-0 to increase the rental rates. Mayor Garrad Marsh was not at the meeting.

City officials say these are the center’s first rate increases since 2003 and are needed to help stabilize the center’s finances. Centre Plaza is expected to operate at a nearly $600,000 deficit in Modesto’s current fiscal year, which ends June 30. The center is projected to have operating expenses of $1.18 million against revenues of $604,000. The increases are expected to bring in $300,000 in additional revenue over three years.

Centre Plaza has not undergone a major renovation or upgrade since it opened in 1989, and city officials say the facility needs about $2 million in capital improvements.

The increases drew the support of DoubleTree General Manager Kole Siefken. The hotel adjoins the convention center, and the city and the hotel are in talks to have the hotel operate the convention center.

But the increases drew questions from Dan Brown with the Stanislaus County Coin Club, which holds an annual expo in August at the center. He has said the increases will price his club out of the center. He said the city’s analysis supporting the increases is flawed.

Modesto compared Centre Plaza’s rental rates with those at the Visalia Convention Center, Monterey Conference Center, the Seasons Event Center on McHenry Avenue in Modesto, Ceres Community Center, South San Francisco Conference Center, Fresno Convention Center, Sacramento Convention Center and downtown Modesto’s Gallo Center for the Arts and Martin G. Petersen Event Center.

Modesto officials said these comparisons show Centre Plaza’s rates are “substantially below other comparable rental facilities,” according to a city report.

Brown said the analysis was arbitrary because the city included some of the other venues’ higher-priced spaces while excluding some of the venues’ lower-cost spaces in the comparison. He also questioned how the city came up with the average costs for renting space at the venues.

The increases also perplexed audience member Ron Jeske, who said Centre Plaza already was having a difficult time filling its rooms and he did not understand how charging more would help that.

Community Economic Development Director Brent Sinclair said city officials have met with Brown to discuss his concerns, that the city’s analysis and conclusions are correct and deeper than Brown portrayed, and that staff members were prepared to provide council members with as much detail as they required to prove that.

“We can take time to dissect that if you like,” he said.

Council members did not ask for that detail. Instead, those who spoke focused on the center’s need for additional revenue. Councilman Bill Zoslocki added that Modesto had gotten itself into this bind of having to raise rates steeply because it had failed to approve smaller rate increases in a more timely manner.

“We haven’t been taking care of business,” he said, “and as uncomfortable as that is, we need to do that.”

The rate increases vary widely based on what is being rented. For instance, the cost of renting Centre Plaza’s 16,000-square-foot Harvest Hall is increasing from $1,850 to $2,400 on Feb. 1 and $3,000 on July 1, 2016. Another example: The rate for the 4,000-square-foot Arbor Theatre is increasing from $460 to $700 and then $800.

This story was originally published January 27, 2015 at 9:10 PM with the headline "Modesto OKs Centre Plaza’s first rent hike in 12 years."