Wesleyan soccer donation: A gift or user fees?

At the Nov. 2 Mitchell City Council meeting, Dakota Wesleyan University Athletic Director Curt Hart made an unscheduled presentation during the citizens’ input portion of the meeting. He said he’d learned since starting his job in February that DWU had no role in the city’s effort to build a 10-field soccer complex in northern Mitchell. He encouraged the "powers that be" at DWU to change that, he told the council.

"They bought into it and said that we would make a $150,000 donation to the soccer complex," Hart told the council at the Nov. 2 meeting. His statement was followed by applause from those in attendance.

I was covering the meeting for the newspaper. I remember thinking that it was a nice gesture by DWU, but I also thought, "Since when does DWU have $150,000 to donate to a soccer complex?" Back in February, around the same time that Hart started as DWU’s athletic director, I wrote a story in which a DWU official admitted to some "budget challenges" at the institution.

A few days went by, I got busy with other things, and I didn’t give much thought to the issue. Then, we received a call from someone who wished to remain anonymous. The person urged us to look into the donation because, according to the caller, the donation was not a donation at all.

I started looking into it and wrote a story, which was published today. By some people’s thinking, DWU negotiated a typical user-fee contract with the city and then labeled it a "donation." By other people’s thinking, the contribution is actually a donation. And by still other people’s thinking, it doesn’t matter what the contribution is labeled. As Mayor Lou Sebert told me, "money is money."

With stories like these, the final judgment is always the reader’s. What do you think of this situation?

31 thoughts on “Wesleyan soccer donation: A gift or user fees?

  1. Looks to me that all they did was lock in the price of their fees for 10 years. I’m sure every organization in Mitchell would like to do the same. Especially if they don’t have to give the money up front. Hockey and Mitchell Baseball Assn. are the first ones that come to mind. I’m sure they would like to have a 10 year contract locked in at 2010 prices! Kind of a sweetheart deal for DWU if you ask me. Appears that the park board was not in favor of this either. What really irritates me is how Curt Hart presented the deal to the public. Long way from a donation.

  2. What is the point of arguing over semantics? I don’t understand the fake controversy…the city gets more money sooner and DWU continues using the facilities. Everybody wins.

  3. I will never understand the contempt in this town for our local university. I would rather have 1 DWU in my town than 10 Corn Palaces! People tend to underestimate the importance of a college to a community and grossly overestimate the importance of tourism attractions.

  4. Puzzled,

    I don’t mean to argue with you. I think everyone would agree that both DWU and the Corn Palace are important to Mitchell.

    However, I don’t know if the importance of the Corn Palace can be “grossly overestimated,” as you say. Do you realize that the Corn Palace brings upwards of 200,000 people to downtown Mitchell every summer?

    If anything, I’d say the impact of the Corn Palace is grossly underestimated by most local people who think of it only as a gym with corn on it. If you were to remove 200,000 visitors from the Mitchell economy every summer, that would be an enormously negative impact. And that doesn’t even include the thousands more who come to the Palace every winter to watch basketball.

    I’m not saying the Corn Palace is more important than DWU. Again, both are vitally important to the city. But I think the Corn Palace deserves a bit more credit than you’re giving it for boosting our economy.

  5. looksm like if someone made a mistake it was the parks board or someone in that capacity- besides if DWU comes out good- then good- shows you what talent the city has for deal making. Ha Ha city hall

  6. I agree with Seth, the Corn Palace is under estimated by some, as is DWU. I, however, feel that when DWU is involved…….they come out on top. That in itself gets a little old.

  7. The Corn Palace and Dakota Wesleyan are great assets to Mitchell and the region.
    And besides, my parents met each other while working at the Corn Palace many, many years ago!

  8. I don’t mean to sound negative and I am glad that we do have the Corn Palace, but a large chunk of those 200,000 visitors only stop because it is free and we are lucky if they buy a popcorn ball before leaving town 30 minutes later. The Corn Palace loses a lot of money every year and there is no way that the city makes that money back with a few cents of sales tax on each dollar spent by these tourists. It does give a bump in revenue to restaurants, bars, motels, and gas stations at the expense of tax payer subsidies. I would argue that Cabela’s is significantly more important for tourism in terms of actually bringing real money to town.

    On the other hand, the Corn Palace is a great place to watch a basketball game! ;)

  9. I think the story was fair, but I can’t help feeling a little amused that an anonymous source to the reporter triggered the story when a few months back we were lamenting the use of anonymous sources in journalism.

    I guess if I want to host some event at a city park or at the CP, that I can make a “donation” to the city.

    If our mayor really feels “money is money,” I just might ask him to prepare my taxes, too.

  10. Good points, Puzzled. It’s true that many Corn Palace tourists probably don’t spend a lot of money in town. But if I owned a local shop or restaurant, I’d sure rather have 200,000 thrifty people come through town than none at all. That flood of travelers creates quite an opportunity for businesspeople who are smart enough to capitalize on it.

  11. I would rather have 1,000 loose-spending college kids here all year than those thrifty tourists stopping in for a half hour each!

  12. It’s for tax purposes. A donation is much different than a fee. A donation can be taken out after net income as far as a tax base goes. A fee will amortized yearly over the course of the period.

    Consider a $1 donation vs. $1 expense.

    Use tax rate of 37%. $1 expense reduces taxed income by 37 cents.

    $1 donation reduces taxed income by $1.

    Now multiply that through at 150,000 and you’ll see that as an expense it reduces taxable income by $55,500 versus $140,000.

    Pretty simple and ingenious. Ultimately DWU will get more federal/state money for doing it this way.

  13. Questions for Seth: Just what is the data on tourists’ spending? Do we know? The glib statement that visitors to the Corn Palace don’t spend strikes me as rather odd. Just a hunch, but I suspect a lot of the 200,000 visit the Palace before they continue on the Hills, many, perhaps, after spending the night in Mitchell and going out to eat.

  14. You travel just about anywhere in the country and tell folks your from Mitchell, SD, and the first thing you hear is “Corn Palace!”
    Definitely puts us on the map.

  15. They are non-profit and tax exempt. However they still do book work like corporate and have budgetary needs. As such, they will have a bottom line that will be impacted by such a move.

  16. Curious,

    The closest thing I know to the data you seek is a 2007 summer survey conducted by the Black Hills State University Center for Tourism Research on behalf of the city of Mitchell. The Center surveyed hundreds of visitors at Mitchell hotels and attractions, including the Corn Palace.

    The survey report says that the visitors who were surveyed at attractions spent or planned to spend an average of $243.19 in town. That includes lodging, shopping, eating, gas and some other things. The visitors who were surveyed at hotels spent or planned to spend $346.47.

  17. Puzzled,

    You may be right. But the BHSU data was at least compiled from surveys filled out by actual visitors. The state data is just an estimate compiled by a guy who is paid to put it together for the state Office of Tourism, probably on the understanding that they’re paying him to make it look good.

    You also have to consider that the BHSU data is not “per visitor.” I may have given that indication in my earlier comment, but I believe the data is “per group” — meaning that every person surveyed spoke for his or her group, whether that group was a married couple or a family of five or whatever. Many of the groups also planned to spend the money over a couple of days. When you consider those factors, I think the BHSU data seems more realistic.

  18. When the visitor figure is thrown around it is ONLY the people that go through the turnstiles. Many drive by or stop and take pictures and then shop, eat or maybe on to the next destination. The 200,000 number is not the whole story and anyone that underestimates the importance of the CP is sadly mistaken.

  19. It was said previously, but I will say it again…..Yes, DWU purposely misstated. They will come out ahead if there is inflation. They will no longer be here if the World Economy goes on the skids. Only time will tell if they made the right move. We, however, were dubed. Lesson learned. (Education is expensive.)

  20. The vistor figure is also inflated by the turnstile operators. My wife and I (locals) went in for a popcorn ball with our infant twins. We were counted as four people and were there less than 10 minutes.

  21. Four people went in. Four people were counted. How is that inflated?

    You can’t expect the turnstile operators to judge, based on age, who should be counted and who shouldn’t. You also can’t expect them to know or predict who will spend 10 minutes in the building and who will spend two hours.

    Seems to me that the only way to do it is exactly what they’re doing — every person who enters gets counted.

  22. Seems like certain people, perhaps with their own agendas, want to underestimate the economic impact of the Corn Palace. Seems odd to me.
    It also seems to me that it really isn’t important which site is the number one draw. If Mitchell is to be a destination or a stopover for tourists, all venues should be promoted (Corn Palace, DWU, Indian Village, Cabela’s) because they all help put Mitchell on the map.
    I agree with Seth. It’s silly to make too much of how accurate the turnstile count is. What other method would “JJ” prefer? The count is what it is. Some will walk in & spend a bundle, some will buy a snow cone.

  23. Last time I visited the Palace there was no “user fee” just to get in. I did see, however, some boxes, and they marked “donations.”
    Maybe I’ll make a little “donation” to endow an economics or accountancy professorship at the college.
    Judging from their AD’s public statements regarding donations to the city for its soccer fields, they already have a solid PR & Spin program.

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