What Is The Grand Junction Events Center?

The Grand Junction Events Center, or GJEC, is a 5,200+ seat multi-purpose event center proposed by the Grand Junction City Council. This arena and events center would be used to facilitate shows currently too big for any current Grand Junction venues. The large seating capacity of the venue as well as its versatility of use allows for significantly more ticket sales at one time, which allows for lower ticket prices for patrons and bigger events to be hosted at the facility.

The Grand Junction Event Center is still contingent upon a "Yes vote" in April of 2017. City Council has unanimously agreed to include the Event Center on the upcoming local ballot. A "Yes vote" from Grand Junction voters would put the $62 million dollar project into motion, which would aim to exponentially grow Grand Junction’s regional draw. 

This swift growth in regional draw would directly benefit several industries in Grand Junction, including retail, restaurants and bars, lodging and hospitality, automotive, and more. This project is a carefully calculated tax investment designed to exponentially increase Grand Junction’s investment.

 

Let’s Talk About The Math

A recent study of the sales tax in 25 cities near Grand Junction showed an average of 3.3% sales tax. The sales tax in Grand Junction is currently 2.75%, which is significantly below the regional average. (The cities and towns included in the survey include Fruita, Delta, Montrose, Glenwood, and Palisade.)

To fund this project, Grand Junction City Council is proposing a .25% sales tax increase, which would bring the local sales tax in Grand Junction up from 2.75% to 3%. 3% is still lower than the local 3.3% sales tax average in Western Colorado. Even after funding this project, Grand Junction's 3% sales tax would would still fall below the average sales tax for Western Colorado.

The City of Grand Junction relies heavily on sales tax revenues to fund government operations. In 2015, sales taxes represented over 40% of revenues for the City and were the largest single source of City revenue. Given the importance of sales taxes to the operation of the City, it is crucial to understand the primary sources of economic activity that result in sales tax and track that information over time. There have been four separate, city commissioned studies performed (in 1990, 1995, 2003, and 2007). The City of Grand Junction commissioned BBC Research & Resulting to provide an updated analysis of sales tax sources based on the most recent information available.

 

What Will This Project Cost The Average Household In Grand Junction?

Let's start by analyzing what types of items Grand Junction residents will see an increase on and what things they will not see an increase on. Not everything you pay for has a sales tax. Things like rent, medical services, education, insurance, finance payments on items like your vehicle, and several other items that make up a large portion of your monthly bills do not get sales taxed. That means that an increase in sales tax will not affect every aspect of your monthly income and expenses--only a portion of them. In fact, only around 35% of your monthly expenditures should realistically be affected by the .25% increase.

What this means is that of all of the sales tax revenue generated from this project, only 22% will actually be funded by Grand Junction residents, who will only feel the additional tax on 35% of their monthly expenditures. The types of items you will see a very slight increase on include apparel and accessories, books, food (including coffee, restaurants, alcohol, etc.) entertainment, home furnishings, non-prescription drugs and medicine, personal care products, pets, and motor vehicle maintenance.

 

60% of the sales tax contributing to the project will be directly generated from local businesses and tourists. These items include:

  • All sales taxes from lodging
  • All sales taxes from visitor services
  • Ninety percent of the restaurant and bar expenditures that are not attributable to Mesa County Residents
  • Ninety percent of the consumer and retail goods purchases that are not attributable to Mesa County Residents
  • One-third of the motor vehicle parts and services expenditures not attributable to Mesa County Residents
     

BBC attributed the following sales tax revenues to businesses:

  • All business services expenditures
  • All business goods expenditures
  • All construction and building materials expenditures
  • All manufacturing and wholesale trade expenditures
  • All financial and insurance expenditures
  • Ten percent of the restaurant and bar expenditures that were not attributable to Mesa County residents
  • Ten percent of the consumer and retail goods purchases that were not attributable to Mesa County residents
  • Two-thirds of the motor vehicle parts and services expenditures that was not attributable to Mesa County residents

Less than one percent of all expenditures were unclassified by the City or BBC. These expenditures were distributed between the four sources according the distribution of the classified sales tax expenditures.

 

What Does a .25% sales tax increase mean for locals?

A .25% sales tax increase means that the average household in Grand Junction will pay about $30 more than they currently pay, per year.

 

Here’s How This Event Center Directly Fiscally Impacts GJ

There are four types of fiscal impacts that a project like this brings to the Grand Valley. These include indirect, induced, fiscal, and employment impacts. Here is how they apply to the Grand Junction Event Center:

  • Indirect Impacts - These are the supply of goods and services resulting from the initial direct spending. For instance, the toilet paper, cleaning supplies, drink napkins, and day-to-day supplies to operate the Event Center. While not all of these items are purchased within the local economy, a considerable amount are. These purchases within the local economy are considered an indirect economic impact.
  • Induced Impacts - These include the change in spending due to the employees whose incomes are affected by the direct and indirect spending. For example, a waitress at a restaurant may make more personal income as a result of a traveler's visit to Grand Junction to visit the Grand Junction Event Center. The amount of that waitress' increased income that she spends locally is considered an induced impact.
  • Fiscal Impacts - These are represented by the incremental tax revenues collected by the City and County due to the net new economic activity. This represents the government's share of total economic benefit. Fiscal impacts provide and offset the potential public expenditures required to support the development. This is what not only allows the facility to pay for itself but also allows an excess of tax revenue to the community to be used on other projects, such as a recreational center.
  • Employment Impacts - This includes the incremental employment provided both on site and by other businesses and industries associated with it. Basically, the amount of indirect and induced impacts from this project will cause local businesses to require more employees, so this provides ongoing employment for citizens.

  

This Events Center Will Create many New Jobs in grand junction

The Grand Junction Event Center will provide many new jobs in the Grand Junction community. New full-time equivalent jobs (FTEs) are projected to vary over the period based on the net new spending, averaging approximately 240 new FTEs. This is not the number of on-site jobs but rather the total number of new, full-time equivalent jobs supported by the Grand Junction economy due to this new project. This only refers to jobs created after the project is operational and does not include construction jobs.

 

Regional Visitors Make All The Difference

It is estimated that up to (and possibly more than) 46% of the attendees at each event will not be Grand Junction locals, and 27% of those visitors are estimated to stay overnight. With those numbers, we estimate these attendees will book nearly 10,000 net new room nights at local hotels and embark on 10,000 new day trips from surrounding areas per year in Grand Junction. Think of the indirect, induced, fiscal, and employment impacts those kind of numbers would create in our local Grand Junction economy. 

The daily spending by visitors and the overnight spending by overnight visitors all contribute to the economic impact of the project.  

 

Food and Beverage Spending (Projected)

Of all of the increased spending that Grand Junction will see from the new Event Center, the largest component of new spending Grand Junction will see is in food and beverage, followed by lodging spending. Grand Junction is projected to see a total of $223 million in direct new spending, with $97,659 of that coming directly from the food and beverage businesses in town and $86,755 coming from lodging. Keep in mind, that convention attendees tend to spend more on hotel rooms, shopping, and food, while event visitors tend to be a bit more price conscious. 

 

Overall Impact Summary Of Grand Junction Events Center

Traditional methods of economic development just aren't working for us anymore. 

So let's do something different.

A "yes vote" for the Grand Junction Event Center will position Grand Junction as the cultural and economic leader for Western Colorado one again.  The Event Center will:

strengthen Grand Junction's economy,
provide jobs both directly and indirectly,
flood our economy with dollars from tourism,
bring in $30 million in sales tax revenues to fund much-needed community projects,
jumpstart development,
inspire industry,
increase property value,
build/repair infrastructure,
support schools, 
and bring culture and diversity to our Valley...all for $30 per year.

The Grand Junction Event Center is an investment, but we believe it's a wise and responsible one for our community as well as for our children's future.