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Amsoil Arena lauded as economic boon for region

From its construction to the draw of more and bigger events, the new Amsoil Arena is a boost to the local economy. Construction on the new arena began in April 2009 and wrapped up last month. It opens Thursday night with a Minnesota Duluth hockey...

From its construction to the draw of more and bigger events, the new Amsoil Arena is a boost to the local economy.

Construction on the new arena began in April 2009 and wrapped up last month. It opens Thursday night with a Minnesota Duluth hockey game followed Friday by the Duluth Superior Symphony Orchestra's "Cirque de la Symphonie On Ice."

"It will make Duluth and the downtown corridor stronger," said Jim Skurla, a UMD economist.

Although the arena's construction was managed by Mortenson Construction of Minneapolis, most of the contracts for the $80 million project went to local firms. That meant jobs for hundreds of local construction workers while the recession lingered.

"The employment came at a critical time," said David Ross, president of the Duluth Area Chamber of Commerce. "At the very time when construction elsewhere was at a low level, this provided a needed employment opportunity."

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The arena's construction cost $60 million, but its total economic impact was about $92 million when the related business-to-business spending and workers' spending is factored in, Skurla said.

"Because those workers live here, they're going to spend money for a multiplier effect," he said.

That local economic impact rises to $120 million when the additional $20 million cost of a new parking ramp, skywalk, landscaping and incidentals is considered, he said.

The arena will continue to have an impact once it's open. It will be able to handle bigger events than the old arena, and those events will be easier to schedule when both arenas are available.

"If we can bring in bigger concerts, they've moved up to the next level," Skurla said.

That's exactly what officials at the Duluth Entertainment Convention Center are counting on. Bigger names. More seating capacity. More venues.

Seventy percent of people who attend major concerts at the DECC already come from outside Duluth, DECC Executive Director Dan Russell said.

"Bigger events increases your pull," Skurla said. "It pulls people from farther away. With big-name acts, people will be willing to travel from farther away to see the concert."

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That creates a ripple effect with more people eating in local restaurants, buying gas, shopping and staying at local motels.

For every $1 spent on a ticket, another 30 to 40 cents is spent in the community, according to Skurla's calculations.

"It goes from two (occupied) tables at the Green Mill to being jammed," Russell said. "That multiplies through the community. Visitors spend a lot of money in the community. And when amenities are centralized, it's better for the community."

"The good news is we didn't demolish the old arena and build new," said Skurla, noting that both arenas can now be used for sporting and other events.

The DECC, which includes the old arena, already draws more than 1 million people a year to events, Russell said.

With the opening of new Amsoil Arena, an estimated 150,000 more people will attend events each year, he said.

Downtown amenities

The impact would have been far less if the new arena had been built on campus, which UMD officials had proposed at one time.

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That would have strengthened the campus and allowed students to walk to the games. But the traffic to get thousands of other people to the hockey games would have been horrendous, and UMD would have had to create more parking. The restaurants, taverns and other retailers who benefit would have shifted away from downtown and Canal Park.

Moreover, UMD and the DECC would have become competitors for other events.

"To have two arenas competing for shows would have been a huge threat to the DECC," said Russell, referring to the DECC's financial stability.

Downtown was the best location for the new arena, says Kristi Stokes of the Greater Downtown Council.

"Close to the freeway, we're better equipped to handle the heavier traffic, plus we have the additional amenities people look for, from restaurants, parking and hotels to entertainment," she said.

In the end, DECC and UMD officials worked together.

"It evolved into a real partnership because we both needed each other," Russell said. "It's a great partnership."

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