Authority Faces Future
Agency has reshaped High Point Market
Heath E Combs -- Furniture Today, June 1, 2011
HIGH POINT - When it was formed in 2001 with the objective of enhancing the visitor experience, the High Point Market Authority brought structure to disjointed market services. Later, it helped bring about a series of market improvements including the Mendenhall Station transportation terminal and centralized registration.
But with a new entity, International Market Centers, about to own the World Market Center in Las Vegas and a majority of the High Point space - backed by well-capitalized investors spending about $1 billion to acquire the properties - and the feud between these two venues seemingly a thing of the past, some argue that the Market Authority's funding needs have diminished.
"The fact that it's now tied up with what used to be a competitor means it should be in a stronger position to strive and survive in the future," said Joe Coletti, director of health and fiscal policy studies for the John Locke Foundation, a think tank based in Raleigh, N.C., where state legislators are deciding on how much state funding should go to the Market Authority in the coming fiscal year.
The latest budget proposal would trim about 15% from state funding for the Market Authority, to about $1.7 million. The largest source of funding for the agency is local showroom and hotel room taxes, which is stable at about $2.8 million a year.
Coletti said that because the World Market Center in Las Vegas has a different business model - privately footing the bill for services similar to those paid for partly by state and federal money in North Carolina - the argument for state "subsidization" of High Point is weaker.
He added that the state is taking a closer look this year at how public funds create jobs.
"Everything this year's probably going to based on how many teachers do you save, or how many teachers do you cut? $800,000 is a lot of teachers," he said.
Proponents of continued Market Authority funding argue that it's an investment well spent, since the High Point Market is an important economic engine for the High Point area and the state.
Bob Maricich, who has led the World Market Center in Las Vegas and now is CEO of the International Market Centers, strongly supports the public funding model in High Point. He said the marketing and transportation improvements made possible with public support have built on the success of the market and led to dramatic improvements.
"Not to have that investment in infrastructure and marketing would be a huge distraction from the quality of the market experience and the effectiveness of shopping the market. The state and local funding is critical unless you want to detract from the quality of the market experience, which none of us want to do," Maricich said.
He acknowledged that the model is different from the Las Vegas Market, which does not receive public funding for its transportation and marketing initiatives.
"That has never been in the cards (in Vegas) that there would be that type of support. We live in a city that is the trade show capital of the world. We are one among hundreds of shows. There are 43 million people that come to Las Vegas annually and we bring in 100,000," Maricich said.
He also noted that lack of public funding also explains why costs of the Las Vegas Market are higher than High Point, adding that "someone has to pay for that infrastructure and marketing."
While acknowledging constraints on the state budget, North Carolina's Democratic governor, Beverly Perdue, made it clear during a visit to the High Point Market in April that she believes state support of the event needs to continue.
"I understand there are great demands on our budget, but we need to continue the state's funding and overall support for the furniture market, building on the momentum we are feeling in High Point," Perdue said.
"North Carolina is the furniture capital and we have refused to let competitors eat our lunch. When you understand this industry, you see pretty clearly that this (market) is a billion-dollar profit center ... and the state has been a terrific contributing partner," she said.
One question for the Market Authority is whether it will hire another seasoned trade show executive as its president, in the model of Brian Casey, who left the agency April 30 to take another job. Casey earned $305,733 in 2009-2010, according to the Market Authority's latest tax return.
"I think Brian left it in such good shape, I'm not sure that they need to have such a high-priced executive fill his 
shoes," said industry veteran Ivan Garry, a High Point real estate broker with Price Commercial Properties who also operates High Point Furniture Market Services. "We know that one of the things he did well was to rally the troops and go after state money, but the state's money coffers are dry."
He added that Casey has created a cooperative atmosphere in High Point and has a management team in place that can likely continue to take care of market operations.
"It's not like you're having to tread new ground. I don't know what the new ownership wants to do to make High Point even better for exhibitors and buyers," Garry said.
Ed Price, president of Ed Price and Associates, a High Point real estate firm that currently lists about 13 showroom properties in the city, said market is still a big economic driver. He added that for the past three decades, it has been a target of a number of competing market centers, not just Las Vegas.
"When Vegas came along the Market Authority got stronger and on the ball more. The state put more money into it," Price said. "We'll still have to promote the market. Especially if we want other kinds of vendors to come here."
Indeed, the Market Authority's stated mission includes helping to fight off international competition from markets in Atlanta, Dallas, Milan, Cologne, China, Paris, Singapore and Thailand.
From winning designation through the U.S. Department of Commerce's International Buyer Program, to managing transportation and hospitality, and dealing with hotels and restaurants, the Authority has proven itself valuable in guiding and operating the market, said High Point City Manager Strib Boynton.
"It's intended to make the buyer experience easier and less frustrating than what it used to be," Boynton said. "I think it's clearly beneficial to the buyers who come here."
With new owners that have a major stake in the market and new leadership at the Market Authority, Boynton said there will be a time to refocus and plan on ways to continue making market better. State and other public funding is still essential to financing the market, he added.
"The market is North Carolina's biggest economic event. It has been for years," said Boynton.
Keith Koenig, a member of the Market Authority's board of directors and president of Fort Lauderdale, Fla.-based retailer City Furniture, said the High Point Market's economic impact creates a reasonable mandate for state funding.
"The more that the state can provide the market, the better the market experience can be. It's relatively costly to set up a market for a short-term duration the way we do," Koenig said.
Associate Editor Thomas Russell contributed to this story.
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State Support of Market Authority in Decline
Jun 2, 2011 -
High Point Market Authority bracing for cuts
Jul 24, 2009 -
High Point Market Authority gets small budget cut
Aug 20, 2009
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