Hospitality group that runs Brookfield Conference Center gets ARPA funds in split vote

Citing pandemic losses, a Madison-based hospitality group that operates the Brookfield Conference Center has received $200,000 in American Rescue Plan Act funds from the City of Brookfield, despite the concerns of some Common Council members that the funds sent to a private company could be spent elsewhere in the community.

Hotel management group NCG Hospitality first requested in December $400,000 from the city to mostly recoup the $442,027 they lost on the conference center between 2020 and 2021.

NCG Hospitality was initially not eligible to apply for the ARPA funds, because while the group operates the conference center, the City of Brookfield owns the property, city officials and NCG representatives said.

NCG Hospitality was approved to receive $200,000 at recommendation of the city's Finance Committee in early April when the Common Council deadlocked on a 7-7 vote but Brookfield Mayor Steve Ponto broke the tie.

The funding is a "symbol of (Brookfield's) commitment to the relationship" with NCG Hospitality, Ponto said.

Ald. Mike Hallquist, one of the alders who voted no, called the decision "an irresponsible use of discretionary public taxpayer dollars" in a press release.

"In the same meeting prior to this vote we unanimously approved $50K for a consultant to advise the city on a potential referendum," he said. "What kind of message does that send to our residents?"

NCG Hospitality, which manages Brookfield Conference Center, requested $400,000 in December, receives $200,000 in April

After years of planning, the city and NCG Hospitality decided to jointly open the Brookfield Conference Center in July 2020 despite the COVID-19 pandemic's negative impact on travel and events. NCG Hospitality manages and operates the conference center and the neighboring Hilton Garden Inn hotel.

NCG Hospitality owns and operates more than 30 properties across multiple states and national brands. It rebranded from North Central Group in 2022.

Brookfield uses bonds, paid for by the city's room tax revenue, to finance the conference center.

"We agreed that it would not benefit the city, other hospitality businesses in the Brookfield area, or long-term prospects for the BCC itself to let the BCC sit idle for two years until the demand for conferences and events returned," Chief Development Officer Andy Inman wrote in a letter Dec. 21 to the city.

But the pandemic proved to bring setbacks to the new conference center, he said.

“While we had some success in booking events at the BCC and bringing guests to the Brookfield area during this period, the pandemic had a much longer and significantly more negative impact on the BCC’s operations than anyone could have anticipated,” Inman wrote.

In the letter sent in December, NCG Hospitality requested $400,000 in economic development assistance from the city’s ARPA funds. The amount would nearly pay back the $442,027 NCG Hospitality lost in operating the Brookfield Conference Center ― $287,020 between July and December 2020 and $155,007 from January to December 2021, according to Inman.

After receiving the letter, City staff and Mayor Steven Ponto recommended a grant of $200,000 to NCG to recoup some of those losses.

The City of Brookfield’s Finance Committee considered the request at a March 19 meeting and recommended the city pay the $200,000 grant from American Rescue Plan Act funds by a vote of 5-2.

"The City likely would have incurred similar operating losses during the initial months of the pandemic,” Robert Scott, Brookfield's director of finance and administration, wrote to the Finance Committee March 13. The grant would secure the city's relationship "with an important business partner and sustain and protect the City’s investment in the conference center."

But some members of the Finance Committee changed their vote when the matter was considered by the Common Council in April.

So Ponto said he was surprised the Common Council decision came down to a tie, the only time he votes in the governing body. Still, he said awarding the center the $200,000 grant was the right thing to do.

"We've got $30 million (invested) in that conference center, and it's very important that it be professionally run, and that there be a good relationship between the city and the manager," Ponto said.

Alderman points out NCG Hospitality did receive PPP loans

Hallquist is concerned that the ARPA money that was meant to help Brookfield mitigate effects of the COVID-19 pandemic will be used without restrictions on whatever NCG Hospitality chooses ― like raises for NCG staff and NCG projects outside Brookfield.

Inman reiterated to the Journal Sentinel that ARPA funds would pay back only part of what the NGC Hospitality spent on the conference center in the pandemic.

"In those first couple years where we had shortfalls, we as a company covered those shortfalls with our cash. So those funds have already been invested a couple times over into the City of Brookfield and specifically in the Brookfield Conference Center," Inman said.

Hallquist also pointed out in a March 27 memo before the Common Council vote that despite the company's claim that they covered their losses without any assistance, they did receive about $6 million in forgiven Paycheck Protection Program loans.

North Central Staffing, Inc., which staffs NCG Hospitality locations, was approved in April 2020 for a PPP loan of $3,998,327 for payroll, $4,043,87 of which was forgiven in June 2021, according to data from the ProPublica PPP loan database. The company was approved for a second loan for payroll of $2 million in March 2021. That loan, and $14,959 of accrued interest, was forgiven in December 2021, according to the database.

Ponto said the city plans to discuss with NCG the concerns that grant money may not directly affect the conference center.

“We’d like to see the money used to improve the conference center, obviously," Ponto said.

Contact the reporter bfogarty@gannett.com