Convention Center Task Force
October 2007 Meeting Summaries
October 4 & October 11 & October 18 & October 25
Community ROI Subcommittee
Meeting Summary
October 25, 2007
Clanzenetta “Mickee” Brown
JCCI Consultant-Task Force Planner
cctf@jcci.org
IN ATTENDANCE: Convention Center Task Force: M.G Orender (chair), Tony Allegretti, Danny Berenberg, Christina Comstock, Jack Diamond, Juan Diaz, Pam Edwards-Roine, Randy Evans, Donald Harris, Robert Johnson, Kish Kanji, Millie Kanyar, Albert Marchant, Don McClure, Mike Miller, Ted Pappas, Dennis Pate, David Potts, A.D. Roberts, Toney Sleiman, Arnold Tritt, Phil Tufano, Tri Vu, and Mark Wood. Community Members: Annette Hastings, Dan King, Laura Lane, Michael Langton, and Deborah Thompson Media: Karen Brune-Mathis (TU), Liz Falsig (TU), Scott Kim (WJCT), and Rachel Witkowski (JBJ). Staff: Mickee Brown, Skip Cramer, and John Reyes. [Staff note: Please advise staff if your name is not listed above.]
MEETING TIME: 5:30 - 7:00 p.m.
PURPOSE: Review Community ROI subcommittee whitepaper presented by Bruce Ferguson. Seek consensus on the convention center scenario to be presented to the Mayor’s office.
MEETING SUMMARY
[Staff note: The write-up below is a summary, not a verbatim transcript. Please read through the document to make sure the pertinent points were captured. If anything is missing or misstated, please advise staff.]
Chair, M.G. Orender thanked the task force for its efforts over the past 10 months and announced this as the last meeting of the entire task force. Members of the task force steering committee will be asked to attend a final meeting within two weeks to finalize the report to the Mayor’s office.
JCCI Facilitator, Skip Cramer reviewed the evening’s agenda, handouts, and instructed the group to contact JCCI should the 9-27-07 meeting summary need any corrections. Skip also outlined that the contents of the report to the Mayor, City Council, and Convention and Visitors Bureau will include the CCTF white papers, meeting summaries, consultant reports, and an executive summary.
In preparation for the discussion to follow, Skip summarized the work of each subcommittee from March to September.
March – Aided by the TAP and GMA reports, the Business Demand Subcommittee concluded that Jacksonville lacks a competitive package (convention space, headquarters hotel, and amenities) and is underperforming in the convention market as a result. The community should proceed cautiously with a new or expanded center given that other markets have already surpassed Jacksonville in terms of exhibit hall space, reputation in the market, and visitor amenities. Consequently, it will take Jacksonville many years and many more dollars to become truly competitive.
April – The Market Support and Infrastructure Subcommittee also concluded that Jacksonville does not have the competitive package needed to gain market share in the convention market. Some of the “bones” (hospitality infrastructure) are in place, but insufficient to support convention business. Without significantly more marketing investment and a good product - convention space, headquarters hotel, and visitor amenities – Jacksonville will not gain market share.
May – Site visit to Tampa.
June – John Kaatz, feasibility study consultant with Convention Sports & Leisure (CSL), briefed the task force on Phase I of the feasibility study, which looked at the local market, industry trends, analysis of comparable markets, and market demand. The recommendations boiled down to two: focus on the Hyatt site or expand and add the needed infrastructure around the Prime Osborn Convention Center (POCC).
July – The Site Selection Subcommittee established key criteria for selection; the site must be located in the core downtown area and either (a) have the infrastructure to support a center or (b) be a prospect for a public-private venture to create that infrastructure. Eight sites were evaluated and three options were chosen pending input from CSL; build a center near existing infrastructure (Hyatt/Wyndham), fill in the infrastructure around the POCC, or build a new center and new infrastructure elsewhere – the “Big Vision” idea.
August – The Finance Subcommittee was not asked to review one specific site, so the subcommittee modified their charge to determine what site selection scenario the community could afford, given current fiscal and political realities. The group determined that bonding opportunities are limited and city revenue streams have been greatly reduced. The bed tax revenue currently used to pay off the POCC’s debt was recognized as the only available funding stream. The subcommittee also discovered a half-billion dollars in unfunded downtown infrastructure needs, separate from the costs of a new convention center. The group suggested building a small convention facility adjacent to the Hyatt or developing infrastructure around the POCC as a short term solution.
September – John Kaatz presented his financial forecasts to the Site Selection and Finance subcommittees for the Hyatt and Prime Osborn sites, as recommended in the Phase I report. The presentation included methods to “get into the game” and then expand to reach the “Big Vision” convention center goal in 5 to 10 years.
September – Using the three options presented earlier, the Facility Operations Subcommittee determined that operating costs at similar sized facilities - new or expanded/renovated - would be approximately the same. However, building a new convention center not at the POCC site would mean covering the operations costs of two buildings – the new site and the existing POCC. The group also looked at alternative management models. While Facility Operations recommend the POCC site, the September CCTF tabled that suggestion and asked the Return on Investment group to consider the three site options, plus the option to do nothing.
Community ROI subcommittee findings and recommendations
ROI subcommittee Vice Chair Bruce Ferguson presented the group’s work in place of Ron Townsend who was ill. Bruce began by thanking the subcommittee members for their work. The charge to the subcommittee was: “Explore the results of convention center development and the proposed benefits to the community. The committee will focus on areas of anticipated impact including economic growth, job development and sustained employment opportunities, as well as issues related to an improved quality of life, real estate development, neighborhood revitalization, and attracting and retaining a young, talented workforce.” He presented the highlights of the white paper, which was sent to task force members on 10-24-07.
To establish the context for their work the ROI subcommittee agreed on the following items.
The Community ROI subcommittee was asked by the task force to evaluate four options. The subcommittee discussed strengths and weaknesses of each option and the financial and community impact of each.
Option 1: Renovate Prime Osborn Convention Center and expand the exhibit hall to approximately 100,000 square feet. Encourage the development of a hotel and amenities through incentives or other means. Estimated investment: Approximately $60-70 million. ($30-$35 million for renovation and expansion of the current convention center, plus hotel and amenity subsidies, facility operations, and budget increases for marketing and operations)
Pros |
Cons |
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Option 2: Build a 120,000 square foot convention center in the parking lot next to the Hyatt Riverfront with an 80,000 square foot exhibit hall. Estimated investment: Approximately $90 - $100 million. ($30-$35 million to construct a new convention center, plus a parking garage (replacement and new parking), site remediation due to failing pilings under the courthouse parking lot, facility operations for two sites, subsidies to encourage public-private partnerships, and budget increases for marketing and operations.
Pros |
Cons |
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Option 3: Build a 500,000 square foot convention center with at least 200,000 square feet of exhibit space on either the North bank or Southbank. Encourage the development of a hotel and amenities through incentives or other means. Estimated investment: Approximately $400 - $500 million. ($200-250 million for the convention center facility, plus land acquisition, construction costs, parking, subsidies for hotel and amenity development, site preparation, site remediation, facility operations for two sites, and budget increases for marketing and operations)
Pros |
Cons |
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[Staff note: Option 3 could be built at the POCC or the Hyatt. A convention center larger than 500,000 SF is also possible at the POCC. Due to land constraints, it is unlikely that a structure larger than 500,000 SF could be built at the Hyatt-Courthouse site.]
Option 4: Opt to do nothing until a later date.
The subcommittee rejected this option. The City would miss the opportunity for substantial financial returns and community impacts.
The ROI team also agreed on a set of community expectations for Jacksonville’s convention center.
The Community ROI subcommittee reached consensus and unanimity that the City should expand the Prime Osborn Convention Center, but the success of the expansion is dependent on the development of a headquarters hotel and amenities that support convention business around the POCC. The group felt this was the most pragmatic decision, because it “get’s Jacksonville in the convention center game” using tourist dollars.
CCTF group discussion regarding the ROI white paper and its request to the task force to accept its recommendation as that of the entire task force
Questions
How is it possible that the POCC can accommodate so much more business than previously stated? According to market survey data provided to CSL earlier this year, the POCC’s 78,500 square feet exhibit hall can accommodate the needs of 95 percent of the regional market and 60 percent of the national market. The Phase I Hyatt center’s 80,000 square foot exhibit hall will accommodate approximately the same level of business. The improvement would be the hotel rooms at the Hyatt. If the POCC were expanded to 100,000 square feet then that space would accommodate more than 95 percent of the regional market and 80 percent of the national market.
Are we looking at the total square feet for the Hyatt box? No. The first phase of the Hyatt center would be 120,000 total square feet placed on the parking lot in front of the courthouse and next to the Hyatt. Phase II might be an expanded center to 500,000 total square feet with up to 200,000 square feet of exhibit space. The phased approach was recommended by CSL and accepted by the task force due to funding constraints.
Can the Hyatt site accommodate the Phase II vision? During Site Selection subcommittee deliberations, the JEDC determined that the site (sans courthouse and annex) could accommodate a 250,000 square foot footprint. To achieve the 500,000 square foot “Big Vision” would require a two story building. A building larger than 500,000 square feet would require more than two stories. OK HI In addition to a 28,000 square feet ballroom, the Hyatt has 110,000 square feet of flexible meeting and exhibit space that should be included in the discussion about this center's dimensions. The proposed center next to the Hyatt would add contiguous exhibit space, which does not exist at present.
Comments
One of the issues with the Hyatt location is the configuration of decks for loading and unloading of large trucks hauling exhibitor materials. Some believe that a second story could be built to accommodate the process. Others believe that the floating dock with questionable pilings that now supports the surface lot in front of the courthouse could not support a multiple story building. It is possible that once the courthouse and annex are demolished the entire site could be configured for a better flow of semi-truck traffic. [Staff note: The ROI subcommittee looked at two Phase I options: Expand the POCC to 100,000 square feet or build a 120,000 square feet center next to the Hyatt.]
The bed tax bond has not been extended. Even though the bond has been refinanced, often to attain a lower interest rate, the anticipated payoff is still within the original 25-26 years. Contrary to earlier written reports, these funds have not been used for other purposes. The funds have always been segregated and there is a full accounting for each dollar. It is appropriate for this task force to recommend that bed-tax funds slated for use to grow or improve convention business be used for convention center development purposes only even though the potential is there for these funds to be used for other purposes including the municipal stadium and other public venues. [Staff note: These statements amend the information in the white paper.]
The Big Vision is likely to bring in more tax revenue and much more direct spending. The drawback is accumulating the funds to pay for the big vision. The solution to this problem is to increase taxes or fees on local residents because Duval County’s bed-tax is at its maximum.
If the POCC location is chosen the built environment should not mimic old-fashioned architecture as stated in the ROI whitepaper. Rebuttal: The intent of the statement in the white paper was to remind the community that LaVilla’s significant cultural and historical place in Jacksonville’s history should be reflected/celebrated in future development.
We are assuming that Jacksonville is a second tier city and will always be a second tier city. [Staff note: The Market Support and Infrastructure subcommittee discussed the positive and negative aspects of the “second tier city” label. Go to http://www.jcci.org/convention%20center/cctfaprilhandouts.aspx and click on Tier Be or Not Tier Be (PCMA Convene 2-2006). The second-tier cities highlighted are Charlotte, Cincinnati, Austin, Nashville, and Indianapolis. Some embrace the label, others would rather discard labels altogether.]
Marketability to and desirability for convention business is at the Hyatt. The critical mass of residential, retail, hospitality surrounds the Hyatt (the Landing, Omni, Bay Street Clubs, Berkman, etc.). This critical mass does not exist at the POCC and would have to be invented. The convention center at the Hyatt would become a part of the portfolio of a successful downtown. The community impact is greater at the Hyatt due to this existing infrastructure and riverfront location.
Downtown has expanded and includes those areas east of the Fuller Warren Bridge to the Stadium area. Much of downtown’s infrastructure development and investment is occurring between the Fuller Warren and Acosta bridges (Riverside Avenue). Rebuttal: This development is mostly ground floor commercial and office space, not the types of infrastructure (retail, residential, and hospitality) that would support convention business. “Convention delegates come to look at the city, the river, and eat in restaurants.”
Jacksonville does not need more hotels downtown. [Staff note: During the 10-18 ROI subcommittee meeting, Lindsey Ballas (JEDC) stated that interest in hotel development in all of Jacksonville has increased in the last four months. Likewise recent news reports indicate that two hotels are being built on downtown’s Southbank at Kings Street Station and the Jones, Langton, Sulzbacher group announced throughout task force deliberations their intent to build two hotels within a block of the POCC.]
When the POCC was chosen as the site for Jacksonville’s convention center, the vision included a headquarters hotel. With both pieces in place Jacksonville would have been able to offer a package in demand by convention planners and delegates. That demand would have stimulated private development of restaurants and entertainment. The City never followed through on the original vision for the POCC, which is the reason that the area still remains undeveloped.
JTA is planning to invest $170 million in improvements to the area north of the Skyway station, which includes an Amtrak station, a relocated Greyhound station, a regional Intelligent Transportation System management center, a JTA bus hub, a Park-n-Ride facility, JTA offices, retail space, parking garage, and a pedestrian concourse. The POCC will not be used for any multi-modal purposes and any planned development will support the parcels slated for development by the JEDC.
Development proposed by Jones, Langton, and Sulzbbacher. |
Source: Financial News and Daily Record. July 6, 2007
JTA looking at October start on Regional Transportation Center
Right now it is irresponsible for this task force to recommend a tax increase to raise $500 million to pay for building a convention center because this community does not have a successful track record of hosting high impact events that bring new dollars into the community. Using tourist dollars via the bed tax provides an opportunity for Jacksonville to create an in-demand convention center experience that can build community support for building a large scale center. Based on current bed-tax revenue, we can leverage $50 to $70 million dollars after the current debt is retired in October 2009. This group seems to be struggling with which option (infusion of cash) would best promote the growth of downtown overall. [Staff note: The ROI and Facility Operations subcommittees each recommended the POCC.]
This group should also consider the impact that a convention center in any location will have on the community as a whole. Not enough time has been spent on thinking about citywide impacts.
Skip reminded the group that each white paper is a stand alone document. At each general meeting the task force is asked to accept the work of the report. If there are modifications or caveats, then those are reflected in the meeting summary.
The task force accepted the white paper, but did not consent to accept the ROI subcommittee recommendation to expand the Prime Osborn, and incent a headquarters hotel and amenities in the immediate vicinity. Instead, the group agreed to present all of the options to the Mayor, City Council, and the CVB for consideration.
Additional comments
The chair summarized the major points of agreement within the task force and all were accepted by the group.
Public Comment:
Dan King: Consider the Hyatt because of its strong location and abundant meeting (110,000 SF) and ballroom space (27,000 SF). The Hyatt’s location also encourages convention delegates to use water taxis to access the restaurants and amenities on the Southbank.
Michael Langton: Bay Street Station - a $250-$300 million development - will proceed no matter what happens to the POCC. Plans include two hotels, an IMAX theater, and six major restaurants. The development group is still trying to determine how to finance a parking garage that is connected to the ASE (Skyway), which would deliver additional patrons to the Landing. The market is strong enough to support additional hotel rooms.
CCTF CHAIR’S SUMMARY:
Chair Orender outlined the next steps. A meeting summary of tonight’s final CCTF session and a final executive summary of the Task Force’s recommendations will be prepared that reflects the Task Force’s decision to present the three options discussed with no site-specific single recommendation. The CCTF Steering Committee will meet within two weeks to review and approve the draft final report and then distribute it to CCTF members for final comment prior to delivering the report to the City and the community.
meeting adjourned: The meeting was adjourned at 7:15 p.m.
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Community ROI Subcommittee
Meeting Summary
October 18, 2007
Clanzenetta “Mickee” Brown
JCCI Consultant-Task Force Planner
cctf@jcci.org
IN ATTENDANCE: Subcommittee: Bruce Ferguson (Vice Chair), Tony Allegretti, Kish Kanji, Millie Kanyar, and Isaiah Rumlin. Not attending: Christin Comstock, Pam Edwards-Roine, Albert Marchant, and Ron Townsend. Other Committee Members: Robert Champion, Don McClure, Jack Diamond, Staff: Mickee Brown, Skip Cramer, John Reyes, and Ben Warner. [Staff note: If your name is not listed above, please advise.]
MEETING TIME: 5:30 – 7:00 p.m.
PURPOSE: Review the draft white paper and make a recommendation regarding the convention site most beneficial to the community.
MEETING SUMMARY
[Staff note: The write-up below is a summary, not a verbatim transcript. Please read through the document to make sure the pertinent points were captured. If anything is missing or misstated, please advise staff.]
Acting Subcommittee Chair, Bruce Ferguson welcomed the group and explained Chair Ron Townsend’s absence. At the request of JCCI Facilitator Ben Warner, the subcommittee approved the October 11th meeting summary and reviewed the forum decorum, agenda and the evening’s handouts.
Lindsey Ballas, JEDC Business Development Manager, was introduced to the subcommittee as a resource regarding the status of the proposed deals at the Hyatt and the POCC. The Hyatt deal would expand the hotel to include convention exhibit space. The POCC site is being considered by a private firm for hotel development.
Lindsey acknowledged that discussions are taking place with the Hyatt and the Hammons Group, but cautioned that the work of the task force should not be influenced by either group. Talks with Hammons are still in the prospecting stage. Lindsey emphasized that an increasing number of hoteliers have expressed interest in Jacksonville over the last 4 months at the rate of 1 new developer every 2 weeks.
Bruce proceeded to walk the group through the white paper. No substantive changes were made to the document; however the comments made during the discussion are summarized below.
After reviewing the white paper and having group discussion, the subcommittee reached consensus on the POCC as the site offering the community the better return on investment. The investment required for the POCC is roughly $30 million less than the Hyatt, but the consultant projected approximately the same economic impact at both sites. The community impact resulting from an expanded POCC is perceived to be greater than the Hyatt based on the information in the white paper.
The group recommended that the “Big Vision” center remains a viable long-term Phase II option. The Phase I option should be the expansion of the Prime Osborn Convention Center. The success of that expansion is dependent on the development of a headquarters hotel and amenities that support convention business. Once successful, the POCC site offers enough acreage to transition from Phase I into the Phase II scenario.
The subcommittee agreed that the City should require developers to respect LaVilla’s history (railway transportation center and multicultural nexus) by creating built environments that reconnect to that past.
Public Comment: None
meeting adjourned: The meeting was adjourned at 7:00 p.m.
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Community ROI Subcommittee
Meeting Summary
October 11, 2007
Clanzenetta “Mickee” Brown
JCCI Consultant-Task Force Planner
cctf@jcci.org
IN ATTENDANCE: Subcommittee: Ron Townsend (chair), Tony Allegretti, Bruce Ferguson, Pam Edwards-Roine, and Kish Kanji. Not attending: Millie Kanyar, Christin Comstock, and Albert Marchant. Staff: Mickee Brown, Skip Cramer, John Reyes, and Ben Warner. [Staff note: If your name is not listed above, please advise.]
MEETING TIME: 5:30 - 7:00 p.m.
PURPOSE: Determine how a new or expanded convention may or may not benefit the greater community.
MEETING SUMMARY
[Staff note: The write-up below is a summary, not a verbatim transcript. Please read through the document to make sure the pertinent points were captured. If anything is missing or misstated, please advise staff.]
Chair Ron Townsend welcomed members of the subcommittee and proceeded to review the previous week’s meeting summary. The subsequent discussion included the following:
JCCI Facilitator Ben Warner reviewed the agenda and explained that the group would look at the three build/expand scenarios handed down from previous subcommittees to determine what would be best for the community. The questions presented to the task force are listed below.
The three scenarios that the subcommittee considered are as follows.
1. Renovate/Expand the Prime Osborn Convention Center
Reasons to consider this option |
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Reasons to avoid this option |
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Community requirements |
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2. Hyatt convention/conference center
Reasons to consider this options |
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Reasons to avoid this option |
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Community requirements |
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3. “Big vision” large scale convention center (generic location)
Reasons to consider this options |
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Reasons to avoid this option |
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Community requirements |
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What would this project require of the community? It is assumed that both the Hyatt and POCC options would be funded by bed-tax dollars, requiring no additional investment by the community. The “Big vision” center will require a much more substantial investment. At the 9-27-07 task force meeting, raising the sales tax was the method proposed.
Before the group could determine the best scenario for the community, it was determined that more information was needed about…
Public Comment: None
meeting adjourned: The meeting was adjourned at 7:00 p.m.
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Community ROI Subcommittee
Meeting Summary
October 4, 2007
Clanzenetta “Mickee” Brown
JCCI Consultant-Task Force Planner
cctf@jcci.org
IN ATTENDANCE: Subcommittee: Ron Townsend (chair), Bruce Ferguson, Pam Edwards-Roine, and Millie Kanyar. Not attending: Tony Allegretti, Christin Comstock, and Kish Kanji. Media: Rachel Witkowski (JBJ). Staff: Mickee Brown, Skip Cramer, John Reyes, and Ben Warner. [Staff note: If your name is not listed above, please advise.]
MEETING TIME: 5:30 - 7:00 p.m.
PURPOSE: Frame subcommittee work through a series of questions to be answered by Meeting 3.
MEETING SUMMARY
[Staff note: The write-up below is a summary, not a verbatim transcript. Please read through the document to make sure the pertinent points were captured. If anything is missing or misstated, please advise staff.]
After welcoming members of the subcommittee, Chair Ron Townsend asked JCCI Facilitator Ben Warner to review the evening’s agenda and handouts. The group was given an overview of what would happen during each meeting and asked to abide by JCCI’s forum decorum.
The chair began the discussion by asking the group to read both the charge to the ROI subcommittee and the questions developed by staff to answer that charge. The group agreed that the questions were appropriate and spent the remaining time in discussion about the questions below.
Group discussion
What financial indicators should be measured to determine ROI?
An increase in the number of high impact (hotel night generating) events is critical when considering economic impact. The average number of high impact events hosted by the POCC in the last three years is zero. Those conventions and tradeshows that draw non-local attendees impact the local community through dollars spent on lodging, food, and entertainment. The following indicators are important in determining a Center’s affect on the local economy.
HYATT OR PRIME EXPANSION |
Yr 1 |
Yr 2 |
Yr 3 |
Yr 4 |
Yr 5 |
High Impact Events |
3 |
3 |
5 |
7 |
9 |
Average Attendan |