Convention Center Task Force

February 2007 Meeting Summaries

 

Business Demand Subcommittee - Meeting Summary

February 22, 2007

 

Clanzenetta “Mickee” Brown

JCCI Planner

cctf@jcci.org

 

In attendance:

Task force members and Community participants: M.G. Orender, chair, Tony Allegretti, Ron Barton, Danny Berenberg, Thomas Bonner, Robert Champion, Cristina Comstock, Jack Diamond, Juan Diaz, Pam Edwards-Roine,  Randy Goodwin, John Haley, Donald Harris, Bob Johnson, Kish Kanji, Millie Kanyar, Terry Lorince, Bruce MacKenzie, Kelly Madden, Jerry Mallot, Albert Marchant, Paul Mason, Greg Matovina, Donald McClure, Mike Miller, Tony Orsini, Ted Pappas, Dennis Pate, Jim Pritchard, John Reyes, A.D. Roberts, Madeline Scales-Taylor, Mike Shalley, Michael Stewart, Arnold Tritt, Paul Tufano, and Tri Vu,

 

Community participants – Kathleen Singleton, Peter O’Brien, Annette Hastings, and David Reese

 

Media – Karen Brune Mathis, Times-Union, Alison Trinidad, Times-Union, and Rachel Witkowski, Jacksonville Business Journal

 

Staff – Mickee Brown, Skip Cramer, Ben Warner, Nicole Trueblood, John Reyes

[Staff note: If your name is not listed above, please advise staff.]

 

MEETING TIME:  Tour: 4:10 - 4:50 p.m. 

                         Meeting: 4:50 - 6:00 p.m.      

 

SPEAKERS: Bob Downey: General Manager SMG     

                 Jim Pritchard: Director Prime Osborn     

                 Shirley Smith: VP of Sales Jacksonville & the Beaches CVB    

 

TOPIC: Convention Center 101   

 

PURPOSE: Review operations at the Prime Osborn Convention Center and discuss processes for acquiring convention business to make sure all participants begin task force deliberations with a similar frame of reference.    

 

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.]   

 

Welcome   

CCTF Chair, M.G Orender thanked the attendees for their participation. He informed the group that meeting at the Prime Osborn provides an opportunity for all involved to tour the facility and walk away with a better understanding of the facility’s capacity.    

 

Housekeeping    

JCCI Deputy Director, Ben Warner guided meeting attendees through their information packages, first reviewing the results of the January 25th group process check indicating overall satisfaction with the process along with a need for more group participation. Ben also reviewed the various topic related handouts and asked that the January 25th meeting summary be approved. No changes or updated were offered and the summary was entered into the record as approved.    

Speaker presentations    

Bob Downey: General Manager SMG

SMG, a Philadelphia based firm, has managed Jacksonville’s assembly facilities since 1993. In addition to the Prime Osborn, SMG also manages Jacksonville Municipal Stadium, Jacksonville Veteran’s Memorial Arena, Times-Union Center, the Baseball Grounds, Jacksonville Equestrian Center, and the Florida Theater. SMG works closely with the JEDC and the Council Auditor to direct both financial and facility operations, including booking, facility management, marketing, and tenant relations.  In addition to Prime Osborn Director, Jim Pritchard, there are five additional staff members who manage or support events, sales, and operations at the convention center. Even with its small size, the Prime Osborn has done well though the majority of its bookings are local business.    

 

Jim Pritchard: Director Prime Osborn

With 78,500 SF of exhibit space the Prime Osborn is a small assembly space that best serves local community needs; such as business meetings and corporate events.  To accommodate events that need exhibit spaces larger than what is available, the center's contiguous pre-function, ballroom, and grand lobby spaces are used to increase the amount of useable square footage. To effectively compete for business, all of the convention center spaces need to be larger particularly the ballroom and exhibit areas. At present, only 10 to 15 percent of the Prime Osborn's convention business is non-local. A larger convention center will allow for more effective efforts to both sell and offer space for larger events not tied to the geographic region. Entertainment venues and a nearby hotel will also aid in the effort to attract more business. The logistics of running multiple events in the Prime Osborn presents another challenge. For example, staging a tradeshow, a cheerleading contest, a corporate event, and a wedding within a few days time frame is complicated because of the size of the venue and the diverse needs of the clients in the spaces available. 

  

Shirley Smith: VP of Sales Jacksonville & the Beaches CVB

The CVB is responsible for selling Jacksonville as a destination and success is measured by the number of hotel room nights booked. If an organization contacts the CVB to host a convention their needs are discussed and requests for proposals (RFP) are sent to area hotels, meeting facilities, and entertainment/activity venues. After receiving the proposals, a bid process begins and the client either accepts or rejects the proposed contracts. Clients who reject the contracts offered are resolicited at a later date. Of those who decide not to close the deal in Jacksonville, the following are the top three reasons they offer:  

1) Lack of exhibit space 

2) Inability to hold multiple events in one facility 

3) Lack of nearby hotel space 

  

Question and Answers

·         What are the overall dimensions of the Prime Osborn? How much space is optimal for a convention center?

The footprint of the Prime Osborn Convention Center is 296,000 SF (exhibit space, ballroom, meeting space, and support space). In some respects the size is driven by the market and/or the types of business the center would like to attract. Previous studies have recommended between 200,000 and 250,000 SF of exhibit space and a ballroom space between 20,000 and 30,000 SF.   

 

·         What is the maximum expandability of the Prime Osborn?

The Prime can be expanded up to 225,000 SF of exhibit space. Expansion plans need be balanced with other concerns such as parking. At some point the convention center would need to be built up and not out to accommodate other expansion needs.

 

·         When is the convention business lost? When does the client walk away in the process?

The majority of business is lost at the end of the business cycle. The client will work through the entire process, but will opt out due to one or more or the factors mentioned previously.

 

·         What are the other factors that influence whether or not a potential client chooses to hold a convention in Jacksonville? How many organizations bypass Jacksonville?

The destination appeal studies that are due back in early March will clarify which factors influence whether or not meeting planners choose Jacksonville as a convention destination. Since 2000, 218 pieces of business (leads sent to Prime Osborn) have been lost due to five major reason reasons 20 percent - Meeting Space Deficiency, 15 percent - Convention Center Booked, 10 percent - No Hotel Adjacent to Prime Osborn, 5 percent - Competition, 4 percent - Image, Remainder – miscellaneous)

 

·         How do we bypass or make use of the infrastructure (land, skyway station) already in place to support the Prime Osborn?

Many of the pieces are in place to support convention business near the Prime Osborn and in other parts of downtown. This task force can help determine what further investment (if any) should be made to connect and improve upon what is in place.

 

·         Is the competition to host conventions driven by a city’s monetary incentives to conventioneers?

[Staff note: I did not hear an answer to this question?]

 

·         Is the convention center primarily a local amenity and is it profitable?

The majority of the events held at the Prime Osborn target the local community. Such events do not make a large economic impact. Like most convention centers, the Prime Osborn operates at a loss. 

 

·         What is the impact of the convention center on downtown room nights?

The formula for room nights available is “number of rooms x days open”. Downtown Jacksonville is home to six hotels totaling at least 2,153 hotel rooms or 785,845 available room nights. In 2006 the CVB generated 157,160 definite room nights. Downtown convention business (Prime Osborn definite bookings) generated by the CVB represented 24,503 of those rooms, which is equal to 15 percent of the definite room production. Per the CVB the majority of those room nights generated for convention business are within the Hyatt Regency (966 rooms) and Omni (354 rooms), which are in close proximity to the Prime Osborn. The total room nights available for these two properties are 481,800.

 

·         Are the taxes generated on hotel rooms enough to cover the operational costs of the Prime Osborn?

The 6 percent bed tax is divided into three buckets: 2 percent to Prime Osborne, 2 percent to ALLTEL Stadium bonds, and 2 percent to the Duval Tourist Development Council (* The CVB receives 70 percent of the 2 percent). In 2005, the total bed tax was $ 15,015,312. Therefore, each bucket received $5,005,104. Non-event expenses for the Prime totaled $2,017,283, while the debt payment on the Prime during 2005 was $3,399,636 per the 2005 Comprehensive Annual Financial Report. The bed tax collected for 2006 will not been published by the City of Jacksonville until April 2007.

 

·         Is success is driven by size ("the larger the center, the better")?

Jacksonville does not need a convention center with the same dimensions as the facilities in New Orleans or Orlando, however the current convention center only serves 4 to 10 percent of the market. Increasing exhibit space in the Prime Osborn or building a new facility with 200,000 to 250,000 SF of exhibit space enables Jacksonville to compete for 85 percent of the business in the market. To some extent, a new or expanded convention center depends on how much of the market Jacksonville wants and the community's expected return on investment.

 

·         How much would it costs to build a hotel on top of the Prime Osborn?

Such a question can be explored in more detail at the subcommittee level.

 

Connecting past studies and the work of the task force    

The subcommittees will have an opportunity to examine each topic with more depth than time permitted in today’s session. These small work groups will look to past studies, current studies, local experts, and other resources to determine the community's next steps. Each subcommittee will explore the given topic, make recommendations, and present those ideas to the larger task force.   

  • Business Demand Subcommittee: Are meeting planners interested in holding their events in Jacksonville? Will a new or expanded convention center increase demand?
  • Market Support and Infrastructure Subcommittee: Does Jacksonville have the mechanisms (lodging, entertainment, transportation, etc.) in place to support convention business?
  • Site Selection Subcommittee: Where should a new convention center be located? Should the convention center remain where it is today? 
  • Finance Subcommittee: How much will a new or expanded convention center cost and how should it be paid for?
  • Facilities Subcommittee: What are most effective methods of managing a convention center to maintain and expand business opportunities?
  • Community Return on Investment (ROI) Subcommittee: What are the impacts of convention center development (i.e. economic growth, job development, business development, and/or neighborhood revitalization)? What can Jacksonville expect?

 

Public Comment   

The public was invited to offer question and comments but none were offered.     

 

The meeting adjourned at 6:00 pm