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Mayor tells City Council that Downtown hotel must not be delayed

Monday, May 13th, 2013

By John Martin

via – Evansville Courier-Press

EVANSVILLE — Evansville needs the commerce and jobs a Downtown convention hotel will bring, and the project must not be delayed any longer, Mayor Lloyd Winnecke told the City Council Monday.

The city is to provide $37.5 million of the development’s $70 million cost, according to a predevelopment agreement with HCW of Branson, Mo. Of the city’s share, $20 million is a direct contribution to construction of the 253-room Doubletree by Hilton, which will be owned and operated by HCW. The remaining $17.5 million is to be for a 330-space parking facility, connections between the hotel property and The Centre and Ford Center and storage for the Ford Center.

HCW also plans a tower with 78 upscale apartments, and a restaurant on the property. The hotel is to include 6,400 square feet of ballroom space.

Bonds issued by the city are to be retired using tax increment financing, Casino Aztar funds and food and beverage taxes, according to city officials. The City Council was told at Monday’s called informational meeting that those three funds generate nearly $18 million in net revenue in an average year, roughly $8 million of which is currently set aside to retire debt on the Ford Center.

Debt on the hotel development’s cost is projected to be about $2 million per year for about 25 years, city financial consultant Robert Swintz with the London Witte Group.

Winnecke said the city’s desire to have an Indiana University School of Medicine facility built Downtown in the next few years — a project that might also involve city incentives — should not prevent the hotel project from going forward.

Committees are currently studying potential locations, academic plans and costs associated with an IU facility. Winnecke said IU will request state funding, but that won’t occur until the next state budget comes up for consideration in 2015.

Winnecke said the project could be “transformative” for Evansville. “We’re very hopeful it will come through for the community. But there’s no guarantee of a medical school. We shouldn’t wait on the hotel for the outcome of the medical project … A convention hotel will be a great inducement to bring a medical facility Downtown.”

The hotel development will create both permanent and construction jobs. CEO Rick Huffman of HCW said a hotel with 253 rooms likely will create the same number of jobs. He said the conference center will bring 8-12 full-time and 35-45 part-time positions, and the restaurant and retail space will also have employees.

Public comment during the City Council meeting generally supported the hotel project and especially its promise of jobs.

“I have a strong belief Downtown is, was and will be worth the effort,” Bruce Griffin said.

“We need that hotel,” Jerome Stewart said. “There’s no doubt about it … When parents struggle for the lack of gainful employment, children suffer as well.”

Jim Braker said the community needs jobs, but he’s concerned about the revenue from Evansville’s casino holding steady in the next few years as competition for players increases.

Charlene Williamson praised the development’s plan for apartments, calling that aspect “an ingenious addition.” She and many others in the audience wore orange stickers which said “Build Them Both,” referring to the hotel project and IU facility.

The Rev. Adrian Brooks Sr. said he supports the hotel development, but he urged the city to attempt to negotiate down its subsidy and the saved revenue to demolish more Center City structures and upgrade parks and sidewalks. Brooks urged that 20 percent of business on the project be set aside for women- and minority-owned businesses and a third of its employment go to Center City residents.

Huffman vowed that women- and minority-owned businesses will be involved.

Most of the City Council’s questions dealt with financing. Conor O’Daniel, D-At-large, asked repeatedly if the city could afford incentives for both a hotel project and a medical school, which would require substantial Downtown real estate.

“Could we afford it based on the cash flows you show?” O’Daniel asked Swintz. Swintz replied that much depends on the pattern of interest rates in the next few years.

Dan Adams, D-At-large, and Finance Chair John Friend, D-5th Ward, urged that the project have an internal auditor who is independent of the developer.

The Evansville Hotel Lodging Association, consisting of owners and operators of 14 local hotels, does not object to the building of a convention hotel but it is “adamantly opposed” to the level of public funding, said Jacob Pendleton, immediate past president.

Pendleton said the association “is strongly in favor of increasing our tourism industry” but “we believe that subsidizing private development with too much public money will ultimately put our industry, and our city, at risk.”

Bob Warren, director of the Evansville Convention and Visitors Bureau, conceded that some “shifting” in hotel business will occur with a new Downtown hotel, but overall hotel business in the city will increase 30 to 40 percent if the property is built.

Hunden Strategic Partners, the city’s hotel project consultant, concluded that the city has a sizeable total number of rooms, but they aren’t in the right locations or the right quality to bring convention business.

Pendleton said Hunden’s report validates his association’s position. Rob Hunden with Hunden Strategic Partners argued the opposite, saying the convention hotel plan being considered “is designed to make the pie bigger” for the whole hotel market.

Officials with the city and HCW continue to negotiate a final development agreement, which is subject to Evansville Redevelopment Commission approval. Bonds for the public share must be approved by City Council. Winnecke said he’d like to break ground on the project in late summer.

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Posted in 2013, Convention Hotel, Evansville, Indiana, Rob Hunden | Comments Off

To build, or not to build?

Thursday, April 18th, 2013

-via Black Hills Pioneer

By Heather Murschel

Spearfish convention center expansion board relays risks of $5.3M project to city

SPEARFISH — The proposed $5.3 million convention center expansion entails several “substantial risks” for both the city of Spearfish and the tourism related businesses that would pay additional taxes to fund the project if it was constructed.

After the city council approved a resolution to create its third Business Improvement District (BID) in December 2012, a board consisting of Scott Stampe, Stephanie Adams, Jim Hess, Greg Krier, Clair Donovan, Barry Bibler, and Don Brune were appointed to review the financial feasibility of the project, as well as determine a fair and equitable rate the potential businesses in the district would pay.

After meeting diligently for three months and fielding questions regarding the project, their conclusions on whether to move forward or not were revealed Monday.

“The proposed expansion could be good for the future, but there are substantial risks involved that need to be considered before making a decision,” Scott Stampe said of the board’s conclusions. “There are just so many unknowns at this point.”

First and foremost, he said, the Holiday Inn would need to renovate the building.

“If funded, the expansion should be contingent on the hotel renovation, and until this happens we believe the project should be shelved,” Stampe said. “It’s quite a few decades old, and though regular maintenance has been done and it looks adequate, we’ve learned that the host facility needs to have the appearance of a new facility for the expansion to be successful.”

He said they made the determination after considering the results of a $25,000 feasibility study Hunden Strategic Partners conducted last year, which reviewed several factors, including economic benefits, what people look for when determining a location, and surveying trade organizations to determine the latest trends.

The other risks involved, Stampe explained, include the abundance of regional competition, the lack of parking and that the hotel may not have enough rooms to accommodate larger events.

“We believe these risks should be reevaluated when the renovation occurs,” Stampe said.

Spearfish City Administrator Joe Neeb said the Holiday Inn relayed information that they are open to the idea, but the details have yet to be revealed.

“I agree that it would improve the convention experience, so this is something that should be discussed further,” Neeb said.

When it comes to the 82 tourism and leisure related businesses provided with an option to pay an additional tax to fund the project, Stampe said the majority of them are hesitant because the only businesses to benefit economically are located at Exit 14.

“They believe the impact of a new facility will not go beyond that area and that an equal assessment of businesses community-wide is not fair,” he said.  “If funded, it should be a partnership between the city and those businesses located in the area.”

After relaying the risks, he presented an option that rather than financing a project of this magnitude, they should reallocate their resources to spend on marketing Spearfish, drawing in new events and putting effort toward targeting existing ones that are held elsewhere.

When asked if this is what the BID board would like to see happen, Stampe said that is the feeling at this point.

After his presentation, he commended city council members for initiating the board.

“It was a wise move on your part to have these individauls come together to ponder these questions because it will give you some insight into the politics when it comes to the expansion,” Stampe said.

The proposal expansion has been on the city’s radar for more than two years, Williams and Associates, an architectural firm in Spearfish, submitted two different designs and several public meetings were held to garner public input.

In 2011, the city of Spearfish utilized the findings of the Convention Center Taskforce, a committee formed to determine if the expansion would be beneficial to the community as a whole, to determine that the proposed expansion has merit and that the process should continue.

From there, Hunden Strategic Partners were hired and in May 2012 representatives of the firm presented the details of the comprehensive study that consisted of multiple components and projections as to whether there will be a solid return on investment.

After this BID was approved, its boundaries were established and the council determined that taxes generated would be in addition to the revenue created by an existing BID that paid off the convention center in 2010. Today, the $2 general occupancy tax levied upon accommodations for transient guests generates $180,000 and is allocated to Visit Spearfish for marketing.

Neeb explained that the new BID would need to generate an additional $360,000 to fund the expansion, so if all the potential businesses agree to be apart of the BID, their annual assessments could range between $5,000 and $6,000 per year.

If the expansion comes to fruition, the two districts would work together to determine how these funds would support each mission. Neeb said all of the leisure and tourism stakeholders receive benefits from Visit Spearfish’s marketing and attraction efforts and that an expansion of the convention center will generate more room nights sold.

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Posted in 2013, Convention Center, Convention Hotel, South Dakota, Spearfish | Comments Off

Tall task: Boosting visits to top of Hancock

Monday, April 15th, 2013

-via ChicagoRealEstateDaily.com

By: Abraham Tekippe April 12, 2013

After nearly a decade and a half in the hotel industry, Nichole Williamson is taking her career to new heights.

As the new general manager of the John Hancock Observatory, Ms. Williamson, 32, is leading a multi-phase redevelopment of the tourist attraction, which was acquired by Paris-based Montparnasse 56 Group for $45 million last June.

Her mission: to make the observatory on the 94th floor of the John Hancock Center a must-see destination for tourists and locals alike.

“Because we’ve been part of the skyline since 1969, sometimes I think the observatory is not necessarily at the top of people’s minds when it comes to a vital place to come visit,” Ms. Williamson said. “We’ve got so much to offer . . . and our biggest challenge will be going to market and making sure people know that.”

Ms. Williamson and her team kicked off the redevelopment effort last month with the installation of 15 interactive monitors on the venue’s observation deck, allowing guests to experience a self-guided, multilingual tour of the Chicago skyline.

By Memorial Day, she said, the observatory plans to unveil an improved queuing area on the building’s concourse level, complete with an expanded ticketing desk, self-serve kiosks and a new 2,100-square-foot retail store carved out of underused space.

After that, Ms. Williamson said, Montparnasse plans to install a “guest experience” on the concourse level while making improvements to the 94th floor. She declined to discuss specifics, saying the changes are “in the early design stage,” but the company plans to wrap up the project by the end of first-quarter 2014, just in time for the U.S. Travel Association’s International Pow Wow, a five-day trade show that Chicago is scheduled to host next April.

The question is whether the changes will narrow the attendance gap between the observatory and Willis Tower’s Skydeck Chicago, which underwent an $8 million renovation in 2009.

About 530,000 people visited the Hancock Observatory last year, about the same as 2011 and nearly a third of the Skydeck’s visitors during the same period, according to a Montparnasse spokesman and Skydeck General Manager Randy Stancik. Attendance at the Skydeck has jumped more than 40 percent since 2008, from about 1.1 million to 1.6 million, according to Mr. Stancik and a Crain’s list of the city’s largest tourist attractions.

The addition of the Ledge, a set of glass cubes that jut out from the building 1,353 feet above ground, has contributed to the increase, Mr. Stancik said.

“The numbers don’t lie,” said Mr. Stancik, also vice president at U.S. Equities Realty LLC, which handles leasing and management at Willis Tower. “We are on an incredible pace here and the nice thing about it is we’re bringing locals back.”

Willis Tower’s status as the tallest skyscraper in the Western Hemisphere—it’s 1,451-feet tall versus 1,128 for the Hancock, according to the Council on Tall Buildings and Urban Habitat—gives it an edge, even though the Hancock is more conveniently located for tourists, some of whom may decide to visit one but not both of the skyscrapers, said Rob Hunden, president of Chicago-based real estate consulting firm Hunden Strategic Partners.

“It’s just something that people have on their bucket list,” he said. “I think the Skydeck is always going to have that sort of advantage over the Hancock.”

While Ms. Williamson sees “the potential” in Skydeck’s attendance numbers, catching or surpassing the competition isn’t her No. 1 priority, she said.

“Is the Skydeck visitorship this number that we have written up in the office that we target? Not necessarily,” she said. “We’re much more focused on the experience that we offer the guests.”

Montparnasse bought the observatory from a partnership including Deutsche Bank A.G., which took over the Hancock building last year and is selling it off in pieces in an effort to boost its return on investment.

A native of Crystal Lake, Ms. Williamson earned her bachelor’s degree from DePaul University in 2003.

She joined the observatory last month after spending more than 14 years in the hotel business, most recently as hotel manager of the 500-room Doubletree Chicago Magnificent Mile, southeast of the Hancock building. Prior to that, she served as general manager of the Aloft Washington National Harbor near Washington, D.C., and hotel manager and director of operations at the Inn of Chicago.

In addition to spending much of her career along the Magnificent Mile, Ms. Williamson recalled making regular trips into the city while growing up, often staying with her family next door to the Hancock building. For her, the role of general manager is a new title in a familiar location.

“The first place I remember being allowed to go when I was allowed to wander around the city by myself was the observatory, so I have a personal connection to the 94th floor,” she said. “I’m motivated by a desire to remind Chicago and the visitors of how unique the experience is up there and really how spectacular the views of the city are.”

 

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Posted in 2013, Chicago, Hunden Quoted, Illinois, Rob Hunden | Comments Off

City signs hotel pre-development agreement

Friday, April 12th, 2013

-via Evansville Courier & Press

EVANSVILLE — The city of Evansville and a Branson, Mo. company have entered into a pre-development agreement on a $70 million Downtown development project, to be anchored by a 253-room, 12-story convention hotel.

Of the total project cost, $37.5 million is to come in the form of city incentives. Final action on the city’s share is subject to City Council approval. The redevelopment commission approved the pre-development agreement 4 to 0 during a called meeting Wednesday.

The full-service hotel will be a Doubletree by Hilton. Combined with about 1,600 square feet of city-owned retail and restaurant space that’s also part of the property, the development is to employ more than 300 people.

Also proposed is a tower with about 70 upscale apartments and a parking garage with about 330 spaces.

A final development agreement is to come in about 90 days. Although some City Council members have met individually with the developer and city administration officials, the entire council will be briefed about the hotel, as well as the status of the Indiana University medical school project, during a called public meeting at 5:30 p.m. April 29 in Room 301 of the Civic Center.

“It is important to note that our administration is continuing to negotiate to reduce costs on all aspects of the development,” Mayor Lloyd Winnecke said in a prepared statement. “It is clear the city is making progress as we are embarking on another transformational project in Downtown Evansville.”

Of the $37.5 million in city subsidy, $20 million will be for the hotel. The rest is for infrastructure such as the parking facility, connections between the hotel and The Centre and the Ford Center, and a storage space for the Ford Center.

Convention & Visitors Bureau Director Bob Warren told the redevelopment commission that a convention hotel Downtown is critical to bringing business back to Evansville — business he said is now going elsewhere.

“We are losing a lot of money in our community,” Warren said.

Rick Huffman, CEO and president of HCW, the Branson company, said the hotel will have an indoor pool and spa, a conference center space and a rooftop bar “with a real modern, hip environment.”

The Centre, Evansville’s convention facility, “is a little outdated but very nice,” Huffman said, adding the hotel property is needed to bring it to life.

“It will be a success because it will draw new business to Evansville. You’re not getting that business today, and it’s your turn,” Huffman said.

Evansville Redevelopment Commission President Ed Hafer said Wednesday’s vote on the pre-development agreement was “a big step” toward moving the project. “We’ve got a great project and we’re going to make it better in the next 60-90 days as we continue to refine things.”

“It’s a branded hotel, which we have not had Downtown in a long, long time,” Hafer said. “That’s very important … most importantly, it’s going to bring a lot of activity Downtown. Activity breeds activity.”

Hafer said there’s no question in his mind the city can afford the hotel project.

“We have the cash flow with the Downtown TIF which this administration and previous administrations have put in place for this very reason,” Hafer said. “We’re not talking about raising property taxes to do it. I think the city has been cautious in their approach to financing this. We don’t want to give tax abatements because we want to keep the cash flows coming in. We can do this project and have plenty of cash reserves left for future projects.”

City Councilwoman Stephanie Brinkerhoff-Riley, D-3rd Ward, attended the redevelopment commission meeting. She noted the city has many other projects on its plate.

“It’s a lot of money, and potentially, the timing is not good. Personally, I would like to understand what’s going on with the medical school … what’s it going to take to get that here and what it’s going to be required of us to make it happen,” Brinkerhoff-Riley said. “I find the impact and idea of the medical school as a general direction of economic development and impact on this community much more exciting than building this hotel.

“It begs the question of wouldn’t it be nice if we had a general plan of economic development, it would put things in order in terms of importance.”

Under terms of the pre-agreement, the city is to pay a maximum of $200,000 to HCW for what the document calls “third-party costs” incurred by the developer. Some of those costs could involve things like analysis of soil density and traffic patterns, said Philip Hooper, Department of Metropolitan Development director.

“Most if not all of that work will be done by local firms,” Hooper said.

City Councilman Dan McGinn, R-1st Ward, said it’s “fair” that the city pay some of those expenses.

“We have to be fair with the developer, because if he’s going to go ahead and hire architects and do preliminary drawings and designs, he’s going to have some costs involved,” said Dan McGinn, a member of a city administration steering committee that vetted developers and met with HCW officials on Tuesday.

McGinn said the April 29 meeting will allow the City Council and public to learn more about the development plan. McGinn finds much to like about it.

“Cities have to preserve, protect and continue to build downtowns, or else people continue to leave and you don’t have a tax base to support city services,” McGinn said. “I look at this development as several things, one is bringing people to town to spend dollars. I believe Bob (Warren) and people who work at the Convention & Visitors Bureau will thoroughly do their job and we’ll get some business. Also, the city’s subsidy does not pay for the apartments. That’s the developer putting his own funds in, helping build the tax base downtown. It comes not only witha promise or a possibility of people living Downtown, but there are concrete realities.

“It’s been known from Day One that large hotels in Downtown areas are not profitable, so you need some government assistance. The question then becomes, do you want a downtown hotel? My answer is yes I do.”

Brinkerhoff-Riley asked Huffman during the redevelopment commission meeting about the types of jobs created by the development.

He answered that it will be a mixture of management and sales jobs and lower-salary service jobs, with all positions having benefits.

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Kentucky Kingdom partnership lands $10 million in tax credits

Wednesday, April 10th, 2013

- via Courier-Journal

By: Tom Loftus

FRANKFORT, KY. — The Kentucky Tourism Development Finance Authority on Wednesday unanimously approved up to $10 million in sales tax credits sought by Kentucky Kingdom LLLP.

“Now that we have secured this important component of our financing package, we can continue to wrap up some other remaining details of this exacting process,” said Ed Hart, of the Kentucky Kingdom partnership.

Hart said in a news release that he is confident that the partnership can meet its planned reopening date of May 24, 2014.

Marcheta Sparrow, secretary of the Kentucky Tourism, Arts and Heritage Cabinet, said she is “completely confident” that the project will succeed, even though owners of Holiday World and Splashin’ Safari in Indiana backed away last year from a plan to renovate and reopen the theme park.

Sparrow said the current plan is different because of “Mr. Hart’s track record, and his interest in this project all along, and his ability to pull together a group of partners within the Louisville community who really believe in Louisville.”

The tourism authority’s action on Wednesday allows Kentucky Kingdom to retain up to $10 million in state sales taxes it collects over its first 10 years of operation. It is the last portion of a public incentive package sought by Hart’s partnership.

The authority vote came after report by the authority’s consultant, Hunden Strategic Partners, which concluded the proposal met all criteria to qualify for the sales tax incentive program.

The Hunden report said the Kentucky Kingdom partnership planned to invest at least $40 million into renovating the park, including a doubling of the size of its water park. The report said that the project will generate about $420 million in new spending over 10 years and “support 439 net new full-time and full-time equivalent jobs” by its fourth year of operation.

Hart said in a news release that after examining the 100 buildings and 40 rides at the park, he and his partners have determined it will cost more to reopen Kentucky Kindgom than they originally thought. “My partners and I are prepared to make the additional commitment needed to cover that cost and all of the parties involved understand that it will take until the end of June to complete the financing and various interparty agreements,” Hart said.

Hart’s group has been granted a long-term lease on the fairgrounds property by the Kentucky State Fair Board. Under the lease, Hart and his partners — businessman Bruce Lunsford, lawyer Ed Glasscock and the Al J. Schneider Co. — have agreed to invest $45 million in park improvements by 2017 — $20 million in partner equity and $25 million in borrowed money.

Hart operated the park for a decade through the late 1990s before he sold it to Six Flags. Six Flags abandoned its lease on the park in early 2010 after it filed for bankruptcy

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Posted in 2013, Kentucky, Louisville, Rob Hunden | Comments Off

Put casino Downtown, add event center, study urges

Monday, April 1st, 2013

-via St. Joseph News-Press

By Kim Norvell – St. Joseph News-Press

After more than a year of research, an outside company has come up with a $64 million plan that would develop Downtown by moving the casino and building a state-of-the art event center.

The company, Hunden Strategic Partners, came up with five different scenarios and plans that could feasibly be done in St. Joseph, but has suggested one that would use less public funds and would keep Civic Arena intact.

A presentation of the study’s results and alternative scenarios will be given to the City Council at a public work session at 4:15 p.m. Wednesday at City Hall, 1100 Frederick Ave.

Objectives of the main proposal include development of a new casino Downtown, renovation of the Holiday Inn, development of restaurants along Felix Street, improvements to Civic Arena, development of a 550-space parking garage and development of a casino-run event center.

The proposed project would cost $64.2 million — $12.5 million of which would come from public funds; the rest would be paid for by the casino. Funding from the city’s portion would come from a Downtown TIF, Downtown CID and the hotel/motel tax, all of which already have been approved by the council or voters.

As part of the suggested plan, the casino would purchase and rehabilitate the Holiday Inn ($7.4 million); build a larger casino, complete with 150 hotel rooms, a spa and a large meeting facility ($19.8 million); build and manage an entertainment center that would be large enough to attract sporting events and concerts ($16.2 million); and develop an “entertainment district” with diverse restaurants and bars ($8.2 million).

The casino would be located north of the Holiday Inn, in its existing parking lot; the event center would bridge Third Street, closing the street, and connect east to Civic Arena.

The city then would be responsible for building a 550-space parking garage adjacent to the casino ($7.5 million); and providing upgrades to Civic Arena ($5 million).

Upgrades to the arena would make it ADA accessible and incorporate additional bathrooms and concessions. The upgrades would not be enough to make it a state-of-the-art entertainment center, but could draw arena events and conventions.

The plan also includes suggestions for what to do with the old casino space on Waterworks Road, if it were to move Downtown. Multiple plans suggested anything from baseball fields to a marina to a restaurant.

The City Council approved a contract with Hunden Strategic Partners in July 2011 to conduct “a development plan on the location, cost and estimated revenue from an event center, casino and Downtown hotel,” said Clint Thompson, director of Planning & Community Development, in a memo to city staff. One of the catalysts of the study was the 2011 flood, which shuttered the St. Jo Frontier Casino for three months.

Originally it was thought that a larger project would be completed in the area, which would include tearing down Civic Arena and adding even more hotel rooms. However, funding for the larger project scenario would be too great, even with assistance from the state.

The full study can be accessed on the city’s website at www.stjoemo.info/study.

 

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Posted in 2013, Cities, Hotel, Missouri, St. Joseph | Comments Off

Ford Center income and expenses both more than budgeted For 2012, arena had $281,000 deficit

Monday, March 11th, 2013

via Courier Press

By: John Martin

EVANSVILLE — The Ford Center’s first full calendar year included 145 sports and entertainment events bringing nearly a half-million people through the doors, according to the facility’s annual report prepared by VenuWorks for the Evansville Redevelopment Commission.

Operating revenues of $8.18 million and operating expenses of $6.6 million for 2012 were both more than budgeted. The report lists an operating profit of $1.58 million, although when taking into account Ford Center-related costs of the City-County Building Authority and other entities, the arena’s deficit came to $281,293 for the year.

Construction debt on the arena is about $122 million, plus interest.

VenuWorks Executive Director Scott Schoenike said the Ford Center became a regional entertainment hub in its first year. About half of the arena’s guests traveled more than 20 miles to attend events.

Evansville IceMen professional hockey and University of Evansville basketball accounted for most arena events. The Ford Center also hosted the Hadi Shrine Circus, Disney on Ice, a monster truck show, a Cirque du Soleil tour, professional bull riders, comedian Jeff Dunham and musicians such as Elton John, Lady Antebellum and The Temptations.

A study of the Ford Center’s economic impact by Hunden Strategic Partners found the arena created $39.1 million in direct spending. The consultant used a metric called IMPLAN, which shows how a dollar injected into one economic sector is spent and re-spent in other sectors.

Hunden found the Ford Center has supported 830 full-time equivalent jobs with $12.2 million in total earnings and a sales-tax collection of $345,000.

All suites and loge seats were sold, and the arena received LEED silver certification, reflecting an environment-friendly design. The Ford Center was recognized by industry publications Pollstar (a nomination for Best New Venue of the Year) and Billboard (named a New Venue to Watch).

Schoenike told the Redevelopment Commission Tuesday that the lack of a capital projects funding source for the arena is a concern. He said some maintenance problems inevitably develop at facilities when they become three to five years old, and the arena will need to keep up with venues in competing markets.

A line in the report states that during 2013, “a long-term capital plan and funding source needs to be developed with the Evansville Redevelopment Commission.”

Redevelopment Commission members praised the arena’s performance. Schoenike said the Ford Center has remained busy in 2013, with more touring acts being booked.

“We’re selling tickets, which helps keep promoters coming here,” Schoenike said.

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Posted in 2013, Economic Impact, Evansville, Indiana, Sports | Comments Off

Ritz-Carlton Chicago for sale

Wednesday, February 13th, 2013

via ChicagoRealEstateDaily.com

By: Alby Gallun February 13, 2013

Investors hunting for luxury hotels have the chance to buy one of the city’s best-known properties: the Ritz-Carlton Chicago.

Chicago-based JMB Realty Corp., the Ritz’s owner, has hired Hodges Ward Elliott, an Atlanta-based hotel brokerage to sell the 435-room hotel just off Michigan Avenue, which could fetch about $180 million, or $414,000 a room, according to sources.

A sale at that price would rank among the most expensive in Chicago, but still well below the record $505,000 a room that Sam Zell paid in 2011 for the Elysian Hotel, now the Waldorf Astoria.

Hotel prices have jumped the past couple years amid rising occupancies and room rates and investors’ increased willingness to buy riskier assets. Revenue per available room, a metric that accounts for both occupancy and room rate, rose to $209.48 at downtown Chicago’s luxury hotels last year, an 11.6 percent increase over 2011, according to data from Hunden Strategic Partners and Smith Travel Research.

Yet the downtown luxury hotel sector has gotten much more crowded since the Ritz opened in the mid-1970s. More recent additions include the 188-room Waldorf in the Gold Coast, the 339-room Trump Hotel in River North and the Langham, a 316-room hotel in the former IBM Building set to open this summer.

“The top of the market has gotten much more competitive and with the addition of the Langham, it will put all luxury hotels in the position of having to defend their current customer base,” Rob Hunden, president of Chicago-based Hunden Strategic Partners, said in a text message.

Executives at JMB and Hodges Ward Elliott did not return calls. Newsletter Real Estate Alert first reported that the Ritz was on the market.

The Ritz, 160 E. Pearson St., is part of the Ritz-Carlton chain but is managed by Four Seasons Hotels & Resorts. Marriott International Inc., the owner of the Ritz brand, would be a logical bidder on the hotel, allowing it to break the management agreement with Four Seasons, establish its own management contract and then sell the property, according to Real Estate Alert.

The hotel, part of the Water Tower Place complex, has rebounded from the recession but has yet to hit pre-crash levels. Revenue rose to $54.2 million in 2011, up 10 percent from 2010, according to a loan report from Bloomberg L.P. Revenue peaked at $65.3 million in 2007.

Net operating income, meanwhile, rose to $6.8 million in 2011, an 86 percent gain from the prior year, according to the report. The hotel generated a $461,183 loss in 2009. Figures for 2012 were not available
Read more: http://www.chicagorealestatedaily.com/article/20130213/CRED03/130219915/ritz-carlton-chicago-for-sale#ixzz2KnKXgnRa

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BID board forms to assess convention center expansion

Monday, January 28th, 2013

- via Black Hills Pioneer

By Heather Murschel

SPEARFISH — When the city of Spearfish proposed the option to create a Business Improvement District (BID) to generate revenue for the proposed expansion of the Spearfish Convention Center, officials received an overwhelming amount of feedback from various interested parties who wanted to serve on the board.

After careful consideration Mayor Jerry Krambeck appointed seven members who have a vested interest in being a part of this process to a BID board. Tuesday, the Spearfish City Council approved a resolution to form the board in order to determine the feasibility of the expansion and set a fair and equitable rate the potential businesses in the district would pay as an assessment, so revenue can be generated to fund the estimated $5.3 million project.

“This is a situation that provides the possibility for some very positive things to occur in Spearfish,” Krambeck said. “We have quite the array of folks on this board and we’re looking forward to seeing where this goes.”

Those members include Scott Stampe, Stephanie Adams, Jim Hess, Greg Krier, Clair Donovan, Barry Bibler and Don Bruner. They couuld serve on the board for up to six months, and by that time they will need to have submitted a report to city officials regarding the estimated cost of the expansion and the proposed method of assessment to allow for the issuance of revenue bonds to pay for the construction.

The next step for board members will be to organize a meeting to discuss economic development, trends in sales tax and some other pertinent information. Once the board has met and culled through all the information and data provided, they are expected to make a decision by March.

This new BID consists of 82 tourism and leisure based businesses in the area and is the second BID the city has formed in relation to the convention center. When the facility was constructed 15 years ago, a BID made up of nine Spearfish hotels that have 36 rooms or more and Spearfish Canyon Lodge as a voluntary member. Created by city ordinance, the BID created enough revenue through a $2 general occupancy tax levied upon accommodations for transient guests, to make the annual $90,000 bond payment. The convention center was paid off in 2010, and the $180,000 the initial BID creates each year is allocated to Visit Spearfish for the purpose of marketing.

 

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Posted in 2013, Convention Center, South Dakota, Spearfish | Comments Off

Winnecke, ERC move forward with Branson, Mo., firm to develop Downtown hotel Commission to then open formal negotiations

Monday, January 28th, 2013

via – Courier Press

By John Martin

Posted January 22, 2013 at 7:49 p.m., updated January 23, 2013 at 4:52 p.m.

EVANSVILLE — A new Downtown hotel developed by a Branson, Mo., firm will usher Evansville back into the convention market for the first time since the Executive Inn closed in 2009, Mayor Lloyd Winnecke said Wednesday.

The property at Martin Luther King Boulevard and Walnut Street is to include a hotel with approximately 250 rooms, a residential tower and businesses.

Wednesday morning’s 5-0 vote by the Evansville Redevelopment Commission signaled the formal opening of negotiations between city officials and Branson-based HCW. A summer groundbreaking on the new development is possible, with construction taking about 18 months.

HCW’s vision for apartments to be part of the development “really set them apart” from other firms interested in the project, Winnecke said.

“HCW understands that for Downtown to grow off this development, it has to be more than a hotel,” Winnecke said. “They get the fact that is has to be (the) catalyst.”

The company developed Branson Landing, a multi-faceted development in the Missouri community, as well as a hotel in Manhattan, Kan.

“Unlike some developers, they have been building through the recession,” Winnecke said. “They have not been on the sidelines. They are also able to bring their own equity to this project, and because of the strength of their balance sheet should be able to secure private-sector funding to secure their piece of the funding of this.”

One other interested developer wanted the city to own the hotel, and another was interested in EB-5 financing, a federal program that allows overseas investors to provide money for U.S. projects in exchange for speeding up the visa process.

Winnecke said he and the advisory group that vetted developers’ proposals were not comfortable with either of those scenarios.

HCW “represents the epitome of quality … What they really wanted was to sit down in a room, roll up their sleeves and develop a project that’s viable for the city and viable for them. There was a really natural chemistry between their team and our team.”

There still will be significant details to work out, especially as they relate to finding and the city’s share.

Winnecke said public subsidies will be involved only with the project’s construction, and local labor — including women- and minority-owned businesses — will benefit.

The Centre, owned by Vanderburgh County government, has lost between $800,000 and $1 million per year since the Executive Inn closed. Winnecke said a Downtown hotel will not close that gap entirely, but it will “get us back in the game” of convention business.

Rob Hunden, the city’s consultant on the hotel project, told the redevelopment commission that Evansville has 44 hotels with about 4,000 rooms, but only 350 are Downtown. Those rooms are at Casino Aztar Hotel and Le Merigot, properties that cater mostly to casino customers.

The average hotel in Evansville is about 24 years old.

Evansville, said Hunden, has a good number of rooms for its market size, but too many of them “are in the wrong place and of the wrong quality.”

He also noted Evansville has gained a nearby competitor in the convention market since the Executive Inn shut down. Owensboro, Ky., using what Hunden described as substantial federal and state subsidies, has built a new convention center and two Downtown hotels, a Holiday Inn and Hampton Inn and Suites, with a total of 270 rooms.

Hunden estimates the Downtown development will produce $35 million to $40 million in local tax revenue over the next 25 years.

His written report to the city states likely convention targets for a new hotel and The Centre would be “corporate training events and meetings from the region, smaller state associations, trade shows and other events.”

The hotel will have its own ballroom space, which Hunden said will likely mean receptions and some other small-scale events will he held there rather than at The Centre, which with 280,000 square feet was built for large gatherings.

Public-private partnerships on convention-style hotels are common in the industry, said Hunden.

He told the redevelopment commission that a convention “anchor” hotel Downtown will give the Evansville market a boost. “There’s a lot to be gained here if you play your cards right.”

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Posted in 2013, Convention Hotel, Evansville, Indiana, Rob Hunden | Comments Off

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