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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

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

BID to include 82 potential businesses

Thursday, December 27th, 2012

via – Black Hills Pioneer

By Heather Murschel Black Hills Pioneer

SPEARFISH — In order to fund the proposed expansion of the Spearfish Holiday Inn and Convention Center, the city will need to incorporate its third Business Improvement District (BID).

On Monday, members of the Spearfish City Council approved a resolution to establish the boundaries for a new BID in order to identify 82 tourism and leisure orientated businesses that would pay an additional assessment. Letters will be mailed to those respective businesses to inform them of the BID and allow the business owners or managers to decide if they would like to be included. In order to review the information and look into financial feasibility of the expansion, in the next month a seven-member board of directors will be appointed to determine a fair and equitable rate the potential businesses in the district would be required to pay each year. The members of this board will be appointed by Mayor Jerry Krambeck, and receive final approval from the council prior to taking on the new position.

City Administrator Joe Neeb said that if the board looks into this further and together they determine that the expansion isn’t feasible, the proposed BID would dissolve.

“We’ve done everything that we can do as a city, and now we have turned it over to the individuals who would be responsible for generating the revenue,” Neeb said. “If they decide the expansion isn’t feasible then the BID would dissolve. If we don’t have a project, we don’t need the funding.”

He added that he expects the board to submit a recommendation either way by April 2013.

The 82 businesses were identified because they rely on the city’s marketing and advertising campaigns and benefit from tourism and travel.

Built 15 years ago for $3 million, the Spearfish Convention Center is owned by the city of Spearfish and leased to the Holiday Inn. In order to pay for the initial construction, the city created a BID made up of nine Spearfish hotels of 36 rooms or more, plus Spearfish Canyon Lodge, a voluntary member. Created by city ordinance, the BID generated enough revenue through a $2 general occupancy tax levied upon accommodations for guests, to make the annual $90,000 bond payment. The convention center was paid off in 2010, and now the $180,000 the BID creates each year is allocated to Visit Spearfish for the purpose of marketing.

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 district, their annual assessments could range between $5,000 and $6,000 per year.

The two BID’s 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.

City officials have been working towards this moment for nearly two years.

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.

In February, the city of Spearfish funded a feasibility study to determine whether an expansion of the Spearfish Convention Center is financially viable. They hired Hunden Strategic Partners for an estimated $25,000 to gather the necessary information.

In May, Robin S. Hunden, president of Hunden Strategic Partners, 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. The study reviewed the area’s economic status, studied the area’s competition, surveyed trade organizations, government agencies and other associations across South Dakota in regard to what they look for in a convention center, and reviewed the potential economic benefits and expansion would have on the community as a whole.

Because Spearfish is known as a place where people can come, relax and enjoy the outdoors is an attractive asset when marketing the convention center.

“This is a huge positive for you because it will help draw in more conventions … this is a great place to visit and that will better when marketing your community,” Hunden said. “And the more people you can draw to Spearfish the better.”

He added that the strong university presence, and a bustling downtown area are also assets.

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Motor Row revival plans shift into gear

Monday, October 1st, 2012

As the economy slowly improves, plans to repurpose Motor Row’s buildings from their uses in the early part of the last century are resurfacing

By Kathy Bergen, Jared S. Hopkins and Melissa Harris, Chicago Tribune reporters

September 30, 2012

via – ChicagoTribune

Chicago’s convention officials long have dreamed of when historic Motor Row — just west of McCormick Place — could be transformed from its dilapidated state into an entertainment zone where visitors could cap their day with a grilled steak and a sizzling show.

But the collapse of the city’s 2016 Olympic bid, which had fueled hopes for the Near South Side, coupled with the flameout of the real estate and lending markets, left development largely dormant along South Michigan and Indiana avenues, between Cermak Road and the Stevenson Expressway.

The malaise left the city at a critical disadvantage to entertainment-laden convention center rivals, both domestically and globally.

When Tony Hu, the city’s most prominent Chinese chef, travels to China, for instance, he said convention centers are surrounded by “wonderful restaurants, wonderful bars, wonderful shops.”

In contrast, the area around McCormick Place “has been a ghost town,” said Chris Schneider, who runs a recording studio and private party venue on Motor Row.

As the economy slowly improves, plans to repurpose Motor Row’s buildings from their uses in the early part of the last century are resurfacing. Designed by notable architects, buildings include deep, high-ceiling auto showrooms and facades accented by glazed brick and swirling terra cotta.

Some of the city’s prominent restaurateurs — including Chinatown’s Hu, Harry Caray’s Grant DePorter and The Firehouse’s Matthew O’Malley — are weighing redevelopment plans in the compact commercial corridor, which remains pocked with for-lease signs and boarded-up historic hulks. The Rockford-born rock band Cheap Trick is planning a music venue and museum, while neighboring Pressure Point Recording Studios is building its own live music space, to be named “Riff.”

A hotelier that operates the historic Pfister in downtown Milwaukee is sizing up an abandoned Cadillac dealership for a boutique hotel directly across from the McCormick Place West Building, while Teatro ZinZanni, a Cirque du Soleil-type dinner theater company, is eyeing a boarded-up showroom next door. Some long-time Chicago Mercantile Exchange traders are financing the launch of Broad Shoulders Brewing, a microbrewery and tasting room, with help from city tax-increment financing.

Meanwhile, real estate/eminent domain attorney Langdon Neal said he has been approaching property owners near McCormick Place over the past 30 days to gauge their interest in selling parcels to the Metropolitan Pier and Exposition Authority, the state-city agency that owns the convention center and would like to see more hotel and entertainment offerings nearby. The authority declined to comment.

The Motor Row area is also steeped in the city’s blues history as onetime home to Chess Records and other recording studios, and in its Prohibition-era gangster past as the former stomping grounds of Al Capone. It’s in the 2nd Ward, whose alderman, Robert Fioretti, reports increasing numbers of inquiries from potential developers.

“It’s still very difficult in the financing world out there, but I’m more optimistic than before,” he said. “It took awhile to build the universe, but we don’t have that much time.”

Mayor Rahm Emanuel has turned up the heat on convention officials to regain footing against such entertainment-heavy rivals as Las Vegas and Orlando, Fla. Toward this end, the city last fall rezoned portions of South Michigan and Indiana avenues for entertainment uses. The ordinance prohibits further residential development — with the goal of separating residents who cherish their sleep from future revelers partying into the night.

The CTA plans to build a Green Line “L” station to serve the immediate area; its opening is scheduled for late 2014. And on Friday, Emanuel held a press conference to highlight $65 million in public infrastructure projects planned for the Near South Side, some of which had been announced earlier. The projects include $5.8 million in TIF funds for streetscape improvements on Motor Row, as well as improvements to mass transit, a new Chinatown library branch and expansion of the southern end of Grant Park.

“Those are the types of public investments that will multiply private investment,” he said in a later interview.

Like Printers Row in the South Loop and the West Fulton Street market area, Motor Row “has the bones” for redevelopment and should be aided by the influx of residents into the downtown area, he said.

But jump-starting the languishing area will not be easy. A long-running foreclosure battle has stalled potential hotel and entertainment projects on nearby blocks — developments that could provide a much-needed stream of evening visitors. And a stately icon at the south end of Motor Row, the former Chicago Defender building, at one time an exclusive auto club, is in foreclosure and is boarded up.

McCormick Place, Soldier Field and U.S. Cellular Park can provide potential customers, but only in spurts when events are under way.

“This area will be challenged unless and until a critical mass of developments begins to bring locals and visitors here on a daily basis,” said urban project adviser Rob Hunden.

Pressure Point Recording Studios, for one, is aiming for Chicago patrons — from students living downtown to South Loop condo dwellers — at its live music space, which it hopes to open in December.

“The McCormick Place situation — it’s a bonus,” said Schneider, the studio manager. “That’s part of the reason they want to develop this area, because people are constantly running up to the North Side.”

The risks for these sorts of projects are high unless there is significant assistance in the form of property tax breaks, historic tax credits or favorable financing terms, said Hunden, president of Hunden Strategic Partners.

CME traders Bob Lassandrello and Gary Lark are in line to receive $628,000 in TIF assistance for their Broad Shoulders Brewing, a $2.5 million project under construction at 2337 S. Michigan Ave. and scheduled to open in January. A city development panel recommended the assistance, which still needs a city council vote.

Building out the brewery in what used to be a truck refurbishing facility is a complex endeavor, with tasks ranging from installing an elevator in the long, narrow space to rounding up an adequate number of original glazed bricks to use on the facade, said brewery manager Frank Lassandrello, a craft brewer who is Bob Lassandrello’s son.

“We were very fortunate to receive the grant from the city,” he said. “We’re on the frontier of this neighborhood. … We’ll be hiring employees and we hope to be generating foot traffic with our tasting room.”

An open question for the brewery and other prospective business ventures is what will become of the former Chicago Defender property, a prominent clock-tower structure that a group of investors led by O’Malley had hoped to redevelop. Fioretti said O’Malley continues to weigh potential projects in the area. The restaurateur could not be reached for comment.

Potential Motor Row investors also are keeping an eye on two large parcels east of the historic district, along the north side of Cermak Road, where major hotel-and-retail development has been on hold because of another foreclosure struggle. A U.S. bankruptcy judge on Friday gave the longtime ownership group, which includes developers Pam Gleichman and Karl Norberg, a last chance to avoid repossession by lender Centerpoint Properties Trust.

The group, Old Prairie Block Owner LLC, said it has a buyer willing to pay $150 million for the property — about twice what it owes Centerpoint — and to lease it back to the group for 99 years. Judge Jack Schmetterer gave the group three weeks to show the proposal had viable financial backing.

Meanwhile, Gleichman is moving ahead with separate projects on Motor Row, where her LandmarkAmerica Illinois LLC controls six properties. She is assembling partners and trying to line up financing with the goal of starting redevelopment next year. She expects projects would make use of federal historic preservation tax credits.

First-phase plans include remaking a former Rambler dealership at 23rd and Indiana, across from the McCormick Place West Building, into a mixed-used development with restaurants, shops and a coffee bar on the first floor and potentially Teatro ZinZanni upstairs. “Nothing is firm at this point,” said theater company spokeswoman Tina Gonsalves.

A boutique hotel is scheduled for the former Cadillac showroom next door, and Gleichman is in talks with Milwaukee-based hotel owner and operator, Marcus Hotels & Resorts.

The company is evaluating construction costs and potential brand options, said David Merritt, senior vice president of development, noting the project would require public assistance.

“It will take quite a lot to reposition that closed industrial building,” he said.

Two other hotel developers are scouting the area as well, Fioretti said.

On South Michigan, Gleichman is working to assemble four other projects, the highest-profile one involving a Cheap Trick performance venue, guitar museum and restaurant, the latter to be operated by DePorter, CEO of Harry Caray’s Restaurant Group.

DePorter also might open an Irish pub, while chef Hu is weighing a restaurant called The Bund, named after the waterfront area in Shanghai and aiming for what he describes as a “1930s Shanghai night life” atmosphere. Gleichman is also aiming for a barbecue restaurant with live R&B music, modeled after the B.B. King blues clubs, said Gunnar Falk, vice president at LandmarkAmerica Illinois.

The evolution will take some time, noted restaurant operator DePorter.

“You need critical mass versus any one restaurant opening by itself,” he said. “When venues come down there all at once, it will be the place to be.”

Tribune reporters Mary Ellen Podmolik and Jon Hilkevitch contributed.

kbergen@tribune.com

Twitter @kathy_bergen

Copyright © 2012, Chicago Tribune

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ERC approves new $40,000 hotel study

Thursday, September 20th, 2012

By Arek Sarkissian II

Wednesday, February 22, 2012

via – Evansville Courier Press

EVANSVILLE — Development of a Downtown convention hotel headed back to the drawing board Wednesday morning as the Evansville Redevelopment Commission authorized a new feasibility study and analysis of the project.

The commission by a 3-to-2 vote approved spending roughly $40,000 to hire a Chicago firm to determine what size hotel should be built, what level of service it should provide and what should be the amount of city investment in the project.

The proposed hotel, to be built at Walnut Street and Martin Luther King Boulevard, would serve the nearby Ford Center and The Centre convention center.

The study, sought by Mayor Lloyd Winnecke, was awarded to Hunden Strategic Partners, which last year conducted a $30,000 analysis that said a $33 million, 220-room hotel proposed by the Kunkel Group was financially viable.

City Council appointees to the Redevelopment Commission, Stan Wheeler and Jay Carter, voted against conducting another study, while Winnecke appointees Ed Hafer Jr., Randall K. Alsman and Sara L. Miller supported it.

Second Ward Councilwoman Missy Mosby urged the commission to forgo the study.

“Weʼve done enough studies on this project, and it was already voted through City Council last year,” Mosby said. “Itʼs time to build a hotel.”

The study is expected to take about two months.

Rob Hunden, president of Hunden Strategic Partners, said the study would encompass 13 tasks that include perspectives such as tourism, the convention industry, regional competition and a meeting planner survey. The study also would provide a cost estimate, investment return and economic impact.

Some examples of variables to the hotel project that were not explored included what plans Casino Aztar has to renovate its aging hotel and the possibility of the revival of Hotel McCurdy, Hunden said.

The progress of Interstate 69 toward Evansville also is an issue.

“And that could be a wonderful resource something like this project could benefit from,” Hunden said. “But the point is, we donʼt know.”

In August, Hunden launched a vetting process of two hotel proposals before the Redevelopment Commission and determined the Kunkel Group and its $33 million, 220-room hotel was financially viable.

Kunkelʼs plan used $8 million in city incentives, which included a $1 million forgivable trade for the land where the hotel would be built. The incentive also included a $3.5 million forgivable loan, and another $3.5 million that would be repaid at 5 percent interest.

The 220-room amount came from a request for proposals the city made two years ago asking developers to name the appropriate size for the hotel. A response made by Indianapolis-based White Lodging included 220 to 250 rooms, but that deal later fizzled. Kunkel had said the number of rooms in his proposal was vetted by the brand he chose, Sheraton, and the finance company willing to provide more than $20 million in senior debt.

Wednesday morning, Kunkel said he predicted the Redevelopment Commission would ask for another request for proposals, which would delay the project by about a year.

“Iʼm not sure if Iʼm willing to wait that long,” Kunkel said, adding he already has his own money waiting to be spent on the project.

The Redevelopment Commission and others in the meeting continuously referred to Kunkelʼs deal including $10 million in incentives. Hafer said that amount also included a 10-year tax abatement also included in the deal.

Evansville Convention & Visitors Bureau Director Bob Warren said a brief study he conducted determined the community is losing $12 million annually in lost revenue from conventions. The city has not held a notable convention since 2009, Warren said.

“But that doesnʼt mean we should just rush in to things,” Warren said. “I think this study is a great idea.”

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Consultant paints expensive picture of Expo Center future

Thursday, September 20th, 2012

Public investment of up to $55 million needed to maximize Expo Center.

Amos Bridges News-Leader

via – Springfield News-Leader

“Go big or go home” was the advice given Thursday to members of the task force trying to determine how to snare more business for Springfield’s Expo Center.

“You have to put a complete package together,” consultant Rob Hunden told the Convention Competitive Assessment Task Force during a conference call Thursday. “Don’t fool yourself into thinking you have the cards to play, ’cause you don’t.”

For Springfield, a competitive hand would require a new, full-service hotel on the vacant lot east of the Expo Center, upgrades at the center and University Plaza Hotel across the street, and development of additional restaurants and retail stores in the immediate area.

“To be successful you really need all of them,” Hunden said, whose firm was hired by the city, Springfield Convention and Visitors Bureau and John Q. Hammons Hotels.

All the improvements would require taxpayer money.

“A bank would not fund that (new) hotel, regardless” of the business it receives from the adjacent Expo Center, said Hunden, who has estimated the total public investment needed at $24 to $55 million. “The private sector’s not going to do it.”

The question, Hunden said, is whether Springfield wants to make the investment.

Under current agreements, the public bears no financial risk associated with the Expo Center, Hunden said. “It’s not really doing much but it’s not costing (taxpayers) anything, either.”

Investing in a competitive convention complex could pay dividends in the form of additional hotel stays, restaurant business and tax revenue, he said, “but there are pitfalls.”

“Most communities your size or larger have a convention center, which makes the market difficult,” he said. “It’s not as big a buck as it used to be, but it’s still very sizeable.”

Hunden said an additional economic impact analysis is needed to determine how much extra tax revenue Springfield could expect to earn for each dollar spent on various upgrades.

Task force members plan to meet within the next few weeks to discuss their next move. Most members appeared to want the additional analysis in hand before Hunden makes a formal presentation to City Council, the Springfield Convention and Visitors Bureau and John Q. Hammons Hotels & Resorts.

Officials skeptical

Burris thanked Hunden on Thursday for an “honest assessment, warts and all.” But he and other task force members didn’t take everything the consultant had to say at face value.

Joe Morrissey, senior VP of operations at Hammons, and Missy Handyside, general manager at Ramada Oasis Hotel & Convention Center, both were skeptical that recommended upgrades at University Plaza would allow the hotel to charge up to $30 more a night.

While several committee members agreed greater connectivity between the the Expo Center area and downtown is needed, Rusty Worley, executive director of the Urban Districts Alliance, questioned whether the area could absorb a half-dozen additional restaurants.

Hunden thinks it will.

“Downtown is just far enough away it’s not visually connected,” he said. Although restaurants four or five blocks away from the Expo Center can help, event organizers will go elsewhere if options aren’t available within a few hundred feet. “The minimum expectation has increased over time.”

Handyside and other task force members suggested Springfield might build on an existing strength and try to focus on snagging sports tournaments, rather than general business conventions. Hunden said the idea had merit, although the sports and recreation niche has become increasingly competitive, as well.

Burris asked whether Springfield might “leapfrog” the competition by putting off any major improvements until the competing facilities going in now begin to show their age.

“The longer you wait, I think the more you’ll have to build to be competitive,” Hunden said.

Additional Facts

Consultant complimentary, too

Still in draft form, consultant Rob Hunden’s assessment of Springfield’s convention facilities doesn’t sugarcoat the city’s position. Critical of facilities at the Expo Center and University Plaza, the report says Springfield also suffers from a reputation as overly traditional and out-of-touch.

“Your description of us as ‘dowdy’ is catching on,” City Manager Greg Burris joked Thursday, prompting Hunden to note that “perception is different than reality.” “There’s not one thing that defines Springfield,” the consultant said, listing the city’s status as a growing regional center, its universities and attractive downtown as valuable strengths.

“What you have (downtown) is authentic, it’s not manufactured,” he said.

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Posted in 2011, Competitive Assessment, Convention Center, Convention Hotel, Exposition Center, Hunden Quoted, Missouri, Rob Hunden, Springfield | Comments Off

Report: Expo needs more than hotel

Thursday, September 20th, 2012

Written by

Amos Bridges

11:00 PM, May. 25, 2011

via – Springfield News-Leader

An attached, full-service hotel could make the Springfield Expo Center more competitive, but it won’t do the job alone, a consultant’s report said.

Upgrades at the center and the University Plaza Hotel across the street, new restaurants and retail stores are needed as well, if Springfield hopes to compete effectively with Branson and other cities for convention business.

Those improvements altogether could require more than $53 million in private investment, as well as public subsidies and incentives estimated at $24 million to $55 million, according to the report from Chicago consulting firm Hunden Strategic Partners.

Alternatively, the report said connecting the Expo Center to University Plaza while trying to land a smaller, limited-service hotel would lead to some improvement at the cost of a few million dollars, but the benefit would belong mostly to University Plaza, owned by John Q. Hammons Hotels and Resorts.

“It would not benefit the community other than to help save a hotel that may otherwise continue to be a drag on the market,” the report says.

The 185-page report — distributed in draft form to members of a task force that includes city, Convention and Visitors Bureau and Hammons representatives — doesn’t appear to pull punches.

In addition to describing the University Plaza as over-priced and in need of significant renovation, the report says Springfield as a whole suffers from a reputation “as overly traditional, dowdy, perhaps even out-of-date/out-of-touch.”

Developing a more “fun” image that highlights the vigor of the downtown area and involvement of local universities could help attract convention business, the report says. Otherwise, the city could “embrace this existing reputation and market heavily to the family/religious market (and suffer from low price points) …”

Other needs and suggested remedies include:

» The Expo Center, built for $16 million in 2003, needs a kitchen, ballroom and more meeting rooms. The report suggests demolishing the old Sears & Roebuck portion of the building to make room, at a cost of $10 million to $17 million.

» The city’s management contract with Hammons for operation of the center should be renegotiated, the report says. The current contract makes Hammons responsible for any losses, which discourages the company from booking smaller or less-profitable events that still might benefit other businesses.

» About a dozen additional restaurants and retail stores are needed along St. Louis Street to connect the Expo Center area with downtown, the report says, suggesting the city foster private development with subsidies or other public investments, such as a parking garage.

The truth hurts

The promise of such a blunt assessment was one reason HSP was hired, City Manager Greg Burris and CVB President Tracy Kimberlin said.

“That’s what this is all about, to get an outside, expert opinion about our current s ituation and where we go,” said Kimberlin, who provided a copy of the draft report in response to the News-Leader’s request. “I think there are probably things in there that will make everybody squirm a bit, but we need to hear that.”

Kimberlin said members of the city, CVB and Hammons task force are scheduled to meet and discuss the draft June 2.

“We will have Rob Hunden, the consultant who did the report, on the phone,” Kimberlin said. “The committee will be able to ask him questions, suggest any changes they may have and just kind of gather information that may not be contained in the report that they have questions on.”

Hunden then will prepare a final version of the report, which he will present in person to the City Council and other interested parties at a yet-unscheduled time, Kimberlin said, noting the task force will be providing input to the council as well.

The back story

Hunden Strategic Partners, of Chicago, was hired in December to evaluate the competitiveness of Springfield’s convention facilities and recommend the best use for an empty lot east of the Expo Center on St. Louis Street.

The Springfield Convention and Visitors Bureau, the City Council and John Q. Hammons Hotels & Resorts agreed to split the $39,000 cost of the report. City Manager Greg Burris suggested the competitive assessment almost a year ago as the city weighed whether to buy back the 1.7-acre tract east of the Expo Center from Hammons for $1.

Hammons bought the site from the city in 2008 with the promise that he would build an Embassy Suites hotel connected to the center. He failed to do by an April 2010 deadline, despite several extensions from the city, pending a decision by council on a buyback.

Posted in 2011, Competitive Assessment, Convention Center, Convention Hotel, Exposition Center, Hunden Quoted, Missouri, Springfield | Comments Off

City urged not to sell land near Expo Center yet

Thursday, September 20th, 2012

via – Springfield News-Leader

City Council should hold on to the vacant lot next the Springfield Expo Center until a connecting hotel can be built there, a committee recommended Thursday.

When that might happen — and with what money — remained unresolved after a conference call with convention center consultant Rob Hunden.

“Itʼs a quandary. How do you move forward with that much public investment required and not enough public cash flow?” City Manager Greg Burris asked.

Hunden, hired to find ways to make Springfield more competitive in the convention industry, estimates that a $90 million investment in the Expo Center and surrounding facilities is needed. About $40 million of that total would come from the city or other public entities.

In return, Hunden expects the improvements to generate about 750 new jobs and more than $1 billion in new spending over 25 years.

That total includes money visitors would spend at the Expo Center, local hotels and restaurants, plus money employees at those businesses would turn around and spend themselves.

Hunden estimates the extra economic activity will generate an estimated $43 million in additional local taxes during the same period. But Mary Lilly Smith, the cityʼs economic development director, noted Thursday that only about $17 million would be coming to the city, with the rest going to Greene County or other taxing districts.

“I think we have some real challenges in trying to do (initial expansion of the Expo Center) because thatʼs where the public money is,” Smith said.

Finding a developer and financing construction of an adjoining hotel could be difficult right now, as well, said Joe Morrissey, senior vice president of operations at John Q. Hammons Hotels and Resorts.

Hammons Hotelʼs failure to do just that led to the creation of the committee in 2010 and City Councilʼs subsequent decision to buy back the vacant lot.

Morrissey said financing remains difficult. “I donʼt know if it would work.”

Rusty Worley, executive director of Urban Districts Alliance, suggested the city develop a detailed strategic plan for the area around the Expo Center and west to downtown before putting the property up for bid.

“I donʼt think the marketʼs ready …,” he said. “If we buy a little more time, hopefully the market will catch up.”

Several committee members affiliated with the Springfield Convention & Visitors Bureau cautioned against waiting too long, however.

“I donʼt want to see us lose this momentum,” said Melissa Dallas, head of the hospitality and restaurant management department at Missouri State University.

Others suggested the project might be scaled back or altered to make it more affordable.

Hunden said the estimated cost is based on a “worst-case” scenario in which the Expo Center and adjoining hotel are owned or managed by different companies.

“If there was one owner over the entire complex it appears there would be some savings,” said Tracy Kimberlin, president of the visitors bureau.

Hunden agreed, suggesting the public investment might be reduced by about half if that were the case and other improvements were scaled back.

Several committee members said the number of new restaurants and retail stores Hunden has suggested — and a related public parking facility — may be unnecessary.

“A lot of that could happen on its own,” Kimberlin said.

Upgrading the Expo

Consultant Rob Hunden says about $90 million needs to be spent to make Springfieldʼs Expo Center competitive, with about $40 million of that coming from taxpayers. Hereʼs whatʼs included:

Component I

Expo Center expansion and renovation — $17.5 million (all public funding) Connecting, 240-room hotel on vacant lot — $37.8 million ($9.8 million public subsidy)

Total: $55.3 million ($27.3 million in public funding)

Component II

Renovation and expansion of University Plaza Hotel and Convention Center — $21.8 million ($7.2 million public subsidy) Development of 60,000 square feet of restaurant and retail space in UP parking lot — $8.9 million ($2.4 million public subsidy)

New parking deck — $3.6 million (all public funding) Total: $34.3 million ($13.2 million in public funding)

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Posted in 2012, Competitive Assessment, Convention Center, Convention Hotel, Exposition Center, Hunden Quoted, Missouri, Springfield | Comments Off

Consulting firm gives green light for convention center expansion

Thursday, September 20th, 2012

By Heather Murschel

Black Hills Pioneer

Posted: Monday, May 7, 2012 11:00 am

SPEARFISH — After months of studying the issue, representatives of a consulting firm contracted to conduct a feasibility study regarding the proposed convention center expansion in Spearfish, said Wednesday that city officials should take the necessary steps to move forward with the project.

“At this point we think it would be the logical thing for you to do, and at this point I believe you are headed in the right direction,” said Robin S. Hunden, president of Hunden Strategic Partners. “An expansion will eventually draw in larger shows … and more people means more businesses in the community will benefit from the expansion.”

Hired for a total of $25,000 the firm was able to create a comprehensive study that consisted of multiple components and projections as to whether there will be a solid return on investment. They reviewed the area’s economic status, studied the area’s competition, surveyed trade organizations, government agencies and other associations across South Dakota in regard to what they look for in a convention center, and reviewed the potential economic benefits and expansion would have on the community as a whole.

Because Spearfish is known as a place where people can come, relax and enjoy the outdoors is an attractive asset when marketing the convention center.

“This is a huge positive for you because it will help draw in more conventions … this is a great place to visit and that will better when marketing your community,” Hunden said. “And the more people you can draw to Spearfish the better.”

He added that the strong university presence, and a bustling downtown area are also assets.

The Spearfish Convention Center, which cost approximately $3 million to construct 15 years ago, is owned by the city and leased to the Holiday Inn. To date, Spearfish City Administrator Joe Neeb said there have been at least 500,000 people who have attended an event at the facility. After losing potential business due to the lack of space, the city enacted a taskforce to study whether an expansion would be a good investment. In March 2011, the city hired Williams and Associates, an architectural firm in Spearfish to draft two preliminary designs for the proposed expansion. The first option would add 22,900 square feet to the building and mirror the current space and extend off the northwest side of the building. The second option allows for an additional 17,600 square feet. Both options will require the city to purchase 1.8 acres of property to provide for up to 150 additional parking spaces.

Hunden said he recommends the city go with the first option, due in large part that an expansion of this magnitude would open up possibilities for larger conventions.

Today, the convention center features a 10,998 square foot ballroom and 3,868 square feet of meeting space with 13 divisions. The recommended proposal calls for 9,600 square feet to be added as ballroom space with at least 24 foot tall ceilings, and 3,200 square feet of additional meeting space with eight dividers. According to a survey conducted by Hunden Strategic Partners, most people are looking at convention centers that have upwards of 10,000 square feet of breakout meeting space and at least a 20,000 square feet of ball room space for exhibits. If the expansion moves forward, Hunden said it will allow Spearfish to compete with some of the surrounding convention centers.

The total cost of the recommended expansion is estimated to cost $5.3 million, to be paid in full in 20 years. In order to afford the expansion, the city of Spearfish will need to look into creating a new Business Improvement District that would generate additional funds or shift the city’s hospitality revenues to assist with payments.

As part of the study, the consulting firm also looked into how the existing convention center performs and how Spearfish stacks up as a meetings and events destination. Hunden said right now, the convention center is losing business because their space isn’t large enough.

“If you had a larger space, you could market to larger groups,” Hunden said. “So our goal is to get as much space as possible with the budget you’ve provided.”

As far as the impact an expansion will have, Hunden Strategic Partners have estimated a total of 10,361 new attendees in the first year, 14,310 new attendees in the second year, 17,733 new attendees in the third year and 20,113 new attendees in the fourth year. Over the 20-year period of the loan, Hunden said local businesses will garner an additional $29.3 million in direct spending and $50.8 million in indirect spending that will be funneled through the local economy.

In addition to the revenue increase, the proposed expansion would allow for 12 additional jobs.

The consulting firm also looked into how Visit Spearfish could make more of an impact in regard to bringing more people to town.

“Just because you build it, people aren’t going to come unless you are really marketing the area and that’s where Visit Spearfish comes in,” said Hunden. “Because they are acting on behalf of the local hotels, they’ll need to look at bringing

Now that the preliminary feasibility study has been completed, the next step is to finalize study, refine the drawings for the expansion and determine a funding plan.

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Posted in 2012, Convention Center, Hunden Quoted, South Dakota, Spearfish | Comments Off

Sesame Place prepares to open for new season

Wednesday, January 18th, 2012

Sesame Place prepares to open for new season

By CRISSA SHOEMAKER DEBREE, staff writer | Posted: Sunday, March 20, 2011 12:00 am

Regional parks are benefiting from people staying close to home, according to one expert explaining Sesame Place’s success.

There’s a little bit of extra excitement in the air at Sesame Place, and it’s not just because opening day is a month away.

Besides adding a new mechanical ride and a new character, the Middletown theme park is about to launch an all-new Neighborhood Street Party parade, the biggest daily production ever.

“We’ve been waiting for this day for many years,” said Diane Benedict, the park’s vice president of entertainment.

Sesame Place opens to the public April 30. But everything needs to be in order by April 22, when the park opens for its annual Variety Day, an event for children with autism and their families.

The parade – which features all new floats and new characters – represents a $1-million-plus investment by park owner Blackstone Capital Group, an investment firm that purchased Sesame Place and nine other theme parks from Anheuser-Busch InBev in 2009.

It was the park’s second ownership change in as many years. Anheuser-Busch, which owned Sesame for 28 years, was purchased in 2008 by Belgium beer brewer InBev, which quickly sought to unload the parks.

Blackstone, Sesame officials said, has been a willing partner.

“They see this product is valuable,” Benedict said. “It’s popular. It’s worth investing in.”

Theme park expert Cliff Warner agrees. Warner is chairman and founder of the Thinkwell Group, a California company that designs exhibits for “guest experiences” – everything from museums and resorts to theme parks.

“One of the great things about the Sesame brand is that as long as they keep their size right, it’s very manageable,” he said. “They have a renewing audience.

There’s always going to be the toddler through 6-year-old (population). People keep having kids, and they want to bring kids to a quality entertainment/education brand.”

While Sesame does not divulge exact park attendance numbers, last year it surpassed a record 1 million guests, Benedict said.

Offering new attractions is critical to keep customers coming back, said Rob Hunden, president of Hunden Partners, a Chicago-based real estate consultancy that works with theme parks and other destinations.

“You always have to be fresh and offering something new, especially for something that has a smaller area,” Hunden said. “For ride-based theme parks, every three to four years having a big, new ride is critical. But in addition to that, having new shows, new software as they call it, that is critical to keeping interest in letting people know there’s something new and different all the time. It gives them a reason to come back.”

Both Hunden and Warner said theme park attendance, especially for regional parks like Sesame Place, has remained strong despite the economic downturn.

“All of the regional parks are benefiting from people doing staycations and staying close to home,” Warner said. “The parks are getting attendance from people that are nearby. People still want to do something. They tend to do the recreation things that are in their backyards. Sesame Place is a great location for such a large community of people.”

Sesame Place got the OK for the new parade in January 2010, Benedict said. It retired its long running Rock Around the Block parade at the end of last season.

In addition to the parade, Sesame Place is introducing Murray Monster, Sesame Street’s reality TV personality, and a new mechanical ride called Elmo’s Cloud Chaser.

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Posted in 2011, Hunden Quoted, Rob Hunden, Year | Comments Off

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