Archive for March, 2009

Report Nixes Valpo Convention Center (The Times, Munster, Ind.)

Tuesday, March 24th, 2009

By Phil Wieland, The Times, Munster, Ind.McClatchy-Tribune Regional News

Nov. 25–VALPARAISO — The numbers don’t lie, and they indicate a convention center, even a small one, would not be a good investment for the city, Mayor Jon Costas said Monday. Costas and other city officials met with representatives of Hunden Strategic Partners, who presented the city with a final draft of the feasibility study of constructing a convention center in conjunction with a sports arena that could become the new home of the Valparaiso University basketball team and other athletic activities.

Costas said the city will review the 228-page report with the university over the next couple of weeks and make suggestions to the consultant before presenting the report at a public meeting the second week in December.
“I think the report will be helpful for Valparaiso University because it will indicate we don’t have the demographics for a full-scale convention center, but it is helpful with regard to an arena and where it might be located, how it would be used and the costs,” Costas said. “The city wants to help the university in any way to expand its programs.”

VU spokesman Reggie Syrcle said the university had not seen the report Monday afternoon. Syrcle said a new field house addition to the Athletics-Recreation Center is in the university’s long-range plans.

Hunden was hired in March to conduct the study of the proposed facilities. The $65,000 study was funded by $10,000 from the city’s Redevelopment Commission, $10,000 from the city’s share of the county economic development income tax, $5,000 from the Valparaiso Economic Development Corp., $10,000 from the Porter County Convention, Recreation and Visitors Commission and $30,000 from donations by VU alumni.
Costas said the report’s data also will be helpful to HyettPalma, the consultant the city hopes to hire to do a phase two study of the downtown. While a convention center would be a bad financial risk, Costas said the recommendations concerning the arena will be a university concern.

“The report looks at the city and the university from many different angles,” he said. “There are a lot of good suggestions coming out of it, and it will help us look introspectively and look forward to the future of the city. We turned speculation into helpful data and realistic alternatives.”

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Indianapolis visitor spending up despite economic swoon

Tuesday, March 24th, 2009

Indianapolis Business Journal
By Anthony Schoettle, The IBJ
aschoettle@ibj.com

Fueled by a $740,000 regional advertising campaign, local tourism spending went sky high even as the economy was in a free fall. According to a study commissioned by the Indianapolis Convention & Visitors Association, tourists spent $185.9 million in the local market in 2008, up from $88.9 million in 2007. The figure doesn’t include spending on conventions and corporate outings.

ICVA CEO Don Welsh credited an aggressive advertising and marketing plan for the increase. The ICVA this year partnered with eight cultural destinations, including The Children’s Museum of Indianapolis, Conner Prairie, Indianapolis Motor Speedway and Indianapolis Museum of Art, to launch the campaign here and in Chicago, Louisville, Cincinnati and St. Louis.

Several key indicators showed the initiative worked. The number of trips to the city increased from 170,182 in 2007 to 270,847 this year. Spending per trip increased from $577 to $687 and the average length of stay for tourists climbed from 2.3 to 2.7 days. “These results confirm that our reputation as an affordable destination with multiple attractions and activities continues to grow,” Welsh said.

Respondents to the study conducted by Carmel-based Strategic Marketing & Research indicated that Indianapolis was the second-most-popular destination in the Midwest, trailing only Chicago. Welsh is promising more aggressive marketing in 2009, including a sweeping branding campaign. The branding campaign will be rolled out in specialty convention and tourism publications as well as through trade shows and other tourism industry gatherings. The ICVA is interviewing ad agencies and marketing firms and plans to hire an agency within three weeks to help with the campaign. “We want to demonstrate all the great new products and amenities this city has to offer,” Welsh said.

With new amenities, including the new airport, Lucas Oil Stadium and hotel additions, Welsh said it’s time for the marketing plan to step up and match the tourism product the city offers. “A lot of cities have better marketing and a better brand than the product they have,” said Welsh, who left the Seattle Convention & Visitors Bureau in August to take his post with the ICVA. “In the case of Indianapolis right now, we have a product that is better than the brand positioning.”

The initiative to bring in more leisure spending comes as numerous cities-including Indianapolis-are building or expanding their convention centers, ratcheting up the competition for conventions and other corporate business. “You’re seeing a transition from a seller’s market to a buyer’s market,” said Heywood Sanders, a University of Texas at San Antonio professor and author of several studies on the convention and tourism industry. John Livengood, president and CEO of the Indiana Hospitality and Lodging Association, thinks ICVA’s plan to grow leisure as well as convention business is smart. “The ICVA has been doing a much better job of promoting leisure travel, which they haven’t done traditionally,” Livengood said. “As more hotel rooms come online in this city, and especially while the convention center is being built, I think it’s a very savvy strategy to diversify the efforts to bring in visitors.”

Central Indiana might actually be benefiting from the lean economy, said Rob Hunden, president of Hunden Strategic Partners, a Chicago-based consulting firm specializing in destination attractions. “There are a number of people looking for an abundance of activities a relatively short distance from home,” Hunden said. “The city’s central location and relative affordability puts it in a strong position.”

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Hotel, convention center in the works for Jeffersonville

Tuesday, March 24th, 2009

Jeffersonville is moving forward with plans to build a hotel and convention center complex that could represent a $100 million investment in the downtown district. The city previously commissioned a study that looked at downtown economic development possibilities. As Business First reported in July, consultants who conducted the study recommended that the city consider building a downtown hotel and convention center complex. The project most likely will involve a public-private partnership that will develop a 125,000- square-foot convention center, a 275-room, full-service hotel and a parking garage. No private developer has been selected for the project, city officials said.

Today, they announced the leadership team that will shepherd the project through the next steps. Rick Lovan, growth coordinator for Jeffersonville, will serve as the local project manager. He will work closely with other city officials, specifically Gayle Robinson, executive director of redevelopment, and Jim Urban, director of planning and development. Jeffersonville also has retained the services of Chicago-based Hunden Strategic Partners, and Memphis, Tenn.-based Pinkowski & Co., the two firms who conducted the feasibility study.
Nashville, Tenn.-based Earl Swensson Associates Inc., the architecture firm that designed the Gaylord Opryland Resort and Convention Center in Nashville, will work with Pinkowsi on the design of the Jeffersonville facility. And Jerry Wayne, a former Floyds Knobs resident who currently serves as sales and marketing director for The Greenbriar, a luxury hotel in White Sulphur Springs, W.Va., will share insights on the hotel and meeting planning industry.

City officials, along with the various consultants, are reviewing possible sites and financing options. Lovan said the group has narrowed the list of six sites down to two: the East corner of Market and Spring streets, which is about six acres; and the intersection of Maple and Mulberry streets, including Colston Park. The park is 4.1 acres, Lovan said, but the site could be expanded to more than 14 acres.

Business First previously reported that the complex likely will need a total of 6.7 acres for the convention center, hotel and parking. Tentative plans call for the convention to include a 30,000-square-foot exhibit hall, a 17,000-square-foot grand ballroom, a 7,000-square-foot junior ballroom, 19 meeting rooms totaling 15,000
square feet and 56,000 square feet of office and event-preparation space.

The recommended hotel would include a 9,000-square-foot ballroom, a 3,300-square-foot junior ballroom and eight meeting rooms totaling 6,750 square feet. Lovan said the goal is to break ground in the third quarter of 2009. He acknowledged that there are many steps between now and then that could push back the time frame. But is confident the project will come to fruition.

“It’s not a pipe dream,” Lovan said. “This is really going to happen.”

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Madison, Marcus Corp. intensify talks on hotel to serve Monona Terrace

Tuesday, March 24th, 2009

From Madison.com

Madison, Marcus Corp. intensify
talks on hotel to serve Monona
Terrace

By DEAN MOSIMAN
608-252-6141
March 23, 2009

City officials are speeding up negotiations with a developer on a major hotel to serve Monona Terrace — a controversial and costly proposal that would use the landmark Madison Municipal Building.

The hotel would be the centerpiece of a complicated redevelopment over two blocks that would add perhaps 320 hotel rooms, likely connect them to the convention center by skyway or tunnel, restore the Municipal Building, provide new parking facilities and deliver a separate mixed-use project with new city office space.

“We’re communicating on a weekly basis, sometimes more frequently,” Mario Mendoza, aide to Mayor Dave Cieslewicz, said of talks with Marcus Corp. “There’s a lot to be excited about, but we’re not there yet. We don’t know for sure that a deal is a go.”

While some in the hotel industry oppose any city subsidy toward another private hotel, a new study says a hotel close to Monona Terrace is vital to ensuring its long-term success.

“If another hotel isn’t built, we’re concerned about falling further behind our competition,” Monona Terrace Director Jim Hess said. “It’s critical for the future of Monona Terrace and Downtown Madison.”

Marcus, based in Milwaukee, opened the 14-story, 236-room Hilton Madison at 9 E. Wilson St. next to Monona Terrace in 2001 and has first option to build across the street in a parking lot behind the Municipal Building or the adjacent Government East parking garage site. But that hotel has never been viewed as big enough to consistently draw large conventions to Monona Terrace.

‘A complicated deal’

Marcus officials could not be reached to comment for this story but have confirmed the company’s interest in a new Downtown hotel project. Mendoza said the biggest challenges are financing and figuring out how the city and hotel would share a parking garage. The hotel and parking portions of the project alone are worth an estimated $78 million; the city hasn’t estimated the value of the mixed-use project across the street.It’s not clear if or how the city might help Marcus make a project economically viable, Mendoza said.

The city could reduce the cost of the property, appraised at $11.7 million, or use tax incremental financing (TIF) to help with the parking garage or skywalk.

“It is a very complicated deal,” Mendoza said, adding that the sides should know if a project is feasible in the next few weeks.

If the city and Marcus can’t make a deal, the city would likely move ahead with planned improvements for the Municipal Building, keeping it for city employees, and build a municipal parking garage behind it.

If a deal is struck, the redevelopment could start in 18 months to two years, Mendoza said.

Losing business?
City officials and others in the business community contend the $67 million convention center, based on a Frank Lloyd Wright design and opened in 1997, is losing business because it can’t offer enough hotel rooms nearby.

A new study by Hunden Strategic Partners of Chicago and funded with $40,000 in room tax money supports that view.

The study said Madison’s current hotels don’t meet the needs of convention planners or match what they can get from competitors. Just two hotels — the Hilton and Best Western Inn on the Park — are within the industry standard of 1,200 feet of the convention center, it said. The number of conventions at Monona Terrace doubled after the Hilton opened in 2001 but have stagnated at about 70 per year, Hess said. The new study estimates that since 2001, the city lost 81,000 attendees with an economic impact of $50 million due insufficient hotel space near Monona Terrace.

Hunden recommended a 400-room hotel, which it estimated would result in 117 more events at Monona Terrace, 200,000 more attendees, $8.2 million more in net revenues, and $4.6 million more in room taxes between 2012 and 2016. Site constraints forced negotiators to scale that back, but the impact is still likely to be significant, backers say.

“It’s been one of our key issues,” said Deb Archer of the Greater Madison Visitors and Convention Bureau, which supports a new hotel but is neutral on the question of a public subsidy.

Public money questioned
Marcus was able to secure public financing for the existing $31.2 million Hilton — a move that was controversial then for the same reason the new proposal is today. Marcus got $9.5 million in TIF support and $1 million for a pedestrian bridge between the hotel and convention center. Stephen Zanoni, general manager of The Concourse, 1 W. Dayton St., the city’s biggest hotel with 356 rooms, said he worries a city subsidy through land or TIF would unfairly draw customers from existing facilities.

“We’re not against the hotel being built. We are against the city subsidizing it,” Zanoni said, noting that the Concourse recently made $3.5 million in renovations.

Ald. Mike Verveer, 4th District, who represents the core Downtown, said he supports the concept of a new hotel but has heard from operators who oppose a subsidy.

“I’m opened minded,” Verveer said of a subsidy. “I would hope it’s not necessary.”

City Council President Tim Bruer said that while the city may be reluctant to directly finance the hotel, there are parts of the development where the city and Marcus have a mutual interest that may merit subsidy.
This could be an invaluable spark plug,” Bruer said. “The city absolutely needs to completely explore every avenue.”

Possible phases for a new Downtown hotel:

  • Marcus Corp. would acquire the Madison Municipal Building block, appraised at $11.7 million.
  • The city would build a parking garage behind the Municipal Building. Early talks called for an 800-space ramp (600 for the city and 200 for the hotel), but negotiators may now be discussing something smaller.
  • The city would move employees from the Municipal Building to a temporary location.
  • Marcus would refurbish the Municipal Building, a neo-classical revival style building built in 1927 and on the National Register of Historic Places. Marcus would use it as the main hotel entrance and locate ballrooms, meeting space and perhaps some guest rooms there. A hotel tower would be built above the new parking garage and would likely be connected by skywalk to Monona Terrace.
  • The city would demolish the 450-space Government East parking garage across the street and build a multi-use project including three floors of city office space.

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