May 7, 2015 • 20 Pages
Convention and Conference
Facilities
Convention Centers
Oregon Legislature Passes Bill To Support
Convention Hotel
Governor Halts Expansion Of Boston Center
Chicago Hoteliers Worried About 2016 Bookings
Loan Sought To Expand Pueblo Center
Conference Center
220-Key Hotel, Center Planned On Lake
Grapevine
Norfolk To Tap General Fund For Center
Development
Plans For Embassy Suites In Davis Adds
Meeting Space
Approval Given For Two Hotels, Center, Waite
Park
Study Shows Lawrence Could Use More
Meeting Space
Cal Poly Plans For New Center
State Rejects Frederick’s Request For Center
Funding
New Center Part Of Boom In Hillsboro
Hotels
Braves Get Into Hotel Business
Mississippi Casino Hit By Hurricane To Become
Hotel
Gaylord National To Add New Ballroom
Hilton To Develop Property In Indianapolis Suburb
New Bedford Council Sets Election For Casino Hotel
Aloft Hotel Coming To Lexington
Four Vie For Downtown Madison Project
Blatstein To Try Again For Philadelphia Hotel
Rhode Island’s Only Casino To Get Hotel
Group Plans To Raze, Reconstruct Hotel Overton In
Memphis
Beale Street To Get New Hotel
Hotel Rates Drop Days Before Mayweather-Pacquaio
Fight
On The Books
Newsletter Archive
One Of Two Developers For Miami Beach Hotel Gets
The Boot
Revenues From Sports Venues
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Convention Centers
GOVERNOR HALTS EXPANSION OF BOSTON CENTER
Boston, Mass. — The Baker administration halted the $1 billion expansion of the Boston
Convention & Exhibition Center, citing concerns that its economic impact has been overstated and
its debt payments could drain money from the state, the Boston Globe said.
Governor Charlie Baker replaced seven of 13 board members at the Massachusetts Convention
Center Authority, the quasi-public agency that oversees the South Boston convention center.
“The environment has changed greatly in the five years since this proposal was first introduced,
and the Seaport District has experienced an economic boom,” Baker said in a statement. “[It] would
be irresponsible given the vast amounts of taxpayer dollars necessary to not only build but operate
the expanded facility.”
Postponing the convention center expansion could have ripple effects on other development
projects on the South Boston Waterfront – a large hotel proposal may be scaled back, and two
parking garages may be scuttled.
The architect of the expansion plan, departing convention center authority executive director
James Rooney, said that any delays risk driving up the project’s debt and construction costs.
Though disappointed in Baker’s announcement, he said he remains hopeful that the new board
members will come to the same conclusion as their predecessors and recommend that the
expansion proceed.
Boston Convention & Exhibition Center officials are plowing ahead with the $1 billion project.
“I didn’t hear ‘never,’ “ Rooney said. “I heard ‘not now.’ “
The Legislature approved $1 billion in borrowing to finance the expansion last year, but the
Baker administration must sign off on the bonds before they can be issued.
Kristen Lepore, Baker’s administration and finance secretary, said the governor now wants the
new board to reconsider the expansion, although no deadline has been set for a decision.
The expansion would add 1.2 million square feet to the roughly 2 million-square-foot center –
including 335,000 square feet of exhibit space, additional meeting areas, and a new ballroom.
Mayor Martin J. Walsh of Boston, a supporter of the expansion, issued a brief statement: “I
look forward to a continued dialogue with the governor as we work to get things back on track.”
Baker’s move raises doubts about the scope of a massive hotel the Massachusetts Port
Authority and the convention center authority want to build across Summer Street from the
convention center. Massport officials are reviewing six bids to build a hotel with at least 1,200
rooms and costing $800 million or more, on two pieces of Massport-owned land.
Now, they’re looking at a backup option – a hotel that’s roughly half that size. Massport chief
executive Thomas Glynn said his agency will move ahead with a market study to find out if there’s
enough support for the smaller hotel without the convention center expansion.
“We will be working on the contingency plan, but we will still be able to kick in gear the
original plan if that’s what [administration and finance] and the governor decide,” Glynn said.
The convention center authority said it has already booked 18 large events for the expanded
complex, and another 23 are pending, for dates as far out as 2029.
All could be in jeopardy because such contracts typically have exit clauses if the project won’t
be done in time.
In particular, the BIO International Convention committed to hold its annual event, which
draws some 15,000 attendees, five times at the expanded complex beginning in 2021. The authority
said that marks the first time BIO has signed a deal of that scope. A representative for BIO couldn’t
be reached for comment.
Rooney said the bookings show that the plan to build a larger convention center has already
begun to pay off. He had once hoped to have the project done sometime in 2019.
“The notion that the marketplace would not react to this has been proven wrong, and we
haven’t lifted a shovel,” Rooney said. “We’ve moved beyond the question of ‘If we build it, will they
come?’ to an exclamation that if we build it, they will indeed come.”
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The authority may also curtail plans to build two parking garages nearby in South Boston –
garages that had been aimed at replacing spaces that would be lost on the vast surface lot where
the expansion would be built.
The delay could also affect the effort to bring the 2024 Summer Olympics to Boston. The
convention center figures prominently in those plans, with a volleyball competition slated for the
new wing. A Boston 2024 Partnership spokesman said the group is early enough in the planning
process to be flexible on picking sites.
Lepore cited several concerns that played into the Baker administration’s decision to pause the
project, including whether the huge cost of the expansion is justified by the business it would bring
to the economy. She said the existing convention center has failed to live up to projections of the
amount of hotel business it would generate after it opened in 2004.
The administration is also concerned that the tax sources used to finance the convention center
won’t generate enough money to pay off the new bonds. Right now, six separate taxes and fees –
including hotel room, car rental, and sales taxes, primarily in Boston and Cambridge – are used to
pay the debt on the existing convention center. If those are not sufficient to cover the expansion
debt, other hotel taxes statewide would be diverted to cover the bill.
A Baker spokesman said the broader hotel taxes sent at least $90 million to the state’s general
fund last year. The administration is concerned the expansion will eat some of those funds used for
other priorities.
In addition to the financial questions, Lepore also pointed to the upcoming leadership transition
at the convention center as a concern. Rooney is leaving his post to lead the Greater Boston
Chamber of Commerce in July. It will now be up to a newly constituted board of directors to find
Rooney’s replacement.
Mark Erlich, executive secretary-treasurer at the New England Regional Council of Carpenters,
said he was disappointed, having only learned that Baker was replacing him on the board.
“I think the authority is a very well-run organization, and I thought we had an effective board,”
said Erlich, who has been on the board for five years.
LOAN SOUGHT TO EXPAND PUEBLO CENTER
Pueblo, Colo. — The Pueblo Urban Renewal Authority is asking the City Council for a $14.4
million loan to expand the Pueblo Convention Center, KOAA said.
Urban Renewal says they want to use “PEDCO” money in a different way.
Money from the half-cent sales tax economic development fund is earmarked to bring more
jobs to the area and Urban Renewal says it will do just that, by helping the area’s tourism industry
grow.
They released images of what the finished expansion project could look like at the end of
January. It’s all a part of the Regional Tourism Act project, one to expand the Convention Center
and connect it with the Riverwalk.
“That will allow us to build a larger facility that will attract larger, more regional level
conventions and bring additional tourists and additional tourist dollars to our downtown,” John
Batey, Pueblo Urban Renewal Authority Executive Director said.
The Greater Pueblo Chamber of Commerce said this expansion project means bringing more
people into the city.
“It will have a huge impact on us, because it allows us to bring a lot larger groups to Pueblo,”
Rod Slyhoff, Greater Pueblo Chamber of Commerce President said.
Plans include building a larger exhibition hall and making more room for meetings.
“We’re really excited about that opportunity to bring more people to Pueblo which the more
people we bring to Pueblo, the more revenue they spend,” Slyhoff said.
As for the $14.4 million needed to pay off the loan, Pueblo Urban Renewal Authority says that
money will come from state dollars.
“We’ll be using the state’s funding to pay that back, so the state has awarded us 24.7 percent of
the state’s share of the sales tax, collected within the city,” Batey said.
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And as for taxpayers: “This represents a method of paying for the expansion of the convention center
and building the tourism economy without any net impact upon the taxpayers of Pueblo,” he said.
The council is expected to hold a public hearing and bring the financing to a vote.
Conference Centers
220-KEY HOTEL, CENTER PLANNED ON LAKE GRAPEVINE
Flower Mound, Texas — The Flower Mound Town Council has paved the way for The Pearl on
the Peninsula, a 12-story, 200-room hotel and conference center planned to overlook Grapevine
Lake, the Fort Worth Business Press said.
By 6-0 approval, the council approved tax incentives to ensure the project’s fruition.
“The town of Flower Mound has needed conference space for some time so we can remain
competitive in the in the market and continue drawing dynamic businesses to Flower Mound,” said
Mayor Tom Hayden in a news release.
“Now we can have an incredible hotel and conference center with a lake view that can’t be
found anywhere else in the Metroplex,” Hayden said.
The move was made to help New Era Hotels & Resorts develop the centerpiece of a 25-acre
peninsula portion of the 150-acre, mixed-use Lakeside DFW development.
Driving the effort are the Tarwater and Stewart families, who have owned the property since
the 1890s.
“We are thrilled that L. Scott Tarwater…will lead the development effort since he sold the
property to our family in 1982,” said Alan Stewart of Sunset Legacy LP, commenting in a news
release.
More than 30 years ago, Stewart said that his father, Peter P. Stewart, envisioned a hotel
overlooking the lake to complement the then-new Dallas/Fort Worth International Airport.
“Our family is thrilled that he will see his dream come true right before his 95th birthday,”
Stewart said.
Groundbreaking is planned for July 1, 2015, with construction expected to reach completion by
Dec. 31, 2016. Managing the property will be DePalma Hotels & Resorts.
Serving as project architect will be Merriman Associates-Architects Inc., with Balfour Beatty
serving as design builder. Also signed on to the project are TBG landscape design, with Fort Worth
offices; Design Duncan Miller, interior design; Gateway Planning; and Kimley-Horn & Associates
Inc. of Fort Worth providing engineering services.
The hotel’s top floor is planned to feature exclusive “sky villas” with lake views, with the
facility also offering a 32,000 square-foot conference center. The developer plans to seek LEED
certification, denoting standards set by the U.S. Green Building Council’s Leadership in Energy and
Environmental Design, for the hotel and conference center.
The hotel will feature what planners call “a warm, yet modern design” featuring flexible
meeting spaces, a 10,000-square-foot ballroom, an infinity pool and two restaurants – one a
European market concept and the other a full-service upscale signature restaurant and bar. An
additional bar is planned to be located near the outdoor pool.
NORFOLK TO TAP GENERAL FUND FOR CENTER DEVELOPMENT
Norfolk, Va. — The city will spend nearly $4 million more – from sources supported by the
general fund – to subsidize its downtown hotel conference center development.
The revelation comes after the Virginian Pilot reported last month that the city’s combined
costs to build the conference center and a parking garage had risen by $10 million, while the
planned sizes of those structures had shrunk.
The additional $3.8 million in expenses bring the city’s total contribution for the project to
more than $100 million.
Further, the city plans to use capital improvement plan and debt service money – revenue
streams supported by property owners through the real estate tax – to pay the additional expenses.
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City officials have said repeatedly and as recently as March that the project would be financed
through the city’s Public Amenities Fund, supported by a portion of the city’s meals and lodging tax
revenue, and parking system revenue.
The project’s developer, Virginia Beach-based Gold Key – PHR Hotels & Resorts, headed by
Bruce Thompson, will contribute $65 million toward the hotel portion of the project, according to
city officials.
The Hilton hotel, named The Main, and conference center, called The Exchange, will be located
near the intersection of Main and Granby Streets. Deputy City Manager Ron Williams Jr. said the
additional charges include costs for kitchen and technology equipment, to develop an outdoor plaza
at the hotel, for infrastructure to supply power to the site and for improvements to sidewalks and
the public right of way.
The Pilot asked City Manager Marcus Jones to comment on the additional expenses and the
city’s plans to pay for them through other funds.
He did not respond, but city spokeswoman Lori Crouch offered a brief statement on his behalf.
“You will not find another project like The Main anywhere in Virginia,” Jones said in the
emailed statement. “The Main is a market maker generating 800 new jobs and at least $2 million in
new direct revenue to the city.”
In an interview on April 8, Williams described some of the costs that make up those additional
expenses as “complementary.” The city could have cut the expenses from the development, he said,
but keeping them makes the project better. He compared the additional costs to the city’s decision
to increase its spending on the conference center by $10 million.
“We could build a whatever ‘x’ square footage facility,” Williams said. “Or we could build one
that’s a rock star, like the one we’re building.”
During the same interview, Jones said pulling money from different funds to pay for those
costs was “the normal course of business, as I would treat any other facility that’s a publicly
owned facility.”
Before Thompson took up the project, Norfolk officials had worked with two other developers
over the past decade, only to see the deals fall apart. The City Council voted to move forward with
Gold Key in April 2013, and held a ceremonial groundbreaking in May 2014.
The hotel will have about 300 rooms. The conference center’s new plan calls for 40,770 square
feet of meeting space, reduced from 50,000, and the parking garage to have 400 spaces, down from
600.
In early March, Crouch emphasized the project would not use money drawn from sources
supported by property taxes.
“We’re not pulling out of the general fund, we’re not pulling out of CIP, we’re not pulling
anywhere,” she said. “We can pull out of the Public Amenities Fund” and the parking system.
Jones and Williams, however, confirmed about a month later that the additional expenses will
be paid for by money set aside in the city’s capital improvement plan and debt service budgets –
both of which get support from the General Fund.
It’s not clear when the city decided to pay for the $3.8 million in costs from those funds.
Neither Jones nor Crouch responded to a question seeking that time frame.
In the early April interview, when asked whether the streetscape and outdoor plaza costs
would be paid with CIP money, Williams said, “Correct.” Asked whether the costs for electrical
infrastructure work would be paid with CIP money, Jones said, “Yes.”
However, Jones and Williams also said it was possible that, despite their current plans, the city
could eventually decide to use the Public Amenities Fund for the additional costs once the bills
come due.
Jones and Williams offered a breakdown of the additional expenses:
• $1.5 million to relocate a Dominion Virginia Power electrical vault and to install power
infrastructure.
• $1 million toward “streetscape” improvements, such as sidewalks, and to develop an
outdoor plaza at the hotel that might have a cafe.
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• More than $600,000 to lease kitchen equipment for banquets at the conference center.
• Nearly $1.2 million to lease technology equipment.
Crouch said two weeks later that the cost for the vault and power infrastructure had decreased
by $500,000. She said in an email that she had no documentation to verify that change.
The revision reduced the additional expenses from $4.3 million to $3.8 million.
In January, when the Pilot began scrutinizing the hotel project, Crouch said in an email that it
was a “$126 million public-private partnership.”
But by that time, the cost of the project already had grown far past that figure, first used in
March 2013 when the city unveiled its partnership with Thompson.
Williams has confirmed the public-private partnership will cost $147 million – $75 million for
the hotel and $72 million for the conference center and parking garage.
That number does not include the $3.8 million in additional expenses, or $16 million the city
spent for demolition of buildings and other costs.
Williams described some of the additional expenses as “complementary” projects, although
several of them are listed in the development agreement or its amendments.
In the first amendment, from July 2014, the city agreed that the outdoor plaza would be considered
a “common element” and not a “related improvement.”
According to the development agreement, related improvements are constructed by the
developer.
City officials did not dispute that labeling the plaza as a common element made it a shared
expense, but Williams said that change was not about money, but rather about clearing the way for
alcohol sales there.
Williams said the plaza would be a public amenity, which supported its classification as a
streetscape – which generally include sidewalks, streetlights and landscaping.
“It’ll be somewhat of a patio of the hotel, but it will also be a little bit like a park because it’s
open to the public on the corner there,” Williams said.
“We’re not just any old city. We do things differently. And that’s how we use those type of
funds.”
PLANS FOR EMBASSY SUITES IN DAVIS ADDS MEETING SPACE
Davis, Calif. — With some more tweaks to its design, a proposed Embassy Suites hotel in Davis
may be ready for prime time. The proposed 132-room hotel now includes an increase in meeting
space and a lower public profile for the building.
The developers will find out next month what the city of Davis planning commission thinks of
the proposed 132-room hotel. The proposal includes 18,400 square feet of meeting space and 172
parking spots on a 2.8-acre parcel at one of the city’s busiest intersections.
The hotel project would add much-needed rooms and convention and meeting space to the
university town, the Sacramento Business Journal said.
Davis-based developers Ashok Patel and Ken Patel, no relation, first submitted plans in March
2014 for a seven-story hotel. The developers made some changes in response to city staff
suggestions. Those plans then were scrutinized by residents and the business community.
In response to resulting comments, the developers made the design look less corporate and
more like other buildings in Davis. Those plans included images of bicycles – which is the city’s
logo – and natural stone finishes. Those plans went to public hearings in February, and the new
plans are the result.
The most notable changes are an increase in the meeting space from 14,000 square feet to
18,400 square feet, less bicycle art and a lower profile for the building. The additional conference
space was added so that meetings have more usable breakout space in separate areas. Prominent
images of bicycles on the building have been removed. And the previous proposal had a public
space on the roof of the of the building.
The city is working on the environmental analysis of the building, which likely will be handled
with administrative approvals.
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One sticky issue for the project is traffic. The hotel faces onto busy Richards Boulevard and a
warren of freeway ramps. The traffic patterns in that part of the city already are a concern, said
Katherine Hess, Davis community development administrator.
With the meeting space and three times as many guest rooms in the proposed hotel, it adds
more traffic into what can be a difficult and confusing stretch of road, Hess said. “We want to
make sure we know how it all works together.”
If approved by the planning commission, the design could go to the Davis City Council in June.
APPROVAL GIVEN FOR TWO HOTELS, CENTER, WAITE PARK
Waite Park, Minn. — A developer can now move forward with buying property to build two
hotels and a conference center in Waite Park, the St. Cloud Times said.
The Waite Park City Council approved a land use change and tax-increment financing proposal
that will allow Silver Leaf Group to build.
One hotel will be a four-story select service operation with 99 units and the other a four-story
extended stay hotel with 96 units. A 27,450 square-foot conference center will also be built.
The Tri-County Mobile Home Park, a vacant radiator shop building and a temporary food shelf
are located at the site.
The council approved using tax-increment financing, or TIF, on the project for up to $4.26
million and up to 20 years. Now the city and the developer will negotiate terms and final TIF
amount, which could be less but cannot be more than $4.26 million.
The project is expected to cost about $28 million.
At a future meeting, the council will approve a final TIF plan and development agreement. TIF
allows a developer to capture, for a set time, increased tax revenue generated by the climbing
market value of a redeveloped property. The money is meant to offset redevelopment costs.
With the approvals, Silver Leaf can move forward with purchasing the mobile home park. At
that time, they will be required to follow the mobile home park closure process outlined in state
law that includes notifying residents and helping them relocate.
Residents of the mobile home park are not happy about that moving forward. Many spoke
about how they do not support the project and the removal of their homes.
STUDY SHOWS LAWRENCE COULD USE MORE MEETING SPACE
Lawrence, Kans. — Lawrence could use some extra conference space and it probably ought to
be located in a place like downtown, a new City Hall report has found, according to the Lawrence
Journal World.
A new conference center report commissioned by the city and Kansas University has been
completed. Among the findings by the firm Convention Sports & Leisure are:
• “Unmet market demand exists to support new convention/conference center
development.” The report estimates that Lawrence could support 30,000 to 37,500 square
feet of new conference center space. More specifically, the space should include a 20,000to 25,000-square-foot multipurpose room with 30-foot ceilings that could support
exhibitions and other types of large events. It also should include 10,000 to 12,500 square
feet of meeting room space.
• A full-service hotel with at least 150 rooms should be attached to the conference center. In
addition, a parking garage of at least 650 spaces would be required.
• Another study is required to determine how much a conference center would cost to build
and operate. The study, though, does forecast that a 30,000- to 37,500-square-foot
conference center probably would have to receive some level of public subsidy. If a project
were to move ahead with only private financing, the project might have to be reduced to
23,000 to 27,000 square feet.
The report doesn’t provide any estimates of how many events a conference center would host,
or how much additional visitor spending it would create.
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The report looked at three general areas that could house a conference center: Downtown, the
KU campus or Clinton Lake. The report determined that “a greater opportunity is believed to exist
for an off-campus project.”
The report implies that: “The concentrated visitor amenity infrastructure on Massachusetts
Street is the designation’s strongest appeal to non-local groups.”
The authors of the report also noted they interviewed dozens of event planners, and all event
planners said they preferred a downtown location to a campus location.
A second phase of the study that comes up with costs estimates will be important before
commissioners could figure out how the project fits into the city’s plans.
As far as price goes, the report did look at about 20 other conference center projects across the
country. Prices vary widely. One project that has gotten talk in Lawrence is a conference center
project in downtown Manhattan, Kans.
The report states the Manhattan project cost $9.5 million to build and an adjacent 135-bed
Hilton hotel cost another $12.5 million. The hotel was privately funded, while the conference
center was publicly funded, although the city is receiving lease payments from the hotel operator,
which also operates the conference center. The Manhattan project is quite a bit smaller than what
is proposed for Lawrence. The Manhattan project has just less than 1,900 square feet of meeting
space and about 15,000 square feet of ballroom space.
The Manhattan conference center and adjacent Hilton hotel in Manhattan.
CAL POLY PLANS FOR NEW CENTER
San Luis Obispo, Calif. — Cal Poly’s plan for the next 20 years calls for an ambitious rethinking
of the campus that would expand north to create a new hub of student life, reroute cars out of the
core and add thousands of new living units for students, faculty and staff, the San Luis Obispo
Tribune said.
In addition, the university wants to add a hotel and conference center, create space for Greek
houses and clubs, and explore the idea of year-round instruction by expanding summer classes.
The university released the first look at its updated Master Plan, offering a glimpse at a future
that proposes a variety of new uses aimed at making the most of campus property. All of the
options and potential ideas for development are conceptual at this point.
“We want to educate more students and create a vibrant core for student services and
activities,” said Cal Poly President Jeffrey Armstrong. “We’re striving to have more people living,
learning, and working on campus. And we’re looking to redirect the vehicle flow, making the
center a corridor for bicycles and pedestrians.”
Although it’s far too preliminary to estimate a cost for the build-out of the Master Plan, it
would easily be more than $1 billion, according to Cal Poly President Jeff Armstrong. By
comparison, the university spent $1 billion on new construction over the past 13 years. Cal Poly is
looking at private-public partnerships to help finance, operate and expedite the construction.
After gathering public input, Cal Poly hopes to finalize its Master Plan by September or October
and seek approval from the California State University Board of Trustees in the 2015-16 academic
year.
As part of an idea to grow the university’s hospitality and tourism program, Armstrong said
he’s “very bullish” about the pursuit of a new hotel and conference center on campus.
Cal Poly has conducted a feasibility study, and officials have consulted with a representative of
Cornell University in New York, where a campus hotel exists. They’re continuing to explore the
idea of a public-private partnership.
The Master Plan draft visuals include a possibility of replacing the existing Mott Athletic
Center with a hotel and conference center.
Another idea places a hotel and conference center near Creekside Village on the northern campus.
Depending on where the hotel/conference center goes, it would create different synergies,
Armstrong said.
Other plans call for building a new arena to replace the aging Mott Athletic Center, possibly in
the new northern hub.
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No specific sites have been selected.
Officials are considering eight to nine possible locations for the hotel/conference center and
arena.
As part of a $20 million gift from Peter and Mary Beth Oppenheimer to the university, Cal Poly
expects to build an agricultural events center and equestrian pavilion just north of Village Drive.
The center would include a 70,000-square-foot indoor events center, seating more than 2,500
guests, with a floor that converts to conference space, according to a November Cal Poly press
release.
The donation also funds a new farm store, envisioned for a prominent corner entering the
campus on Highland Drive.
The Oppenheimer-funded agricultural facilities are already in the early planning stages and are
expected to be built sooner than many of the other projects.
“We know where those facilities are going, and we’re locked in,” Armstrong said.
A winery, with an instructional focus, also is envisioned for a section of campus off Mount
Bishop Road near the campus’ Technology Park.
STATE REJECTS FREDERICK’S REQUEST FOR CENTER FUNDING
Frederick, Md. — Without so much as part of $15 million in requested funding included in the
state’s recently approved $40.8 billion budget, it’s back to the drawing board for a plan to build a
hotel and conference center in downtown Frederick.
Developer Plamondon Hospitality Partners’ proposal relies on a combination of state
government funds and county and city tax revenue generated from the project to fund about onethird of the $64 million cost. The $22 million – $15 million from the state and $7 million in tax
revenue – would fund only the public portions of the project: the conference center, on-site parking
spaces, utilities, road improvements and land at the site of the old the Frederick News-Post
building, the newspaper reported.
Plamondon would pay the remaining $42 million for the 207-room hotel and its amenities, plus
a small portion of the 23,459-square-foot conference center meeting space.
Richard Griffin, the city’s director of economic development, said he was not altogether surprised
that the project didn’t get funded in what he described as a “very austere budget,” despite
unanimous support and continued advocacy from the Frederick County delegation.
But without state funding, the slow-moving project may be further delayed or modified.
“It does mean we need to take a step back and regroup,” Griffin said.
According to Griffin, the decision boils down to three options: place the entire project on hold
with the hope that requesting state funding in the next year’s budget will be successful; proceed as
planned by getting the project “shovel-ready” with all necessary permitting, site plan approval and
finalizing a memorandum of understanding between the city and the developer; or some action
between these two ends of the spectrum.
Alternatively, the developer could fund the entirety of the project itself, making city approval
and state funding unnecessary. That option is unlikely, Griffin said, since the public-private
partnership was born from the results of two studies showing a developer would need financial
help to make such a project profitable.
No decisions have been made, according to Griffin, who said the groups involved haven’t met
since the state budget was approved.
John Fieseler, a member of the advisory team and executive director of the Tourism Council of
Frederick County, indicated that certain components of the project can move forward even without
the funding.
“There’s so many aspects of this,” he said. “From the city side, there are a lot of other things
that have to happen.”
These include a study to determine if an additional parking garage is needed and the MOU,
which Pete Plamondon Jr., co-president of the development company, said he hoped will be ready
for review by the Mayor and Board of Aldermen in the next 30 days.
“We’re very close to 100 percent agreement,” Plamondon said of the MOU.
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Several Frederick County delegates pledged to continue pushing the downtown hotel and
conference center project for funding in the next fiscal year’s budget.
Delegate Carol Krimm said she was hopeful the governor would include money for the project
in the next budget.
“I wouldn’t extend the effort if I didn’t think there would be a positive outcome,” she said.
Delegate Karen Lewis Young described the project as a top priority for county representatives,
and expressed surprise that even a minimal amount of project funding was not included in this
year’s budget.
“Within the scheme of a $40 billion budget, $7.5 million, or even $5 million, that’s just seed
money,” she said.
The city originally requested $15 million from the state’s budget, which delegates chose to split
into two $7.5 million requests – to be split between the 2015 and 2016 budgets – given the
conservative budget expected from Gov. Larry Hogan.
“I still think it’s realistic, but of course, I thought it was realistic this year,” said Lewis Young of
the plan to present the same funding request next year.
Lewis Young also suggested exploring other options, such as including more private investors
or investment tools.
Her husband, state Sen. Ron Young advocated for an alternative option to state funding as well.
“I don’t think he’s going to fund a hotel,” Young said of Hogan. “I think we had a chance to get
some funds in the last administration, but it’s going to be more difficult yet.”
Instead, Young proposed reallocating the funds designated for the project’s parking to the
conference center, and expanding the public-private partnerships proposed for the project.
Supporters have praised the project’s economic benefits for the city and the county extensively.
Fieseler described it as “the next big game changer for Frederick.”
Plamondon crowned it the “biggest economic development downtown Frederick has ever seen,”
apart from Carroll Creek Linear Park.
According to a study conducted by the Maryland Stadium Authority in 2010, the project would
create 280 jobs, 110 at the hotel itself and the rest indirectly at other area businesses based on the
increased traffic to the area. The project’s estimated economic impact totals over $25 million
annually, including both direct and indirect spending. It would generate $1.5 million in state taxes
per year.
The project has been well-received by the public because of these economic benefits,
Plamondon said.
But Lewis Young noted that the project plans could be reframed to better highlight these
benefits, which might make Hogan more willing to provide funding in the next budget.
“We need a package and a business plan that resonates with him,” she said.
Plamondon pledged continued support to the project as it has already been designed, despite the
setback in state funding.
Of changes to the design, “we really haven’t gone down that path,” he said.
Griffin also maintained the city’s commitment to the project.
“We continue to believe it’s not only worthwhile but a very fundable project,” he said.
NEW CENTER PART OF BOOM IN HILLSBORO
Hillsboro, Ore. — Five new hotels with about 700 rooms among them have been built or
proposed in Hillsboro over the past two years. More than 270 of those rooms are in the
Tanasbourne neighborhood, where an Embassy Suites and a Hampton Inn & Suites recently opened
right next to each other, according to The Oregonian.
Apparently, there’s still room for more.
Planning documents show that Kalyan Hospitality, a Virginia-based hotel developer, has
applied to build a five-story, 140-room, extended-stay hotel with executive suites, a restaurant and
a conference center. The building would measure more than 100,000 square feet and be located a
short walk from the two new Tanasbourne hotels.
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Kalyan Hospitality has also requested exemptions from the city’s standards for building
setbacks and height in that location, which is zoned for industrial-park use. The Hillsboro Planning
Commission will consider the request on June 10.
There are three other Hillsboro hotels currently in the works. Bend-based Oxford Hotel Group
has applied to build a 237-room, extended-stay inn. City planners in 2014 approved a 146-room
Marriott Residence Inn, which was expected to open by the end of this year. And McMenamin’s
wants to build a 47-room hotel at the Cornelius Pass Roadhouse.
Hotels
ONE OF TWO DEVELOPERS FOR MIAMI BEACH HOTEL GETS THE BOOT
Miami Beach, Fla. — One of two developers bidding to build the Miami Beach Convention
Center headquarters hotel has been disqualified from the process.
In a letter, the city notified Chicago-based Oxford Capital Group that its bid was disqualified
because the proposal called for using public money and it did not include financial details on rent
to be paid to the city. Oxford had teamed with Phoenix-based RLB Swerdling for the bid, the Miami
Herald said.
As outlined in the bid solicitation, the city does not want to spend taxpayer dollars on building
the hotel. The developer would lease the land for the hotel.
“The role of the public sector in the hotel project will be limited to the leasing of the hotel site
at a market rate,” the request for proposals reads. “The City shall not provide, nor should Proposers
rely on, any public funding or public financing for the hotel project.”
According to the April 21 letter signed by City Manager Jimmy Morales, Oxford proposed the
city subsidize $16 million to $33 million and did not propose a schedule for fixed rent payments.
“The failure to include basic financial terms such as rent and schedule of minimum fixed rent is
a substantial and material irregularity impacting the responsiveness of Oxford’s proposal,” Morales
wrote, adding that allowing Oxford to continue would destroy the competitive nature of the
solicitation process.
With Oxford out, one firm remains to develop the hotel. That firm is Atlanta-based Portman
Holdings – one of the firms that bid in 2013 to undertake a previously proposed billion-dollar,
larger-scale redevelopment of the convention center and its surrounding neighborhood.
Once again, the city has only one company vying for a large project in its convention center
district. Clark Construction Group, based in Bethesda, Md., is the only firm bidding to be the city’s
contractor for the $500 million renovation for the convention center, a massive project that
attracted star architects in the last go-around. The city, however, changed direction during the
process and called for a smaller project after new commissioners were elected, tossing out all the
previous work.
Commissioners earlier authorized city staff to open Clark’s sealed bid and determine whether it
will recommend the firm for the contract at a commission meeting.
OREGON LEGISLATURE PASSES BILL TO SUPPORT CONVENTION HOTEL
Salem, Ore. — A bill intended to clear the way for a taxpayer-backed hotel at the Oregon
Convention Center in Portland is headed to Gov. Kate Brown’s desk.
Senate Bill 927 would give the Metro regional government the authority to finance the hotel,
undercutting lawsuits filed by opponents of the project. It passed 35-24 in the House and was
previously approved 20-10 in the Senate, The Oregonian said.
The 600-room Hyatt Regency hotel is already headed through the permitting process, and the
Metro Council has approved a plan to issue $60 million in revenue bonds to be paid back through
hotel lodging taxes. Under Metro’s projections, the hotel by itself would generate enough lodging
tax revenue to pay back the bonds.
The $212 million hotel would also be subsidized with $10 million in state lottery funds and $8
million in other public loans and grants.
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Metro has said the hotel would help attract at least five new mid-sized conventions each year,
bringing with them conventioneers who would spend $600 million during their stay and help boost
hotels citywide.
A coalition of opponents, led by Portland-based Provenance Hotels, has argued the regional
government’s projections are too rosy, and that lodging taxes paid at their hotels could help finance
a competitor. With the help of a subsidy, they say, the hotel could undercut nightly room rates.
Their argument that Metro needed voters’ approval to move ahead with the plan was rebuffed
in Multnomah and Clackamas county courts and are on appeal, as is an effort to put the funding
mechanism to a referendum in Multnomah County.
CHICAGO HOTELIERS WORRIED ABOUT 2016 BOOKINGS
Chicago, Ill. — Chicago hoteliers have their work cut out for them. While the city has been
setting records for visits by out-of-towners, the 2016 calendars of some of downtown’s biggest
hotels are full of costly holes, Crain’s Chicago Business said.
So far for next year, Chicago has booked 31 “citywide” conventions – gatherings that fill 3,000
or more room nights on their busiest night each and account for about half of all hotel stays here.
That’s down from 41 this year and 35 last year. The upcoming events would amount to just over 1
million hotel room nights versus 1.2 million this year.
The expected downturn comes at a bad time. Nearly 2,500 hotel rooms are projected to open by
the end of 2015, boosting capacity by 7 percent, as the industry has expanded to accommodate
rising visits by tourists. (Visits topped 50 million for the first time in 2014.) Another 1,750 rooms
could come online next year, according to Chicago-based hotel consulting firm T.R. Mandigo. Thus,
even a steady year of trade shows would mean more empty rooms and possibly lower rates.
The 2016 calendar is worrisome, says Marc Anderson, who joined Choose Chicago in February
as the city tourism bureau’s chief sales officer after nearly eight years running regional sales and
marketing at Peninsula Hotels. “We needed to do something as a city to affect business for 2016
and be creative.”
Those in the business blame two behaviors for the drop in bookings. Many organizations rotate
their annual conventions among host cities, and competitors are drawing business away with
lucrative incentive packages. On top of that, Choose Chicago has focused on securing conventions
just a year out, rather than for a series of years, recognizing that many associations and companies
are wary of making long-term commitments after the Great Recession.
Among big annual trade shows skipping Chicago next year are the International AirConditioning, Heating, Refrigerating Expo, which will be in Orlando, Fla., and the American Bar
Association, which will hold its annual meeting in San Francisco.
To fill those gaps, Choose Chicago and the city’s self-described Big 12 hotels have organized a
push from a total of 64 hotels to offer what they say are unbeatable deals for group meetings
during nonpeak months in 2016.
Any group that books 20 or more rooms next year in January, February, July, August and
December or 2017’s first quarter in one of those hotels is on the hook to fill only half of its room
block instead of the standard 80 percent. (A hotel can turn down business if it already has a group
on the books.) Participating hotels also are offering half-off parking, 20 percent off food and
beverage costs and free WiFi. Events at McCormick Place can get food and beverage at cost and 20
percent off rent, and 21 restaurants have agreed to waive minimums on food and beverage bills.
“They’re saying, ‘Quit going to Orlando; have (an event) in Chicago,’” says Steve Conklin,
director of sales and marketing at the JW Marriott hotel in the Loop.
It’s working in some cases. Orlando-based conference planner Lauralee Shapiro of third-party
contractor Conference Direct says one small association client that has been wavering between
Chicago and another city soon will sign to bring 370 room nights thanks to nearly $10,000 in
savings on food and beverage and WiFi, as well as a roughly $14,000 potential difference between
50 and 80 percent hotel room commitment.
“Reducing liability (on the hotel room minimum) was huge,” Shapiro says. “It gives them peace
of mind to say we can commit to something two years out because we’ve got that leeway.”
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Other small clients that usually consider holding shows in the suburbs now are looking at the
city because of the cost savings, says Kathleen Clickett, Chicago-based national account manager at
third-party booking agent Experient.
Some hotels are taking other measures to boost 2016 bookings. The Hyatt Regency McCormick
Place, which is owned by the city-state agency known as McPier that runs the convention center
next door, paid Conference Direct its commission fee upfront. McPier is projecting that the hotel’s
operating income will decrease in 2016 for the first time since 2010.
Choose Chicago will embark on a 10-city nationwide road show in June to promote the
incentive offering, which is on the table only through Sept. 30, and is targeting groups that fill
2,000 or more room nights, such as large corporate meetings. Anderson says the price breaks have
generated 237 leads, 65 of which signed for a total of more than 8,800 room nights, many from
customers that have never been to Chicago.
Lucrative incentives are becoming a bigger part of the convention and trade show recruiting
game given an explosion in convention space over the past decade that has outpaced demand.
Whether the deals will pay off for hoteliers, however, is uncertain.
“Do I expect it to produce a huge amount of business? Probably not,” says Bill Bennett, director
of sales and marketing at the InterContinental Chicago Magnificent Mile. “But it does get our name
out there.” He says his 2016 business is not looking as weak as others’. Still, agreeing to the
incentive offer is a smart marketing move, he adds. “It’s eyeballs on something that mentions our
name.”
BRAVES GET INTO HOTEL BUSINESS
Marietta, Ga. — The Atlanta Braves got into the hotel business, announcing a 50-50 partnership
with Omni Hotels & Resorts on a luxury hotel to be built overlooking the team’s new ballpark in
Cobb County, the Atlanta Journal-Constitution said.
The full-service hotel – the latest addition to the mixed-use complex the Braves plan to build
around SunTrust Park – will have about 260 rooms on 16 floors and about 12,500 square feet of
meeting space, Omni officials said. It also will feature a two-story restaurant, rooftop hospitality
suites and an elevated pool deck with views into the ballpark, the officials said.
Neither the Braves nor Omni would disclose the cost to build the hotel, which Omni will
manage.
“We’re putting hard dollars into this project (as) 50-50 owners with the Braves,” said Bob
Rowling, chairman and chief executive of TRT Holdings, the parent company of Omni Hotels &
Resorts. “We’re excited about putting our money down and making some money here.”
Mike Deitemeyer, president of Omni Hotels & Resorts, said the company expects construction
on the outside of the hotel to be largely completed by the time the ballpark opens for the Braves
season in April 2017. He said interior work would continue beyond that and the hotel would be
ready for guests in fall 2017.
Deitemeyer sees the market for the SunTrust Park hotel – The Omni Atlanta Northwest Hotel –
as a combination of “mid-week corporate” and “weekend leisure” guests.
Omni Hotels has a similar partnership with the Dallas Cowboys to develop a new hotel in a
mixed-use complex at the future site of the Cowboys’ training headquarters in Frisco, Texas.
MISSISSIPPI CASINO HIT BY HURRICANE TO BECOME HOTEL
Biloxi, Miss. — Casino Magic hasn’t been open since Hurricane Katrina hit 10 years ago, but
now it is being reinvented as a resort and water park, the Sun Herald said.
Cono Caranna III, one of the developers of the project, told the Biloxi City Council on the resort
will have restaurants, 373 hotel rooms and a water park.
“We should be open with phase 1 within the next year,” he said. He expects a second phase to
open a year after that.
Caranna, who also was part of the development team that restored the White House Hotel in
Biloxi, said the ownership group is still developing a name for the resort and finalizing plans for
the project. He said the owners plan to develop the area west of the tower.
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Crews started work on the steel frame that was left intact after the rest of the abandoned
casino project was demolished by Caesars Entertainment last year. The frame will be incorporated
into the new resort.
For some reason, the site was left off the map of sites eligible for tax abatements. The City
Council voted to include the site on the map, and Caranna said the developers will be back asking
for a tax incentive.
Attorney Michael Cavanaugh said he doesn’t know why the property wasn’t included on the
map that shows which areas are eligible for a tax abatement. The City Council adopted the map to
bring tourism development back to the beach and other areas of Biloxi.
Cavanaugh said some parcels are split, with half in the tax abatement zone and half excluded.
GAYLORD NATIONAL TO ADD NEW BALLROOM
National Harbor, Md. — Gaylord National Resort & Convention Center will add a $20 million
ballroom facility to host even more large-scale events at its National Harbor site, the Washington
Business Journal reported.
The stand-alone ballroom will be located on the Potomac River just west of the existing hotel
and span 24,000 square feet, with glass on three sides to provide sweeping views of the water.
The building, which is expected to deliver in August 2016, will also have 16,000 square feet of
meeting space, according to Gaylord owner Ryman Hospitality Properties.
The decision to add the stand-alone ballroom is in response to demand, said Ryman CEO Colin
Reed. The space will also attract a different style of event and allow for a different type of
experience than does the typical, subterranean hotel ballroom.
It will also allow the hotel to book more events simultaneously, with the new meeting space
able to accommodate 400 to 500 people, Reed said, allowing for small and medium-sized events
even as a large convention is being held at the hotel.
Gaylord’s existing ballroom, the signature Potomac Ballroom, is double this space, at more than
50,000 square feet. Still, the new waterfront ballroom will rank among the largest in the region,
behind just a few others: the Washington Hilton, the Marriott Marquis D.C. and the Marriott
Wardman Park.
The project will also expand the green space outside the hotel, growing the Orchard Terrace to
39,000 square feet. That space will be the new home for holiday events the hotel hosts in
November and December.
Ryman Hospitality Properties announced the ballroom’s impending arrival at a grand opening
of another of its hotels in National Harbor, the AC Hotel by Marriott. Late last year, Ryman bought
that property, formerly an Aloft Hotel, along with another piece of land adjacent to the convention
center. Ryman envisions building another hotel on that acreage someday, but those plans are not
imminent, Reed said.
“If we get [the Gaylord] full, then we’ll move forward,” he said.
Reed said the opening of the Marriott Marquis Washington D.C. and the subsequent uptick in
the Walter E. Washington Convention Center’s viability hasn’t affected bookings at the Gaylord,
which is still the largest hotel in the region.
“It may have only opened a year ago, but we’ve been booking against it for the past four years,
and we haven’t seen any impact,” he said.
HILTON TO DEVELOP PROPERTY IN INDIANAPOLIS SUBURB
Indianapolis, Ind. — Hilton Worldwide announced the signing of a franchise license agreement
with PK Partners to develop the 125-room Hampton Inn & Suites Indianapolis/Keystone, the
company said.
The five-story hotel is owned by PK Partners and will be operated by Schahet Hotels, Inc.
Located in Keystone at the Crossing, adjacent to the River North at Keystone, Hampton Inn &
Suites Indianapolis/Keystone will be part of a mixed-use development and within walking distance
to the Fashion Mall at Keystone.
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The hotel will offer amenities, such as free WiFi, a 24-hour business center with complimentary
printing, an 800 square foot meeting space that can accommodate up to 50 people and a fitness
center. The hotel’s design will feature an architecturally enhanced exterior and other elements
intended to integrate the property into the surrounding upscale mixed-use development.
Additionally, the hotel will feature TREATS, Hampton’s new food and beverage shop filled with
snacks, toiletries, local merchandise and drinks for purchase.
Guestrooms will be equipped with 42” LCD TV, microwave and coffeemaker. Hampton Inn &
Suites Indianapolis/Keystone will offer pet-friendly rooms and suites, providing guests additional
space and a sleeper sofa.
NEW BEDFORD COUNCIL SETS ELECTION FOR CASINO HOTEL
New Bedford, Mass. — The city is all but set for two months of casino campaigns this spring, as
City Council voted resoundingly to hold a June 23 special election on the $650 million casino, hotel
and conference center development proposed for New Bedford’s waterfront, the web site
SouthCoastToday reported.
The Council ordered the citywide referendum in a 10-0 vote that followed comments by
numerous councilors in support of the proposal. Councilor-at-large Naomi Carney, who has ties to
tribal gaming issues on Martha’s Vineyard, did not cast a vote on the election.
Several councilors also urged residents, whether they support or oppose the casino project, to
get involved in the public conversation in coming weeks and come out to vote June 23.
Councilor-at-large Linda Morad said she hoped “the apathy we’ve seen in several elections”
does not occur June 23. Morad said a strong turnout could send a message to state gaming officials,
who may face a choice later between casino proposals in New Bedford, Somerset and Brockton.
Councilor-at-large Debora Coelho expressed mix feelings that may be at the heart of citywide
debate in coming weeks. Coelho said that while she is against casinos and gaming on principle, she
supports bringing a casino to New Bedford.
“I am pro-development, I am pro-waterfront development, and I am pro-jobs,” Coelho said.
Council President Brian K. Gomes noted that council “has not wavered” in its support of the
casino proposal, which he said “will bring jobs to the city, it will clean up the contaminated site,
and will put us on the map.”
Opponents have said it could be devastating to the city and have widespread social, cultural
and business impacts.
A hurdle remains for the developer well before the June 23 vote.
New York-based developer KG Urban Enterprises faces a deadline to secure sufficient equity
investment in the project, as part of its application to the Massachusetts Gaming Commission.
Mayor Jon Mitchell has said public outreach efforts in support of the casino likely would start
after that date.
The ballot language could be simple.
The state’s Gaming Act describes language for special elections on casino proposals. According
to that statute, New Bedford voters could see a “yes” or “no” question that looks something like
this:
“Shall the City of New Bedford permit the operation of a gaming establishment licensed by the
Massachusetts Gaming Commission to be located at (description of proposed waterfront site)?”
KG Urban will pay for the election, according to that statute and to the Host Community
Agreement signed between the city and KG Urban March 19.
If city voters reject the casino proposal in the June 23 referendum, KG Urban would not be able
to ask the city for a new election until 180 days, or about six months, have passed, according to the
state gaming law.
A request for a new vote would have to be accompanied by a Host Community Agreement that
was signed after the June 23 vote, the law adds.
Approval of the casino proposal at the polls June 23 could trigger a regional competition.
Backers of casino proposals in Brockton and Somerset also are vying for the sole resort casino
license the state Gaming Commission can allocate in the state’s southeast.
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Brockton voters will cast ballots May 12 on the $650 million proposal by Mass Gaming &
Entertainment for a resort casino on the Brockton Fairgrounds.
Somerset casino backers Crossroads Massachusetts face the same May 4 deadline as KG Urban
to secure equity investment for their proposal.
GWINNETT HOTEL GETS LAND LEASE AGREEMENT
Gwinnett, Ga. — A new hotel to be built at the Gwinnett County convention center passed
another hurdle when county commissioners agreed to a lease agreement that would allow the land
to be transferred to a developer, the Atlanta Journal Constitution said.
The property on which the Marriott hotel will be built will go first to the county’s Development
Authority then to the Gwinnett Convention and Visitors Bureau. That group will sign agreements
with the developer, Concord Sugarloaf LLC.
The $70 million project will not require any additional investment from county taxpayers.
The hotel has been years in the making. Commissioner John Heard, who abstained from the
vote because he had served as a paid consultant to a partner of the winning bidder, said the process
had often been frustrating to watch.
“It’s been a long, long battle,” he said. “Now hurry up and get it built.”
Preston Williams, CEO of the Convention and Visitors Bureau, called the hotel the “cornerstone”
of the master plan for the center that has been in the works for more than a decade. Commissioners
unanimously praised the deal.
The Marriott is one of three hotels in the works in the area. A 115-room Courtyard by Marriott
on Satellite Boulevard broke ground in October and a 166-room Embassy Suites is slated to break
ground by early June.
ALOFT HOTEL COMING TO LEXINGTON
Lexington, Ky. — Aloft Hotel, part of a boutique line from Starwood Hotels, is building a 136room hotel. It’s scheduled to open in 2017, the Lexington Herald Leader said.
Aloft was launched in 2008 as a more moderately-priced brand that would appeal to younger
customers who would someday graduate to the higher-priced W.
Aloft spokesman Chelsea Ensel said in an e-mail that Aloft’s amenities will include the Re:Mix
Lounge, W XYZ Bar, Motion Fitness Center, and Re:Fuel, a self-serve gourmet eatery that includes
mix-and-match meals and make-your-own cappuccinos.
Starwood research indicates that Aloft customers are more likely to book online and provide
feedback via social media.
Starwood’s brands also include Sheraton, Four Points, St. Regis and W Hotels. Aloft has hotels
throughout the United States, Mexico, England and Canada as well as in Abu Dhabi and India.
In addition to the Aloft, a couple of other hotels are soon to open on other parts of Nicholasville
Road.
Hilton Hotels and Resorts is building a 103-suite Home2 Suites Hotel behind the Trader Joe’s
store at 2326 Nicholasville Road. Home2 Suites is described by Hilton as “a hip extended-stay hotel
experience” that promises “to always provide our guests with earth-conscious products and
services they can feel good about.”
The Home2 Suites is scheduled to open in June.
Closer to the University of Kentucky and downtown, the Greer Companies real estate
development firm is building a Hampton Inn hotel at Nicholasville Road and Southland Drive. That
hotel is scheduled in August.
FOUR VIE FOR DOWNTOWN MADISON PROJECT
Madison, Wis. — Four developers are offering elaborate new proposals for Judge Doyle Square,
including one that moves Exact Sciences’ headquarters into as much as 357,000 square feet of
office space in the massive redevelopment south of Capitol Square.
The developers – Beitler Real Estate Services, Doyle Square Development, JDS Development
and Vermilion Development – are proposing mixed-use projects with a new hotel to serve Monona
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Terrace, housing, commercial space and parking. But they offer differing design, features and price
tags, the Wisconsin State Journal said.
The developers, bringing regional, national and international experience, are seeking to
redevelop blocks that now hold the landmark Madison Municipal Building and aging Government
East parking garage.
“The opportunity to develop such valuable and underutilized property in the central city will
not happen again,” Mayor Paul Soglin said. “We were fortunate to receive several very exciting
proposals, and I’m looking forward to hearing more about the details.”
The city had negotiated with JDS – composed of the Hammes Co. of Madison and Majestic
Realty of Los Angeles – from February to December 2014 on a project that included a hotel,
housing, commercial space, a bike center and parking. But the City Council voted to reopen the
process to others because the project – especially the hotel – had evolved dramatically amid
concern about city costs.
The new proposals bring new concepts and players to the table with public financing limited
almost exclusively to support the cost of parking.
“All appear to meet our land use objectives. All appear to bring unique aspects,” city project
director George Austin said.
JDS is proposing a $186.4 million to $203.2 million project with a hotel, entertainment
establishments, terraced gathering areas, public food hall, health and wellness facilities and a
whopping 250,000 square feet of office space for booming Exact Sciences Corp., as well as another
107,000 square feet if the company wants to expand. Exact Sciences, which has headquarters on
the city’s West Side and a new lab in the Novation Campus off Rimrock Road, has created the first
and only federal approved noninvasive colorectal cancer screening test now available for use in the
U.S. and Europe.
“We’ve invested a lot of time and effort in Judge Doyle Square,” Hammes president Robert
Dunn said of his decision to stay in the process. “It’s a site I really feel has potential to change
Madison in a really meaningful way.”
The JDS proposal will strengthen Downtown and make the site lively 365 days a year, Dunn
said, adding that it’s believed the last time a major employer like Exact Sciences brought its
corporate headquarters Downtown was in 1975, when Verex moved to its new headquarters next
to James Madison Park on Lake Mendota.
Exact Sciences is working exclusively with JDS to find a site for its headquarters and prefers to
be at Judge Doyle Square, chairman and CEO Kevin Conroy said.
“Being in the center of the city is an exciting place for our employees to be,” Conroy said, adding
that the Downtown has attractive offerings, opportunities to use alternative transportation, and
synergy with the University of Wisconsin-Madison. “Having a headquarters Downtown just makes
sense.”
Between 500 to 600 workers could be located at the site, he said.
Beitler Real Estate Services of Chicago, which is proposing the least expensive project at $112.8
million, is offering two mid-priced hotels, city office space, housing and parking, and is the lone
entity not seeking any public support, not even for parking.
The company is proposing to lease land from the city with $750,000 annual payments that
along with other revenue could help the city pay for parking facilities, new city office space and
renovating the Municipal Building, president J. Paul Beitler said.
The city has struggled on the financing component of the redevelopment, and his company’s
proposal offers a real way to finance the project, Beitler said.
Doyle Square Development, comprised of Urban Land Interests of Madison and North Central
Group of Middleton, is proposing a hotel with dual Marriott brands, housing, office and retail
space, and 1,302 parking spaces on five underground levels.
Vermillion Development of Chicago has a $189.5 million proposal with a Marriott-branded
hotel, restaurant, meeting space, housing, office space and 1,055 parking spaces.
Doyle Square Development and Vermillion Development executives could not be reached for
comment.
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Convention and Conference Facilities
May 7, 2015 Page 18 of 20
The city’s Judge Doyle Square negotiating team will next analyze all of the new proposals and
the Board of Estimates will make a recommendation on a developer to the full council. The
negotiating team will submit a preliminary report to the board on May 11.
After years of study, the city first began a process seeking developers in February 2013 and
chose JDS a year later. The city and JDS then began protracted negotiations on details of the
project. Negotiations got complicated when city officials voiced concern about the high public cost
of a full-service hotel with a dedicated block of 250 rooms for Monona Terrace and underground
parking, and talks shifted to how to downsize the project.
In the late fall, city negotiators and JDS made changes, including scaling back the hotel, that
would have cut the city’s tax increment financing (TIF) investment to about $20 million for a
roughly $147 million project from the previous estimate of $47 million for a $174.2 million project.
Those concepts still would still have required another $28.3 million from the city, paid largely
through the parking utility, to replace Government East, as well as for other parking and for a bike
center requested by the city on that block.
BLATSTEIN TO TRY AGAIN FOR PHILADELPHIA HOTEL
Philadelphia, Pa. — Developer Bart Blatstein is taking another crack at turning the former
Philadelphia Newspapers building into a hotel, with a nearly $40 million development proposal,
the Philadelphia Inquirer said.
In an application that surfaced for $5 million in state money toward the project, Blatstein’s
Tower Investments proposes transforming the North Broad Street building – for decades the home
of the Philadelphia Inquirer and Philadelphia Daily News – into a 125-room boutique hotel with a
restaurant and meeting space.
The hotel, projected to cost $36.4 million to develop, would aim to draw visitors northward
from the nearby Pennsylvania Convention Center to a part of Center City that has lagged other
more rapidly revitalizing areas, according to Blatstein’s application for a grant from the state
Redevelopment Assistance Capital Program.
“This project could be the keystone to spur one of the most important redevelopment
opportunities for the city and state at the present time,” the developers wrote in the document
obtained by a reporter.
A project schedule included in the application sets the completion of its design phase this
month, with construction beginning August 2016.
This Center City stretch along North Broad street has only seen a smattering of redevelopment,
such as the ongoing conversion of the Thaddeus Stevens School building into residential lofts and
the planned transformation of the derelict Divine Loraine Hotel into apartments.
Despite the Hahnemann University Hospital complex and the convention center, the area
suffers from a lack of around-the-clock street activity, Center City District President Paul Levy
said.
“Anything that adds people, life, restaurants, would be extremely good for North Broad Street,”
he said.
The proposal would salvage some of the work Blatstein had done toward developing his
proposed Provence Entertainment Complex, a casino with 3,300 slot machines and 150 table games
he had intended for the 1925 Art Deco former Inquirer tower.
That plan began unraveling in November, when the Pennsylvania Gaming Control Board
instead awarded the city’s remaining casino license to a development team building a resort in the
stadium district at the southern end of the city.
When dropping an appeal to the gaming board’s decision, Blatstein hinted he may sell the North
Broad Street property, saying he had encountered “significant interest” from potential buyers.
Numerous phone messages left with Blatstein seeking details of his latest plans for the
property, which he bought in October 2011 for $22.7 million, were not returned.
Blatstein’s application for the state grant would have been received before a February 2015
deadline, said Jeffrey Sheridan, a spokesman for Gov. Tom Wolf. The state’s decision on the grant
request is not expected before July, he said.
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Convention and Conference Facilities
May 7, 2015 Page 19 of 20
RHODE ISLAND’S ONLY CASINO TO GET HOTEL
Providence, R.I. — Governor Gina Raimondo has signed legislation clearing the path for Twin
River to build a hotel at the state’s only full-fledged casino the Providence Journal said.
State law prohibited a hotel from being built on the casino’s sprawling Lincoln property in
recognition of concerns once voiced by the Providence hotel industry, which feared competition.
But with the state facing imminent competition from Massachusetts casinos, elected officials
favored lifting the restriction. Massachusetts’ first gambling facility – a slots parlor in Plainville –
will open in June just 12 miles from Twin River.
“As our neighboring states look to draw revenue and economic development away from Rhode
Island, we need to examine every possible way to remain competitive and create more economic
opportunities here in Rhode Island,” Raimondo said in a statement.
Twin River Management Group will now vet the site plan with officials in Lincoln.
“We’re grateful for the support we receive from the legislature and governor in lifting the
prohibition on a hotel at Twin River,” casino spokeswoman Patti Doyle said.
Twin River officials have said the hotel will be built in the style of a Courtyard Marriott or a
Hampton Inn. The four-story hotel will have 150 to 250 rooms and cost $30 million to $35 million
to construct.
The project is expected to create roughly 200 temporary construction jobs and 100 full-time
jobs for employees needed to operate the hotel.
Twin River officials have said the hotel is not intended to draw in gambling from a larger
radius. Instead, officials have said the focus remains on retaining “convenience gamblers” within
the surrounding area who might be tempted to cross the Massachusetts border.
Casino officials have said they will not seek any tax breaks or concessions for the project.
GROUP PLANS TO RAZE, RECONSTRUCT HOTEL OVERTON IN MEMPHIS
Memphis, Tenn. — The group that bought the old French Quarter Inn at Overton Square this
past December plans to demolish the circa 1984 hotel and build a new and larger “Hotel Overton”
on the land, the Memphis Daily News said.
NCE Realty and Capital Group LLC of Irvine, Cal. filed an amendment to its original proposal
May 1, with the local Office of Planning and Development.
NCE bought the hotel, closed since 2008, for $1.9 million “with hopes of renovating,” according
to a letter to OPD officials from Brenda Solomito Basar of Solomito Land Planning.
“However because of the poor condition and the outdated functionality of the site and building,
the owners decided to start over,” she added.
The application says Hotel Overton will be locally owned and it will be managed by Artesano
Hotel Group of Seacrest Beach, Fla.
The amended plans call for 134 suites instead of the 37 suites currently, a restaurant with a
bar, a ballroom, meeting rooms and a conference center, a rooftop bar and a parking structure with
140 spaces.
The new building would be five stories instead of the four stories of the existing French Quarter
Inn. And the eastern portion of the hotel would be closer to Madison Avenue than the current hotel
with the new parking structure to be on the eastern end of the lot.
Artesano’s web site refers to Hotel Overton being within walking distance of “the new BB King
Blues Bar” and adds that the hotel will have a pool area with cabanas as well as a bakery and
gourmet coffee shop.
Artesano sets the opening of the new hotel for the fall of 2016.
BEALE STREET TO GET NEW HOTEL
Memphis, Tenn. — The Carlisle Corporation’s planned development for its One Beale project at
Riverside Drive and Beale Street includes an “assembly/performance hall and convention center” as
well as a lounge or nightclub with more than 125 seats.
The details of the $150 million project are in the One Beale application to the local Office of
Planning and Development filed April 27 by SR Consulting LLC, the Memphis Daily News said.
Copyright 2015 Mediaventures
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Convention and Conference Facilities
May 7, 2015 Page 20 of 20
Carlisle had previously stated its intent to have some kind of meeting space. But later said the
convention center category on the planned development application best fit its plans for the
meeting space.
However, Carlisle representatives said the space will not amount to a convention center in its
scale.
Carlisle Corp. is also seeking to raise the maximum building height to 450 feet for the twin
tower complex with initial plans for 20,000 square feet of office space, another 40,000 square feet
of retail and meeting space – including a 6,500 square foot restaurant, 280 apartments and a 300room hotel.
The 3.21 acre site includes not only the land at Beale and Riverside long owned by Carlisle but
also a parcel of land on the eastern side of Wagner Place south of Beale.
The application is due before the Land Use Control Board on June 11.
HOTEL RATES DROP DAYS BEFORE MAYWEATHER-PACQUAIO FIGHT
Las Vegas, Nev. — Rates for the cheapest rooms at MGM Grand, the host hotel for the so-called
fight of the century boxing match between Floyd Mayweather Jr. and Manny Pacquaio, plummeted
two days before the battle when the room cost fell to $499 a night from more than $1,500 for
Friday and Saturday nights, according to Vegas.com.
The Las Vegas Review-Journal said overall, room rates for May 1 and 2 dropped from $558 a
night to $338 a night at the 113 hotels served by Vegas.com, said Vanessa Doleshal, Vegas.com
business development manager
“There has been extreme fallout. Hotels are dropping rates dramatically,” Doleshal said. “They
thought the demand was going to be more than what it was.”
“Since early last week, we have seen average rates drop about $150 for the two- to four-star
hotels,” Doleshal added.
But an executive for MGM Resorts International, which owns MGM Grand, offered context to
the MGM Grand room rate numbers, saying the lower costs are only for a single category of rooms
and only after the hotel did not anticipate the number of cancellations in that room category.
In addition, Micah Richins, MGM Resorts International senior vice president of revenue
management and services, said it’s not uncommon for room rates to be re-calibrated before major
special events such as the big boxing match. The fight was expected to attract 336,000 visitors to
Las Vegas with occupancy reaching 95 percent to 99 percent.
“If we can sell our rooms all the time for $499, we’d be pretty happy,” Richins said Thursday.
“You’re talking about an event that will be one of the biggest in the city. If it’s not the best day (for
MGM Grand), it will be one of the best days ever.”
Doleshal said there are two causes behind the dropping room rates: customers exercising their
right to cancel reservations 48 to 72 hours before their scheduled arrival date and MGM Resorts
International not allowing the fight to be broadcast in non-MGM hotel-casino properties in Las
Vegas, Doleshal said.
“Having exclusivity to pay-per-view rights is almost hurting the city as a whole,” she said.
Doleshal said some customers are taking a pass on Las Vegas because they don’t want to pay for
rooms at non-MGM Resorts hotel-casinos if they can’t watch the fight at their hotels.
“It’s the lead factor behind why this is happening,” she said.
Most of the MGM Resorts properties sold out tickets for boxing fans to watch the bout on
screens at their sites, but there were available tickets to watch the fight broadcast at Mandalay
Bay and The Mirage.
But MGM Resorts International spokeswoman Mary Hynes said visitors at non-MGM Resorts
hotel-casinos can watch the fight on closed-circuit TV at other nongaming businesses that purchase
the pay-per-view in Las Vegas.
Hynes also said that an occupancy rate expected to reach at least 97 percent “does not suggest
people are staying away. It will be a great day for us and it will be a great day for Las Vegas.”
Copyright 2015 Mediaventures
2813 Harbor Lights Dr., Nashville, TN 37217 • (615) 367-4241 • [email protected]