Greater%20Columbus%20Georgia%20Chamber%20of%20Commerce

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Greater Columbus Georgia Chamber of
Commerce September 26, 2013
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Franklin County Convention Facilities Authority

• The FCCFA was created in 1988 to build the
  Greater Columbus Convention Center.
• The FCCFA is a special government unit created
  under Chapter 351 of the Ohio Revised Code.
• The FCCFA has an 11 member board appointed by the
  Franklin County Commissioners (6), City of
  Columbus (3) and Suburban Mayors (2).
• The FCCFA was created to develop, build and
  operate convention facilities in Franklin County.
  The FCCFA has full governmental powers to levy a
  4 countywide and additional .9 citywide hotel
  tax, set its own budgets, appropriate property
  and other duties outlined in ORC 351.
• The FCCFA owns the Greater Columbus Convention
  Center, Nationwide Arena, the Columbus Hilton
  Downtown, land used to develop the Hyatt Regency
  and Drury Inn and Suites and various parking
  facilities.

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Greater Columbus Convention Center

• The Greater Columbus Convention Center (GCCC) was
  developed by a community urban redevelopment
  corporation (CURC) and opened in 1980 as a mixed
  use facility called the Ohio Center. The CURC
  became the operating company that managed the
  facility.
• The Ohio Center consisted of 90,000 sf of
  arena/exhibit space, 50,000 sf of meeting space,
  an 18,000 sf ballroom and a retail mall. It was
  connected to the 631 room Hyatt Regency.
• Almost as soon as it opened, the Ohio Center was
  too small to be an effective convention center
  and planning began for a new convention center.
• The FCCFA opened the GCCC in March, 1993. It
  contained 216,000 sf of exhibit space, 50,000 sf
  of meeting space and a 25,000 sf ballroom.
• In 1996, the FCCFA assumed ownership of the Ohio
  Center and through an RFP process hired SMG to
  manage the combined convention center.
• The convention center was expanded in 2001 to add
  125,000 sf of exhibit space, 15,000 sf of meeting
  space and a 15,000 sf ballroom.

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Need for a Full Service Convention Hotel

• The target market for Columbus conventions are
  groups with room blocks ranging from 1,000 to
  3,500 that have met in our geographic region.
• With the Hyatt Regency (631 rooms) as the HQ
  hotel, Columbus was able to meet the HQ hotel
  requirement for 65 of our target market. The
  addition of an additional 500 room HQ hotel
  enables us to meet the HQ hotel requirement of
  92 of our target market.
• At 426,000 sf of exhibit space, the Greater
  Columbus Convention Center can accommodate
  approximately 98 of our target market.
• Based on market surveys, a new 500 room HQ hotel
  increased the propensity of customers to meet in
  Columbus by 170

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Columbus Hotel Pre-Development Timeline
Subcommittees formed to understand financing,
marketing, economic impact and connectivity
Experience Columbus began lobbying for more hotel
rooms
Market/Financial Feasibility Study completed by
SAG
City, County, CFA announce agreement to finance
project
Feasibility/ Demand Study completed
Feasibility/ Demand Study completed
Financial Feasibility Study completed
County endorses project
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
Feasibility/ Demand Study (confirmation of
previous study) completed recommended potential
expansion of Hyatt as alternative
Feasibility/ Demand Study completed
Determined Hyatt expansion too difficult
Mayor decided to explore public financing due to
expense of using private development
Elected officials briefed on potential public
financing plans
City, County, CFA agree to financing terms
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Conditions Driving HQ Hotel Public Participation
The last convention hotel to be financed without
public support (other than in Las Vegas or
Orlando) was the Chicago Sheraton in 1992
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Impact on Convention Center Generated Room Nights
Source Local convention and visitor bureaus.
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Impact on Competitive Hotels
Supply Demand Yr 1 Demand Yr 2 Demand Yr 3 Demand
Yr 4 Demand Yr 5
Supply/Demand Increase
Denver 2005 Hyatt 1,100
Houston 2004 Hilton 1,203
Louisville 2005 Marriott 616
Charlotte 2003 Westin 700
Austin 2003 Hilton 800
Indianapolis 2011 JW Marriott 1,005
St. Louis 2003 Renaissance 917
San Diego 2008 Hilton 1,190
Baltimore 2008 Hilton 757
San Antonio 2008 Grand Hyatt 1,003
Source Smith Travel Research.
Opened in Recession
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Typical Problem
Private Finance Approach Prototypical 700 Rooms
236m
Land Allowance 14
Financing Gap 50m
500 Parking Spaces 12m
Meeting Space 52m
Donate Land
Self Supporting Parking
Rooms 158m
Private 160m 140_at_75 16m NOI 10 Yield
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Convention Hotel Financing Models
Pittsburgh
1991
Norfolk
1992
Philadelphia
1995
Denver
Providence
1998
Chicago
Miami
1999
Nashville
2000
Tampa
Baltimore
Pittsburgh Airport
2001
Jacksonville
Sacramento
North Charleston
Seattle
PRIVATE FINANCING With Public Incentives
PUBLIC FINANCING
Charlotte
Overland Park
2002
Richardson
Trenton
St. Louis
San Jose
Cambridge MD
2003
Myrtle Beach
Austin
2004
Houston
Omaha
Shreveport
2005
Winston-Salem
Schaumburg
2006
Raleigh
Denver
San Antonio
Phoenix
2008
La Vista
San Juan
Lancaster
2009
Baltimore
Ft Worth
Manhattan KS
2011
Dallas
Columbus OH
2012
Indianapolis
Nashville
2013
2014
Washington DC
Austin
2015
Houston
2016
Miami Beach
2018
No public incentives.
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Public Private Partnerships

• Nationwide Realty Investors developed the office
  buildings immediately south of the hotel site and
  brought 9,000 jobs downtown.
• The FCCFA expanded the garage next to the hotel
  by 900 spaces to provide daily parking for these
  new workers.
• The revenue received from these daily parkers
  covers approximately 85 of the debt service on
  the bonds.
• Hilton International provided 3 million in
  upfront cash to help develop the Hilton Columbus
  Downtown.
• The current convention center accounts for
  approximately 208,000 room nights annually for an
  economic impact of 140 million. With the new
  hotel this impact is expected to increase by at
  least 52,000 room nights worth 35 million in
  economic activity.
• The convention center accounts for 2,100 jobs,
  44 million in wages and 9.2 million in tax
  collections annually. With the new hotel, we
  expect 550 new jobs, 11 million in wages and
  2.3 million in new tax collections.

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Public Approach Case Study Columbus

• Opened fall 2012
• 532 Rooms 22,000 sf meeting space
• 142.8m project cost 268,400/key
• Plus Land Contribution
• Hotel guests park in a CFA garage and pay market
  rates
• 178m w/ issuance reserves
• 160m bond sale
• 15m Authority equity
• 3m Hilton key money contribution
• 10 hotel occupancy tax rebated forever
• No property tax public ownership
• 17.8m in Reserves (working capital, operating,
  rental, debt service)
• Other Financing Pledges
• Authority hotel land lease revenues from two
  other hotels
• Equal amount of City Parking Meter Revenues
• County Full Faith and Credit

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Financial Dashboard
August 2013
GA Expense
Dept. Profits
Revenues
Occupancy
NOI
Debt Service
Goal
Y E Cash Forecast
Sales Mkting Expense
ADR
December 1 Pmt
BABs
Goal
Deposited
June 1 Pmt
RevPAR
Other Expense
Goal
Gross D/S prior to BABs subsidy
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STAR Report SALT Dashboard (STAR data thru
July 2013)
August 2013
Occupancy Index (thru July 2013)
Revenue / Available Room Index (thru July 2013)
Hilton Compared to Competitive Set
Hilton Compared to Competitive Set
Average Daily Rate Index (thru July 2013)
Guest Satisfaction Scores (SALT) (thru August
2013)
--- Hilton Brand Benchmark
Hilton Compared to Competitive Set
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Hilton Columbus Dashboard
August 2013
Room Night Pace
Room Night Bookings By Year
Prospects by Year
Prospect by Type
Conv. Center Revenue Generated by Hilton
Average Rate
Definite Booking Types
Contracted through Yr End
Year to Date Actual
Tentative Booking
Definite
Goal/Budget to date
Hilton bookings reflect contracts received and
out for signature.
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CVB Dashboard
August 2013
CVB Goal
CVB Pace and Position
Definite room nights as of 9/3/2013
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Secrets to Success
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• Questions