People invested in the local tourism industry are considering the implications of building a stand-alone conference center. But the jury is still out on whether it’s a worthwhile investment and where the funding to build it would come from.
A question of demand
A report issued in March by the proposed developer, NPI, paints an optimistic view of the center’s projected impacts — and of the demand for it.
The state, city, county, public schools and water district will all benefit from the development, according to the report “A report on the economic impact of West 38th hotel, proposed conference center, and associated commercial
development in Gainesville, Florida” prepared by Impact DataSource, NP International and Burns Development group.
The report states the center is slated to bring in $56 million of net benefit to those entities over a period of 10 years. It’s also projected to create 476 jobs directly and 202 jobs indirectly.
It says the figures are conservative and consistent with those used in the May 2010 PKF Conference Center and Hotel Analysis commissioned by the Community Redevelopment Agency on behalf of the city and county.
According to the report, the West 38th project started taking shape 15 years ago when the city, county and UF began coordinating with
the Metropolitan Transportation Planning Organization to lay out the 64-acre, $104 million mixed-use development. This development would include a hotel, a proposed conference center, retail space and a parking garage.
“The inclusion of the proposed conference center is in response to the need for meeting and function activities accommodating about 500 attendees,” the report states. “Gainesville is currently losing this potential tourism and economic activity to Orlando, Tampa, and Tallahassee.”
For many local business leaders, there is no question about demand for more conference space locally.
Adrian Taylor, vice president of regional initiatives for the Gainesville Area Chamber of Commerce, said that ever-expanding
research initiatives at UF necessitate more meeting space near labs so academic travelers can “see the actual research in action.”
As an example, he noted that RTI Surgical — an Alachua-based surgical implant manufacturing company with a global reach — hosts annual conferences. But because the company has expanded and “outgrown their particular region,” he said the company is not able to have conferences “in their backyard.” “People who say ‘There is not demand locally’ don’t understand how business is expanding locally,” he said. “We know that there is demand locally.”
He noted that several publicly traded corporations based in the region lend support to that theory.
He also said that a Chamber case study of communities similar to Gainesville lends credibility to the concept of a stand-alone conference center.
Taylor said the Chamber analyzed community dynamics in Greenville, South Carolina; Columbia, South Carolina; and Athens, Georgia. An aggregate report on the study’s findings is in the works.
Columbia is getting a stand-alone convention center, he said, and the organizer expressed surprise that Gainesville did not have a similar facility.
“He said he doesn’t know why Gainesville doesn’t have a convention center already,” Taylor said.
Critics of the plan have said the area doesn’t have enough regional attractions to make groups want to hold conventions here. But Taylor said the case study proves otherwise.
“None of them have beaches. None of them have Mickey Mouse, but people say we can’t attract conferences because we are not Orlando,” he said. “None of those entities have those things, but they have still been successful.”
He noted that of the three cities in the case study, Athens was the only that has a university. For that community, he said, its stand-alone conference center is quite viable and the same would be true for Gainesville.
“Because of the power of the research and the things that are happening there, it makes it a reliable option,” he said.
But Tony Trusty, general manager of the UF Hilton, disagreed. He said the Hilton looked at market studies to determine whether it should expand its conference center, and the results indicated “no.”
Trusty said the hotel hosts about 160 conferences per year. Of those conferences, only about eight have more than 200 attendees. And he said these relatively small conferences are not due to limited space at the Hilton’s convention center. In all, Trusty said the Hilton’s convention center could accommodate 1,200.
So, why aren’t events maxing out the space? Trusty said it’s simply because the demand isn’t there.
“It does not exist,” he said.
A question of funding
According to the proposed developer’s report, the conference center would be considered a public-private partnership. It would be funded through a $25 million bond given by the development company to the county. Revenue from the county’s tourist development tax – also known as the hotel room bed tax – each year would eventually pay off the bond.
The “bed tax” regulation comes from Florida Statute 125.0104 and gives local government the purview to collect up to 6 cents per dollar to funnel toward projects that would increase tourism to the area.
But some local business leaders argue that the conference center would not achieve the desired effect.
Trusty said using bed tax money is risky because its ability to attract tourism is yet unproven. If it failed to bring in out-of-town traffic, he said, the venue would turn into a place for locals’ events such as weddings.
“If that model didn’t work, you’d basically have a catering hall,” he said. “And now you’re going after weddings because you couldn’t get conferences. There are no bed tax dollars in weddings, but it was built with bed tax dollars.”
Susan Perkins, general manager at the Hampton Inn near I-75, expressed similar concerns. She predicted that people in town will use the center but that it won’t be successful bringing in out-of-towners.
A question of alternatives
Perhaps stand-alone conference space isn’t the best way to meet the community’s needs, some local professionals surmise.
Megan Eckdahl, the Hampton’s director of sales, said it’s wiser to use facilities that are already in place. She suggested that with some tweaks, the UF campus could become a better place for larger groups to book events.
“UF has a huge convention center at the Reitz Union, but they don’t utilize it because of parking,” she said.
To make the campus conference space more feasible for large groups, Eckdahl suggested adding another parking garage near the Reitz Union. She said that “would be smarter than building the convention center.”
Trusty presented another idea. He suggested imposing a deed restriction on certain properties so that hotel developers would have to include
a certain number of square footage for meeting space.
“So you start to have private industry build the city you want, and you don’t have to spend [public] dollars to get it,” he said.
But for now, County Commission Chairman Lee Pinkoson said it’s a bit premature to talk about specifics. He noted that the proposal has not officially come before the commission.
“As far as the county is concerned, I don’t know what our level of involvement would be… We haven’t had any discussion on how it will
be funded,” he said. “We haven’t gotten any information besides private conversations where I referred [the developer] to staff with questions.”
He also said it’s unlikely that, if approved, the convention center would be able to garner funds from the bed tax.
“Most of the dollars are committed,” he said.