The condition of the city’s downtown convention hotels was characterized as “a major problem” by Tracy Kimberlin, president and CEO of the Springfield Convention & Visitors Bureau, during Monday’s City Council meeting.
Councilperson Richard Ollis queried Kimberlin on the matter following a discussion of the CVB’s annual contract with the city, which will be voted on at the next meeting June 27.
“I’ve noticed that a couple of our hotels, one being The Q, looks like it may be shuttered,” Ollis said. “I walked through University Plaza the other day, and there were 55-gallon drums catching rainwater coming off the roof.”
Ollis asked if the convention facilities in those hotels were viable. The Q Hotel & Suites, advertising a 676-square-foot meeting room, has been shuttered for 18 months, according to an unidentified employee who answered the phone at University Plaza and Convention Center, where The Q’s phone calls were being forwarded. University Plaza offers 47,000 square feet of space, including 35 meeting rooms, across the street from the Springfield Expo Center.
Of University Plaza, Kimberlin said, “Our biggest and used-to-be-best convention hotel is in a sad shape right now.”
Alpharetta, Georgia-based Atrium Hospitality LP owns University Plaza.
According to past Springfield Business Journal reporting, Atrium Hospitality in 2018 made a deal with the John Q. Hammons estate to liquidate Hammons’ hotels, operated as JQH Hotels & Resorts.
Kimberlin said the bankrupt Hammons estate stopped investing in the property, and upon its takeover, Atrium has not invested in the property, either.
“We have had several major problems with convention groups there,” Kimberlin said, citing leaky roofs and no hot water or air conditioning. “When you rent a hotel room, you really expect to have air conditioning and hot water working, even in the most basic hotels.”
He said Mayor Ken McClure and City Manager Jason Gage have been involved in discussions with Atrium. Attempts to reach Atrium Hospitality and local management were unsuccessful by deadline.
“They’re saying at this point they are assessing what they are going to do with the property, whether to improve it or sell it,” Kimberlin said. “Hopefully, we’ll have that decision very soon, because something needs to happen.”
Ollis then asked about the shape of the Expo Center, a convention facility offering 112,000 square feet of contiguous space.
Kimberlin said, “Both are being used, but unfortunately, we hold our breath every time they are used that the groups are going to have a halfway decent experience while they are there.”
He added there have been several cases where lack of physical investments and staffing has caused groups to leave. The United Methodist Church used to meet at the Expo Center annually in June, but because of problems, ranging from roof leaks and similar physical problems to issues with the former management, they have since moved to Branson. Some 4,000-5,000 student members of Future Business Leaders of America almost left after similar issues with their convention, but ultimately they didn’t, Kimberlin said. According to the Expo Center website, events there are overseen by University Plaza.
Kimberlin added the city needs a decision from Atrium Hospitality as quickly as possible. He told SBJ that repairs, chiefly to the heating, ventilation and air conditioning system and the hot water system, will cost in the 10s of millions, either for Atrium or for a potential buyer.
“That’s an important part of our convention picture here in the community,” Ollis said. “I certainly hope Atrium is going to step up and take their properties to a livable level and hopefully beyond that, where we can then be confident and use that facility as we move forward.”
Kimberlin agreed, noting University Plaza is a reflection on the city of Springfield to traveling guests.
“Before people open a new business here, they’re going to visit,” Kimberlin said. “If they stay at University Plaza, it’s not going to be very pretty at this point.”
Kimberlin told SBJ the problem is a serious one because University Plaza has far more meeting space than anywhere else in Springfield. He said DoubleTree by Hilton and Oasis Hotel & Convention Center, located on the city’s north side, are fine facilities, but their meeting space is limited.
“Any convention of any significant size really only has one choice,” he said.
Kimberlin told council that because of the state of downtown convention facilities, he has shifted a lot of his energy toward promoting sports tourism as a replacement.
“I’ve worked very hard to try to get sports facilities here in Springfield improved, and we have checked off some boxes in that regard, and I’m hoping we can check off a couple more,” he said. “Without a convention center, we need something.”
The CVB budget is set at nearly $4.2 million, and of that, about $3.3 million comes from the city’s hotel/motel tax.
“The travel industry has come back with a vengeance since the pandemic,” Kimberlin said.
The average daily room rate has risen significantly, according to Kimberlin. For three months in a row, it was above $100, something that had not happened before in any month.
Councilperson Andrew Lear expressed concern about short-term rentals, like Vrbo and Airbnb, cutting into hotel proceeds, as they are not required to pay the hotel tax.
Kimberlin acknowledged that’s a problem. There were about 375 such rentals in May, he said, and had they remitted hotel tax, both the city and CVB would have been $25,000 richer from a single month.
Kimberlin noted lost tax revenue is in the neighborhood of $500,000 per year, half to the city and half to the CVB.
“So far this year, we have lost $84,000 each, CVB and city,” Kimberlin said.
Two years ago, that figure was $96,000 for the entire year. “That’s how quick it’s going up,” he said.
Ariake Sushi and Robata opened; Great Southern Bancorp Inc. (Nasdaq: GSBC) opened its newest branch in Springfield; and a longtime employee with City Utilities of Springfield went into business for himself with the launch of Van Every Drafting & Design LLC.