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Report: Expo Center trails convention competitors

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Convention center business is booming in nearby markets, and city leaders have reached out to a consultant to discover how Springfield can get into the game.

Of six cities studied the last eight months by Chicago consultant Rob Hunden, Springfield came in dead last in the number of events hosted in 2010 – some 140 events behind its closest competitor, the America’s Center in St. Louis.

Hunden unveiled the findings of his 185-page report to an audience of about 60, including Springfield City Council members and Springfield Convention & Visitors Bureau and JQH Hotels & Resorts staff at an Aug. 2 meeting at University Plaza Hotel. Hunden recommends the city make improvements to the Springfield Expo Center, review the facility’s management contract and pursue more than $100 million in public and private investment to attract more events and visitors to the city.

The report, which cost the city, the CVB and JQH Hotels $39,000, calls for more than $10 million in improvements to the west side of the Expo Center, a full-service hotel built on adjacent vacant land and additional restaurant and entertainment options for a total public investment of up to $55 million and a private investment of more than $53 million.

Events and profit gaps
In 2010, the Springfield Expo Center held 37 events, according to Hunden Strategic Partners’ report. During the last five years, it has averaged 35 events per year.

This compares to 178 events held at America’s Center in St. Louis in 2010 and 409 at the Kansas City Convention Center. And it's not just big cities that are outperforming Springfield’s Expo Center. The Overland Park Convention Center drew 285 events in 2010, St. Charles Convention Center managed 305 events, and Hilton Branson Convention Center held 248 events last year.

The competition will only increase with St. Joseph and Jefferson City planning their own new convention facilities.

“To stay where we are would be backing up because others are not going to stay where they are,” Springfield CVB President Tracy Kimberlin said of attracting convention business. “If we are not going to go down this road, the sooner we make that decision, the better.”

Brett Mitchell, general manager of the Overland Park Convention Center, said that meeting planners seek certain criteria: ballroom and meeting space, restaurant and entertainment options, and perhaps most importantly, a connected hotel.

“They need the flexibility of breakout rooms, a big ballroom and hotel rooms that are connected, ideally. Anymore, (conventioneers) don’t even like walking across the street,” Mitchell said.

He said the OPCC is connected to a 412-room Sheraton Hotel, and there are a number of limited-service hotels within walking distance. While Overland Park is known for its restaurant and entertainment options, Mitchell admitted few were within close proximity of the center.

Mitchell said Overland Park officials contract with a third-party company, Global Spectrum, for event bookings. He said OPCC is one of only a handful of city-owned convention facilities nationwide to turn an operational profit. He said the convention center was $350,000 in the black in 2010. Even so, that profit margin doesn’t take into consideration construction costs for the 97,000-square-foot center.

“The idea is that you build a convention center to bring people in from out of town and they spend their out of town dollars in your community, which creates the economic boon,” Mitchell said. “Oftentimes, a convention center is a loss-leader because its debt service and operating losses are offset against that economic impact that brings growth into a community for all those other businesses.”

The Springfield Expo Center had a net income loss of $61,939 in 2010, according to Hunden’s report.

Hotel demand
Hunden said improvements to the Expo Center and the construction of a full-service hotel with roughly 240 rooms connected to the facility would be the best use of the 1.7 acres east of the Expo between the adjacent parking garage and the best way to lure conventioneers to Springfield. City officials have debated whether the city should buy back the land from JQH Hotels for $1 following a second missed deadline in April 2010 to begin construction of an Embassy Suites hotel on the site.

Hunden recommended the city review its contract with John Q. Hammons Hotels Management LLC, which is managing the Expo Center, in favor of an arrangement where the city could afford to book out-of-town business, regardless of whether the event generated enough money to cover expenses, echoing the sentiments of Mitchell. Hunden said Hammons Hotels has only been motivated to generate events that turn a profit.

“With city-run convention centers, there’s not a profit motive per se,” Hunden said. “They can operate with a deficit because money is being generated locally.”

Mayor Jim O’Neal suggested the city buy back the vacant land next to the Expo Center soon and “sit still” before deciding to make any moves.

“We need to expand who we attract here without spending a great deal of money, which no one is ready to do,” O’Neal said at the Aug. 2 meeting.

City Manager Greg Burris asked that the members of the Convention Attraction Task Force remain in the group, prepared to study options as the city looks to commission a follow-up report that would explore the impact of acting on the report’s recommendations. At the meeting, none of the members objected to continuing in their roles.

John Whittington, president of Springfield-based marketing firm Whittington Associates and member of the task force, said he thought Hunden’s report did a fine job of pointing out what’s needed in Springfield to attract more convention business. What’s most important, according to Whittington, is to put a nice hotel next to the Expo Center.

“I think the picture that Hunden has painted from the report is right on target for us to become competitive,” Whittington said. “I think there has to be a full-service quality hotel adjacent to that site.”

He said he thought city leaders should take a measured approach and be mindful of the current economic climate, but look at creating a long-term plan following a secondary report by Hunden on the impact of implementing his recommendations during the next five to seven years.

“Knowing the competition that exists, certainly, we’re not getting our share. I think we have to have the facilities to merit consideration for people to come here,” Whittington said.  

Hunden said whatever the city decides, it should have its plans in place before opening up the land to requests for proposal.

“You don’t want to leave this to chance,” Hunden said.[[In-content Ad]]

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