$50M Ballroom, Facilities Expansion Planned for America’s Center

$50M Ballroom, Facilities Expansion Planned for America’s Center

Sources tell WhoLou the St. Louis Convention and Visitors Commission (CVC) intends to present an approximately $50 million America’s Center expansion plan to city leaders next week. It is hoped completion of the project will make the 32-acre, 502,000 sq. ft. complex more competitive within the rapidly growing convention and meeting industry. The CVC manages and operates America’s Center and the adjacent Edward Jones Dome. Sources believe that the expansion will make St. Louis a real contender for not only more conventions, but also an elite caliber of that business.

The project will focus on updating and expanding the size of a functionally obsolete 28,000 sq. ft. ballroom. Sources say 50,000 sq. ft. is now the industry standard for ballroom size. Earlier this week 6,500 attendees at O’Reilly Auto Parts annual manager’s conference in St. Louis had to meet in exhibit space to hold general sessions. The current America’s Center ballroom can only accommodate 2,000 people.

{America’s Center largest current ballroom occupies areas 220-229}

Another element to the potential project includes the construction of new truck berths and loading docks to enhance the convention center’s logistical and delivery capabilities. Sources say that the initial southern expansion at America’s Center in 1989 included plans for the new berths and docks that were never completed.

In Nashville, a direct St. Louis competitor for convention business, the city recently invested nearly $600 million to construct the Music City Center, which opened last May. The Nashville convention complex features an expansive 57,500 sq. ft. grand ballroom that can accommodate 6,000 people. The Music City Center also features a public art collection, an expansive exhibit hall covering eight-acres, and environmentally sound components to the development.

{the $600 million Music City Center}

{the nearly 60,000 sq. ft. Grand Ballroom at The Music City Center}

Sources say the America’s Center expansion is badly needed to keep pace with mid-major markets like Nashville and Denver. Numbers one, two, and three in the 2013 USA Today rankings for top convention destinations were Orlando, Chicago, and Las Vegas. At number 35, St. Louis was sandwiched in-between Arlington, VA and Ft. Lauderdale, FL. Kansas City, which is chasing the 2016 Republican National Convention (RNC), ranked number 42.

As part of a $187 million expansion initiative to attract more events to Orlando, the Orange County Convention Center will begin a $55 million renovation in March. The venue is the second largest convention center in the U.S. The project will include a new ballroom, meeting rooms, and boardrooms along with the renovation of existing meeting rooms and the concourse area.

McCormick Place in Chicago, the largest convention center in the U.S. by square feet, recently upgraded their Wi-Fi capability. The venue can now service up to 45,000 visitors along with their laptops, smartphones, tablets, and other gadgets. McCormick Place can also handle newer devices that operate in the 5GHz frequency range.

Most devices are still operating on the 2.4GHz band which is jam-packed compared to the 5GHz band. As more devices utilize the 5GHz band, Chicago is prepared to accommodate additional demand. In 2013 McCormick Place also committed to purchasing enough power generated by wind turbines to supply the convention center’s entire annual electricity needs.

In 2013, the Las Vegas Convention and Visitors Authority approved the first phase of a $2.5 billion overhaul of the Las Vegas Convention Center that includes a new World Trade Center building and a multimodal transportation center. The $150 million first phase includes land acquisition planning, financing approval, requests for proposals, and making minor improvements in existing space.

In January the Convention Industry Council released data from their 2014 Economic Significance of Meetings to the U.S. study during a press conference in Boston. According to the Council, between 2009 and 2012 the industry saw numerous categorical increases including participant volume at meetings and events rising up by 10%. The convention industry also contributed $115 billion to the GDP during that period, up by almost 9%.

Additionally, the industry’s contribution to federal, state, and local tax dollars increased by 9.6%, providing more than $28 billion in tax receipts. The industry also stimulated job growth with an 8.3% increase, employing more than 1.7 million Americans, according to the group.

According to the Fort Lauderdale Sun-Sentinel, the largest annual convention that city hosted left in 2012 after 20 years, citing a lack of meeting space and the need for an adjoining hotel. In 2013, a group of more than 100 Broward County business leaders called the convention center situation a top priority that requires a master plan that goes beyond just a proposed hotel.

The Sun-Sentinel reported that the Greater Fort Lauderdale Convention and Visitors Bureau expects Broward County to lose $400 million in business and 960,000 hotel room nights between 2008 and 2016 for lack of a convention center hotel, and the expansion needed to compete with sites in other second-tier cities. The America’s Center expansion hopes to break St. Louis out of its B-List convention status, and to avoid the problems that plague Fort Lauderdale.

Throughout 2013 St. Louis Mayor Francis Slay reaffirmed that the city was interested in hosting the 2016 Democratic National Convention (DNC). St. Louis last hosted the DNC in 1916, and came very close to landing the 2012 event. The DNC was awarded to Charlotte in 2012. Cleveland and Minneapolis joined St. Louis as finalists, but sources say it came down to St. Louis and Charlotte. St. Louis also hosted the 1876, 1888, and 1904 DNC along with the 1896 RNC.

Mayor Slay put most of the blame for not being selected on electoral politics. Missouri holds 10 electoral votes and North Carolina has 15. It takes 270 electoral votes to become President of the United States. “That is a decision of the President and his reelection team,” Slay wrote on his blog at the time. In 2008, Republican presidential candidate John McCain won Missouri by 0.01%, or just 3,632 votes, while President Obama carried North Carolina by 0.04%, 13,692 votes.

In 2012, 15,000 members of the national and international media, 6,500 delegates, and 14,000 other visitors came to Charlotte for the DNC. Attendees that year spent nearly $35 million, excluding airfare. This was an average of $235 per day spent in Charlotte per visitor on lodging, food and beverage purchases, retail purchases, and transportation according to an economic impact study of the event.

The lodging industry reportedly benefitted more than other industries, with 90% of hotels indicating a positive impact from the convention during the week of the event. Restaurants and recreation-oriented businesses were less enthused about the convention’s impact, but still 42% and 39% respectively, reported increased sales during the convention and less of a boost before and after the convention. The impact on business services was also more moderate with 32% reporting a positive impact both before and during the convention and a smaller benefit after the convention.

That study found the net economic impact of the 2012 DNC included $163 million in increased business sales, 1,427 full-time jobs sustained on an annual basis, and $58.5 million in additional labor income generated. Additionally, the event raised the gross regional output by $94 million.

St. Louis is not without competition for the 2016 event. U.S. Rep. Bob Brady (D-PA) is touting Philadelphia for the 2016 DNC. Philadelphia’s most recent turn as host was for the RNC in 2000, where then-Texas Gov. George W. Bush was nominated. Brady has already utilized high profile Florida Congresswoman Debbie Wasserman-Schultz as a lobbyist in his effort to land the 2016 event. Wasserman-Schultz is also Chairwoman of the Democratic National Committee.

In 2011 the Pennsylvania Convention Center in Philadelphia completed a $786 million expansion. It remains the single largest public works project ever undertaken in the Commonwealth of Pennsylvania. The Pennsylvania Convention Authority also recently eliminated an 8% labor management fee charged to groups at the venue in an effort to attract more business.

Brady has also used the team that won and produced the 2012 DNC in Charlotte as a consultant. However, he faces a fight from within. While Mayor Slay and the CVC are united in the fight for the St. Louis bid, Philadelphia Mayor Michael Nutter is not sold on his city hosting the event. Nutter’s concerns reportedly include the amount of private funding the event would require, and safety costs. Charlotte received a $50 million security grant from the federal government for the 2012 DNC.

According to the Philadelphia Daily News, the nonprofit organized to run the 2000 convention raised $66 million. This included $39 million from taxpayers in the Philadelphia area. A report compiled by the city later said the RNC resulted in a $345 million economic impact to the region.

Cincinnati, Cleveland, Columbus, Indianapolis, Nashville, and Newark have also expressed interest in hosting the 2016 DNC. Additionally, Phoenix Mayor Greg Stanton recently pursued both Republicans and Democrats in an effort to persuade leaders of one of the political parties to hold its next national convention in the Arizona capital.

WhoLou sources say that the planned America’s Center expansion is part of an effort to attract new convention business and the 2016 DNC rather than a component of any effort to keep the St. Louis Rams in town. Ongoing negotiations with the NFL team regarding potential renovations to the existing stadium have put the full scope of the America’s Center expansion on hold.

Terms of the Rams 30-year lease, which was signed in 1995, allow for the team to end the agreement 10 years early if the Edward Jones Dome doesn’t rank in the top 25% of NFL stadiums. This means the venue would have to be one of the eight best in the league. As things stand now, the team will be eligible to opt out of the lease after the 2014 season. The Rams could them continue using the Dome on a year-to-year lease.

The 66,000 seat Edward Jones Dome was built in 1995 with taxpayer money for $248 million. The City of St. Louis and St. Louis County contribute $6M, and the State of Missouri $12M each year to retire debt, for a total cost to taxpayers of $720 million. In July of 2013 the CVC sent a letter to the Rams rejecting the $700 million renovation budget the team was seeking. Earlier in 2013 arbitrators ruled in favor of the Rams ownership group renovation request. In the July letter the CVC also expressed hope that a compromise could still be reached. In 2013 Forbes Magazine valued the privately owned Rams at $875 million. The team was purchased in 2010 for $750 million.

Recently, billionaire Rams majority owner Stan Kroenke bought 60-acres of prime Los Angeles property. This has led to much speculation regarding the future home of the team. According to an item this past Friday by ESPN.com reporter Nick Wagoner, NFL commissioner Roger Goodell was asked whether he believes the Rams and St. Louis have had ongoing dialogue. Goodell reportedly indicated the two sides have recently “had a lot of discussions.”

{the CVC rejected the Rams proposed $700M renovation of the Edward Jones Dome}


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