Which comes first, a convention center or a reason to have one?
The Downtown Investment Authority is seeking proposals for a convention center, hotel and parking garage at the Downtown East Bay Street site of the old City Hall Annex, courthouse and a parking lot.
The DIA cites the New Convention Center Feasibility Analysis Update prepared by Strategic Advisory Group as the basis for its proposal.
“The DIA commissioned a convention center study, which was completed in June 2017, and which generally support the City/DIA pursuing development of a convention center, hotel and parking garage to complement the other development in Downtown Jacksonville,” reads the resolution inviting proposals.
The SAG study supports the concept of a Downtown convention center, but as a key component in planning for overall redevelopment. The report concludes that until Downtown becomes a destination that can attract conventions, it is not ready for a new convention center.
SAG conducted interviews and surveys with more than 40 meeting planners about Jacksonville’s viability as a convention destination. More than 80 percent of those interviewed said that Jacksonville was “not on the radar” as a large meeting or convention destination.
Much of that was based on the perception that Jacksonville lacks key criteria sought by convention planners.
The report cited “walkability, lack of sufficient hotel package, airlift, the need to ‘clean up’ downtown, safety and the overall lack of ‘things to do’ ” as challenges. Also cited was a “lack of restaurants, attractions and retail.”
Those surveyed indicated that Jacksonville should maximize the St. Johns River to create an experience unique to the city.
First things first
The DIA is seeking a proposal that includes these minimum requirements: A 350-room full-service hotel; a 200,000-square-foot exhibit hall; a 40,000-square-foot ballroom; 45 meeting/breakout rooms; function space; retail; recreation; food and beverage including a full-service restaurant; 400 hotel parking spaces; and 1,300 convention center parking spaces.
By contrast, the Prime F. Osborn III Convention Center, at 1000 Water St., comprises 78,000 square feet of exhibit space. It has no connecting or nearby hotel.
According to the SAG report, the historical performance of the Prime Osborn is below industry standards.
In 2013, the Prime Osborn had an overall occupancy of 28 percent and in 2014 it was 27 percent, the study says. The industry standard for a center that is operating at capacity is 70 percent occupancy.
“The feedback received in this study, as well as past studies, supports the conclusion that the current location of the Prime Osborn prevents it from being an active convention facility,” the report says.
The center was built in 1919 as a railroad terminal but ceased operations in 1974. It was converted into a convention center in 1986.
The new convention center would sit next to the 951-room Hyatt Regency Jacksonville Riverfront Hotel and is near Jacksonville Jaguars owner Shad Khan’s planned Shipyards development, which would include dining, entertainment and nightlife venues.
“It is envisioned that the new project would create and support new demand for convention center facilities, promote larger events in adjacent areas of the urban core and Sports Complex, and possibly spur additional development in the area,” the DIA’s resolution reads.
The SAG report suggests, however, that such “additional development” would need to precede a convention center.
In conjunction with national and local sales offices of Hyatt, the SAG surveyed 30 meeting planners representing more than 73,000 meeting and convention attendees.
Of the respondents, 81 percent who had met in Jacksonville were “somewhat unlikely or highly unlikely to return.”
They also said a new convention center with no improvement in the Downtown experience was not appealing. The results of the Hyatt National Sales survey indicated that interest in placing a meeting at a new convention center in Jacksonville with no destination enhancements was “very low.”
The DIA request doesn’t include city funding, but says proposals must include a financial analysis and a financing plan for the project. That includes financing sources and estimated costs, and the level of public participation needed to combine with private financing to accomplish the project.
Proposals also should include the bidding firm’s plan for permanent financing and capitalization of the facilities, including design, construction, implementation branding and operational costs. A minimum required rate of return for equity investors and lenders also is requested.
Convention centers typically are not privately financed. The 550,000-square-foot Charlotte Convention Center was built in 1995 for $150 million.
It includes 280,000 square feet of contiguous exhibit space and is financed through a portion of the county’s hotel/motel/prepared food tax.
It is adjacent to the NASCAR Hall of Fame and within walking distance of dozens of restaurants and bars, a National Basketball Association arena, several performance venues, a Class AAA ballpark and Bank of America Stadium.
An expansion of 50,000 square feet is scheduled to begin in 2019 at $110 million and is amid a $2.7 billion mixed-use development that includes urban residences, restaurants, retail and hotels. It is connected to a 700-room Westin Hotel.
The expansion is being paid for through an allocation of the Convention Tax Fund debt capacity approved by Charlotte City Council.
Planning is crucial, execution is critical
The SAG study shows the potential convention site identified by the DIA ranks low in terms of walkable restaurants and bars, a high priority cited by meeting planners. They also concluded Jacksonville is below average in accessibility of retail for convention attendees.
SAG is owned by JLL, a professional services and investment management firm specializing in real estate services.
Current comprehensive visioning for Downtown Jacksonville, the report states, is a critical element to long-term success, and a key component of that visioning is a convention center that can serve as a catalytic element to Downtown planning.
But for now the report says it should remain a plan.
The SAG report says Jacksonville should:
“While the research has indicated that currently the potential demand does not warrant the construction of a convention center, SAG recommends that a plan is developed to improve the current Jacksonville experience and take the necessary steps to keep the vision of evolving into a competitive meetings destination as a top priority.”
