Some odds and ends
Today Bill Lucas, president ? Crown Center, addresses strategies and priorities for the Crown Center complex this year.
Q: How is the travel business looking overall this year, and how is that affecting Crown Center hotels?
A: There's been a slight pickup, mostly in business travel. Our hotels have had some success booking their own groups as opposed to citywide conventions, which is resulting in about a 5 percent increase in our occupancy rates, but we're not back up to pre-recession levels yet.
Unfortunately, in the conventions market, there is a perception that Kansas City doesn't have enough hotel rooms and convention space. This perception has had an adverse impact on our ability to book national conventions. The conventions landscape has gotten incredibly competitive. The number of cities with which we compete has doubled in the last 10 years, and we've lost our place as a leader in the conventions business. The city will need to spend a significant amount of money to create the right image and support advertising that goes with it. It will take several years for us to catch up.
Q: How are Crown Center retail and restaurant sales going?
A: Again, we're seeing a slight uptick in sales, but we're still mired down in the recession. Consumer spending hasn't returned to the robust nature of 2006-2007, but we're beginning to see some signs of recovery. We expect our retail sales to be flat compared with last year, which we consider good in this market.
Our retail occupancy is about 93 percent, and we've had some success developing small business entrepreneurs. We've worked with the Kauffman Foundation to help new retailers develop their skills. Big Momma's Bakery-Caf? is an example of a new tenant that is doing very well. Function Junction's sales are up significantly, and it has almost doubled its retail space. Fritz's Railroad Restaurant doubled its space about 1? years ago, and its sales are up significantly.
The economy is still affecting retailers' ability to get the loans and credit they need to open and run a business, but we're always on the lookout for unique, local businesses that would fit our niche.
Q: How is Crown Center office space performing?
A: Our office space is currently about 92 percent full, which we consider fantastic. The office environment in Kansas City is very weak. Typical vacancy rates are fairly high at 15-20 percent. We have some tenants whose contracts will be up soon, and we are working aggressively to re-sign them.
Q: Are there any major initiatives for Crown Center this year?
A: We are in a period of maintaining what we have. The businesses we'd most likely grow ? in-office leasing and residential condominium development ? are both currently down. We don't expect to see a strong market for further development for another three to four years. For us to get back into a growth mode, we need those markets to become healthy again.
Q: Are you planning any new events this year? What role do events play at Crown Center?
A: Instead of adding new events, we are working on fine-tuning and improving the events we have, such as the Free Friday Flicks, Jiggle Jam children's festival, Fiesta Kansas City and Kansas City Irish Fest. Events can be fairly expensive to put on, and sponsorship dollars aren't as readily available as they have been in the past due to the recession. We are trying to make our events as efficient as possible so we can stretch our marketing dollars.
Events are important because they allow us to remain relevant. When you're an urban center like Crown Center, you have to work harder because most people go home from the city at 5 p.m. We have to get them to stay later or come back on weekends. That's what events do for us. They help us create an atmosphere in which employers want to lease office space, for example. They help our hotels sell rooms; for example, about 2,500 hotel rooms are booked over Labor Day for the Irish Fest. Events help our retailers to a varying degree, and they generate sales for our food and beverage vendors.
Q: Is Crown Center partnering with any other downtown Kansas City entities on any events or initiatives?
A: We've partnered with the Downtown Council on a fairly substantial marketing campaign that reminds suburbanites of the vital renaissance going on in the urban core, which is defined as the City Market through 31st Street. We're also part of the Convention & Visitors Association's ongoing campaign to attract families and leisure travelers from about a 200-mile radius. Along with other area attractions, we provide marketing dollars for these campaigns to help expand our reach. It would be significantly more expensive to launch an advertising campaign like this on our own.