OFFICIAL - Loews Convention Hotel (formerly Hyatt)

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[aknowledgeableperson]

OK, I think I underestimated the scale of travel taxes a bit. (But you also don't get 1,000 car rentals and 1,000 hotel rooms out of a conference attended by 1,000 people. I bet the actual tax revenue is in the $15,000–20,000 range for a large conference.)

That is so true of the car rentals but the hotel rooms are a different story. Conventions usually involve a stay of 3 to 4 nights (ones I attended had 5 night stays - arriving Sun nite and leaving Fri). True, there can be a few attendees staying in the same room but for the most part it is one attendee per room and oftentimes with spouse or partner. A 1,000 person conference can easily have 3,000 room nights, and likely more.

Now consider the substantial costs of running a convention bureau, building and maintaining a convention center, and subsidizing hotels—someone on KCPT's local talk show pointed out this week that one of the downtown hotels already costs the city a million dollars a year in direct subsidies, over and above TIF—and is it at all obvious that the convention business should be a priority for this city?

The convention bureau is paid for by a portion of the hotel/motel tax. Another portion of that tax goes to Convention Center operations. 10% of that tax goes into what many call the Council slush fund - that helps pays for various events held in the city.

Ah, yes, the TIF's and mostly Super TIF's, that is a sore subject with me and one I might agree with you. But remember I can also argue the other side. And I would go back to my original post, it is all about JOBS. True, there are jobs in hotels require some degree of education but for most of the jobs the qualifications are very minimal and there are many jobs in these hotels that fit that classification. You have stagehands and teamsters and electricians who have jobs because of the industry. You have many temp type jobs to help support those type of workers. Kids have used catering jobs to help pay for college and parents have used them to help support families. Plus, the hotels are just a part of the industry. How many passengers fly into and out of KCI that are attending activities at the CC?

Instead of looking at the economic effect of just one conference take a look at it as a whole. First, remember that the Convention Center hosts just a small portion of the conferences, trade shows, etc. The small exceed far in number the large ones and many of those are held in the local hotels. The downtown and CC hotels for the most part, owe their existence to this industry. Business and leisure travel doesn't come close to supporting these businesses, especially their size.

Now, I am not sure if you are a complete supporter of the P&L. If so don't forget the direct subsidy for that exceeds the subsidy for the hotels.

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[aknowledgeableperson]

The 1,000 attendees is just the number of people actually going to the conference. The number doesn't count spouses or partners, nor support people, nor speakers, nor exhibitors, and so on. For 1,000 conference attendees my 3,000 room nights was rather conservative.

So you want to talk about cost. The Convention Center does receive $2M from the state and there is some general fund subsidy but for the most part the operations are funded by the hotel/motel tax and revenues it generates. Unless things have changed Convention Center debt is retired by the food/beverage tax collected at restaurants, no other tax money involved.

Not sure how short in total the hotels are on the TIF/Super TIF issue but if I were to bet my bet would be the taxes generated by conventions/trade shows/etc. more than cover the various subsidies.

If you want a definite study on the economic impact, well, I don't think there is one. I think you know how studies are. One will say the industry is good and another one will say it just sucks money. With regards to data I do not recollect anything recent but I would surmise that the impact is substantial, especially in the downtown/CC area. I say that because of the reactions by various businesses with the loss of Walmart, Skills USA, and still with the FFA.

I think, though, that you are not concerned with what is already here. Afterall it is here, nothing much we can do about it. Your concern I would think has more to do with future investment, primarily a large hotel and possible CC expansion. A few years ago when the hotel issue first came up there was a study (see above about studies) and if memory serves me correctly it really didn't come out all that favorable concerning the impact of a large hotel.

FWIW, the city needs to decide what it wants out of its convention industry, what kind of player does it want to be. At one time KCMO was in the top 10 but that was a long time ago. And unless the city wants to triple the size of Bartle and add 4,000 or so hotel rooms in the downtown area that is out-of-sight. Even to add a 1,000 room hotel wouldn't be enough without some expansion of exhibit/meeting room spaces at the CC. Remember, Walmart and Skills USA also commented on the lack of space at the CC as a reason to leave. And there are other past conventions KC has hosted that outgrew the CC facilities. Any substantial incentives used by the city can be expected to be subsidize much like the P&L, maybe not as much but still way north of $1M/yr.

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[aknowledgeableperson]

Can the difference between building this thing or not possibly amount to more than, say, $10 million in economic activity each year?

Go to page 28 of this topic and you can see some of the data from a study that was done to help justify a new hotel. From my perspective it was rather bleak but who knows. Study done at a different time by a different company using different data can provide a different result.

I have argued that building a 1,000 room convention hotel without adding exhibit space doesn't really solve the city's convention problem.

Generate that much economic activity? Only if the new hotel 'can' increase the convention business. Otherwise it is mostly shuffling chairs on a boat deck with the net effect being taking business away from existing hotels. Unless you add exhibit space to Bartle the city's best approach would be to go with smaller hotels.

[flyingember]

Generate that much economic activity? Only if the new hotel 'can' increase the convention business. Otherwise it is mostly shuffling chairs on a boat deck with the net effect being taking business away from existing hotels. Unless you add exhibit space to Bartle the city's best approach would be to go with smaller hotels.

the city already has the convention capacity well in excess of the hotel rooms.

we can hold a 15,000+ person event in Sprint Center and another multi-thousand event in Bartle Hall (not sure on capacity), another event in the ballroom and another in Municipal and there's not enough rooms in downtown as a whole to do this by a long shot.

the city claimed it could hold the tens of thousands a political convention would bring but it would basically need the sum of hotel space for the entire metro to do so.

look at the 2016 convention goal. we would basically use every room in the metro area to hold an event we wouldn't need any new convention space for

[flyingember]

I'd most like to see a headline number for the aggregate economic impact of conventions because this whole convention-hotel political football seems like much ado about very little. Can the difference between building this thing or not possibly amount to more than, say, $10 million in economic activity each year?

is it likely? I don't know. is it possible? yes.

you misunderstand that I'm not talking theoretical but practical attained results year after year

http://www.kcmo.org/idc/groups/citymana ... y11-12.pdf
pdf page 455

the city gets around $33 million in tourism related income each year

so convention and tourism taxes are a $635,000/week *on average* business. one up week like a NCAA tournament could be several million while a down week in winter could be 5 figures

the notable problem with this number is it's hard to break down into the exact source
but how fair is that to do? plenty of people who go to conventions to go museums, shopping and such. the skills usa age group has kids that will go to legoland. some people coming into town for a boat show is going to go to other events like a sports game.

a hotel isn't going to drive just one event it's driving massive amounts of economic activity around it.
I recently saw a vehicle from Warrensburg at NFM. The Ikea is similar as a massive regional draw. and if just10% of these people do something in KC that's a very large number.

so maybe $10 million is unreasonable just in conventions but as a whole, it's doable with all the other things going into the region. And more hotel space is critical to use what amenities we have more.

tourism is one of the sides to the triangle of downtown. it's the oxygen to the fuel and heat
tourism - residential - office

[aknowledgeableperson]

the city already has the convention capacity well in excess of the hotel rooms.

If so then why did the Walmart get together leave? And it is not just because of hotel rooms.
If so then why is Skills USA going to leave in the future? And it is not just because of hotel rooms.
The city has less than 400,000 sq ft of continuous 1st class exhibit space which can be on the low end of sizes compared to other cities.
The city has only 45 meeting rooms in the CC which is a low amount.

Using the 2016 GOP Convention does not apply. #1, from what I have heard the convention itself will be held in the SC. #2, the political convention does not have the need for exhibit space.

[flyingember]

the city already has the convention capacity well in excess of the hotel rooms.

If so then why did the Walmart get together leave? And it is not just because of hotel rooms.
If so then why is Skills USA going to leave in the future? And it is not just because of hotel rooms.
The city has less than 400,000 sq ft of continuous 1st class exhibit space which can be on the low end of sizes compared to other cities.
The city has only 45 meeting rooms in the CC which is a low amount.

Using the 2016 GOP Convention does not apply. #1, from what I have heard the convention itself will be held in the SC. #2, the political convention does not have the need for exhibit space.

the facts show it's hotel space for both

http://fox4kc.com/2013/06/24/kcs-larges ... next-year/
notice how skills usa managed to use three convention buildings. that's the biggest event the city had and they hadn't overflowed into the Sprint Center yet but they had overflowed into 38! hotels. so there was still convention space left over but rooms were further and further out.
oh, and this gives you a 6-figure number you claim isn't realistic. 4% of $16 million is 640,000. and we already know 4% is low because hotel taxes are higher than that

here's the thread on walmart. there were claims we lost walmart on purpose to make a case for a hotel. this is the Funkhowser era too, and he apparently didn't push back on it being anything but hotel space and he didn't want to provide assistance for a hotel at all. so if he could have passed the buck, why wouldn't he have?
http://www.bizjournals.com/kansascity/s ... l?page=all
$8 million, $320,000 at 4%

all your arguments are provably hotel space issues. if we can't fill all our convention space using 38 hotels, there's no other issue as far as conventions go.

on the republican convention, post your source or this is just making things up. no one know anything solid on where it will be.

also, political conventions absolutely need the exhibition space. you'll have tons of media that need a place to setup, the staging space for all the staff, etc. the Sprint Center isn't big enough for a 50K event by itself

[aknowledgeableperson]

Go back to some earlier posts on this topic, like around page 5. There are quotes concerning both organizations, and a third, and the lack of space as a contributing factor. Yes it worked for Skills USA this year and a few years past but their preference is that the space used by them be under one roof. They were under a long term contract and since the start of that contract the organization has grown way beyond their initial plans. They honored the contract and took additional space in different locations, something they prefer not to do.

With regards to the GOP convention:

It’s huge that Kansas City lacks causeways and heavy rush-hour traffic and can tout the still-new Sprint Center where the gathering would be staged, she said.

“We actually have a better shot of anyone with this (transportation) issue,” Nugent said.

That Kansas City’s delegation left Boston and the summer meeting of the Republican National Committee convinced that the city has a shot is unexpected in itself. Many local insiders had been insistent that Kansas City faced too many drawbacks, with the lack of a major downtown hotel ranking as only one of them.

The city appears to lack some of the big-time amenities that other recent host cities, including New York and Los Angeles, offer, such as new-style mass transit. (If all goes according to plan, Kansas City’s short downtown streetcar system could be up and running by convention time.)

Politically, both Missouri and Kansas also are regarded as likely to vote Republican for president in 2016, meaning that the area lacks the swing-state profile that attracted the Republicans to Florida for their 2012 convention and the Democrats to North Carolina the same year.
Read more here: http://www.kansascity.com/2013/08/20/44 ... rylink=cpy

Be prepared to see many trailers for weeks around the SC if KC get's the convention.

[KCPowercat]

You sure about that? The main reason Hyatt in CC went to Sheraton is because Westin next door has same parent as Sheraton, so one entity to book both hotels for convention planners. Crown Center was very specific about that as the key benefit. I suppose if it's all corporate owned it could be different but would think Marriott flag with different owners is easier to book than completely different hotels. I'd be surprised if all Marriott branded hotels don't use the same booking system, if not huge fail on their part.

Yes I'm sure. Hyatt changed to a Sheraton because they would both be Starwood properties that is correct....but the reason it works there is they are both owned by one owner and split the hotel space across one sales team. Now if the same hotel owner wanted to build 4 hotels of 300 rooms then you could do the same thing I guess...but that's a long shot. I'm sure there are economies of scale as to why you wouldn't do that typically.

[KCPowercat]

the city already has the convention capacity well in excess of the hotel rooms.

If so then why did the Walmart get together leave? And it is not just because of hotel rooms.
If so then why is Skills USA going to leave in the future? And it is not just because of hotel rooms.
The city has less than 400,000 sq ft of continuous 1st class exhibit space which can be on the low end of sizes compared to other cities.
The city has only 45 meeting rooms in the CC which is a low amount.

Using the 2016 GOP Convention does not apply. #1, from what I have heard the convention itself will be held in the SC. #2, the political convention does not have the need for exhibit space.

While it is true Walmart left because there aren't enough of either rooms or convention space, it's widely acknowledged that we need more rooms walkable to the convention center to maximize the space we do have, the ratio is off...and the space is nothing to blow off actually. 400k continuous exhibit space is pretty high in our weight class.

[moderne]

With the talk about Omni, I am surprised that they are not interested in using the P&L Building as part of the hotel. Omni has a subspecialty in running historic properties. Omni has 15 hotels desginated as Historic Hotels of America by the National Trust for Historic preservation. Historic Hotels.org/NationalTrust

[KCPowercat]

With the talk about Omni, I am surprised that they are not interested in using the P&L Building as part of the hotel. Omni has a subspecialty in running historic properties. Omni has 15 hotels desginated as Historic Hotels of America by the National Trust for Historic preservation. Historic Hotels.org/NationalTrust

I think they are....

[smh]

I wonder if there is any sort of timeline yet on the Omni discussions. I understand these things take time to develop, etc. but my brain operates on a SimCity Cheetah cycle. I expect that hotel to be built now!

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[aknowledgeableperson]

Unless a lot of behind the scenes work has already been done seriously doubt the hotel would be finished in time for the convention.

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[KCPowercat]

Omni announcement in Dec/Jan is a rumor I just heard....dunno.