Consultants recommend convention hotel instead
Greenville has neither the funding nor the space to build a new convention/conference center downtown, Chicago-based Hunden Strategic Partners said in a feasibility study released this week.
Instead, HSP recommends “the development of a larger convention hotel property that includes the most compelling elements of a meeting facility, without the costs and size of an independent convention center.”
The City of Greenville, joined by Greenville County and VisitGreenvilleSC, requested the study to examine whether a conference center is feasible downtown to draw more business-focused people from out of the area to spend money eating at restaurants, shopping in retail stores and staying at hotels.
“It’s important that we did the study,” said County Councilman Bob Taylor. “We now have a good picture of the lay of the land.”
The verdict
HSP’s 244-page report said Greenville is still very much “a drive market” for conferences because of the “airline situation” and regional location, and thus attracts smaller-type meetings.
For the minimum convention center size that would make sense for Greenville, 12+ acres are needed, the consultants told a group of city business leaders in a presentation earlier this week. “As a result of these site constraints, along with the lack of significant funding for a true convention facility, HSP does not recommend building a convention center in downtown Greenville,” HSP says.
HSP analyzed three different sizes of convention center complexes in the study, but recommended a mid-point option to include a minimum 450-room “headquarters” hotel with a Marriott, Sheraton or Hilton branding. The hotel should offer at minimum a 25,000-square-foot ballroom, 10,000-square-foot junior ballroom and 16,000 square feet of breakout meeting rooms.
The cost is beyond what the market will bear, the consultants said, so a public subsidy would be required. Total cost? Approximately $135 million in public funding, not including the land. A proposed incentive package in the study could include money from local accommodations tax, hospitality tax and state accommodations tax, which could offset that cost by 35 percent.
Where to put the new destination hotel?
The city asked HSP to evaluate four initial sites: property near the Bon Secours Wellness Arena, property near the former proposed Visitors Center on River Street, a site near Fluor Field and property near East Broad and Church Streets.
Because of the proximity to existing and proposed new hotels, size of contiguous property available and walkability to downtown, that list was then narrowed to two: River Street and East Broad Street. The Broad Street property is currently owned by Timberland Capital Partners. The River Street property is owned by developer Phil Hughes, with the exception of a 1.1-acre parcel owned by Greenville County on which a now-defunct visitors center was planned.
The county is currently soliciting offers for highest and best offers on that property, and Taylor says the study results indicate that “it might be a good idea to sell the property and then look at another location in the future” for a conference center.
HSP recommended against adding on to the existing Hyatt Hotel, for space and cost reasons and because “development is moving west, instead of anchoring a north end amenity,” the consultants said. A County Square site was also thrown out as the county told HSP it wasn’t available.
Parking and congestion are big concerns for a downtown facility, but meeting planners want “meet, greet and eat space” where attendees can walk. Downtown hotels hold 68 percent of meetings across the country, the consultants said.
TD Center and trends
For a market the size of Greenville, the TD Center is “too large and in an area without hotels and amenities” and loses $750,000 per year, the consultants said.
Meeting planners today are looking for much different type of space than in the past, and the market views the TD Center as “a glorified expo center, not a true convention center,” HSP said. Today’s meetings are very compressed with a tight return on investment, while virtual teaching and other technology have evolved, making reliance on large exhibit space less intense than it once was. Large, flexible rooms and numerous breakout rooms are the trend now, said HSP.
HSP received 56 responses from meeting planners it surveyed as part of the study. While many said they like Greenville, the planners said they do not need major exhibit space, but they do want adjacent or walkable hotels within 1,200-1,500 linear feet. The lack of hotel room at the TD center creates logistical challenges as well, those surveyed said.
“Despite its limitations, we have a great facility in the TD Center,” said Julie Horton, government relations manager with the city of Greenville. “It’s very well run. The limitation is in the building itself, but we will continue to nurture it and take care of it to have a space for meetings and events.”
Recommendations
The consultants suggest that the city save money and find new funding sources over the next several years while it assembles 15-20 acres of land near downtown for the convention hotel and parking needed. “HSP does not recommend that this hotel open sooner than 2020” to allow time for absorption of the “nearly 1,000 new hotel rooms coming into the market in the next two years,” HSP said.
It’s important for everyone to “take time to pore through the report and recommendations,” said Chris Stone, president of VisitGreenvilleSC. “It’s very expensive.” Stone said he was uncertain from the presentation given this week as to what a new convention hotel would do to overall market demand and hotel room demand on the days when no conferences were scheduled.
“I’m not surprised the findings show a building, parking and headquarter hotel,” Stone said. “But if downtown continues to run at a very high average [hotel room bookings], it’ll still be really hard to get room blocks, and that’s what meeting planners are looking for. We need to take a really hard look at market demand and make sure there’s sufficient demand and let that be the lead on where we go.”
Taylor agreed, saying, “The hotel market is expanding right now and we need to digest that for a few years and see how it plays out.”
“This is a planning tool that we needed,” said Horton. “With all of these conclusions, it’s evident that this would have to be a shared community vision because no one entity could do this alone. We needed that expert advice, based on all of the data. To hear that and understand what that cost would be is something that we had to have and need have to move forward.”.
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To read the entire study, visit bit.ly/convention-center.
