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HomeMy WebLinkAbout3/5/2003 - STAFF REPORTS (15) MEMORANDUM PALM SPRINGS INTERNATIONAL AIRPORT From the desk of: Allen F. Smoot, A.A.E., Executive Director - Airports DATE: March 5, 2003 TO: City Council SUBJECT: CONVENTION CENTER EXPANSION—PHASE 11 UPDATE On February 13, 2003, City Council reviewed a series of suggested expansion options and provided direction that Option 5 was preferred with the elimination of the"L" shaped Exhibit Hall and an accompanied reduction in pre- function space. City Council was also interested in a flexible design which might include up to 20,000 sq.ft. for a ballroom/meeting room space. Project funds that the Council made available for the project were as follows: Total Funding Available $37,868,954. Less Phase I Cost (3,125,000.) Total Available for Phase II $34,743,954. Less Soft Costs (3,978,442.) Less Pre-Opening Marketing Allowance (1,500,000.)* Less 500 Space Parking Allowance (925,000.) Less FF&E Allowance (400,000.) Total Available for Construction $27,940,512, *Subject to further review by City Council. City Council also expressed that a $1 million construction contingency was inadequate as was $400,000 for site landscaping. Staff then assigned a$2.2 million value to the construction contingency and increased the allowance for landscape to$650,000. With these changes, the Option 5 project would exceed budqet by $2 to$2.5 million. With the above parameters,the designers and the design team went back to work to refine the design to bring it into budget and provide for greater flexibility. After reviewing several more options, the committee recommended Option #10, (see attached drawing) with a concern over the feasibility and cost of restructuring the Oasis 5 mezzanine area yet remaining. The structural engineer has completed his review and has found the restructuring is impractical and cost prohibitive. Option#11 is also attached. This option shows Oasis 5 remaining and actually being expanded by a couple thousand square feet and a resultant 16,000 sq.ft.flex space for ballroom and meeting rooms. The priority, as originally described by the Convention Center, was more meeting rooms and ballroom if possible. Following the two drawing attachments are,first,the original exhibit on howwe raise the$37.8 million"Total Funding Available" and second, a new cost estimate sheet. Amado Road --�--—4Q2— ] �C \ I 'Column Free Flex Space 'ExhibR antl Flex Space Connectetl by 66'Amxall Connection // I 'MustCerro and Relocane s,,4` s,ne MecM1 Meaabove Oasis5 I 'Munn Demo antlr desgn sesmc sWcwral systemwth lM1ree new olumns y I 'Layer Oasts at Amatlo i ----- a j Option #10 Pnl a� 1n Exhibit 94,239 sf �NbAH- FWS,® Flex Space(ballroom) 20,035 sf mass I Replace Mech Mezz 1,500 sf Add Admin + Mech 2,250 sf Overall Reduct. 5,010 sf A. ' t t 1 w ali F i w E7 11 j Feb, 26, 2003 Scale: NTS ` � 3E � r •,a � I I c Fentress ------ ------ Bradburn - _- -�- - — - - Q A R tu I T E ri T L T D. Architecture • Inferiors . Planning Andreas Amado Road ^�_ V _V_" -�' Z-"y— \ ! •Keep axis ga,exwong slmclu2lsystem Ke tin mach me,oaame above Oasts 5 /// 3interwrmWmns between . fsS&Flex Space) sule 1 'L Get approximately t Option mare sf(but i$600K mlerwr columns) ! -Lessdxpensive that OpCwn%16($660$666K mnge)due mIsms ncluded above\ I'Much less functional back of house Less functional food]service Less functional loading dock Layer oasis at Amatlo i -¢ \1 ! I u,. a ! Option #11 (((lll��777)� 0 u 173 s3ms nca ! _ ! Exhibit 94,239 sf a „,n axnmunao .— � 1 I w.a3s r y Oasis 5 X 7,061 sf Flex Space(ballroom)16,894 sf ll Add Mech + Admin 2,250 sf t _ ! Overall Reduct. 5,251 sf Feb. 26, 2003 o $ 1 ! Scale: NTS Q Fentress -- - - ��- Bradburn A R C H I T E C T S L T D. Architecture • Interiors - Planning tl ! Andreas � I CONVENTION CENTER EXPANSION BOND ISSUE Funding Scenarios For Phase II TOT Plus Interest (Plus Growth) Revenue Available Annually $2,000,000. Bond Proceeds 38,080,000. Cost of Issue (1,251,782.) Reserve Fund (2,36.5,000.) Capitalized Interest (3,461,677.) Net Bond Proceeds 31,001,541. Phase 1I Civil Design Savings 100,000, TOT Collections FY 02-03 1,700,000. FY 03-04 1,785,000. FY 04-05 1,838,550. FY 05-06 1,893,707. Net Debt Service,FY 05-06 (449,844.) Total Funding Available 137,868,954. w� CONVENTION CENTER PHASE II EXPANSION Cost Estimate March 5,2003 Total Available for Construction $27,940,512. Less Construction Contingency (2,200,000.) $25,740,512. Current Square Footage Based Estimate (26,253,090.) (Option 10 or 11) Current Overrun ($512,578.) • Current estimate includes no dollars to restructure OASIS 5 mezzanine. ($500,000 to $700,000) • Current estimate includes no dollars to refurbish existing meeting rooms or restrooms. ($500,000) • Current estimate includes only $650,000 for landscaping compared to an estimate of up to $1.8 million. • Current estimate assumes we will have sufficient savings in the current per square foot cost in pre-fimetion to offset exterior finishes and covered areas. • Current estimate does not include a major rebuild of the HVAC system or dollars for the deferred maintenance items. PSCC MARKETING PROGRAM SUMMARY Pre-Opening Marketing March 2003 - March 2005 Pre-opening Timeline • 22 Months Out: Initiate creative development of marketing materials, including advertising, brochures, meeting planner kits, etc. Secure future advertising placements. • 18 Months Out: Introduce new Convention Center to key clients using collateral materials, site inspections, internet and trade shows. First release of advertising program, and announcements at key trade meetings (American Society of Association Executives [ASAE], International Association of Exposition Managers [IAEM], etc.). • 16 Months Out: Begin ramp-up of public relations campaign highlighting project milestones (topping off, human interest, advance bookings of interest, etc.). • 12 Months Out: Peak activity in terms of advertising, PR and promotional activity, working with potential clients. • 1111�th4 x, Sep �raragements for grand oper� ng, ribbon cutting, amillarttatio ours; -et c. ��zo all post=operling collateral materials. Prepared by 3/5/2003 Page 1 Months Before Building Opening: 22 Months as of March 2003 FY 2002- FY 2003- FY 2004-05 Category 03 Total 04 Total Total Sub-totals Totals Sales Collateral Expansion Initial Piece(Incl.Floorplan) Design&Copy Development(3,000 copies) 750 0 0 750 Printing 1,200 1,200 Postage 1,100 1,100 Trade Show Piece(Incl.Floorplan& Rendering) Design&Copy Development _ 6,000 6,000 Printing(4,000 Pieces) 7,500 7,500 Meeting Planner Sales Kit w/stand alone elements Design&Copy Development 10,000 6,000 16,000 Printing& Production(3,500 Kits) 0 35,000 35,000 Print Overrun on Stand Alone Elements 0 9,000 9,000 Final Tradeshow Brochure w/Completed Building Graphics Design&Copy Development 0 1,500 1,500 Printing(5,000 copies) 0 7,500 7,500 Category Subtotals: 16,550 10,000 59,000 85,550 Advertising/Direct Mail Industry Publications Ad Design&Development 37,000 7,500 44,500 Meetings&Conventions 6 @ 8,753 ea. 4,753 30,259 17,506 52,518 Association Meetings 6 @ $5,891 ea. 23,564 11,782 35,346 Association Management(CEO's)6X @ $8,695 ea. 34,780 17,390 52,170 Tradeshow Week Exhibit Hall Directory 2 @ $6,966 ea. 6,965 6,965 13,930 Tradeshow Week NewsMagazine 2 @ $4,350 ea 2,350 65350 0 8,700 Forum(Chicago Market)6 @ $3,632 ea. 14,528 7,264 21,792 USAE 1 Show daily at ASAE @ $9,098 95098 9,098 0 18,196 Executive Update(DC Market)6 @ $5,185 ea. 205740 10,370 31,110 Medical Meetings 4 @ $5,157 ea. 10,314 10,314 20,628 Corporate Business Periodical (Western US)-2 @ $9,971 ea. 19,942 0 19,942 Direct Mail Expansion Promo Kick-off Design& Production 500 0 500 Printing(4,000 Pieces) 10,250 0 10,250 Postage 55500 0 5,500 Completion Mail Promo Production(continue design theme from kick off promo) 4,000 4,000 8,000 Postage 6,000 6,000 12,000 Category Subtotal: 53,201 210,290 91,591 355,082 Prepared by 3/5/2003 Page 2 FY 2002- FY 2003- FY 2004.05 Category 03 Total 04 Total Total Sub-totals Totals Public Relations Develop&Host Media Events(Trade&Local) 15,000 15,000 30,000 (Also See Pre-Opening Events Described Below) Pre-opening Events PSDRCVA Golf Tournament Sponsorship 2,000 2,000 0 4,000 ASAE Annual 2,500 3,000 4,000 9,500 CSAE Annual 4,000 4,000 8,000 Chicago Sports Spectacular 2,500 2,500 5,000 Cal ASAE 2003 4,000 4,000 8,000 Groundbreaking-Nov.2003 5,000 0 5,000 Topping Off-Date TBD 10,000 0 10,000 Grand Opening-TBD 0 75,000 75,000 Familiarization Tour for Sacramento 10,000 12,000 22,000 Familiarization Tour for Chicago 10,000 15,000 25,000 Familiarization Tour for DC 6,000 25,000 31,000 HOPS Dinner(Oct.2003&2004) 5,500 5,500 11,000 Meeting Manager's Event 3,200 3,200 Category Subtotals: 7,700 77,000 162,000 246,700 Tradeshows/Sales Blitzes Tradeshow Booth Display-Design and Purchase 20,000 0 20,000 ASAE 8/03&04 2,000 2,000 - 4,000 Cal SAE(Sacramento) 12/03&04 2,000 2,000 4,000 Destination Showcase (Feb.2004) 2,000 0 2,000 IAEM 2,500 2,500 5,000 CSAE Seasonal Spectacular(Chicago) 12/03&04 2,000 2,000 4,000 Category Subtotals: 0 30,500 8,500 39,000 Website Revision Update Current Website to include Expansion Elements/Progress 4,000 0 4,000 Complete Redesign of website to match new brand/theme 10,000 25,000 35,000 (Elements to include New Logo/Image, Floorplans, online ordering of services, diagrams,etc.) CVA Web Promotion Program 4,000 4,000 8,000 Category Subtotals: 8,000 14,000 25,000 47,000 Convention Sales Person-DC Hire DC Sales Person/Office Share w/CVA Staff 8,334 100,008 75,006 183,348 (Salary, benefits,office,etc, beginning in 6103 thru 3105) Category Subtotals: 8,334 100,008 75,006 183,348 Contingency/Pop-up Opportunities Marketing/Client Opportunities/Incentives Etc. 5,000 26,500 41,000 72,500 Category Subtotals: 5,000 26,500 41,000 72,500 Grand Total: 1,029,180 Totals by Fiscal Year: 98,785 468,548 858,194 rv'rCARTHY 91a 9cc1 2902 02J12J09 09142pm P. S01 MEMO February 12, 2003 TO; Palm Springs Mayor, City Council and City Manager RE; Increasing annual Convention Center loss to $7 million FROM; Frank Tysen on behalf of Palm Springs Hotel Owners • Convention Center expansion originally a good idea When the big hotels initiated a move to increase the bed tax for the possible expansion of the convention center we did not oppose it even though we felt that to increase the bed tax for the small hotels fron n 10%to I 1 30,0 was not fair and appropriate. To appease any opposition the big hotels tnanagers assured us that a feasibility study was to be done and that they would not pursue the convention center expansion if This studv would show that it was not a good idea. • Expansion does not pencil out We have analyzed this study and feel that the convention center expansion proposal is not a positive proposal for our crty. To spend some $30 million dollars for this expansion to increase the bcd tax by a mere $500.000 00 does not make sense. Debt service alone would increase to $ 5,51 0,000 a year while operating loss would add another annual expense of$1,500,000, • Ci.ty's Solvency'Threatened Such expansion would indood be dangerous to our city's financial health and could ultimately lead to insolvency , It s-ems irresponsible at this point to saddle the taxpayers with an annual deficit of some S7,000,0J0 for the convention center. 'Phis is money that would otherwise be in our general funds which we cannot afford to spend on such a foolhardy proposal, • Expansion leaves no tnoney fi7r urgent priorities Our community is currently faced with some horrendous problems that will require major future outlays. Foremost, crime has become a very serious problem it) Ixalm Springs being one ofthe bighest in the Coa hclla Valley. Obviously we need to spend more money for police not incur a greater bUchnot deficit to seta few more conventioneers when we alreadv ca.lft handle crime control :°or t.be people who now visit plus our residents. We desperately need the money to stin;ulate infusion of"quality retail in our downtown which we have been losing at an alarming rate. Finally due to economic conditions and fear of war many of our hotels are now staffcring substantial oucupancy drops requiring creative solutions which again will be difficult when There is no money left to do Anything. • barge corporate hotel interests versus owner operated hotels We are aware that a handftil of corporate hotel managers have been lobbying hard for the convention center expansion ""heir corporations will marginally benefit from some convention business increase but ti-esc corporations hardly concern themselves with saddling our taxpayers with an unjustifiable debt' Bcsidcs ''he typical corporate hotel manager d,res not stay long in our city. On the contrary we are hotel ovmers wllo have hrvcsted our life savings in these hotels. We live he e and are herc for the long haul. We are all worried and we urge you not to put all our eggs in tsne basket. Perhaps a scaled, down version is in order. We need to explore less costly Me-native to increase tourism.