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CP Dec. Presentation - t5boston -- MCCA

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CP Dec. Presentation - t5boston -- MCCA Powered By Docstoc
					                                                        DRAFT FOR POLICY
    Convention Partnership Update                       DISCUSSION ONLY

    December 21, 2010
    James Rooney – Executive Director, MCCA
    Howard Davis - Director of Capital Projects, MCCA




1
                                             DRAFT FOR POLICY
                                             DISCUSSION ONLY

    Agenda

    I. What Have We Done?
        •   A year-long, intensive, wide-ranging
            look at the MCCA and its future.

    II. Where Are We Today?
        •   Preliminary conclusions resulting
            from this process.

    III.Where Are We Going?
        •   A suggested “road map” for the next
            four months.

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                         DRAFT FOR POLICY
                         DISCUSSION ONLY

    What Have We Done?




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                                              DRAFT FOR POLICY
    What Have We Done?                        DISCUSSION ONLY

    Convention Partnership Established


    Established 27 member Convention
    Partnership to steward the public study
    and analysis of T5 initiative.




4
                                                 DRAFT FOR POLICY
    What Have We Done?                           DISCUSSION ONLY

    Convention Partnership: Statement of Purpose


    Boston will become a “Top 5” destination for
    conventions and meetings, substantially increasing its
    market share among North American competitors,
    enhancing the economic benefit to the City of Boston
    and the Commonwealth and be identified as the
    #1 destination for international meetings,
    conferences and exhibitions.




5
                                            DRAFT FOR POLICY
    What Have We Done?                      DISCUSSION ONLY

    Convention Partnership: Relationships




6
                                      DRAFT FOR POLICY
    What Have We Done?                DISCUSSION ONLY

    Convention Partnership: Process




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                                             DRAFT FOR POLICY
    What Have We Done?                       DISCUSSION ONLY

    Convention Partnership: Information Phase
                            [January – June]
    January: Overview of Industry

       • “Convention Industry 101”
       • MCCA – Who and History
       • MCCA Success – Sales and Marketing Performance

    February: BCEC Success and Market Demand

       • BCEC Case Study
       • Market Demand and BCEC
       • Potential Expansion Elements


8
                                                     DRAFT FOR POLICY
    What Have We Done?                               DISCUSSION ONLY

    Convention Partnership: Information Phase
                            [January – June]

    March: Customer Advisory Group

       •   Introduction of Customer Advisory Group
       •   Boston as a Convention Destination
       •   Boston Hotels and Site Venues
       •   Potential BCEC Expansion

    April: Hotels and BCEC

       •   Relationship between BCEC and Hotels
       •   Benefits of Additional Proximate Hotel Rooms
       •   Headquarters Hotel Financing and Trends
       •   Overview of City-wide Hotel Development
9
                                                  DRAFT FOR POLICY
     What Have We Done?                           DISCUSSION ONLY

     Convention Partnership: Information Phase
                             [January – June]

     May: Urban Context/Financing Trends/Westin Hotel

        • Urban and Community Context
        • BCEC Financing: Case Study
        • Financing Overview of Other Convention Center
          Expansions
        • BCEC Westin Hotel: Case Study


     June: The “Tough Questions”
        • Panel Discussion, Chaired by David Luberoff with
          Panelists Charles Chieppo, Dan O’Connell, Lisa
          Petraglia, and Samuel Tyler
10
                                                                          DRAFT FOR POLICY
     What Have We Done?                                                   DISCUSSION ONLY

     Convention Partnership: Analysis Phase
                             [July – October]

     Finance Working Group

     1. Compare Pre-Development BCEC Projections with Actual Results
              Analysis of 1997 Johnson Report: events, room nights, exhibit hall
               occupancy
              Johnson Report: new hotel development requires public/private participation

     2. Analyze Convention Center Fund
              How it works & revenue sources
              How it has performed to date against initial projections
              Future revenue and expense projections
              Sensitivity analyses

     3. Identify Potential Revenue Sources for BCEC Expansion



11
                                                                            DRAFT FOR POLICY
     What Have We Done?                                                     DISCUSSION ONLY

     Convention Partnership: Analysis Phase
                             [July – October]

     Finance Working Group Continued

     4. Review Convention Center Expansion Financings in Other Cities
               Financing models and revenue sources; case studies

     5. Review Headquarters Hotel Financings in Other Cities
               Ownership structures
               Financing models/flow of funds
               Case studies

     6. Current Hotel Financing Environment: Debt Structures and Requirements
        (private, public/private, public)
     7. Construction Costs in Boston
               Historical costs & cost differentials: Boston vs. other cities



12
                                                                  DRAFT FOR POLICY
     What Have We Done?                                           DISCUSSION ONLY

     Convention Partnership: Analysis Phase
                             [July – October]

     Hotel Working Group

     1. Examine Relationship Between BCEC and Hotels

     2. Evaluate Headquarters Hotel Demand

     3. Develop 10 Year Operating Proforma for Headquarters Hotel

     4. Evaluate/Rank/Select Potential Headquarters Hotel Sites
            Input of major headquarters hotel operators




13
                                                                        DRAFT FOR POLICY
     What Have We Done?                                                 DISCUSSION ONLY

     Convention Partnership: Analysis Phase
                             [July – October]

     Hotel Working Group Continued

     5. Establish Programs for Headquarters Hotels (1,000 Rooms and 1,200
        Rooms)
               Input of major headquarters hotel operators and survey of national
                headquarters hotels

     6. Review Headquarters Hotel Development/Ownership Options

     7. Explore How Other Headquarters Hotel Projects Were Financed

     8. Consider Approaches to Encouraging Mid-Priced Hotel Development




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                                                                   DRAFT FOR POLICY
     What Have We Done?                                            DISCUSSION ONLY

     Convention Partnership: Analysis Phase
                             [July – October]

     BCEC Expansion & Urban Context Working Group

        Review of Convention/Tradeshow Industry Trends

        Analysis of Market Demand for BCEC Expansion Elements

        Analysis of Competitor Facilities Development Plans and Rationales

        Clarify/Articulate Benefits of BCEC Expansion

        Identify and Evaluate Location Options/Siting Requirements for
         Expansion Elements




15
                                                                        DRAFT FOR POLICY
     What Have We Done?                                                 DISCUSSION ONLY

     Convention Partnership: Analysis Phase
                             [July – October]

     BCEC Expansion & Urban Context Working Group                            Continued


     6. Analysis of Existing Transportation and Infrastructure Conditions (South
        Boston Bypass/Haul Road, Track 61, HazMat Cargo)

     7. Develop Programs for Expansion Elements

     8. Develop Conceptual Designs for Expansion Elements
                “Right sizing” of elements and support space

     9. Consider Land Acquisition Strategies
                Investigation of existing land uses and major land owners surrounding
                 BCEC




16
                           DRAFT FOR POLICY
                           DISCUSSION ONLY

     Where Are We Today?




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                                                                         DRAFT FOR POLICY
     Where Are We Today?                                                 DISCUSSION ONLY

     Preliminary Conclusions: Information Phase

     •   The BCEC was successfully developed as a joint MCCA/City of Boston
         project, opening in 2004.


     •   Initial marketing and operations were very successful, with exhibit
         space occupancy reaching over 62% (a solid, “stabilized” occupancy level)
         in FY 2007, just three years after opening.


     •   This success was evidenced by the BCEC’s selection by Events Solutions
         Magazine as “Convention Center of the Year” in 2007.


     •   When opened, the BCEC was the country‟s leading convention center
         technologically, a position that has been maintained through continuous
         strategic upgrades.




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                                                                            DRAFT FOR POLICY
     Where Are We Today?                                                    DISCUSSION ONLY

     Preliminary Conclusions: Information Phase

     •   Despite its substantial size and status as New England’s largest building,
         the BCEC is smaller than most competitive and comparable facilities –
         with total exhibit space ranking 13th out of 16 facilities reviewed in 2009,
         and total ballroom space ranking 11th out of 13 facilities reviewed in 2009.


     •   The BCEC has one of the industry’s highest ratios of meeting room
         space to exhibit space (1 to 3), an important feature in attracting desirable,
         high-impact events.


     •   Potential BCEC expansion components include a second, larger
         ballroom; expanded exhibit and meeting room space; and a fixed seat
         auditorium.


     •   Events categorized as “conventions/tradeshows” (events that use exhibit
         hall and meeting space, such as BIO, New England Grows, etc.) are the
         BCEC‟s dominant event type in terms of number of events, attendance
         and hotel room night generation.


19
                                                                            DRAFT FOR POLICY
     Where Are We Today?                                                    DISCUSSION ONLY

     Preliminary Conclusions: Information Phase

     •   Only two consumer-oriented “gate shows” are held at the BCEC, the New
         England International Auto Show and the New England Boat Show, in contrast
         to many other facilities where such shows are common.


     •   Sought after medical and technology events, which generate superior
         economic benefits compared to most other types of events, have each
         represented more than 20% of total BCEC event activity.


     •   The BCEC has far fewer accessible hotel rooms than most competitive
         facilities, with only 1,700 rooms within a half-mile radius, compared to other
         facilities with five to ten times as many rooms within a half-mile radius.


     •   Most BCEC attendees stay at Back Bay hotels, resulting in time-consuming
         and expensive transportation from the facility to these hotels.




20
                                                                            DRAFT FOR POLICY
     Where Are We Today?                                                    DISCUSSION ONLY

     Preliminary Conclusions: Information Phase

     •   Over the past 20 months, the MCCA has lost 65 future events at the BCEC and
         Hynes due to insufficient exhibit, meeting room or ballroom space;
         inadequate hotel room availability near the BCEC; or lack of hotel rate diversity.


     •   The potential economic impact of those lost events is about $480 million; the lost
         tax benefit is almost $30 million.


     •   In a survey of event planners, Boston’s appeal as an event location was ranked
         above all competitors east of the Mississippi except Orlando.


     •   The Hynes location, in the heart of the Back Bay, is superb, with a large supply of
         connected hotel rooms, diverse shopping and restaurant options, and excellent
         transportation access.




21
                                                                            DRAFT FOR POLICY
     Where Are We Today?                                                    DISCUSSION ONLY

     Preliminary Conclusions: Information Phase

     •   The Hynes and the BCEC are complementary facilities, each with its
         special attributes and market position.


     •   The BCEC’s proximity to Logan Airport is another significant
         advantage relative to competitors.


     •   High costs for hotels, auto rentals, and restaurants; the weather; and the
         BCEC’s setting in a location lacking a full complement of amenities are cited
         by meeting planners and attendees as locational disadvantages.


     •   Boston/Cambridge is the top destination for international meetings in
         the United States (with more meetings than any other U.S. location)
         according to the International Congress and Convention Association.




22
                                                                           DRAFT FOR POLICY
     Where Are We Today?                                                   DISCUSSION ONLY

     PreliminaryConclusions:Finance Working Group

     •   The MCCA has two distinct sources of revenue to pay operating expenses,
         capital expenses and debt service – revenues from operations (fees from rental
         of space and for providing services) and the Convention Center Fund (“CCF”).


     •   The CCF, established by Chapter 152 of the Acts of 1997 (“Convention Center
         Legislation”), collects revenue from various sources, as provided for in the
         Convention Center Legislation.


     •   The largest source of revenue for the CCF is hotel room occupancy taxes
         (predominantly from hotels in Boston and Cambridge), providing approximately
         64% of all CCF revenues.


     •   Other CCF revenue sources include retail sales taxes (collected from limited
         types of establishments in accordance with the Convention Center Legislation),
         providing 15% of total revenues; a surcharge on car rentals in Boston (13% of
         total revenues); and surcharges on ticket prices for certain tours and cruises in
         Boston (2% of total revenues).


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                                                                          DRAFT FOR POLICY
     Where Are We Today?                                                  DISCUSSION ONLY

     PreliminaryConclusions:Finance Working Group

     •   CCF revenues have been more than sufficient to cover all obligations and, in
         fact, the CCF balance had been increasing in recent years.


     •   In response to the Commonwealth’s severe budget pressures, amounts were
         withdrawn from the CCF in fiscal years 2009, 2010, and 2011 and redirected to
         non-MCCA purposes.


     •   Since CCF receipts exceed funding obligations, a potential source of funding
         for expansion of the BCEC and related purposes is debt supported by the
         CCF.


     •   The CCF does not, however, have the capacity to support the cost of the
         full BCEC expansion program (a second, larger ballroom, expanded exhibit
         and meeting room space and other expansion components).




24
                                                                           DRAFT FOR POLICY
     Where Are We Today?                                                   DISCUSSION ONLY

     PreliminaryConclusions:Finance Working Group

     •   In other, competitive cities, major recent expansions have typically been
         supported by increased hotel occupancy taxes and new or increased food
         and beverage taxes, but other financing options have also been used,
         including imposing taxes and fees on services primarily used by tourists, and
         providing direct municipal support.


     •   Hotel financing differs fundamentally from financing of convention center
         expansions because hotels are income producing assets.


     •   The net operating income from new, full-service convention hotels is not
         sufficient to cover debt service and required returns on equity capital.


     •   All new, large convention center hotels developed in the last decade have
         been financed with significant levels of public support.




25
                                                                          DRAFT FOR POLICY
     Where Are We Today?                                                  DISCUSSION ONLY

     PreliminaryConclusions:Finance Working Group

     •   Two approaches have been used to finance new, large convention center
         hotels in the last 10 years: the “public/private” model and the publicly
         financed and owned model.


     •   The Westin Waterfront Hotel‟s financing model, which combines private
         financing with public support, is considered an example of the
         “public/private” model.


     •   Financing of the Westin Waterfront Hotel was predominantly private, with
         public support from the MCCA and the City of Boston constituting less than
         20% of total costs.


     •   Hotels financed through the public/private approach are typically privately
         owned, with the associated convention center benefitting from the increased
         supply of hotel rooms and, typically, a “room block agreement” providing
         the center with certain rights to the hotel rooms.



26
                                                                             DRAFT FOR POLICY
     Where Are We Today?                                                     DISCUSSION ONLY

     PreliminaryConclusions:Finance Working Group

     •   A recent example of a hotel developed under the public/private model is the
         Marriott Marquis in Washington DC, a 1,170 room, approximately $600
         million hotel financed with more than $300 million of public support
         (including land).


     •   The other model for financing large convention center hotels is based on bond
         financing, using tax-exempt or taxable bond sale proceeds – or a combination
         of both – to fund all project costs.


     •   In nearly all cases, bond financed hotels are publicly owned, providing the
         public owner with a high level of control over operations including, most
         importantly, control over the sale of rooms, with the public owner also receiving
         cash flow and other economic benefits.




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                                                                             DRAFT FOR POLICY
     Where Are We Today?                                                     DISCUSSION ONLY

     PreliminaryConclusions:Finance Working Group

     •   The risks of ownership (principally the risk that revenues will not be sufficient
         to pay expenses and debt service) are also borne by the public owner.


     •   Bond financed convention center hotels have generally performed well
         with the notable exception of the bond-financed Renaissance Hotel in St. Louis.


     •   Boston‟s high construction costs present an additional challenge to
         expanding the BCEC or developing new hotels near the BCEC.


     •   In the ten years since the construction contract for the BCEC was signed,
         Boston’s construction cost index has increased approximately 50%.




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                                                                          DRAFT FOR POLICY
     Where Are We Today?                                                  DISCUSSION ONLY

     PreliminaryConclusions:Hotel Working Group

     •   Conventions and tradeshows – the principal market served by the BCEC –
         generate significant demand for hotel room nights.


     •   The 1997 “Johnson Report,” which established the framework and rationale
         for the BCEC, strongly emphasized the need for additional hotel rooms
         proximate to the new facility.


     •   The Johnson Report recommended that 3,800 new hotel rooms be available
         within seven years of the BCEC’s opening (i.e., 2011); fewer than one-half of
         this recommended total (1,682 new rooms) have actually opened.


     •   Inadequate hotel supply near the BCEC requires event attendees to stay at
         Back Bay hotels and other hotels even farther away, an inconvenience that is
         also expensive – transportation costs of as high as $1 million have been
         incurred by shows.




29
                                                                             DRAFT FOR POLICY
     Where Are We Today?                                                     DISCUSSION ONLY

     PreliminaryConclusions:Hotel Working Group

     •   When an event at the BCEC generates demand for hotel rooms in the Back
         Bay, a concurrent event at the Hynes Convention Center cannot be booked, as
         the necessary hotel room supply is unavailable.

     •   Additional hotel supply proximate to the BCEC would enhance the BCEC‟s
         competitive position and allow concurrent events to be booked at the
         BCEC and the Hynes.

     •   The three hotels within walking distance of the BCEC are all full-service “four
         star” hotels; there are no limited service hotels within a half-mile radius.

     •   New hotels generate significant employment opportunities during
         construction and during operations (operating a 1,000 room hotel requires
         approximately 400 to 500 full time equivalent positions).

     •   The fiscal impacts from new hotels are also substantial (a 1,000 room
         convention hotel near the BCEC would generate approximately $6,700,000 per
         year in occupancy taxes, $1,350,000 per year in sales taxes, and $4,400,000
         per year in property taxes (in today’s dollars)).
30
                                                                           DRAFT FOR POLICY
     Where Are We Today?                                                   DISCUSSION ONLY

     PreliminaryConclusions:Hotel Working Group

     •   Despite projections of high occupancy rates and substantial net operating
         income, unassisted private development of large convention center hotels
         is unlikely for the foreseeable future due to very high development costs,
         limited availability of debt for hotel development, and high rates of return
         required by equity capital.


     •   Since 2000, only two full service, business-oriented hotels of 700 rooms or
         larger have opened in the United States without public support (both in Times
         Square, in 2000 and 2002).


     •   Of the 15 other 700 room plus hotels opened since 2000, approximately half
         were publicly financed, using bond proceeds, and half were publicly assisted
         (through grants, favorable loans, favorable ground lease terms or myriad other
         forms of assistance).




31
                                                                           DRAFT FOR POLICY
     Where Are We Today?                                                   DISCUSSION ONLY

     PreliminaryConclusions:Hotel Working Group

     •   Chapter 152 of the Acts of 1997 (the BCEC legislation) prohibits hotel
         development south of Summer Street in the area around the BCEC.


     •   The development of “limited service” (moderately priced) hotels near the
         BCEC is also inhibited by high development costs and lack of available
         financing, although these hurdles are less formidable than those facing larger,
         full-service hotels.


     •   There is land available near the BCEC for both larger- and smaller-scale
         hotel development, an opportunity not available in many other competitive
         locations.


     •   Competitors in other cities have recently decided to face hotel development
         challenges directly and move forward with new convention center hotels
         (for example, Dallas – bond financed; Washington DC – substantial
         (approximately 50%) public investment).



32
                                                                              DRAFT FOR POLICY
     Where Are We Today?                                                      DISCUSSION ONLY

     PreliminaryConclusions:BCEC Expansion &
     Urban Context Working Group

     •   With 516,000 s.f. of exhibit space, the BCEC‟s exhibit hall area is smaller
         than the exhibit hall areas of almost all competitors.


     •   Exhibit space at the BCEC is well configured – all exhibit space is
         contiguous, ceiling heights are generous, and column spacing is good.


     •   The BCEC’s relatively small exhibit hall capacity prevents the largest shows
         from coming to Boston, and does not allow two or more large shows to be
         hosted concurrently.


     •   Expansion of exhibit space at the BCEC should occur directly south of the
         existing exhibit hall, with new exhibit space contiguous to existing exhibit space.




33
                                                                            DRAFT FOR POLICY
     Where Are We Today?                                                    DISCUSSION ONLY

     PreliminaryConclusions:BCEC Expansion &
     Urban Context Working Group

     •   Additional meeting room capacity should accompany any expansion of
         exhibit space, in approximately the same ratio as exists now (1 s.f. of meeting
         room space per 3 s.f. of exhibit space).


     •   Preliminary planning indicates that, depending upon the arrangement of other
         program elements on the site, between 335,000 and 390,000 s.f. of
         additional exhibit space could be accommodated in the “expansion area”
         between the existing BCEC and Cypher Street.


     •   Other competitive cities, including Philadelphia and San Diego, are currently
         expanding their exhibit hall and meeting room capacity.


     •   The ballroom at the BCEC is 40,000 s.f. in area, also at the lower end of the
         range when compared to competitive cities.




34
                                                                           DRAFT FOR POLICY
     Where Are We Today?                                                   DISCUSSION ONLY

     PreliminaryConclusions:BCEC Expansion &
     Urban Context Working Group

     •   With a high level of finish, a column-free configuration, and a generous pre-
         function area providing views of downtown Boston and the harbor, the BCEC
         ballroom is a desirable space for a variety of users.


     •   The location of the existing ballroom at the north end of the BCEC makes
         access difficult from exhibit and meeting room space at the south end of the
         building.


     •   Most BCEC events using exhibit space also use the ballroom, limiting the
         ability to book concurrent exhibit hall events.


     •   A second, larger ballroom would be highly desirable, allowing larger
         ballroom events to be accommodated and for two concurrent exhibit hall events
         – both requiring ballrooms – to be accommodated.




35
                                                                            DRAFT FOR POLICY
     Where Are We Today?                                                    DISCUSSION ONLY

     PreliminaryConclusions:BCEC Expansion &
     Urban Context Working Group

     •   This new ballroom should be located at the southern end of the existing
         BCEC, or in the expansion area to the south of the BCEC, for accessibility to
         an expanded exhibit hall and the southern portion of the existing exhibit hall.


     •   Exhibit hall expansion to the south of the existing BCEC, together with a new
         ballroom located on the southern portion of the site, should be complemented
         by a second, major BCEC entrance in this area.


     •   While locating a new ballroom at the west side of the BCEC would provide a
         number of benefits, including a connection between the BCEC and the Fort
         Point neighborhood, expansion in this direction would involve construction
         over the existing railroad tracks and Bypass Road and, consequently,
         formidable regulatory and building code challenges.


     •   Orienting expansion planning for a new ballroom to the east side of the
         BCEC provides functional, less expensive options, and would help activate
         and develop D Street.
36
                                                                           DRAFT FOR POLICY
     Where Are We Today?                                                   DISCUSSION ONLY

     PreliminaryConclusions:BCEC Expansion &
     Urban Context Working Group

     •   The targeted size range for a new ballroom is 60,000 to 100,000 s.f. of
         ballroom area, together with necessary support space.


     •   A large fixed seat auditorium was considered as an expansion component,
         since some event sponsors indicated that such space would be desirable and a
         number of other convention centers have auditoriums.


     •   After extensive analysis, it became clear that the benefits of a new
         auditorium were not as compelling as the benefits of other expansion
         components under consideration, particularly in Boston, which has many
         existing auditoriums.


     •   As a planning principle, a “campus” configuration of existing and new
         buildings, with discrete but interconnected components is preferable to a
         massive, single building.



37
                                                                          DRAFT FOR POLICY
     Where Are We Today?                                                  DISCUSSION ONLY

     PreliminaryConclusions:BCEC Expansion &
     Urban Context Working Group

     •   Expansion plans should allow for both “all at once” development of a full
         expansion program and for incremental development of expansion
         components over time.


     •   A plan that is flexible, allowing for changes over time in response to new
         circumstances and priorities, is essential.


     •   Expansion planning must incorporate parking, truck marshalling and other
         essential support functions.


     •   Expansion plans must respect and support the residential neighborhoods
         near the BCEC, other planned and existing developments, existing and
         planned transportation infrastructure, and the city’s vision for the South
         Boston Seaport.




38
                                                                          DRAFT FOR POLICY
     Where Are We Today?                                                  DISCUSSION ONLY

     PreliminaryConclusions:BCEC Expansion &
     Urban Context Working Group

     •   All four sides of the expanded BCEC must be active and engage abutting
         neighborhoods – uninviting “back doors” should be avoided.


     •   An expanded BCEC will serve as a catalyst for growth in the area, bringing
         new customers to local businesses and promoting the surrounding “Innovation
         District.”


     •   Since a full BCEC program cannot be accommodated on the existing BCEC
         site, acquisition of property at the periphery of the BCEC is desirable.


     •   A thoughtful program of land acquisition is timely, as land is currently
         available and market conditions are favorable.




39
                           DRAFT FOR POLICY
                           DISCUSSION ONLY

     Where Are We Going?




40
                                                              DRAFT FOR POLICY
     Where Are We Going?                                      DISCUSSION ONLY

     Overview: 4-Month Game Plan
               December ‟10 – March „11

     A. Complete Our Analysis and Answer Four Key Questions:
         1. Why are we doing this?
         2. What do we propose to do?
         3. How much will it cost?
         4. How could it be paid for?

     B. Compile this Information Into:
         5. Options and Recommendations
         6. Implementation Plan

     C. Prepare Final Report Capturing A. and B.
             Make sure all “Tough Questions” are addressed.
41
                                                                       DRAFT FOR POLICY
     Where Are We Going?                                               DISCUSSION ONLY

     1. Why Are We Doing This?

     • MCCA’s Existing Contribution to Massachusetts Economy
         – How do we support other key sectors of the economy: health care, education,
           finance and insurance, information technology, life sciences?
         – The importance of the hospitality and tourism sector.
         – The role we play in the hospitality and tourism sector.
         – The MCCA’s international presence – a special feature.
         – The jobs we create.
         – The taxes we generate.
         – The spending we generate.

     • Maintaining/Enhancing Our Leadership Position in the Convention
       Industry
         – Responding to overall trends in the industry.
         – Capitalizing on opportunities to move ahead of competitors.
         – Addressing existing challenges at the BCEC and Hynes (shortage of hotel
           rooms at BCEC, inadequate ballroom at BCEC, etc.).




42
                                                                          DRAFT FOR POLICY
     Where Are We Going?                                                  DISCUSSION ONLY

     1. Why Are We Doing This?

     • BCEC and Hotel Expansion as Catalysts for Urban Development
         – Making the “first move” to free up planned, stalled projects in the Seaport
           District.
         – Creating additional demand for surrounding projects – restaurants, retail, and
           housing.

     • The Importance of Timing: Now vs. Later
         – Create jobs in time of high unemployment.
         – Take advantage of favorable construction costs.
         – Take advantage of favorable land costs.

     • The Direct Economic Benefits of Expansion
         – Jobs
         – Taxes
         – Spending




43
                                                                         DRAFT FOR POLICY
     Where Are We Going?                                                 DISCUSSION ONLY

     2. What Do We Propose To Do?

     • Overall: A Vision for the Future
         – 5-20 year time horizon.
         – Avoid trap of expedient, piece-meal, short-term thinking.
         – Present more than one option for BCEC and hotel expansion.

     • BCEC Expansion: Ballroom
         – Why: The case for a second, larger ballroom (lost business, operational,
           marketing, industry trends, etc.).
         – What: Size, program, etc.
         – Where: Locational options; comparative analysis of options.

     • BCEC Expansion: Expanded Exhibit Hall and Meeting Rooms
         – Why: The case for an expanded exhibit hall and expanded meeting room
           supply (lost business, operational, marketing, industry trends, etc.).
         – What: Size, program, etc.
         – Where: Locational options; comparative analysis of options.

     • BCEC Auditorium
         – Why: How do others with fixed seat auditoriums use them?
         – Reasons auditorium is not part of proposed vision: Expensive; use/benefits
           don’t justify investment; Boston has adequate supply of venues.
44
                                                                              DRAFT FOR POLICY
     Where Are We Going?                                                      DISCUSSION ONLY

     2. What Do We Propose To Do?

     • Hynes: Repositioning as Congress Center
         –   Why: Capitalize on inherent strengths (location, hotel proximity, etc.).
         –   Why: Enhance international positioning/appeal (Congress Center).
         –   Why: Position as distinctive complement to BCEC.
         –   What: Proposed improvement program.

     • Address BCEC Challenges
         – Facility Challenges: Eastern lobby and registration area, inadequate
           administrative offices, etc.
         – Context Challenges: Improve surrounding area.

     • Interventions to Promote Hotel Development
         – Headquarters hotel.
         – Mid-priced hotels.

     • Take Necessary First Steps Toward Future
         – Land acquisition: West (USPS land); east (Intercontinental, etc.); south
           (Cypher to First block).
         – Relocate existing parking; increase parking supply.
         – Relocate testing lab and maintenance facility.
45
                                                                           DRAFT FOR POLICY
     Where Are We Going?                                                   DISCUSSION ONLY

     3. How Much Will It Cost?

     • BCEC Expansion Costs
         – Construction Costs: Overall costs of construction; costs by expansion
           element (ballroom, etc.); costs by major components of each element;
           identify special premiums (e.g., site premiums).
         – Other Development Costs: Land acquisition, permitting, design and
           engineering, etc.
         – Cost of Enabling Activities: Relocate testing lab and maintenance facility;
           site remediation costs; relocated parking costs.

     • Hynes “Congress Center” Costs
         – Breakdowns: By program component; hard and soft costs.

     • Headquarters Hotel Costs
         – Breakdowns: By program component; hard and soft costs.

     • Program to Encourage Mid-priced Hotels
         – Cost Breakdowns: By program component; hard and soft costs.

     • Financing Costs
     • Other Costs

46
                                                                    DRAFT FOR POLICY
     Where Are We Going?                                            DISCUSSION ONLY

     4. How Could It Be Paid For?

     • BCEC Expansion and Hynes Repositioning
         – Convention Center Fund: Capacity.
         – Other Financing Options.
         – Evaluation of Options.

     • Program to Encourage Additional Hotels
         – Headquarters Hotel: Options and evaluation of options.
         – Mid-priced Hotels: Financing options.




47
                                            DRAFT FOR POLICY
     Where Are We Going?                    DISCUSSION ONLY

     5. Options & Recommendations

     • BCEC Expansion
         – Recommended expansion program.
         – Priorities.
         – Costs and financing.

     • Hynes Repositioning
         – Recommended program.
         – Priorities.
         – Costs and financing.

     • Headquarters Hotel
         – Recommended strategy.
         – Costs and financing.




48
                                     DRAFT FOR POLICY
     Where Are We Going?             DISCUSSION ONLY

     5. Options & Recommendations

     • Mid-priced Hotels
         – Recommended strategy.
         – Costs and financing.

     • “First Steps” Toward Future
         – Recommended strategy.
         – Costs and financing.




49
                                                         DRAFT FOR POLICY
     Where Are We Going?                                 DISCUSSION ONLY

     6. Implementation Plan

     • Implementation Steps
         – Legislation, permitting, financing, design,
           land acquisition, construction, etc.

     • Schedule for Implementation

     • Cash Requirements Schedule




50
                             DRAFT FOR POLICY
                             DISCUSSION ONLY

     Discussion/Next Steps




51
                                                      DRAFT FOR POLICY
     Discussion/Next Steps                            DISCUSSION ONLY

     Preliminary Agendas for 2011 Meetings

     • January
         –   BCEC Expansion Scenarios – 3 Options
         –   Hynes as “Congress Center”
         –   Initial Implementation Steps
         –   Answers to the “Tough Questions”

     • February
         – Costs
         – Financing Options

     • March
         – Review Draft Report
         – Focus on Conclusions and Recommendations




52

				
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