HomeMy Public PortalAbout1997 - Price Waterhouse Market, Financial & Economic Impact Analyses for Proposed Multipurpose Center II
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City of Jefferson
MARKET, FINANCIAL AND ECONOAHC
EUPACT ANALYSE9S�FOR THE PROPOSED
MULTIPURPOSE CENTER
January 1997
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�� Price Waterhouse LLP
Suite 2800
400 North Ashley Street Telephone 813 223 7577
4 P.O.Box 2640
Tampa, FL 33601-2640
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Price Waterhouse LLP
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January 10, 1996
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Mr.Richard Mays
City Administrator
City of Jefferson
320 Fast McCarty Street
Jefferson City,Missouri 65101
Dear Mr.Mays:
Price Waterhouse LLP is pleased to present this report of the market,financial and economic impact
analyses for the proposed convention/multipurpose center.
This analysis is based on the proposed work program,estimates and assumptions from previous
studies,information developed from supplemental research,knowledge of the industry and other
sources,including certain information that you provided. These sources of information and bases of
significant estimates and assumptions are stated in our report
The terms of this engagement are such that we have no obligation to revise the report to reflect events
or conditions which occur subsequent to the date of the report. However,we are available to discuss
the necessity for revision in view of changes in the economic or market factors affecting the project.
Our services do not include ascertaining the legal and regulatory requirements applicable to the
proposed project,including zoning,other state and local government regulations,permits and licenses.
Further,no effort was made to determine the possible effect on this project of future energy shortages
or present or future federal,state or local legislation,including any bond restrictions,environmental or
ecological matters,interpretations thereof or subsurface conditions.
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Report and analysis of characteristics included herein,are intended for the information of the person or
persons to whom they are addressed,solely for the purposes stated therein and should not be relied
upon for any other purpose.
Neither this report nor its contents,nor any reference to Price Waterhouse LLP may be included or
quoted in any offering circular or registration statement,prospectus,sales brochure,advertisement,
appraisal,loan or other agreement or documentation.
1 Price Waterhouse does not,as part of its market,economic and financial analyses,perform an audit,
review or examination(as defined by the AICPA)of any of the historical or future estimated financial
information,and therefore does not express any opinion with regard to same.
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The estimated event day occupancy for the proposed Center,given the location,building program and
other operational requirements described herein,may range from approximately 55 to 75 percent. This
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Mr.Richard Mays
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January 10, 1997
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level of usage is within the range of the performance of centers in similar size markets and should
accommodate existing demand and market opportunities in the area
Price Waterhouse has appreciated the opportunity to work with you and your associates and wish you
success in the future.
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Sincerely,
P.
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David C.Petersen
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FTABLE OF CONTENTS
RL INTRODUCTION................................................................................ ............ I
Definitionof Event Types................................................................................... . .. .... .2
H. MARKET CHARACTERISTICS OF JEFFERSON CITY AND
F� COMPARABLE/COMPETITIVE DESTINATIONS................. .......... .... .... . 4
Population.................................................................................... ........ . .......... . ...... ... ... 8
Employment............................................................................................ ... ......... . . .......... .... .. 10
HotelRoom Supply................................................................................................................ . ..... ... . . . 10
Access................................................................................................................... ................... ......... 12
Attractions.............................................................................................................. . ....... ................ ........ 12
ExistingLocal Facilities.................................................................................................. ........... .. ...... 14
IH. USER SURVEYS............................................................................................................... . .. .. . .... 15
Summary of Jefferson City's Advantages and Disadvantages................................ . ....... ... 16
IV. BUILDING PROGRAM AND SITE ANALYSIS............. ............ .. .. .... .............. 17
BuildingProgram.................................... ......... ..................... ....................... 17
SiteAnalysis........................................................ .. .. ....... 19
V. ESTE%IATED,UTI]LIZATTON OF THE PROPOSED CENTER............ ... ... . ..... 23
Basis of Utilization Estimates......................................................................... ... .. ...... . 23
Utilization by Event Type....... 23
VL FINANCIAL OPERATING ANALYSIS............................................................ ............ 25
Operating Revenue and Expense Estimates................................................ .. ..................... . . 26
VIEL ECONOMIC AND FISCAL IMPACT ANALYSIS..................................... . ........... ..... .. ... 29
Economic Impact of Proposed Center Operations................................................... . ......... .... ... 29
Economic Impact of Construction.......................................................................... .. ... ............... .33
APPENDIXA............................................................................................ .................... .. ...... .. .... .....36
Economic/Fiscal Impact Concepts..................................................................................... . ...... ... ......36
Definitions of Economic and Fiscal Impacts................................................ ..................... ............ .......36
MultiplierEffects.......................................................................................................................... ...... ..... .37
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APPENDIXB........................................................................................................................ .. .... .... 39
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I. INTRODUCTION
The City of Jefferson(the"City")retained Price Waterhouse LLP to perform a needs analysis to
assess/estimate market demand for a convention/multipurpose center,describe a cost-effective building
{ program,evaluate the four proposed site areas,and provide estimates of financial operations and
E economic/fiscal impacts for the proposed facility.
This report presents study findings covering market,financial and economic impact analyses. Several
analytical techniques have been used to provide a basis for evaluating the demand for the proposed Center.
The analysis relied primarily on past and potential user survey results,an analysis of Jefferson City's
economic/demographic characteristics both over time and in comparison to comparable and competitive
destinations and an evaluation of comparable and competitive facility and financial operating
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characteristics.
Our work included:
f • Interviews with representatives of local organizations including the Jefferson City Chamber of
Commerce, Convention and Visitors Bureau,City Council,the Convention Center Committee, State
Government officials,area business representatives,hotel managers and other community
representatives to gain an understanding of the background,history and key issues relating to the
proposed center;
�17 • Tours of existing meeting facilities in Jefferson City and the four proposed site areas for the new
center;
• Surveys of State Associations, State Government departments,and past users of local meeting
facilities to determine potential user requirements for the proposed facility as well as Jefferson City's
competitive advantages and disadvantages as a meeting destination.
�It • Analysis of facilities in comparable and competitive destinations in terms of utilization and operating
r characteristics;
• Evaluation of community resources(e.g.population,hotel rooms and others)in Jefferson City and its
�- comparable/competitive markets to understand Jefferson City's advantages and disadvantages in
terms of attracting events to the proposed center;
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• Evaluation of the proposed site areas and describing a cost-effective building program in terms of
those characteristics which will meet the needs of major market segments and enhance the
F, marketability of the proposed center;
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• Estimation of the proposed Center's potential future utilization for conventions,consumer shows and
r other events;
• Estimation of financial operating revenues and expenses of the proposed Center;and
f • Estimation of economic/fiscal impacts generated from operations of the Center and from construction
activities.
The following section explains different event types which will be referred to throughout this report.
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Definitions o vent Types
Meeting venues host a variety of events including professional or trade association events,
consumer/public shows,corporate,government,social and local meeting functions. Each of these events
place different priority on center,site location characteristics and destination amenities. The following
(� descriptions highlight characteristics of event types.
Conventions
Conventions are large gatherings hosted by professional associations or social organizations that are held
I in hotels or convention centers. These meetings may take place annually or more often and are attended
by association members and invited guests. A convention can consist of a single assembly or plenary
�j session and/or a number of concurrent meetings or"breakout"sessions. Conventions often include trade
shows(exhibits)to display and demonstrate products and services unique to their businesses or
professions. Admission to the exhibitions may be open to nonmembers,who must purchase a ticket to
— view the exhibits.
Conventions with or without exhibits are considered"high economic impact"events because attendees
normally stay two to four days and nights in the host city. In addition to spending money at hotels,
attendees purchase other goods and services from restaurants,retail shops,local attractions and
transportation services.
r Trade Shows
Trade shows are attended by persons engaged in commercial activities and belonging to a trade
association rather than to a professional association. Consequently,attendees are more interested in
seeing the display and demonstration of products than in going to seminars or lectures for the exchange of
ideas or information. Historically,trade shows required little or no meeting-room space. But as they offer
increasing numbers of lectures and training sessions during their exhibitions to attract larger audiences,
the space requirements of trade shows are often indistinguishable from requirements of conventions.
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Trade shows are often held in the same part of the country in which their activities or members are
4 concentrated,and often in the same venue each year. Compared with conventions,trade shows tend to
draw a greater number of attendees whose average stay is shorter. Participants often travel to the
exhibition to see a specific type of product of interest to them and then leave. Although a trade-show
exhibition may run five days,attendees typically stay only one or two nights.
Convention and trade-show markets are further distinguished by the fact that trade shows often draw
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of their attendees from the local metropolitan area or region because the industry may be headquartered in
�f the geographic area that is home to the trade-show facility.
Consumer Shows
{ Consumer shows are ticketed events open to the public. They are exhibitions of consumer retail products
for display and sale to attendees. Examples include boat,auto,recreational vehicle,antique,and home
and garden shows. They take place in convention centers and, depending on the size, location and type of
merchandise sold,usually attract mostly local residents. The largest of these shows, such as the Miami
Boat Show,will fill a community's hotel rooms for the duration of the event. Smaller shows—for
example,those exhibiting coins or baseball cards—may not attract any overnight attendees.
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Other Events
Other events commonly hosted at public assembly facilities include festivals, concerts,sporting events,
banquets,wedding receptions,corporate sales meetings,training,professional continuing education
- meetings and seminars. The types and sizes of these events are determined by the local and regional
economy and the availability of other assembly,exhibition and entertainment facilities in the community
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1i The following table illustrates characteristics of the main event types described in this section.
Illustrative Event Characteristics
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Event Characteristics Conventions Trade Shows Consumer Shows
Membership Related to Occupation Related to Product or Open to Public
RiMerchandise Line
Attendee/Visitation Non-resident Resident and Resident
Pattern Non-resident
Destination Proximity to Hotel Rooms, Drive Radius Population, Drive Radius
Requirements Attractive Destination, Population,Hotel Rooms, Population
Access Access
F, Center Requirements Adequate Space for Exhibit Space Exhibit Space,
Meetings,Assemblies Parking
and Banquets
f Example Missouri Baptist State St.Louis Leather&Allied Kansas City
PConvention Trade Show Sportshow
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II. MARKET CHARACTERISTICS OF JEFFERSON CITY AND
COMPARABLE/COMPETITIVE DESTINATIONS
In this section,an evaluation of Jefferson City's community resources is presented in order to assess the
city's attractiveness as an event destination. As illustrated previously,community resources such as
li if population,access and number of hotel rooms are essential to event organizers in selecting a venue.
Furthermore,different types of events place different priority on these resources. In this section, local
community resources are evaluated both over time and in comparison to other destinations which
currently host meetings and are competitive or comparable to Jefferson City. The community resources
that are evaluated include:
(� • Population: Population is very important in attracting trade shows,consumer shows and spectator
events since these events are mainly attended by attendees from the immediate area.
' • Employment: Employment diversity could be a measure of economic stability in an area as well as
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indicating the existence of a wide range of industries,which in turn helps determine potential users.
For example,if an area has a strong corporate base,it is likely that these corporations will use the
meeting facilities.
i _ • Hotel room supply: The number of hotel rooms is important to events with overnight attendees.
Event planners tend to prefer accommodating their attendees in one or two major hotels in close
proximity to the meeting facility.
• Air and highway access: Air access is especially important in the case of national and regional events
where the majority of attendees prefer flying to the destination. Highway access is important for
statewide events since attendees can drive to the destination.
• Area attractions: Having a wide range of attractions helps a destination attract a greater number of
I� attendees as well as increase the possibility of attendees being accompanied by their spouses or
l families. Hence,a facility located in an area with popular attractions typically has higher utilization
and accordingly the economic impact to the area can be greater.
` • Existing Meeting Facilities: Existing meeting facilities in Jefferson City are evaluated to understand
the supply of meeting facilities in relation to demand. Illustrating existing facilities in comparable
and competitive destinations provides better insight to types of facilities that exist in markets with
similar characteristics to Jefferson City and markets that Jefferson City will compete with.
Comparable destinations were selected based on one or more of the following characteristics:
• State capitals with relatively smaller populations;
• Capitals that are located in states which house at least two larger cities;
• Population;
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• Location in the nation;and
• Types of facilities located in these destinations.
State capitals are included since they are expected to attract similar events as Jefferson City. Other
r� destinations provide an indication as to what size and types of meeting facilities are housed by
destinations with similar characteristics to Jefferson City. Additional cities that could be comparable to
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'� Jefferson City in terms of economic and demographic characteristics were also evaluated;however, these
l were excluded as comparable destinations since they did not have a convention/civic center.
PDestinations that are included as comparables are:
• Albany,New York • Lexington,Kentucky
• Augusta,Maine • Little Rock,Arkansas.
P • Austin,Texas • Montgomery,Alabama
• Bismarck,North Dakota • Monterey,California
Boise,Idaho • Norfolk,Virginia
f • Charleston,West Virginia • Roanoke, Virginia
• Collinsville,Illinois • Santa Fe,New Mexico
• Columbus,Ohio • Shreveport,Louisiana
• Daytona Beach,Florida • Springfield,Illinois
• Des Moines,Iowa • Spokane,Washington
• Huntington,West Virginia • Visalia,California
• Jackson,Tennessee
The following table illustrates the largest meeting facilities in comparable destinations. Exhibit space at
r� these facilities ranges from 10,000 square feet to 306,000 square feet while ballroom/multipurpose space
ranges from approximately 5,000 to 35,000 square feet. In addition,comparable facilities have
approximately 4,000 to 50,000 square feet of meeting space.
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Facility Characteristics-Comparable Destinations(Ranked by Total Rentable Space)
Total Additional
Year Exhibit Hall Ballroom/ Meeting Rentable No.ofMig. Auditorium On-Site Parking in
Location Facility Built Space Multipurpose Space Space r Rooms Seating I Parking Walking Dist
Columbus,OH Greater Columbus Convention Center 1980 306,000 25,000 48,037 379,037 54 N/A 2,500 n/a
Austin,TX Austin Convention Center 1992 125,972 23,756 21,518 171,246 21 N/A N/A 1,100
Montgomery,AL Montgomery Civic Center 1976 62,000 N/A 17,628 79,628 17 N/A 1,000 5,000
Lexington,KY Lexington Center 1976 66,000 8,600 3,800 78,400 6 1,100 2,000 10,000
Little Rock,AR Statehouse Convention Center 1982 62,125 N/A 7,506 69,631 10 N/A N/A 2,000
Shreveport,LA Shreveport Civic Center Complex 1980 64,800 N/A 4,811 69,611 9 2,435 2,000 n/a
Huntington,WV Huntington Civic Arena 1976 55,476 N/A 10,184 65,660 9 N/A 1,600 4,000
Daytona Beach,FL Ocean Center 1985 44,000 N/A 20,915 64,915 17 N/A 1,200 500
Spokane,WA Spokane Center 1953 38,772 18,270 6,840 63,882 12 2,700 3 n/a n/a
Springfield,IL Prairie Capitol Convention Center 1979 40,000 N/A 21,830 61,830 11 N/A 700 1,500
Des Moines,IA Des Moines Convention Center 1985 27,025 N/A 32,556 59,581 26 N/A n/a n/a
Bismarck,ND Bismarck Civic Center 1969 48,600 N/A 9,177 57,777 6 N/A 1,200 4,000
Charleston,WV Charleston Civic Center 1980 36,256 N/A 20,398 56,654 16 3,483° 2,000 7,000
Visalia,CA Visalia Convention Center and Theaters 1971 31,675 8,316 8,649 48,640 12 1,268 450 n/a
Augusta,ME Augusta Civic Center 1973 N/A 25,500 18,623 44,123 19 224 2,600 n/a
Norfolk,VA Waterside Marriott Hotel 1991 N/A 35,095 7,300 42,395 16 N/A 700 n/a
Albany,NY Empire State Plaza 1971 26,000 N/A 12,750 38,750 6 950 3,000 n/a
Roanoke,VA Hotel Roanoke and Conference Center 1995 N/A 19,580 14,649 34,229 21 170 n/a n/a
Monterey,CA Monterey Conference Center 1979 N/A 30,265 3,876 34,141 6 490 900 n/a
Boise,ID Boise Centre on the Grove 1990 N/A 24,426 9,034 33,460 6 322 185 1,000
Collinsville,IL Gateway Center 1990 18,600 4,745 4,786 28,131 6 N/A 500 825
Jackson,TN Jackson Civic and Convention Center 1973 N/A 17,500 4,400 21,900 9 2,100 350 750
Santa Fe,NM Sweeney Convention Center 1935 10,000 N/A 7,814 17,814 5 N/A 255 420
Source: Facility Management; Amusement Business,Aud4renaStadium International Guide, 1996
1 Includes exhibit hall,ballroom/multipurpose space and meeting space 2 Largest fixed seating capacity in a single room 3 In the Opera House 4 Municipal Auditorium
N/A--The facility does not offer n/a-Not available
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( Competitive destinations consist of cities in the State of Missouri which house venues with 10,000 square
feet or larger contiguous exhibit space,excluding major facilities such as America's Center in St.Louis
i and Kansas City Convention Center. Competitive destinations include:
• Cape Girardeau
• Columbia
• Joplin
• Kansas City
• Lake of the Ozarks
• Osage Beach
• St.Louis
r • Springfield
The following table presents the physical characteristics of competitive facilities, ranked by contiguous
exhibit space. As illustrated,approximately 80 percent of competitive facilities have less than 30,000
(�4 square feet of contiguous exhibit space. Facilities with up to 30,000 square feet of total exhibit space
i comprise 65 percent of the competitive facilities. This may indicate that in order to differentiate itself and
attract a segment of the market that is not as easily accommodated,Jefferson City should consider
providing a facility larger than the majority of its competitors currently offer.
Facility Characteristics-Competitive Destimtiau
Total
Contiguous Exhibit Mar Beak- Theater Banquet No.ofHotel
Destination Facility ErA Space Space r outRooms Capacity Capacity? Rooms
Springfield/Oart ML Area Holiday Inn University Plaza 69,000 103,400 17 2,200 1,920 271
Cape Girardeau Show Me Center 31,980 31,980 4 404 2,000 N/A
Joplin Holiday Inn 30,000 37,200 15 3,700 3,000 264
Osage Beach Marriott Tan-Tar-A Resort&Golf Club 30,000 58,903 22 3,250 2,500 930
Columbia Holiday Irm Executive Center 21,000 29,437 15 1,400 1,000 315
St Louis Regal Riverfront Hotel 20,800 44,150 23 2,800 2,000 780
St Louis Adam's Mark Hotel St Louis 20,000 36,800 32 2,500 2,000 910
Kansas City Hyatt Regency Crown Center 17,487 32,847 22 2,200 1,700 731
St Louis Hyatt Regency St Louis 16,200 24,300 23 1,600 1,520 538
Kansas City The Westin Crown Center 16,089 16,089 18 2,000 1,460 774
I Kansas City Marriott Downtown 15,080 15,080 22 1,500 1,100 550
St Louis The Ritz-Carlton St.Louis 12,750 12,750 13 1,300 1,000 301
Jefl'ersan City Capitol Plaza Hotel 12,000 12,000 13 1,425 1,200 255
Kansas City The Ritz-Carlton 11,868 11,868 14 1,300 1,000 373
Lambert(St Louis) Renaissance St Louis Hotel 11,424 25,128 34 1,300 800 394
Lambert(St Louis) Henry VIII Hotel 11,000 14,552 22 1,600 1,000 385
Lake of the Ozarks The Lodge of Four Seasons 10,962 21,262 24 1,400 900 311
Kansas City Embassy Suites 10,656 10,656 8 1,350 1,000 236
Kansas City Overland Park Marriott 10,010 12,698 18 1,200 900 390
Fill Lambert(St.Louis) Holiday Inn Airport North 10,000 14,472 11 550 336 392
t Source: Facility Management;Gavel,Meetings and Conventions,1996
'Includes Exhibit Hall and Ballroom Spas
�1 2 In a single roan N/A-Not Applicable
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The following graph further illustrates exhibit space available at competitive facilities.
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Competitive Facilities —Exhibit Space
70,000
60,000
f50,000 `.'.:
1 ` 40,000
30,000 '.: ..'
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20,000f
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R', 10,000
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Facilities
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1 Population
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Population is a primary factor impacting a market's potential for events which attract local attendees.
These types of events include trade shows and consumer shows. The following table illustrates Jefferson
F,` City's and Cole County's population growth in comparison to that of the State and the nation.
Population Growth
F,,; 1990 1995 Compound
Area Population Population Annual Growth
Jefferson City 35,175 35,500 0.18%
Cole County 63,900 68,400 1.37%
State of Missouri 5,145,100 5,345,200 0.77%
United States 250,812,000 264,900,900 1.10%
Source: Sales and Marketing Management,Survey of Buying Power, 1991, 1996;
City of Jefferson,Missouri, Comprehensive Plan Update; American Automobile
Association, Tourbook Feb 1996.
Jefferson City has maintained a stable population and Cole County's population has increased at a rate
greater than national growth rate over the last five years.
The following table presents population within a 50-mile radius of Jefferson City and comparable cities to
illustrate population within driving range. It also compares Cole County's population to county
F,j populations of comparable destinations.
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Population-Jefferson City and Comparable Destinations (Ranked by Population within a 50-mile Radius)
Location 50-mile Radius County Location 50-mile Radius County
F11 Collinsville,IL 2,579,081 256,800 Charleston,WV 764,439 206,200
Columbus,OH 2,004,703 1,016,700 Des Moines,IA 701,388 351,900
(�? Norfolk,VA 1,677,214 N/A Augusta,ME 584,370 117,700
Albany,NY 1,364,518 289,000 Springfield,IL 565,185 185,500
4 Monterey,CA 1,329,175 360,200 Spokane,WA 558,942 407,900
Daytona Beach,FL 1,243,958 408,600 Montgomery,AL 557,587 221,300
4 Visalia,CA 1,205,386 356,700 Shreveport,LA 548,372 246,600
Austin,-IX 1,154,455 669,100 Boise,ID 456,611 256,700
Huntington,WV 894,235 96,800 Jackson,TN 454,551 84,200
Roanoke,VA 827,301 96,600 Jefferson City,MO 428,261 68,400
Little Rock,AR 821,713 351,900 Santa Fe,NM 298,563 117,300
Lexington,KY 801,873 242,400 Bismarck,ND 105,624 65,200
Source: Sales and Marketing Management,Survey of Buying Power, 1996; Claritas Inc.
N/A-Not Applicable
Jefferson City ranks 22nd and Cole County ranks 23rd in population among 24 selected destinations. Since
F", population is one of the main considerations of the trade show and spectator event organizers,having a
relatively small population might indicate limited market potential for these types of events.
A similar analysis is provided in the following table,where Jefferson City and the Cole County
populations are compared to those of competitive destinations.
R Population-Jefferson City and Competitive Destinations
(Ranked by Population within a 50-mile Radius)
Location 50-mile Radius County
St.Louis 2,615,877 N/A
Kansas City 1,898,991 636,000
Springfield,MO 518,106 230,100
F Joplin 433,506 97,200
Jefferson City 428,261 68,400
Cape Girardeau 420,197 65,100
Columbia 403,336 124,500
Lake of the Ozarks 342,906 22,300
Osage Beach 328,753 22,300
'- Source: Sales and Marketing Management,Survey of
Buying Power, 1996; Claritas Inc.
N/A-Not applicable
Cole County's population ranks fifth out of seven counties. Jefferson City ranks fifth out of nine cities in
terms of its population within driving range.
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Employment
Jefferson City's labor market area includes Callaway and Osage Counties in addition to Cole County. The
main employer,by a significant margin,is the State Government. State Government employs
approximately 65 percent of all workers employed by the top ten employers. The following table
illustrates the top ten employers in Jefferson City,ranked by number of employees.
Major Employers—Jefferson City
Number of
Employer Employees
State Government 13,000
Scholastic,Inc. 1,350
Capital Region Medical Center 1,070
Jefferson City Public Schools 930
ABB Power T&D Company 900
St.Marys Health Center 800
Chesebrough-Pond's USA 600
Wal-Mart Super Center 521
Lincoln University 420
Von Hoffman Press,Inc. 357
Source: City of Jefferson
As illustrated,Jefferson City has several large non-government employers. However,while some of these
expressed interest in the proposed facility,the general response indicated that the majority either does not
hold meetings that require a new center or their meeting needs are met by existing facilities.
Hotel Room Supply
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If the proposed center is built,Jefferson City's ability to host conventions and trade shows depends
significantly on its inventory of convention class hotel rooms,their location in relation to each other and
the center and prospects for future growth.
Hotel room supply is measured by the number of"convention class"hotel rooms both in the city and
proximate to the center. Price Waterhouse defines convention class hotel rooms as having a minimum of
fifty rooms and at least a two diamond rating by the Reed Travel Group. In Jefferson City,there are 11
hotels and motels with a total of 1,261 hotel rooms. According to the Reed Travel Group,Jefferson City
contains 789 convention class hotel rooms. In order to provide a meaningful comparison among
destinations,this ranking is utilized in this section of the study. However,according to the Hotel/Motel
Council of Jefferson City,currently there are 1,019 convention quality hotel rooms in the City. In
addition,upon completion of the planned modifications,Motel 6's rooms are also expected to qualify as
"convention class,"increasing the total supply to 1,119 rooms.
It is our understanding that Hotel De Ville is planning to add 26 rooms and Ramada Inn is considering
adding 286 rooms to its property. In addition,preliminary plans for a new 100-room hotel in downtown
are being developed. These additions would bring the supply of hotel rooms in the city to 1,673,
r providing approximately a 30 percent increase. Furthermore,depending on qualifications of the new
hotel rooms,these additions might result in an increase of approximately 37 percent in the number of
convention quality hotel rooms.
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The following table illustrates the convention class hotel room supply in comparable destinations in
relation to the existing hotel room supply in Jefferson City area.
Convention Class Hotel Rooms—Jefferson City and Comparable Destinations
Location Rooms Location Rooms
Austin,TX 6,244 Boise,ID 1,668
Columbus,OH 6,045 Charleston,WV 1,349
Lexington,KY 4,221 Albany,NY 1,110
Daytona Beach,FL 3,318 Bismarck,ND 1,038
Santa Fe,NM 2,926 Roanoke,VA 1,031
Monterey, CA 2,678 Jackson,TN 870
Little Rock,AR 2,610 Jefferson City,MO 789
Des Moines,IA 2,343 Huntington,WV 720
Norfolk,VA 2,291 Collinsville,IL 405
Springfield,IL 2,182 Augusta,ME 309
Spokane,WA 2,038 Shreveport,LA 289
Montgomery,AL 1,980 Visalia, CA 150
Source: Reed Travel Group,Oficial Airline Guide Business Travel Planner,
Spring 1996;
Jefferson City ranks 19''among the 24 selected destinations in its convention quality hotel room supply
according to the Reed Travel Group. However,the number of convention class hotel rooms provided by
the Hotel/Motel Council improves the ranking to 15's. The planned or proposed additions to Jefferson
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City(addition of 412 rooms)would further improve the City's hotel room supply ranking.
The following table presents the number of convention class hotel rooms in Jefferson City and its
competitors. Jefferson City currently ranks fifth out of nine cities.
Convention Class Hotel Rooms—Jefferson
City and Competitive Destinations
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Location Rooms
Kansas City 7,005
St.Louis 6,290
Y Springfield,MO 2,019
Osage Beach 1,503
Jefferson City 789
Columbia 749
Joplin 654
E Cape Girardeau 349
_ Lake of the Ozarks 309
Source: Reed Travel Group,Oficial Airline
Guide Business Travel Planner, Spring 1996
As mentioned previously,availability of hotel rooms is a critical factor in an event planner's selection
decision. In general,events tend to book a facility one to two years in advance,occasionally even earlier.
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J Major cities such as St.Louis and Kansas City house individual hotels with large room supplies.
Examples of such large hotels include Adam's Mark Hotel and Regal Riverfront Hotel in St. Louis and the
Westin Crown Center and Hyatt Regency Crown Center in Kansas City. In addition, some smaller resort
destinations may have large hotels. For example,Marriott Tan-Tar-A Resort&Golf Club in Osage Beach
has 930 hotel rooms. Having these types of destinations within the same geographical market for state
conventions may hinder the proposed Center's ability to attract regional or larger state events. In order to
11 improve the Center's marketability it may be necessary to encourage further growth of the convention
f quality hotel room supply or construction of a full-service convention hotel.
Access
Jefferson City is centrally located and easily accessible throughout the State by the highway system. It is
located at the crossroads of the U.S.Highways 54,63 and 50. It is approximately 30 miles from 1-70,
which passes through the middle of the State connecting St.Louis and Kansas City and 60 miles from I-
44 connecting St.Louis to Springfield,Joplin and the Southwest comer of the State. I-70 is also linked to
1-35,1-55 and I-64 which connect Missouri to Kansas,Iowa,Illinois and Arkansas. Having extensive
highway access may enable Jefferson City to attract statewide meetings where most of the attendees tend
to drive.
The nearest airport to Jefferson City, Columbia Regional Airport,is located 12 miles away and is served
} by TWA Express. St.Louis is the only city served by direct flights from this airport which limits air
access to Jefferson City. The nearest international airport is Lambert-St.Louis International Airport,
which is approximately 100 miles east of Jefferson City. Limited air access may hinder Jefferson City's
ability to attract national or regional events which,unlike state events,depend heavily on air access in
selecting a destination.
Attractions
z
Jefferson City
E
Jefferson City offers a variety of attractions that are unique to a capital city. According to the Convention
and Visitors Bureau most frequently visited attractions include Missouri Capitol, Governor's Mansion,
Cole County Historical Museum,Missouri State Highway Patrol Museum and the Runge Nature Center.
Housing the legislature is a significant advantage for Jefferson City in attracting State Association
meetings,especially those who are interested in legislative participation to their meetings. However,
having a limited variety of attractions is a disadvantage especially when several competitive destinations
offer more variety.
Competitive Destinations
The following paragraphs illustrate attractions in cities which Jefferson City would compete with in
attracting events.
• Cape Girardeau: Cape Girardeau contains several scenic parks. Court House Park overlooks the
Mississippi;Capaha Park contains rose gardens and Arena Park is the site of the Southeast Missouri
District Fair in September. Riverfest, held in June,includes river excursions,arts and crafts and
1 $
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concerts. A scenic portion of I-55 runs 57 miles north from Cape Girardeau to St.Marys.
• Columbia: Columbia is located on I-70. It is the home of University of Missouri-Columbia,the
F',
oldest state university west of Mississippi,as well as Columbia College and Stephens College. The
Hearns Center is the home to Missouri Tiger Basketball of the Big 12 Conference. Columbia also
houses several museums including the Museum of Anthropology and the Museum of Art and
Archaeology.
• Joplin: Historically a mining town,Joplin is the home of Missouri Southern State College,which is
located on a 310-acre area. Post Memorial Art Reference Library includes a 2,500-piece collection of
r art reference material.
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• Kansas City: Kansas City metropolitan area spreads into seven counties both in Missouri and
Kansas. The city accommodates nearly 200 of the nation's largest industrial firms including auto
and truck assembly,steel and metal fabrication and food processing. The Harry S. Truman Sports
Complex consists of twin stadiums for professional baseball and football. Crown Center,developed
h by Hallmark Cards Inc.,is one of the larger private urban projects in the country with its 85-acre
shopping,residential and business complex.
Kansas City also offers cultural activities. The city houses the Lyric Opera of Kansas City,the
University of Missouri's Conservatory of Music as well as a variety of museums. Kansas City's
nightlife is active with many clubs and lounges featuring jazz,bluegrass,country, rock and folk
music. Restaurants serve famed Kansas City steak among other types of food.
• Lake of the Ozarks: Lake of the Ozarks is a popular resort area with fishing,boating and
swimming activities. The area is especially popular during the Spring and Summer. According to
the Lake Area Chamber of Commerce,the Lake area,which includes Lake of the Ozarks and Osage
Beach,attracts 3 to 4 million visitors annually.
• Osage Beach: Osage Beach's location in the Ozarks makes it a popular vacation site. It is also
known for the country music and variety shows popular in the region.
• St.Louis: St.Louis,the largest metropolitan area in Missouri,contains numerous restaurants, hotels
and entertainment facilities. Busch Stadium,where the St.Louis Cardinals play,and the America's
Center are two of the city's attractions. The recently completed TWA Dome houses the Rams while
the Kiel Center is the home of the NHL's St.Louis Blues. The Gateway Arch symbolizes the City's
(� status as the Gateway to the West. From blues to big-band dance music,the city offers a variety of
a late night entertainment.
( The St.Louis metropolitan area houses several universities including Washington University, St.
Louis University,branch campuses of the Universities of Missouri and Southern Illinois as well as
Logan Chiropractic College,the St.Louis Conservatory of Music,the St.Louis College of Pharmacy
and Webster University. Some of the other attractions include the St.Louis Art Museum and the St.
4 Louis Zoological Park.
• Springfield: Springfield,a gateway to the Ozark vacation region and a medical,agricultural and
educational center,houses five colleges including Southwest Missouri State University. Nearby
Fellows and McDaniel lakes offer fishing,boating and picnicking,as does Springfield Lake,which
also has an 80-acre nature center featuring exhibits,hiking trails and public programs.
As illustrated,competitive destinations tend to offer a greater variety of attractions than Jefferson City
F` which is an important consideration for event organizers since attractions tend to increase the attendance.
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4 Exiting Local Facilities
J
Jefferson City houses several meeting facilities. The following paragraphs concentrate on the City's
largest facilities.
Capitol Plaza Hotel and Convention Center: Located in downtown Jefferson City, Capitol Plaza was
�i opened in 1987. The hotel offers 12,000 square feet of contiguous multipurpose space,divisible into 8
meeting rooms. The facilities include a total of 13 meeting rooms,of which four are located on the second
floor. The largest banquet style seating capacity is 1,200 in a single room. Capitol Plaza contains 255
hotel rooms.
Ramada Inn: Ramada Inn is located in the suburbs of Jefferson City and has 234 hotel rooms. The hotel
was opened in 1962. It offers approximately 18,000 square feet of non-contiguous multipurpose space,
�a which is divisible into 8 meeting rooms and can seat up to 600 people in banquet style in a single room.
.� The facilities also include 2 additional meeting rooms.
i Richardson Auditorium: Located on the campus of Lincoln University,Richardson Auditorium was
{ completed in 1958. The Auditorium has a seating capacity of 1,270. The main level seats 779 while the
balcony holds 491. Richardson Auditorium is equipped with theatrical lighting and sound,a versatile
r—� orchestra pit,dressing rooms with showers,ticket booths,automatic loading dock entrance and a multi-
purpose reception/gallery.
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III. USER SURVEYS
One of the most critical steps of the market analysis is obtaining past and potential users' input in order to
determine the level of demand for the proposed Center. This process helps identify qualitative issues
relevant to the area's comparative attractiveness as a meeting destination and determining specific user
needs.
Price Waterhouse conducted phone interviews with approximately 150 groups consisting of State
Associations, State Government Departments,past users of Capitol Plaza and the Ramada Inn and local
Fil corporations. These groups were selected based on information provided by representatives of City of
Jefferson,Convention and Visitors Bureau, Chamber of Commerce and hotel managers. Phone interviews
were completed for 50 percent of the groups contacted. Potential users were asked about the facilities they
utilize,characteristics of their events and advantages and disadvantages of Jefferson City as a meeting
destination. This section summarizes survey results.
f7 • The majority of respondents have held an event in Jefferson City. The facilities most commonly
utilized by these groups were Capitol Plaza and Ramada Inn. Groups that did not utilize Jefferson
City for their events gave the lack of adequate meeting facilities,limited number of hotel rooms and
limited activities outside the meeting as the main reasons.
• Some of the facilities within the State that are heavily utilized by respondents included Marriott's
Tan-Tar-A in Osage Beach,Holiday Inn Executive Center in Columbia,Lodge of Four Seasons in
F! Lake of the Ozarks and Adam's Mark in St.Louis.
• On average,responding groups have 3 day events with an average attendance of 700. Peak hotel
' room night demand averages approximately 240 with a range of 30 to 1,000,while the average total
hotel room night demand is 625. The average room rate paid by the responding groups for their last
meeting was$70 per night.
• Almost all of the respondents stated that they would consider using a new convention center should it
be built. However, 99 percent of these groups currently hold their events in hotels,where both
(�� meeting space and rooms are provided under one roof. When asked whether they would hold their
1 events in a separate facility than the hotel their attendees are staying at,approximately 57 percent
stated they would consider using a separate facility. Of these groups,52 percent stated that they
would do so only if a hotel is attached to or within walking distance of the proposed center. Another
45 percent was concerned with the cost of meeting rooms. These groups stated that currently they get
_ meeting rooms free of charge if they hold their event in a hotel and reserve a minimum number of
rooms.
I
• Building program requirements of these groups included:
- An average of 11,000 square feet of exhibit space with a range of 630 to 30,000 square feet.
- An average of 7 meeting rooms. The range for the number of meeting rooms is 1 to 35.
F - An average banquet style seating capacity of 500 with a range of 20 to 2,000.
L! - An average of 300 parking spaces. A range of 10 to 1,200 parking spaces was stated by the users.
j Another criterion mentioned was having a building that complies with ADA requirements.
A greater portion(70 percent)of the respondents stated that the site of the proposed convention center
( is not important as long as it is within a short drive from downtown and that there are enough hotel
1 rooms and parking within walking distance of the facility.
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`� • Respondents listed central location,being in the capital and convenience(i.e. having their office
located in the city,etc.)as the-three main advantages of holding their event in Jefferson City.
Disadvantages included limited leisure activities,limited hotel room supply and meeting facilities.
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_ Summary of Jefferson City's Advantages and Disadvantages:
The following paragraphs summarize advantages and disadvantages of Jefferson City as a meeting
I destination. These observations are based on the evaluation of Jefferson City's resources,analysis of
�} comparable/competitive facilities and destinations and user survey responses.
Advantages: Disadvantages:
- • Central location • Small population base
I • Capital . Limited air access
+ • Highway access • Limited hotel room supply
• Headquarters of various State Associations • Limited leisure/entertainment activities
• Limited restaurants
i
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While Jefferson City is in the center of the State,provides access to the legislature and is convenient to
State Associations,event planners expressed that events are generally held in a self-contained"complex."
Having a smaller population base would reduce the number of trade shows and spectator events that would
utilize the proposed Center. The small population base could also negatively affect the level of attendance
to consumer shows. Lack of air access along with a limited supply of hotel rooms would reduce the
P, likelihood of attracting regional events. The limited hotel room supply also hinders the number of larger
state events the proposed Center could attract.
( I On the other hand,based on our conversations with local representatives,it is our understanding that local
j organizations such as Rotary,Lions,etc. have a difficult time finding meeting space for their gatherings.
This may indicate potential local event utilization for the proposed Center. In addition,it is possible that
( having an appropriately sized headquarter hotel would improve some of the existing conditions and
increase utilization of the proposed Center.
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IV. BUILDING PROGRAM AND SITE ANALYSIS
This section presents the description of the proposed facility's building program based on the preceding
market analysis and evaluates the four potential sites.
F1, Building Program
The building program is based on several factors including:
• Analysis of Jefferson City's economic and demographic characteristics and trends;
• Comparable and competitive facility and destination characteristics;
• Utilization of facilities with most comparable destination characteristics and utilization of competitive
j facilities;
• Analysis of existing local meeting facilities;
(— • Past/potential user survey results;
• Analysis of Jefferson City's strengths and weaknesses with regard to attracting local meeting,
convention and trade show,and spectator event business;and
—, • Interviews with Jefferson City representatives.
I
The building program should offer a facility which is flexible enough to accommodate the proposed
Center's expected primary base of business--State Association meetings and local events,as well as
occasional consumer show or out-of-state convention/trade show events. Therefore, the center should be
Fj large enough to host primary events requiring up to 30,000 square feet of ballroom space,while having
the capability to be divisible into several sections for smaller simultaneous events. As mentioned
(— previously,Jefferson City's small population base restricts opportunities to host trade shows and spectator
1 events at the proposed facility. Although out-of-state convention and trade show business might not be a
primary source of business,the Center should be flexible enough to accommodate these occasional groups
nto maximize potential use of the facility.
L Exhibit Space
F- The
proposed Center does not need to include exhibit space at this time. Based on conversations with
potential users,the majority do not require significant dedicated exhibit space. Instead,
ballroom/multipurpose space could be utilized to meet their exhibit needs and provide a more flexible
building program.
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Multipurpose Room and Meeting Space
The quality and functionality of meeting rooms and ballroomstbanquet halls are increasingly important to
event organizers. Since large hotels are primary competitors within the State, it is important that the
proposed Center be developed as a first-class facility. This would involve high quality interior finishes
and fixtures, seating and other furnishings as well as lighting and acoustics above the level currently
found at competitive facilities.
The ballroom/multipurpose room should offer 25,000 to 30,000 square feet of space. This is based on
potential user requirements and a comparison to comparable and competitive facilities. This space should
be divisible into several smaller multipurpose rooms,allowing for maximum flexibility.
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Approximately 10,000 square feet of additional meeting space,divisible into approximately 10 to 15
rooms,should be included in the proposed Center's building program. This estimate is based on several
analyses including the meeting space to exhibittmultipurpose space ratio of comparable facilities,the
j number of meeting rooms at these facilities and the number of meeting rooms required by potential users.
The following is an"illustrative"description of some characteristics of the proposed meeting and
ballroom/multipurpose space:
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• Meeting rooms should be located in such a way that they can function independently with their own
pre-function space(lobby/registration)as well as in conjunction with ballroom activities.
• Meeting rooms should be configured so that public access is separate from service access.
• The ballroom should be column free with ceiling heights of approximately 20 to 25 feet to
' accommodate audio-visual presentations and to provide an aesthetically pleasing environment.
Meeting rooms should have ceiling heights of not less than 15 to 20 feet. Ideally,meeting and
ballroom space should both be part of the same column-free"multipurpose"space,divisible by
moveable partitions,allowing their usage for additional break-out sessions.
a Separate pre-function areas should be provided for the multipurpose space with similar design
characteristics/finishes to host registrations,receptions and breaks.
I
0 Sound-proof,movable walls should be used when subdividing the multipurpose space.
• Subdivided rooms should have individual controls for temperature,lighting and audio/visual.
FI • Meeting room sizes should range to accommodate groups of less than 50 persons,groups ranging
from approximately 50-100 persons,and rooms which accommodate larger groups of 100-200.
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Food and Beverage
Price Waterhouse studied the degree to which a full-service kitchen(versus a catering or a holding
kitchen)is needed in the proposed Center. This analysis was based on interviews provided by potential
Ril
users and comparable centers. Almost all of the potential users interviewed stated that their event
includes a banquet style food function. Furthermore,all of the comparable centers interviewed,with the
exception of one facility,stated that they have a full service kitchen in the building. Some hotels
developed as part of conference facilities also have their own kitchens,providing sufficient space to meet
f^f both transient business food and beverage service demand and that of the groups utilizing the Center.
The proposed Center should include a full-service kitchen in order to better market itself to meeting
-�I planners. Specifically,the kitchen area should be capable of supporting banquet functions for a maximum
of 2,500 attendees(the maximum number of people that could be accommodated in the ballroom in
banquet style which would require approximately 12 square feet per person).
In order to serve two separate events being hosted simultaneously in the proposed Center,it may be
necessary to have separate ballrooms accessible to the same kitchen. The kitchen facilities should be
located with direct access to each portion of the ballroom. It is preferable to have one large kitchen with
the capability to handle at least two separate events and with direct access to all ballroom divisions.
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Lobby/Registration/Prefunction Areas
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There should be at least two separate and distinct main entrances with lobbies for the proposed Center;a
-E primary lobby and a secondarylobbY• The primary will be the focal point for arrival at the Center
and the secondary lobby will be utilized for ballroom events held simultaneously. The lobbies should have
' enough space to serve as the point of delegate registration or prefunction areas,as well as the general area
I _4 for orientation in the center.
Parking
Parking capacity should range from 700 to 800 spaces based on a maximum banquet capacity in a
ballroom/multipurpose room of 25,000 to 30,000 square feet or 2,100 to 2,500 persons. This is based on
f an estimate of approximately 3 persons per car attending large social events. This capacity should be
adequate during simultaneous conventions considering the average parking space requirement of 300 by
potential users and an average event attendance of 700 which would require 233 spaces per event. It
Fi,
should be noted that if the proposed Center has an adjacent or connected hotel with parking availability
for all types of meetings at the Center,it may not be necessary to develop as many parking spaces as part
of the facility.
Summary
Based on discussions with potential user groups,comparable center representatives and an analysis of
competitive and comparable facilities,it is estimated that the proposed facility should have 25,000 to
30,000 square feet of flexible ballroom space, 10,000 square feet of divisible meeting space, a full-service
kitchen and 700 to 800 parking spaces.
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Site Analysis
�f Attendance and occupancy of a center are closely related to its location. For example,a convention
center's occupancy by professional or social organizations are influenced by proximity to support facilities
such as hotels,restaurants and retail shops. In the case of statewide events,the availability of parking is
also an important factor since most attendees drive in. Hence,site selection must be made carefully in
order to maximize a venue's utilization.
P' The following analysis provides a comparison of the four sites in Jefferson City that have been considered
by the City to be potential sites for the proposed Center. The results of this analysis could assist the City
in deciding which site would make the Center most marketable for conventions,consumer shows and
P
other meetings.
Each site is ranked based on the following criteria:
n • Site size and configuration;
• Visibility;
• Vehicular and pedestrian access;
E 0 Proximity to parking facilities;
• Proximity to existing hotel facilities;
• Proposed hotel development or expansion;
F • Land availability for hotel development and facility expansion;1
• Proximity to entertainment,restaurants and attractions;
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i • Development cost;and
• Ease of site acquisition.
This section describes each criterion and how the sites were compared.
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Site Size and Configuration
PThe minimum size for a facility's site is determined by the footprint of the building(which is expressed in
terms of its exterior dimensions),service access needs,required on-site parking,zoning regulations,area
reserved for future expansion or related facilities,and requirements for set-backs and circulation. All four
sites appear to have enough space for a footprint of 70,000 square feet(gross building area provided by the
City of Jefferson)which would require 1 to 2 acres,excluding parking space or room for expansion.
Visibility
(` Facility visibility to both residents and non-residents is important in facilitating access to the center. A
meeting planner would be concerned about the ease with which attendees can locate the facility. In
addition,convention centers might become symbols of the cities if they are set on a prominent,highly
visible spot. In the case of Jefferson City,the latter consideration might not be very important because of
i the presence of the Capitol. The two downtown sites would be visible,especially to CBD workers and
l 'I residents. The site across from the Ramada Inn might be the most visible among the four sites to highway
traffic since it is located adjacent to Highway 54. It might be visible to residents as well since it is in a
growing suburban area. The Lincoln University site would be less visible than the other three sites to both
l l residents and non-residents.
Access
In addition to being visible,a center should also be easily accessible. Consideration should be given to the
fact that attendees to some events will arrive and depart in the same time periods before and after an
event,such as a banquet or graduation. For this reason,multiple traffic lanes serving the venue's parking
areas are essential to disperse traffic effectively and to avoid a long wait to exit the site. A downtown site
with multiple points of entry through the local street grid system is usually more efficient than a location
at a single freeway interchange. Although we did not conduct a traffic analysis in Jefferson City,the two
downtown sites appear more accessible than the Ramada and the University sites.
Parking
A considerable number of potential users of the proposed Center stated availability of parking is important
to their group in choosing a venue. Therefore,both existing and potential parking available near a site are
important in determining advantages of each location. Currently,downtown sites appear to be closer to a
greater number of existing parking spaces;however,according to City officials these spaces are heavily
occupied and are,therefore,not available most of the time. The site across from the Ramada Inn appears
to have more space available for the construction of additional parking. The University site might utilize
111 existing parking at the University;however,that might not be sufficient.
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Existing Hotel Supply
FProximity to hotel rooms and the ability to accommodate attendees in one or two hotels were conditions
mentioned by potential users in selecting a facility. 504 of the 1,119 convention class hotel rooms are
located downtown,while 615 are located in the area near the Ramada site. Of the four sites,the
�I University site is the furthest from convention class hotels.
Future Hotel Supply
In addition to the existing hotel room supply,future hotel room supply in relation to proposed sites should
also be evaluated. It is our understanding that the Ramada Inn has preliminary plans for increasing its
hotel room supply by approximately 300 rooms should the site across from the Ramada Inn be selected.
There are also preliminary plans for a new 100-room hotel and some hotel room additions in downtown.
Land Availability
It is important that there be land available for future expansion of the center and land available to build
hotels near the facility. Downtown Jefferson City may not have much land available. By comparison, it
might be easier to acquire land proximate to the Ramada site.
l Attractions
Successful convention centers attractingprofessional/social association meetings must be located within
P g
walking distance(three to five blocks)of restaurants,retail stores,local entertainment and other
attractions. The majority of most frequently visited attractions,such as the Capitol, Governor's Mansion
and Cole County Historical Museum,are located downtown. In addition,there are more restaurants
downtown than outside. Therefore,downtown sites are the most advantageous in this criterion,followed
by the Ramada site.
Development Cost
�( Development cost involves,among others,costs such as construction,predevelopment planning and bond
issuance costs. One of the considerations for the Jefferson City downtown sites is their tendency to flood
during heavy rain. The building structure required to overcome this problem may result in a higher
construction cost in downtown. In addition,site preparation may be more expensive in downtown,since
existing structures may have to be demolished and sites may have to be filled. Therefore,the Ramada site
may be the most advantageous in this category.
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Site Acquisition
1 Since nearly all development budgets are limited,the cost of the site is an important consideration. It is
our understanding that the Ramada Inn is willing to contribute the site across from the hotel if they have
input and some control over the Center's architectural design. This would provide the Ramada site with a
(�} significant advantage over other proposed sites. In addition,acquisition of either downtown site would
finvolve negotiations between the City and current owners,which may be a lengthy process.
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Summary
The following table illustrates a ranking of the four sites in terms of the criteria described in this section(1=best;3=average;5=lowest).
Site Analysis
Size/ Existing Future Develop. Site
Site Configuration Visibility Access Parking Hotel Hotel Dev7 Land Attractions Cost Acquisition
Downtown--State Parking Lot Sufficient 1 1 3 1 2 Limited 1 5 3
Downtown--Housing Authority Sufficient 1 1 3 1 2 Limited 1 5 3
Lincoln University Sufficient 3 3 3 5 5 Unknown 3 Unknown Unknown
Across from the Ramada Inn Sufficient 1 3 2 1 1 Sufficient 3 1 1
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V. ESTIMATED UTILIZATION OF THE PROPOSED CENTER
t
G Basis of Utilization Estimates
Utilization of the proposed Center for a stabilized year was estimated based on the following.
C
• Surveys of potential users including State Associations, State Government Departments, local
corporations and past users of major local facilities.
• Utilization of facilities that will compete with the proposed Center for conventions and trade h
p p p sows,
as well as major local facilities.
• Utilization of similar convention/civic centers in markets comparable to Jefferson City.
• Community resources and economic/demographic characteristics of Jefferson City and
Pcomparable/competitive destinations.
Utilization estimates were made using ranges for each event type,since there are a number of factors in
Rthe competitive environment(which cannot be predicted with certainty)that will affect future utilization.
l
The proposed facility's actual performance at the high or low end of the ranges will depend primarily on
the following.
• Availability of hotel room blocks. In order to achieve the high end,it is important to provide the
necessary room block for various events. The average room block required by users is approximately
C 250. Thus,a headquarter hotel that has sufficient room supply and can block 200 to 300 rooms for
conventions and other meetings could contribute to the Center's utilization at the high end of the
estimated range.
F • The proposed facility's location with respect to support facilities such as restaurants,retail and
entertainment establishments.
1 • The booking policy of the proposed center must give priority to State Association convention and
trade show business in order to perform at the high end of the range for these types of events.
�7 1 • The budget established NYheadquarter hotel Center City, CVB etc.)for marketing Jefferson Ci tyas
well as the proposed center.
F` Utilization by Event Type
State Association and Other Conventions
F
Convention estimates are based primarily on surveys of State associations,utilization of competitive
centers and local facilities. The number of conventions is estimated to be 15 to 20 in a stabilized year of
F� operations. Average attendance is expected to range from 300 to 700 based on user survey results and
local facility utilization. These events are estimated to last 3 days on average. The fact that there are
relatively few hotel rooms available for a room block makes it difficult for Jefferson City to consistently
Phold large conventions in the proposed Center.
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Consumer Shows
Consumer show estimates are based on comparable and local facility utilization as well as economic and
F demographic characteristics of Jefferson City. The number of consumer shows is estimated to range from
15 to 20 with an average attendance of 1,000 to 2,000. These events are estimated to last 1 to 2 days. In
17 order to achieve the estimated number of events,the Center must be willing to book these shows 12
months in advance.
tt Meetings/Training/Educational Seminars
Fi These events include smaller State Association meetings,local/state government and corporate meetings,
training and seminars. Based on comparable and local facility utilization as well as user survey results,it
is estimated that the proposed Center could host 75 to 100 of these types of events in a stabilized year,
with an average attendance of 50 to 150. These events are estimated to last 1 to 2 days.
Local Social Events
Local social events are estimated to approximate 20 to 30 events with an average attendance of 200 to
� 300. These events include fund-raising or charity events,wedding receptions,parties and banquets.
{ } These estimates are based on utilization of centers in destinations similar to the proposed center. Local
social events are estimated to be one day events.
The following table summarizes the estimated utilization of the proposed Center.
Fi
Estimated Utilization of the Proposed Center
! Number oJEvents Avg.Attendance Total Attendance
Event Low High Low High Low High
(�? State Association and Other Conventions 15 20 300 700 4,500 14,000
Consumer Shows 15 20 1,000 2,000 15,000 40,000
Meetings/Training/Seminars 75 100 50 150 3,750 15,000
Local Social Events 20 30 200 300 4,000 9,000
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TOTAL 125 170 27,250 78,000
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- Vi. FINANCIAL OPERATING ANALYSIS
Estimated operating revenues and expenses for the proposed multipurpose Center in Jefferson City are
presented for a stabilized operating year(in 1996 dollars). Operating revenue and expenses estimates are
based on:
• Utilization and attendance estimates presented in the Market Analysis;
• A building program of 25,000 square feet of multipurpose space, 10,000 square feet of meeting space
and 70,000 square feet of gross building area. This building program is consistent with the proposed
building program presented in the Market Analysis;
• Information provided by existing facilities in Jefferson City;
• Information provided by industry representatives;and
{ '? 0 Operating data from competitive and comparable facilities.
It is important to note that operating revenues and expenses exclude debt service,interest income, interest
expense,transfers,capital outlay and subsidies generated by local taxes,reserves, depreciation and other
sources. Costs for capital improvements and marketing for long-term events are not included in the
following analysis. The Convention and Visitors Bureau or the Chamber of Commerce is expected to play
a significant role in marketing the proposed Center,in particular,for non-local events such as state
association conventions.
Estimates of operating revenues and expenses are based on operating statements of similar facilities for
the past several years,adjusted for inflation and the cost of living,where appropriate. These estimates are
based on the following key factors:
• Supply of meeting and assembly space within the Jefferson City area will remain constant;
• Effective,professional facility management; -
Aggressive in-house marketing efforts;
• Aggressive marketing assistance by local/government agencies including the Convention and Visitors
�- Bureau and the Chamber of Commerce;
• Efficient facility design characteristics;
• Planned/proposed additions to the existing hotel room supply;
• Cooperation from area hotels in providing necessary room blocks for conventions and corporate
conferences;and
• Efficient access for local attendees,as well as drive-in attendees for state events.
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Operating Revenue and Expense Estimates
�-� All operating revenue and expense estimates are provided for a stabilized year of operation and are
{l �` expressed in 1996 dollars. Operating revenues are estimated to range from approximately$145,000 to
$270,000 and include the following:
• Rent revenue is generated from events utilizing the ballroom/multipurpose room and meeting space
f and is estimated to range from approximately$68,000 to$90,000. Rental rates may differ from one
event to another based on food and beverage requirements. Estimates of rental revenue take into
account the discount events receive when they generate a minimum level of food and beverage
revenue.
�} • Net food and beverage revenue is generated from catering and concession sales. The proposed
Center is estimated to generate annual gross food and beverage revenue ranging from$165,000 to
t $480,000 in a stabilized year. It is estimated that the net food and beverage revenue to the proposed
Center will approximate 30 percent of gross concession and catering revenue. This estimate is
consistent with information provided by comparable facilities and industry standards in similar
facilities which employ an outside caterer to provide food and beverage service. If the proposed
Center provides in-house food and beverage service,then the 30 percent represents revenues net of
expenses such as salaries of catering staff and other costs related to food and beverage services.
Therefore,net revenue from food and beverage sales is estimated to range from$50,000 to$144,000.
• Event service revenue is generated from facility assessments for services and equipment provided
i f such as set-up,tear-down,electrical services,cleaning,security,telephone,additional chairs and
I f tables as well as revenues from vending machines,pay telephones and other small profit centers.
Event services revenue is estimated to range from$27,000 to$36,000.
• Parking revenue is not included in the analysis. Although many convention/civic centers realize
parking revenues,because the major local hotels do not charge for parking during events hosted in
their facilities,the proposed Center might have to provide free parking in order to be competitive.
Therefore,parking revenue is not estimated as part of operating revenues.
( Operating expenses are estimated to range from approximately$560,000 to$625,000. -
( • Personnel expense includes salaries,wages and benefits for all full-time employees. This estimate
does not include part-time event staff as these employees are typically charged to the event producer.
Personnel expenses are estimated to range from$313,000 to$375,000. This expense reflects an
estimated average number of 10 full-time employees for the Center,based on an analysis of similar
facilities.
• Utilities expense consists of electric,gas,telephone,water and sewer service as well as other fixed
costs and charges. Utilities expense is estimated to range from$90,000 to$100,000 per year.
�` • Maintenance,Supplies and Repairs expense consists primarily of the costs associated with cleaning
supplies and other building equipment,along with routine expenditures for maintenance of the
building and equipment. This expense is estimated to range from$42,000 to$49,000.
• General and Administrative expense refers to in-house marketing and administrative expenses.
Marketing expenses are related to the promotion of the facility,especially for events that will take
�} place in a shorter time frame. These include expenses related to sponsoring events for meeting
planners,attending meeting planner conferences,advertisement,facility brochures and other
marketing materials. In-house marketing costs are in addition to the marketing provided by the
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Convention and Visitors Bureau or the Chamber of Commerce. Typically, in-house marketing is
geared toward short-term local and state events while the CVB/Chamber of Commerce promotes the
destination and books events that would take place in a longer term.
l_ 1 Administrative expense consists of office supplies,printing services,communication costs,travel,
conference fees,temporary office help and other miscellaneous and contingency costs routinely
associated with the operation of the facility. General and administrative expense is estimated to range
from$50,000 to$60,000.
• Insurance expense includes general liability coverage for$1 million and casualty insurance against
fire,flood,etc. Total insurance expense is estimated to range from$30,000 to$35,000 annually.
• Contractual Services expense includes services which may be produced by an outside contractor
including landscaping,janitorial services,trash removal,security,etc. This expense is estimated to
range from approximately$14,000 to$27,000.
Expressed in 1996 dollars,the Center's net annual operating cost is estimated to range from
approximately$290,000 to$480,000 in a stabilized year. Operating revenue and expense estimates for
the proposed Center are illustrated in the following table.
i Estimated Operating Revenues and Expenses
Expressed in 1996 Dollars
-Range- Midpoint
Operating Revenues'
-Rent $ 68,000 $ 90,000 $ 79,000
-Net Food and Beverage 50,000 144,000 97,000
Fi -Event Services 27,000 36,000 32,000
Total Revenues 144,000 270,000 207,000
I} Operating Expenses'
-Personnel 375,000 313,000 344,000
-Utilities 100,000 90,000 95;000
-Maintenance, Supplies and Repairs 42,000 49,000 45,000
-General and Administrative 60,000 50,000 55,000
-Insurance 35,000 30,000 33,000
i
-Contractual Services 14,000 27,000 21,000
Total Expenses 627,000 558,000 592,000
PNet Operating Cost' S (483,000) S (288,000) S (385,000)
' Rounded to nearest$1,000
This net operating cost is consistent with other similar centers. The following table illustrates the
operating cost for several centers.
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Net Operating Cost of Comparable Centers
1 Net Operating
Center Cost'
A $ (472,000)
1 B (443,000)
f ! C (415,000)
D (390,000)
Proposed Center (385,000)
�7 E (272,000)
F (255,000)
G (215,000)
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' Rounded to nearest$1,000
Source: Facility Operating Statements
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VII. ECONOMIC AND FISCAL IMPACT ANALYSIS
1
The existence of a multipurpose center within a region generates spending from various sources including
overnight and drive-in convention delegates and association executives. The"first round" of spending
then generates economic impacts to the region,through the multiplier effect. Further,fiscal impacts are
generated through the region's tax structure.
This section provides estimates of the economic and fiscal impact of the proposed Center on the City of
f Jefferson, Cole County and the State of Missouri. The economic and fiscal impacts associated with
( construction of the proposed Center are also presented. Economic and fiscal impacts and multiplier
effects are•presented in 1996 dollars. A detailed explanation of the concepts and methodology utilized is
provided in Appendix A of this report.
Economic Impact of Proposed Center Operations
Economic impacts created by operations of the Center will result primarily from spending by attendees to
conventions and spending made by associations. Consumer shows and local social events are not
considered to generate significant economic impact since the majority of attendees to these events are
local residents. Without local events,the majority of the spending that takes place during these events is
l f likely to occur elsewhere within the economy unless the prospective attendee would have attended this
type of event outside the region. It is not reasonable to presume that a majority of these local residents
would indeed spend these same dollars outside the economy,or that these local events would necessarily
F(( leave Jefferson City if it were not for the existence of the proposed Center. Thus,it is not reasonable to
estimate that these local events generate significant new expenditure flow into the economy,despite their
importance to the operations of the proposed Center. Similarly,meetings,training and seminars are not
L ; expected to generate significant new spending since the majority of these events are already taking place
f in other facilities in Jefferson City.
As a result of new spending in Jefferson City and Cole County by convention delegates and associations
(recurring impact),and construction(non-recurring impact),the City, County and State should benefit
from increases in:
• Sales Volume. An increase in the total aggregate economic activity resulting from new expenditures
or new dollars imported into an economy as a result of construction, Center operations or spending by
non-residents or residents who,without the facility,would have spent their dollars outside the"local"
P area. In other words,it represents the total dollar flow of sales made by the major economic sectors
(wholesale,retail,manufacturing and service).
• Employment. The equivalent number of new employees based on average wages paid(local
earnings)supported by the direct and indirect spending.
{ • Income. Changes in personal earnings resulting from increased employment supported by new
r dollars flowing into the economy.
—j Overnight convention attendees(or those requiring hotel rooms)generate the highest level of impact.
Convention day-trippers who drive to Jefferson City to attend an event for the day or do not require hotel
! rooms also generate economic impact,albeit to a lesser degree. Many of these day-trippers are likely to
come from neighboring counties(e.g. Callaway,Boone)or other parts of Missouri.
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Direct Effects
{� Total"direct"spending from both overnighters and day-trippers to conventions resulting from the
proposed Center's operations was estimated for a stabilized year of operations. Industry specific HOPLAN
1 (IMpact analysis for PLANning)multipliers,which are based on data supplied by U.S.Department of
Commerce Bureau of Economic Analysis,were then applied to the incremental direct spending to
compute estimates of total impacts(direct and indirect)to the City and County in terms of sales volume,
employment and resident income.
The following is a discussion of the critical factors used to estimate direct expenditures of attendees to
conventions:
• IACVB(International Association of Convention&Visitors Bureaus)Delegate Spending Survey for
1993—national statistics from over 500 events held in over 70 locations,converted to 1996 dollars
and adjusted for Jefferson City visitor costs(e.g.average hotel rates,etc.);
• Information provided by local facilities, Sales and Marketing Management,Survey of Buying Power,
1996 and the IACVB survey to estimate the split between overnighters and day-trippers;and
• Information from industry publications and Price Waterhouse database.
Estimates for convention attendance and spending levels are based on the following:
• Incremental convention attendance was estimated to range from 3,200 to 9,800 in a stabilized year
based on the range of utilization estimates presented in the Market Analysis.
• Approximately 60 percent of convention attendees were estimated to be overnighters,while the
balance are day-trippers based on information provided by local facilities and an analysis of Cole
County and State of Missouri population and population within a 50-mile radius of Jefferson City.
Fl! Spending levels were estimated as follows(in 1996 dollars):
Convention Spending per Event
Overnighters Day-trippers
-1' Delegate Spending(per attendee)
-Lodging $ 105 $ 0
-Meals 106 26
-Entertainment 10 1
-Retail 20 13
-Tranportation 11 2
-Business Services 14 11
f—� Total $ 265 $ 54
l� Association Spending $ 31 per attendee
• Association spending includes expenditures on meals and business services such as rental of the
proposed Center.
_ • It is estimated that approximately 70 percent of total convention spending resulting from operations
of the proposed Center is new to the County. This is based on the understanding that all conventions
will be statewide events,drawing attendance from across the State of Missouri. Based on analyses
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nconducted in Phase I,approximately 30 percent of spending generated by conventions is estimated to
be displaced spending,or spending that would have occurred within the County regardless of the
proposed Center's operations.
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Total estimated convention direct expenditures from operations of the Center are based on the attendance
and spending estimates previously explained and range from$700,000 to$2.1 million in 1996 dollars for
FHa stabilized year.
Multipliers
The multipliers for Cole County utilized to calculate indirect and total spending generated from the initial
round of direct expenditures are provided in the following table. These are calculated using the 11VIPLAN
input-output model described in Appendix A of this report. Multipliers were applied to industries
appropriate for convention attendees'expenditures in each of the three economic impact categories: sales,
income and employment.
Multipliers—Cole County
Industry Sales' Incomes Employment'
Hotels&Lodging Places 1.6200 0.8064 51.1
Py Eating&Drinking Places 1.5514 0.5974 47.9
Amusement&Recreation 1.6072 0.7270 49.6
Aggregate Retail 1.6255 0.8202 35.2
` Interurban Transportation 1.6821 1.0425 69.4
Other Business Services 1.5286 0.6191 35.1
f
'Ratio of total sales generated from$1.00 of direct spending.
Ratio of total income(earnings,salaries,benefits)generated from
$1.00 of direct spending.
'Ratio of jobs generated by$1,000,000 in direct sales.
Cole County multipliers were adjusted to estimate the economic benefits to the City of Jefferson based on
(�} an analysis of demographic characteristics of the City and County.
Total Impact
1 a
! The sum of direct and indirect impacts reveals a total effect of the proposed Center on the City of Jefferson
and Cole County. This impact,generated by conventions,and illustrated in the following table,is
provided in terms of sales,income and employment. Economic impacts to the City of Jefferson and Cole
County were estimated by applying the city and county multipliers to estimates of direct spending. These
impacts represent the economic benefit(or loss)to the City and County if the proposed facility is built(not
—� built).
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Total Economic Impact from Proposed Center Operations
Conventions
Cole Countyow
L High Midpoint
-Sales Volume' $ 1,063,000 $ 3,289,000 $ 2,176,000
r -Resident Income' $ 470,000 $ 1,456,000 $ 963,000
-Employment 30 90 60
City ofJe.fferson
-Sales Volume' $ 867,000 $ 2,684,000 $ 1,776,000
-Resident Income' $ 398,000 $ 1,233,000 $ 816,000
-Employment 25 80 53
V i ' Rounded to nearest$1,000.
As illustrated,in terms of total sales,the proposed Center is estimated to generate approximately
$900,000 to$2.7 million for the City of Jefferson and$1.1 to$3.3 million for Cole County in a stabilized
year of operations. The effect of the proposed Center on total resident income is estimated to range from
$400,000 to$1.2 million in Jefferson City and$470,000 to$1.5 million in Cole County.
The increase in the total number of jobs as a result of new spending by attendees to the activities hosted at
the proposed Center is estimated to range approximately 25 to 80 for Jefferson City and 30 to 90 for Cole
County. The first round of spending generated by the proposed Center at conventions impacts
employment primarily in area hotels,restaurants and retail establishments since these sectors comprise
more than 80 percent of direct spending at such events. Alternatively,the second and subsequent rounds
of spending typically affect the entire economy of a region and it is unlikely that the operation of the
t+ proposed Center would alter the current overall employment distribution among employment sectors.
Accordingly,the estimated impact on employment(created by second and subsequent rounds of spending)
would be distributed within the various categories of employment in the same proportion as the current
j distribution of workers within the region.
Although the proposed Center is expected to host primarily state events,some delegates at these events are
from out of state. Based on information provided by local facilities and comparable centers,it is estimated
that approximately 15 percent of convention delegates would originate from outside of Missouri. The
-- direct spending associated with these delegates ranges from approximately$180,000 to$560,000. This
spending would generate total sales volume within the State of Missouri ranging from$330,000 to
4—` $1,000,000;total income ranging from$150,000 to$460,000;and 10 to 25 jobs.
t
The impact to Cole County includes the impact to Jefferson City. While impacts to the City and County
represent incremental(new)attendees to these areas,impact to the State takes into account all of the
f attendees from outside of Missouri,including those previously visiting other venues within the State(e.g.
St.Louis,Kansas City,Lake of the Ozarks,etc.).
Fiscal Impact of Proposed Center Operations
The City of Jefferson and Cole County also benefit from Center operations in the form of increased tax
revenues. In addition,out of state delegates provide fiscal benefits to the State. The primary taxes
111 affected by the proposed Center-related expenditures include sales and lodging(hotel)tax. The following
is a discussion of these taxes.
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Retail Sales Tax
• The State of Missouri levies a 6.225 percent sales tax. Of this rate,the State keeps 4.225 percent.
i
• Cole County receives 0.5 percent of the state sales tax.
• The City of Jefferson receives 1.5 percent of the state sales tax.
(� Lodzins(Hotel)Tax
"1 • Cole County and the State of Missouri do not impose a lodging tax.
• The City of Jefferson imposes a 2.0 percent lodging tax.
Income Tax
F! • The State of Missouri levies a personal income tax. The effective rate on overall state income is
estimated based on 1994 taxable income and total personal income in the State of Missouri. This rate
is estimated to approximate 2.3 percent. This is applied to total state income generated as a result of
the proposed Center's operations.
Based on total expenditures generated by the proposed Center's operations and the applicable tax rates
previously illustrated,total annual fiscal benefits(increase in taxes)to the City and County are estimated
in 1996 dollars,as illustrated in the following table.
1 Annual Fiscal/Tax Benefits of Proposed Center Operations
i r
Cole County Low High Midpoint
-Retail Sales $ 4,000 $ 12,000 $ 8,000
4�
City ofJefferson
' -Retail Sales $ 11,000 $ 33,000 $ 22,000
-Lodging 4,000 12,000 8,000
Total City $ 15,000 $ 46,000 $ 31,000
111 Note: All figures are rounded to nearest$1,000.
As illustrated,the City of Jefferson will benefit from the proposed Center at a higher degree than Cole
County. Spending associated with out-of-state attendees is expected to generate$9,000 to$30,000 in
sales tax and$3,000 to$10,000 in income tax for the State of Missouri.
Economic Impacts of Construction
In addition to economic and fiscal impacts generated annually from facilityoperations,the City, County
and State will receive one-time(non-recurring)economic and fiscal benefits from construction activities
�j (capital expenditures for labor and materials)associated with the proposed Center.
According to architects Thompson,Ventulett&Stainback S total hard construction costs materials
P � ),
and labor)for the building program defined in Section IV of this report could range approximately from
$150 to$175 per square foot. For purposes of this analysis,an estimated$150 per square foot is applied
to a building footprint of approximately 70,000 square feet. This provides a total hard construction cost
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estimate of approximately$11 million. Based on this estimate,non-recurring economic impacts from
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construction in 1996(constant)dollars to the State, County and City are shown in the following table. It
should be noted that the impact to the City is included in the impact to the County which in turn is
included in the impact to the State.
Economic Impact of Proposed Center Construction
State of Jefferson
Missouri Cole County City
Sales Volume' $ 19,140,000 $15,807,000 $ 13,153,000
Resident Income' $ 6,271,000 $ 4,742,000 $ 3,732,000
Employment(jobs) 215 175 135
`Rounded to nearest$1,000.
a a
These non-recurring total impacts were estimated by applying the following multipliers to the construction
cost estimate provided by TVS. Adjustments to these multipliers were calculated as described earlier to
estimate total impacts to the City of Jefferson.
(` Multipliers(New Industrial and Commercial Buildings)
State of Cole
Missouri County
Sales` 1.8229 1.5054
Income' 0.5973 0.4517
�? Employment' 22.5 18.1
I �
'Ratio of total sales generated from$1.00 of direct spending.
'Ratio of total income(earnings,salaries,benefits)generated
from$1.00 of direct spending.
'Ratio of jobs generated by$1,000,000 in direct sales.
Fiscal Impacts of Construction
Fiscal benefits of construction of the proposed Center to the City, County and State were estimated by
;I applying the following tax rates to estimated indirect and total economic impacts.
.J
• The State of Missouri levies a 6.225 percent retail sales tax. Of this,0.5 percent is redistributed to
Cole County while 1.5 percent is redistributed to the City of Jefferson.
• The State of Missouri levies a personal income tax. As mentioned previously,the effective rate on
overall state income is estimated based on 1994 taxable income and total personal income in the State
of Missouri. This rate is estimated to be approximately 2.3 percent. This is applied to total state
income generated by the proposed Center's construction.
Estimates of the primarily one-time(non-recurring)fiscal impacts from construction activities of the
proposed Center are presented in the following table,in 1996 dollars.
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Fiscal Benefits of Proposed Center Construction
State of Missouri
-Retail Sales $350,000
-Income 143,000
Total—State $492,000
Cole County
-Retail Sales $ 36,000
City of Jefferson
f -Retail Sales $ 93,000
I Note: All figures are rounded to nearest$1,000.
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-f APPENDIX A
Economic/Fiscal Impact Concepts
Economic impacts from the proposed Center's operations and construction result from the export of
services and the import of new visitor spending. In their simplest form,economic impacts can be
measured by estimating total direct expenditures resulting from facility operations. However,to equate
total new expenditures with only new direct expenditures would be incorrect because total new
Pexpenditures would also include the spin-off or ripple effect as these direct expenditures(or"first round"
f of spending)are re-spent(by their"second"or"third"round recipients)within the local economy.
Increased activity or indirect benefit from subsequent spending rounds is commonly known as the
multiplier effect. The size of a given economy's or area's multiplier is directly related to its geographic
size,population and diversity of its industrial and commercial base. A larger population is generally able
to support a more diverse economic base and more products are likely to be manufactured and purchased
locally. Therefore,money injected into the economy is re-spent more often,causing greater changes in
local business volume.
The existence of a convention/multipurpose center in a community creates impacts on the economy in
-r several ways. During a convention,spending occurs on items such as lodging,meals,entertainment and
transportation. The operations of the center generate other sources of expenditures by association
executives and event promoters on items such as business services,lodging,meals and facility rental.
Definitions of Economic and Fiscal Impacts
d Economic impacts are presented in terms of direct effects,indirect effects,total spending and fiscal
impacts. Each of these terms are defined below. Fiscal impacts quantified in this report include City,
County and State tax revenues generated by the proposed Center's existence in Jefferson City.
ti ;1
• Direct effects are defined as"first round"spending generated by the operation of the Center in
vl Jefferson City. These are expenditures made which are directly related to the Center.-
- • Indirect effects consist of the re-spending of the first round of expenditures. This occurs as the
dollars spent on direct goods and services are distributed throughout the economy,continually
ry4 changing hands,leading to further expenditures,or indirect spending. However,every dollar is not
re-spent within the designated economy indefinitely. Rather,recipients of the direct expenditures
may spend a portion of their income outside the defined community. As this leakage occurs,the flow
i
is diminished,and ultimately exhausted.
• Total effect is the sum of direct and indirect effects produced by visitor spending attributed to events
at the proposed Center. Total effects are provided in terms of sales,resident income and employment.
-, • Fiscal impacts are the effects created by the proposed Center's operations on the public sector within
the economy. These include tax revenues generated by direct and indirect spending identified above.
1� Typical revenues affected are those generated from accommodations,personal income,and sales
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taxes.
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! Multiplier Effects
Input-output analysis or modeling describes the sum of transactions between suppliers and consumers of
goods and services. The initial demand for such products is the direct effect. These suppliers then
-- purchase goods and services from other producers,the indirect effect. This process continues until
leakage occurs and the flow ceases.
l Indirect effects can be mathematically derived by input-output models and result in sets of multipliers,
specific to a particular region or economy. These sets provide a description of the change in sales for
every regional industry caused by a one dollar change in demand for any given industry.
Two well-known modeling systems which generate multipliers are RIMSII,created by the U.S.
Department of Commerce,and IMPLAN(IMpact Analysis for PLANning),created by the Minnesota
INIPLAN Group(NUG),Inc. Both models are widely used and accepted for economic impact analyses.
Each one generates a different type of multiplier.
The notion of a multiplier rests upon the difference between the initial effect of a change in final demand
and the total effects of that change. Total effects can be calculated either as direct and indirect effects,or
as direct,indirect,and induced effects. Direct effects are production changes associated with the
immediate effects or final demand changes. Indirect effects impact area production changes in backward-
s linked industries caused by the changing input needs of directly affected industries(for example,
additional purchases to produce additional output). Induced effects are the changes in regional household
spending patterns caused by changes in household income generated from the direct and indirect effects.
11.
?, Three different sets of multipliers are estimated by IMPLAN corresponding to three measures of regional
economic activity;total sales,personal income,and employment. For each set of multipliers,three types
r of multipliers are generated,Type I,Type II and Type Ill.
i
• Type I multipliers. A Type I multiplier is the direct effect,produced by a change in final demand,
plus the indirect effect divided by the direct effect. Increased demands are assumed to lead to
increased employment and population with the average income level remaining constant. The
Leontief inverse(Type I multipliers matrix)is derived by inverting the direct coefficients matrix. The
result is a matrix of total requirement coefficients,the amount each industry must produce in order
for the purchasing industry to deliver one dollar's worth of output to final demand.
J,
• Type II multipliers. A different type of multiplier is the Type H. In addition to inter-industry
effects,this multiplier takes into account the income and expenditures of households. The household
i� income and expenditure are included in the Leontief inversion. This internalizes the household
sector,therefore,a Type II multiplier includes the induced,or household spending,effects.
• Type III multipliers. The 110PLAN Type III multiplier is an employment-based calculation of the
induced effects. It assumes full employment and,therefore,each job adds/subtracts population with
an associated average expenditure per person. The Type III multipliers are based on the employment
1 generated by the new economic activity as captured by the Type I multiplier. This new employment is
translated into a number of persons through a population to worker ratio. The population change is
introduced to the model,resulting in induced economic activity via the Type I multiplier. In general,
Type III multipliers tend to be higher than Type II. One consideration for Type III multipliers is that
4 it treats all jobs equally,whether it is a manufacturing job or a job at a restaurant. It is recommended
-- to be utilized when the types of jobs created are known to be of similar nature. In order to provide a
f— conservative approach and because the nature of new jobs were unknown prior to the study, this
j analysis utilized the Type II multiplier.
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IMPLAN produces a report which provides multipliers for over 500 sectors of economic activity at the
t' county and state levels. These are calculated using the methodology described above. The data used in
the model is based on 1993 economic activity. For this reason,direct spending applied to the employment
multipliers is deflated to reflect expenditures in 1993 dollars.
As a result of direct spending generated by operations and construction of the proposed Center,Jefferson
City,Cole County and Missouri economies should benefit from the following:
s
• Total sales. Represents an increase in aggregate economic activity resulting from import of new
expenditures(or new dollars imported into an economy)as a result of proposed Center-related
spending by non-residents or residents whom,without the new facility,would have spent their dollars
outside the region. In other words,it represents the total dollar flow of sales made by major economic
sectors(wholesale,retail,manufacturing and service). These multipliers are used to measure the
interdependence of the Center and other businesses in the regional economy.
• Total income. Represents direct and indirect changes in resident employee compensation resulting
from increased employment from new dollars flowing into the economy.
t
• Total employment. Represents direct and indirect employment effects from the production of one
million dollars of sales. Employment is measured in equivalent number of total jobs(in terms of full-
and part-time jobs).
• Taws. Includes both direct and indirect tax revenues generated by the multiple rounds of spending.
- Direct tax rates are applied to the direct spending generated in the first round.
{� Effective tax rates are applied to indirect retail expenditures at the County and State level
!i because not all indirect retail spending may be considered taxable sales.
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APPENDIX B
One of the advantages of Jefferson City for event organizers is its affordability. In order to illustrate the
cost efficiency for overnight and day tripper delegates attending events in Jefferson City,this appendix
provides cost estimates per delegate during a State Government event held in Jefferson City versus several
other cities in Missouri. Cities included in this comparison are those that are most frequently mentioned
by the user groups as meeting destinations and consist of Columbia,Lake of the Ozarks,Kansas City, St.
Louis and Springfield. The event is assumed to last 3 days in accordance with the average event length
estimated for conventions presented in Section V of the report.
.., The following table illustrates the cost for overnight and day-tripper delegates. It should be noted that
these estimates do not take into account the concentration of overnighters versus day-trippers. The total
cost of an event to the State Government will vary depending on the number of overnight versus day-
tripper delegates in each destination.
Delegate Spending per Event
Overnight Delegates:
City Hotel Meals Transportation Total
k St.Louis $ 239 $ 114 $ 14 $ 367
Kansas City 191 102 13 307
Lake of the Ozarks 156 90 15 261
Springfield 134 90 16 239
Columbia 127 90 14 231
Jefferson City 120 90 15 225
Day-Trippers:
City Hotel Meals Transportation Total
St.Louis N/A $ 114 $ 2 $ 116
Kansas City N/A 102 2 104
Springfield N/A 90 3 93
Columbia N/A 90 2 92
I ,
Jefferson City N/A 90 2 92
Lake of the Ozarks N/A 90 2 92
_I
Source: Reed Travel Group,Oficial Airline Guide, Spring 1996;
Department of Treasury,Internal Revenue Services,Per Diem Rates, June 1996;
FIV IACVB Convention Income Survey, 1993.
N/A—Not Applicable
_„
• Hotel spending is based on hotel rates in each city obtained from the Official Airline Guide,published
by the Reed Travel Group. This spending does not account for doubling-up in hotel rooms(i.e. single
occupancy).
• Spending on eating and drinking is estimated using per diem rates for meals and incidental expenses
published by the Department of Treasury,Internal Revenue Service.
• Transportation spending is obtained from IACVB Delegate Spending Survey for 1993,converted to
1996 dollars and adjusted for local area costs and event length. Transportation expense includes
spending on auto rental,gasoline and other local transportation expenses. It should be noted that the
`— Page 39
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transportation expense illustrated refers to expenses occurred during the event. It does not include
transportation expenses incurred to arrive/return to/from the host city prior to and after the event.
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