Published Feb. 23, 2016
While there is a market for a space that could hold meetings, conventions, conferences and other events in downtown Greenville, the city does not have the funding or the space to accommodate a downtown convention center, according to the results of a feasibility study by Chicago-based Hunden Strategic Partners. What the city can do, however, is consider developing a larger convention hotel property.
“Based on the conclusions presented in the study, it is clear that there must be a shared community vision regarding how best to proceed if a newer facility designed to accommodate a wider range of meetings and conventions in the central business district is to become a reality,” said Greenville City Manager John Castile. “As a result, we look forward to continued dialogue with our partners and community stakeholders.”
The smallest convention center that could be considered within the definition of a convention center is one with 30,000 square feet of exhibit space that would require nearly 3 acres under roof at a cost of $63 million. Required parking adds another $10 million and more land. Also, according to the report, a convention center will not succeed unless attached or adjacent to a large convention headquarters hotel. The cost of these is beyond what the local market will bear, so a subsidy will be required. In total, the smallest convention center complex will require a public investment of around $95.5 million. If this were to be funded over 30 years at 3% interest, the annual payment would be more than $5 million. This size facility would not be large enough to accommodate most of the conventions and events that may want to consider Greenville.
If land and funding were available, Hunden Strategic Partners recommends a convention center with about 5-6 acres under roof, with parking and a 450-room hotel, which would add several more acres. This would require more than $175 million in public investment. The annual debt payment would be greater than $9.3 million.
The feasibility report found that most conventions and conferences actually take place in hotels, not in convention centers. The Hyatt in downtown Greenville is a testament to that and has played that role for many years. The market and demand has grown beyond what it and other hotels can accommodate.
Hunden Strategic Partners recommends the development of a larger convention hotel property that includes the most compelling elements of a meeting facility without the costs and size of an independent convention center. In the long term — as this recommended facility is absorbed and enough land can be assembled nearby, as well as funding for a large independent facility — a convention center could be developed. However, such an endeavor is likely at least 10 years in the future.
In order to move Greenville a full step beyond what the Hyatt can currently offer — and so that whatever is developed is adding to the market and not simply transferring business or competing directly with the Hyatt — Hunden Strategic Partners recommends the convention hotel:
- Have about 450 guest rooms.
- Be branded, such as Marriott, Hilton or Sheraton.
- Have a 25,000-square-foot ballroom, divisible into at least five divisions. Ballroom capacity is 1,600 at round tables.
- Have a 10,000-square-foot junior ballroom, divisible into at least three divisions.
- Have 16,000 square feet of breakout meeting rooms in 800- and 1,600-square-foot modules.
- One board room.
- 833 parking spaces. Typically hotels require one space per room, but due to the robust size of the ballroom space, more parking is required for events.
Given the large amount of meeting and function space in a convention hotel, the cost per key will likely surpass $300,000 per room. Total development cost will likely be $135 million, according to the report. However, the private sector can be induced to develop it with a strong incentive package. The size of that incentive package is estimated to be 35% of the project’s cost, though it could be less depending on many factors.
Hunden Strategic Partners does not recommend that this hotel open sooner than 2020. The opening of nearly 1,000 new hotel rooms in the next two years will take some time for the market to absorb. However, the process for developing a major hotel like this does take time. It will take approximately a year or more to attract a developer and negotiate a development agreement. Then, once funding is in place, it will take approximately 20 months to construct. Realistically, the hotel would not be able to open until 2020, given the timing of the report, selection of a developer, negotiation of a deal and construction.