HOTELS &
      CONVENTIONS
     

Directors brought with them a 4-year-old study by KPMG Peat Marwick that said Richmond could win the conventions, conferences and meetings that were bypassing Virginia cities for places like Baltimore, Charlotte, Cincinnati and Portland. With appropriate backing, the study said, Richmond might build a convention facility that could compete. The city already had Richmond Centre, completed in 1986. But after eight years its scant 62,000 square feet of exhibit space put it near the back of the pack.

photo by Mark Rhodes

Donald L. Charles, chief administrative officer of the Greater Richmond Convention Centre Authority, says the expanded Richmond Centre will be better able to compete for conventions.

"I was pleasantly surprised by the consensus of the group," Hager says. The four localities began immediately to talk about mustering support for the project from retailers, the hospitality industry and state legislators.

The board asked Peat Marwick for an update with specific recommendations and further research to prove an expanded convention center could work. They set up a task force and came up with a building design. Last December, the localities created an independent authority to oversee the expansion and run the center.

Critical funds came from the state, which appropriated $10 million. Legislators also authorized the four localities to raise their hotel and motel occupancy taxes to provide a steady source of funds for the project. By midsummer, the authority had begun acquiring the 57 privately owned real estate parcels it needed for the site. By November, a crew was swinging a wrecking ball into the side of an abandoned warehouse once owned by Miller & Rhoads, a defunct department store that was a principal in the heyday of downtown economic prosperity -- something the convention center is hoping to revitalize.

If all goes as planned, Richmond Centre will be more than five times bigger when the $160 million expansion is completed in 2002. It will contain 605,000 square feet of enclosed space, including 180,000 square feet of exhibit hall, 50,000 square feet of meeting rooms, and a ballroom big enough to handle a sit-down dinner for a royal wedding.

Richmond is not the only Virginia locality with big plans. Other publicly managed meeting sites throughout Virginia are trying to win their share of a strong convention market. The city of Chesapeake has a new center up and running, as does Breaks Interstate Park, a remote site on the Virginia-Kentucky border that is operated jointly by both states. Hotel Roanoke and Conference Center has exceeded all expectations during its first three years as a convention site, city officials say, and Loudoun County recently got the results of a marketing and feasibility study for a proposed convention center near Washington Dulles International Airport.

John Barry, executive director of the Metro Richmond Convention and Visitors Bureau, calls the Richmond project the "first major convention center in Virginia." The existing center and other sites scattered around the state have been successful in attracting shows and meetings that suit their size. Typically, Barry says, those sites draw statewide associations and regional meetings for 2,000 or fewer people. But Barry says the Richmond Centre expansion will place the city among the second tier of available U.S. convention sites, back in the running with Charlotte, Baltimore and Cincinnati.

Supporters expect the project to stimulate growth in the number of hotel rooms, which will be needed to support the convention center when it books bigger events. The new center is designed for national meetings with an optimum number of 5,000 attendees, with potential to handle up to 15,000. "Clearly, we are expecting a good return on our investment," Barry says. "The new Richmond Centre is expected to attract $90 million in expenditures annually and $6.5 million in state tax receipts."

With site preparation under way, the convention bureau's marketing staff is already scheduling conventions of a size the new center can handle. Barry says events are booked for the years 2003 and 2004, and the bureau has leads stretching out to 2007.

Competition for convention business can be fierce. Many states dangle outlandish incentives to attract events. Alabama in recent years has been offering a Mercedes Benz as an enticement. "Virginia can't afford to do anything like that," says Lynn Bostain, manager of the Virginia Tourism Corp.'s Washington, D.C., office. Instead, the state must rely on its reputation for quality of life, historic attractions and in many regions, the affordability of hotels, restaurants and retail stores.

Pitching to the right market is critical. Roanoke is more compact than Virginia's other urban areas, and the people who operate the Hotel Roanoke and Conference Center know they must market their facility to groups that fit their profile. The conference center is jointly owned by the city of Roanoke and Virginia Tech. Doubletree Hotels manages the hotel and conference center.

Gary Crizer, the Doubletree executive who manages the conference center, says the facility bills itself as midsized, ideally suited to groups of 30 to 120 people, although it has handled meetings with up to 500. The 63,000-square-foot center has 14,400 square feet of unobstructed exhibit space, and its principal targets are corporations, university groups and associations. "Because the university is involved in our ownership, it has a responsibility for producing a certain amount of that type of business," Crizer says. "That has been the case. Much of our appeal comes from the fact that Roanoke is such a beautiful setting, and that we have such a sophisticated product in such a small city." The center is state-of-the-art, with even a high-speed Internet connection to Virginia Tech.

Crizer says the city and university made a strong commitment when the Norfolk & Western Railroad gave them the hotel site in 1989. Overseen by its own city-run commission, the 63,000-square-foot conference center's financial performance is viewed separately from the hotel's. The project was built in 1995 by the city with $12.8 million in general obligation bonds. A 1997 report on the first two-and-one-half years of the conference center's operation claims creation of 375 jobs and 74 new downtown businesses. The document also says the hotel and center generated $1.3 million in local taxes their first year.

"This project was built as an economic development engine, and it has worked," says Debbie Moses, the commission's director. "It has shown its ability to create tax revenues for the city and is now making a profit. Our intent is to take our profits and build a capital reserve to maintain the facility."

Farther west, where Dickenson County shares a mountain gorge of the Russell Fork River with Pike County, Ky., officials from Breaks Interstate Park are carving out their own modest niche. A jointly operated two-state park since 1954, Breaks is nearing completion of its first full year as a conference center.

This is the spot for an isolated weekend retreat. The 5,500-square-foot center is nestled on the Virginia side of the 4,600-acre park, overlooking a 1,600-foot-deep gorge. Park officials lovingly refer to it as "The Grand Canyon of the South." The only access is a winding bit of asphalt known as Virginia Highway 80.

After just eight months in operation, the $2.3 million center is in the black. It has logged 7,800 attendees from 120 scheduled events, says Debbie Walters, a marketing consultant from Jonesborough, Tenn., who helps promote the site. Breaks has been a popular place for family reunions, seminars for health care professionals, religious meetings and corporate retreats.

"The trend today around here is for meeting planners to set up two- and three-day seminars and for the attendees to bring their family members with them," Walters says. "We offer those families a place to relax and have fun. We have good food, mountain bikes, hiking trails, a pool and beautiful views."

The conference center was an element in a long-range economic development plan developed by the Tennessee Valley Authority. Construction began in 1996, after the Coalfields Economic Development Authority set aside $1.3 million in coal severance taxes from Buchanan and Dickenson counties. The park borrowed another $800,000 from a federally backed lender.

Breaks Interstate Park Conference Center seats 525 people theater style, can handle 250 for a sit-down dinner, and has restaurant seating for 115. Bookings for overnight events are limited by the park's 34 guest rooms and four cottages, but construction on 24 new guest rooms is scheduled for completion next July.

Chesapeake Conference Center is another newcomer to the Virginia convention scene, having completed its first full year of operation in September. Donald C. Goldberg, director of the city's Department of Economic Development, says an estimated 250,000 people used the center for more than 2,200 events during that year.

The 51,000-square-foot, one-story center is near the city's Greenbrier business park. It has a 20,000-square-foot ballroom that can be broken into six large meeting rooms, and Goldberg says it is designed primarily for corporate and government meetings and training sessions.

Chesapeake city councilmen became seriously interested in the convention center idea in 1993, after an Old Dominion University study concluded that such a center would be successful. A few years later, "all of a sudden, the city said, 'We want it. Go for it,'" Goldberg says.

A local developer, Armada-Hoffler Enterprises, was the only respondent to the city's request for proposals to develop the center. Construction was completed in September 1997, and the city leased the site from Armada-Hoffler until the city decided to purchase it in July. Goldberg's economic development staff has run the center since it opened.

The city's decision to purchase the center for $8.9 million was criticized locally, but a city auditor's report concluded a cash buyout was the only reasonable option that would not lose money. Continuing the lease with Armada-Hoffler would have resulted in losses of more than $600,000 annually, while owning the center is expected to produce profits of $145,000 to $545,000 each year.

Goldberg says the center is already running in the black and is having to turn away bookings for social engagements to meet the demand for more lucrative regional conferences and meetings.

Loudoun County, meanwhile, has rejected the idea of owning and operating its own convention center after reviewing a market study by PricewaterhouseCoopers. The study concludes that the county could benefit from a convention hall of 44,000 to 69,000 square feet, but local officials say they will try to find a private developer to build and operate the facility.

Both public and private facilities should continue to enjoy revenue gains. The market for meetings is expected to increase this year, according to a 1999 survey by the American Society of Association Executives of Washington, D.C., and Meeting Planners International of Dallas. The survey predicts increases of 21 percent in regional events, 14 percent in national meetings and 11 percent in international conferences.

"City properties are used most often [45 percent] by meeting planners due to the obvious convenience of location and accommodations for attendees," the survey says. For Virginia's municipal convention centers, the numbers point to a very good year.