Agency will vote on new convention center today: Many potential benefits seen |

Agency will vote on new convention center today: Many potential benefits seen

Susan Wood

Five city representatives stand poised today to advance the largest construction project to date in South Lake Tahoe based on a variety of factors – including their own individual research on convention centers, a gut feeling and a developer’s market study that two of them read.

A study conducted in February for Lake Tahoe Development Co. on a $410 million convention center-condominium hotel complex near Stateline estimated 95,950 people would attend conventions or entertainment venues here in the first year. In the fourth year, that figure would nearly double for attendees.

It was backed by an overall estimate these conventions would generate $77 million in revenue for the region, according to Strategic Marketing Group, a South Shore research company run by South Lake Tahoe Chamber President Carl Ribaudo.

Hal Cole and John Upton, members of the convention center subcommittee for the South Tahoe Redevelopment Agency, were privy to the report by hospitality consulting firm HVS of Chicago. Board members Kathay Lovell, Mike Weber and Ted Long had not seen the report but have done their own levels of research.

The agency will take up the issue at the Lake Tahoe Airport at 1 p.m.

Lovell said she’s undeterred by not having seen the study based on the developer holding the responsibility of building it and contracting with a management firm. Weber was convinced it was a good idea after hearing the Monterey County Convention & Visitors Bureau books events an average of 300 days out of the year. Like the others, Long believes Lake Tahoe is a special place many would clamor to get to. Like Long, Cole emphasized the need for effective marketing.

“I always felt there’s a market for it,” Upton said, stressing the functional and aesthetic reasons for rehabbing the area between Highway 50, Stateline, Cedar and Friday avenues.

He called the convention center “frosting on the cake” compared to the tax benefits. The city stands to gain about $1.5 million annually in motel room tax revenue, $800,000 in redevelopment set-aside housing funds and the remainder of reimbursable Mello Roos property tax revenue when the bonds issued are paid back. Mello Roos is a special district that operates as a tax mechanism imposed on a specific area.

This proprietary study supports claims the 12-acre convention center complex would have a market – albeit, a specific one.

“South Lake Tahoe demonstrates significant potential for attracting meeting and convention demand,” the report summarized.

While management meetings have dropped in the United States over the last four years, conventions for associations such as the League of California Cities seem to be in a growth pattern since the 9/11 terrorist attacks – when the tourism and convention business took what the developer’s representing attorney Lew Feldman referred to as “a body blow.”

The study also indicates the primary months for conventions are October, November, April and May – the slower times for tourism traffic. Tahoe has long harbored a deep concern about overcrowding with intense demand stressing the infrastructure.

That’s the concern Steve Lowe, sales manager for Harrah’s/Harveys Lake Tahoe, shared when asked about the potential for meeting the demand for convention space.

The proposed convention center, which the city is due to own after construction begins in May 2007, will house 2,000 people in conference assemblies and open up to a 4,400-seat arena.

Collectively, the Stateline casinos and Embassy Suites now offer space for more than 6,000 people. But the question for the management firm tasked by the developer to operate the convention center becomes: “How do you feed all these people?”

“The concept is right on with the project – especially with small to medium associations. The problem is whether the infrastructure can handle it,” he said. Lowe listed transportation, restaurants and shuttle services as general issues.

Market analysis for conventions

— Estimated annual revenue generated on South Shore: $77 million (one third in room revenue)

— Estimated convention goers: 95,950 (first year); 181,450 (fourth year)

— Estimated room nights: 19,093 (first year); 56,946 (fourth year); 71,952 (seventh year-60 percent on complex site)

— Estimated average room rate: $206.48 (first year)

— 465 events estimated annually (300-meetings; 85-banquets; 20-performing arts)

— U.S. convention-type events: (decline in management meetings: 83 in 2002 and 63 in 2004); (increase in conventions: 1,452 in 2002; 1,814 in 2004)

— South Shore meeting space for: (Harrah’s-1,100 people; Harveys-1,000; Mont Bleu-1,300 (1,500-showroom; Horizon-750; Embassy Suites-500)

Sources: Hospitality Valuation Services and Strategic Marketing Group

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