News for the Hospitality Executive
|By J.K. Wall, The Indianapolis Star
Knight Ridder/Tribune Business News
Nov. 30, 2003 - When the Performance Racing Industry trade show rolls into town Thursday, it will fill every inch of the 400,000 square feet at the Indiana Convention Center.
The show's projected 40,000 attendees are struggling to find nearby hotel rooms, and its 1,200 exhibitors will spill over from convention halls into small conference rooms and even hallways.
"They've even put exhibits in the bathrooms," joked Bob Schultz, spokesman for the Indianapolis Convention & Visitors Association.
The space constraints, however, could soon be no joking matter. Performance Racing Industry likes Indianapolis, which benefits from more than $23 million that PRI visitors spend here annually. But if no more space is available once PRI's contract expires after 2004, PRI might have to find another home.
"We basically have outgrown the facility," said Steve Lewis, producer of the show. "We just need more space to keep growing."
But simply adding more space is not so simple.
The Convention Center has no readily identifiable land to grow on, which could significantly increase the cost of expanding. There are unknowns about the market potential and funding available for such an expansion. And, to fully use a larger convention center, Downtown might need another major hotel, say some in the convention industry.
Knowing this, the Capital Improvement Board, which owns and operates the Convention Center and RCA Dome, has commissioned a study to determine the feasibility of an expansion, which the board estimates in excess of 200,000 square feet. The board is a municipal corporation, whose nine members are appointed by various city and county officials.
Fred Glass, president of the board, said the study conducted by PricewaterhouseCoopers is the first step in an attempt to answer three questions:
The Convention Center was last expanded by 100,000 square feet in 2000, a roughly $55 million project funded by a hotel tax and $30 million from Lilly Endowment.
Glass then considered the issue settled, at least for his tenure on the board. But 18 months later, local tourism industry leaders approached him about adding more space. The problem, they say, is that the competitive convention business has become an exercise in keeping up with the Joneses.
"When we broke ground (on the last expansion), we were the 31st largest convention center in the country. When we cut the ribbon on the center a year and a half later, we were the 31st largest convention center in the country," Schultz said.
The first hurdle to expansion is that the facility is effectively landlocked. It is bordered by Victory Field on the west, the Westin Hotel on the north and by the Hyatt on the east. There is open space south of the RCA Dome, but walking through or around the football stadium to get to exhibit halls is not an attractive option, Glass said. "There's just no natural, unimpeded way to expand without breaking a few eggs in the process," Glass said.
However, a three-member task force has identified at least one location, and possibly others, Glass said. He declined to name the potential sites.
"They have been looking at a variety of scenarios, with no sacred cows (except for) the demolition of St. John's Church," Glass said. "I've got enough problems trying to get in the pearly gates."
The dearth of open real estate means this potential expansion would "be substantially more expensive than any of the previous ones," Glass said. He said drawing revenue from the local tourism industry would be a primary option for funding the project.
An extra 200,000 square feet could be filled up rather quickly, said PRI's Lewis, judging by the growth of his own show. For four years, PRI has not allowed exhibitors to expand booths. Others who are in the show are stuck in small conference rooms and want to move to the main exhibit floor. And other racing products firms are cooling their heels on a waiting list.
If a Convention Center expansion takes place, Bob Bedell, executive director of the convention and visitors association, said Downtown would need another major hotel or hotel expansion, built simultaneously with the expanded center. A second headquarters would allow the city to book two major conventions at once, Bedell said.
But the head of the Restaurant & Hospitality Association of Indiana said he's skeptical, citing Downtown vacancy rates that are hovering around 40 percent and even higher in the suburbs, according to Smith Travel Research.
"I don't know that we need another major hotel," said John Livengood. "Right now, we're overbuilt."
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(c) 2003, The Indianapolis Star. Distributed by Knight Ridder/Tribune Business News. HOT,