By Carol Cole
The Norman Transcript


A proposed $20 million conference center could generate about $12 million in economic impact annually and support 211 jobs, a consultant to the city said Tuesday.

The final version of a feasibility study prepared by HVS Convention, Sports and Entertainment Facilities Consulting was presented at a study session to the Norman City Council.

There are plenty of big "ifs" attached.

If -- the center is attached to the proposed $30 million, 250-room Embassy Suites Hotel, a "headquarters hotel" expected to be built by John Q. Hammons next year in the University North Park development east of Interstate-35 between Tecumseh Road and Robinson Street.

If -- the conference center is marketed aggressively.

And if it has the appropriate amenities to be competitive with conference centers in Oklahoma City, Tulsa and around the region.

According to the most recent numbers from the Hammons group, the facility would have about 78,000 square feet including about 43,000 in rentable function space and other support spaces like pre-function areas, lobby, corridors and the kitchen and catering areas.

The conference center would be owned by the city and operated by Hammons, along with the hotel.

"A growing population, affordable labor rates and good transportation access will provide important advantages for a new conference center in Norman," wrote Hans Detlefsen, HVS director, in his market analysis. "Norman is an attractive location for local and regional group events. The proposed facility location, adjacent visitor amenities, drive-in access and the proposed full-services headquarters hotel could make the proposed Norman Conference center an attractive venue for banquets, small conventions, educational conferences, corporate meetings and community civic functions."

HVS evaluated the proposed mid-sized center against the performance of five other Hammons facilities, with the Embassy Suites property in Frisco, Texas, deemed the most similar. Others evaluated were in Richardson, Texas; Cary, N.C.; Fort Collins, Colo.; and Tulsa.

In the study, Norman's function space is assumed to include a 28,800 square-foot, divisible grand ballroom, a 7,200 square-foot junior ballroom and 7,200 square feet of meeting room space for general sessions, classrooms, board meetings and breakout meetings.

HVS projects 310 events and annual attendance of 91,150 in the center's first year, with 435 events and 127,050 visitors when the center stabilizes in its fourth year.

In a stable operating year, HVS projects gross operating revenues of about $5.1 million at the center, with operating expenses of about $3.9 million.

Net new economic impacts of $12 million and jobs attributed to event activity at the center would include $7.7 million in direct impact, $1.7 million in indirect impact and $2.6 million in induced impact.

"We try really hard to carve this down to what's totally new," Detlefsen said.

The center is expected to generate about $372,424 in fiscal impact in sales and hotel taxes annually.

Elements of HVS' demand analysis included interviews with Oklahoma meeting planners, a review of Hammons preliminary operating plan and marketing strategy, evaluation of lost business reports and group booking data from the Norman Convention and Visitors Bureau and generated event demand projections.

The event planners indicated a need for high-end banquet space suitable for groups of up to 1,000 guests and numerous smaller breakout meeting rooms suitable for groups of 50 to 100 people in a classroom setting.

Local meeting planners indicated "a desire for a higher quality of food service than existing meeting facilities offer."

HVS indicates the development of the proposed full-service Embassy Suites hotel would be a critical component of the proposed conference center's success.

"Substantial blocks of potential hotel demand are not coming to town because there is no full-service hotel property in Norman," the study noted, with 77 percent of those interviewed calling a headquarters hotel "very important" for their events.

Norman's strengths as a market include the University of Oklahoma, attractions, dining and entertainment, having a central location in Oklahoma and transportation access and infrastructure.

Weaknesses were noted as traffic congestion, lack of destination appeal, quality of existing facilities and not enough to do and see.

Event planners' expectations of certain amenities have increased in recent years.

"Any new conference center should offer high-tech communication services, food and beverage services, audio and video equipment and support, power service, professional lighting equipment and support and a range of modern business services," notes the study.

The study recommends marketing and planning efforts to make the center successful, including:

Development and implementation of a pre-opening budget and marketing strategy for the conference center;

Creation of a booking policy for the conference center that reflects the city's priorities for the facility;

Identification of the general manager (shared with hotel) and the director of sales for the center;

Determination of details concerning how revenues and expenses will be allocated between the hotel and the conference center;

Establishment of a budgetary process and oversight committee to provide recommendations to city council regarding how to fund ongoing investments in the conference center, as needed to provide long-term capital improvements, maintenance and external marketing efforts through the NCVB.

Detlefsen said the next steps would be to analyze the lease contracts of Frisco and Richardson, Texas, clarify the development program and timeline, identify the city's top priorities for negotiation, negotiation of a development contract and lease agreement and finalizing the approach to financing, including an analysis of what the University North Park Tax Increment Financing District is expected to generate.

"Probably one of the biggest risks for the city is if you negotiate too hard, the (Hammons) deal might go away," Detlefsen said. "Be clear about what your top priorities area ... so other priorities don't kill the deal."

He said several things look good for the city in the proposed Hammons deal.

"You are not being asked to be responsible for the ongoing operating losses (of the conference center,)" Detlefsen said.

He said the proposed hotel/conference center "will lift or enhance the image of the whole district," referring to the developing University North Park area. "And the district will lift the project."