Exhibition Facility Construction Slows

Continuing a trend that began last year, plans for new, renovated and expanded exhibition facilities are having increasing difficulty getting off the ground.

Tradeshow Week's last update of exhibit hall construction, published Sept. 8, 2003, included 18 projects in Phase 1, where they are under discussion or study. This report has 14 projects in Phase 1 – and it isn't because four have moved on to the next stage.

In fact, only one project (Northlands Park in Edmonton, Alberta) has moved on to Phase 2 (secured legislative approval and funding) and one (the Orlando World Center Marriott) has moved on to Phase 3 (design). Only one new project was begun (the World Trade Center in El Paso, Texas).

As many projects as made progress were called off or put on indefinite hold since the last report: the Cleveland Convention Center; the Midwest Airlines Center in Milwaukee, Wis.; and the New Buffalo Convention Center in Buffalo, N.Y. All three attributed the suspensions to shaky local economic conditions.

More telling is the fact that 13 projects didn't budge from Phase 1 in the last six months. Among them, at least five – in Bellevue, Wash.; Boise, Idaho; Hartford, Conn.; Myrtle Beach, S.C.; and Nashville – are on hold, but asked to remain in the listing. Several others pushed their prospective opening dates further into the future or didn't report back to Tradeshow Week at all.

"We had an election and didn't get the two-thirds majority needed," said Ed Pikerton, general manager of the Boise Center in Idaho, which hopes to add 65,000 square feet of exhibit space to its existing 45,000 sq. ft. "We won't know anything for a while."

Reflecting the financial concerns of many general managers, Paul Edwards, of the Myrtle Beach Convention Center, explained, "The problem is the asking price of the property: $47 million. That's kind of tough to swallow, to build a convention center and make it profitable."

Even the two first-tier destinations on the Phase 1 list seem stuck in a rut. Los Angeles Convention Center General Manager George T. Rakis said the city had just completed a feasibility study looking at what the future expansion could include, but "there's been no movement on anything else." And the Jacob K. Javits Convention Center of New York is mired in disagreement over the proposed use of the land and complex that would include an exhibit hall expansion (see "Industry Members Lobby for Javits Expansion," p. 1).

Phase 2 projects also were sluggish in moving forward. Five of those on the current list were already in the legislative approval or funding stage in the September 2003 update, and several lowered their expectations in terms of size and target completion dates.

Larry White, general manager of the Osceola County Convention Center in Kissimmee, Fla., said, "We have not begun construction, pending a finance proposal that has to be brought before the developer and us, and until that's resolved we'll still be in discussion. … Realistically, the target date will have to be adjusted. Depending on the climate, it's more likely to be summer 2006."

Early-stage projects have not been the only ones affected by adverse economic conditions and fickle local government officials. The board of directors of the Irving (Texas) Convention & Visitors Bureau decided to suspend that city's planned 350,000 square foot convention center and headquarters hotel, citing a volatile hotel market and general economic sluggishness. "For now, we'll continue to direct our energies and resources toward promoting Irving's current meeting product," said Mike Barns, vice chairman of the board, in a statement.

Myrtle Beach's Edwards expressed similar concerns, saying the resort city was better off spending its time and effort getting hotel occupancy back up to speed. But Irving had already shelled out $13 million for 40 acres in the Las Colinas business district and paid for complete schematic designs for its convention center project.

Another major project already in the design phase has hit a legal bump in the road. The Ernest N. Morial Convention Center in New Orleans has been held up for several months by contract disputes. "The development contract has been awarded, and the second lowest bidder is contesting that in court," said Sabrina Written, a spokesperson for the center. "But we're ready to get rolling as soon as the legal issues are ironed out."

Fortunately for facility managers, these snags in projects in the advanced stages of development are the exception, rather than the rule. All of those listed in Phase 5 of last September's update reported being on schedule for their targeted completion, and one – the Omni Orlando Resort at ChampionsGate – said it would even finish ahead of time.

However, more evidence of a general slowdown in construction can be seen in the number of Phase 6, or completed, projects. Since the last update, only seven centers have reported celebrating their grand openings, compared with 16 in the previous report.

While the winter months may be partially responsible for the decrease, Thom Connors, senior vice president of convention center management for SMG, said the cool-off following the extremely rapid growth in space of the last decade has changed things: "The competitive edge in the '90s was the amount of exhibit square footage. Technology, quality of space, convenience and flexibility – particularly in the area of food service – will be the important competitive areas in the coming decade." For this reason, he said to expect fewer groundbreakings and more ballroom, meeting room and kitchen renovations.