| This week
VOL. 25 NO. 36, NOVEMBER 15-21, 2004
Expansion dooms Dome
Convention Center officials tout plan that would replace stadiumBy Andrea Muirragui Davis
IBJ Reporter Billilynne Keller has been in the Indiana Convention Center and RCA Dome hundreds of times. For a week each September, she practically lives there.
But these days, she's seeing it differently.
More than a year after the Keller-led Custom Electronic Design & Installation Association decided to move its annual trade show out of tight quarters in Indianapolis, it's planning a comeback.
The massive CEDIA Expo will return to roomier digs in 2010 if city leaders succeed in adding 275,000 square feet to the convention center, razing the RCA dome to nearly double exhibit space. Association leaders were set to sign a multiyear commitment to Indianapolis midmonth, pledging to stay put through 2013.
"We're looking forward to leaving so we can come back," Keller told IBJ with a laugh. "We didn't want to leave, but we had no choice. We've been turning exhibitors away."
The Indianapolis-based organization is moving its expo to Denver for three years beginning in 2006 and will spend a year in Atlanta before coming home. But officials can reconsider if the project isn't on track in 2008.
Keller has high hopes.
"We've given our commitment. Now we're looking forward to Indianapolis giving theirs," she said.
She was scheduled to visit the convention center complex again Nov. 15, and expected to tour the RCA Dome to take a fresh look--and assess how the space will work when the stadium is gone.
"It will be interesting," she mused, "to get an idea of how much better it will be."
Arranging the walk-through for CEDIA leaders made sense, said Fred Glass, president of the county's Capital Improvement Board, which owns the convention center and dome, and has been studying an expansion for years.
Final designs are still a long way off, but the location is a foregone conclusion.
"I think the dome is it," Glass said, citing the likely cost of an alternative site.
So why not give a sneak peek to one of the center's biggest customers?
"I'm not sure they'll be able to pick out booth space yet, but they will get a feel for how connected it will be," he said. "It will help cement our relationship."
The CEDIA show is one of the city's largest annual events, attracting 24,000 attendees who spend $22 million. It was the first major event to announce plans to leave because of the space crunch, and the second to say it will return.
Last month, Laguna Beach, Calif.-based Performance Racing Industry agreed to return for four years beginning in December 2010 as long as the convention center is expanded. Luring PRI back means recapturing the $26 million its 40,000 attendees spend in the Circle City each year.
More important, Glass said, it sends a message to other groups.
"They become ambassadors for Indianapolis," he said. "CEDIA and PRI are actually demonstrating in the marketplace that if we build it, they will come."
Building a case
Together, the two trade shows could generate nearly $200 million in visitor spending during their four-year commitments. And the new business that is expected to flock to a larger center could spur another $165 million each year, according to estimates included in a 2004 feasibility study.
That's all ammunition CIB can use to rally support for the project, which includes a replacement for the RCA Dome.
With costs expected to exceed $700 million, some of the funding likely will come from higher hospitality taxes. That would require legislative approval, and CIB may seek other public support, too.
Before rate increases, a larger convention center would produce $8.6 million in newstate tax revenue each year, the feasibility study said. Glass told CIB members Nov. 8 that any request would be less than that.
Proponents have been building the case for years, warning of the potential for lost convention business even as they studied ways to expand the landlocked facility.
As the need became more obvious, so did the site of the expansion.
After months of study, CIB settled on two possibilities: the RCA Dome parcel and property to the northwest now occupied by a state parking garage and, across West Street, a T.G.I. Friday's restaurant.
Glass said the northwest option has lost appeal. Among the biggest hurdles: the price. Expanding on the site of the dome is expected to cost $250 million; Plan B was more than twice that.
"With that kind of difference, I'm not sure the numbers work," Glass said.
Making it work
Tearing down the dome would mean finding another home for the events held there now, but a new venue may have been in the cards anyway given the city's talks with the Indianapolis Colts and the NCAA's dissatisfaction with the 21-year-old facility as a site for its Final Four.
Still, the case for support of a $450 million retractable-roof stadium--officially a "multi-use venue"--is still coming together.
Consulting firm PricewaterhouseCoopers is studying the Colts' impact on the city and state, comparing the status quo to a scenario that includes a new venue. Results are expected later this month.
Glass expects to see numbers "well north" of the $72 million different consultants estimated in 1996, due in part to the team's success.
A new venue can't hurt, he said, and may help the Colts--and the city.
Under terms of a 1998 contract, the Colts could leave Indianapolis after the 2006 season if the team's revenue has not matched the league median for two of the past three years. Unless the city makes up the eight-figure difference.
City and team leaders have been working on an agreement behind closed doors, but Glass told CIB members a new venue would boost revenue.
"It may be the single tool in the toolbox," he said. "It's where you generate revenue the NFL lets you keep."
Twenty-three of the 31 NFL cities have built or substantially remodeled their stadiums since the dome was erected in 1983, Glass said, which is raising the bar.
"That median revenue just keeps going up," he said.
Then there's the potential--if not likelihood--of an Indianapolis Super Bowl that would follow a stadium project, a one-time boost of $150 million or more.
And let's not let football overshadow basketball. This is Indiana, after all.
Indianapolis-based NCAA has agreed to stay put for the long haul and keep its hometown in a regular rotation for college basketball tournaments, as long as the dome is replaced or improved. Having the NCAA here has an economic impact of $65 million a year, Glass said, not counting the $30 million fans attending the Final Four spend.
Glass is an attorney, not an accountant, but the steady stream of numbers he spouts when talking about the project isn't surprising. Proponents have work ahead of them before legislators convene in January.
"Those kind of numbers are important in two ways," he said. "First, they help us make a decision about whether the cost/benefit makes sense. We are talking about a huge investment, and we need to really understand what we're buying for that.
"And it certainly will be part of the case we make."
Hospitality consultant Rob Hunden approves of the approach.
"They have to make the case; they should put it all together," said Hunden, of Chicago-based Johnson Consulting. "But it needs to be bulletproof, because there are always people out there ready to pick it apart."
He should know.
Before joining Johnson in 2000, Hunden worked for the Indianapolis Bond Bank, managing projects that included a previous convention center expansion and RCA Dome renovation.
Hunden has little doubt the proposed project will be successful.
"Indianapolis has had a great track record," he said. "They always have known what they need and then go after it. Somehow, it always gets done." |
