Ed Shadid Launches Formal Attack on MAPS 3 Conv Center in tandem with Mayoral Bid

[OSUFan]

I have stayed at convention hotels all over the US and have never seen one less that $200/night. Where are these hotels that are that cheap and also very luxurious?

I'm also curious where all these $60 a night convention center hotels are.

[mkjeeves]

Haywood you share that info...

[warreng88]

ah, well, I've only been there once, very long ago, so not enough data to derive a rating on my own...

I worked at the bank that financed the renovation of it. Although, the interior was nicely done (you can see in the pictures) it is still a two story exterior room hotel with no amenities next a highway, other budget hotels and truck stops. The flood of 2009 made them gut the entire thing and start from scratch.

[betts]

I meant to post this here, but got distracted by the Red Dirt Report implying that the middle class is somehow now the enemy. So, sorry for the double post, but these are the questions I'm asking on this subject:

1. Do we have a current convention center that is of an appropriate size and quality for a city of our size? Personally, although I'm not dying for a new convention center, I have to admit that the answer is probably no. The Cox Center is poorly organized, looks shabby and that's on the interior. The exterior is ghastly and the superblock it's on is in a horrible location for a superblock. It will be 50 years old soon. So, I don't mind building a $250 million convention center. A different location would be nice. So, based on my answer, even if I didn't think that it's a mistake to basically spit in the eye of people who took the trouble to vote for MAPS 3 by trying to stop it, I think a new convention center is probably a worthwhile expenditure. I might go for it just to see the Cox Convention Center torn down, personally.

2. Do we have to have a convention center hotel? This I don't know. I'm fine with getting more information on this subject. I'm going to read the consultant's report when I get a bit of free time and decide what I think of their data. That's pretty much what the city council has done. They listened to the consultant, looked at his slides and handout and said "thank you". Did anyone say we're getting a convention center hotel come hell or high water? Not publicly. Did anyone say we're using MAPS dollars for a convention center hotel? Not that I've noticed. Did anyone say $200 million? Ed Shadid. Anyone else? Not on the record anywhere. Did anyone say $50 million? Not anywhere that I've read. So, it seems like any convention center hotel anxiety is premature. Let's educate ourselves so we can have an educated opinion if the subject comes up.

3. If the city decides we have to have a convention center hotel, who will pay for it? This too is an important question. But, until the question of whether we're going to have a hotel is answered, what value is discussing who will pay what? This is definitely putting the cart before the horse.

4. What if the convention center needs a phase II? Hmmmm. Is there any way to pay for a phase II with MAPS 3 funds? Nope. So, I guess the voters will have to decide. What a concept! Ask the people. If they say no, the Chamber will have to hold a few bake sales I guess.

5. Should a convention center be self-supporting? I don't know. Is anything else we've built with MAPS self-supporting? Is anything a city builds self-supporting? It's kind of tricky, as you have to factor in salaries of people employed to build the structure, salaries of people who run the structure, potential sales taxes and hotel taxes generated, not to mention all those pesky intangibles like civic pride, interest generated in visiting the city, how many new conventions might be interested in coming, what the economy is doing, what the economy will be doing in the future. It's tough.

6. Does any of the above justify stopping MAPS collections prematurely? To me, question #1 is the only relevant one here, since nowhere has anyone said we're getting a hotel and/or it's being paid for with MAPS dollars. Personally, my answer is a resounding no, for all the reasons I've outlined previously. But trying to lump a hotel with the question of stopping MAPS is again using fear-mongering to politick. Ed is hoping the low information voters won't think this through and will believe all his hype.

[Steve]

I guess that depends on your travel budget and other factors. I've been known to stay in $60 a night hotels when I travel with one of my outdoor buddies because that's all he'll spend and I've spent in the hundreds for rooms in resorts and upscale urban centers.

If you had been to hear the arguably highly biased HS, you would have heard his stories of him personally staying in convention center hotels for $57 a night, because they were built on consultants bull hockey, spend most of the time empty, if not go bankrupt on the taxpayers dime, and seriously affect the other business owners in the area. Who is going to stay in the Skirvin for $229/night if they could get a taxpayer subsidized room a couple of blocks away for a fourth the price?

You've clearly not stayed at the Skirvin. This is like asking why would someone dine at Red Prime Steakhouse when a McDonalds is just a couple blocks away in Bricktown.

[mkjeeves]

You've clearly not stayed at the Skirvin. This is like asking why would someone dine at Red Prime Steakhouse when a McDonalds is just a couple blocks away in Bricktown.

You clearly suffer from reading comprehension failure.

[Steve]

You clearly suffer from reading comprehension failure.

That happens a lot on chat boards....

[mkjeeves]

True that and I'm guilty of much more, including writing failure. The hypothetical choice was staying at the Skirvin for $225 vs staying at a brand new (possibly lux) downtown convention center hotel a couple of blocks away from the Skirven for super subsidized cheap because we were stupid and built way too many rooms. Some would still pick the Skirvin. Some wouldn't. Might have a huge impact on the Skirvin's bottom line. Might not.

Wife and I do all sorts of expensive not always the best financial decision stuff, depending.

I worked on the Skirvin during the overhaul but haven't stayed there.

[Steve]

You're not saying it's overbuilt now, right? Downtown's hotel occupancy is considered to be among the best in the state, often hovering at over 80 percent. BTW: in terms of comparing the "Bricktown" Hotel and Convention Center (it is not in Bricktown at all) to downtown's other hotels, read the reviews: http://www.yelp.com/biz/bricktown-ho...klahoma-city-2

[mkjeeves]

You're not saying it's overbuilt now, right? Downtown's hotel occupancy is considered to be among the best in the state, often hovering at over 80 percent. BTW: in terms of comparing the "Bricktown" Hotel and Convention Center (it is not in Bricktown at all) to downtown's other hotels, read the reviews: Bricktown Hotel & Convention Center - Oklahoma City, OK

Pretty astute, Steve, you caught me not saying that.

[betts]

I hope Steve doesn't mind me quoting him. Thanks Steve for being the voice of reason.

Steve Lackmeyer: Major new retail is coming to downtown Oklahoma City | News OK

The speaker, Haywood Sanders, is paid to travel around the country to provide an argument against convention centers and conference hotels, just as he argues consultants like Convention Sports & Leisure are paid by cities and chambers to justify why they are needed. I am not aware of an instance where CSL has recommended against building a convention center and conference hotel. I am also not aware of an instance where Sanders argues for building a convention center and hotel. One argument being cited is that this new convention center will operate at a loss. Well, yeah, that's a given with every convention center. They are considered "loss leaders" that are designed to bring in out of town visitors whose spending elsewhere is what cities hope will make the proposition profitable. This all boils down to a philosophical debate: does Oklahoma City want to compete for convention business or drop out all together?

[mkjeeves]

I read that earlier looking for the as yet non-existent first hand Oklahoman reporting on the town hall meeting.

Well, yeah, that's a given with every convention center. They are considered "loss leaders"

Steve, are you making the claim everyone, leadership on down, including both Mick and the Chamber, knew and informed the voters before the Maps vote a CC in and of itself would be on ongoing loss for the city? Can you cite that for us showing when that was common knowledge? How much can the city expect to lose each year for the first decade? Will that black hole get bigger or smaller with the size of the center getting larger or smaller initially? How will it change with a future expansion, become more of "loss leader" or less?

[shawnw]

I presume the Cox Convention Center also operates at a loss? Can anyone give us numbers?

How about its predecessor, the municipal auditorium? Did it operate at a loss?

If so, I'm not sure it should be a surprise to anyone that the next replacement would also operate at a loss. I mean, does anyone, even the least informed among us, think that a Convention Center of any kind is a profit maker?

[mkjeeves]

I presume the Cox Convention Center also operates at a loss? Can anyone give us numbers?

How about its predecessor, the municipal auditorium? Did it operate at a loss?

If so, I'm not sure it should be a surprise to anyone that the next replacement would also operate at a loss. I mean, does anyone, even the least informed among us, think that a Convention Center of any kind is a profit maker?

And if we double the size of the CC will it cost twice as much, three times as much or 1/2 as much?

[mkjeeves]

Steve, what's the difference between Steve getting paid and saying CCs are losers and Haywood Sanders getting paid and saying CCs are losers, other than the fact Haywood is a recognized scholar in the field and you aren't?

[betts]

So, after getting an email today telling me about a professional meeting being held by one of the organizations to which I belong and seeing the hotel prices for the convention, I tried to do a little research. My convention is in San Diego. In addition to it, I tried to look for cities that are fairly comparable to Oklahoma City that have subsidized hotels to see what they charge for a night.

For my convention, which has an option to stay at the San Diego Hilton - ($46.5 million subsidy): $253/night

Denver Convention Center Hyatt Regency Denver at Colorado Convention Center: $199 (Subsidy is $350 million in revenue bonds paid off from hotel’s earnings.
Since 2006, the hotel has paid $52.9 million in taxes to Denver and contributed $2.1 million in excess profits to the city's general fund.)
I noticed the Denver Convention Center hosts mostly local and regional events, at least in 2014.

Omni Convention Center Hotel in Nashville: From $270/night ($128 million subsidy)

Indianapolis Westin $207/night (couldn't find the subsidy amount)

Charlotte Westin: $195-300/night ($16 million subsidy)

And a sobering piece of data: $265 million dollar Renaissance in St. Louis, built by the city, went bankrupt

None of this implies that a convention center hotel would make money for Oklahoma City. Since it has been suggested that cities give deep discounts to attract people to these hotels, I just wanted to see if that was the case. What I found was that subsidized hotel prices for these cities do not really seem to be much different from the prices charged by other hotels. I tried to find a convention for 2014 in each of these cities and look at the cost for an attendee so that if there were deep discounts for convention goers, I would discover that fact.

[mkjeeves]

Did you try to actually book any for a given date through a discounter?

[mkjeeves]

Here's one of the first ones I found on a search earlier today. I do not remember if HS mentioned this one last night but I do remember him talking about one in NJ.

September 2013

Trenton, New Jersey: Lafayette Yard Hotel and Conference Center has filed for Chapter 11 bankruptcy relief.

The public board that oversees the hotel formerly known as the Trenton Marriott voted to file for bankruptcy protection after it was projected that it would run an $880,000 operating deficit by the end of the year. Since it opened in 2001, the hotel has struggled to turn a profit and has been unable to pay the debt service on bonds, which include $13.3 million in city-backed debt.

The 197-room Lafayette Yard Hotel & Conference Center is Trenton's only hotel. When it opened, it was promoted as a potential boon for a struggling city.

Trenton, NJ, Conference Center Hotel Files for Bankruptcy | International Meetings Review

[mkjeeves]

BTW...Haywood says he uses Priceline and that's how he got his $57 CC hotel room. I've used them once, not to book a convention center hotel, to book a hotel in Atlanta for a wedding. It was cheap but there were issues unrelated to the topic.

[betts]

I'm not going to go back right now and compare all of them. I did check hotels.com for a few of the prices listed above. So, for the convention I used for Charlotte, the Priceline price was $241 and the Hotels.com was $258.

For my convention in San Diego, both Priceline and Hotels.com were $299/night.

Did Heywood say if that $57 price was found in 2013, found in every city, and found during a reasonably high season?

You can find amazing prices in New York and London if you pick undesirable dates. If you used 2008 as a benchmark, prices were likely pretty low and if he found that $57 price in every city with a subsidized convention center hotel it would be more significant than just one.

Have you ever been to Trenton? It's halfway between NYC and Philadelphia. How do you compete with them?

[mkjeeves]

He wasn't checking prices online, he was recounting his experience actually bidding for rooms for his travel, which means committing to buy a room at his price in advance, rooms the hotel has set up in the discount market at those lower prices. He didn't discuss those mechanics because it really didn't have anything to do with the topic at hand other to illustrate that it happens with CC hotels.

[mkjeeves]

I think I understand what you are saying but if you are saying what I think you are saying, then his "research" is pretty flawed. I've stayed at very nice hotels for cheap rates. That doesn't mean they were subsidized or going bankrupt. How can getting a good deal at a CC hotel count as any kind of useful data?

It wasn't presented as "his research," neither by him nor I.

[Tier2City]

It wasn't presented as "his research," neither by him nor I.

We'll see when the video comes out. Any word on that yet?

[mkjeeves]

Exactly.

I have no idea. It's been asked about and not answered on the facebook page about the event. I haven't looked elsewhere.

[betts]

Again, in 2013 and in every city with a subsidized hotel? When you make offhand remarks like that they can be misinterpreted as being consistently the case. Also, if he was using the Priceline "name your price" option, it may have been similar to what the airlines do. If they haven't sold a few seats they will deeply discount them. But they may have sold the majority of the seats at full price, they may have sold every first class seat. Selling one or two seats at a deep discount tells you only that they haven't sold one or two seats, not that they're losing money.