Jump to content

Recommended Posts

Holy Crap! This is BIG...

It is a big, malleable, long-term idea...with a nice rendering. Nothing more. Eeven the chairman of the group tasked with making it happen (Ric Campo, CEO of Camden Property Trust) struck me as being cautious in his statements.

Link to post
Share on other sites

I think the convention center plan has been around for a little while, but a great plan nonetheless. Maybe it's picking up a little bit of steam since there was an article a few weeks ago that mentioned the 1,000 room hotel next to GRB was back on the table, so who knows. If the Convention District and the Dallas Street Shopping District plan ever get off the ground, then that would definitely be huge for downtown. Only time will tell....

Link to post
Share on other sites

It is a big, malleable, long-term idea...with a nice rendering. Nothing more. Eeven the chairman of the group tasked with making it happen (Ric Campo, CEO of Camden Property Trust) struck me as being cautious in his statements.

Agreed. However, this - or something like it - will almost certainly happen. Why? Because the city is growing in population and economic importance. Whether the development is in keeping with sound urban planning principles through a well-thought strategy, is another matter.

Edited by Simbha
Link to post
Share on other sites

It is a big, malleable, long-term idea...with a nice rendering. Nothing more. Eeven the chairman of the group tasked with making it happen (Ric Campo, CEO of Camden Property Trust) struck me as being cautious in his statements.

The Dallas St Shopping plan is a "big, malleable, long-term idea" but this "Convention District" thing is not that far fetched when you consider 2 of the 3 hotels planned already have developers. We already know the city is looking for developers for the other Disco Green site that mirrors Hilton Americas. Im fairly certain they should get this project off the grand without a Federal bribery scandal this time. But on the other side of the freeway, 2 developers are already in place in Dan Nip (Chinatown Hotel) and Ocean2Ocean (San Antonio-based firm that already demolished the On Leong building for their Wyndham Hotel).

I personally feel this "4 Corners" idea wasn't really developed by anyone at all. It's really the same plan they've had all along, just adjusted to include the hotels on the other side of the freeway that were already in planning stages.

Remember this rendering from Gensler?!?

discovery-green-embassy.jpg

The only real difference is the new southward expansion of GRBCC ...didn't they just build a new garage on that site?!? And for that other new garage north of GRBCC, isn't MetroRail supposed to take up half of that site as the Southeast line jogs over to Capitol/Rusk from Texas Ave?!?

Edited by tigereye
Link to post
Share on other sites

You heard it here first, folks! There are developers in place. It will happen. Tigereye assures us.

I'm not assuring anyone anything. I'm just saying whoever came up with this grand "4 Corners" plan is really just rehashing development plans by others. We all knew about these hotel plans long before this "grand plan" announcement. There's multiple threads on HAIF for the Chinatown & Wyndham hotels respectively.

It's like the city now coming in and taking credit for someone else's work. I can hear it now... "hey, look we magically created a Convention District in Downtown Houston" when these hotels were already in development.

Edited by tigereye
Link to post
Share on other sites

Not the best timing as this op-ed just came out in the Wall Street Journal...

http://www.emailthis...lToID=916016990

Have We Got a Convention Center to Sell You!

From Boston to Austin, politicians spend money on fancy white elephants.

By STEVEN MALANGA

For two decades, America's convention center business has been declining, resulting in a nationwide surplus of empty meeting facilities, struggling convention halls and vacant hotel rooms. How have governments responded to this glut? By building more convention centers, of course, financed by debt backed by new taxes and fees on already struggling taxpayers.

Back in 2007, before the recession began, a report from Destination Marketing Association International described America's convention industry as a "buyer's market" suffering excess capacity. It's only gotten worse, attracting just 86 million attendees in 2010, compared to 126 million in 2000. Meanwhile, the amount of convention space angling for business has increased to 70 million square feet, up from 53 million in 2000 and 40 million two decades ago.

That's largely because governments refuse to stop making convention centers bigger and hotels even more dazzling, arguing that whatever business remains will flow to the places with the fanciest amenities. To finance these risky projects—which the private sector won't build by itself—cities float debt backed by new taxes and fees on already struggling taxpayers. As Charles Chieppo, a former board member of Massachusetts Convention Center Authority, lamented last year, "Logic rarely has a place in the convention business."

Take Illinois, an industry leader,where officials have invested heavily to keep Chicago's McCormick Place, long one of the three most-used centers in the nation, on top. They spent $1 billion in the early 1990s to build a 840,000-square foot expansion financed by fees on auto rentals, a hotel tax and a surcharge on restaurant meals in downtown Chicago. In 2007 they opened a new building, McCormick West, at a cost of an additional $900 million. The result? According to the Chicago Tribune, the center operates at 55% capacity.

Then there's Boston, perhaps the quintessential example of a city that interprets failure in the convention business as a license to spend more on it. Massachusetts officials shelled out $230 million to renovate Hynes Convention Center in the late 1980s. When the makeover produced virtually no economic bounce, officials decided that the city needed a new, $800 million center financed by a hotel occupancy excise tax, a rental-car surcharge, and the sale of taxi medallions. Opened in 2004, that new Boston Convention and Exhibition Center was projected (by consultants hired by the state) to have Boston renting some 670,000 additional hotel rooms annually within five years. Instead, Beantown saw just 310,000 additional hotel room rentals in 2009.

ED-AO726_ccmala_G_20111230182655.jpgAssociated Press

Chicago political and labor leaders, including Mayor Rahm Emanuel (arms crossed), appear at the expanded McCormick Place convention center in October.

Now Massachusetts officials want to spend $2 billion to double the size of the Boston Convention Center and add a hotel. Of course, they predict that the expanded facilities would bring an additional $222 million into the local economy each year, including 140,000 hotel room rentals. Even with these bullish projections, officials claim that the hotel would need $200 million in public subsidies.

"The whole thing is a racket," Boston Globe columnist Jeff Jacoby recently observed. "Once again the politicos will expand their empire. Once again crony capitalism will enrich a handful of wired business operators. And once again Joe and Jane Taxpayer will pay through the nose. How many times must we see this movie before we finally shut it off?"

Many times, if officials in Baltimore have their way. Several years ago they built a $300 million city-owned hotel, (the Hilton Baltimore Convention Center Hotel) to boost the fortunes of the city's struggling convention center. Having opened in 2008, the hotel lost $11 million last year. Now the city is considering a public-private expansion plan that would add a downtown arena, an additional convention hotel, and 400,000 feet of new convention space at the cost of $400 million in public money.

The list goes on—everywhere from Columbus, Ohio, to Dallas, Austin, Phoenix and places in between. One problem is that optimistic projections about new facilities fail to account for how other cities are expanding, too. Why did Minneapolis struggle to hit projected targets after it enlarged its convention center in 2002? "Other cities expanded right along with us,'' Minneapolis's convention center director, Jeff Johnson, said this year.

The surest sign that taxpayers should be leery of such public investments is that officials have changed their sales pitch. Convention and meeting centers shouldn't be judged, they now say, by how many hotel rooms, restaurants, and local attractions they help fill. That's "narrow-minded thinking," said James Rooney of the Massachusetts Convention Center Authority this year. Instead, as Boston Mayor Thomas Menino has said, expanding a convention center can "demonstrate to the world that we have unlimited confidence in our city and what it can do, not only as a convention destination but as the center of the most important trends in hospitality, science, health and education."

This new metric—a city's amorphous brand value—is little more than a convenient way to ignore the failure of publicly sponsored facilities to live up to exaggerated projections. But as far as city officials are concerned, that failure is nothing that hundreds of millions more in taxpayer dollars can't fix.

Mr. Malanga is a senior editor at City Journal. A longer version of this article appears in City Journal's Winter 2012 issue.

Edited by ToryGattis
  • Like 1
Link to post
Share on other sites

The only real difference is the new southward expansion of GRBCC ...didn't they just build a new garage on that site?!? And for that other new garage north of GRBCC, isn't MetroRail supposed to take up half of that site as the Southeast line jogs over to Capitol/Rusk from Texas Ave?!?

There is a parking garage on one of the four blocks planned for the southward expansion of the GRBCC. That garage was built at the same time as the Hilton-Americas and the last expansion of the GRBCC -- a little more than 8 years ago. We just have a bare-bones master plan here. It is possible the existing garage will be retained and incorporated into the expanded structure.

On the north end, yes it appears that the rail line will run on that parcel. But is there any reason a parking structure cannot be built over a rail line? I can't imagine why not.

Link to post
Share on other sites
  • 4 weeks later...

In response to the wsj article, I'm curious why convention goers has nose dived; they don't tell us.

Second, I'd like to know what Reliant and GRB's numbers are. Have they increased or decreased?

Lastly, Houston First says they want at least 2,000 more hotel rooms. That would mean another "Hilton" to mirror Discovery Green and to add two more hotel towers (The Four Seasons and Magnolia hotel have 400 and 300 rooms respectively).

Is this a matter of the chicken and the egg? Or do they (hotels and convention expansion) have to come simultaneously to produce success?

grb master plan pdf: http://www.houstonfi...PlanWebsite.pdf

Houston first presser: http://www.houstonfi...plan-012612.pdf

I wonder if the blown up photo below is one of the "plans?" It looks like three resi/hotel towers in place of the big convention hotel. Does it look that way to yall?

1327687314519.png

Edited by lockmat
Link to post
Share on other sites

In response to the wsj article, I'm curious why convention goers has nose dived; they don't tell us.

Most recently, the economy, but longer term: the Internet. Conventions are an exchange of information and networking, but now all of that information is easily available on the web - why travel and peruse a bunch of booths with marketing hype? Speakers are replaced with videos, webinars, blogs, and online reports or slide presentations. And LinkedIn and other social networks are even reducing the need for the networking. Their whole purpose hasn't been replaced by the Internet, but a lot of it has - enough to substantially reduce demand and attendance.

Link to post
Share on other sites

Most recently, the economy, but longer term: the Internet. Conventions are an exchange of information and networking, but now all of that information is easily available on the web - why travel and peruse a bunch of booths with marketing hype? Speakers are replaced with videos, webinars, blogs, and online reports or slide presentations. And LinkedIn and other social networks are even reducing the need for the networking. Their whole purpose hasn't been replaced by the Internet, but a lot of it has - enough to substantially reduce demand and attendance.

I am sure you're right. The ones that have the internet have not replaced I guess are the ones that people still want and need to see and touch physically, like a gun, quilt or bridal show.

Is this a matter of the chicken and the egg? Or do they (hotels and convention expansion) have to come simultaneously to produce success?

The answer to my question was right in the master plan:

There are no plans for near term expansion of the Convention Center and there are a number of things that must happen first, including a significant increase in the convention center hotel room supply, before future expansion of the GRBCC facilities can be considered. However, now is the time to establish a general direction for future growth so that if and when the time comes to expand, the GRBCC is well-positioned to pursue a design solution that is best for both the Convention Center facility and the entire east downtown area.

Of course the GRBCC wants assurance their facility will be used by having hotels in place before expansion, yet so do hotel developers. Their solution: get the taxpayers to jump start it by getting a "Hilton" deal done.

Link to post
Share on other sites

I am sure you're right. The ones that have the internet have not replaced I guess are the ones that people still want and need to see and touch physically, like a gun, quilt or bridal show.

Yes! Exactly. And note that 2 of those 3 examples you gave are generally aimed at locals - not out of town travelers - so they don't actually generate the economic development (hotel nights and restaurant meals) that justify the subsidy of convention centers (and their hotels) in the first place.

Conventions are more paid business boondoggles now than real, productive activities, meaning that people often only go if they want to enjoy a company paid vacation in that city. This disadvantages Houston - it's not about the facility anymore, but the fun that's available nearby - because we just don't measure up against places like NYC, SF, Orlando, Vegas, Miami, New Orleans, or even San Antonio. And as the WSJ article pointed out, it's an arms-race that most cities should probably not be competing in - and unfortunately and realistically, we may fall into that camp. Note all the hedging in the GRB plan. They came up with the right dream plan if we really want to try to compete, but it all could end up being one giant black hole or white elephant, depending on the analogy you prefer...

Link to post
Share on other sites
  • 1 month later...

Don't get me wrong - this is great news for Houston - but it seems woefully inadequate. If the city is going to rebuild its convention/tradeshow market, it needs at least 2,500 additional hotel rooms downtown - immediately.

Another thing at which I take umbrage is the heading of the CultureMap piece, "[...] it's going to be Texas big." Umm... a 1,000-room hotel isn't huge. By comparison, Dallas has four 1,000+-room hotels in or near downtown - the Sheraton (1,840 rooms), the Hilton Anatole (1,608), the Hyatt Regency (1,120), and the Omni (1,001). And, including these, there are around 30 non-resort hotels nationwidewhich are larger than even the Hilton Americas.

The number of very large (1,000+ room) hotels is not necessarily the best indicator - but this city needs far more hotel rooms around both the GRB and Reliant Park if we're going to be more than a mediocre convention town.

The funny thing about the convention business is that organizers are looking for places like Houston! The (comparably) low room rates, rental fees, and drayage/labor rates are hugely positive factors for the city in attracting professional conferences. Plus, many meeting planners have openly voiced their concern that the 'hot' areas for meetings over the past twenty years - Anaheim, Vegas and Orlando - have too many distractions for non-leisure conventions. Houston could easily position itself, like Chicago, to attract these meetings it had adequate proximate accommodations.

  • Like 1
Link to post
Share on other sites
  • 1 month later...

I'm with HVS Consulting here im Houston and below is our 2012 update on the Houston hotel market.

http://www.hvs.com/article/5755/hvs-market-intelligence-report-houston-hotels-in-2012/

A firmly entrenched, expansive, and consistently viable oil and gas sector has earned Houston the moniker “Energy Capital of the World.” Houston is home to 22 companies on the 2011 FORTUNE 500 list (second only to New York City), and the vast majority are energy conglomerates, including ConocoPhillips, Marathon Oil, Halliburton, and many others (see list below). 1 Major corporations such as Chevron, ExxonMobil, and Shell, as well as oil service companies such as Schlumberger and Fluor, also have a presence in the area—in some cases, a larger presence than at their “home” locations. With oil above $75 per barrel for the entirety of 2011, these companies were able to resume high levels of hiring, training, and oil exploration. Oil prices have risen steadily in the first quarter of 2012; as of April 2nd, the price of West Texas Intermediate crude was approximately $105 per barrel. In addition to the energy industry, healthcare and shipping play a role in driving strong demand to area hotels.

Job Growth and Office Space Expansions

Houston’s workforce grew by 94,700 non-agricultural jobs between January of 2011 and January of 2012, a 3.75% increase from the prior year. 2 This growth placed the city first in the nation among metropolitan areas with a workforce of at least one million. The Greater Houston Partnership reported that Houston was the first metro area in the nation to surpass its pre-recession employment levels in the fall of 2011. As of January of 2012, the unemployment rate for the Houston metropolitan area stood at 7.6% (compared with 8.3% for the nation), and approximately 85,000 new jobs are forecast for 2012.

Houston’s office market is expanding to accommodate the surge in jobs. As of year-end 2011, the Houston office market offered 190.7 million square feet of commercial space. 3 Office vacancy rates in the city now stand at approximately 15%. Over one million additional square feet of office space is under construction throughout the city, primarily in the Galleria and West Houston submarkets. Absorption levels are expected to keep pace with those of 2011, potentially resulting in even lower vacancy rates for 2012.

New Convention District

Houston’s George R. Brown Convention Center, located Downtown, hosted 218 events in 2011, with a record-breaking attendance of more than 930,000 delegates. Earlier this year, officials released a master plan detailing a vision for a new convention district. The plan proposes three additional hotels within walking distance of the convention center, followed by an expansion of the existing facility. According to the master plan, Houston’s convention market needs another 2,000 hotel rooms to remain competitive with other convention destination cities such as New Orleans, San Antonio, and Denver. This plan is already moving forward; as of March 2012, Houston First Corporation, the entity responsible for managing the convention center and attracting development around it, officially began the search for a developer of a 1,000-room convention hotel through a Request for Qualifications (RFQ).

 

CONVENTION CENTER-AREA MASTER PLAN CONVENTION CENTER DISTRICT RENDERING

 

Hotel Submarkets in Houston

A variety of submarkets, each oriented toward the capture of select segments of lodging demand, encapsulate Greater Houston’s hotel industry. The most prominent of these submarkets are described in brief below:

Downtown/Central Business District: Houston’s Central Business District greatly benefits from the presence of companies in the energy sector; the more than 40 million square feet of office space in the CBD boasts the highest overall rental rate and lowest vacancy in Houston. The convention center, the Theater District, and sports and entertainment venues such as the Toyota Center and Minute Maid Park bring large amounts of meeting and leisure demand to hotels in the Downtown/CBD submarket. The 1.8 million square feet of commercial space added to Houston’s CBD in 2010/11 should greatly benefit area hotels as companies continue to move in.

Medical Center: 33.8 million gross square feet of patient care, education, and research space distributed across 162 buildings make the Texas Medical Center (TMC) the largest of its kind in the world, and the TMC continues to grow at a remarkable pace. Planned projects include new hospitals, clinics, research space, and other office space developed by TMC institutions and buttressed by city, county, state, and federal investments in infrastructure. The center’s projected growth to approximately 41 million gross square feet by 2014 would make this submarket a near match in terms of commercial square footage with Downtown.

Galleria: With nearly 32 million square feet of office space and the 7th largest mall in the nation, Houston’s Galleria district is one of the best-performing hotel submarkets in the city. The Galleria attracts national and international visitors, including many from Latin America. Hotels in this submarket achieve occupancy levels that typically exceed those of the city as a whole given strong, commercially driven weekday occupancy supported by healthy tourism levels on the weekend. Two new office buildings, totaling 682,000 square feet, are under construction in this submarket along the proposed Post Oak light rail line.

Houston Intercontinental Airport: The airport submarket has traditionally been one of the strongest in Houston, but significant supply increases before and during the recent recession negatively impacted existing hotels. Occupancy levels began recovering in 2011, but average rate growth in this submarket has lagged behind.

The Woodlands: Limited increases in hotel supply in this emerging office and medical submarket have kept hotel occupancies and rates strong. Just south of The Woodlands, ExxonMobil, a major demand generator for hotels throughout the city, continues with the construction of a three-million-square-foot home campus across 389 acres. It is uncertain at present whether the home campus will only consolidate Houston-area employees or also receive employees from ExxonMobil’s Fairfax, Virginia and Dallas, Texas operations.

Energy Corridor: Over the last five years, Houston’s Energy Corridor has been a premier office and hotel submarket, and growth has been evident within both sectors. Despite increases in supply, overall hotel occupancy has been healthy, and a lack of proposed supply should benefit existing hotels in 2012. Demand in this submarket could be affected by the relocation of ExxonMobil to its new facility near The Woodlands, but the impact may be lessened if current trends in office space absorption keep up.

Hotel Supply and Demand

Houston’s citywide hotel occupancy remained near or above 65% from 2005 through 2008 4, driven by hurricane-related demand, as well as several years of a booming economy. These strong levels drove average rate increases of approximately 25% (from nearly $80 to $100) during this same time frame, leading to the entrance of nearly 8,000 new hotel rooms in 2009/10 5. Unfortunately, fallout from the Great Recession, coupled with this tremendous increase in supply, brought occupancy and average rate down by 10% or more in 2009/10. Recovery became evident in late 2010, and hotels came through 2011 relatively healthy, with occupancy nearing 60% and rate between $90 and $92 6.

Year-to-date, the rate of growth has kept pace with performance in 2011. With only limited increases in supply expected in the near future, HVS forecasts the lodging market in Houston will recover to an occupancy level of 62%, with average rate growth of 5%, in 2012; as such, existing hotels (or new projects that have been able to obtain financing) are well positioned to benefit from the city’s economic recovery in the coming years.

Conclusion

The recent recession had a negative effect on Houston’s economy and lodging market, but both have come up strong. The latest performance trends show that Houston hotels are on an overall course of recovery, but performance is still far removed from the peaks achieved prior to the recession, suggesting Houston’s hotel industry still has room for growth. With so much job creation in the past two years, and the prospect of tens of thousands of new jobs; millions of square feet of commercial space; and the well-established healthcare, shipping, and energy sectors fueling future growth, Houston hotels seem to be on not only solid but fertile ground.

Since 2007, Luigi Major has completed over 50 consulting and valuation assignments for hotels in the Houston area and currently oversees hotel assignments in the region through our satellite office in Houston. The Houston office will host an upcoming HVS Regional Hotel Valuation Summit on April 26, 2012. To learn more and register for free, please visit www.hvs.com/events.

Link to post
Share on other sites

^^ so are we getting a hotel?

When I met with them, they said they had over 100 interested developers at the initial RFQ event. They plan on narrowing that down to about 30 and then do a RFP. But given the initial interest they feel it is pretty certain they can get another 1000-room hotel at the north corner of the CC.

  • Like 2
Link to post
Share on other sites

Kinda of off topic, but post #21 is one of the reasons I finally broke down and joined HAIF. Lots of information that I am interested in and would not have the time or connections to find.

Such as:

Downtown - 40 million+ sq ft

Med Center - 33.8 million sq ft

Galleria - 32 million sq ft

What I found interesting was I knew the Medical Center was big - but did not know how big and that it will almost rival downtown in Sq. footage in a few years. With the number of buildings being built there, I totally believe it can catch up to downtown.

And I really had no idea there was that much sq. footage in the Galleria submarket.

Basically Houston has three downtowns (which I already knew) that are not that far apart in size.

  • Like 1
Link to post
Share on other sites

Yes! Exactly. And note that 2 of those 3 examples you gave are generally aimed at locals - not out of town travelers - so they don't actually generate the economic development (hotel nights and restaurant meals) that justify the subsidy of convention centers (and their hotels) in the first place.

Conventions are more paid business boondoggles now than real, productive activities, meaning that people often only go if they want to enjoy a company paid vacation in that city. This disadvantages Houston - it's not about the facility anymore, but the fun that's available nearby - because we just don't measure up against places like NYC, SF, Orlando, Vegas, Miami, New Orleans, or even San Antonio. And as the WSJ article pointed out, it's an arms-race that most cities should probably not be competing in - and unfortunately and realistically, we may fall into that camp. Note all the hedging in the GRB plan. They came up with the right dream plan if we really want to try to compete, but it all could end up being one giant black hole or white elephant, depending on the analogy you prefer...

agree and disagree.

in the early 2000s people didn't know how to handle conventions, or expos. people were opting for the connected online world, over going to a convention. Look at E3 for example, they even stopped doing it for a period of time, but what has been found is that there is still need, and the need is more focused.

conventions like comicon, they're getting even bigger, unconventional conventions, like SXSW, they're expanding. the market is there, it's bigger than ever imo. while webinars, online training and online communities have resulted in less overall need for certain aspects of conventions, the need has shifted.

panels and forums of discussion in person have become a lot more desirable, going from a kenote speech to smaller panels of discussion. they're catching back up.

Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
×
×
  • Create New...