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Columbia Metropolitan Convention Center Expansion & Vista Station Analysis

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Columbia Metropolitan Convention Center Expansion & Vista Station Analysis Columbia Metropolitan Convention Center Expansion & Vista Station Analysis DRAFT Submitted to: Bill Ellen President and Chief Executive Midlands Authority for Conventions, Sports & Tourism 1101 Lincoln St Columbia, SC 29201 October 9, 2019 October 9, 2019 Bill Ellen President and Chief Executive Midlands Authority for Conventions, Sports & Tourism 1101 Lincoln St Columbia, SC 29201 Dear Mr. Ellen, The Midlands Authority for Conventions, Sports & Tourism in cooperation with the City of Columbia and Arnold Companies, hired Hunden Strategic Partners (HSP) to conduct an analysis of the proposed expansion of the Columbia Metropolitan Convention Center and the Vista Station Mixed-use Master Plan (Project) to recommend the optimal physical program and assess the Project’s impact on the City of Columbia and Richland County. This is the DRAFT report of our findings. This deliverable has been prepared under the following general assumptions and limiting conditions: ▪ The findings presented herein reflect the analysis of primary and secondary sources of information that are assumed to be correct. HSP utilized sources deemed to be reliable but cannot guarantee their accuracy. ▪ No responsibility is taken for changes in market conditions after the date of this report and no obligation is assumed to revise this report to reflect events or conditions occurring after the date of this report. ▪ HSP has no control over construction costs or timing of construction and opening. ▪ Macroeconomic events affecting travel and the economy cannot be predicted and may impact the development and performance of the project. We have enjoyed serving you on this engagement and look forward to providing you with continuing service. Sincerely, DRAFT Hunden Strategic Partners www.hundenpartners.com TABLE OF CONTENTS ------------ Executive Summary Chapter 1 CMCC & Vista Station Profiles Chapter 2 Economic, Demographic and Tourism Analysis Chapter 3 Convention & Meetings Market Analysis Chapter 4 Local Hotel Market Analysis Chapter 5 Convention Headquarters Hotel Trends Chapter 6 Commercial Real Estate Market Analysis – Office, Residential & Retail Chapter 7 Recommendations Chapter 8 Demand & Financial Projections Chapter 9 Economic, Employment & Fiscal Impact Analysis EXECUTIVE SUMMARY Hunden Strategic Partners (HSP) was engaged to determine the market feasibility, financial viability and net new fiscal impact of the proposed 12-acre Vista Station Development as part of an overall major expansion of the Columbia Convention Center (CMCC) in downtown Columbia, South Carolina (Project). The basis for the analysis is the notion that the existing CMCC has maxed out its capacity and hotel package and cannot induce any additional business to downtown Columbia without both an expansion and a much larger walkable, and “blockable” hotel package. As a result, private and public-focused entities, including Arnold Companies, the City of Columbia and the Midlands Authority for Conventions, Sports & Tourism (MACST). Elements proposed in the Project include: ▪ Columbia Metropolitan Convention Center (CMCC) expansion: approximately 96,000 square- foot expansion, including 72,000 square feet of new exhibition space; ▪ Hyatt Regency: 387-key full-service convention center hotel, to include 25,000 square feet of additional meeting space; ▪ Hotel Anthem (Tapestry by Hilton): 158-key boutique hotel; ▪ Hyatt Caption or Hilton Brand Select-Service Lifestyle Hotel: 130-key hotel; ▪ Additional office (200,000 square feet) and residential (195 apartments) components on the remaining acreage; ▪ Renovated existing commercial space of approximately 170,000 square feet; and ▪ 1,620-space parking structure to accommodate the expanded convention center, the three hotels and the future commercial development. This list includes two adjustments made by HSP based on the analysis presented in this report. The CMCC expansion was adjusted, redrawn and costs were re-estimated by HKS based on HSP’s recommended program. HSP also recommended that the Hyatt Regency be expanded from the original program of 332 rooms. After an iterative process, the final room count came to 387 by adding two floors to the building. The recommended program for the CMCC and the Hyatt Regency will be used for the demand and financial projections, as well as the impact analysis later in this report. Project Description The CMCC is a meeting facility with nearly 142,000 square feet of gross space and has a planned expansion that will virtually triple its sellable space. Vista Station is a proposed master plan of three hotels, multiple parking structures and office, residential and restaurant / entertainment uses adjacent to the existing CMCC. The following figure shows the location of the Project in downtown Columbia. Columbia Metropolitan Convention Center Expansion & Vista Station Analysis Executive Summary – Page 2 Figure 1 The CMCC and Vista Station (Project) are located in downtown Columbia, South Carolina. The Project is located within the Congaree Vista restaurant and entertainment district, commonly known as the Vista, only two blocks west of the South Carolina Statehouse and three blocks west of Main Street. The following table lists and describes the various elements of the Project. Columbia Metropolitan Convention Center Expansion & Vista Station Analysis Executive Summary – Page 3 Table 1 CMCC & Vista Station District Master Plan Structure Status SF Qty Unit Start Date Open Date Cost (millions) Existing Office Building* Occupied 147,000 -- -- -- -- $10 Existing Depot Building* Occupied 22,460 -- -- -- -- CMCC & Hyatt Regency Parking Structure Proposed 360,000 1,620 spaces Q4 2020 N/A $50 CMCC Expansion Proposed 200,000 -- -- Q4 2020 Q3 2022 $63 Hotel Anthem (Tapestry by Hilton) Proposed 148,000 158 rooms Q2 2020 Q3 2021 $48 Hyatt Regency (CMCC HQ, connected) Proposed 430,000 387 rooms Q4 2020 Q3 2022 $136 Select-Service Lifestyle Hotel (Hilton or Hyatt) Proposed 90,000 130 rooms Q2 2021 Q3 2022 $21 Multifamily Towers Proposed 195,000 195 apartments Q4 2022 Q2 2024 $44 Office Tower Proposed 200,000 -- -- Q4 2022 Q4 2024 $56 Total -- 1,792,460 -- -- Q2 2020 Q4 2024 $428 * Existing Office and Depot buildings cost is for the combined cost of planned renovations Source: Arnold Companies, HKS The Project is nearly 1.8 million square feet including the CMCC expansion, three hotels, structured parking, three multifamily apartment buildings and an office tower, as well as the renovation of existing retail, restaurant and office space. The entire project is projected to cost $428 million and will take approximately 4.5 years to complete. While the timeline shown is preliminary, Arnold Companies hopes to time construction of the CMCC parking structure, Hyatt Regency and Select-Service Lifestyle Hotel to open at approximately the same time as the CMCC expansion (Q3 2022). The City of Columbia, the MACST and Arnold Companies have created a base of activity and impact for the community with the existing CMCC and commercial space on Gervais Street, respectively. Now that these entities have decided to coordinate efforts and generate a synergistic district centered around conventions and meetings, entertainment and hospitality, the improvement of each piece of the Project will benefit the other. This level of investment by the City and Arnold Companies, especially in the popular Vista district is expected to increase Columbia’s viability and attractiveness for conventions and events, as well as for all tourists and local residents by establishing a critical mass of entertainment and hospitality options in a centralized location. Throughout the remainder of this report, HSP will profile and analyze the market and various industries that will be a part of and affect the Project. Ultimately, the analysis will culminate in the projections of the Project’s performance and its impact on Columbia, Richland County and the State of South Carolina. Recommendations The following figure show the revised drawings of the first floor of the CMCC. Columbia Metropolitan Convention Center Expansion & Vista Station Analysis Executive Summary – Page 4 Figure 2 As shown, the revised floor plan allows for multiple arrangements in the division of the exhibit/flex hall closest to the Colonial Life Arena. These arrangements require the pre-function space on the south end of the CMCC, so there is attendee and service access to each of the subdivisions. The plans were also revised to replace the new first floor meeting rooms with bathrooms based on code requirements. The following figure shows the revised drawings of the second floor of the CMCC. Columbia Metropolitan Convention Center Expansion & Vista Station Analysis Executive Summary – Page 5 Figure 3 The second floor of the CMCC remained mostly the same as the McMillan plan other than the additional pre-function space on the south end of the building and the additional meeting rooms shown just below the “C” area on the drawing above. Overall, these changes reduced the additional meeting space from the McMillan plan of approximately 23,000 square feet to just less than 19,000 square feet in the updated plan. The following table shows the breakdown of function space for the CMCC post-expansion. Columbia Metropolitan Convention Center Expansion & Vista Station Analysis Executive Summary – Page 6 Table 2 Columbia Metropolitan Convention Center Function Space Facilities Total (SF) By Division (SF) Divisions Exhibit Space Exhibit/Flex Hall 95,470 7 95,470 7 Ballroom Facilities Columbia Ballroom 16,704
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