Committee Request Materials Convention Centers Convention Center Follow-Up Information Requests Table of Contents 1. Are there questions relative to the current role of the LVCVA and/or current LVCVA expenditures? a. LVCVA budget and expenditures i. Review of rental rates, current ranking among competitors ……………....1 ii. Comparative analysis of how room taxes are distributed ……………….....2 iii. Alternative LVCVA budget scenarios that reduce spending by $15 million to $30 million …………………………………………………………….. 3 iv. Summary of the 99-day requirement booking limitation (IRS requirement); is there a potential work around? ………………………………………….4 v. LVCVA list and map of recent property acquisitions …………………….5 vi. History and current regulations governing the makeup of the LVCVA’s board ………………………………………………………………………6 vii. Would legislative action be required to change the makeup of the LVCVA board? ……………………………………………………………………..7 2. Is the committee comfortable with the cost estimates and financing projections provided by the LVCVA? a. Cost of upgrading the existing facilities i. Renovation costs for competitive facilities………………………………..8 ii. Size comparison of expansions, including non-leasable space……………9 b. Cost of newly constructed facilities i. LVCVA project estimates compared with the recent Mandalay Bay expansion …………………………………………………………….…..10 c. Are LVCVA pro forma projections accurate? i. LVCVA financial model summaries………………………………….….11 d. Does the LVCVA have a long-term capital plan to invest in facility infrastructure upgrades on a regular basis to keep up with industry standards? i. LVCVA current maintenance budget, including what is expensed and what is capitalized……………………………………………………………...12 ii. Detail on the makeup of the $100 million in preconstruction costs………13 e. What is the current bonding capacity of the LVCVA? What is the long-term outlook? i. LVCVA bond refunding schedules………………………………………14 ii. LVCVA annual bond capacity estimates to the extent those are not clarified in the pro forma model…………………………………………………...15 3. Is it possible for improvements of the current facility (i.e., Las Vegas Convention Center) to be done without construction of expansion space to facilitate the maintenance? What is the potential for Las Vegas/LVCVA to keep major conventions through space sharing with existing or expanded private convention space? a. What is the potential loss to Las Vegas/LVCVA resulting from a progressive improvement schedule that takes convention halls and meeting spaces offline one at a time? Additional follow up required i. How business interruption was managed by other facilities that recently renovated (Moscone Center example) ……………………….…...refer to 8 ii. Potential impact number; facts citied included $15 to $20 million annually (in businesses); 1 million attendees; $1 billion in visitor spending; working papers behind this estimate; estimate for large and small conventions; who are the 14 at-risk shows?.............................................................................16 iii. Where else can they go? Hotel rooms and convention space by major competitive market ………………………………………………………17 b. Is there capacity for local facilities to accommodate the space that is taken offline? What would the space shortfall, if any, be? What would be the increase in cost to conventions, tradeshows, etc., if any? Are there other considerations for conventions, such as user/vendor experience, that would impact their ability/willingness to divide their shows among local facilities? i. Summary of convention/meeting space in Las Vegas.……………………18 ii. Summary of all planned, proposed and under construction space in the development pipeline…………………………………………………….19 4. Is southern Nevada maximizing the utility of room taxes? What is the capacity of room taxes? a. How does Nevada’s room tax compare with other competitive jurisdictions? i. Room tax comparison and comparison of how room taxes are distributed; also, does sales tax apply to the sale of hotel rooms? …………………...20 b. What are coverage requirements for debt secured by room taxes? How are excess room taxes (coverage values) allocated each year? i. Question for modeling is can the LVCVA increase the utility of available funds by reducing coverage requirements while remaining fiscally conservative?..............................................................................................21 c. Additional follow ups: i. What is the current bonding status of the local government collection allowance for the room tax?.......................................................................22 ii. Online Travel Agencies (OTA’s) as tax revenue source……………….....23 iii. How are local governments currently using the room tax?...........refer to 22 iv. How are schools currently using the room tax?..........................................24 v. Statute that provides for the implementation of the room tax local collection allowance …...…………………………………………………………....25 vi. What share of the room tax is retained by Clark County?..........................26 5. Other potential issues for discussion by the committee a. What is the LVCVA’s plan for governance/oversight of the LVCC financing and construction process, and does a process similar to the CCSD Bond Oversight Committee structure have merit? i. Statutory construct of the CCSD bond oversight committee ……………..27 6. Other Documents a. LVCVA Financial Compliance and Industry Recognition ………………………28 Comparison of Convention Center Rental Rates The Southern Nevada Tourism Infrastructure Committee requested information on rental rates for the Las Vegas Convention Center compared with other facilities in the United States. This section contains a survey of estimated daily rental rates from 20 competitive convention facilities ranked from highest to lowest. Section 1 LAS VEGAS CONVENTION AND VISITORS AUTHORITY CONVENTION CENTER RENTAL RATE SURVEY Reflects 2016 Published Non‐Discounted Rates As of March 18, 2016 Based on Sample Show with: 3 Show Days 6 Move In/Out Days 9 Total Days AB C DD / 100,000 NSF / 9 Days NSF of Est. Rental Exhibit Sample Est. Rental Cost Cost For EST. TOTAL Effective Rental Rate City Facility Name Space * Show For Show Days Move Days RENTAL COST Per NSF Per Day New Orleans, LA Ernest Morial Convention Center 1,068,508 100,000 $165,000 $114,000 $279,000 $0.310 Las Vegas, NV Mandalay Bay Convention Center 1,043,030 100,000 $120,000 $120,000 $240,000 $0.267 New York, NY Jacob K. Javits Convention Center 840,000 100,000 N/A N/A $224,280 $0.249 Las Vegas, NV Sands Expo & Convention Center 1,035,600 100,000 $108,000 $108,000 $216,000 $0.240 San Diego, CA San Diego Convention Center 615,000 100,000 $124,500 $62,250 $186,750 $0.208 Houston, TX George R. Brown Convention Center 771,730 100,000 $150,000 $30,000 $180,000 $0.200 Anaheim, CA Anaheim Convention Center 813,000 100,000 $114,000 $57,000 $171,000 $0.190 Orlando, FL Orange County Convention Center 2,100,000 100,000 $109,800 $54,900 $164,700 $0.183 San Francisco, CA Moscone Convention Center 800,914 100,000 $132,000 $23,700 $155,700 $0.173 Las Vegas, NV Las Vegas Convention Center (as of 7/1/16) 1,940,631 100,000 $99,000 $49,500 $148,500 $0.165 Los Angeles, CA Los Angeles Convention Center 720,000 100,000 $96,000 $48,000 $144,000 $0.160 Rosemont, IL Donald E. Stephens Convention Center 840,000 100,000 N/A N/A $140,000 $0.156 Salt Lake City, UT Salt Palace Convention Center 515,000 100,000 $87,000 $43,500 $130,500 $0.145 Indianapolis, IN Indiana Convention Center 566,600 100,000 $110,000 $17,400 $127,400 $0.142 Chicago, IL McCormick Place 2,600,000 100,000 $54,000 $108,000 $124,000 $0.138 Louisville, KY Kentucky Expo Center 1,300,000 100,000 $88,000 $14,000 $102,000 $0.113 Atlanta, GA Georgia World Congress Center 1,400,000 100,000 $100,000 $0 $100,000 $0.111 Denver, CO Colorado Convention Center 584,000 100,000 $56,700 $28,350 $85,050 $0.095 Dallas, TX Dallas Convention Center 724,526 100,000 $51,600 $14,595 $66,195 $0.074 (Kay Bailey Hutchinson Conv Ctr) Philadelphia, PA Pennsylvania Convention Center 675,000 100,000 $59,200 $4,800 $64,000 $0.071 Average 100,000 $101,378 $49,889 $152,454 $0.169 * Does not include meeting, ballroom or pre‐function space. Compiled by the Las Vegas Convention and Visitors Authority NSF = Net Square Feet Total Rental Cost may not equal Rental Cost for Show Days + Move Days due to required minimum rental costs N/A ‐ Separate estimate not available for Show and/or Move Days; included in total rental package costs Sources: Individual Convention Centers ConventionCenterRentalRate 2016.xlsx Comparison of Lodging Tax Distribution The Southern Nevada Tourism Infrastructure Committee requested information about how much revenue generated from lodging taxes in major cities is distributed to tourism-related programs. This section contains a summary of lodging tax distributions in major cities throughout the United States. For a nationwide ranking of lodging tax rates, see section 20. Section 2 LAS VEGAS CONVENTION AND VISITORS AUTHORITY EXHIBIT A ROOM TAX COMPARISON OF MAJOR DESTINATIONS USES OF TAXES CHARGED TO HOTEL ROOM NIGHTS TRANSIENT LODGING TAX RATES: ROOM TAX + (WHERE APPLICABLE) SALES TAX* Other Tourism & Community Stadiums & Gov't City Tourism Conv Ctr Programs* Tourism Arenas* Trans‐ Services Destination Promotion* Funding* (Arts, History, etc.) Subtotal Subtotal State Gov't Local Gov't Schools & Ed.* portation* Subtotal Total Lodging Taxes Chicago d 2.50% 2.50% 2.14% 6.17% 6.58% 12.75% 17.39% Dallas 4.10% 4.72% 0.18% 9.00% 0.00% 6.00% 6.00% 15.00% Denver