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HomeMy WebLinkAboutNovember 12, 2002 Agenda AGENDA CITY OF DENTON CITY COUNCIL November 12, 2002 After determining that a quorum is presem, the City Council will convene in a Planning Session of the City of DeNon City Council on Tuesday, November 12, 2002 at 4:30 p.m. in the City Council Work Session Room at City Hall, 215 E. McKinney, DeNon, Texas at which the following item will be considered: NOTE: A Planning Work Session is used to explore matters of interest to one or more City Council Members or the City Manager for the purpose of giving staff direction imo whether or not such matters should be placed on a future regular or special meeting of the Council for citizen input, City Council deliberation and formal City action. At a Planning Work Session, the City Council generally receives informal and preliminary reports and information from City staff, officials, members of City committees, and the individual or organization proposing council action, if invited by City Council or City Manager to participate in the session. Participation by individuals and members of organizations invited to speak ceases when the Mayor announces the session is being closed to public input. Although Planning Work Sessions are public meetings, and citizens have a legal right to attend, they are not public hearings, so citizens are not allowed to participate in the session unless invited to do so by the Mayor. Any citizen may supply to the City Council, prior to the beginning of the session, a written report regarding the citizen's opinion on the matter being explored. Should the Council direct the matter be placed on a regular meeting agenda, the staff will generally prepare a final report defining the proposed action, which will be made available to all citizens prior to the regular meeting at which citizen hput is sought. The purpose of this procedure is to allow citizens attending the regular meeting the opportunity to hear the views of their fellow citizens without having to attend two meetings. 1. Receive a report, hold a discussion, and give staff direction regarding future Convemion/Conference Cemers and/or Arenas in the City of DeNon. CERTIFICATE I certify that the above notice of meeting was posted on the bulletin board at the City Hall of the City of DeNon, Texas, on the day of ,2002 o'clock (a.m.) (p.m.) CITY SECRETARY NOTE: THE CITY OF DENTON CITY COUNCIL WORK SESSION ROOM IS ACCESSIBLE IN ACCORDANCE WITH THE AMERICANS WITH DISABILITIES ACT. THE CITY WILL PROVIDE SIGN LANGUAGE INTERPRETERS FOR THE HEARING IMPAIRED IF REQUESTED AT LEAST 48 HOURS IN ADVANCE OF THE SCHEDULED MEETING. PLEASE CALL THE CITY SECRETARY'S OFFICE AT 349-8309 OR USE TELECOMMUNICATIONS DEVICES FOR THE DEAF (TDD) BY CALLING 1-800-RELAY-TX SO THAT A SIGN LANGUAGE INTERPRETER CAN BE SCHEDULED THROUGH THE CITY SECRETARY'S OFFICE. AGENDA INFORMATION SHEET AGENDA DATE: DEPARTMENT: CM/DCM/ACM: November 12, 2002 Economic Development Dave Hill, 349-8314 .,:"~¢ SUBJECT Receive a report, hold a discussion, and give staff direction regarding future Convention / Conference Centers and/or Arenas in the City of Denton. BACKGROUND The City Council requested a work session meeting be set aside to discuss convention/conference centers and equestrian arenas. Many groups, over the years, have expressed interested in the City building a convention center in Denton. The cost to build and maintain a convention center can be very costly, and a feasibility study to determine appropriate need, location, and cost would need to be performed. Another type of facility that has drawn interest in Denton is an equestrian arena. A group of investors approached the Council in May 2000 and presented the North Texas Equestrian Center project. Unfortunately, the project was not built. )n economic impact study was performed by the UNT Center for Economic Development and Research concluded that the project would have generated a significant impact in jobs and tax revenue. The purpose of this meeting is to allow City Council to review and discuss the information provided in the white paper (attached) and to provide staff with direction with regard to further research on these facilities. Christine Gossett, Convention and Visitors Bureau Manager and Ken Burdick, North Texas Fairgrounds Manager will be present to provide input in their specific areas. ATTACHMENTS White Paper Respectfully submitted: Linda Ratliff Director of Economic Development CONVENTION/CONFERENCE CENTERS For the purpose of this report, the terms convention center and conference center may be used interchangeably. Although both types of facilities may vary in size, conference centers are usually limited by the kind of events accommodated. For example, a convention center may promote rodeos, car or boat shows, major concerts, and large national or international trade shows and conferences. Conference centers tend to host smaller conventions, weddings, banquets, and provide meeting space for local or regional companies and organizations. It is certainly true that the highly successful convention/conference centers have the ability to generate a great deal of revenue for their operators and for the cities where they are located. However, these centers are probably the exception rather than the rule for cities of Denton's size. In fact, many cities construct convention centers knowing the center may not be self-supporting, especially in the early years of operation. It's the ability to provide the community with event and meeting space that drives the decision in these cases. Convention/conference centers have a greater chance of being successful if the following supporting elements are in place: · Proximity to a large airport · Public transportation · Hotel rooms- preferably adjacent to the center · Restaurants · Shopping opportunities · Entertainment venues · Unique attractions Cities such as New York, Las Vegas, Orlando and San Francisco are unquestionably tourist destinations. These cities are sought after as locations for events and meetings of all sizes, and convention centers are considered basic necessities. Other large cities, such as Dallas or Atlanta construct convention centers to support the activilJes of their large populations as well as to compete for large conventions and trade shows. These large facilities can accommodate thousands of visitors - a boost to any city's economy. However, cities of lesser population, tend to have fewer of the key elements necessary for the success of a large facility. For example, lack of public transportation from the airport or from hotels to a convention center can eliminate a city from bid lists for conferences and events. Convention/Conference Centers and Equestrian Arenas White Paper Page 2 Current facilities in Denton The City of Denton does not have a stand-alone convention or conference center. What Denton does have is a mix of meeting and event facilities throughout the city. Conferences hosting 200-300 attendees can be accommodated at the Radisson Hotel and Conference Center. Meeting space is broken up into several small rooms, limiting the size of events that can be hosted. The Radisson is considered Denton's premier conference space because the hotel, restaurant, catering services and meeting rooms are located in the same facility. activities and community needs. The UNT administration informs us that they had hoped to construct the Gateway Center with an additional shell floor for future conference space, but were unable to include it when built. As UNT grows, additional conference space will be needed. In fact, a convention center is on the university's wish list for the future. Should the City consider building a convention or large conference center (depending upon the details of the project), the university would consider entering into a partnership with the City to maximize the use of facilities. Although the Radisson is very close by, transportation from hotel(s) to meeting space is an obstacle that meeting planners must address when planning multiple-day events. In addition to the Union and Gateway Center, events can be held at routs Field and the Coliseum. These two facilities are very unique and are not suitable for most conventions or conferences. Radisson Hotel The University of North Texas provides meeting/event space at both the University Union and the newly constructed Gateway Center. The Union has several suites, the largest holding approximately 400 people. The Gateway Center, which opened just one year ago, can accommodate up to 800 people, assuming all rooms are in use. The largest room can comfortably hold about 300. Meeting space is flexible in this facility and food services are available in both. University meeting space was constructed to accommodate university UNT Gateway Center Texas Woman's University also has meeting space available to the public, but not to the extent as UNT. In the past few years, TWU has hosted conferences as small as 20 attendees and those as large as 500. Other facilities, such as the Campus Theater, Center for Visual Arts, and Convention/Conference Centers and Equestrian Arenas White Paper Page 3 Civic Center (as well as a few privately owned rooms such as Fremaux's and the Ben E. Keith community room) can accommodate smaller events. Can Denton Support a Conference Center? Let's look at how Denton stacks up with regard to the elements needed to support a successful convention center: Proximity to a large airport Denton has excellent access to DFW Airport. Public transportation Denton lacks regular shuttle service to and from DFW. Visitors must rent cars or schedule pickup through two commercial shuttles. Only one of the shuttle services is based in Denton. The second is based out of Gainesville. Currently no Denton hotels offer shuttle service. Denton lacks sufficient taxi service. LINK routes run every hour but do not provide door-to-door service from hotels to meeting space. Hotel rooms - preferably adjacent to the convention center Currently the majority of meeting space is located near UNT and the Radisson. Denton has a total of 1,209 hotel rooms, none (with the exception of the Radisson) within safe walking distance to meeting space. Two additional hotels have indicated they will build in Denton soon - adding another 200+ rooms to the total. Restaurants Denton's supply of restaurants is growing; however, there are very few within sight or walking distance from UNT or the Radisson. Shopping opportunities With Denton Crossing and Unicorn Lake developments gearing up, opportunities for shoppers are improving. Although Downtown Denton offers a variety of shops and restaurants, there are few meeting rooms and no hotels nearby. Entertainment venues Denton is extremely fortunate to have a variety of cultural opportunities for visitors. Performances at the Murchison Center, Campus Theater and both universities provide opportunities that not many cities the size of Denton can offer. What may be missing in Denton is an "entertainment center" such as a West End or Deep Ellum. With concerted planning, the Square and Fry Street are two areas that have the potential to develop into entertainment centers. Convention/Conference Centers and Equestrian Arenas White Paper Page 4 Unique attractions. During the Hotel Motel Fund Committee meetings this year, the committee concluded that Denton is not a destination city at this time. They determined that it is individual events and festivals that draw visitors to Denton - and typically for a day trip - not many overnight stays. Industr~ Comments It would appear that Denton already has some of the characteristics needed to be able to support a conference center, but it is not clear if one could be self- supporting at this time. Over the last six months, staff has visited with hotel/conference center developers. One estimated that Denton is approximately five years out from being able to support a successful conference center of a moderate size- 30,000 square feet. When asked if they would consider construction now, some have indicated an interest, but stated that a financial partnership with the City would be necessary in order to justify operating at a loss for the first few years. As part of our Downtown Master Plan, consultant John Fregonese enlisted the assistance of TIP Strategies, Inc. to investigate the city's potential to support a small convention or civic center near Downtown. TIP was asked to provide a preliminary feasibility assessment that could lay the groundwork for a more comprehensive study (which would include design elements, cost projections and financing strategies). TIP S TRATEGI ES INC TIP Strategies Assessment Within the scope of this study, TIP relied on published data and interviews. Towards this end, the consulting team interviewed convention center operators and economic development professionals in a number of Metroplex cities. In addition, the meeting needs of some of the City's major employers were assessed to provide an understanding of their current activity levels, as well as to gauge their interest in a Denton area facility. TIP Strate_clies - Ke~ Findin~Ts The size and strength of the Denton economy strongly suggests that more meeting space would be beneficial to the city. With a population of nearly one million projected for the county by 2025, strong employment growth, and relatively high per capita income levels, there is a sufficient economic base to support public events, lectures, exhibitions and trade shows. The city is home to a number of major corporations that could serve as an excellent source of meeting activity. Most major employers interviewed for this study indicated an interest in using a new meeting Convention/Conference Centers and Equestrian Arenas White Paper Page 5 facility in the city. However, the number of annual meetings currently being held by even the largest of the city's employers TIP spoke with was somewhat below national averages. Parking was seen as a key concern if such a facility were to be located downtown. From the standpoint of attracting outside events, Denton faces several challenges. Not the least of these is competition for convention activity within the Metroplex. The lack of a resort-quality hotel presents another obstacle to the success of a convention center in Denton. The presence of a high-end hotel could serve to create a destination that would make the area more attractive to meeting planners. Convention/Conference Center Profile Summary Year Cost Size Annual Operating Built ($Mil) (Sq. Ft.) Usage Budget Staff Addison Conference 1991 $6 54,000 800 events $750,000 7 full-time and Theatre Center 50,000 attendees Charles W. Elsemann 2002 $35 116,900 Not open yet N/A N/A Center (Richardson) Desoto Civic Center 1993 Six 900 sq. ft. meeting 841 events 6 rooms (9 months) 2,200 sq ft ballroom Garland Performing Arts 1982 $3.5 Currently 30,000 sq ft 355 events, $500,000 Center (currently Expansion will add: 100,000 undergoing expansion) 13,000 sq ft banquet room attendees & 8-9,000 sq ft meeting space Grapevine Convention 1988 23,500 $961,000 6 full-time Center Mesquite Arena & 1999 70,000 200 events $800,000 10 full-time Convention Center 300,000 attendees Piano Centre 1990 $17 86,400 750 events $2.5 Mil 56 Richardson Civic Center 1980 15,000 410 events $430,000 for 210 clients Source: TIP Development Strategies, Inc. EQUESTRIAN ARENAS For the purpose of this report, the term "equestrian arena" will include facilities used primarily for horse, livestock and rodeo events. In many instances, these facilities are constructed for other purposes as well, such as concerts, sporting events and other non- equestrian related activities. Denton County is Horse Country Drs. Weinstein and Clower reported in a study performed for the North Texas Equestrian Center (see below) that Denton County has long been recognized as the Quarter Horse Capitol of the World with the horse industry exceeding all other agricultural production combined throughout the country. Ken Burdick of the North Convention/Conference Centers and Equestrian Arenas White Paper Page 6 Texas Fair Grounds concurs. He estimates that with all of the equestrian breeders, trainers and other related businesses in Denton County, the Fair Grounds' activities would more than double if he had room for expansion of the facility. Proposed site: North Texas Equestrian Center North Texas Equestrian Center In May 2000, the North Texas Equestrian Center project was presented to City Council. Project investors (lead by Mr. Edwin Pickett) consisted of a group of eight equestrian related businessmen. They advised the City that a need exists for a world-class equestrian facility in the North Texas area. They said the Will Rogers coliseum was outdated and the Mesquite Rodeo Arena facility had many limitations. The investors requested that the City consider the establishment of a County Development District (CDD) in the City's ETJ on FM 428, just north or Loop 288. The development would include: · 10,000 seat indoor arena · 1,000 horse stalls · support buildings and outdoor arenas · multi-story hotel golf course high-end residential development with homes ranging from $200,000 to $750,000 The project promoters enlisted UNT Center for Economic Development and Research economists, Bud Weinstein and Terry Clower to provide an economic impact study of the proposed development (copy attached). The study reported "recurring economic and fiscal impacts" as follows: Description Impact Arena/Resort Development Ticket, food and $22,450,000 merchandise sales Total economic activity $26,200,000 Total earnings $6,500,000 Total jobs 405 Residential Development Economic activity generated $9,670,000 by residents of new housing New jobs created due to 97 residents Annual Tax Revenues (property, sales & hotel tax) > DISD $1,616,000 > City of Denton $1,210,000 > Denton County $223,000 The economists concluded that the proposed development would be a tremendous job, income and tax generator, and that it would put Denton on the international equestrian circuit. Promoters requested the CDD be formed so that they could take advantage of unique financing opportunities available through CDDs. Council supported the CDD concept and the County formed CDD #7. However, this project and several other CDDs were challenged. It was determined that residential development was not an appropriate use under a CDD structure. Convention/Conference Centers and Equestrian Arenas White Paper Page 7 The project depended upon the support of the residential development, and the arena was not developed. Other Equestrian-Related Prospects In August of this year, Economic Development staff was approached by a Metroplex representative for a site selection task force. He was looking for a 600-acre site for an international equestrian event for 2005. The project included a 30,000 sq. ft. indoor facility, stalls and support buildings on about 20 acres that could later be used for other events. The additional acreage would be used for cross-country and steeplechase events hosted by USA Equestrian, National Equestrian Federation of the United States. The representative indicated the development would generate an economic impact of $20 million annually. Soil composition was a major factor in the site selection process. Several sites were identified, only to be rejected due to unacceptable soil conditions. A final site was selected and a site selection committee member from England was flown out to review the Denton location, as well as a location in Georgia. The Denton site was not selected, and staff was not apprised as to the reasons behind the organization's decision. The purpose for mentioning this contact in this paper is simply to inform readers of another equestrian organization that has considered Denton, Texas. Equestrian Facilities in Denton Surrounded by residential neighborhoods and commercial activity, the North Texas Fair Grounds is land- locked and cannot expand. Ken Burdick maintains there is a need for additional equestrian facilities in Denton. Burdick was involved in discussions with the North Texas Equestrian Center group and says they had even considered partnering with the Center to move the Fair Grounds to the site. The Fair Grounds has an outdoor arena that seats 3,500. It is used for rodeos only, as the facility does not have the horse stalls needed to accommodate horse shows. Lack of stalls and inadequate parking for large events are two obstacles the Fair Grounds must address when hosting events. Burdick believes his board would entertain discussions of a partnership role should the City or other private developers consider construction of an equestrian center in Denton. North Texas Fair Grounds Saddlebrook Estates is a residential development that caters to horse enthusiasts. The development provides an equestrian center with covered show stadium, fenced pens, and personal stalls. (Staff was unable to reach the equestrian center for further information for this report.) Convention/Conference Centers and Equestrian Arenas White Paper Page 8 Successful Equestrian Facilities Similar to convention centers, equestrian arenas vary in size and by types of events accommodated. A summary of successful facilities surveyed is attached (Page 10). Young County Arena, Graham, TX Prince George's Equestrian Center Comments from arena contacts made during this survey were very encouraging regarding a Denton facility. John Painter of the Mesquite Rodeo Arena indicated that a considerable amount of the new growth in the Metroplex is made up of non-Texans - folks from New York to New Delhi. He says the first things these newcomers want to see in Texas are cowboys and all things western. He estimated that these newcomers and visitors represent two-thirds of his business. He could envision Denton as an excellent site. Prince George's Equestrian Center Conclusion Denton has been considered by at least two organizations interested in constructing sizeable projects. Both would have required considerations or incentives from the City in order to develop. Current facilities in Denton cannot accommodate large events that may consider Denton if facilities were available. Of all the arenas contacted in the survey all were privately owned with the exception of Prince George's Equestrian Center in Maryland and the newly constructed arena in Graham, Texas. If it is determined that an equestrian center is desirable in Denton, a site may need to be selected (one with suitable soil) and promoted to equestrian organizations. Consideration should be given to ancillary facilities that would complement an arena, such as hotels, restaurants and convention centers. Partnerships with local equestrian groups and the City and County should also be developed. Convention/Conference Centers and Equestrian Arenas White Paper Page 9 Equestrian Arena Profile Summary Year Description Built Size Events Staff Will Rogers Memorial 1936 Multi-purpose complex under Southwestern Expo and Center 45 acres of roof spread over Livestock Show (two-week Fort Worth, TX 85 acres. Facility has event hosts 800,000 people) galleries, museums, Located in the Fort Worth restaurants, and shopping. Performances by variety of Cultural District bands, choirs, entertainers, Auditorium seats 2,856 etc. Flea Market every weekend Resistol Arena 1986 Approximately 25,000 sq ft Mesquite Rodeo runs from 10 full-time (Mesquite Rodeo Arena) arena adjacent to 8-story hotel April through October each Mesquite, Texas and convention center, year. Owner, Tom Hicks Arena seats 5,500. Facility also hosts concerts, circuses and other non- Facility has petting zoo and equestrian events. catering services. Synergy created through connection to hotel and convention center. Young County Arena 2002 101,000 sq ft building with Facility will host stock Graham, Texas 36,000 sq ft arena, seating shows, 4H, roping and 2,100. cutting horse events, tractor The facility was built with shows, car and trade shows, donations from local Building includes meeting concerts, and more. businesses and will be rooms and offices. given to the County. Lazy E Arena 1984 70,400 sq ft indoor arena Over 25 events hosted per 20 full-time Guthrie, OK Seats 6,832. year. Annual profits exceed (private development) $500,000. 200-300 for Includes bar & gift store, special events Guthrie rural area north Currently for sale. The owners produce most of of Oklahoma City. the events and profits are due to productions rather than leasing facility. Roberts Arena 2002 2 indoor arenas (One 23,300 Multi use facility for horse, 20 Wilmington, OH sq ft, seats 480. One 20,680 car, llama, and dog shows, (private development) sq ft, seats 275), 3 outdoor weddings, receptions and arenas, 526 horse stalls, banquets. Arena 10 miles from restaurant, party hall, inside Wilmington (Small town; and outdoor exhibit space. commuting distance to Columbus, Dayton and Cincinnati) Prince George's 125,280 sq ft facility; all Capacity for Events: Equestrian Center stadium seating; includes Horse shows/rodeos-2,007 Upper Marlboro, MD banquet area (2 rooms of Concerts - 5,892 (owned by Prince 4,000 sq ft). Basketball/hockey - 5,100 George's County) Boxing/wrestling - 5,200 Located outside of Washington DC on major highways. Convention/Conference Centers and Equestrian Arenas White Paper Page 10 TIP Development Strategies, Inc. DRAFT.. Denton Convention Center Brief Executive Summary As part of its downtown planning process, the City of Denton has asked TIP Development Strategies to conduct a preliminary investigation of the city's potential to support a small convention or civic center. While such studies are typically more comprehensive (and include design elements, cost projections and financing strategies), TIP has sought to provide a preliminary feasibility assessment that can lay the groundwork for a broader review. Within the scope of this study, TIP relied on published data and interviews to provide a preliminary assessment of the city's ability to support a meeting facility. Towards this end, the consulting team interviewed convention center operators and economic development professionals in a number of Metroplex cities. In addition, the meeting needs of some of the area's major employers were assessed to provide an understanding of their current activity levels, as well as to gauge their interest in a Denton area facility. Key Findings The size and strength of the Denton economy strongly suggests that more meeting space would be beneficial to the city. With a population of nearly one million projected for the county by 2025, strong employment growth, and relatively high per capita income levels there is a sufficient economic base to support public events, lectures, exhibitions, and trade shows. The county is home to a number of major corporations that could serve as an excellent source of meeting activity. Most major employers interviewed for this study indicated an interest in using a new meeting facility in the city. However, the number of annual meetings currently being held by even the largest of the city's employers we spoke with was somewhat below national averages. Parking was seen as a key concern if such a facility were to be located downtown. From the standpoint of attracting outside events, Denton faces several challenges. Not the least of these is competition for convention activity within the Metroplex. Lack of a resort-quality hotel presents another obstacle to the success of a convention center in Denton. The presence of a high-end hotel could serve to create a destination that would make the area more attractive to meeting planners. Conclusion Our preliminary analysis indicates that Denton should proceed with a more detailed study regarding the construction of a small convention or civic center as part of its downtown plan. The continued expansion of the Dallas-Fort Worth Metroplex and of Denton itself suggest that the area has a sufficient economic base to provide the infrastructure and supporting amenities. However, there are a number of conditions that would need to be met to ensure the success of such a facility, including linkage to a broader community plan (that incorporates enhanced parking, pedestrian access, and support from surrounding amenities), connection to a hotel, a flexible and scalable design, and an aggressive marketing plan. TIP Development Strategies, Inc. 11 TIP Development Strategies, Inc. DRAFT.. Denton Convention Center Brief Market Demand One of the primary considerations in convention center planning is whether or not sufficient market demand exists to support the facility. In the case of an existing facility, this demand is typically measured based on existing usage. When no facility exists, the market is based more on the strength of the local economy and the level of growth anticipated for the area. Economic Overview The following information is intended to provide a brief overview of the Denton area. Emphasis is placed on the following economic and demographic indicators: ~ Population growth--provides an indication of the level of potential use of a convention or civic center by the public. ~ Income--provides an indication of the health of the economy, which directly affects the presence of infrastructure and amenities required to support such a facility. ~ Employment--population and income are closely tied to job growth. ~ Majoremployers--source of potential meeting activity, as well as indicator of size and diversity of the local economy. Location Situated at the northern junction of 1-35E and 1-35W, the city of Denton is located 38 miles northwest of Dallas and 36 miles northeast of Fort Worth. Denton lies only 22 miles to the north of Dallas/Fort Worth International Airport, the second busiest passenger airport in the world. The city encompasses 64 square miles, 60 percent of which is currently undeveloped. ~ulation Denton is the county seat of Denton County, which is part of the eight-county Dallas primary metropolitan statistical area (PMSA). According to the 2000 Census, Denton County's population totaled 432,976, while 80,537 resided in the city. In percentage terms, the city of Denton accounts for 18.6 percent of the population of the county and 2.3 percent of the PMSA. Table 1 displays the historical population growth of both the city of Denton and the state of Texas from 1970 to 2000 and their respective annual growth rates. The table shows that Denton grew at a slightly faster annual compound growth rate than the state did over the period. Table 1: Historical Population Growth City of Texas Denton 1970 3,874 11,198,655 1980 48,063 14,225,513 1990 66,270 16,986,510 2000 80,537 20,851,820 Avg. Annual Pct. Chg. 2.37% 2.09% Source: U.S. Census Bureau TIP Development Strategies, Inc. 12 TIP Development Strategies, Inc. DRAFT.. Denton Convention Center Brief Table 2 contains North Central Texas Cou nc il of Government (NCTCOG) demographic projections for the city of Denton and Denton County to the year 2025, using 1995 as the base year. According to the NCTCOG forecast, the population of Denton will reach almost 133,000, with the city hosting neady 66, 000 jobs. NCTCOG predicts that the county's population will reach almost 800,000 in 2025, with roughly 294,000 households and one-quarter of a million jobs. Table 2: Demographic Forecast, 1995-2025 Numeric Percent Area 1995 2025 Growth Growth City of Denton Population 62,450 132,700 70,250 112% Households 26,950 51,700 24,750 92% Jobs 41,700 65,850 24,150 58% Denton County Population 320,550 794,000 473,450 148% Households 117,000 293,900 176,900 151% Jobs 94,750 244,800 150,050 158% Source: North Central Texas Council of Governments Population projections for Denton County prepared by the Texas State Data Center (TSDC) at Texas A&M University, which are based on more recent 2000 Census data, are more aggressive than the NCTCOG figures, placing the county's population at closer to one million by the year 2025. Due to the high degree of variability in population growth patterns in the state, the TSDC prepares three different sets of population projections for each county, each of which uses a different assumption about net migration. The TSDC estimates vary depending upon the assumed migration scenario used: Iow, medium, or high. The three scenarios are referred to as the Zero Migration (0.0) Scenario, which assumes that in-migration and out-migration are equal; the One-Half 1990- 2000 Migration (0.5) Scenario, which assumes rates of net migration one-half of those of the 1990s; the 1990-2000 Migration (1.0) Scenario, which assumes that the net migration rates of the 1990s will characterize those occurring in the future. There is some question as to which scenario is most appropriate. Texas experienced unusually rapid economic and demographic growth during the 1990s, rates that are not likely to be sustainable in the future. The economic slowdown beginning in 2000 has already impacted growth in many areas of the state. Therefore, the TSDC recommends using the more modest 0.5 scenarios for most counties. However, it is easy to imagine that the DFW Metroplex will continue to attract large numbers of people from other areas of the state and nation. Therefore, a high migration scenario is probably more appropriate for the region. TIP Development Strategies, Inc. 13 TIP Development Strategies, Inc. D~£T.. Denton Convention Center Brief Table 3 displays projections based on two different migration scenarios: the One-Half 1990-2000 Migration (0.5) Scenario and the 1990-2000 Migration (1.0) Scenario. The Zero Migration (0.0) Scenario was not included due to the unlikelihood of zero net migration in the area. Under the two remaining scenarios, the Texas State Data Center places the county's population in 2025 between 880,346 and 938,152. Table 3: Denton County Population Forecast Scenario Scenario 0.5 1.0 2005 512,658 567,835 2015 690,150 734,978 2025 880,346 938,152 Regardless of the scenario used, Denton County stands to Source: Texas State Data Center grow significantly during the next decades. Figure 1 below illustrates projected population growth based on the State Data Center 0.5 migration scenario for both Denton County and Texas. The forecasts for both geographic areas have been indexed to the year 2000 to provide a means of graphically comparing the projected growth of each. The figure shows that the rate of population growth in Denton County will be considerably more robust than for the state as a whole over the next 40 years. 3.00 2.80 2.60 2.40 2.20 2.00 1.80 1.60 1.40 1.20 1.00 Income Figure1: Indexed Projected Population Growth, 2000-2040 (Based on 0.5 Migration Scenario) Denton County Texas 2000 2005 2010 2015 2020 2025 2030 2035 2040 Source: Texas State Data Center Denton County has also demonstrated strong income growth in recent years. At an average of $31,004 per person, the county ranked 13th in per capita personal income in the state in 2000, according to the U.S. Bureau of Economic Analysis. This figure is well above that of the state and many of its Metroplex counterparts, as indicated in Table 4. TIP Development Strategies, Inc. 14 TIP Development Strategies, Inc. D~£T.. Denton Convention Center Brief Table 4: Per Capita Personal Income for DFW Counties. 2000 Per capita Rank in Texas personal in 2000 income Texas $27,752 -- Collin County 41,086 2 Dallas County 36,553 5 Denton County 31,004 13 Ellis County 25,589 45 Henderson County 21,400 115 Hunt County 21,102 124 Kaufman County 24,123 63 Rockwall County 33,613 10 Hood County 29,148 21 Johnson County 22,775 82 Parker County 25,618 44 Tarrant County 30,110 14 Source: U.S. Bureau of Economic Analysis According to the Texas Workforce Commission, Denton County establishments employed nearly 125,000 people in 2001. The two largest employment sectors in Denton County are (1) trade, transportation, and utilities and (2) government. The former sector accounts for about one-quarter of the county's employment, while the latter comprises just over one-fifth. The concentration of the trade, transportation, and utilities employment in the county is likely a reflection of the growing importance of service-based industries in the county, including retail trade, wholesale trade, warehousing, distribution, and telemarketing. Figure 2: Denton County Sector Employment, 2001 Classified by NAICS Construction 7% Manufacturing 10% Government 21% Trade, Transportation & Utilities 24% TIP Development Strategies, Inc. 15 Information Other Services 3% 3% Financial Activities Leisure & Hos 4% 10% Education & Health Professional & Services 9% 9% TIP Development Strategies, Inc. DRAFT.. Denton Convention Center Brief Manufacturing accounts for 10 percent of the county's employment, which is a level similar to the statewide average. Other significant employment sectors include leisure and hospitality, education and heath services, and professional and business services. Table 5 lists Denton County's largest public and private employers. The largest of these is the University of North Texas, which employs nearly 7,000 people. Other significant employers in the education sector include Denton lSD (2,000), the Denton State School (1,380), and Texas Woman's University (900). The largest private employer in the county is Boeing, which employs 1,700 people at its military and commercial electronics facility. Another important manufacturer in the county is Peterbilt Motors, which manufactures diesel trucks at its 1,325-person facility. Significant government employers include Denton County, the City of Denton, and the Federal Emergency Management Agency (FEMA), which operates a five-state Federal Regional Center in Denton. Table 5: Major Public and Private Emplo Employer Employees University of North Texas 6,995 Denton lSD 2,000 Boeing Company 1,700 Denton State School 1,380 Peterbilt Motors 1,325 Denton County 1,225 City of Denton 1,200 Texas Woman's 900 University Denton Regional Medical 850 Center Federal Emergency 750 Management Agency Source: Denton Chamber of Commerce ~ers Meetinqs Industry Overview While a true demand study could not be conducted within the given timeframe, data regarding the state of the national meetings industry is presented here as background for future discussions. There are no solid figures on the number of meetings held annually in the United States. In its recent survey of meeting planners, the "State of the Industry 2001," SuccessfulMeetings magazine estimated that there were approximately 1.7 million corporate meetings held in 2000. The total spending for these meetings was estimated at $45.8 billion. According to the survey, corporate meeting planners planned 15 meetings per year, including an average of three conventions. TIP Development Strategies, Inc. 16 TIP Development Strategies, Inc. D~£T.. Denton Convention Center Brief Independent planners--those working on a contract basis--reported slightly higher workloads with an average of 17 meetings per year, with four conventions. The survey respondent's employers typically held an average of 47 off-site meetings per organization in 2000. Associations represent another significant source of meetings in the U.S. According to Association Meeting Trends 1998, published by the American Society of Association Executives, associations held approximately 376,000 meetings involving 272 million attendees in 1996-1997. ASAE estimates that spending on association events totaled more than $56 billion. Table 6: Average Cost per Meeting Percent of Total Under $10,000 28% $10,001--50,000 31% $50,001 --100,000 13% $100,001--500,000 24% More than $500,000 2% Source: Successful Meetings magazine, "State of the Industry 2001" Table 7: Attendees by Type of Meeting Average Type of Meeting Number of Attendees Management 83 Sales 160 Training/educational 170 Incentive travel 117 Conventions 1,452 Source: Successful Meetings magazine, "State of the Industry 2001" Successful Meetings' "State of the Industry" survey found that the average meeting budget in 2000 was slightly more than $225,000. However, most meetings are much less extravagant, with 59 percent having a budget of $50,000 or less. Table 6 provides a breakdown of the average cost per meeting from the survey. According to ~he survey, meeting space rental accounted for about 3 percent of the average meeting budget, with exhibit space and exhibit services accounting for an additional 7 percent each (see Figure 2). Mtg space rental Other 3% 4% Figure 2: Average Spent for Various Line Items Ground transport 3% Food & beverage 19% Audiovisual 5% Speaker/trainer 6% Exhibit svc/d6cor 7% Exhibit/expo space 7% Airfare Accommodations 11% 14% TIP Development Strategies, Inc. Technology 18% 17 TIP Development Strategies, Inc. DRAFT.. Denton Convention Center Brief Denton Employers Event planners at several of Denton's largest public and private employers were interviewed by telephone. The purpose of the interview was to obtain a sense of the number and size of events they planned on an annual basis, as well as to gauge their interest in holding events in the local area. Nine employers were contacted (five private sector and four public sector) and seven interviews were completed. Responses regarding the number of events ranged from a Iow of three (Peterbilt, with an average attendance of 125 at each) to a high of more than 40 (Denton Community Hospital, with an average attendance of approximately 100). The number of attendees also varied, with some respondents planning meetings for as few as 10 to 12 people. The largest event was reported by Denton Regional Medical Center, which hosts an average of three meetings with 200 attendees each in addition to eight smaller meetings with an average of 50 attendees. When asked where they were currently holding meetings, several people mentioned the University of North Texas (UNT). However, some people indicated that availability has been a problem in booking UNT facilities. Smaller meetings, such as board meetings, were handled within the organization's own facilities or at external locations such as UNT. Other facilities mentioned for various size events include Alliance Airport, the Radisson, the Wildwood Inn, the Women's Center, and the local country club. Of the seven respondents, four indicated that they would be "very likely" to use a facility in downtown Denton if one were available. The remaining three events planners said they would be "somewhat likely" to do so. Several people, however, indicated that their interest in using a facility downtown would be contingent upon the availability of adequate parking. The price and quality of the meeting space were also mentioned as concerns. One person indicated that recent events had changed the character of the meetings she planned, with meetings becoming less elaborate than in the past. In her words "the days of 'Palm Springs' are over," which would make holding events locally more attractive. Other Facilities The DFW area is home to a number of convention and meeting facilities, including a number of luxury hotels. Many of these facilities are significantly closer to air service than Denton, as well as to other cultural and recreational amenities, factors that would make them more attractive for meeting planners. Some recent and planned convention center activity in the Metroplex that would create even more competition for events, include: ~ Expansion of the Dallas Convention Center recently added 250,000 square feet to its facility * Expansion and renovation of the Fort Worth Convention Center ~ Irving Convention Center * Grapevine Opryland TIP Development Strategies, Inc. 18 TIP Development Strategies, Inc. DRAFT.. Denton Convention Center Brief Other Considerations Location Given the focus of the city's planning efforts, an important question about the future of such a center is the potential location. While a downtown center would meet many of the city's objectives, its distance from the freeway might act as a deterrent to developers looking for easy highway access. There are ways to mitigate this concern, including ones that would actually strengthen support from the development community. Among the options available to the city would be a more flexible center that includes facilities for public and private functions. This approach would ensure that a variety of public activities will provide a revenue stream (albeit somewhat limited), while allowing for more traditional convention center functions. The actual design of the center plays a role in this discussion. A flexible floor plan, including one that would allow for some consolidation of community services, would be beneficial. In addition, well-designed expansion potential would help offset costs and allow the center to take advantage of some functions currently conducted only at the University of North Texas. Parking will also play a role in the feasibility of the center. This was made abundantly clear by the companies interviewed. There is the possibility of meeting several communities needs connected with the downtown if the parking can serve current overflow needs. Finally, the linking of the center with a convention-based hotel is worth further exploration. While Piano has not been successful in attracting a major hotel, Denton serves a different market and may be able to garner interest from a mid-sized hotel chain. Public Support What level of public support is required? This question - answered by tax rates, incentives and bond levies -is also an important factor in the feasibility equation. A larger vision for the downtown, and indeed for the city as a whole, is critical. That vision is being articulated through the downtown plan, renewed economic development activity, and the energies of city officials and city staff. In other words, broad public support can play a critical role in the funding of a civic center. Denton's potential for garnering this kind of support is greater than it has been in the past and will be a key factor in future discussions. Impact on Economic Development How directly can one connect a civic center with economic activity? Is it a "trailing indicator" of economic success? Is it a necessary part of a community's economic growth? Whatever the answer to these questions, there is no clear evidence that convention centers contribute directly to economic development in the community. Based on the experience of the consulting team and the comments of economic development professionals interviewed for this project, such facilities have little impact on the attraction or retention of businesses. Despite this lack of direct impact, incorporation into a broader vision can most definitely play a part in the way a community is perceived, both internally and externally. A civic center in Denton would be strengthened through the following: · linkage to a broader community plan that benefits from enhanced parking, pedestrian access, and support from surrounding amenities TIP Development Strategies, Inc. 19 TIP Development Strategies, Inc. DRAFT.. Denton Convention Center Brief · connection to a hotel · a flexible and scalable design · an aggressive marketing plan that enfranchises businesses in meeting and convention space This is not, of course, a comprehensive list. It does suggest that the feasibility of a civic center depends as much on the variety of functions it can serve and how well it is marketed. TIP Development Strategies, Inc. 20 TIP Development Strategies, Inc. DRAFT.. Denton Convention Center Brief Appendix A: Convention Center Profiles ADDISON CONFERENCE AND THEATRE CENTER PO Box 9010 Addison TX 75001 972.450.6200 Robert Bourestom, Manager Operating Budget: $750,000 The 54,000 square foot Addison Conference and Theatre Center was constructed in 1991 at a cost of $6 million. It is divided into three main sections, a 15,000 square foot conference center, a 35,000 square foot theatre center, and a 900 square foot "stone cottage" used for smaller, more intimate meetings. The facility is located in the downtown area of Addison right next to the very successful Addison Airport, a commercial jet hub. Additionally, the center is located around a high concentration of restaurants and hotels in the Town of Addison. In fact, the main purpose of the facility is to generate room rentals for the hotels in the community since the funding for the facility comes from hotel/motel tax revenue. The city owned and marketed facility can accommodate approximately 1,575 people. The facility is mainly rented out for smaller events and holds approximately 800 events a year, which attract a total of approximately 50,000 people annually. The average event uses between 1,200 and 2,400 square feet of space and brings in between 30 and 60 people. The center has seen a dramatic increase in both bookings and revenue over the last year, especially in the last 4 to 5 months. Instead of offering in-house catering, the center works a partnership with local restaurants. Any booking may cater or order food only from restaurants located in the city limits, further adding to the sales tax revenue generated by the bookings. Currently, the center has 7 full- time employees. Like many centers, however, the Addison Center relies primarily on temporary labor to set up and tear down events. TIP Development Strategies, Inc. 21 TIP Development Strategies, Inc. DRAFT.. Denton Convention Center Brief CHARLES W. EISEMANN CENTER (RICHARDSON) 959 E. Lookout Drive Richardson, TX 75082 972.907.8205 Linda Kaualoku The 116,900 square foot Eisemann Center is about two months away from opening. The $35 million facility was primarily funded through hotel/motel tax revenue in addition to the land donation valued at $1.2 million. The building is adjacent to the Central Expressway (US 75), the Galatyn Park DART light Rail Line, and the 12-story, 336-room John Q. Hammons Renaissance Hotel. Additionally, the facility is less than a mile from the President George Bush Turnpike, the new loop around the metroplex. Furthermore, the facility sits in the heart of the Telecom Corridor, the largest employment center in Richardson and the largest concentration of high-tech jobs outside of Silicon Valley in California. The facility sits on 500 acres of land donated to the City of Richardson by Galatyn Park Corporation. The development of the facility is a true public/private partnership involving the City of Richardson, the Galatyn Park Corporation, John Q. Hammons Hotels, Nortel Networks, DART, and several local businessmen. This city-owned and marketed facility will cater to the businesses that surround it while offering a venue for the performing arts in Richardson, its main purpose. The Center features three venues: a 7,875 square foot, 350-seat adaptable theatre; a 19,416 square foot, 1,500 seat Performance Hall, and a 3,150 square foot meeting and banquet hall. The maximum capacity for receptions will be 350, meetings will have a 300-person capacity and banquets will seat 200. The ancillary Renaissance Hotel will be jointly marketed for its meeting space and capability to handle large groups and corporate events. It contains 30,000 square feet of meeting space in 17 rooms and two boardrooms. All meeting space contains video conferencing equipment, high speed Internet, and state-of-the-art audiovisual equipment. TIP Development Strategies, Inc. 22 TIP Development Strategies, Inc. DRAFT.. Denton Convention Center Brief DESOTO Civic CENTER 211 E. Pleasant Run Desoto, TX 75115 972.230.9650 Maurice Nelson, Recreation Center Supervisor Operating Budget: see info below The Desoto Civic Center was modeled after Richardson's Eisemann Center. The Center, constructed in 1993, is part of the city hall and library complex. The facility contains a total of six meeting rooms that are 900 square feet each and a 2,200 square foot ballroom. The city owned and marketed facility has seen a slight increase in bookings over the past nine months. Event numbers for a full year are not available, however, 841 events have been booked at the facility in the past nine months. Data on total number of attendees are not kept. The Parks and Leisure Department at the city runs the facility. While the center has 6 employees, the budget for the center is not separated from the overall departmental budget. According to Maurice Nelson, Recreation Center Supervisor and the person in charge of the facility, the center has enjoyed great success. TIP Development Strategies, Inc. 23 TIP Development Strategies, Inc. DRAFT.. Denton Convention Center Brief GARLAND PERFORMING ARTS CENTER 300 North 5h Street Garland TX 75040 972.205.2780 Patty Granville, Director Operating Budget: $500,000 This $3.5 million facility was originally constructed in 1982, but is currently undergoing a significant expansion. Located in the heart of old downtown Garland, it is a centerpiece of the re-developed downtown area. The center is located immediately adjacent to the Main Garland Station DART Rail Line, which offers a tremendous advantage for patrons and eases the strain of not being located next to a major freeway. The facility is currently 30,000 square feet but is being expanded and reconfigured. The new expansion will include a 13,000 square foot banquet facility and an additional 8,000 to 9,000 square feet of meeting space. The current meeting space, 3 rooms at 800 square feet each, will be converted into office space for the staff of nine people. The new configuration will also contain two theatres, a 720-seat facility and a more intimate 200-seat venue. The city-owned and marketed facility holds approximately 355 events a year with some days being booked for two and three events. This translates into more than 100,000 people using the facility in an average year. The main purpose of the facility is to cater to the arts in the northeast Dallas and Garland areas, at least until the expansion is done and meeting rooms are available. Over the last year, the bookings and revenue at the facility have increased dramatically for the City of Garland however the same cannot be said for the arts groups that perform there due to falling ticket sales, which is the revenue by which the performing arts group thrives. According to the director, marketing the facility was very tough in the beginning due to the location and lack of freeway access. However, with the addition of the DART Rail line and DART Park and Ride facility as well as the familiarity over time the center has flourished. TIP Development Strategies, Inc. 24 TIP Development Strategies, Inc. DRAFT.. Denton Convention Center Brief GRAPEVINE CONVENTION CENTER 1209 South Main Grapevine, TX 76051 817,410,3459 Rusty Hernandez, Manager Operating Budget: $961,000 The Grapevine Convention Center was constructed in 1988. The 23,500 square foot facility sits in the heart of the revitalized downtown area. Grapevine is a Main Street City and this center is a key part of that rebirth. The facility contains 3 meeting rooms varying in size between 700 and 1,200 square feet each. It also contains 8,500 square feet of exhibit space and a 5,000 square foot ballroom area. Although the center does not contain a hotel, the location of the center itself provides access to many unique amenities. There are many trendy shops and restaurants located within walking distance of the complex. Additionally, the center is close to many hotels and shopping venues. Perhaps most important, the center is within a few minutes drive from DFW International Airport. The city owned and marketed facility has seen a slight decrease in business over the past year, booking 840 events. Numbers are not kept on the average size of the events both in terms of people or square footage requested. The facility staff includes 6 full-time employees. TIP Development Strategies, Inc. 25 TIP Development Strategies, Inc. DRAFT.. Denton Convention Center Brief MESQUITE ARENA AND CONVENTION CENTER 1818 Rodeo Drive Mesquite, TX 75149 972,285,8777 x 2016 Jack Beckman, General Manager Operating Budget: $800,000 The Mesquite Rodeo and Convention Center is a very unique and successful facility. The Rodeo Arena remodeled when the convention center was constructed, is owned and operated by Southwest Sports, the owners of the Dallas Stars and Texas Rangers. The Convention Center, constructed in 1999, sits adjacent to the Rodeo facility. The 70,000 square foot center contains 35,000 square feet of exhibit space, 20,000 square feet of ballroom space and 9 meeting rooms totaling between 1,000 and 2,000 square feet each. Additionally, the facility contains a 160-room hotel that is also attached to the center. The complex is located right off Interstate 635 (LBJ Freeway) and has excellent visibility from the highway. The Convention Center portion of the complex is owned and marketed by the city of Mesquite and can accommodate a maximum of 6,000 people at any given time. In its first full year of operation, the facility held 200 total events and 300,000 people use the center. Unlike other centers in the metroplex, the facility has not seen an increase in bookings; rather they have remained stable from previous years. The Convention Center has 10 full time employees and uses temporary labor as needed to set-up and tear down various events throughout the year. TIP Development Strategies, Inc. 26 TIP Development Strategies, Inc. DRAFT.. Denton Convention Center Brief PIANO CENTRE PO Box 860358 Piano, TX 75086 972.442.0296 Jim Stroup, Centre Manager Operating Budget: $2.5 million The Piano Centre is located on 56 acres of landscaped, manicured property at the corner of Spring Creek Parkway and Jupiter Roads in Piano, TX. Although the facility is not immediately adjacent to a major freeway, it is located only 3/10 of a mile from Central Expressway (US 75). This location allows the facility to reap the benefits of major highway frontage while maintaining a "secluded, country club appeal," according to Jim Stroup, Centre Manager. The 86,400 square foot facility was constructed in 1990 and cost $17 million to build. It contains 21,600 square feet of exhibit space that can be turned into a ballroom as well when needed. The city-owned and marketed facility also contains 12 meeting rooms between 850 and 3,500 square feet. The facility can hold a maximum of around 5,000 people at any given time depending on configuration or the type of events booked. The Piano Centre averages 750 events a year and rents about 6 million square feet of space in any given year. Although the average number of bookings has increased over the last year, revenues are down approximately 12 percent due to the type of meetings booking the facility. In the past, the venue had been popular for corporate events that were more inclined to use catering and equipment provided by the Centre and its 56 employees. Recently, however, more small, social events are being held at the facility, which typically rent only the rooms without taking advantage of the additional services that offer more revenue to the facility operators. TIP Development Strategies, Inc. 27 TIP Development Strategies, Inc. DRAFT.. Denton Convention Center Brief RICHARDSON Civic CENTER 411 W. Arapaho Road Richardson, TX 75080 972.744.4090 Geoff Wright, Manager Operating Budget: $430,000 Constructed in 1980, the Richardson Civic Center was intended and is still used as part City Hall and part Civic Center. The 15,000 square foot facility (civic center square footage only) sits on a large tract of land adjacent to the City Library. It is located on the corner of Arapaho Road and Central Expressway (US 75) which provides good visibility and parking. The Civic Center part of the facility contains 8 meeting rooms, including an 8,400 square foot ballroom. The facility handled 410 events last year, mostly smaller in size and scope. Additionally, the center averages 210 clients per year, the measuring stick the center uses rather than calculating the total number of people that come through the center. This city-owned and marketed facility has seen an increase in bookings over the past year as well. However, the bookings have been for smaller events than in the past so revenue has actually remained steady. TIP Development Strategies, Inc. 28 0 0 0 0 LO ~oO~ o~ 0 0 0 0 0 C~ 0 0 C~ o ~o ~o_ .x 0 0 0 0 0 LO 0 0 0 0 0 LO C~ 0 0 0 0 0 O0 0 0 0 0 0 LO 0 0 O0 0 0 0 0 0 0 0 0 0 00 Appendix C: Economic Development Professionals DESOTO ECONOMIC DEVELOPMENT CORPORATION Layne Ballard Executive Director 1801 N. Hampton Road, Suite 330 DeSoto, TX 75115 972.780.9915 The DeSoto Civic Center is used primarily for non-profits and social events rather than business meetings. Since it is usually booked 4-6 months in advance, local businesses have difficulty taking advantage of the space for meetings or training. In many ways, the DeSoto Civic Center functions more as a public amenity than a business-oriented facility. Consequently, the City of DeSoto and the EDC work together with local businesses to make available other facilities (EDC Board Room, Council Chambers, etc.) for local businesses to use for monthly board meetings or training functions. GARLAND ECONOMIC DEVELOPMENT PARTNERSHIP Greg Sims Vice President 914 S. Garland Avenue Garland, TX 75040-6934 972.272.7551 The Garland Performing Arts Center, true to its name, was constructed and designed to meet the needs of the performing arts. Sufficient meeting or banquet space is not currently available in the city, but an expansion of the center will accommodate some meetings. According to chamber studies, the expansion of the center will not have a significant effect on local businesses (for training and meetings). CITY OF MESQUITE Tom Palmer ED Manager PO Box 850137 Mesquite TX 75185-0137 972.216.6342 The Mesquite Convention Center has provided a significant service for local businesses looking for places to hold meetings and training sessions. In addition, local companies such as Georgia Pacific have and will continue to rotate quarterly meetings to the center. Additionally, new businesses have found the center advantageous. A new distribution company locating to Mesquite has been able to use the facility as a temporary base while hiring new employees for their facility. Also, the center has been an important tool in capturing and identifying all local non-profits searching for meeting space before the construction of the facility. TIP Development Strategies, Inc. DRAFT.. Denton Convention Center Brief Furthermore, the center has been able to attract new development. Hotels and motels have expanded as a result of the facility but increases in restaurant development have not been as quick to follow. PLANO ECONOMIC DEVELOPMENT BOARD Sally Bane Executive Director 4800 Preston Park Blvd., Suite A- 100 Piano, TX 75093 972.985.3700 As with all economic development professionals surveyed, Mrs. Bane indicated that the Piano Centre is not a primary factor in locating or attracting businesses to the city. However, many companies, particularly smaller ones, use the Centre as a location for meetings and training sessions. As previously mentioned, the Centre sits on 56 acres in close proximity to Central Expressway (US 75). There is an effort by the city to site a major hotel on city-owned land adjacent to the facility. This is an ongoing process that has not yet met with success. RICHARDSON CHAMBER OF COMMERCE John Jacobs Vice President 411 Belle Grove Richardson TX 75080 972.234.4141 The City of Richardson offers a unique look at the civic center debate. The original civic center, built in conjunction with city hall, was constructed mostly as a venue for community events. One of the driving forces behind the construction of the Eisemann Center and accompanying hotel, however, was to provide meeting space for Richardson companies who were leaving the city to hold meetings and training sessions. The civic center is mainly used for small shows, parties and other social events, and community and non-profit meetings. On the other hand, the Eisemann Center will allow the city to have a quality performing arts venue as well as a place to host meetings for companies such as Cisco, Ericson, and Nokia. TIP Development Strategies, Inc. The Economic and Fiscal Impacts of a Proposed Equestrian Center and Related Development in Denton County Bernard L. Weinstein, Ph.D. Terry L. Clower, Ph.D. Center for Economic Development and Research University of North Texas Denton, Texas May 2000 Background Mr. Edwin G. Pickett and a group of local investors have developed a master plan for a combined equestrian center, hotel, golf course, and single-family residential neighborhood to be located east of the City of Denton but within the city's ETJ. The equestrian center and arena will be the centerpiece of the development, around which a golf course, hotel, and homes will be constructed. Though dozens of horse centers are found across the U.S., the Denton project is unique in its size and scope, It will contribute greatly to the local economy, both during construction and when fully in operation. What's more, the facility will constitute a unique amenity for residents of the Denton area and will help put Denton County on the international map for horse shows and related activities. Equestrian centers aS economic ge~lerators Horse shows and related events have become big business in recent years, driven in part by the growing popularity of the U.S. Equestrian Olympic Team. Cutting, jumping, dressage, and reining all will be represented in this year's summer Olympics. And though not generally recognized as such, Denton County is a major breeding and training center for show horses. Recognizing the growing popularity and potential economic benefits of the sport, many communities have constructed new equestrian centers in recent years. New, state~ of-the-art facilities can be found in Palm Beach, Atlanta, Boston, northern New Jersey, and Virginia. Perhaps the best example of what horse shows offer a community can be found with the Virginia Horse Center in Lexington. This 378-acre facility includes a 4,000 seat enclosed coliseum, barns for 700 horses, several outdoor arenas, a cross- country course, and scenic trails. Since opening in 1986, the Center has hosted 1,059 events with more than 300,000 participants and approximately 4.8 million spectators and visitors. Events are scheduled every weekend from mid-January through mid-December. A typical equestrian event will average 350-400 horses and approximately 4,000 exhibitors and spectators. During the week, the Center is used for training, special events, and trade shows. The Virginia Horse Center is owned by a quasi-public body, the Virginia Equine Center Foundation. The Commonwealth of Virginia finances the Center's debt service, but operating expenses are paid through revenues earned from facility rentals, ticket sales, sponsorships, gifts, and grants. The justification for state involvement is that the Center benefits the entire horse industry statewide by helping to maintain and increase the level of production and use of horses and ponies. Public expenditure is also justified on the grounds that the Center helps to ensure the survival of Virginia's rural communities and lifestyle. An economic impact study conducted in 1998 found that the Virginia Horse Center produced $30 million in direct spending for the Lexington area, with 53 percent of that spending coming from outside Virginia. Center activities also generated more than $2.1 million in state and local tax revenue. As the following analysis illustrates, the proposed equestrian center for Denton County will have co,arable economic impacts. 2 Economic i. mpacts of construc, tion isctivities In this section we present our estimates of the economic impacts that will attend construction activities associated with the equestrian center and related developments. Our impact estimates are based on the Regional Impact Modeling System (RIMSII) developed by the Bureau of Economic Analysis (BEA) of the U.S. Department of Commerce for Denton County. This model provides estimates of total economic activity generated in the defined economy as a result of new industry activity or spending. In addition, the model estimates direct, indirect, and induced employment and earnings.~ Infrastructure and residential lot development, combined with construction of the arena, golf course, hotel, and related facilities, will cost an estimated $39.5 million. These expenditures will add $64.9 million in local economic activity and generate 544 person-years of employment paying $14.8 million in wages, salaries, and benefits (see Table 1). The impacts will be spread over the construction time frame. For example, if construction takes two years, then the employment impact will be an average of 272 new, temporary jobs for each of the two years. Homes built on the residential.lots are expected to range from the low $200,000's to more than $750,000. Housing construction will occur over several years with full build-out of the residential development probably taking 10 years. In current dollars, total housing construction costs will approach $21.7 million. Residential housing construction will generate $35.6 million in countywide economic activity and support almost 300 person-years of employment paying over $8 million in earnings. ~ Direct jobs are those directly engaged in the measured activity, in this case construction workers and related c~-site employment. Indirect jobs as those jobs associated with suppliers of mater/als or services supporting the direct activity. Induced jobs are those that axe supported by direct emplqyees spending a portion of their earnings in the local economy. 3 1. E of Construction Activities in Denton Arena, Hotel, Golf Course, Lot Development Expenditures Total economic activity generated Total earnings Total jobs (person-years) $ 39,500,000 $ 64,855,0O0 $14,824,000 544 Construction of Housing Expenditures Total economic activity generated Total earnings Total jobs (person-years) $ 21,680,000 $ 35,596,000 $ 8,137,000 299 Economic and fiscal impacts, of continuing operations and new..residents On-going operations at the arena, golf course, and hotel will have a number of economic and fiscal impacts. These operations are broken into separate components for arena events, rounds played at the golf course, hotel rooms rented, and food and retail sales related to each of these activities. The equestrian arena is projected to attract 40 large weekend shows and up to 30 other smiler equestrian events. These events will include cutting, reining, rodeo, AQH, county fair, and livestock shows. In addition, the arena will be used for concerts and community events. It is expected that total annual attendance for these events will approach 290,000, with 225,000 of these for the equestrian events. Importantly, based on attendance at similar facilities, 70 percent of event attendees will be from outside the local area, including 20 percent from outside the state. These out-of-area visitors represent new spending to the local economy resulting in a net increase in local economic activity, not just shifting entertainment dollars from one local venue to another. Total 4 ticket, food, and merchandise sales at the arena and its adjacent western-wear clothing store will likely exceed $9.5 million per year. The golf course is projected to accommodate 40,000 rounds per year with about half being played by non-local golfers. Total golf course revenues, including some pro- shop sales, are expected to reach $3.4 million. The hotel is budgeted to generate approximately $9.5 million per year in room rentals and food sales. For purposes of this analysis, we are assuming that 80 percent of hotel food sales will be to out-of-area guests. Adjusting these sales to account only for the spending by out-of-area visitors, we estimate total new economic activity in the area will increase by $26.2 million. More than 400 new full-time-equivalent jobs will be created, paying almost $6.5 million in annual earnings (see Table 2). If anything, these estimates are understated. Out-of-area visitors will also likely spend additional dollars in the local economy for food, entertainment, and merchandise, though precise estimates are problematic. In addition to operations at the equestrian center and resort, the residential portion of the proposed development will bring new spending to the local economy. Based on projected housing prices, when the residential development is fully occupied, about $12.5 million in new income will reside in the area. Assuming that no more than 20 percent of this new income will be derived directly or indirectly from operations at the equestrian center, local economic activity will increase by $9.7 million as a result of new household spending in current dollars. This new economic activity will support 97 new jobs paying about $2.2 million in earnings. Local taxing jurisdictions will eventually benefit greatly fi.om the proposed equestrian center and related development. Based on projected construction costs and associated property valuations, annual property tax payments to the Denton Independent School District will be almost $1.6 million per year. The City of Denton and Denton County will enjoy $483,000 and $223,000 in property tax receipts, respectively. Local hotel occupancy tax revenues will be about $420,000. Ticket, food, and merchandise sales at the arena and related resort facilities will generate substantial local sales tax revenues estimated at $288,000 per year. In addition, local expenditures by residents of the housing development will boost sales tax revenues by $19,000. In total, we estimate that City of Denton tax receipts will increase by at least $1.2 million annually once the proposed project is fully operational and all of the homes are in place. Table 2. Recurring Economic and Fiscal Impacts of the Proposed Equestrian Center and Arena and Resort Development Ticket, food, and merchandise sales Arena Golf course (green fees, merchandise) Hotel (room rental, food sales) Total sales Total economic activity Total earnings Total jobs (full-time equivalent) Spending by Residents of New Housing (at build-out) Estimated income of residents not counted in above Total economic activity Total earnings Total jobs (FTE) Annual Tax Revenues by Jurisdiction Denton Independent School District City of Denton (sales, property and hotel tax) Denton County $ 9,550,000 $ 3,400,000 $ 9,500,000 $ 22,450,000 $ 26,200,000 $ 6,500,000 405 $ 9,974,000 $ 9,670,OOO $ 2,236,000 97 $ 1,616,000 $ 1,210,000 $ 22,3,000 Ancillary and "non-quantifiable" benefits from the proposed equestrian facility Horse ranching is a major industry in Denton County, accounting for more than two-thirds of all farm cash receipts. In 1997, the latest year for which data are available, receipts fi.om marketing horses exceeded $65 million. If constructed, the Denton equestrian center will provide further stimulus to Denton County's farm economy and, over time, attract additional breeders and trainers. Local crop farmers, as well as area feed stores, will also benefit from this stimulus. As mentioned above, the arena and related facilities will offer a range of amenities to area residents. Not only will the county boast a premier showplace for equestrian and other events, but the site will also provide a much-improved venue for the North Texas State Fair. Knowledge that the equestrian center is approved and under development may also enhance the prospects for the Dallas area landing the 2012 Summer Olympics. In short, the proposed equestrian center, hotel, golf course, and residential development proposed by Mr. Pickett and his associates will be a tremendous job, income, and tax generator for the City of Denton, the Denton I.S.D., and Denton County. This premier facility will improve the quality of life in the region and put Denton on the international equestrian circuit. (D 0 0 0 r.~ r~ 0 r~ 0 0 r../'j 0 0 0 r.~ 0 ~) c~ 0 r~ 0 r~ 0 il -W 0 -,~ ~ 0 Ir i E 0 0 ~.. c",4 ~ ~