Vail conference center taking shape
A lot of public committees labor long, only to bring forth ideas that land with a flutter. The Vail Conference Center Oversight Committee has labored long and brought forth a report than lands with a resounding thunk.
The public Tuesday got its first look at a business plan prepared by the committee and its consultants, HVS Convention, Sports & Entertainment Facilities Consulting. The plan, chock-full of numbers and projections, is about an inch thick, and lays out a possible future for the facility.
While plans for the center aren’t yet complete – still to be determined is whether the center will sit atop the Lionshead parking structure or just to the east, between the structure and Dobson Ice Arena – the plan presented Tuesday does lay out recommendations for the center’s size and its possible use.
The size recommendation is for a building of approximately 100,000 square feet – the Wal-Mart Supercenter in Avon is about 180,000 – with a main ballroom of about 25,000 square feet. The center would be targeted at conferences bringing in between 500 and 2,000 people. The ballroom is also expected to host concerts and other special events, and the banquet facilities are expected to draw other groups.
The current cost estimate for such a facility is roughly $42 million, which would be paid for with bonds backed by a dedicated lodging tax and an additional .5 percent sales tax. Those taxes raised about $3.3 million in 2003, and are expected to raise about that amount over the next few years. If the total bond repayment costs could be kept under $2.7 million per year, the remainder could be used to help pay the center’s operating subsidy, said Vail Town Council member Kent Logan, who also sits on the oversight committee.
The operating subsidy is one of the most important factors in the decision whether or not to go ahead with the project, said Logan. “People need to know this facility will lose money on its own,” Logan said. That’s normal for conference centers in resort areas, though.
The HVS study included the operating losses of conference centers in Keystone, Snowmass, Telluride, Monterey, Calif., and Banff and Whistler, British Columbia. The subsidies those centers require average about $1.1 million per year.
If Vail caps its debt repayment at $2.7 million per year, Logan said the current tax collections would leave about $600,000 per year to help cover operating losses. The rest of the subsidy could come from money already banked from the tax collections and additional sales tax revenue generated by bringing more people to town, Logan said.
There’s already $3.3 million in the bank, Logan said, adding that if bonds for the center aren’t issued until late in the year, there will be even more money in the bank.
But those bonds should be issued sooner rather than later, said committee member Merv Lapin. If interest rates rise another 1 or 2 percent before bonds are issued, the cost of financing the center could rise above the town’s ability to pay, he said.
The other question is if people will come.
The HVS report conducted an Internet survey of meeting planners around the country. That survey showed Vail is an attractive potential destination, said HVS Senior Vice President Paul Sajovec.
Despite concerns about access and the lack of one giant hotel adjacent to the center to house participants, the survey of meeting planners indicates Vail may be the most desirable conference site in the state. The survey also put Vail at or near the top of the list of comparable resort conference sites.
Acknowledging the risk involved in building the center, committee members and others at the Tuesday meeting still supported the idea.
“We need to realize we have a lot of beds available all year ’round,” said Pam Stenmark, manager of the Evergreen Lodge. “And I’d sure rather sell beds than food and beverage.”
While some council members expressed concern whether Vail actually has enough beds to accommodate a 2,000-person convention, committee member Stan Cope, manager of the Lodge Tower condominiums, reminded the audience that Vail has more hotel space coming on line over the next few years.
A Four Seasons hotel is in the planning stages, Cope said, and developer Waldir Prado may or may not renovate and expand the Vail Village Inn across the street.
While council member Diana Donovan, an ardent opponent of the convention center both before and since the election, continued to voice her objections to the plan, sentiment Tuesday seemed to favor the project.
“We can’t look at this in a rear-view mirror,” said Logan after the meeting. The conference center needs to be viewed in the context of other improvements to Vail coming along over the next few years, he said.
In light of nearly $1 billion in public and private improvements planned for Lionshead and Vail Village over the next several years, a conference center is a good fit with the larger plans for renovating the town.
The report prepared by HVS is just a projection, Logan said. However, he added, “The potential is there for this to be a home run.”
The council will take up the conference center at meetings next month and in May, said Mayor Rod Slifer, who added there may be a firm enough plan in place to issue bonds by late this year.
“The potential is there for this to be a home run.”
– Kent Logan, Vail town councilman