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Gainesville consultants say large convention center a bad idea
Hotel still a possibility for city
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The Georgia Department of Transportation gave Gainesville City Council an update on Howard Road traffic improvements, after a fatal wreck that claimed three lives in July.

Traffic Engineer Dee Taylor said one of “the bigger-ticket items” would be lighting at the intersection, which will go to the city’s power bill.

“Typically with an intersection that’s of a medium size, we can call Georgia Power, and say we give you the authority to come out here and light this thing ... these bigger intersections require a great deal more planning to make sure that they do it right the first time,” he said.

Georgia Power has set up a special lighting group to make a plan, and the RaceTrac at the intersection has agreed to fund a portion of the initial installation, Taylor said.

Two sets of road strips will be installed to jar people awake if they drift off approaching the intersection in the northbound lane, and a left-turn signal will be added.

In anticipation of delays with the lighting project, Taylor said DOT is “tremendously behind” on other work.

“They’re going through a laundry list of back-work,” he said.

Gainesville is unlikely to see a convention center development any time soon, after consultants discouraged the idea in a Thursday presentation to City Council.

The contracted economic feasibility consultants said an already oversaturated market, weak occupancy levels and slow upticks in demand made construction of a publicly subsidized large-scale gathering place a bad idea.

Linda Wilson, president of Key Advisors Inc., said the center was shooting for more than what Gainesville lends itself to, and risked operating on annual shortfalls.

“As we started to narrow down the possibility, in terms of recommending what kind of facility, we started at the big convention box, and looked at some national trends,” Wilson said. “And basically what we found is that the market is really overbuilt, and there’s plenty of new supply coming in the pipeline.”

“Market occupancies are extremely low in these convention centers,” she continued, citing a PowerPoint presentation showing the numbers of nearby existing centers. “And yes, group demand is coming back, but it’s coming back very slowly.”

Those national trends, Wilson said, would strongly affect a convention center in Gainesville.

“We also understood that, whatever it is that you all build, you weren’t interested in having an annual subsidy,” she said. “So these big boxes have a tendency to require annual operating subsidies.”

The city leased its former convention center, the Georgia Mountains Center, to Brenau University last year as part of the school’s expansion. Now called the Brenau Downtown Center, the building is being repurposed as classroom and lab space for graduate students.

City Council members complained the center was too small to attract big-name talent and was losing $300,000 to $400,000 a year.

Construction plans for a new convention center/hotel complex withered because of the economic downturn. A pedestrian bridge that spans Jesse Jewell Parkway — linking downtown and midtown areas of the city — ends at the original intended site.

Wilson said the city’s poor accessibility, with Interstate 985 as the only key entry point, stifles its appeal for big-draw events.

“If you want to draw in regional and national conventions, which is what large convention centers are intended to do, you really do want to have access from all directions, and also the fact that we’re far away from Hartsfield International Airport, it would be harder to book an international convention.”

Instead, consultants recommended an upscale “select service” hotel with a national chain affiliation that would target solo business travelers and corporate conferences instead of entertainment options.

“The meeting space would be anywhere from 11,000 to 15,000 square feet in total space. We’re recommending the banquet capacity be at least 500 people, to be competitive compared to what exists in the current market,” Wilson said.

The former Mountains Center was 18,000 square feet with a 2,600-seat arena, 4,500 square feet of meeting space and a 300-seat theater.

Wilson said such a downtown hotel would fill a need for gathering space, while attracting business and tourism in a way that plays to the strengths of the city — its diverse, walkable downtown.

“The walkability and the urban experience that you have here is tremendous. I think it’s a huge asset and meetings planners will really embrace that,” Wilson said.

Chateau Elan in Braselton and Legacy Lodge at Lake Lanier Islands Resort in Buford would be the comparable market competitors as hotels that attract groups.

Wilson recommended capitalizing on the lure of Lake Lanier, combining a “resort feel” with the urban, setting the hotel apart from competitors. It also would be less expensive and less seasonal.

She added that Gainesville’s current hotels are at capacity during certain times of the year, creating demand for new space.

The projected cost of the hotel, using median estimates of size, is $28.4 million — $19 million to the hotel, $6.9 million to the meeting space, $2.1 million for land purchase and $400,000 to the pavilion.

Bleakley Advisory Group President Ken Bleakley recommended issuing requests for proposals to see “what the marketplace brings back” as the next step, if the city is interested.

“We think that’s probably the right-size project, the right-scale project, and it fits a niche we think exists in the Gainesville market that really ties together a business setting, business conference center, but also connects you to the lake — a tremendous asset that most communities don’t have,” he said.

Bleakly also recommended striking while the iron was hot, as the hotel market tends to be volatile, he said.

“The hotel market is ... unusual. The tap is on or the tap is off. Right now the tap is on,” he said.

Overall council members were pleased with the study, despite it not reaching their original size aspirations.

“Thank you for not sugarcoating it, not making it something we wanted to hear,” Councilman George Wangemann said.

Bleakley said that’s a common mistake he sees, at the expense of being cost-effective.

“We tried to focus on where we thought the core part of the demand was, and not build a facility just to get another 5 or 10 percent. A lot of communities do that, where they make it, ‘We can get this one big event,’ and then they only use it one day for that event,” he said. “There’s an old line in the ski business ‘You don’t build capacity for Christmas Day.’ You want Christmas Day to be a sellout, you don’t want to have extra capacity for the rest of the year. The same thing in the convention business. You want to lose a few and say, ‘Well, let’s keep (it) the busiest we can but we’re not going to build every possible alternative.’”

Mayor Bob Hamrick said the next step is for the council to “sit down with the developers and see where we go from here.”

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