cuyahoga county proposed $260 million convention hotel presentation for cleveland city council...

8/13/2019 Cuyahoga County Proposed $260 million Convention Hotel presentation for Cleveland City Council 11.21.2013

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Cleveland Convention Center

Headquarters Hotel Project

City Council PresentationNovember 21, 2013

Where, What, Who, When,

Why and How?

presented by Jeff Appelbaum


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Site Plan

LAKESIDE AVENUE

ONTARIOSTREET

WESTMALL

DRIVE

Where?


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HOTEL PROGRAM

665 Guestroom Bays-- 600 Guestrooms 30 Story Tower Structure with 4 Story Podium

Public Space consisting of:

Approximately 55,000 SF of Meeting Space which

includes: 22,500 SF Grand Ballroom

13,500 SF Junior Ballroom

Three Meal Restaurant with Access to West Mall Drive

Lobby Bar and Lounge

Additional Retail Opportunity Possible Green Roof on Podium

Top of Building Event Space

Below Grade Parking -- 280 spaces

Total Area is Approximately: 691,000 SF

What?


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Plan Level 1 - Lobby


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Plan Level 3 Jr. Ballroom


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Plan Level 5 - Ballroom


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Plans - Tower


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Parking level 2


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Parking Level 1


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CuyahogaCountyConve

ntionHotel

KeyTower

TerminalTow

er

PublicSquare

ToweratErie

view

TerminalTow

er

FifthThirdCe

nter

FederalCourthouse

JusticeeCent

er

FederalBldg

.

NationalCity

Center

EuclidTower

OhioBellHur

on

RhodesTowe

r

EatonCenter

MarriottatKe

yCenter

900 770 657 528 450 445 430 420 419 410 389 370 365 363 356 321

1 2 3 4 5 6 7 8 9 10 11 12

Tower Height Comparison


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North Elevations


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North Elevations


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East Elevations


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East Elevations


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South Elevations


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South Elevations


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South Elevations


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West Elevations


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West Elevations


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Elevations


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Hotel Conceptual Schedule

Select Criteria Architect

Select Operator/Brand

Select Design Builder

Cooperative Agreement

Issue COPs

When?


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Public Outreach Meeting August 8, 2013

Project Kickoff Meeting October 7, 2013

Completion of Schematic Design November 8, 2013

Schematic Design Presentation to Council November 12, 2013

Public Outreach Meeting #2 Mid-Late Nov 2013

Design Presentation to City Planning/Landmarks November 21, 2013

Abatement / Demolition Activities Commence Late Nov 2013

Issuance of GMP Document Pricing Package January 10, 2014 Design Development Presentation to Council Mid Jan 2014

Early Construction Start Date (Mass Excavation) February 26, 2014

Receipt of GMP Proposal from Design Builder February 28, 2014

Reconciliation of GMP March 3 - 7, 2014

Revision of GMP Documents and Acceptance of GMP March 7 - 21, 2014

DRC Submission to Hilton March 28, 2014 Construction Document Preparation JanJuly 2014

Substantial Completion April 1, 2016

Hotel Opening June 1, 2016

PROJECT DESIGN SCHEDULE


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Who? Key Project Stakeholders

City of

ClevelandPort Authority


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Workforce/Business Inclusion Goals

20% City Workforce 40% County Workforce

4% Low Income Workforce

25% SBE ( include tracking 8% CSB)

Voluntary MBE/FBE Goals and Reporting

15% MBE; 7%FBE

Prevailing Wage/Section 189 Living Wage)


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Why?


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Direct Economic Benefits to City

Jobs Construction

2800 jobs; 1,600,000 manhours

Income Tax -- $700k +

Operations

366 Employees Annual payroll $9M+

Income Tax--Present Value = $2.5M

$10M contribution forbridge project

Property tax for schools $1.2M annually

Other taxes Bed tax (other hotels)

Admission tax

Parking tax

Sales tax (via Local GovFund)

Car Rental Fee

Taxi License Fee

Increased Business inConvention Center andPublic Auditorium


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How?

Funding Sources Non- School TIF -- $ 12.4M

Combined Bed Tax 15.6M

Net Hotel Revenue 121.6M

Sales Tax Exempt 8.0M

Misc. + Equity 10.0M

City Contribution 8.0M

Convention Center 93.0M

Original Plan


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Original Proposed Sources and Uses for

Hotel

Hotel +Parking


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Original Proposed Sources and Uses for

Group Plan Improvements


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Essential Hilton Deal Points

15-year Term

Base Management Fee - Year 1 $639K; grows to $1.2M after Year 5

Subordinate Incentive Fee - Grows from $267K in year three to $616K in

Year 5, but only payable to the extent that funds are available; that Hotel

has met 95% RevPAR index; and that owner's priority payment is made.

(But unpaid Subordinate Fee paid on termination.)

Owner Priority Payment - $8M Year 3; $9M thereafter

Room Block Agreement

Performance TerminationRevPAR falls beneath 95% of competitive

set for two-year period Financial Contribution (Key Money)


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Hilton Proforma Assumptions

2016

600 Rooms

50% Occupancy

Average Daily Rate $150.17

2020

600 Rooms

70% Occupancy (stabilized)

Average Daily Rate $182.58 (future rate growth 2.5%)


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Hilton Proforma

Stabilized Year 2020 Total Revenue $41,034,000.00 Departmental

Expense 15,088,000.00Overhead Expense 10,480,000.00

GOP 15,466,000.00

Hilton Base Fee 1,231,000.00Hilton Incentive Fee 616,000.00

Income Before Fixed Charges 13,619,000.00Property Tax 1,986,000.00Insurance 247,000.00

EBITDA 11,386,000.00County Replacement Reserve 1,231,000.00

County NOI 10,155,000.00Debt Service 9,000,000.00

County Remainder $ 1,155,000.00


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Possible Uses of City Contribution


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Questions?