Cuyahoga County Council receptive to Global Center renovations, which will receive application for funding ‘soon’
CLEVELAND, Ohio — If Cuyahoga County helps invest $46 million to turn the empty Global Center for Health Innovation into a meeting center, it will boost Cleveland’s profile as a competitive convention destination, a Destination Cleveland CEO David Gilbert told board members on Tuesday.
Currently, Cleveland ranks 13th in terms of total event space compared to its competitors, sitting between 105,000 and 423,000 square feet, below Indianapolis, Columbus and Pittsburgh, according to information shared by Gilbert during the meeting of the full committee of council.
In particular, Cleveland lacks flexible meeting rooms around 3,000 to 6,000 square feet, a size it says is most sought after by event planners, who also want more natural light and meeting spaces. outdoor reception. Cleveland’s Huntington Convention Center has just two such rooms, and the Global Center’s Junior Ballroom is adding two more, giving the complex four “good-sized” rooms, he said, but most other competitors offer eight.
Cleveland can make up the shortfall, Gilbert said, with a series of Global Center renovations that would add 89,000 square feet of meeting space, including doubling the size of the Junior Ballroom to make it divisible into four. to six flexible meeting rooms with an outdoor rooftop reception. The plan also includes escalators to help attendees traverse the four floors more easily.
This “modest” $46 million investment, Gilbert said, could mean an additional $20 million in annual economic activity, if convention bookings increase as predicted by a 2020 study of “highest utilization and the best”. He also says it could increase tax revenue for the area by $3.2 million, nearly half of which would go to the county, adding to what it already receives through bed sales taxes and d a quarter of a percent that fund the facilities.
“If we do nothing, we start losing,” he told the council, referring to the study which showed a 10% loss in annual economic activity. The proposed renovations “just give us a lot better space to sell,” he said.
At the same time, Gilbert also celebrated Cleveland’s “above the beat” rebound from the pandemic with the facilities it already has. He said there were 16 events already scheduled between 2024 and 2027, which equates to 56,363 room nights, and leads on other events were up 42% from 2021.
“By the end of next year we will be back to our 2019 levels and more, so we are doing well,” he told the board.
But the industry has changed during the pandemic, and he argued that Cleveland will have to change with it to support that growth.
“We have been very successful in filling this building. We have been very successful in generating revenue for the community through the convention center that we have,” Gilbert said. “There’s no guarantee we’ll continue to do this, but I think we’ve had a great proof of concept over the last 7-8 years of making good use of this facility and knowing that fortunately this that you can add with the current west block building is what is most needed and frankly the most profitable…”
Competitors are also expanding their facilities. Cleveland’s additions could propel him into the top 10, but that would only narrow the gap slightly. The facility would still fall below Columbus, Pittsburgh, and Indianapolis in terms of event space, but have an edge over Austin, Texas, Charlotte, North Carolina, Portland, Oregon, and Baltimore, Maryland.
However, the city would be tied for third among its competitors for its number of good-sized meeting rooms, which he says will generate more business. Since 2013, at least 37 events have refused to come to Cleveland “for the very specific reason that we didn’t have the facilities they were looking for,” he said. Destination Cleveland didn’t even attempt to pursue 27 other events because they knew they couldn’t compete, he added.
Those events could have meant a total of 363,000 hotel stays, 245,000 attendees and about $383.1 million in economic activity, he told the council. Spread over 9 years, this equates to a loss of approximately 7 events, 40,000 room nights and $42.5 million per year.
Gilbert did not ask for funding during the presentation, instead calling it “informational” and a way to gauge the board’s thoughts and concerns about the proposal. He expects the council to receive a formal request “soon”.
So far, the board appears receptive to the spending, having already offered to contribute $5 million in federal stimulus funds to move the project forward. The taxpayer-funded Cuyahoga County Convention Facilities Development Corporation (CCCFDC), which oversees the center, would also inject at least $5 million and sell the naming rights for $2 million.
That would leave $31 million to $34 million, which CCCFDC board member Gilbert said would have to be bonded by the county or covered by another source. It projects that the additional taxes generated by the renovations would cover half of the county’s annual debt payments, while the revenues would cover those of the CCCFDC.
The county has already recouped its money on the original project, he said, pointing to an estimated $1 billion in economic activity he says the facilities have infused into the community over its lifespan. That would be a $500 million return on investment above the $465 million construction cost, he said.
But the county also owes $306 million in debt service on those bonds through 2027, according to county figures.
Still, the numbers were encouraging for Councilwoman Nan Baker who, also factoring in the market value of the adjoining hotel, said an additional $46 million wouldn’t put the county ‘under water’ in terms of value. properties and what they could sell for. She encouraged renovations as a good investment.
“I think the public is just exhausted from the attempts of the Medical Mart and the attempts of the Global Center, and here we are a third time, but I really think we have to look at this as the expansion of the convention center that already exists, and that doesn’t seem like a risk to me here,” Baker said, calling it different from past attempts where companies tried to take over space and do something with it. “We need to give both attempts a proper burial and stop talking about it and definitely move forward on what this place can be…”
Councilman Jack Schron and others have also offered ideas to expand the scope of the project by considering adding skybridges to connect other hotels and capitalizing on the use of green space in the mall and other adjacent properties, such as the Cleveland Public Auditorium.
No one spoke out against the project at the meeting, but opposition is mounting. County Attorney Michael O’Malley and Republican county executive candidate Lee Weingart have both criticized the extra spending, especially as the county plans to spend $550 million to build a new jail and over a billion dollars for a new courthouse.
The board has not been given any timetable for when it must make a decision on funding, but at the last CCCFDC meeting two weeks ago, board members stressed that they must select a design builder by June, finalize designs and lock in a final cost by the end of the year, then begin construction in January 2023, if not sooner.
They are pushing a tight schedule, they said, to complete construction in time to host the American Society of Association Executives, the largest gathering of national convention and meeting planners. Gilbert said about 20% of ASAE attendees historically book events in the host city within five years, which could represent about $500 million in revenue.
“If we’re going to do it, let’s make it happen, so they see it,” he said.