CITY COMMISSION AGENDA ITEM

Department:	City Manager’s Office		Commission Meeting Date:  December 12, 2017
Staff Contact:	Diane Stoddard, Assistant City Manager
Recommendations/Options/Action Requested:
Receive presentation on proposed downtown conference center by the development group.  There is no action on this item because this is a work session.  The City Commission may provide general comments and general direction.
Executive Summary:		A development team led by TreanorHL will be making a presentation for the City Commission related to a proposed conference center and conference hotel located generally on the site of the former Journal-World production facility near 6^th and Massachusetts Streets.  Staff has received a general presentation from the group and the group requested the opportunity to present the concept to the City Commission.  In 2014, the City in cooperation with the University of Kansas, engaged Convention Sports & Leisure (CSL) to conduct a market analysis of a potential new conference center in Lawrence.  CSL provided the Phase 1 Market Analysis report to the City in 2015.  Phase 2 of the report, which included a more detailed site and cost analysis, was completed by CSL at the request of the World Company and was completed in May 2017.  Because the University was a contributor toward the first study, TreanorHL inquired with the University regarding willingness to participate in the development of a conference center.  The University provided its response in a letter dated July 2017. Staff thought it may be helpful for the City Commission to know how the public sector participated in the development of several well-known conference centers in the area.  The attached staff memo generally summarizes public sector participation in the conference centers located in Manhattan, Olathe, Overland Park and Lenexa. The CSL study does not appear to include the Lenexa Conference Center (Hyatt Place/Lenexa City Center) which opened in 2016.  Generally, public participation is required for development of conference centers.  Staff also asked the City’s bond  counsel, Gilmore & Bell, for issues to consider when contemplating a conference center project.  Gilmore & Bell provided a memorandum briefly summarizing these major issues.
Strategic Plan Critical Success Factor		A downtown conference center was not an initiative selected during the City’s strategic plan process in early 2017.  Such a project may have the potential to fit within one of the following critical success factors.  However, such a project should be taken in context with other projects and initiatives.  Safe, Healthy, and Welcoming Neighborhoods Collaborative Solutions Economic Growth and Security
Fiscal Impact (Amount/Source):		This project is not currently in the City’s budget of Capital Improvement Program.  The exact fiscal impact to the City as a result of conference center project is complex and would require further development of the proposal and analysis to more accurately estimate.  The feasibility analysis contemplates two different scenarios outlined on pages ES6-ES12 of the report. In both scenarios, the public sector would build and own the conference center.  Scenario 1 is a stand-alone conference center, with the public-sector building and owning the conference center, the private sector would manage the property via a contract, the public sector would cover all operating shortfalls and the conference center would be larger, built to full market supportable space.  Scenario 2 would be a public/private conference center with the public-sector building and owning the conference center space, a hotel partner operating the space via a lease agreement, no ongoing public sector operating subsidy and the center would be built to a reduced scope.   The study projects the annual public-sector costs relating to Scenario 1 at $1.4 million and Scenario 2 at approximately $700,000.  The study projects significant annual economic output benefits associated with both scenarios but notes that Scenario 2 has the greatest net new benefits-to-costs.
Attachments:		· Feasibility Analysis of a Potential New Conference Center in Lawrence, Kansas by Convention Sports & Leisure International (CSL) May 3, 2017

Reviewed By: (for CMO use only)

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