HomeMy WebLinkAboutBCC_Feasibility_Rprt_FINAL 6Feasibility Report
Central Group Companies
Hospitality Consulting Group
Leo A Daly
Langlas & Associates General Contractors
CTA Architects Engineers
Convention Center BOZEMAN MONTANA
Bozeman Convention Center
April 16, 2013
Mr. Daryl W. Schliem
Executive Director
Bozeman Tourism Business Improvement District
2000 Commerce Way
Bozeman, MT 59715
BOZEMAN CONVENTION CENTER | feasibility report |||| 1
Contents:
Market Analysis ....................................................................3
Market Study
Marketing Plan
Project Design ..................................................................91
Site
Building
Project Cost Estimate ............................................103
Narratives
Cost Estimate
2 |||| BOZEMAN CONVENTION CENTER | feasibility report
Market Analysis
Bozeman Convention Center
5315 Eureka Road • Excelsior, MN 55331
(612) 867-1649 • ssherf@hcgroup2.com
www.hcgroup2.com
Market Study for
Convention Center
BOZEMAN, MONTANA
April 2013
5315 Eureka Road • Excelsior, MN 55331
(612) 867-1649 • ssherf@hcgroup2.com
www.hcgroup2.com
Mr. Daryl W. Schliem Executive Director Bozeman Tourism Business Improvement District 2000 Commerce Way Bozeman, MT. 59715 Dear Mr. Schliem: The Hospitality Consulting Group is pleased to present the accompanying report entitled: "Market Study for a Convention Center, Bozeman, Montana" which has been prepared in accordance with our contract dated February 13, 2013. Incorporated within this report are a discussion of the local market conditions, an analysis of competitive convention/event centers, analysis of the potential market support for a convention center, facility recommendations, estimates of utilization for the recommended facilities, projections of revenue and expenses for the stabilized level of operations, and a quantification of the economic impact the center would have on the community. Our conclusions are based on information developed from research of the market, which included interviews with area businesses and groups, meeting planners, managers of similar facilities in the region, local hotel managers, and on our knowledge of the industry. The sources of information and bases of the estimates and assumptions are stated in the body of this report. Some assumptions inevitably will not materialize and unanticipated events and circumstances may occur; therefore, actual results will vary from our projections and the variations may be material. Further, we are not responsible for future marketing efforts and other management actions upon which actual results will depend.
Mr. Daryl Schliem Page 2
5315 Eureka Road • Excelsior, MN 55331
(612) 867-1649 • ssherf@hcgroup2.com
www.hcgroup2.com
We have no responsibility to update this report for events and circumstances occurring after the conclusion of our field work, which is concurrent with the report date shown below. However, we are available to discuss the necessity for revision in view of changes in the economic and market factors affecting the project Our report is intended solely for the information of the Bozeman Convention and Visitors Bureau and the Bozeman Tourism Improvement District for their use in development planning. It may also be used in support of efforts to attract a developer for the project and to obtain funding for it. Otherwise, neither the report nor its contents, nor any reference to our Firm may be referred to or quoted in any registration statement, sales brochure, prospectus, loan, appraisal or other agreement or document without our prior written consent. April 12, 2013 HOSPITALITY CONSULTING GROUP, INC.
MARKET STUDY FOR A CONVENTION CENTER
BOZEMAN, MONTANA
Letter of Transmittal CONTENTS
PAGE
1. INTRODUCTION 1 BACKGROUND .................................................................................................................................................. 1 SCOPE OF STUDY ............................................................................................................................................ 2 2. EXECUTIVE SUMMARY 4 3. LOCAL MARKET CONDITIONS 13
OVERVIEW ......................................................................................................................................................... 14 LOCATION ........................................................................................................................................................... 14 TRANSPORTATION ....................................................................................................................................... 14 DEMOGRAPHICS ............................................................................................................................................. 16 EMPLOYMENT ................................................................................................................................................. 20 AREA ATTRACTIONS AND AMENITIES ............................................................................................ 21 TOURISM ............................................................................................................................................................. 22 MONTANA STATE UNIVERSITY ............................................................................................................ 23 LOCAL MEETING AND EXHIBIT FACILITIES ................................................................................. 23 HOTEL SUPPLY ................................................................................................................................................ 26 HOTEL MARKET CHARACTERISTICS ................................................................................................ 28 CONVENTION AND VISITORS BUREAU............................................................................................ 30 LOCAL MARKET CONCLUSIONS ........................................................................................................... 30
4. COMPARABLE COMMUNITIES AND FACILITIES 31 MONTANA EVENT FACILITIESS ........................................................................................................... 31 REGIONAL CPONVENTION CENTERS ............................................................................................... 37 COMPARABLE COMMUNITY COMPARISONS ............................................................................... 39
MARKET STUDY FOR A CONVENTION CENTER
BOZEMAN. MONTANA
CONTENTS (Continued)
PAGE 5. MARKET DEMAND ANALYSIS 41 INDUSTRY CHARACTERISTICS .............................................................................................................. 41 SURVEY RESEARCH ...................................................................................................................................... 43 SUMMARY AND CONCLUSIONS ............................................................................................................ 49 COMPETITIVE STRENGTHS ..................................................................................................................... 49 OBSTACLES ........................................................................................................................................................ 50
6. FACILITY RECOMMENDATIONS 52 40 GENERAL ............................................................................................................................................................. 52 SITE REVIEW .................................................................................................................................................... 53 RECOMMENDED FACILITIES .................................................................................................................. 54 MARKETING ...................................................................................................................................................... 57 7. UTILIZATON ESTIMATES 59 ESTIMATED UTILIZATION ....................................................................................................................... 59 NEW BUSINESS ............................................................................................................................................... 61 OVERALL UTILIZATION ............................................................................................................................. 62
8. FINANCIAL PROJECTIONS 63 OPERATING REVENUE ............................................................................................................................... 63 DEPARTMENTAL EXPENSES ................................................................................................................. 64 OPERATING EXPENSES .............................................................................................................................. 66
MARKET STUDY FOR A CONVENTION CENTER
BOZEMAN. MONTANA
CONTENTS (Continued)
9. ECONOMIC IMPACT 70 CONSTRUCTION IMPACT .......................................................................................................................... 71 ATTENDEE EXPENDITURES ................................................................................................................... 71 EMPLOYMENT ................................................................................................................................................. 73 EMPLOYEE EARNINGS ................................................................................................................................ 73 PURCHASE OF GOODS AND SERVICES ............................................................................................. 73 SUMMARY ........................................................................................................................................................... 74
ADDENDUM: CONSULTANT’S QUALIFICATIONS
Bozeman Convention Center Study Introduction
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SECTION 1: INTRODUCTION BACKGROUND A community benefits in many ways from having a first class convention center available to its employers and citizens. Such facilities attract trade shows, consumer shows, conventions and entertainment events that bring outside dollars into the community, as well as enhance the area’s quality of life and exposure. They also provide a high quality venue for community events and social functions that improve the success of these events and result in increased civic pride. Many communities across the United States are finding that they lack sufficient event space to meet the needs of groups that want to sponsor a function, as well as the needs of local employers and residents. Through no fault of their own, these communities find themselves victims of an industry development trend. The economics of the hotel industry have become more focused on highly profitable room revenue, rather than restaurant and group function revenue. The early hotel chain model was a full service hotel that included a restaurant, lounge and meeting space. As the costs of constructing and operating these complicated hotels continued to increase, a new market niche opened up for the rooms-only economy hotels that could offer lower priced sleeping rooms because they did not have to deal with the expense of the public amenities. The resulting dilution of demand at the full service hotels began to challenge their profitability, making it difficult to maintain and/or renovate them as time passed. The next wave of hotel development brought limited service hotels that focused on the commercial traveler, providing new facilities with inexpensive amenities and competitive prices that are attractive to this highly sought after market segment. These hotels further diluted the demand for the traditional full service hotel, particularly in rural markets. The net result of hotel development trends is that very few new hotels with a restaurant and large amounts of meeting space have been
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constructed in the last 30 years, other than in larger cities. Thus, many communities are left with an inadequate amount of meeting space and older hotel facilities that are bordering on obsolescence. The Hospitality Consulting Group has been retained by the Bozeman Convention and Visitors Bureau and the Bozeman Tourism Improvement District to assess the market support for a convention center in the community and to recommend the size and type of facilities that would attract the most business to the community and be economically viable. The objectives of our study were to:
Identify the competitive position of the Bozeman community within the region, and the nature and extent of competing meeting facilities;
Determine the market support for an convention center facility, including the type, size, and frequency of events;
Recommend the type and size of facilities best suited to the market demand and Bozeman’s competitive position;
Estimate the level of utilization expected for the convention center’s recommended facilities;
Prepare financial projections for the operation of the recommended center; and,
Prepare an analysis of the project’s economic impact.
SCOPE OF WORK The research program for the convention center market study consisted of three basic components, as outlined below. 1. Research was conducted in the local market to identify existing facilities and community resources, to determine the potential utilization available from local sources and to assess the level of community support for a new meeting facility. 2. Representatives of state and national associations were surveyed to gain
Bozeman Convention Center Study Introduction
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insight into the size and range of facilities they require, their perceptions of Bozeman, and to explore the likelihood of holding an event here. 3. Information was obtained on existing meeting facilities in surrounding cities to determine the size, range of facilities available in the market, and their pricing structure to provide a basis for estimating the prospective levels of utilization which a new meetings center could achieve. Following the completion of the research program, recommendations for a building program suited to the needs of the market and estimates of stabilized utilization for such a facility were developed. Immediately following this introduction an executive summary is presented, which is intended to outline key findings and provide quick reference to conclusions regarding major issues. The body of the report presents a discussion of the findings from our research followed by recommendations of suitable facilities, estimates of utilization, and estimates of revenues and operating expenses for the center.
Bozeman Convention Center Executive Summary
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SECTION 2: EXECUTIVE SUMMARY This section describes, in brief, the findings and conclusions derived from our study of the market for a proposed convention center in Bozeman, Montana. This overview includes our review of the market area, and the competitive environment, our recommended facilities, estimates of the projected financial results of operation for the center, and an analysis of the economic impact the center would have on the community. The estimates and the information presented in this section are meant as a summary of, not a substitute for, the body of the report, which contains additional information and detail critical to a full understanding of the basis for the estimates made and the context within which they were formed.
LOCAL MARKET CONDITIONS
Our analysis found that Bozeman has a strong economy and is well positioned to achieve the population increase of more than 50 percent that is anticipated to occur over the next two decades. The area possesses truly impressive natural beauty and outdoor activities that make visitors’ stays memorable. Combined with a good infrastructure of restaurants, shopping and a large and diverse hotel supply of 1,785 franchised rooms, these positive attributes will help Bozeman to attract conventions and groups to its community. The hotels are estimated to operate at an annual occupancy of around 60 percent, so they do have excess capacity to accommodate convention business, except during the summer months when the hotels operate at capacity. The community lacks quality meeting space that is available for larger group functions. The existing space is located at the university which allows only limited outside use, at the fairgrounds where the space is outdated, or at three hotels where the largest ballroom is only 4,400 square feet. COMPARABLE FACILITIES The majority of the large state convention business is accommodated in Billings, as it is the largest city in the state and has the most hotel rooms. This
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activity is centered around the Holiday Inn which has 316 guest rooms and 50,000 square feet of public space. There is a total of more than 1,000 hotel rooms at this location, although many of them are in older economy properties. For the very large tradeshows and exhibitions, Metra Park has a large arena, a 77,000 square foot exhibit hall, and an 18,000 square foot meeting room. In Missoula, the student union at the University of Montana has the largest public space, supported by the Hilton Garden Inn with 13,000 square feet of space. Great Falls has the Mansfield Convention Center which has over 15,000 square feet of meeting space. Buildings at the fairgrounds are used for large exhibits. Butte has very limited meeting space. Helena’s meeting needs are met by the Double Tree Hotel which has 15,000 square feet of very flexible meeting space which includes a 4,600 square foot ballroom.
MARKET DEMAND ANALYSIS It is important to understand that different types of events have varying levels of economic impact on the community. Events that draw people from outside the local community generally have the greatest impact as their expenditures represent new dollars for the local economy. These visitors require lodging and may also make other purchase while in the community. Also, their exposure to Bozeman may encourage them to return for a leisure visit at a later date. Research was conducted among potential users of the proposed convention center including representatives of state associations, event promoters, local non-profit organizations, and area businesses. The purpose of the research was to gain qualitative information regarding market perceptions of Bozeman and to determine the size and range of the facilities required to accommodate various segments of meetings demand The major convention center market segments include conventions and tradeshows, conferences, consumer shows, community events, and local events. Conventions are considered "high impact" events since attendees
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normally stay several nights in the host city, which generates hotel sales. In addition to hotel expenditures, attendees purchase other goods and services while in the city such as food and beverage, entertainment, merchandise and gasoline. Consumer shows draw greater attendance but generate fewer hotel rooms. Local events originate from a variety of sources within the local market including local companies, civic organizations, cultural groups, social groups, private individuals and the management and marketing entities responsible for the proposed center itself. The results of our survey indicated that 90 percent of the potential state and regional convention business could be accommodated by a convention center with a total of at least 21,000 square feet of rentable space that includes10,000 square feet of exhibit space and a ballroom of at least 8,000 square feet. A combination of ballroom and exhibit space of 24,000 square feet should provide the capacity to accommodate all but the largest of the state conventions. For all but the largest groups, our research indicates that Bozeman should be able to compete effectively with Billings for all but the largest state groups. Bozeman is almost uniformly perceived as a desirable community and we believe that Bozeman will be able to capture more than its fair share of the state association business that rotates around the state. In support of this conclusion, we have identified the following competitive advantages possessed by Bozeman.
Central location within the state with interstate access
Air service superior to all other Montana cities except Billings
Supply of nearly 1,800 nationally franchised hotel rooms
A quaint and vibrant downtown shopping area
Variety of outdoor recreational activities
Extensive restaurant and retail development
Montana State University is an attractive draw for alumni and also a source for speakers
Scenic beauty
Proximity to Yellowstone National Park We have also identified some obstacles that could hinder the convention center’s ability to attract national groups:
Bozeman Convention Center Executive Summary
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The two hotels that presently serve as headquarters hotels are around 40 years old and are dated
Bozeman has a very low awareness among national and regional meeting planners and groups, other than as a vacation destination.
Event planners tend to avoid colder climates for fear of potential weather-related travel problems.
Montana lacks population density and is too isolated to draw well since almost all of the attendees would have to travel a long distance.
Limited non-stop air service The last three situations cannot be altered, and because of them, we have concluded that new convention facilities of any size are unlikely to improve the attractiveness of Bozeman as a meeting site for most national groups. It should, however, be able to attract certain special interest groups such as environmental and recreation organizations, as well as regional meetings of national organizations.
FACILITY RECOMMENDATIONS
In our survey, meeting planners indicated a strong preference for meeting facilities that are connected to a hotel. For the smaller groups that are available to Bozeman, there are several alternative communities around the state and the region that have convention hotels sufficient to accommodate both meeting and lodging needs. Therefore, a free-standing meeting facility without a hotel would be at a competitive disadvantage when bidding for these group events. Two sites have been suggested by CVB officials as potential locations for the convention center:
Although not specific, a site at the fairgrounds was suggested that would allow the new center to capitalize on the existing arena, exhibition buildings and parking on the grounds.
The second site suggested was the vacant land that exists to the north of the Holiday Inn, located within the area bounded by North 11th Avenue on the west and Baxter Lane on the north and east. The respondents to our survey unanimously indicated that adequate hotel rooms must be either connected to, or within a short walk from the
Bozeman Convention Center Executive Summary
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convention center. In our opinion, this requirement eliminates any location on the fairgrounds because there are no hotels in the immediate vicinity. Alternatively, there are five hotels with a total of 584 guest rooms surrounding the site that fronts on North 11th Avenue. This site also has good visibility and accessibility from the interstate. We conclude that this is a uniquely superior site for the development of the proposed convention center. We have prepared the following recommendations regarding the building program meant to meet the needs of the Bozeman community in the most cost effective manner. We recommend that a large meeting facility with approximately 35,000 square feet of rentable space be developed. While not specifically addressed in our recommendations, non-revenue space such as circulation, storage, rest rooms, and administrative offices typically require an area approximately equal to the amount of rentable space. Thus, the building will encompass a total of approximately 60,000 to 70,000 square feet. It is important for the space to be designed to allow for maximum flexibility for a variety of uses. The specific components of the public space include the following:
A large ballroom of approximately 16,000-square feet that can be divided into four smaller spaces.
Adequate pre-function space to meet group requirements for registration and coffee breaks exhibits. We concur with the floor plan developed by Leo A. Daly that provides 7,600 square feet that is designed in such a way as to be useable for exhibit space.
A junior ballroom of approximately 6,000 square feet that can be divided into three smaller spaces.
At least four breakout meeting rooms with a total of about 5,000 square feet.
A catering kitchen of 1,500 to 2,000 square feet to be used for banquet service. Included in this area is adequate cold storage.
High quality sound system and wireless internet throughout the building.
Bozeman Convention Center Executive Summary
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Paved parking for at least 300 vehicles. Since the majority of the center’s convention business will come from state associations whose attendees are expected to arrive by automobile rather than airplane, a large amount of parking will be required. The survey indicated a median group size of 200, while around 20% of the groups have attendance of 500 or more. Ample parking will also be required for the larger consumer shows. The recommended facilities and approximate space program are summarized in the table below.
UTILIZATION ESTIMATES Based upon an assessment of the market demand, we have estimated the likely utilization for the recommended facility on a stabilized basis. Like most other new convention facilities, the center will require up to five years to reach stabilization. It typically takes several years for the facility to achieve awareness throughout the region and many conventions book up to three years in advance. In order to achieve these estimated utilization levels, it will be critical for the center to be aggressively marketed by both management and the convention bureau.
Size Banquet Theater ClassroomComponent(Square Feet)Capacity Seating Seating ExhibitBallroom16,000 1200 1600 800 90Junior Ballroom 6,000 460 600 300 30Meeting Room 2,000 90 200 100 10Meeting Room 1,000 65 100 50 naMeeting Room 1,000 65 100 50 naMeeting Room 1,000 65 100 50 naPre-function Space 7,600 na na na 40Total Rentable Area 34,600
Source: Hospitality Consulting Group
Leo A. Daly Architects
Bozeman, MontanaRECOMMENDED CONVENTION CENTER FACILITIES
Bozeman Convention Center Executive Summary
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Most of the business described above represents new business brought to the community by the state-of–the-art convention facilities. A few of the conventions and conferences may transfer from one of Bozeman’s hotels to the center. However, for the most part the convention business will all be new. Similarly, a portion of the consumer shows, community events and other activities will transfer to the convention center from existing facilities in the market. To this extent, the planned center will compete with other local venues. Some level of competition is inevitable. However, the scope of assembly facilities at the convention center will allow many existing meetings and functions to expand as well as attract new events. This will result in a net gain for the community of Bozeman. Overall, the planned event center is estimated to accommodate approximately 126 events on a stabilized annual basis, expected to occur by the fifth year of operation. The events are estimated to occupy the center for a total of 219 days of the year. This represents a utilization of 60 percent which is in the midrange of acceptable utilization for a convention center. FINANCIAL PROJECTIONS The following pro forma operating statement has been prepared for the stabilized level of operations for the Bozeman Convention Center, assumed to occur in its fifth year.
Annual Average Average Total TotalEvent Events Attendance Event Days Event Days AttendanceConventions34 300 2.2 81 22,000Conferences10 400 1.8 18 7,000Community Events 20 1,000 2.0 40 20,000Consumer Shows 12 4,000 2.5 30 48,000Social Events/Meetings 50 400 1.0 50 20,000Annual Total 126 219 117,000
Source: Hospitality Consulting Group
BOZEMAN, MT
CONVENTION CENTER UTILIZATION ESTIMATES (STABILIZED)
Bozeman Convention Center Executive Summary
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Facility Rental Income $425,000 31.7%Building Services 126,000 9.4%Food Sales Commission 247,950 18.5%Beverage Revenue 543,000 40.5%Total Revenue 1,341,950 100.0%Departmental Expenses: Beverage Cost & Labor 228,603 42.1%Total Dept. Expense 228,603 42.1%Operating Expenses Wages & Benefits 435,600 32.5% Utilities 255,000 19.0% Repairs & Maintenance 54,000 4.0% Materials & Supplies 24,000 1.8% Marketing & Promotion 51,000 3.8% Insurance 34,000 2.5% Travel & other expense 22,100 1.6% Management Fee 67,098 5.0%Total Operating Expenses 942,798 70.3%Net Operating Profit $170,550 12.7%Note: The comments and assumptions contained in this report are an integral part of these estimated operating results.
PROPOSED BOZEMAN CONVENTION CENTER
ESTIMATED SCHEDULE OF OPERATING RESULTSBozeman, Montana
Bozeman Convention Center Executive Summary
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ECONOMIC IMPACT A community benefits in many ways from having a first class event center available. The largest benefit is the injection of new dollars into the local economy by the thousands of people that the center will draw to the Bozeman community. Such facilities are also able to host local community events and attract consumer shows and entertainment events that enhance the quality of life for area residents. There is also an intangible benefit that results from exposing Bozeman to so many people: a portion of them will return for a visit or vacation, or possibly relocation. These factors must be included in the decision to invest in and operate the convention center. The most visible factors are the impacts generated directly by the operation of the convention center. These are called direct impacts and include employment, wages, and purchases of goods and services by the facility and spending in the community by visitors to the center. The direct economic impact estimated to be generated by the new convention center is summarized below. One time benefits:
$4.2 million construction payroll resulting in 97 construction jobs
$14.8 million in construction materials and related services Annual recurring benefits:
Annual additional expenditures of a minimum of $2.8 million in the Bozeman community
13,000 more occupied hotel rooms
$92,000 increase in lodging tax receipts
$13,000 increase in hotel payments to the CVB
Creation of 55 new full time equivalent jobs at rhe center and with caterers
Wages of approximately $534,000
Purchase of more than $500,000 of goods and services by the convention center
Purchase of approximately $824,000 of food and beverage raw materials
Bozeman Convention Center Local Market Conditions
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SECTION 3: LOCAL MARKET CONDITIONS A convention center facility is only one factor, albeit a major one, in the ability of a community to attract conventions, exhibitions and events. A variety of other factors play important roles in determining the competitive position of the community and defining the types of events which can be most readily attracted and accommodated. Consequently, such factors affect not only the potential utilization of an event center, but also the feasible scale of such a facility. An initial consideration for a new convention center is the economic health of the community, in particular, its population trends, employment base and relative household wealth. Among the primary elements that enhance the ability of a community to attract outside events, such as conventions and consumer shows, are: 1. The transportation infrastructure and location of the community relative to other large cities; 2. The hotel supply that is available to support functions at the convention center; 3. The scope of the community’s hospitality infrastructure that includes restaurants, entertainment, shopping, and attractions; 4. The marketing of the community and its visitor resources; 5. The image and attractiveness of the community itself and its market size. These factors, as they relate to Bozeman, are addressed in the following chapter.
Bozeman Convention Center Local Market Conditions
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OVERVIEW
The characteristics of Bozeman’s economy, culture and environment surprises people that are not familiar with the community. They are best described in the economic profile compiled by the Prospera Business Network. “Located in southwestern Montana, the Gallatin and Park County region is one of the fastest growing economic areas in the northern Rocky Mountains. It has a varied economic base, an educated workforce, thriving technology and manufacturing industries, a major research university, plentiful cultural and outdoor recreation amenities, and a scenic natural landscape at the doorstep of Yellowstone National Park.” LOCATION The City of Bozeman is located in Gallatin County in central Montana. It is located 400 miles from the North Dakota border to the east and 300 miles from the Idaho border to the west. By car, Bozeman is about 290 miles south of Alberta, Canada. Interstate 90/94 bisects the state horizontally and four of the largest cities, Billings, Bozeman, Butte and Missoula, are located along this corridor. Population in Montana is concentrated mostly along the Interstate 90 corridor and the Interstate 15 corridor. Proximity to major population centers is an important factor in attracting meetings and conferences. However, the same proximity can, in some instances, reduce the availability of certain events, particularly entertainment and consumer show events, due to concerns about over-exposure and demand overlap.
TRANSPORTATION
Highways Interstate 90 provides excellent highway access to Bozeman and the community has three exits. I-90 is a major transcontinental route between Boston and Seattle. At Billings, I-90 joins with Interstate 94 that passes through North Dakota and connects with Fargo and Minneapolis- St. Paul. I-90 swings south and passes through South Dakota, connecting with Rapid City, Sioux Falls, Milwaukee and Chicago.
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Just west of Bozeman State Highway 101 extends south to the main entrance of Yellowstone National Park, about 95 miles from Bozeman. Air Service Much of south central Montana is served by Bozeman Yellowstone International Airport. It is the second only to the airport in Billings in total passengers, and exceeds Billings in the number of passengers brought into Montana. The size of the airport terminal was more than doubled with an expansion in 2011. The airport is serviced by six carriers: Delta, United, Frontier, US Airways, Alaska, and Allegiant. The April flight schedule shows the following daily flights: Chicago 1 Flight Denver 4 Flights Minneapolis 2 Flights Salt Lake City 4 Flights Seattle 2 Flights Las Vegas 2 Flights/week Phoenix 1 Flight/week Atlanta Service beginning in June Los Angeles Service beginning in June Newark Service beginning in June San Francisco Service beginning in June In 2012 there were approximately 434,000 enplanements and a similar number of deplanements. The number of passengers has increased by about 9% in each of the last two years. DEMOGRAPHICS The demographic and economic characteristics of the Bozeman market area will have a great influence on the potential success of the proposed convention center. The size of the market and its income characteristics will be an important determinant of the number of events and participation rate for community events, consumer shows, and social events. The economic strength and business composition will influence both the types and numbers of conferences and conventions attracted to the community,
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encouraged by the local membership in regional groups and in particular industries. Demographic data is provided in this report for Bozeman, Gallatin and Park Counties and for the five other surrounding counties that make up our defined primary market area.
Primary Market The primary market is the geographic area from which most of the hosts and many of the attendees for events at the center are expected to originate. The primary market area was determined based on Bozeman’s proximity to neighboring large cities. The seven county primary market area has a total 2012 population estimated to be 138,600 and Gallatin County is projected to be 92,614. As shown in the census data shown below, this area experienced a 25.6 percent increase in the number or residents in the last 12 years, which exceeds the state growth rate of 11.4 percent. Gallatin County experienced the highest growth rate in the state at an incredible 36 percent.
1990 2000 2012 1990-2000 2000-2012Gallatin County 50,463 67,831 92,614 34.4% 36.5%Park County 14,562 15,694 15,567 7.8% -0.8%Meagher County 1,819 1,932 1,924 6.2% -0.4%Sweet Grass County 3,154 3,609 3,605 14.4% -0.1%Broadwater County 3,318 4,385 5,756 32.2% 31.3%Jefferson County 7,939 10,049 11,401 26.6% 13.5%Madison County 5,989 6,851 7,733 14.4% 12.9%87,244 110,351 138,600 26.5% 25.6%State of Montana 799,065 902,195 1,005,141 12.9% 11.4%
Source: U.S.Census Bureau
POPULATION TRENDS
PRIMARY MARKET AREA Increase
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Bozeman Convention Center Local Market Conditions
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The City of Boseman has an estimated population of 38,025 according to U.S. Census 2011 estimates. The population of Gallatin County is projected to increase by roughly 53 percent by 3030, according to the Montana Department of Commerce and Economic Information Center. This increase would represent an additional 137,000 residents.
Median Household Income Household income is the after tax amount of disposable income that a household has available to spend. Median household income is the amount that divides the universe in half so that there is an equal number of households above and below the number. The median figure can provide some insight into residents’ capacity for spending on entertainment and their interest in attending consumer shows.
The median household income in Gallatin County is among the highest in the primary market area and 13 percent higher than the State.
Demographic Summary Other pertinent data, as well as information on the primary and secondary market area is provided below.
2010
Gallatin County $51,391Park County $41,232Meagher County $33,846Sweet Grass County $41,913Broadwater County $44,570Jefferson County $59,284Madison County $45,242State of Montana $45,324
MEDIAN HOUSEHOLD INCOME TRENDS
PRIMARY MARKET AREA
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EMPLOYMENT
Leisure and Hospitality is the largest single industry employer (behind government) in Gallatin County, employing nearly 15 percent of the workforce. This is indicative of the high level of tourism that exists in the Bozeman area and the infrastructure of hotels and restaurants that make up this industry.
Source: Bureau of Labor Statistics
Gallatin Park PrimaryBozemanCounty County Market MontanaPopulation(1):2012 38,025 92,614 15,567 138,600 997,667200027,686 67,831 15,694 110,351 902,195 % Increase 37.3% 36.5% -0.8% 25.6% 10.6%Median HH Income(1)$44,412 $51,391 $41,232 na 45,324Unemployment Rate [2/13] (3)4.3% 5.0% 7.0%na na
Source: 1. U.S. Census Bureau
Source: 2. Montana Department of Labor & Industry
Primary Market Area Demographic Summary
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A list of Gallatin County’s major employers follows below.
AREA ATTRACTIONS AND AMENITIES Montana is known for its vast beauty and variety of outdoor activities that include:
Skiing
Fly fishing
Hunting
Hiking
Whitewater rafting
Mountain biking
Snowmobiling
Horseback riding. According to the Montana Department of Commerce office of Tourism, over 10 million visitors come to Montana each year and spend nearly $2.8 billion. The general quality of life is high in the area and Bozeman is known as a pleasant place to visit, as confirmed by the responses from meeting planners and others we interviewed during the course of our study.
Company Product/Service EmployeesBozeman Deaconess Hospital Healthcare 1000+Montana State University Eductation 1000+Oracle Computer software 500+First Security Bank Financial services 100+Gibson Guitar Musical Instruments 100+Reach, Inc.Disabled adult services 100+Zoot Enterprises Financial services 100+
Source: Montana Department of Labor & Industry, Research & Analysis Bureau
GALLITIN COUNTY MAJOR EMPLOYERS
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TOURISM
Surrounded by the impressive beauty of mountains and streams, Bozeman is a popular tourism destination. It serves as the gateway to Yellowstone National Park, located less than a two hour drive to the south. Visitors frequently headquarter in Bozeman from which they take day trips to activities in the area. Local and area attractions that are of interest to tourists and convention attendees are discussed below. Performing Arts The performing arts community is active in Bozeman. Two theater companies and an opera company perform throughout the year. The newly refurbished Ellen Theater recently opened as a movie and performing arts venue. Constructed in the early 1900s and lavishly designed playhouse has great historical significance with a long list of famous performers of the past.
Museums Bozeman’s museums are popular with local residents and visitors alike, and are of a quality that make them tourist destinations. The most popular museums are:
Museum of the Rockies
Gallatin Pioneer Museum
American Computer Museum
Children’s Museum
Big Sky Resort This popular report is located approximately 50 miles south of the Bozeman and 18 miles from Yellowstone National Park. The resort is consistently ranked in the top 10 best resorts in North America. It features two ski hills with a combined total of more than 5,000 skiable acres. There are a number of shops, restaurants and nightspots in the village and the area has 2,000 rooms located in hotels, condominiums and cabins. Other amenities include a golf course, a spa. Outside of the ski season, the area offers world class trout fishing, white water rafting, hiking, and horseback riding.
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Bridger Bowl The Bridger Bowl ski area is located 16 miles north of Bozeman. It is a popular destination for people vacationing in Bozeman., as well as residents. This developing recreational amenity has no lodging accommodations so skiers return to Bozeman in the evening. The hill has eight chairlifts that provide access to 2,000 skiable acres. Due to its proximity to Bozeman, ski outings could easily be arranged for convention attendees.
MONTANA STATE UNIVERSITY Montana State University –Bozeman is one of four branches of the university. It offers degrees through eight colleges student enrollment is 8,763 undergraduates and 5,897 graduate students. The university competes in the NCAA Division I Big Sky Conference. MSU-Bozeman is known for its hi-tech innovation activities and in 2011 was awarded $102 million in research funding for study in biomedical sciences, energy and the environment. University alumni are very loyal and are reported to return to campus frequently. This level of interest could help the draw of the convention center for consumer shows and for booking conventions and conferences. The University would also be a good source of speakers for events at the center.
LOCAL MEETING AND EXHIBIT FACILITIES The existing meeting facilities in Bozeman have an impact on both the scale and the eventual utilization of the planned convention center. The building program for the center must take into consideration the existing facilities to avoid needless and costly duplication. The eventual utilization of the facility will be affected not only by the avoidance of such duplication, but by the availability of existing facilities both from a competitive standpoint and as supplemental meeting and/or banquet space for events which have need for space in addition to the proposed center. Existing facilities in Bozeman include the following:
Montana State University – The University has two large venues in which it hosts various events.
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The Strand Union Building has a total of 16,700 square feet of meeting space consisting of a 13,000 square foot ballroom and 10 meeting rooms that total 4,700 square feet. The ballroom, which can seat 476 for a banquet, is the largest in town and therefore is used for fundraisers and other large food events. It is also used for speakers and meetings. The facility is only available to the public on limited occasions while school is in session, so most of its public activity occurs during the summer months. The ballroom rents for $1,440 per day or $720 per half day. The Worthington Arena is the University’s field house. It can seat 7,250 for sporting events and concerts. The floor area covers 50,000 square feet and was reported to host four or five tradeshows and consumer shows annually. Like the student union, availability of this venue is limited as users must work around the university athletic schedule, and the normal schedule can be extended if a team makes the playoffs in its sports. Gallatin County Fairgrounds – Located on the northern side of Bozeman, the fairgrounds hosts the county fair during the third week in July and makes its facilities available to the public to rent for functions the rest of the year. A 5% “improvement” fee is added to all rentals. The Indoor Arena has 10,440 square feet with a dirt floor and can seat 1,200 in bleacher seating. It rents for $426 per day on weekends and $277 per day during the week The Sale Pavilion has bleacher seating around a raised platform and is used for concerts, theater productions and animal shows. It has a capacity of 350 people and rents for $332 on weekends and $216 during the week. The four Exhibit Buildings are lined up adjacent to each other and are used for consumer shows such as gun and antique shows, tradeshows, and for retail warehouse sales. These older and modestly appointed buildings have floor areas of 7,000, 6,000, 4,000, and 2,400 square feet. The three larger buildings rent for $387 to $508 on weekends and $252 to $331during the week. Promoters expressed dissatisfaction with these facilities, mentioning their low quality interiors, poor lighting, and lack of
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public address system. Promoters do like the large amount of convenient parking that is adjacent to the buildings. The Haynes Pavilion is an open air facility used for consumer shows, fund raisers, concerts, dances, animal shows, and farmers markets. It is only available April through October as it is used as a skating rink during the winter. The 25,000 square foot space rents for $847 on weekends and $541 on weekdays. Holiday Inn – This 177-room property is the largest hotel in Bozeman and its facilities include a restaurant and bar. It has a total of 15,000 square feet of meeting space that consists of a 3,600 square foot divisible ballroom that is divisible and four breakout rooms. The ballroom has a banquet capacity of 350 and can seat up to 450 people theater-style for a meeting.
Best Western Gran Tree – This 120-room hotel is located adjacent to the Holiday Inn and also has a large amount of meeting space, a restaurant and a lounge. Its 11,000 square feet of meeting space consists of a 4,400 square foot divisible ballroom and 3 breakout rooms with a total of 2,000 square feet. The ballroom has a banquet capacity of 400 and can seat up to __ people theater-style for a meeting. Hilton Garden Inn – This 122-room property is one of the newest hotels in the market and its facilities are the highest quality. Meeting space consists of a 3,375 square foot ballroom that is divisible into three sections, and 1small boardroom. The ballroom has a banquet capacity of 220 and can seat up to 300 theater style for a meeting.
Big Sky Resort –This popular report is located 50 miles south of the Bozeman airport near Yellowstone National Park. The resort is consistently ranked in the top 10 best resorts in North America. It features two ski hills with a combined total of more than 5,000 skiable acres. Other amenities include a golf course, a spa, and retail shops, restaurants and nightspots in the village. There are some 750 lodging units on the ski hill and another 1,250 in the village. The ski resort has constructed convention facilities and successfully markets them to professional continuing education groups as well as conferences and conventions. The Yellowstone Conference Center has nearly 14,000 square feet of public space that includes an 8,000 square foot divisible
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ballroom and four breakout rooms. The ability to ski a half day after a meeting or stay a day or two afterwards has proven to be a strong incentive in capturing this business. In the first quarter of this year, 16 mostly medical education events were held at Big Sky covering 80 event days. Meeting attendees that don’t drive to the resort, must either rent a car or catch a shuttle from the airport to the resort. Even with this inconvenience, a meeting planner familiar with this business remarked that it would be difficult, but not impossible, for Bozeman to capture a portion of this business. The key characteristics of the Bozeman area meeting facilities are summarized in the following table.
HOTEL SUPPLY A critical factor considered by convention planners in their site selection process is the number of hotel rooms that are either connected to or within easy walking distance of the meeting facility. The necessity of using public or private transportation in order to move delegates from hotels to meeting facilities translates into increased cost and inconvenience, but is acceptable to very large groups that choose to meet in a community that does not have a convention hotel of sufficient size. Respondents to our survey unanimously
Total MeetingFacilityMeetingBallroomExhibitTheaterRooms Banquet MeetingStrand Union (MSU)18,000 sf 13,000 sf -190 7 476 1,300Worthington Arena (MSU)--50,000 sf - --Gallatin County Fairgrounds: Exhibit Building 1 7,000 sf Exhibit Building 2 6,000 sf Exhibit Building 3 4,000 sf Exhibit Building 4 2,400 sf Haynes Pavilion 24,750 sf 24,750 sfHoliday Inn 15,000 sf 3600 sf -4 350 450Best Western Gran Tree 11,000 sf 4,400 sf 2,700 sf 3 400 485Hilton Garden Inn 3,800 sf 3,400 sf 1 220 300Yellowstone Conf. Ctr.13,900 sf 8,000 sf -120 4 750 800
BOZEMAN AREA MEETING FACILITIES Capacity
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required a location that has hotel rooms directly connected or immediately adjacent to the meeting facilities. There are 19 franchised hotels with a total of 1,785 rooms located within Bozeman and nearby Belgrade. There are an additional 11 independent hotels with a total of 502 rooms. For purposes of evaluating the lodging capacity in a community, we focus on the franchised properties as they are the ones that visitors, unfamiliar with the area hotels, are most likely to book. The supply of hotels represents a broad range of facilities and room rates, which will provide delegates with a number of lodging choices. The three full service hotels, which delegates usually prefer because of their convenient food and beverage, make up almost one fourth of the available franchised room supply. We believe the supply of hotels to be sufficient to support the proposed convention center at the recommended size. The Bozeman hotel supply is summarized in the following table.
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Source: Smith Travel Research
HOTEL MARKET CHARACTERISTICS In order to assess the recent business trends of the local Bozeman lodging market, we analyzed lodging tax data to provide a picture of total hotel sales over recent years. Our analysis found that lodging tax revenue, and thus total room revenue, increased by 1% in 2008, declined by 5% percent in 2009, and then recovered quickly with a 13% increase in 2010 followed by an 8% increase in 2011. For the first three quarters of 2012, lodging revenues are up 11% over the same period in 2011. Our research included discussions with the general managers of several of the leading hotels, regarding demand patterns, pricing structures and performance of the local market. Information obtained from these discussions was correlated with lodging tax data to arrive at estimates of the
Service Date NumberHotelTypeOpenedof RoomsFranchised Hotels: Holiday Inn Midscale full service 1969 177 Hilton Garden Inn Upscale full service 2005 123 C'mon Inn Economy 2006 125 Comfort Inn Midscale limited service 1992 121 Best Western Plus Gran Tree Midscale full service 1974 120 Residence Inn Economy 2007 115 Days Inn & Suites Economy 1978 114 Super 8 Economy 1980 107 Homewood Suites Midscale limited service 2010 102 Holiday Inn Express & Suites Midscale limited service 1999 97 Comfort Suites Economy U/C 80 Super 8 Airport Economy 1985 72 Hampton Inn Midscale limited service 1998 70 Quality Inn Belgrade Midscale limited service 1995 67 LaQuinta Inn & Suites Belgrade Economy 2001 65 Microtel Inn & Suites Economy 2001 61 Fairfield Inn Midscale limited service 1992 57 Roadway Inn Economy 1994 56 LaQuinta Inn & Suites Economy 2010 561785
BOZEMAN HOTEL SUPPLY
FRANCHISED HOTELS
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hotel market performance. Based on our analysis, we estimate that the Bozeman hotel market experiences an annual occupancy of around 60 percent. If this demand occurred equally throughout the year, there would be sufficient excess capacity to accommodate the new demand from convention center attendees. However, demand in this market peaks dramatically during the summer due to the influx of large amounts of leisure/tourist demand. In fact, we were told that the market reaches capacity consistently during the summer, causing business to be turned away from the market. In order to evaluate the hotel supply’s available capacity throughout the year, we analyzed the seasonality of business.
Seasonality
Area hotels achieve their highest occupancy levels during the summer months of June, July and August, when tourism and leisure travel peaks. The quarterly lodging demand pattern, as demonstrated by lodging tax receipts, is exhibited in the graph below.
Based on our review of lodging tax receipts, we estimate the market achieves an average occupancy of 93 percent during the summer. While this leaves little
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room for a large influx of new group demand from the convention center, the situation is not critical because association and convention demand is lowest during these same months. CONVENTION AND VISITORS BUREAU The success of the planned Bozeman convention center in attracting conventions, meetings and other events from outside the area will depend largely upon the efforts of the Convention and Visitors Bureau. Facility management will need to work closely with the Bureau to allocate their respective marketing resources in the most effective manner. Typically, the convention and visitors bureau takes a lead role in marketing the community and its public assembly space to events outside the area while the convention center places primary emphasis on local marketing and filling gaps in the schedule. Consequently, the convention and visitors bureau must compete on a regular basis with similar organizations from other cities. While dollars available are not the sole factor in determining marketing success, adequate funding, comparable to the communities which compete for the same business, will be necessary to compete effectively.
LOCAL MARKET CONCLUSIONS
Our analysis found that Bozeman has a strong economy and is well positioned to achieve the large growth that is anticipated to occur over the next two decades. The area possesses truly impressive natural beauty and outdoor activities that make visitors’ stays memorable. Combined with the infrastructure of restaurants, shopping and a large and diverse hotel supply, these positive attributes will help Bozeman to attract conventions and groups to its community. There is a lack of quality meeting space that is available for larger group functions. The existing space is located at the university which allows only limited outside use, at the fairgrounds where the space is outdated, or at three hotels where the largest ballroom is only 4,400 square feet. Bozeman has a large and diverse supply of hotels that have excess capacity to accommodate convention business, except during the summer months when local hotels operate at capacity.
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SECTION 4: COMPARABLE COMMUNITIES AND FACILITIES
MONTANA EVENT FACILITIES
Bozeman will compete with other large Montana cities and resorts for state association and government meetings and continuing education functions. We have identified the large meeting and event facilities that exist within the state and have provided brief descriptions of their facilities and pricing structure. These existing facilities provide useful insight into the types and sizes of spaces that other communities have constructed to meet their needs, as well as an understanding of the alternatives that the Bozeman facility would have to bid against for these kinds of groups. Billings, MT Billings is the largest city in the state with a population of 106,000 and, with 4,000 hotel rooms, has the largest supply of lodging accommodations. Its major meeting venues include the following.
Metra Park – This public facility opened in 1975 near the county fairgrounds. It is owned by the City of Billings and Yellowstone County. The arena component was damaged by a tornado in 2010 which led to a $27 million renovation. The complex consists of the 30,000 square foot Rimrock Auto arena that can seat up to 12,000 for a concert. The venue hosts sporting events and tournaments, concerts, consumer shows, rodeos, and similar events. Another component is the 77,400 square foot Expo Center that is used for large exhibitions and ticketed events. The facility consists of two large rooms: a 63,000 square foot large hall that rents for $3,250/day and a 14,400 square foot hall that rents for $1,000/day. The entire hall rents for $4,000/day.
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The Montana Pavilion is the third main component of the Park. The 28,800 square foot facility has two large rooms: an 18,000 square foot space that rents for $1,400/day and a 10,800 square foot space that rents for $1,000/day. The entire facility rents for $2,000/day. Much of the state’s convention business is centered around the Holiday Inn Grand Montana and the adjacent Billings Hotel and Convention Center. Both hotels have large amounts of public function space and are supported by five other hotels that are within easy walking distance. Combined there are over 1,000 hotel rooms at this location, however 400 of these rooms are in older economy hotels.
Holiday Inn Grand Montana– With 50,000 square feet of meeting space, this 316-room hotel is the largest in the state. The older, two-story portion of the hotel opened in 1972 and a newer midrise atrium building opened in 1986. Its 10,200 square foot ballroom has a banquet capacity of 4,670 and can seat over 1,000 for a meeting. Other facilities include the 29,000 square foot Montana Convention Center that can seat 2,000 for a banquet.
Billings Hotel and Convention Center – This older 235- room hotel, located adjacent to the Holiday Inn Grand Montana, has 23,000 square feet of meeting space. Its largest space, a 9,000 square foot ballroom, has a banquet capacity of 1,400. It has a smaller 2,000 square foot meeting room and 12 other breakout rooms.
Crowne Plaza Hotel – This 289-room hotel is a midrise structure located in downtown Billings. It features a restaurant and lounge and has 16,000 square feet of meeting space. Its 6,800 square foot ballroom can seat up to 520 for a banquet and 760 for a meeting. It also has a 2,000 square foot junior ballroom and 12 breakout rooms that total about 7,000 square feet. Northern Hotel – This 160-room older hotel is also located downtown and is just about to open after a complete renovation. It features a restaurant, lounge and 12,100 square feet of meeting space. It will have a 7,000 square foot ballroom and six breakout rooms that will total approximately 5,000 square feet.
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Missoula, MT Missoula is located on Interstate 90 on the western side of the state. With a population of nearly 67,000, it is the second largest city. It is served by four airlines that offer direct flights to Denver, Seattle, Salt Lake City, and Minneapolis on a regular basis. The University of Montana is located here and it has the largest assembly space in the community. There are also three hotels with large amounts of public space.
University of Montana – The Adams Center on the university campus hosts sporting events, concerts, and other large assembly functions. It represents over 44,000 square feet of exhibition space. The University Center student union has 17 meeting rooms for a total of 37,000 square feet. The largest is a 10,400 square foot ballroom that can serve 700 for a banquet. Hilton Garden Inn – This 146 room hotel opened in 2006 and features 22,000 square feet of meeting space. Its ballroom has over 13,000 square feet and is supported by three breakout rooms. This is a popular meetings destination and several of our survey respondents shared very favorable comments about it.
Holiday Inn – This 200 room hotel is located in the downtown and opened in 1983. It has a total of 15,000 square feet of meeting space, which includes a 5,500 square foot ballroom.
Doubletree Hotel – This older 171 room hotel opened in 1973 and has 8,100 square feet of meeting space which includes a 6,300 square foot ballroom. Great Falls, MT Great Falls is located in central Montana north of the I-90 corridor. It has a population of nearly 59,000 which makes it the third largest city. The city has two venues with large public space and one older convention hotel.
The Mansfield Convention Center features a historic theater with 1,782 seats that is attached to a convention center with nearly 25,000 square feet of rentable space. The largest room in the center has 15,300 square
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feet and can seat 688 for banquets. There are three breakout rooms with a total of 9,600 square feet. The center is located in the downtown and the nearest hotel is a 105 room Quality Inn two blocks from the center.
Montana Expo Park is the state fairgrounds which makes its buildings available for public use. Its facilities include a 5,300 square foot arena and a 15,000 square foot exhibit hall. It also has large event space available in 3 older buildings.
Best Western Plus Heritage Inn - This 231 room hotel opened in 1972 and is the largest convention hotel in Great Falls. It has approximately 18,000 square feet of public function space that includes an 11,000 square foot ballroom that can seat 800 for a banquet. Butte, MT Butte is located along Interstate 90, about 90 miles west of Bozeman. It has a population of over 34,000, making it the fifth largest city in Montana. It does not have a convention center so meetings and social functions are held in several hotels that have public space. The two hotels having the most function space are described below. Copper King Hotel & Convention Center – This 150-room historic hotel has 15,000 square feet of public space that is divided nearly equally between a ballroom and a convention center that can be divided into six rooms. The hotel is undergoing renovation. Quality Inn & Suites has 129 guest rooms and a total of nearly 10,000 square feet of public space. The largest space has 4,300 square feet and the remainder of the space exists in five meeting rooms.
Helena, MT Helena is the state capital and is located on the western side of the state on Interstate 15, about 55 miles north of Butte. It has a population of 28,200. Most of its convention business is related to state government and is accommodated mainly in three hotels. The supply of franchised hotels in Helena totals 1,400 guest rooms.
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Red Lion Colonial Hotel – This older 149-room hotel is located adjacent to the capitol and has the largest amount of meeting space with 15,000 square feet. It features two ballrooms of 4,600 and 3,400 square feet, and 8 other meeting rooms. Best Western Premier Great Northern Hotel – This 100-room hotel opened in 2003. It has 8,000 square feet of public space that consist of a 7,000 square foot ballroom and a 1,000 square foot meeting room. An additional three small boardrooms are available.
Holiday Inn Downtown Conference Center – This older 71 room hotel has 6,000 square feet of meeting space that includes a 2,200 square foot ballroom.
Pertinent facts for the largest facility in each city are summarized in the table below.
Meeting TotalLargest Facility Arena (Seats)Ballroom Exhibit Rooms MeetingBillings: Metra Park 10,000-12,000 18,000/10,800 sf 77400 sf -106,200 sf Holiday Inn 10,200 sf 29000 sf 8 50,000 sfMissoula: Adams Center 5,500-7,500 -44000 sf -44,000sf University Center 10,400 sf -17 3,7000 sf Hilton Garden Inn 13,000 sf -3 22,000 sfGreat Falls: Mansfield Convention Center 1,800 15,300 sf -3 25,000 sf Montana Expo Park 5,000 -15,000 sf -15,000 sf Best Western Plus Heritage Inn 11,000 sf -3 18,000 sfButte: Copper King Hotel & Covention Ctr 7,500 sf 7,500 sf -15,000 sfHelena: Red Lion Colonial Hotel 4,600/3,400 sf -8 15,000 sf
OTHER MONTANA CITIES CONVENTION FACILITIES
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REGIONAL CONVENTION CENTERS We believe that the proposed convention center will be able to capture some convention and conference business from the Pacific Northwest region of the country. Most associations define this region to include Washington, Oregon, Idaho, Montana, and Alaska. In order to assess the nature of the facilities in these states that Bozeman would be competing with, we developed an inventory of potentially competitive facilities within 375 miles of Bozeman. Their locations are shown on the following map and their facilities are summarized below.
Casper Events Center – Casper, Wyoming. This arena is owned by the city and hosts athletic events, family shows, concerts, community events, rodeos, and trade shows. The arena floor covers 28,200 square feet and can seat 10,000 for a concert. There are also four meeting/function rooms; one has a capacity of 200 while the other three each have a capacity of 50. The center averages 200 event days a year and last year it hosted 21 conventions/tradeshows and 15 concerts. The arena rents for a minimum of $1,500/day for non-admission events. The small functions rooms rent for $150/day and $50/day. Boise Centre – Boise, Idaho. This events center is owned by the city and has become a popular venue for local events, as well as conventions, tradeshows, and exhibitions. It reports an average of 300 use days annually. The center has 50,000 square feet of rentable space that includes a 25,000 square foot ballroom that can serve 800 for a banquet, a 375 seat theater and a variety of meeting rooms that can produce 20 different meeting room combinations. There are 800 hotel rooms within three blocks of the center.
Spokane Convention Center – Spokane, Washington. This relatively new facility has more than 140,000 square feet of rentable space. Its space consists of a 100,000 square foot exhibition hall, a 25,300 square foot ballroom, and 8 divisible meeting rooms with a total of 15,100 square feet. Also included is a 2,700 seat performing arts theater.
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Salt Palace Convention Center – Salt Lake City, Utah. This major convention facility has a total of 679,000 square feet of meeting and exhibit space. The center has a 45,000 square foot ballroom and the exhibit hall encompasses 130,000 square feet. There are 1,000 parking spaces beneath the center. COMPARABLE COMMUNITY COMPARISONS Additional insights regarding facility sizing can be gained by reviewing convention and event facilities that are operating in similar markets throughout the country. We selected communities that were located within the central part of the country (avoiding either coast) and were distant from a major metropolitan area. The size of a community is a major factor affecting the utilization of an events center. More residents generate a larger number of social events and provide a larger audience for entertainment and consumer shows. The level of household income influences the success of consumer shows. The level of commercial activity and related meetings is generally related to the size of the area population. The table below presents a summary of the selected comparable facilities and markets evaluated as a part of this analysis.
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The level of median household income for Bozeman compares favorably with most of the comparable communities. With respect to population, there does not appear to be a direct correlation with size of convention center. This is understandable because of the difference in such variables as economy, funding sources, presence of alternative venues, proximity to other convention centers etc. It is worth noting that none of these communities with populations of 1 million of less have convention centers with more than 100,000 square feet.
MSA Convention
Location Population Center (sq. ft.)Bozeman, MT 92,614Mankato, MN 98,020 45,000Wenatchee, WA 113,017 42,500Wausau, WI 134,735 75,000LaCrosse, WI 135,298 63,000Rapid City, SD 138,738 57,000Iowa City, IA 158,231 60,000Joplin, MO 174,327 50,000St. George, UT 186,000 68,600Watertown, SD 223,000 23,500Topeka, KS 234,566 68,000Grand Junction, CO 256,000 20,700Eugene, OR 354,552 30,000Lansing, MI 465,732 97,000Madison, WI 620,778 25,000Boise, ID 637,896 51,100Sioux City, IA 656,000 37,900Ardmore,OK 1,025,000 44,600New Bern, NC 1,093,000 16,200
Comparable Facilities and Communities
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SECTION 5: MARKET DEMAND ANALYSIS
It is important to understand that different types of events have varying levels of economic impact on the community. Events that draw people from outside the local community generally have the greatest impact as their expenditures represent new dollars for the local economy. These visitors require lodging and may also make other purchase while in the community. Also, their exposure to Bozeman may encourage them to return for a leisure visit at a later date. Research was conducted among potential users of the proposed convention center including representatives of state associations, event promoters, local non-profit organizations, and area businesses. The purpose of the research was to gain primarily qualitative information regarding market perceptions of Bozeman and to determine the size and range of the facilities required to accommodate various segments of meetings demand. The following section presents key characteristics of various user groups which will have an impact upon the scale and the potential utilization of the planned center. INDUSTRY CHARACTERISTICS
Convention centers host a variety of events that generally involve face-to-face communication of some sort, information gathering, or entertainment. Given the wide variety of uses, the flexibility of a center’s public space is a major factor in the amount of utilization it receives. The major convention center market segments are described below. Conventions/Tradeshows Associations, the primary component of the convention market, are entities organized within the framework of a particular industry, industry group, profession, social theme or fraternal affiliation. Conventions are privately held meetings of professional groups and associations and commonly take place in hotels or convention centers. These meetings are attended by association
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members and/or affiliates wishing to share ideas. The convention can consist of a single meeting or a number of concurrent meetings during the entire event period. Conventions sometimes feature extensive exhibits as well. Conventions with or without exhibits are considered "high impact" events since attendees normally stay several nights in the host city, which generates hotel sales. In addition to hotel expenditures, attendees purchase other goods and services while in the city such as food and beverage, entertainment, merchandise and gasoline.
Conferences
Conferences are meetings and continuing education programs held by professional associations, businesses, and government agencies. These events typically do not have exhibits associated with them and are less likely to have banquets. Consumer Shows Consumer shows are open to the public in contrast to tradeshows which restrict attendance to persons having certain qualifications, typically membership in the sponsoring organization, occupation or industry. Event promoters bring a variety of functions to a community, including consumer/trade shows, family shows, concerts, and entertainers. The type of event and frequency is influenced by the size of the area population and by the suitability, size and availability of a venue. Examples of consumer shows presently being held in Bozeman are the Women’s Expo, Home & Garden Show, Gun Show, Farm & Ranch Show, Gem & Mineral Show, and Antique Show. The majority of the consumer shows are held at the fairgrounds, either in the four exhibit buildings, the arena or the pavilion, or at the student union or the arena on the MSU campus. Local Users Events will originate from a variety of sources within the local market including local companies, civic organizations, cultural groups, social groups, private individuals and the management and marketing entities responsible for the proposed center itself. Examples of community events include festivals, warehouse sales, and charitable garage sales. Other categories of local use include fundraisers, recognition banquets, receptions, public meetings, and meetings of local organizations.
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A focus toward major economic impact events such as conventions notwithstanding, a primary function of the proposed center is to meet the public assembly needs within the local community. The availability of a high quality venue encourages more civic events, provides appropriate assembly facilities needed by area employers and social events, and generally improves community pride. Local usage is difficult to characterize for several reasons, including the number of different potential sources, variety of types of events, price sensitivity and the impact of booking policies (both priorities and discounts) at the center. Much of the future utilization will represent expansion of existing events, due both to more available space and to more successful events, as well as new events which cannot currently be accommodated in the existing venues. To this extent, potential local users have difficulty determining their eventual needs until the facility is operational. SURVEY RESEARCH In order to assess the potential for the proposed convention center, we surveyed local organizations, Montana state associations, planners for regional/national conventions, and consumer show promoters. The objectives of this research were the following:
Identify pertinent event characteristics, including attendance, space needs, length of event, and time of year functions are held;
Identify lodging requirements for the total number of hotel rooms required by attendees and the minimum number of rooms available in a headquarters hotel;
Identify insights into the familiarity with Bozeman that planners possess and their impressions;
Identify perceived constraints and obstacles that could limit business at the convention center; and
Explore the likelihood that Bozeman would be considered for a future event.
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The survey consisted of telephone calls to 65 state associations, electronic surveys sent to 95 regional/national planners, and written surveys mailed to 38 Montana non-profit organizations. We received responses back from planners who represent 50 annual state meetings and 50 national meetings. The following is a summary of the survey responses.
Familiarity with Bozeman
One of the initial questions posed to respondents had to do with their familiarity with Bozeman. Almost 73% of the state association respondents reported that they had held a function in Bozeman in the past. Some of these were board meetings or other smaller groups, however, several were conventions. There was a lack of awareness among the national planners, other than those who had vacationed there. This is understandable as there are presently no convention facilities to attract attention when planners conduct destination searches. The responses of national planners and association executives consistently raised the same obstacles that would prevent them from considering Bozeman for a national event. The theme of their comments had to do with the limited air service to Bozeman and the cold weather. Due to these factors, little interest was shown in holding a national convention in Bozeman, however a few indicated that it would be a consideration for a regional event. These issues will be explained in greater detail later in this report. However, in order to not skew the results and interpretation of our survey, the following analysis focuses mostly on the state association responses. Number of Meetings Held
The state association respondents were asked how many meetings they hold annually. 45% of the associations hold just one annual meeting, 45% have between 2 and 4 meetings annually, and 10% do not hold any meetings. Perceptions of Bozeman
Since the proposed convention center will have to capture state association demand from existing venues, respondents were asked about their perceptions of Bozeman. In general, the state associations were quite complementary about the Bozeman community and its amenities and were very enthusiastic about having a convention facility in Bozeman. Several mentioned that they hold
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functions in Billings only because no other city can accommodate their space needs. Many respondents said they like to rotate around the state and would welcome another meeting site. Relevant comments obtained during our interviews included:
“great town, fairly central and easy to get to by car”
“great place! Centrally located, fun town.”
“Close to the national park so people sometimes add on a couple days and make a family vacation of it.”
“Just get it done please!”
“the right facilities would own the Montana market”
Likelihood of Holding an Event in Bozeman All of the Respondents were asked about the likelihood of their organization holding a convention or conference in Bozeman if adequate facilities existed. Of the state associations, 77% indicated they would be likely or very likely to consider Bozeman. A much smaller percentage of national planners, around 5%, indicated Bozeman would be a possibility for a future meeting site. We conclude that this shows a very high level of interest among state associations and a relatively low level of interest among national groups. There were no negative reasons given by state associations for not convening in Bozeman. A number of respondents indicated that the organization’s president selects the convention location. The chief reason given by national groups were related to weather and location. Several indicated they only met in warm weather locations to encourage participation and avoid weather-related travel problems, or only on the east or west coast. Limited air service and high cost was mentioned. One national respondent indicated there are not enough upscale hotels in Bozeman. Season Meeting Held For those groups showing a positive interest in the new convention center in Bozeman nearly one-half hold their meetings in the fall. Summer is the least popular meeting time with only 14 percent holding their function during this season. This fits well into the Bozeman lodging industry business cycle as summer tourism frequently fills Bozeman hotels to capacity.
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Length of Meeting The survey found that the average number of days per event for the groups showing a positive interest in Bozeman was slightly more than 2 days (excluding move-in and move-out days). Hotel Requirements Industry surveys of meeting planners consistently find that the quality and location of hotel rooms is one of the most important factors in choosing a meeting site. Therefore, we asked several questions regarding hotel requirements. All of the positive respondents required a headquarters hotel that was either attached or adjacent to the convention center. The size of headquarters hotel required by the associations was 140 rooms or less. The national meeting planners, who typically handle larger groups, required a minimum of 300 rooms in the headquarters hotel. The total number of hotel rooms required by the state groups ranged between 20 and 700, while the number of rooms required by the national groups ranged from a low of 300 to a high of 1,500. The average number of hotel rooms required by state groups was 160 while the median number of rooms was 100. Approximately 90% of the state groups require 500 hotel rooms or less. This is indicative of the Montana association gatherings which are attended by
Winter Spring Summer Fall
18%
23%
14%
45% Seasonality
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relatively small numbers of participants. These requirements can easily be accommodated within the existing Bozeman supply of hotels. Only the largest groups were willing to use a shuttle between the hotels and the center. All others require hotels within easy walking distance. This is a key finding with great relevance in determining an appropriate site for the proposed convention center.
Exhibit Space Requirements In order to obtain an idea of meeting space needs, we asked respondents about their requirements for exhibition space and for meeting space. We found that 70 % of the functions held by groups interested in Bozeman require exhibit space. The median amount of exhibition space required is 4,000 square feet and 90 % of the groups need 10,000 square feet or less. For many functions, portions of the ballroom and larger meeting rooms can be used for exhibit space. Total Space Requirements Total meeting space requirements (exhibit, meeting, and banquet) can be a misleading statistic because a particular space can be used for multiple purposes, such as a meeting room turned over for banquet use. We calculated the total square footage needed on average by the respondents to include banquet space that was separate from required meeting space. Our survey found that virtually all of the functions held by state associations that indicated a positive interest in Bozeman require a ballroom for either meetings, or for meals and banquets, or for both. Discussions with meeting planners indicated that they greatly prefer having meal functions and banquets in a space separate from their meeting rooms. Thus, in our space needs analysis, we have assumed separate space for meetings and meals for all but the largest groups. Since ballrooms are typically divisible, they can be used to provide breakout space as well. For all the groups that felt positively towards Bozeman as a future site, the median amount of total meeting space required is 7,000 square feet and 90 % of the groups need 21,000 square feet or less. To obtain a measure that was more realistic for a convention center, we eliminated the smaller groups that could fit into a large hotel and therefore
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would not need to hold their function in a convention center. An analysis of these remaining groups found the median amount of total space was 9,000 square feet and 90% of these groups require 21,000 square feet or less.
Ballroom Space Requirements Nearly all of the respondents required an upscale meeting space for their function, either for a meeting attended by all participants or for a banquet, or both. Such space is often used multiple times during the course of an event and typically can be subdivided into smaller breakout meeting rooms or to host concurrent events. Based on the survey results we found that 90 percent of Bozeman’s potential state and regional organization events require 8,000 square feet of dedicated ballroom space or less. All could be accommodated in12,000 square feet if the ballroom could be used for a banquet as well as for the meetings. Summary of Findings The data summarized above indicates that 90 percent of the potential state and regional convention business could be accommodated by a convention center with a total of at least 21,000 square feet of rentable space that includes10,000 square feet of exhibit space and a ballroom of at least 8,000 square feet. A combination of ballroom and exhibit space of 24,000 square feet should provide the capacity to accommodate all but the largest of the state conventions. Attendance Based on the estimated average attendance reported by respondents for the groups that would be interested in Bozeman, 90 % of the functions have attendance of 500 attendees or less. Approximately 70 percent of the functions have an average attendance of 200 people or less. Entertainment The ability of Bozeman to attract national entertainers and family shows is limited due to both the size of the market and its proximity to Billings. Promoters are reluctant to book acts into both Bozeman and Billings for fear of over exposure and dilution of demand. The types of entertainment that would be economically viable to promote in Bozeman require a tiered facility with
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3,000 to 5,000 seats. The 7,000-seat Worthington Arena on the MSU campus currently hosts the community’s large entertainment events, as well as high school tournaments and many other arena events. The fairgrounds also has an arena that can seat 1,200. The proposed convention center would be able to host smaller concerts and entertainment acts.
SUMMARY AND CONCLUSIONS Based on our interviews and surveys it is evident that Bozeman has a very positive image among Montana groups. Its central location is viewed as a positive attribute for all but some of the agricultural groups that prefer to meet in the western half of the state, and the petroleum groups that prefer to meet in Billings because that is where the industry is concentrated. Although Bozeman lacks a large headquarters hotel (such as the 316-room Holiday Inn in Billings) it has a concentration of six hotels with a total of over 700 rooms within easy walking distance of the proposed convention center site that provide the necessary capacity to accommodate all but the largest state groups. Although delegates would stay at a hotel of their choice that may be located elsewhere in the city, the planners would appreciate the fact that sufficient lodging for their group exists near the center. Thus, it is the lack of new large meeting space that is the main obstacle preventing Bozeman from hosting more state conventions. COMPETITIVE STRENGTHS
Billings is the largest city in the state and therefore will be Bozeman’s chief competition for groups seeking to meet in Montana. For all but the largest groups, our research indicates that Bozeman should be able to compete effectively with Billings, if for no other reason than variety for groups that have been confined to meeting there due to lack of adequate facilities elsewhere. Bozeman is almost uniformly perceived as a desirable community. For the other smaller cities in the state that host rotating conventions, we feel that Bozeman will be able to capture more than its fair share of this business. In support of these conclusions, we have identified the following competitive advantages possessed by Bozeman.
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Central location within the state with interstate access
Air service superior to all other Montana cities except Billings
Supply of nearly 1,800 nationally franchised hotel rooms
A quaint and vibrant downtown shopping area
Variety of outdoor recreational activities
Extensive restaurant and retail development
Montana State University is an attractive draw for alumni and also a source for speakers
Scenic beauty
Proximity to Yellowstone National Park
OBSTACLES For state and regional convention business whose attendees are within driving distance, Bozeman represents a very favorable meeting site. The age of the two convention hotels that are located adjacent to the convention center site could become an issue.
Headquarters Hotels - Several respondents to our survey referred to the Holiday Inn and the Best Western Plus Gran Tree as “dated” and “facilities not so good”. This is not too surprising as the two-story hotels are 43 and 38 years old, respectively. In comparison, the main headquarters hotel in Billings, the Holiday Inn, is a more contemporary mid-rise atrium structure that was completely renovated in 2008. Although Bozeman has a very positive perception among event planners within the state, it has a very low awareness among national and regional meeting planners and groups, other than as a vacation destination. This is not surprising since, without an existing convention center, planners have no reason to consider Bozeman for a meeting destination. The main obstacles to drawing national groups that we encountered in our research have to do with climate, population density, air service and hotels.
Colder climate – Concern was expressed about potential weather-related travel problems for an event in Bozeman. Also, there was a belief that conventions held in warm climates draw better attendance than a colder location.
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Lack of surrounding population density – A number of national group respondents rotate their meetings among the east coast, west coast and occasionally the Midwest as a convenience to its members. They felt that Montana was too isolated to draw well as almost all of the attendees would have to travel a long distance.
Limited air service – Respondents explained that non-stop air service is extremely important for national events attended by people from all over the country. At the present time, the only daily non-stop service to Bozeman is Denver, Minneapolis, and Salt Lake City, and one daily flight to and from Chicago and Seattle. Non-stop flights reduce travel time and the potential for delays and missed flights. They also allow attendees to arrive on the day the convention begins and return home on the afternoon of the last day. It is easier to get speakers if they can fly in and out from the site in the same day. Inconvenient connections frequently result in an extra night in a hotel.
Lack of high quality hotels – Some of the national groups meet in large cities or resorts where they are headquartered in four star hotels, such as Marriott, Hyatt, Hilton and Westin. Bozeman’s has several new hotels, but its two large convention hotels, while in good condition, are more than 35 years old. The characteristics of the lodging demand in Bozeman could not support the investment required by this type of hotel. However, a new three star headquarters hotel would substantially improve Bozeman’s attractiveness as a meeting destination. The first three situations cannot be altered, and because of them, we have concluded that new convention facilities of any size are unlikely to make Bozeman an attractive site for most national groups. It should, however, be able to attract certain special interest groups such as environmental and recreation organizations, as well as regional meetings of national organizations.
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SECTION 6: FACILITY RECOMMENDATIONS This section of the report presents our recommendations for the meeting facilities that we believe represents the best match between resources of Bozeman and the sources of group demand available to it and that represents the greatest potential economic impact for the community. Our recommendations are derived from the analysis of the various factors and issues presented in the previous sections of this report. Estimates of the potential utilization of the recommended event center are presented in the next section of the report. GENERAL In the previous section of this report the relative economic impact that different types of events have on a community was discussed. Conventions generally have the greatest economic impact on a community because the attendee expenditures represent new dollars to the area and the events require multiple meals and hotel rooms. Conventions typically seek out meeting facilities that are either attached or very close to a hotel that is large enough to accommodate most of the attendees, or one that can serve as a headquarters for the event. A fundamental challenge faced by smaller communities is matching the hotel demand generated by large meetings with the sustainable hotel supply. For example, while a new convention hotel may be effective in attracting meeting events to a community, there must exist sufficient lodging demand to sustain the hotel during the many nights that conventions have not been booked. A related issue, and one that is very pertinent to Bozeman, is the displacement of existing lodging demand that can occur when a large group fills all of the hotel rooms in the community. Most hotels are only willing to block a portion of their rooms for a large group, holding back remaining rooms for their loyal guests. Thus, the number of hotel rooms that are available for a convention is usually much lower than the total supply. Due to the high occupancies experienced by Bozeman hotels during the summer, it will likely be difficult to obtain a large block of rooms for a convention during this period, as the hotels benefit more from
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higher rated tourist business than from convention attendees. SITE REVIEW
As previously discussed, meeting planners indicated a strong preference for meeting facilities that are connected to a hotel. For the smaller groups that are available to Bozeman, there are many alternative communities around the state and the region that have a convention hotel sufficient to accommodate both meeting and lodging needs. Therefore, a free-standing meeting facility would be at a competitive disadvantage when bidding for these group events. Two sites have been suggested by CVB officials as potential locations for the convention center:
Although not specific, a site at the fairgrounds was suggested that would allow the new center to capitalize on the existing arena, exhibition buildings and parking on the grounds.
The second site suggested was the vacant land that exists to the north of the Holiday Inn, located within the area bounded by North 11th Avenue on the west and Baxter Lane on the north and east. The respondents to our survey unanimously indicated that adequate hotel rooms must be either connected to, or within a short walk from the convention center. In our opinion, this requirement eliminates any location on the fairgrounds because there are no hotels in the immediate vicinity. Alternatively, the site fronting on North 11th Avenue has an unusually large number of hotels within walking distance. The city’s two largest convention hotels, the Holiday Inn and the Best Western Plus Gran Tree, border the site to the south, and there are three other hotels immediately adjacent to the site. Combined, these five hotels have 584 guest rooms. The 122-room Comfort Inn located to the east across North 17th Avenue brings the total number of conveniently located hotel rooms to 706.
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This site has several other positive attributes:
It is easily accessible from Interstate 90;
It is highly visible from I-90;
There are a variety of sitdown and fast food restaurants in the immediate area;
North 17th Avenue provides direct access to the downtown shopping area; and
West Oak Street, the southern border of the site, leads directly to the growing concentration of shops and restaurants on the west side of town. We conclude that this is a uniquely superior site for the development of the proposed convention center.
RECOMMENDED FACILITIES This section of the report presents our recommendations for the convention center facilities. They are based on our research, analysis, experience with
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public assembly facilities and the findings and conclusions discussed in previous sections of this report. We have prepared the following recommendations regarding the building program meant to meet the needs of the Bozeman community in the most cost effective manner. The facility will act as an economic generator by attracting conventions and a variety of other events to the community and will also function as a community resource for hosting local events in a pleasant environment. Estimates of the potential utilization of the recommended event center and hotel are presented in the next section of the report. We recommend that a large meeting facility with approximately 35,000 square feet of rentable space be developed. While not specifically addressed in our recommendations, non-revenue space such as circulation, storage, rest rooms, and administrative offices typically require an area approximately equal to the amount of rentable space. Thus, the building will encompass a total of approximately 60,000 to 70,000 square feet. It is important for the space to be designed to allow for maximum flexibility for a variety of uses. The specific components of the public space include the following:
A large ballroom of approximately 16,000-square feet that can be divided into four smaller spaces. These divisions will allow for maximum flexibility in meeting space and banquet sizes and will allow for simultaneous use by more than one group. This space would be utilized for meetings, large banquets, large receptions and exhibits. The ceiling height should be at least 18 feet and be finished at the level of a hotel ballroom, with carpeting, vinyl wall coverings, ceiling accents and decorative lighting. The main floor should be accessible for vehicles and the carpet should be removable for certain exhibitions. Since this space will frequently be used for exhibits, it should have a utility grid built into the floor.
Adequate pre-function space to meet group requirements for registration and coffee breaks. The amount of pre-function space in event centers varies with the design of the building. This space is quite flexible and can also be used for receptions, displays and exhibits. We concur with the floor plan developed by Leo A. Daly that provides 7,600 square feet that is designed in such a way as to be useable for exhibit space.
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A junior ballroom of approximately 6,000 square feet that can be divided into three smaller spaces. This space should also be finished at the level of a hotel ballroom. It would be utilized for smaller meetings and banquets, and would also function as breakout meeting space and overflow exhibit space.
At least four breakout meeting rooms with a total of about 5,000 square feet. The survey indicated needed capacities of 25 to 100 people, or rooms of 600 to 1,000 square feet. At least one of these rooms should be divisible to provide two smaller rooms. Space in the divisible junior ballroom could provide another three large breakout meeting rooms.
A catering kitchen of 1,500 to 2,000 square feet to be used for banquet service. Included in this area is adequate cold storage.
High quality sound system and wireless internet throughout the building.
Paved parking for at least 300 vehicles. Since the majority of the center’s convention business will come from state associations whose attendees are expected to arrive by automobile rather than airplane, a large amount of parking will be required. The survey indicated a median group size of 200, while around 20% of the groups have attendance of 500 or more. Ample parking will also be required for the larger consumer shows. The recommended facilities and approximate space program are summarized in the table below.
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Officials at the Bozeman Convention and Visitors Bureau have requested that offices for the CVB, the Bozeman Business Improvement District (BTID) and several other organizations be included in the convention center. Accordingly, 14 offices with a total of 2,350 square feet of rentable office space has been incorporated into the building. As rental rates have not yet been determined, no rental income from these offices is included in the facility’s operating projections. The ballroom will be capable of seating approximately 1,000 people for a banquet and 1,500 people theater style for a meeting. If used for exhibit space, the ballroom can accommodate up to 125 booths, and the pre-function space will provide for an additional 60 booths.
MARKETING Marketing efforts for the planned event center must be performed by several sources. The Bozeman Convention and Visitors Bureau's marketing role should focus on long term efforts that emphasize both the new center and the community. Conventions expected to book the facility generally have booking lead periods of two to three years. The Bureau should concentrate on marketing towards state association events and regional government organizations. It will play a key role in responding to requests for proposals issued by organizations that are interested in coming to Bozeman. Once booked, the Bureau will play a
Size Banquet Theater ClassroomComponent(Square Feet)Capacity Seating Seating ExhibitBallroom16,000 1200 1600 800 90Junior Ballroom 6,000 460 600 300 30Meeting Room 2,000 90 200 100 10Meeting Room 1,000 65 100 50 naMeeting Room 1,000 65 100 50 naMeeting Room 1,000 65 100 50 naPre-function Space 7,600 na na na 40Total Rentable Area 34,600
Source: Hospitality Consulting Group
Leo A. Daly Architects
Bozeman, MontanaRECOMMENDED CONVENTION CENTER FACILITIES
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vital role in coordinating hotel arrangements, shuttle service, entertainment and any other related services. The Bureau should work with facility management, area hoteliers and other members of the hospitality industry in order to offer the best possible package to potential groups. National groups are increasingly expecting to receive a cash incentive to encourage them to book a convention. It will be the Chamber’s role to budget and/or locate a source for this expense. Facility management must also play a key role in marketing the facility and its efforts must be adequately budgeted. The facility must respond to leads provided by the Bureau as well as those developed through its own efforts. In addition, the facility staff must ensure that all events are coordinated and serviced effectively. Primary marketing efforts in the promotion of the center should be focused on conventions and meetings that require lodging. This will provide support for area hotels and hold participants in Bozeman so that they have the opportunity to shop and eat, thus maximizing the economic impact on the community. Booking policies will need to be established to minimize situations where local functions at the facility preclude an outside meeting, convention or consumer show. This conflict is typically avoided by requiring a shorter booking lead time for local functions. Policies on local function bookings will have a material effect on the financial performance of the facility.
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SECTION 7: UTILIZATON ESTIMATES ESTIMATED CONVENTION CENTER UTILIZATION Based upon an assessment of the market demand, we have estimated the likely utilization for the recommended facility on a stabilized basis. Like most other new convention facilities, the center will require up to five years to reach stabilization. It typically takes several years for the facility to achieve awareness throughout the region and many conventions book up to three years in advance. The estimates are based upon our research, discussions with meeting planners, event promoters, and management of similar facilities, and our knowledge of comparable facilities located elsewhere. In order to achieve these estimated utilization levels, it will be critical for the center to be aggressively marketed by both the hotel and the convention bureau. The table on the following page presents a summary of our utilization estimates. The various event types are discussed below.
Annual Average Average Total TotalEvent Events Attendance Event Days Event Days AttendanceConventions34 300 2.2 81 22,000Conferences10 400 1.8 18 7,000Community Events 20 1,000 2.0 40 20,000Consumer Shows 12 4,000 2.5 30 48,000Social Events/Meetings 50 400 1.0 50 20,000Annual Total 126 219 117,000
BOZEMAN, MT
CONVENTION CENTER UTILIZATION ESTIMATES (STABILIZED)
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Conventions consist of state associations, industry groups, fraternal organizations, and similar groups. These functions frequently include exhibits and may be referred to as tradeshows. Not all conventions have high attendance and require large amounts of meeting space. Whereas larger groups are restricted to meeting locations that have convention centers or large convention hotels, the smaller groups can hold their functions in any of a number of communities that have a hotel of adequate size with meeting space. There are three hotels in Bozeman that have ballrooms large enough to accommodate smaller conventions and attract such groups now. Hotels have two distinct advantages over a free standing meeting facility in attracting demand from this segment that does not require a large amount of space. First, they are capable of serving both the meeting and the lodging needs under one roof, an arrangement which groups strongly prefer. Second, the hotels derive revenue from room sales to the attendees, so that they can offer the meeting space at reduced rental rates, sometimes even at no additional charge. In comparison, function space is the primary commodity which an event center has to sell so it cannot afford to give such space away. In arriving at our utilization estimates for the convention center, we did not include these smaller conventions. We estimate the convention center should attract approximately 34 state/regional meetings annually at its stabilized level of operation. These functions represent new business not currently accommodated in the community and therefore will have a significant economic impact. They are larger events and generate significant hotel demand because many participants arrive at the venue the night before the event and some of the events last two or three days. In addition to hotel expenditures, attendees purchase other goods and services while in the city such as food and beverage, entertainment, merchandise and gasoline. Conferences consist of government agencies and programs, businesses holding regional meetings and seminars, and professional groups making presentations and conducting continuing education programs. Their duration is often shorter than conventions and they tend to be more business oriented. We estimate the convention center should attract approximately 10 conferences annually at its stabilized level of operation.
Community Events are events that are sponsored or produced by local organizations or government for the benefit of the community. Examples include festivals, warehouse sales, charitable garage sales, speakers, and graduation ceremonies. Last year 9 such events were held at the fairgrounds.
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The larger and higher quality spaces at the convention center will attract some, but not all from the fairgrounds. More importantly, as we have seen occur in other communities, the new meeting facilities will encourage a number of new events not previously. We estimate the new convention facilities should attract approximately 20 community events annually at its stabilized level of operation. Consumer Shows are sponsored by promoters or an industry and are open to the public. Examples include product shows such as cars, boats and guns. Also included in this category are family entertainment shows, concerts, and entertainers. Last year 10 such shows covering 24 days were held at the fairgrounds. Some of these shows are very price sensitive and therefore will continue to hold their shows at the fairgrounds. Discussions with promoters indicated that the larger and higher quality space at the convention center will encourage them to bring some new shows to Bozeman and will allow them to expand the size of their existing shows. We estimate that approximately 12 consumer shows will be held annually at the convention center at its stabilized level of operation. Billings is largest city in state and therefore hosts the major consumer shows. Because some of these shows draw people from a large surrounding area, regional promoters would be cautious in promoting events in Bozeman that would compete with the larger events held in Billings.
Social Events/Meetings include fundraisers, recognition banquets, weddings, company parties, receptions, public meetings, and meetings of local organizations. The availability of the center should generate a number of new social functions. We estimate that approximately 50 social events and meetings will be held at the new convention center on a stabilized annual basis. NEW BUSINESS Most of the business described above represents new business brought to the community by the state-of–the-art convention facilities. A few of the conventions and conferences may transfer from one of Bozeman’s hotels to the center, however, for the most part the convention business will all be new. Similarly, a portion of the consumer shows, community events and other activities will transfer to the convention center from existing facilities in the market. To this extent, the planned center will compete with other local venues.
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Some level of competition is inevitable. However, the scope of assembly facilities at the convention center will allow many existing meetings and functions to expand as well as attract new events. This will result in a net gain for the community of Bozeman. OVERALL UTILIZATION Overall, the planned event center is estimated to accommodate approximately 126 events on a stabilized annual basis, expected to occur by the fifth year of operation. By then, all meeting planners in the region should be aware of the facilities and existing future booking obligations will have expired. The events are estimated to occupy the center for a total of 219 days of the year. This represents a utilization of 60 percent which is in the midrange of acceptable utilization for a convention center. The estimates of utilization presented herein are based upon Bozeman’s
position within the competitive market and the experience of comparable
facilities. Actual utilization will depend upon the efforts of facility
management and the cooperation between management, the Bozeman
Convention and Visitors Bureau and the local hospitality industry.
Consequently, the actual utilization will vary from the estimates
presented. The purpose of these estimates is to provide a reasonable and
conservative foundation for the analysis of the center’s economic feasibility and benefits to the community.
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SECTION 8: FINANCIAL PROJECTIONS The pro forma operating statement presented in this section has been prepared for the stabilized level of operations for the Bozeman Convention Center, assumed to occur in its fifth year. Assumptions used to develop these projections are based on information gained from the market study and the operating performance of comparable meeting facilities. The projections of operating expenses are based on only a facility concept available at this time; actual expenses will be influenced by the final design and may vary significantly. Key assumptions used to estimate the potential financial operations include the following: - The center will be managed by an experienced and competent management group; - The center will be aggressively marketed statewide, regionally and locally; - The center will be owned by a public sector entity and therefore will not be assessed real estate taxes; - It assumed that parking will be free at the center and therefore there is no parking revenue included in the operating projections; and - The projections are expressed in 2013 dollars and represent the center’s stabilized level of operations, assumed to occur in its fifth year. Utilization and revenues are likely to be lower in the earlier years, so that a larger subsidy will most likely be required in those years.
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OPERATING REVENUE
Facility Rental Income represents income derived from the use of the meeting spaces and comprises the single largest source of revenue. Utilization estimates previously described were applied to a rental schedule that was developed from the rental rates and policies reported by the Gallatin County Fairgrounds, the Strand Union on the MSU campus and Metra Park in Billings. The assumed rental rate structure is presented in the table below:
The rental schedule was used to derive our estimate of facility rental. Actual rental rates will be determined by management and the governing authority of the facility and often may be open to negotiation. Based upon the assumed rental rates and a further derivation of utilization estimates previously discussed, facility rental of $425,000 is estimated to be achieved on a stabilized annual basis (in 2013 dollars). The sources of this revenue are shown in the table below.
Move-in Junior Large SmallMarket Segment Ballroom Move-out Ballroom Mtg Room Mtg Room ExhibitConventions$1,800 $900 $650 $200 $100 $600Community$1,800 $900 $650 $200 $100 $600Conference$1,800 $900 $650 $200 $100 $600Social/local meetings $1,800 $900 $650 $200 $100 $600Consumer shows $2,200 $1,100 $750 $200 $100 $600
BOZEMAN CONVENTION CENTER
Recommended Rent Schedule
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Building Services include rental for tables and chairs, audio equipment, stages, and lecterns, as well as labor charges for setup. While some facilities include these charges in the facility rental, we recommend the center charge individually for these items, in order to keep its rental rates competitive with alternative venues. Based on the experience of comparable facilities, we estimate this expense to average $1,000 per event.
Food Sales Commission is the commission that a caterer will pay the center based on the food sales sold at an event. We have assumed the center will rely on outside caterers to provide food service at the center who will pay it a 15 percent commission. Accordingly, the center will have a full catering kitchen with both cold and dry storage available. Food revenue estimates are based on projected utilization by type of function, meal periods and average checks for the level of service anticipated. Food revenue is expected to total approximately $1,653,000 per year on a stabilized basis. The 15% commission rate yields $248,000 to the center
Beverage Sales refer to all alcoholic beverages sold in the center. Estimates are based on projected utilization by type of function, and average beverage check. Beverage revenue is expected to total approximately $543,000 per year on a stabilized basis. The center will operate the liquor sales at the center, so will retain all the revenue from beverage sales.
Annual Estimated Estimated Event Events Rent Rent/EventConventions34 $189,000 $5,400Conferences10 $22,000 $2,200Community Events 20 $49,000 $2,450Consumer Shows 12 $106,000 $8,833Social Events/Meetings 50 $59,000 $1,180Annual Total 126 $425,000 $3,373
CONVENTION CENTER RENT ESTIMATES (STABILIZED)
BOZEMAN, MT
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DEPARTMENTAL EXPENSES
Beverage Departmental Expense includes all the costs of providing alcoholic beverage sales. These costs include cost of goods sold estimated at 29.5% of sales, payroll and benefits at 6.3% of sales, and other costs at 3.0% of sales, for a total departmental expense equal to 38.8% of beverage sales.
OPERATING EXPENSES Wages & Benefits include payroll and related benefit expenses for the center’s management and staff. This expense is within the range experienced by comparable facilities and is based on the staffing schedule below.
Annual Total Average F&B Food Beverage TotalEvent Events Attendance Expenditure Revenue Revenue F&B SalesConventions34 22,000 $50 $813,000 $301,000 $1,114,000Conferences10 7,000 $50 $256,000 $94,000 350,000Community Events 20 20,000 $2 $40,000 $0 40,000Consumer Shows 12 48,000 $4 $144,000 $48,000 192,000Social Events/Meetings 50 20,000 $25 $400,000 $100,000 500,000Annual Total 126 117,000 $19 $1,653,000 $543,000 $2,196,000
Source: Hospitality Consulting Group
FOOD & BEVERAGE ESTIMATES (STABILIZED)
BOZEMAN, MT
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Utilities expense includes costs related to heating and cooling, electricity, gas, water and sewer. This expense was estimated to be $7.50 per gross square foot for the building. Repairs & Maintenance expense includes the costs associated with repairs, maintenance, grounds keeping, and other related property operating costs. This expense was estimated to be $.90 per gross square foot for the building. Materials & Supplies include the cost of materials used in cleaning and maintenance of the facility, restroom supplies, and office supplies. This expense was estimated to be $.40 per gross square foot.
Marketing & Promotion expense include the cost of local media advertising and promotion for community events and consumer shows. It does not include marketing salaries, as this function is generally conducted by the convention and visitors bureau with the assistance of convention center personnel. We have assumed that the marketing and promotion efforts toward state and regional groups would be performed by the CVB and the costs included in its budget. This expense was estimated to be $1.50 per net square foot.
Full Time AnnualPositionEquivalentsWageGeneral Manager 1 $70,000Administrative Assistant 1 30,000Director of Sales & Marketing 1 50,000Sales Assistant/Events Coordinator 1 35,000Director of Operations/ Asst. GM 1 50,000Maintenance Engineer 1 50,000Head Housekeeper 1 34,000Housekeeper121,0008340,000Benefits @21%71,400Partr time event labor 24,200$435,600
Bozeman Convention Center
Staffing Schedule
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Insurance expense refers to the cost of liability and casualtyinsurance for the facility. This expense was estimated to be $1.00 per gross square foot. Travel & Other expense includes the travel costs for center management, professional services, and other expenses not included in the categories above. This expense was estimated to be $.65 per net square foot.
Management Fees are fees paid to a professional management company for managing the convention center. These fees are for oversight and do not include the general manager’s salary. For analysis purposes, we have assumed a management fee equal to 5.0 percent of total revenue. The projected operating revenues and expenses described in this financial analysis are presented on the following page. The projections are presented in 2013 dollars and present the convention center’s stabilized level of operations, assumed to occur in its fifth year of operation.
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Facility Rental Income $425,000 31.7%Building Services 126,000 9.4%Food Sales Commission 247,950 18.5%Beverage Revenue 543,000 40.5%Total Revenue 1,341,950 100.0%Departmental Expenses: Beverage Cost & Labor 228,603 42.1%Total Dept. Expense 228,603 42.1%Operating Expenses Wages & Benefits 435,600 32.5% Utilities 255,000 19.0% Repairs & Maintenance 54,000 4.0% Materials & Supplies 24,000 1.8% Marketing & Promotion 51,000 3.8% Insurance 34,000 2.5% Travel & other expense 22,100 1.6% Management Fee 67,098 5.0%Total Operating Expenses 942,798 70.3%Net Operating Profit $170,550 12.7%Note: The comments and assumptions contained in this report are an integral part of these estimated operating results.
PROPOSED BOZEMAN CONVENTION CENTER
ESTIMATED SCHEDULE OF OPERATING RESULTSBozeman, Montana
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SECTION 9: ECONOMIC IMPACT
A community benefits in many ways from having a first class event center available. The largest benefit is the injection of new dollars into the local economy by the thousands of people that the center will draw to the Bozeman community. Such facilities are also able to host local community events and attract consumer shows and entertainment events that enhance the quality of life for area residents. There is also an intangible benefit that results from exposing Bozeman to so many people as a portion of them will return for a visit or vacation, or possibly relocation. These factors must be included in the decision to invest in and operate the convention center. The most visible factors are the impacts generated directly by the operation of the convention center. These are called direct impacts and include employment, wages, and purchases of goods and services by the facility and by visitors to the center. Although not addressed in this study, there are additional rounds of benefits that would result from the convention center operations that are frequently addressed when examining the total economic impact from a project. While direct impacts from a business venture are easy to understand, the concepts of secondary effects, known as indirect and induced impacts, are among the most widely used and most poorly understood tools in economic analysis. These impacts are frequently referred to as the “multiplier effect”. Fundamentally they are based upon an extension of the direct expenditures by the convention center operation. The revenues generated by the center are redistributed back into the economy in the form of wages, taxes and expenditures for goods and services. In the same manner that the center redistributes the revenue it receives, the people to whom those wages are paid and from whom the goods and services are purchased further redistribute the money they receive in the form of wages to their employees and purchases for their own operating needs. It is this on-going cycle of redistribution that estimates of indirect and induced impact attempt to quantify.
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The direct impact projections presented below are based on estimated operating statistics and financial projections for the Bozeman convention center, as prepared by Hospitality Advisors. CONSTRUCTION IMPACT The convention center’s total development cost is estimated to be $19 million, with a construction cost of around $14 million. Construction worker payroll is estimated to account for approximately 30 percent of the total construction cost, or $4.2 million. Assuming an average of $43,000 per year in earnings per construction worker, according to average wage information from the 2012 Montana State Occupational Employment Statistics published by the U.S. Bureau of Labor Statistics, we estimate that the construction project will support about 97 construction jobs. This estimate of the construction impact is conservative, since it does not factor in the indirect and induced impacts (the multiplier effect) that are created by the increased activity at the largely local businesses that supply the building materials, equipment and related services, as well as the additional purchasing power that will result from the construction and the increased production payroll, all of which will flow to the city, county and regional economy. ATTENDEE EXPENDITURES We have prepared estimates of attendee and exhibitor spending that was derived from our evaluation of a variety of industry sources. Attendees and exhibitors at regional meetings and events held at the center provide the major economic impact on the community. Visitors to consumer shows and entertainment are important as well, but typically their visits are shorter and require less overnight stays. Regional and local meeting attendee expenditures were calculated based on the 2012 Per Capita Spending Assumptions survey of delegate expenditures published by Destination Marketing Association, International. The survey provides spending statistics that can be used to measure the economic impact of meetings and conventions business on the host community. Since the majority of large convention business is conducted in major cities where tourism infrastructure is more expensive than Bozeman’s, we felt it appropriate to reduce DMAI’s figures for hotel and restaurant expenditures by 20 percent.
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While local participation does have some economic impact, the greatest impact results from out-of-town delegates and visitors. Therefore, we estimated the number of nonlocal attendance for each of the convention center’s market segments. We then applied these average expenditure amounts to the nonlocal attendance to arrive at an estimate of additional spending in the local economy by category from convention center visitors. The results of this analysis are summarized in the table below.
The largest impact occurs in the lodging industry which would see an estimated additional expenditure of over $1.3 million. To put this in perspective, at an average room rate of $100, the convention center would bring another 13,000 occupied rooms to Bozeman. These additional room revenues would generate another $92,000 in lodging tax revenue at the current tax rate of 7.0 percent. Also, the $1 per occupied room CVB assessment would receive another $13,000. Events held at the convention center will generate additional economic impact above the $2.8 million quantified above. For example, a portion of the consumer show attendees will be “day trippers” or people who come to Bozeman for the day from outside community, but return home the same day. These visitors are very likely to do some shopping, go out for a meal, and purchase fuel before or after they attend the consumer show. Also, many of the social events held at the convention center, such as weddings and receptions, will have out-of-town guests who will require lodging and visit local restaurants and shops.
Number Estimated Non-local Applicable Nonlocal AnnualSegment Attendees% Non-Local Attendees Sector Amount Adjustment(1)to Bozeman Attendees ExpendituresLodging$135.51 ($27.10) $108.41 12,160 $1,318,241Conventions10,200 80%8,160 Food & Beverage 71.43 (14.29) 57.14 694,871Conferences4,000 80%3,200 Entertainment & Recreation 12.16 12.16 147,866Consumer Shows 4,000 20%800 Retail 30.80 30.80 374,52818,200 12,160 Auto Rental 8.46 8.46 102,874Transportation8.09 8.09 98,374Other6.67 6.67 81,107Total$273.12 $231.73 $2,817,861
Source: Destination Marketing Association, International, Per Capita Spending Assumptions 2012Note 1: Expenditures adjusted to reflect Bozeman's lower costs
Estimated Non-Local Attendees Average Delegate Expenditures
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EMPLOYMENT The convention center will have a permanent staff and its operations will employ labors for setting up and dismantling events and food and beverage activities will employee servers and food preparers. The convention center itself is expected to employ the equivalent of 10 full time people: eight people on a full time basis and the equivalent of two more laborer positions that will likely be filled by several part time employees. In order to estimate the employment by the food and beverage activity, we applied industry labor cost percentages to the projected food and beverage sales to arrive at a payroll figure, which we then divided by average wages to arrive at the number of labor hours. The food and beverage operation at the convention center is estimated to employ the equivalent of 45 full time workers. This industry typically hires part time workers, particularly for server positions. Therefore, this activity will create employment opportunity for a large number of people.
EMPLOYEE EARNINGS
The ten full time equivalent employee positions at the center are estimated to receive a total of $436,000 in wages and benefits. We have recommended that the center operate the beverage service and have outside caterers provide the food service. Between the two functions, we estimate total wages of approximately $89,000. Most of these employees will be tipped, which will add at least another $9,000 to the total compensation. Whatever taxes are state taxes are paid on this income will benefit the State of Montana. PURCHASED GOOD AND SERVICES Employment opportunities and the corresponding wages that follow are not the only benefits of consequence that the convention center will bring to the area. In addition to wages, the center will spend over $500,000 each year to purchase goods and services necessary for on-going operations. This
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includes expenditures for maintenance supplies, contract labor and services, marketing and advertising, utilities, and other miscellaneous supplies and services purchased in the area. Based on industry averages for food and beverage costs, the over $2.0 million of food and beverage sales projected for the convention center would require the purchase of $824,000 in raw materials.
SUMMARY
The direct economic impact estimated to be generated by the new convention center is summarized below. One time benefits:
$4.2 million construction payroll resulting in 97 construction jobs
$14.8 million in construction materials and related services Annual recurring benefits:
Annual additional expenditures of a minimum of $2.8 million in the Bozeman community
13,000 more occupied hotel rooms
$92,000 increase in lodging tax receipts
$13,000 increase in hotel payments to the CVB
Creation of 55 new full time equivalent jobs
Wages of approximately $534,000
Purchase of more than $500,000 of goods and services by the convention center
Purchase of approximately $824,000 of food and beverage raw materials
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ADDENDUM
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QUALIFICATIONS Stephen Sherf – President, Hospitality Consulting Group Stephen Sherf has over 30 years of operational and consulting experience in the hospitality industry. He spent 15 years with a large national public accounting firm, where he was the partner-in-charge of the hospitality consulting division for the Upper Midwest. He also started a gaming consulting company where he worked for 15 years, and most recently, founded a hospitality consulting company. He is presently active as a sales agent with Minneapolis-based Leines Hotel Advisors. Mr. Sherf has an extensive background in hospitality consulting that encompasses market studies, valuations, appraisals, acquisitions and sales. He has performed market studies and other advisory services for over 200 hotel projects located mainly throughout the Midwest, for clients that include developers, lenders, hotel companies, and municipalities. He also has particular expertise in development consulting to the gaming industry and has worked on numerous income producing real estate projects that include nursing homes, elderly housing, subsidized and market rate housing, office buildings, retail developments, convention centers, ice arenas, restaurants, convenience stores, bowling alleys and cinemas. Operating positions held during Mr. Sherf’s career include restaurant manager, auditor, Vice President of Development for a hotel company with 13 properties, and Treasurer for a gaming company where he oversaw the operations of three Colorado casinos. He has provided expert witness testimony relating to the valuation of hotels and restaurants and business interruption claims. He has taught continuing education seminars and spoken at gaming, investment, and state appraisal conferences. He has been a guest lecturer at the University of Minnesota Graduate School of Business and Stout University. He is frequently quoted in local newspapers and business magazines. Mr. Sherf received an undergraduate degree in economics and an MBA in finance from Cornell University. He holds a real estate license in Minnesota and Wisconsin and has taken several American Appraisal Institute courses. He is a Certified Public Accountant (inactive), is active in the Minnesota Lodging Association, has served on the planning commission for the City of Minnetrista, and has held a Colorado gaming license.
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Bozeman Convention Center
Parameters For a Marketing Plan
Background
This section draws on and updates the initial work developed by Flying Horse
Communication (FHC) for the Bozeman Tourism Business Improvement District (TBID)
submitted in May 2011. The project consisted of market research, brand development
and a strategic communication plan all designed to increase the number of events and
hotel occupancy in Bozeman. Work done at the time was for the TBID although during
the research phase, meeting planners almost universally said that they would turn to
a Convention and Visitors Bureau(CVM) to acquire information and, ultimately, plan
events. Since then, the Bozeman TBID and the CVB are now managed cooperatively by
the Bozeman Chamber of Commerce and the CVB is the market facing entity.
During the brand building process, the brand team devised a mission statement, which
also serves as a primary positioning statement. This statement says: “Our mission
is to make Bozeman the destination of choice for events and activities.” This brand
differentiates itself as a place for “a great experience” with “no worries,” that will be
known as “a great place for meetings.” In positioning itself as a “great place for a great
experience,” Bozeman relies on its beautiful physical environment and its simple but
sophisticated Western culture. From that point what Bozeman can use as attractors
depends significantly on whether the organization that could use the event center
is located in Montana, the Rocky Mountain Region, the United States as a whole or
outside the United States.
As noted in Section 5: Market Demand Analysis, a Bozeman event center can easily
attract groups from Montana and will have the hotels, facilities, restaurants, bars and
brewers, shopping and other amenities that meeting planners (and attendees) find
desirable. By like token, an analysis of Bozeman’s desirability drops progressively as
one moves out of Montana to the region, the nation and, finally, outside of the United
Sates. As noted in both the FHC study and this study, some of the limiting factors are
cold climate, geographical isolation, limited air service and lack of quality hotels.
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Perhaps the biggest challenge to marketing the event center outside of Bozeman is lack
of awareness of both Bozeman and an event center, and an inaccurate view of Montana
that generalizes to Bozeman. While conducting research at the Professional Convention
Management Association (PCMA) annual meeting held in Las Vegas, meeting planners
from outside of Montana thought that Bozeman was remote and there would be difficulty
traveling there. But, of greater importance, when they heard Montana they thought
“Alaska,” and not a flattering view. “Alaska,” in this context, translated to remote, cold,
beautiful, technologically and socially unsophisticated, and lacking key amenities.
That said, the FHC study noted an interest by some regional and national organizations
once they understood more about what Bozeman is like and has to offer. Further,
national organizations, as noted in Section 5, that would not be likely to hold a national
meeting in Bozeman may well consider holding regional meetings here.
It may be helpful to add one final observation to the analysis in Section 5 into a
meaningful perspective before moving on to a general approach to marketing the event
center. The conclusions in Section 5 are based on current market conditions rather
than future market conditions that could exist once a concerted effort has been made
to market Bozeman outside the state as “a great place for meetings” and other events.
The city’s natural beauty and easy access to world-class recreational amenities and
Montana State University can be powerful attractors. In addition, the current assessment
of limited air travel may be ameliorated as airlines increase direct flights to major
metropolitan areas.
With the appropriate resources and strategy, it is possible to significantly improve the
image, and thus the desirability, of Bozeman among regional and national meeting
planners. And that starts with building familiarity.
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A Strategic Approach to Marketing
The Bozeman Convention Center
Marketing a convention center in Bozeman requires a multifactor approach including
geography, resources and time. As noted above and in Section 5, a primary
consideration in marketing a Bozeman event center is the geographical location of the
target market. Marketing meetings and convention business requires long-lead times
since meetings are planned years in advance. And it can be expensive to reach and
educate meeting planners with little or no understanding of Bozeman and what it has to
offer.
From a strategic point of view, marketing within the state of Montana should begin
as soon as possible, once a decision has been reached to move forward with this
project, in order to get bookings as soon as the facility is operational. At the same time,
marketing should commence to meeting planners in the region and throughout the
United States.
Initial marketing efforts should focus on familiarity (awareness plus knowledge) of the
event center and its benefits and Bozeman and its benefits. While in-state meeting
planners and associations generally are aware of Bozeman and have a favorable opinion
of the city, their knowledge is not as deep or detailed as one might suppose, given their
positive impression of the city. This knowledge-gap was uncovered by the FHC study
and should be readdressed early in the marketing process.
Marketing efforts outside of the state should assume that meeting planners have a
low level of familiarity. To put this in perspective, a quick way to assess a marketing
challenge is to view it through the prism of a FRED analysis. FRED is an acronym
that stands for familiarity, relevance, esteem and differentiation. It is clear from both
this study and the FHC study that, outside of Montana, there is a lack of awareness
and knowledge about Montana, in general, and Bozeman, specifically among meeting
planners. It is impossible to build relevance, esteem or differentiation—the elements that
build a brand and lead to choice—without first building familiarity.
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The FHC study outlined a strategic communication plan that, while it needs to be
updated to reflect changes since 2011 and the results of this report, is still relevant.
For that plan—or one like it—to be implemented, the event center will have to create
or outsource its marketing function. The FHC plan calls for an integrated use of digital
and print advertising, direct mail, networking, 1 on 1 sales and the creation of a base
of materials including print and digital brochures, DVD, press kit, and a new, state-of-
the-art website or a section on the CVB website. Social Media will be an important and
efficient piece of the marketing and brand engagement effort, as will the incorporation
of mobile device capabilities and tools. Mobile search is forecast to be the dominant ad
format growing to $5 billion in sales by 2017. In addition, it is important to conduct FAM
tours for both in-state and out-of-state meeting planners.
The marketing budget discussed in this Feasibility Study is anticipated to be under
and guided by the CVB. It will need to be created to include startup costs to create
marketing materials and tools as described. These costs however, may be mitigated by
efforts already underway by the Chamber and CVB. Detailed analysis will, however, need
to be conducted to determine the true costs of materials for the initial surge of marketing
to build the required familiarity.
The plan outlined in the FHC study, as noted, is still relevant but needs to be updated to
determine what kind of budget is required to launch and sustain this enterprise.
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Project Design
Bozeman Convention Center
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OAK STREET
BAK
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HOLIDAYINN
HAMPTONINN
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LA QUINTAINN & SUITES
Project Site
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Aerial photograph showing Project Site, relationship to adjacent hotels, and relationship
to streets and I-90
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N
Lot 4,
Preferred Site
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CONVENTION
CENTER
N
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Architectural Design
The design of the Bozeman Convention Center carefully integrates the vision and
mission for Bozeman as a diverse, attractive, and sustainable community which values
a unique quality of life through innovative and responsive design.
The Convention Center is carefully sited to follow the natural water course that bisects
the site and presents a face to the public along 11th street. The parking lots when fully
developed will integrate native plantings and serve the building from both of the major
entry points. We see the water course as a major asset to the site as it will allow for
views to a natural linear park like space for both the interior meeting and pre-function
spaces and for visitors approaching the east entrance via the pedestrian bridge.
The massing of the building utilizes a combination of sloping roof forms that reflect
the design traditions of the region combined with lower varying height flat roof masses
that give the building a smaller human scale and blends with the gentle sloping site.
The exterior building skin utilizes both natural materials and native building colors such
as native stone and wood on the public facades. The use of high performance glazing
will serve to bring in abundant natural light in a sustainable manner. For less visible or
public areas such as the loading area the use of masonry, synthetic stucco and metal
panel materials will be utilized in natural color selections.
The functional layout of the building is designed to be user friendly with a straight
forward placement of the large multipurpose ballroom that can be subdivided into
smaller rooms easily accessible from the public pre-function side and the back of house
private side. The smaller meeting rooms are located to share the private back of house
access with the large multipurpose ballroom space and the smaller meeting rooms
which will have views toward the linear park space from the pre-function area.
Support offices are located near the front entry for convenient access for guests and
convention center clients.
The warming kitchen, loading dock and support spaces are located to minimize
mixing of vehicular and pedestrian access for service deliveries with the convention
center guests.
The interior finishes and amenities will be designed to reflect the unique quality and
regional colors found in the Bozeman area with a focus on sustainable materials.
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Floor Plan and Site Design
Exterior Rendering
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Building Massing Studies
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Project Cost Estimate
Bozeman Convention Center
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Project Construction
Narratives and
Cost Estimates
The project Construction Narratives and Cost Estimates have been prepared
collaboratively by our team of architects and engineers. Langlas & Associates General
Contractors provided the detailed costs by construction division. Alternate Items To Be
Considered To Add were researched and provided by the collective team members.
These costs reflect preliminary estimates based on the recommend site. Site conditions
and challenges, facility design, and careful consideration of facility systems and
elements were important factors in arriving at a preliminary project cost estimate.
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Environmental
Responsibility
As a full service design firm, CTA is situated to create beautiful, cost effective, durable
and energy efficient buildings, as sustainable design is really an integrated systems
approach to the design of buildings. CTA has 90+ LEED (Leadership in Energy and
Environmental Design) Accredited Professionals in architecture, civil engineering,
electrical engineering, mechanical engineering, structural engineering, landscape
architecture and interior design. We are a proud member of the U.S. Green Building
Council (USGBC) and have completed nearly 40 LEED certified projects. As the
integrated design process progresses on any CTA project, we continually have
sustainability in mind, whether or not the project or client will be seeking a LEED
Certified facility.
We create energy-conscious design solutions including daylighting, natural ventilation,
passive and active solar, photovoltaics, low-head hydro, high-efficiency commercial
refrigeration systems, natural refrigerant systems (low or no CO2e), biomass boilers,
geothermal heating, lighting controls for energy savings, and many types of distributed
power generation systems.In addition to energy modeling during the construction
documents phase, we provide industry leading building performance simulation
interactively in the conceptual and schematic design phases. CTA uses state of the art
software such as IES-VE, Meteonorm and WUFI as well as industry standard software
like eQuest, Trane Trace, and EnergyPlus. The design for our Corporate Headquarters
obtained an Energy Star rating, and was awarded Gold Certification from the LEED
O&M program for existing buildings. We are an EPA Green Power Partner and purchase
Green Power for 100% of CTA’s electrical energy use. We speak with conviction when
we encourage our customers to make sustainable design a priority. We are not afraid to
take the lead and build a better world.
106 |||| BOZEMAN CONVENTION CENTER | feasibility report
Structural Systems
Design Narrative
Design Criteria:
Design criteria for the new building will be as set forth by International Building Code,
IBC 2009 and Minimum Design Loads for Buildings and Other Structures,
ASCE 7-05.
A preliminary code review indicates the following design criteria:
Occupancy Category II
Wind Criteria: 90 mph 3-second gust
Importance Factor IW=1.00
Exposure Category C
Seismic Criteria: Ss=0.749 G, S1=0.230G mapped values for site class B
Site Class D
Sds=0.599G, Sd1=0.298G
Importance Factor IE=1.0
Seismic Design Category D
Snow Criteria: Ground snow load 40 psf
Importance Factor IS=1.0
Exposure Factor Ce=1.0
Temperature Factor Ct=1.0
Roof Snow Load = 30 psf
BOZEMAN CONVENTION CENTER | feasibility report |||| 107
Foundation System / Geotechnical:
The geotech report for The Kenyon Nobel Building adjacent to the propose site location,
completed July 12, 2004 by Rimrock Engineering, has been used as the basis of design
for this project. Variations may occur between the findings of this report and the actual
conditions found on the proposed site.
It is assumed that shallow foundations comprised of conventional spread and
continuous footings may be used to support the anticipated structural loads if founded
on dense native gravels. To achieve this, the site will require over-excavation and
re-compaction with structural fill. The depth of over-excavation to reach native gravels
may vary across the site. Over-excavation limits should extend laterally 1’-0” beyond
plan limits of foundation for exterior footings, and 2’-0” for interior footings. With these
provisions, an allowable bearing pressure for footings of 4,000 psf can be used with a
anticipated settlement of ½ to 3/4”.
Exterior footings should extend a minimum of 42” below finished grade to protect
against frost heave. Interior footings should bear at least 12” below lowest
adjacent grade.
Slabs should be placed directly on top of a 15 mil vapor barrier, over 6” of imported
granular fill compacted to 95% of standard proctor. Minimum slab on grade thickness
should be assumed to be 5” with a minimum reinforcing of #5 bars at 16” on center.
Framing System:
It is assumed the primary structural system will be steel Wide-flange and Tube Steel
columns supporting wide flange beams, and open web steel joists. Assume steel joists
will be spaced approximately 4’-0” on center. Typical roof deck will be a 1-1/2” 20 gauge
metal deck welded to joists and beams with 5/8” puddle welds.
The building will be designed to resist conventional lateral loading including wind and
seismic. The lateral system will utilize braced frames if window and door locations allow.
The front portions of the building will most likely need to be Moment frame construction
to accommodate the large windows.
Exterior walls will be constructed of steel studs with sheathing directly applied to the
outside face, or blocked at 4’-0” on center. Assume a 16” 43 mil standard stud. Heavier
gauge studs may be required for stud lengths greater than 15’-0”.
108 |||| BOZEMAN CONVENTION CENTER | feasibility report
Mechanical System
Narrative
Packaged rooftop heating and cooling units will be used to provide space air
conditioning and ventilation/make-up air. All rooftop air handling units will have
staged natural gas heating, high efficiency DX cooling (R-410 A refrigerant) with scroll
compressors, 2” thick 30% efficient pleated filters, condenser coil guards, electrical
convince outlet, premium efficient motors with variable frequency drives, and return
air smoke detector. When outdoor conditions permit, economizer cooling will be
available to provide non-mechanical cooling. Each rooftop unit will be controlled with
a programmable thermostat with the capability to provide night time temperature set
back to reduce energy consumption.
The following temperature control zones and corresponding RTU system sizes are
provided for planning purposes only:
Pre-function Area: 45 Tons
Ballroom: 4 @ 15 Tons
Breakout: 4@ 5 Tons
Board Room: 2@ 3 Tons, 1@ 2 Tons
Offices: 1@ 5 Tons, 1@ 3 Tons
Kitchen: 7.5 Tons
Dock/Service Area: 7.5 Tons
Circulation: 15 Tons
BOZEMAN CONVENTION CENTER | feasibility report |||| 109
A variable air volume system will be used in the areas to provide additional space
temperature control. The controls system will poll all zones comparing actual space
temperature to space setpoint to determine the mode of space conditioning. The
controls system will automatically adjust the discharge air temperature of the RTU to
satisfy the zone of greatest temperature difference. The remaining VAV boxes will adjust
the air flow accordingly to satisfy its space temperature setpoint. A differential pressure
transducer located near the end of the main supply duct work will vary the RTU fan
speed as needed to maintain duct static pressure. The rooftop units serving these
VAV systems will have digital DX scroll compressors to provide tight discharge
temperature control.
It is assumed that the kitchen area will be utilized as a catering kitchen and will have
no cooking appliances. This will reduce construction costs as a commercial exhaust
hood, fire suppressions system, and required make-up air system will not be required.
An exhaust hood located above the dishwasher and a roof mounted exhaust fan will be
provided to comply with code requirements. Exhaust duct work serving the dishwasher
system will be sealed liquid tight and constructed of aluminum to better resist corrosion.
The public restrooms will be exhausted as required by code, using a roof mounted
exhaust fan. This fan will be interlocked with the room’s lights.
110 |||| BOZEMAN CONVENTION CENTER | feasibility report
Plumbing Narrative
The building shall be provided with sanitary facilities, including provision for the physically
handicapped. The quantity of fixtures required shall be determined based on the total
occupancy of the building. All lavatory and sink faucets shall be ADA compliant. High-
efficiency fixtures should be utilized in order to maximize water efficiency to reduce
municipal water supply and waste water.
Plumbing Fixtures
Water Closets: Water closets shall be wall-mounted with dual-flush water conserving
valves and 15-inch rim height for non-handicapped fixtures and 17-inch height for
handicapped fixtures.
Urinal: Urinal shall be wall mounted vitreous china 0.128 gallon per flush washout style
with exposed flush valve, wall cleanout 4” above valve.
Lavatories: Lavatory sinks shall be counter-mounted, vitreous china type with direct
wired electronic actuated faucets.
Mop Sink: Floor mounted enameled cast iron location in the janitor closet, faucet, and
standard trap.
Electric Water Coolers (EWC): Self contained, energy efficient. Exposed surfaces shall
be stainless steel. EWC’s shall be handicapped accessible and wall mounted at an
accessible height.
Floor Drains: Each floor drain shall be provided with a perforated strainer with 1/4-inch
diameter perforations. Floor drains shall be provided with a mechanical type automatic
trap primer. A floor drain shall be provided for each toilet room or required area.
Floor Sinks: A 12x12x10” deep floor sink shall be used in kitchen area. Each floor sink
shall be provided with a perforated strainer with 1/4-inch diameter perforations. Floor
sink shall be provided with a mechanical type automatic trap primer.
Domestic Water Distribution
Hot and cold water distribution piping shall be routed above ground. Piping shall not be
installed below the floor slab of the building. The domestic hot and cold water piping
systems shall be designed for a maximum system piping loss of 10 psig at full system
flow. Velocities within any main or branch of the piping system shall not exceed 8 fps.
The supply line to each item of equipment or fixture, except faucets, flush valves, or
other control valves which are supplied with integral stops, shall be equipped with a
shutoff valve to enable isolation of the item for repair and maintenance without interfering
BOZEMAN CONVENTION CENTER | feasibility report |||| 111
with operations of other equipment or fixtures. Supply piping to fixtures, faucets, hose
bibbs, hydrants and flushing devices shall be anchored to prevent movement.
Incoming Domestic Water
Cold and hot water service for the building shall be brought into the utility room. Upon
entering the utility room, the cold water service shall include unions on each side of the
full size reduced pressure backflow preventer, shut-off valves, a ball valve, and a hose
bibb before it services anything else in the building. Backflow requirements shall meet
the requirements indicated in the Uniform Plumbing Code (UPC).
Domestic Hot Water Generation
The size of the domestic hot water system shall be in accordance with ASHRAE
Handbook – HVAC Applications, “Service Water Heating”; and shall have a minimum
thermal efficiency greater than 80 percent. The building water supply temperature shall
be 120 F. The water heater shall be provided with fully automatic controls with safety
controls.
Pipes, Fittings, and Drains
Water piping shall be Type L copper for above ground and inside the building, and Type
K copper for below ground. The waste piping shall be cast iron no hub inside building
and cast iron hub and spigot below slab and below ground up to 5 feet outside the
building. Beyond 5 feet outside the edge of the building PVC piping shall be used. The
vents shall be PVC. A water hammer arrestor shall be provided at flush valve assemblies
before the last fixture. All domestic hot water, cold water, and heating water piping shall
be insulated.
A grease interceptor shall be sized and installed according to building use, and
plumbing/local codes. The grease interceptor shall be installed outside adjacent the
kitchen area.
Natural Gas System and Piping
Natural gas line shall be sized in accordance with NFPA 54. Anodeless riser shall be
used on service line gas piping, from the low pressure regulator to the equipment. This
piping shall be steel (Schedule 40 – minimum) with fittings of malleable iron conforming
to ANSI B16.3. Piping connection to all gas burning equipment shall be made with
rigid pipe and fittings. A ball-type gas shut-off valve and coupling shall be provided
in an easily accessible pace in the gas line to each equipment item. A gas meter and
pressure regulator shall be provided.
112 |||| BOZEMAN CONVENTION CENTER | feasibility report
Electrical System
Narrative
The electrical service will be provided via Northwestern Energy primary to a Utility owned
Padmount Transformer. Three 2” PVC will be stubbed from the Utility CT cabinet by
the electrical contractor to the property line; the Utility will provide the primary cable. A
pad mount CT cabinet will be provide adjacent the transformer (on the same concrete
pad) by the electrical contractor in accordance with Utility company requirements. The
electrical contractor will provide minimum of 4-4” PVC conduits between the CT cabinet
and the transformer secondary compartment. The electrical contractor will provide the
transformer secondary conductors and conduit to the building. A main disconnect will
be provided at exterior of the building for the main service in accordance with Utility
Company and City of Bozeman requirements.
The main disconnect at exterior of the building will serve a main switchboard at interior
of the building. The main switchboard will be sized at approximately 1,600 amps, 208
volt, 3-phase, 2-section, 90” high, 18” deep. It is anticipated that a 800 amp, 208 volt,
3-phase panel will be installed in the Kitchen area. It is anticipated that each of the
two the office areas will be provided with a 200 amp, 208 volt, -3-phase panel. It is
anticpated that the break room / boardroom area will be provided with a 200 amp, 208v,
3-phase panel. It is anticipated that the ballroom area will be provided with a 2-Section,
200 amp, 208v, 3-phase panel. A 30 KVA UPS double conversion online with bypass
will provided with related 100 amp panel for powering critical loads in the facility with
sensitive equipment connected.
All conductors shall be copper THHN. Feeders and homeruns shall be in EMT conduit;
all other circuitry is permitted to be MC cable or conductors in EMT. All exterior feeders
and branch circuit runs shall be in Schedule 40 PVC with Schedule 80 elbows.
Feeder sizes as follows:
100A feeder – (4) #2 awg, #8 gnd gnd, 1-1/4” C.
200A feeder – (4) 3/O Awg, #6 awg gnd, 2” C
400A feeder – Two parallel runs of (4) 3/O awg, 4” C
800A feeder – Four parallel runs of (4) 600 KCMIL, #1/O Awg gnd, 4” C.
1600A feeder – 4 parallel runs of (4) 600 KCMIL, #4/O awg gnd, 4” C.
BOZEMAN CONVENTION CENTER | feasibility report |||| 113
Power receptacles will be located throughout and will be commercial grade quality. For
the kitchen, it is anticipated that there will be several pieces of equipment that will need
to be connected in the 50-80 amp range depending on how many pieces of equipment
are electric powered. It is anticipated that the ballrooms will have receptacles at the
exterior walls and will have two runs of Walker cell recessed in the floor the entire length
of the space with activations every 24” (a receptacle will be installed in every other
activation). Each ballroom and breakout room will have power provisions for a ceiling
projector and motorized screens.
The lighting system will be a combination of T5 fluorescent linear lighting and LED
downlights. All break out, boardroom and ballroom spaces will be provided with
0-10v dimming capability. It is anticipated that the ballroom areas will have a Lutron or
Crestron lighting system for scene control and other automated functions for screens
and projectors. All breakout, boardroom, office areas and corridor areas will be provided
with occupancy sensor control. Emergency lighting will be provided utilizing Edge Lit
exit signs with battery backup, fluorescent fixtures will battery backup and exterior
emergency lighting with battery backup.
Exterior building lighting will be LED wall mount with cutoff optics. Parking lot lighting
will be comprised of LED light heads on maximum 20ft poles – estimate of quantity of 20
dual head. (an deduct alternate could be provided for using Metal Halide). All exterior
lighting will be controlled via a small relay panel like the Light Keeper 8 with astronomical
time clock and photocell input.
An addressable fire alarm system will be provided throughout with Voice Evac for an
assembly area. This will incluced FA speaker strobe coverage in all rooms with exception
of individual offices in accordance with NFPA 72, ADA and IFC 2009. A manual pull
station shall be installed at every exit. Air handling units with 2000 cfm or more will be
provided with Smoke Duct Detection. Exterior horn strobe near the Siemise connection
will be provided. Smoke dection will be provided throughout with exception of heat
detection being provided in the Kitchen area.
114 |||| BOZEMAN CONVENTION CENTER | feasibility report
A telephone service will be provided with 4” PVC from TTB to the property line and a
provision will also be made for Cable company services with (2) 2” PVC from the CATV
board to the property line. A free standing voice data rack will be provided with (5)
Category 6 patch panels and Category 6, 4-pair cabling to each workstation jack. It is
anticipated that there will be 200 cables / 100 2-jack workstation outlets.
It is anticpated that there will be Plasma and/or LCD TVs – estimated quanity of 15.
Each will have a power connection and RG-6 coax provided to a CATV board at the
data room.
It is anticpated that there will be a lightning protection system provided for this building
with counterpoise ground around perimeter of the building.
A card access and security instrusion detection is recommend for this facility with prox
readers and door switch monitoring at least each exterior door.
Electrical System Narrative
(continued)
BOZEMAN CONVENTION CENTER | feasibility report |||| 115
Landscaping
Narrative
Based on precedent and a $4-5 per sq ft cost, landscaping for the Bozeman Convention
Center would be approximately $275-$300,000. This project cost would include design,
construction of plantings and installation of irrigation (no hardscape elements, signs,
water features, etc.).
116 |||| BOZEMAN CONVENTION CENTER | feasibility report
Furnishings
Narrative
A convention center of this size will offer a variety of opportunities for many different
types of functions.
Based on square footage, 1300 chairs would provide comfortable seating in the
ballroom when placed in a banquet setting. Within the budget we have also included
banquet and classroom tables as well as a removable stage and dance floor.
We accommodated similar layouts to maximize flexibility in the adjacent breakout
rooms in our cost estimate. An allowance for artwork has also been included to
enhance all the spaces. Tables and chairs estimated for this area include lightweight,
durable, moderately priced furniture that can be easily set up and taken down.
The board rooms will comfortably support 25 seats surrounding a large conference
table. We also recommend a side board for these rooms and that the furniture be of a
nicer quality, mostly wood product.
In the office spaces we factored in plastic laminate return desks; each receiving an
ergonomic chair, two guest chairs and a small bookcase. In the six smaller offices off
the kitchen a more compact desk including an ergonomic chair and one guest chair
were chosen.
The other spaces requiring furniture would include the pre-function and circulation
areas. We recommend minimum furniture in the pre-function area other than benches
for seating and removable tables and chairs for guest welcoming stations. The
circulation areas should remain mostly open in order to keep traffic patterns flowing
freely. We recommend a lounge seating arrangement for comfort.
Several miscellaneous items have also been included in the estimate. These items
include lecturns for the speakers, mobile coat racks and trees to enhance the spaces.
We estimate the furnishings package to cost $500,000.
BOZEMAN CONVENTION CENTER | feasibility report |||| 117
Catering Kitchen
Narrative
There is a fine line between commercial kitchen and warming kitchen.
Based on information received that a warming kitchen is recommended
we have considered the following:
• Double stack convection ovens
• Hot Box fixtures
• 16 x 18 foot walk-in cooler
• Multiple dry storage racks
• 800 pound banquet bin icemaker
• Plate dollies
• A small wares package including place settings for approximate 20%
more than estimated guests and food prep accessories, and table linens
• Triple bay sink,
• Handwashing sink
This estimate includes a type 2 hood system. Type 1 hood could be code requirement
once more details are delivered. In keeping with confidentiality we were not able to
outlay much information to our kitchen consultant.
This estimate does not include a dishwasher as part of the catering kitchen.
The estimated cost of the commercial kitchen is $450,000.
118 |||| BOZEMAN CONVENTION CENTER | feasibility report
Project Cost Estimate
Langlas and Associates is one of the few Construction Managers that work tirelessly to
prepare a budget and will carry that effort through completion of the project. To prepare
a budget or estimate, we spend considerable time with the Design Team and the Owner
on constructability issues and reviewing the Project Programming to understand exactly
what the project intent is and to have a clear understanding of the project goals.
Langlas uses a three-fold approach to cost estimating that incorporates in-house
material takeoffs and labor estimates, subcontractor feedback for major scopes of work
(such as mechanical, electrical, plumbing), and our own historical database of project
costs from similar projects or construction types that we are currently working on or
have recently completed.
Detailed costs are categorized within proprietary estimate spreadsheets developed by
our firm, then organized by CSI division with line item detail for review by the Owner and
Design Team. Pre-construction estimates are tracked in the same fashion throughout all
stages of design (SD, DD, CD). Any variances from one stage to the next can be easily
identified and hi-lighted for discussion.
For preliminary estimates, we use our experience and knowledge of past projects
to develop an estimate that includes not only the items shown on the current set of
documents, but also reflects meeting discussions and our forecast of scope that will
likely be part of the project once the design is complete.
Langlas & Associates has extensive experience in performing preliminary estimates and
forecasting project costs. Because we use a three-fold approach to estimating, we find
that our preliminary estimates are usually within a 5% - 10% range of the GMP.
BOZEMAN CONVENTION CENTER | feasibility report |||| 119
What will you require in the way of plans, specifications and direction to provide
an accurate preliminary budget?
We have reviewed the plans that were provided and were able to prepare a preliminary
budget based on those documents. We encourage you to review the budget closely.
Our intent is to give you the most honest and inclusive budget based on the information
available. We also are one of the few Contractors that can sit down with an Owner, listen
to your concerns on a budget, and begin the process of getting a project within your
budget. We will begin discussing Value Engineering (VE) ideas with you and your design
team. We have completed projects where we have prepared 315 VE ideas to projects
where we have introduced 10 VE ideas. This past experience that is valuable for a non-
profit organization because you have a proven system that you can use to get a project
within your budget and you have a Company that has shown that they will not rest until
you have a project in budget or complete to your vision.
Can you provide an example of a preliminary budget?
We have attached a budget for this project. In reviewing the plans, we had many
questions. We assembled three meetings with eight key consultants to discuss the
projects various systems and core design elements. All these individuals were very
helpful to us in understanding the pros and cons of each system. We also discussed
the challenges associated with operating this building so we wanted to include systems
that were easy to operate and complete. All this information, along with the preliminary
design documents, were a good foundation for us to prepare an accurate budget.
120 |||| BOZEMAN CONVENTION CENTER | feasibility report
BOZEMAN CONVENTION CENTER PROJECT COST ESTIMATE 4/18/13
BUILDING(52,000 sf)
DIVISION 1 TESTING $84,000DIVISION 1 PERMITS/IMPACT FEES $192,000DIVISION 1 BUILDER'S RISK $9,500
DIVISION 1 GENERAL CONDITIONS $511,150INCLUSIONS:
PROJECT MANAGERSUPERINTENDENTFINAL CLEANINGFIELD ENGINEERFORKLIFTTOILETSDUMPSTERSTEMP HEATWEATHER PROTECTION
DIVISION 2 BUILDING EARTHWORK $288,489INCLUSIONS:
EXCAVATION AND BACKFILLOVEREXCAVATION
DIVISION 3 CONCRETE $578,977INCLUSIONS:
FOOTINGSSLABSCONCRETE MATERIALSPUMPING
DIVISION 4 STONE/MASONRY $139,093INCLUSIONS:
STONEMASONRY AT LOADING DOCK
DIVISION 5 STEEL $600,872INCLUSIONS:
REBARSTONE ANBLEBOLTS, HANGERS, FASTENERSERECTION
Langlas Associates Inc.1019 E. Main St. Suite 101Bozeman, MT 59719
BOZEMAN CONVENTION CENTER | feasibility report |||| 121
DIVISION 6 CARPENTRY $1,036,966INCLUSIONS:
FRAMINGFRAMING MATERIALSIDINGCABINETSTRIM
DIVISION 7 THERMAL/MOISTURE PROTECTION $669,497INCLUSIONS:
INSULATIONMETAL ROOFINGWATER PROOFINGGUTTERSTPO ROOFING
DIVISION 8 DOORS AND WINDOWS $1,164,477INCLUSIONS:
DOORS AND HARDWARESTOREFRONTMIRRORSACCESS CONTROL
DIVISION 9 FINISHES $1,266,477INCLUSIONS:
TILEDRYWALLPAINTINGSTONE TOPSCARPET
Langlas Associates Inc.1019 E. Main St. Suite 101Bozeman, MT 59719
122 |||| BOZEMAN CONVENTION CENTER | feasibility report
DIVISION 10 SPECIALTIES $1,160,014INCLUSIONS:
Toilet Accessories/ Fire Ext/ Partitions/ Signs $42,687WARMING KITCHEN $0OPERABLE WALLS $400,000SCREENS/PROJECTORS $17,000BACK OF HOUSE EQUIPJANITORIAL EQUIPCONV. CENTER EQUIP.NETWORK SYSTEMS $239,000AV EQUIP.$56,000INTERIOR EQUIPEXTERIOR AREAS $88,850OFFICE FURNITUREMONUMENT SIGN $25,000Specification, Purchasing and Coordination of FF&EBLINDS $41,477
DIVISION 15 MECHANICAL $1,129,500INCLUSIONS:
PLUMBINGFIRE SPRINKLERHVAC
DIVISION 16 ELECTRICAL $957,500INCLUSIONS:
ELECTRICALFIRE ALARMAV/DATA/ COMMUNICATION
TOTAL BUILDING $9,788,512W/ MARKUP @ 5.50%$10,369,589
IN FFE BUDGET BELOW
IN FFE BUDGET BELOWIN FFE BUDGET BELOWIN FFE BUDGET BELOW
IN FFE BUDGET BELOW
IN FFE BUDGET BELOW
Langlas Associates Inc.1019 E. Main St. Suite 101Bozeman, MT 59719
BOZEMAN CONVENTION CENTER | feasibility report |||| 123
SITE
DIVISION 2 SITEWORK $2,087,771INCLUSIONS:
DEWATERINGSITEWORKONE BRIDGE, TWO BOX CULVERT CROSSINGUTILITIESLANDSCAPINGSITE ELECTRICALSTRIPINGHANDRAILPAVINGCURB AND GUTTER AND SIDEWALK
EXCLUSIONS:
TOTAL SITE $2,087,771W/ MARKUP @ 5.50%$2,211,707
BUILDING AND SITE SUBTOTAL $12,581,296CONTINGENCY$950,249FFE BUDGET $582,650BOND$122,232TAX w/o MATERIAL SALES TAX $143,802TOTAL PROJECT $14,380,229
Building Cost Per Square Foot $199.42Site Cost Per Square Foot $42.53Bond and Tax Cost Per Square Foot $5.12Total Cost per Square Foot $276.54
$1,232,371.22$480,000
$5,052,150
$353,651$1,772,000$70,880IN GARAGE$3,248,000$227,360$350,000
100 UNIT 2-STORY PARKING STRUCTURE COMBINED WITH SURFACE PARKING ON ADJACENT 2 LOTSDESIGN FEES FOR COMBINED PARKING GARAGE AND ADJACENT PARKING
ADDITIONAL CONSTRUCTION COST FOR ADJACENT SURFACE PARKING ON 3 LOTS
DEQ STREAM REVIEW AND PERMITTING
ALTERNATE ITEMS TO BE CONSIDERED TO ADD
LEED CERTIFICATION ON BASE BID ELEMENTS
PARKING GARAGE ALLOWANCE IF EXTERIOR FASCADE/FINISHES ARE REQUIRED
DESIGN FEES FOR BASE BID
3 LEVEL PARKING GARAGE (310 SPACES PLUS ELEVATOR AND STAIR TOWERS, THIRD LEVEL ISUNCOVERED)
DESIGN FEES FOR PARKING GARAGE
DESIGN FEES FOR SURFACE PARKING
Langlas Associates Inc.1019 E. Main St. Suite 101Bozeman, MT 59719
124 |||| BOZEMAN CONVENTION CENTER | feasibility report
Project Cost Estimate
(Continued)
Total Project Cost- $ 14,380,229
Additional Construction Cost for Surface Parking- $ 1,772,000
Design Fees for Base Bid- $ 1,232,371
DEQ Stream Review and Permitting- $ 350,000
Estimated Land Costs for Center and Additional Parking- $ 2,855,000
Development Services Costs and Expenses $ 225,000
*Estimated Total Project Cost- $ 20,814,600
*Subject to Decisions Regarding Other Alternate Items Referenced in Cost Estimate
Sources of Funding
A variety of funding sources are used by almost all communities to help defray the
annual debt service and operation costs of their Convention and Event Centers.
These include:
• Sponsorships
• Naming Rights
• Advertising Sales
• Sales Tax
• State Assistance
• Tax Increment Financing
• STAR Bonds
• Angel Funds
• City subsidies
• Service Charges
These sources of funding can be substantial and in many cases eliminate any
operating and debt service short-falls.
Central Group Companies
Hospitality Consulting Group
Leo A Daly
Langlas & Associates General Contractors
CTA Architects Engineers
Bozeman Convention Center