Illustrated Daily; 5125; Albuquerque Convention Center Expansion

United States is a billion-dollar industry, and American cities which are its beneficiary, say it is clean, lucrative, and an employment bananza. But without that quarter-cent sales tax, can Albuquerque expect its fair share of the nation's convention business? We'll find out next on the Illustrated Daily. The Illustrated Daily, Managing Editor How Roads Good evening. For years, convention industry analysts around the nation have argued that Albuquerque is well-situated to become the major convention city of this region, notably in those summer months when other southwestern metropolitan areas are either too hot or too humid or both to be attractive to conventioneers.

It could be, they say, a multi-million-dollar industry for the state's largest city. And as a consequence, Albuquerque civic leaders, both in the private and in the public sectors, have increasingly hoped in recent years to tap that lucrative vein of gold. The payoff, according to economists familiar with the convention industry around the country, could be substantial, jobs for the unemployed, economic spin-offs in the form of convention-related businesses, not to mention additional tax revenues born of the convention business and therefore relief for local tax payers. Although some still continue to believe the Duke city still has a shot at all that, there's contend the defeat at the polls earlier this month of that quarter-cent sales tax and urban development fund. There's a serious setback to Albuquerque's hopes of becoming the major convention city of the southwest. Momentarily, we will explore this situation with Albuquerque Mayor Harry Kinney, the director of Albuquerque Center Incorporated Harold Stewart and Fran Hill, a member of the Albuquerque

City Council. First, however, this background report. In a municipal referendum two weeks ago, voters refuted the quarter-percent tax for open space, urban development, or for any other purpose. Gone for the time being, at least, are plans for the urban park and undetermined public facility and any sort of retail food center or marketplace. Plans for the convention center expansion are moving ahead, however, as this project is to be funded by the 5% lodgers tax. Ways to alleviate the downtown parking problem are being explored as are ways to lure a 500 to 1000 room convention headquarters hotel to Albuquerque's downtown area. And so will one step backward lead to one step forward, and if so, where exactly will that leave the push for a major convention industry in Albuquerque? Albuquerque Mayor Harry Kinney, if I conduct this interview, the way I introduce this program,

we could call this, watch how roads walk on his tongue hour. Well, I'll keep you company on that. All right. Mayor Kinney, let's start with assumptions. If you don't mind, do you buy the view of some convention industry analyst around the country that Albuquerque really does have a shot at becoming the major convention center of this region? Well, we're not going to ever compete with Las Vegas Nevada or Anaheim, California. I think we already are competing fairly well with Tucson and Phoenix and Denver, El Paso. So we're doing fairly well, but we will never exceed or catch up with Las Vegas. A lot of people would be surprised to hear you mention Anaheim, California, as a major convention center. It had always been my supposition that Anaheim was one of those places that wasn't there. Well, convention areas like to bring their families and the families like to have something to do.

And of course, Disneyland is there. And it is a major source of income. They even fund part of their general fund off of the room tax. But so we don't have those kind of attractions, but on the other hand, we do have very interesting scenery. We have Indians living in the pebbles and we have a beautiful climate for people to tour around. So I think we're very much in the competition. They'll go to Disneyland one year, but the next five, they'll go someplace else or maybe the next 10. So we are in competition. We're doing very well. The bookings hasn't have increased in recent years or so, and even our real problem is on the bigger conventions that require a large amount of exhibit space. We're not competitive. But don't you have to do that if 3D are going to be the major convention center of the Southwest? I mean, don't you have to go into the big league to pull it off? Well, I don't know how to compare with others, but we are missing business that we'd like to get here by not having enough exhibit space.

All right. Immediately following the defeat of that 1.5 sales tax recently, what, now 2 weeks ago, it seems a lifetime I know to you, Mary Kinney, and that urban development fund, which some suggested, of course, as you know, and the course of that campaign would be instrumental in Albuquerque's push to realize that objective of much larger convention activities here. The day after, as I recall, the press conference, you unveiled a plan which was admittedly substantially less than some of those which were being discussed and debated in the course leading up to that election. As I understand it, those plans would include the convention center expansion, a new parking structure, correct me if I'm wrong, perhaps a convention hotel. Yes. Of course, the decision whether we have a convention hotel is not made by the city, it would be made by a private developer. I was going to ask you, where's the finances for all this coming from? Where's the timetable? The reason that I had that press conference is we had had several drawings and preliminary

plans of a convention center expansion that amounted up to like 35 or 40 million dollars. I say we cannot afford that. We have to come up with a plan with the ability of the room tax to pay for it, which is something around 20 million. It might be more. I think it's wise for us to make a plan big enough that we can, something around 20 million, we can get our 100,000 square foot of exhibit area and also out of the room tax subsidize in some manner, part of the parking for at least the parking that will be directly usable by the convention center. That, in some other source, try to get some additional parking that will help attract a major hotel. Some people after the press conference ask if this can be accomplished without the quarter cent sales tax, what was all that commotion about? The very basic thing is we cannot, without some of the amenities we were going to do with the quarter cent, we cannot attract as big and high quality of hotel as we can without

that. Also, the surroundings, we do not have the money to make it more interesting for evening activities that the convention goes. That's the magnitude of the size and the quality of the hotel and the amenities around the hotel and convention center. We will not be as good. All right. What kind of expansion are you talking about? What kind of convention size? Some people were talking during the recent election of a hotel, for instance, as large as 500. Yes. I would hope that we still can attract at least 350 room hotel people have been talking to me about that size hotel even before the development fund was considered. It would be good and we would be trying to get up to 500. I don't think we're going to get larger than 500 room, but someplace between 350 and 500 room. All right. As you note, the hotel would be funded through private capital, sure. But what, in terms of the world of, you know, the national convention market, is a convention

hotel, 300 to 350, regarded to be, in other words, that's a medium size convention. You're talking about that? Well, no. We will then have about 700 rooms, not all that will be assignable to a convention, but I've served for many years on the executive committee of U.S. Conference of Mayors and our criteria is to have 600 rooms within walking distance. So we would then qualify for that convention. There's a group of conventions that we'll qualify. Some we will still be too small. And we will never qualify for the very biggest one. Some need 150 or 200,000 or even 300,000 square foot of exhibits. So there's a niche that we can handle. We also have some excellent other hotels, an easy busing area that help us attract others. We have major, we're going to have an Optimus International Convention this summer that will require a lot of busing. So we've, our convention business is relatively good. You know, we just had a, I just did a show during that, it was a Latin American studies conference

meeting that was here in Albuquerque, a couple of guests from out of town were on the program. Quite frankly, when it was over, they were grousing because they were, they felt, I won't tell you where they were staying, I don't want to offend a hotel in Keeper, but they felt they'd been stuck out in nowhere with nowhere to go. Well, that's a problem and it will, it's something we have to make downtown more attractive so that the conventioneers have more fun. I was in Houston a couple years ago and I was only about four blocks from the convention center and it was considered to be a convention hotel, but it was so hot, it's impossible to walk, so they had a bus service leading to it and time you wait for the bus, it took as long to get from this six block away hotel as it would from four seas in the Hilton or the Mariette or the Amphac would have been just as convenient. Well, there's a natural law which goes no one in their right mind goes to Houston in the summer. Well, it's still convention time. To what extent, Mariette, are we dealing in a way here with a chicken and the egg problem?

The kind of convention industry a lot of people would like to see here, need those amenities, but you need the convention industry to get those amenities, is there... I think it's real important that we proceed on the expansion of the convention center. I went through this about 13 years ago in regard to our present one. We had to go... Power had with no hotel in sight and we did get a hotel. I think with a power head with the expansion, we'll get a hotel. What was the like time in there between getting the convention and between a pay off? About three years before we got the hotel, in that case, the only incentive was we would put a tunnel in from the convention center to the parking structure. We even had five to four vote on that $265,000. Boy, things do get divisive in this town. Harold Stewart, Albuquerque Convention, pardon me, center, incorporate, I've got conventions on the mind. The organization long supported an expanded convention industry in Albuquerque. What do you say to those who argue that Albuquerque really cannot compete with places like Phoenix and Dallas in the Southwest and become a big convention center?

Well, I think I take pretty much the same approach to Mariette's and that is that you look for the niche that you can fill and you look for the opportunity that's there as a community that's the size we have of half a million people approximately. There are a lot of opportunities to attract the high quality, very dynamic kinds of conventions to bring a lot of money and a lot of people into the community. They take very little out with them, except some souvenirs and some good memories of the city. And that's the sort of approach that we've taken and looking at the expansion of the convention center. You don't necessarily want to try to compete with the Anaheim's or whatever. There aren't that many shows when you get into the big end, the large space you use. There's just aren't that many shows. Maybe shows. Well, exhibitions in the convention centers. So there's nothing wrong at all with finding that niche and assuming a good strong place wherever that's at in the middle or the upper two-thirds or wherever that we end up at. I was talked to a business analyst at the Wall Street Journal who said it's just inconceivable to me that Albuquerque is not a more significant convention industry town given the fact of

its proximity to mountains and deserts and notably in the summertime to Santa Fe, opera and the like. I think I understand what you're saying. But what I've never fully understood is anybody who put down pen on pad and figured out really what kind of economic payoff we're missing by not taking that plunge. Well in the study that was done by Gladstone Associates, I forgot the exact number. But the expense of the convention center means something like an additional 20 to 25 million dollars of income to the community. In addition to what's already here, I think it was in like in the first five years. So it's a substantial amount of new money. And the bigger the convention, the more people you get obviously the more money you get out of the convention. One of the things that helps with conventions and I'm not a conventions expert, but the after or before convention trips that are associated with a lot of them, maybe a weekend trip up to the opera or a trip out to the pub blows or things like that. And also spouses programs and for many of the conventioneers, those are important because

they'll bring along their husband or their wife and go to these side scene areas during the time of the convention. So not both members of the family participate. But there's a lot of opportunity here for capturing the sort of showed places that we have. And especially the winter time, we've got relatively mild winners and certainly compared to many places. And there's the opportunity for skiing and that sort of thing. So we could begin to package those again and as I understand it, the convention people are beginning to do a substantial amount of that. I don't want to go right back to you, but Mercky, can you tell me, say you add $25 million to your local economy in the form of convention industry payoffs? What does that translate to into in terms of taxes? I'm thinking about it. I'll give it back to you. Thank you, Mercky. That's difficult, but it's a kind of business that is good for us because we have the manpower to take care of the manwoman power. It's people locally and it helps the entire state. So I can't give you the exact figure.

The Glazedone report did have it, but I don't have it for me. Well, it's the test, Mercky. Let's go back to the chicken and the egg problem if you don't mind. You need a much expanded convention headquarters type hotel in order to house conventioneers. But you need the convention expansion facility in order to attract the hotel. You've heard the mayor on this, but is there a key that unlocks this mystery? Key that unlocks the mystery as far as the developers, we've talked over the last couple of years, is doing the convention center and getting the commitment made to go forward with the convention center. We treated as the chicken and egg problem. They see the commitment of the city and moving forward with the convention center expansion as the key to their decision as to whether or not they'll build a hotel. All right. As you see it, then, expansion is of the sort, the mayor just outlined. What niche convention industry niche will Albuquerque come to occupy with that kind of facility? Well, I don't remember the exact size, but we'll end up somewhere around 100,000 square

feet of exhibition space in the expanded facility. That means that we can take on most of the shows throughout the country that, as I said before, there are a number that deal with the quarter of a million square feet or 300,000 square feet of exhibition space, but most of them are in 100,000 to 120,000 square foot range. All right. Does Albuquerque, how much longer do you think Albuquerque has if it wants to occupy that niche? In other words, when do we have to get on with it and when do we have to have it completed? Oh, I think we're ready on with it now. I mean, it's a matter of, we have opportunity. It's recognized that we're taking that step as a community, and the hotel and convention people are looking at the opportunity in the next couple of years, three or four years at least. The Convention of Israel People are already promoting the existing facility very well and they're waiting for the opportunity to begin to promote the expansion. So I think we're ready to assume that position.

How serious is that back to you calculate the quarter cent sales tax and the urban development fund to be in terms of the kind of convention industry we might otherwise have had here? Well, the quarter cent is going to make it more difficult to get it, get the 500 room hotel, the loss of that quarter cent. We had the opportunity there to do some things in the downtown, and of course, throughout the city, that was the purpose of the tax was to be city wide. And it's going to be much more difficult to create the atmosphere, to create the environment for a major hotel and to create the environment to the after five environment for the convention areas. We're going to have to work a lot harder to make it happen. And we won't be able to use the spin-off results of that for things like office space and that sort of thing that we could have gotten back out of the investment in the hotel and that. So we're going to lose quite a bit over the long term. It's hard to measure, but certainly we have the opportunity when we, with the fund and the community. Are we still looking at $25 million for the cost of doing things downtown? No, for the return that you mentioned a moment ago.

In other words, all the convention industry without all that still produced $25 million would have produced more with it. It should have produced more with it because we should have been able to, we had more to sell if we had, you know, all the other things in place. But the Gladstone Report didn't take into account the full program for downtown. Councilor Hill, the day following the municipal referendum, which occasion the mayor held the press conference and articulated the plans he's just described. Therefore some members of the city council took exception to the plan. I think they said too little, not enough. What's your feeling about what the mayor is trying to accomplish here? Well, we're both trying to accomplish the same thing, which is to expand the convention center, which has been in the works for a long, long time. I guess the only bonus contention we had with the mayor on that particular day was that there was a meeting set up the next day on Thursday to discuss some of the final plans. And we thought that was a little premature on his part, but I don't think we want to

get into an argument on that. Do you want to argue about that? No, I think the difference of opinion on which scheme, and there were seven of them, some of us would like to see the scheme that has potential for future expansion. We can lock ourselves into the situation with one particular design, and that's as far as we can ever go, and we might in ten years be back where we are right now. If we go with the bigger scheme and get more space, we can do it in phases. We don't have to, if we don't have the money, and I agree with the mayor, we have to stay within the lodgers tax. And the lodgers tax right now is growing at the rate about 12 and a half percent a year. We've done several projections, we being the city administration, on how much lodgers tax would be available if it was 9 percent growth or whatever. And for this fiscal year, it's running between 12 and a half and 13 percent increase in the lodgers tax.

How long do you go on that kind of increase? In other words, what's the carrying capacity of that lodgers tax? Forever I guess. And that kind of growth? Yeah. Well, it's been doing that over the years. Is that your feeling, Mayor Kenny? We wouldn't say forever, but our hotel rooms are rather inexpensive, and so I think that's going to be an advantage, and because we have been working on various schemes of what way we could fund, and we'd had a meeting of three weeks ago on the thing. So I think we're relatively close together. I've sort of encouraged that we might expand to the north over where the tower building, the laundry is, and that would be available from the site and the Y of the Grand Avenue overpass. So these are details. But we're going to continue. We're going to continue getting good convention visits. I think maybe we've drawn too much black and white. We're going to get good convention of the medium size. It's to get into the larger one that we have to make these improvements. I want to get back though. I'm sorry.

I didn't even interrupt you. It just occurred to me. I needed to know that. Well, one of the problems we have, and I talked to the head of the Commission of Tourism Bureau, and with the expansion of the convention center, we would jump over into a market, and there's approximately 300, 296, something like that, conventions that we would automatically be in the market for, with the expansion up to between 85,000 and 145,000 square feet. It opens up a whole group of conventions that we can't handle now up to maybe 1,400. And we could conceivably have 25 or 26 of those in our first year after the expansion. One of the things, and I think we're all in agreement, that we need to proceed, is to make that commitment. Well, that's the thing. That's already the question I was asking Mr. Stewart the moment ago. How much time do we have? Because I'm told other cities are just as hungry as Albuquerque for this business, and when do you have to get positioned if you're going to get it? I think we need to do it now, because they're waiting out there to make those decisions, and the conventions are booked several years down the line.

And so we need to get on board. If we want to start locking a man for the next three or four years, then we need to do that now. And once that commitment is made to that additional exhibit space, and it's very important on the design that we get exhibit space that is designed that will attract a convention. Certain designs they don't like. All right. I would ask the mayor about this. There's a dispute over design. Design seems to be a debatable issue in Albuquerque anymore. They debated the design of the festival, so-called marketplace, and to everybody. That's right. Everybody's talk listing after a while. I don't want it to happen here, at least for the next few minutes. But what about the point to Council Hill raises that perhaps a different design is necessary in order to evolve, as it were, as a convention industry in New Mexico? Albuquerque? Well, I think it's legitimate to take in expansion capabilities, and I think we have to sit down. As I have, I've probably met five or six times with the architect. I had mainly, I'm trying to get the architect to focus in on plans that are within our capability under the room tanks.

And I was disappointed, some of them were too expensive, too rich, and there's no way we could, I think, waste their time on some of the schemes. And the other thing that I think it's important to me is that we can proceed without having a hotel signed up. One of the schemes would be better if we had the hotel signed up. In the next three months, we find a hotel that wants to participate in that design. I think we can switch gears very quickly. What's the mechanic of seducing a hotel in-keeper type to come and say, hey, I'll give you 350 rooms. How do you do that? Well, they contact a herald, they contact me, and they're- Contacting quite a few of the architects around the city as well, with package deals, and they're just ideas. So they're out there nibbling, and they're waiting for you. A lot of nibbles. I think probably one of the things that we have to be aware of is that the hoteliers that we've talked to have been very enthusiastic about, Albuquerque. But they also recognize that they need something other than convention business to keep the doors open.

They need the convention business, and as it grows, that will be very helpful to them. But they also need to get the business traveler to stop by, and they need to get the occasional tourist person traveling just traveling through town to stop by. So they're looking at several segments to the market. And that causes me to ask the question, you've already got two, say, downtown, rather nice hotels, the region to La Pousada de Albuquerque, now you add a 350 room facility, let's say that's what you end up with. Except when conventions are in town, or you have to do damage to something like La Pousada and the regions. Well, I think you have to remember, Hal, that we have other things, and if we tie in with some sort of traffic, such as the Molytrile that's going around now, with the Convention Center to Old Town, you're going to have them stay. We have Banner Square going in, which is not quite walking distance, I wish it was closer. But it's not, but we can tie it in pretty close with the Molytrile's or transportation of some sort. The Molytrile's are those little go-knotes to go-knotes. Yeah, and they're fun to ride, and they get you around real well, and then you also have the World Warehouse downtown.

We have some very good restaurants downtown, if there were people downtown, I think they'd stay open. All right. So we already have a pretty good thing down here, we're just going to sell it. You're negotiating with people interested in expanding the Convention Center. Then ask a question again, when will the Convention Center be expanded? Well, I think within the next month and a half, we have to make a decision on where the preliminary plans agrees with us most. And then we have to select an architect for the final design. And during that process, when we say yes, we're going to this, then we'll begin to hotel people that have been talking to us over a period of years. We'll get serious about talking. So I would say that it'll be a approximate year before we can go to contract on the hotel. And after you go to contract, how long before you go into business? What a year and a half? A year and a half, two years depends on the contract. December 27, approximately. When will the Convention and Visitors Bureau of Albuquerque be able without having their heart and their throat, book in some of these medium-sized conventions that you made?

Well, as soon as we really, not an architect, I think it will be when we go to bed and it takes about two-year-lead time anyway, so if we say it's going to be two years, two and a half years from then, they'll start guaranteeing that we can do it. Okay, folks, two years ago, two years ago, two years ago, two years from now, let's already assemble here and find out how good it's predicting you folks were. Thanks an awful lot, all of you. Thank you. Thank you. Faith, that's it for tonight. I should mention that Wednesday and Thursday, the Illustrated Daily, a two-part series very likely the most important health-related television journalism we have undertaken here over the years. Hey, look at what has been called the disease of the century, acquired immune deficiency syndrome, AIDS, the New Mexico story. But tomorrow, anticipating that special session of the state legislature, which begins this Saturday, meanwhile, thanks for joining us, I'm Hal Roads, goodnight. Bye.

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