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HomeMy WebLinkAbout2009-04-16 Business and Economic Development Committee Minutes � . � Speciai Committee on Arena Implementation Thursday, April 16, 2009 � Minutes Attendees: Silver, Barrett, Palmer, Cyr, � In the absence of Councilor Hawes due to illness as well as the delayed arrivai of � Council Chair Palmer, Evelyn Silver indicated that she had been asked to start the meeting. � 1. Recommendation to Award Contract— Market& Facility Sizing: Arena & Meeting Complex � The Marketing Sub-Committee has recently completed interviews of potential consultants to perform a market &facility sizing study. An overview of the process and the overafl recommendation was presented to the entire Committee � and public. By e-mail, Cyr provided a copy of the Sub-Committee's report to the full Committee. Silver asked Cyr to highlight the report. � Cyr noted that 13. responses were received and reviewed by stafF which resulted - in 5 top proposers. Although an ambitious number to interview, it was done with � the understanding that this study could lead to one of the largest investments the City will ever make. The Marketing Committee, City staff, and a number of ` City Councilors sat in on each of the five interviews. With the involvement of the � overall Arena Committee in this process, she wanted to provide as much . information as possible from the individual interviews. In alphabetical order, she reviewed and highlighted each of the five interviews noting that all firms interviewed were very capable and of high quality. . �' The first was Basile Baumann Post Cole and Associates from Annapolis, � Maryland. They are strictly an advisory development firm with a heavy emphasis on meeting, event and hospitality facilities. They do cover all market sizes, which is the case with all five proposers. BBPC has an extensive in-house staff � to use for statistical and financial work and would bring in other sub-consultants as necessary. They have experience with a number of similar scopes of services noting that a11 five firms have existing and well developed relationships within the � arena community whether with promoters, operators, meeting planners, etc. She noted that user surveys are a key component to all. BBPC indicated they � would do stakeholder interviews and surveys over the phone as well as face to �, face and felt a demand analysis for Bangor would be cruciai. All revenues generated from a facility such as this are derived from discretionary income. Mr. � Yewell, the presenter from BBPC, spoke about the potential resulting impact on ancillary development if the City were to make a large investment; i.e. would it bnng restaurants, office space, and other potent�al new development within that � � . � rea of the ci . Yewell inted out that the current market trend is toward � a ty po smaile��facilities. It is a reduced travel time for most folks, more intimate�veriue - and a draw for the local users. In terms of construction costs, BBPC will look at � historicai data. They take a conservative approach in operafing projections � noting that a successful project is one that covers its operating cosfis. This point � was noted by all five firms. This firm tends to get results that are difFerent than what w�s originally envisioned. They have a limited local knowledge of the area but were able to portray their understanding of the area's market-- being rural � in nature and that folks are willing to drive a further distance to enjoy entertainment. The second was Convention, Sports and Leisure from Texas represented by Bill � Rhoda and Populous represented by David Greusel. CSL came in with Populous (formerly H�K Associates, who performed the first study in 2002). ]ust recentiy, � HOK was hired to revamp the site location study which resulted in the current selecdon of the Bass Park site. Rhoda and Greusel brought with them a hisborical knowledge of what Bangor is looking for, the market, and the city. � They did propose a team with HOK as the architecturaf piece and Piuud, a development firm. This presentation included smafl to medium marketing � examples but a majority of their submission focused on larger markets and pro sports. The group has worked in this industry for weli over 20 years and has done a significant number of similar scopes of service. They referenced the � amount of repeat business as a testament to their success. All firms were asked about the scope of services and it was pointed out that the City didn�ask for an economic impact study. Firms atso noted that it would depend; if the data is � needed to sell the project, an impact study would be beneficial. C�r said that the City's scope does not include a request to update the economic impact study. Finding the right building mix was paramount to this group in order to appeal to ,� what the market can support and not overbuild. All firms talked about the state of the economy and they also are seeing a drop in entertainment events and a noticeable reducdon in the meeting market. This group uses a variety of � measures to obtain user-survey information, promoters via phone, e-mail for meeting planners and faoe to face surveys within the community and other local � stakeholders. They pian to use the Populous firm to develop not only the construction costs but the total outfitted costs. She again said that CSL and Populous are the individuals the �ty dealt with under HOK back in 2002. They feel that 95% of their projects have achieved or exceeded initial estimates and � envision reviewing what other development uses exist within the area to see if something is missing or to include the possibility of including ancillary � development within the facif'ity itself. They are knowledgeable about the Bangor area as well as potential stakeholders. _ . � � � �� � The third was E AECOM from Chica o and is a mana ement su rt �/ 9 9 PPo � consulting service. They chose to come iri vriith the architectural firm of Sink Combs and Dethlefs (SCD) specializing in event center projects. ERA feels they have a niche in serving Bangor's smali to medium size market facility as the majority of their work involves facilities in the 5,000 to L0,000 seat range. In � reviewing Bangor's scope of services, ERA feit that there were several more moving parts than normal but the data the City is looking for is similar to projects J � ERA has completed. They have Eompleted studies with some similar economic and demographic in competitive environments that they feel could be used as base data going forward in Bangor's project. ERA pointed out that the City did � not request an economic impact study which, as wi� previous proposers, it depends on whether or not Bangor needs to sell the project. Regarding competitive facilities, ERA pointed out that other facilities shouid be reviewed as � comparisons but also as an opportunity to create a complementary relationship. ERA has seen a drop ofF in recreational spending but feels the market should � improve over the coming years. They prefer to conduct surveys face to face but recognize it is not always feasibte and use e-mails and phone calls as necessary. SCD could take the lead in estimating construction costs assoaated with the s�ze � and matrix the C'�ty had asked for and indicate their estimates are very accurate. They also stress that the u�imate form of construction contract could play a . significant role in total construcpon costs. They emphasize their ability to � develop in a wst ef�ective manner. Operating projections as well as the feasibility of incorporating mixed use space will be done by ERA. This firm tends to be conservative. Their overail preference is to build small rather than tao big. � Tfiey view their role as providing realistic information to find the right solution - recognizing that the solution may not be what was originally envisioned. ERA does have a unique ability to examine the City's financial projections relating to �, gaming. They have employees with gaming industry experience and knowledge. They understand the role of Bangor within the overall region as the hub for events and activities. They also looked at the City's current assets: the fair, �. hamess racing track, and goif course. ERA's architect had reviewed the site and presented potential layouts for a new facility and taiked about repurposing the � current auditorium into some other form because of the ceiling height. They want to maint�in as much of the park as possible and want to incorporate the park into the overall facility. � The fourth was HVS located in Chicago. The City has had some experience with this group during ifis work with the Hunter Group who�did the original waterfront � master plan. The presenter was Tom Hazinski. HVS has done some hotel studies for non-city businesses w�thin the area. They are a very targe global hospitality consulfing firm, have significant in-house staff that could handle most � aspects of the scope of service, anticipate using historical and average data for estimating facility costs, work extensively with govemments and/or public � flnance projects�. HVS said the City should potentially look at engaging in a � . � � master lannin session to evaluate the stud for additional amenities in the area � P 9 Y of the facifitjr:�"Tfiey have perFormed studies for a number of multi-purpose �-�� � -� � facilifies within New England and with communities of similar size and demographics to Bangor. They have developed their own approach and proprietary data bases for all of the work they perform. HVS views their role as � providing the information with the City making the decision. They feei that the economic impact should be focused how much new money could be generated or circulated into the market from another market. They noted that a generai � location has already been selec�ed for a new facility and did not include an evaluation of the type of facility that would fit the site. Each of their projects is done from a multi-cycled perspecave where they are constantly reviewing and � refining throughout their process. Their user surveys emphasize qualifiy and relevant data. The surveys are designed to encourage response, and they conduct face to face and e-mail surveys as well. They note tfiat the industry is � trending down at the moment due to the economy, that corporate spending is down, and point out that since Bangor's facility is primarily a local use that actually tends to lessen the economic downside especiaily when looking at � corporate spending. HVS is conservative in its approach to operating projec�ions. They would convert Bangors historical information with what the new facifity and � market is indicating with other comparable facilities. They intend to estimate the construc4on costs and they will not be site specific. HVS understands that the project is an essenfial amenity for the City. �, The fifth firm was VenuWorks located in Ames, Iowa represented by Andy Long, and Dan Miller of JLG Architects and Lee Esckilson of ES Venues. While �� VenuWorks does the consulting and feasibility study, they also are an operator of facilities which is 60% of their business. They brought in an architectural firm as well as an individual with a long history of experience and development in � construction and management of public facilities. If chosen, this specific individual would be'on the ground'in Bangor. VenuWorks would present the � facts as well as altemative possibilities that make sense in the overall market that they find. They employ an event based methodology where usage teads to function and function leads to design which then leads back to usage until the � right mix is found. They would look to the City/Arena Committee as its support � mechanism to identify relationships, logistics and planning. Their focus was on face to face interviews whenever possible. One of the key questions that VenuWorks felt needs to be answered is what can we afford. They intend to � look at Bangor's flnancial forecast. VenuWorks has some experience with the Canadian markets. They want to look at all potential markets while specificatty � looking to identify a niche market. Silver noted that the irrterview pracess was very thorough. Responding to a � question, Cyr said�there were �inro individuais from the Marketing Subcommittee that were able to attend all five inberview sessions. Otl�er participants made two ;� . � � � or three or four. r and Barrett sat in on all five. Someone asked for a list of �Y � interview questions, and C�rr will provide a copy:���ilver noted that a majority of the C"�tjr Council also attended the interview sessions. Responding to a question, Silver said that meetings and conventions were also � discussed during the interviews but not to the same extent as sports and entertainment. In terms of other funding sources, Cyr said the assumption is � that the City wiil focus on the money available through the operation of the racino. Part of the scope of services is to review the City's flnancial projections related to that particular revenue source. Specifically tfie firms were asked `what � type and size facilities dces the Bangor market support'and`what is the estimated cost of that.' � Responding to a question about working w�th the current facility, ERA and SCD � did spend time at the current facilities and provided a layout of what could be done with the site. One comment made was that to tear down everything to � rebuild isn�the best use of dollars and felt that the Civic Center could be � enhanced with an addition even looking at doing something with the Auditorium � Instead of simply tearing it down. Silver said that all firms were asked to consider renovaaons to the current facility in their scope of services, and all said they would consider it. ERA stood out because they did some of their work even � before coming to the intenriew. � Silver indicated that members of the subcommittee recommended ERA/AECOM � as their first choice as did City staff and �ty Councilors. Someone inquired about the top compelling aspects about ERA/AECOM. Silver � said she felt that this firm had an expertise and focus on the small to medium size markets. The examples provided were in much more reasonable price ranges. She liked their thinking on the renovation combined with some new � canstruction. Baldacci complimented ERA for their thought that it is better to build a bit smalier. It costs money for empty seat�s. The selling of the project is � separate from the value of the project, and ERA felt this is a cornmunity commitrnent to make this an important part of the community. That commitment should drive the project. � Palmer said that the Marketing Subcommittee has reached the right and clear decision in recommending ERA/AECOM. He spoke about the potential for expanding the �vic Center. ERA brought new things to the table and they were �� the right size. ERA didn�agree with a design/build concept but to have an architect in place. � � Silver said ERA s ke about the casino the olf course hamess racin and the P� . 9 , 9 .�� fair. � . � � Jonason asked if specific examples were��prd�ided that the Subcommittee fe�t � � were comparable to Bangor in terms of reuse or modification. Silver said there were examples of the size and variety of activities but nothing in detail in terms � of renovations versus new. Cyr said she would electronically provide copies of � the ERA proposal to the entire committee. � Responding to Silver, C�rr said at this point the Marketing Subcommittee has � completed its interview process and comes forward to the entire Arena Committee with a recommendation to award the contract for market and facility sizing to ERA/AECOM. She asked for a vote from this meeting on that � recommendation, which will then move forward to the City's Fnance Committee on Wednesday evening for approval. AIl contracts in excess of$10,000 require Fnance Committee approvai. � Baldacci said that ERA presented 5-6 projects for which they had produced plans and perFormed marketing studies. Almost every one was a smaller commun'ity � � _ than Bangor. ERA said this was a.different approach than what they had seen in Bangor's prior studies. In pertorming their work, they felt they would look at their analysis as placing Bangor in the middfe. In looking at communities smaller � and a little �arger in terms of comparing information, Bangor would be in the middle. He felt that was a good thoughtful approach. ERA also thinks that this � is a good time to move forward with the market being very receptive to construction projects during the next year or so. Several of their recently bid projects have come in at much lower costs. � Responding to Johnson, Silver said that several firms pointed out that Bangor had not included an economic impact study and it wasn� discussed in detail � during the interview process. All firms were tremendously enthusiastic about what this facility could mean to Bangor, not just economically. Johnson said he was pleased that ERA has individuals within their company to analyze the gaming � revenue. He complimented the Comm'�ttee and the City for their thorough review. � One attendee spoke about the potential savings of getting out early with this project stating that the new courthouse came several million dollars under its � planned construction cosfis. The savings enabled them to add some features they had expected to forego. One member said he is very irnpressed with tl�re connectivity ERA has with �� understanding the region. He is curious with what sounds like an intimacy of _ venue by virtue of the size of the�arenas they speak about but the emphasis � around more sporting and entertainment events. He asked how that affected dialogue around some of the revenue sources; i.e. is a skybox scenario included. � ;� ,� � � He asked if all proposals were within the dollar scope of what was being sought. Responding, Cyr said that some of't�e'prices came back with a revised scope. � ERA came back with an opti�n to do everything all inclusive with the price. Although there might be some redefining, in the end the amount wili not exceed � the appropriation. All firms spoke about meeting space but more in the way of looking at user surveys. ERA made it clear that they would go after the typical meefings and conventions in their user surveys. All firms saw Bangor as a � regiona! market for meetings and conventions. C�r didn't recall that ERA spoke about skyboxes or any other specific revenue generating ideas. � Silver asked Cyr to comment about reference checks. G�r said that at this point she has spoken with one particular reference and is waiting for a specific call from Heart Island, Nebraska which ERA used as a project that was very similar in � size, scope, demographics to Bangor. She has spoken with individuals from the arena in Leigh Valley, PA and they are currently using ERA and SCD. Leigh Valley � is looking at an 8,200 seat hockey arena, 10,000 concert seating, multi-purpose community center. She spoke further of positive reference checks specifically for David Stone (ERA} and Don Dethlefs (SCD). The Leigh Valley representative � indicated that ERA and SCD are the best of both worlds. One member spoke about the comfort level with the gaming revenue staffing at � ERA. He also noted and agreed with ERA's assessment that Bangor does not _ � need additional hotel rooms. In the past nine months, Bangor has had a 25% increase in hotel supply. Lodging sales in the Bangor market place is down . � double digits for the past six months. Silver commented that ERA had definitely done their homework in this area. Daigle recommended that a motion be made for ERA with a 15 week time period for an answer. The motion was seconded. � Silver clarified that this motion with a second will forward the recommendation of ERA to the City's Finance Committee. � Bruce Nickerson spoke about user surveys, the definition of users and if it is a City staff process. Dyer said that his office will provide user lists over the past � five years. He is certain that it will be a thorough process. � � Cyr said there will be a ramp up period before the 15 week period starts and part of that will be the presence of ERA in the area. They will want to meet�with the � Council, the Arena Committee, the GBCVB, the Chamber of Commerce, meeting associations and all potential stakeholders. She noted that the Committee needs � to establish a contact person for ERA to work with. Lewis agreed with the Committee's review and recommendation. He expressed � one concern about the scope of the study and the batance between being reasonable, realistic, and conservadve in terms of wisely using the funds with stretching and being visionary. - �� �' . � � ��� ��Wfieeler commended the Marketing Committee for a good choice���af•ERA. He urged the Committee not to hold this firm's feet to the fire if the survey is not t� completed in 90 days. Silver called for a vote on the motion to recommend ERA. The vote was �� unanimous. The next meeting date will most iikely be tied to an initial stakeholder type � meeting with ERA on site. Cyr estimated a meeting sometime in mid-May. A motion was made to adjourn. � . � � � � � � � � ;� � � � �