Blueprint Board weighs funding Arena District project at double the cost
March 10, 2020
TALLAHASSEE, Fla. (WCTV) -- The Blueprint Board will look into the next steps for the Arena District Convention Center Project at its Thursday meeting; new studies put the possible price tag for the project at $53 million, which is double the original projections.
Florida State University conducted a market feasibility report on the project, and is seeking board direction to determine the next steps.
The convention center is part of the larger FSU plan for the Arena District, previously named the Madison Mile. The big picture includes attracting a full-service hotel to the Madison District. The vision was introduced in 2013, and the referendum for 20 million dollars of funding was approved by voters in 2014.
In December 2019, FSU sent a letter to Blueprint staff, explaining that due to funding limitations, the university will not be able to provide supplemental funding for the design and construction of the convention center.
The HVS study conducted on behalf of FSU recommends a convention center with 39,000 square feet of rentable meeting space; the construction is estimated to cost $35 million, with an addition $4.5 million for "furniture, fixture, and equipment."
The bond issuance would be $40 million, with $13 million in debt service to finance the bond, bringing the total up to about $53 million.
The HVS study outlined minimum requirements for the project, including the capacity to generate county-wide conventions/conferences and events to support multiple existing hotels, restaurants, and attractions. It calls for a major ballroom providing at least 25,000 square feet of meeting space, a full size conference hotel (including one restaurant, valet parking, gift shop, dry cleaning, swimming pool, sauna, fitness center, and internet), and parking facilities. FSU says the Turnbull garage would be available to fill parking needs.
According to the agenda item, "the market feasibility report conducted by HVS indicates that Tallahassee is capable of supporting a convention center with 39,000 square feet of rentable meeting space, and is the only state capital in the south without one."
Leon County Tourism Development agrees with the HVS statement that the Tallahassee-Leon County area can support the development.
The agenda item also says, "HVS states that a center of this size would allow the community to compete for state association and regional corporate events, as well as allow for growth among existing and prospective events that would consider Tallahassee-Leon County."
According to the agenda item, a smaller facility could be built utilizing the $20 million funding, but it would be half of what's recommended.
The dimensions would include 14,5000 square feet of ballroom space, 5,000 square feet of meeting rooms; that totals 19,500 rentable space, the same size as Turnbull Conference Center.
An economic analysis has not been run for the smaller size.
The agenda item states, "A smaller convention center half the size HVS recommendation would not provide a fully functioning conference or convention center, which is by Tourism staff."
It also notes that more than five hotels are currently under construction within a one mile radius of the Arena District, including the Washington Square development; the total amount of conference space from those has not yet been determined.
FSU notes that due to the new cost projections, additional input from the Blueprint Board is needed. The university has agreed to contribute land, own and manage property in third party operating structure, and any fund operating deficit. It says it intends to move forward w/ design and construction of a hotel, separate from the convention center, but adjacent.
The agenda item includes a study by the Center for Economic Forecasting and Analysis, commissioned by FSU.
Regardless of the number of visitors, the study says there will be an economic output of $30.7 million, with 230 jobs, and income of $8.5 million.
The study looked at a "high" condition of visitors and a "low" condition of visitors.
The high condition assumes 91,000 annual visitors; that would generate economic output of $153,864,966 and 1,137 jobs.
The low condition assumes 45,500 visitors annually; that would generate an economic output of $76,932,476 and 570 jobs.
According to the agenda item, "the estimated annual impact to cover debt service would be $2.8 million annually for an estimated total payout of $53 million."
That number represents 42% of the economic development portion of the sales tax dollars. It means the IA Board could have less financial capacity to incentive new projects or fund new programs.
Blueprint staff is recommending "board direction," which means they are not suggesting a particular option. However, in the conclusion, staff writes that it "does not recommend the $20 million option for consideration."
The Board will meet Thursday, March 12, at 3 p.m.
WCTV will continue to update this developing story.