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Cleveland Convention Center
Headquarters Hotel Project
City Council PresentationNovember 21, 2013
Where, What, Who, When,
Why and How?
presented by Jeff Appelbaum
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Site Plan
LAKESIDE AVENUE
ONTARIOSTREET
WESTMALL
DRIVE
Where?
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HOTEL PROGRAM
665 Guestroom Bays-- 600 Guestrooms 30 Story Tower Structure with 4 Story Podium
Public Space consisting of:
Approximately 55,000 SF of Meeting Space which
includes: 22,500 SF Grand Ballroom
13,500 SF Junior Ballroom
Three Meal Restaurant with Access to West Mall Drive
Lobby Bar and Lounge
Additional Retail Opportunity Possible Green Roof on Podium
Top of Building Event Space
Below Grade Parking -- 280 spaces
Total Area is Approximately: 691,000 SF
What?
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Plan Level 1 - Lobby
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Plan Level 3 Jr. Ballroom
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Plan Level 5 - Ballroom
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Plans - Tower
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Parking level 2
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Parking Level 1
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CuyahogaCountyConve
ntionHotel
KeyTower
TerminalTow
er
PublicSquare
ToweratErie
view
TerminalTow
er
FifthThirdCe
nter
FederalCourthouse
JusticeeCent
er
FederalBldg
.
NationalCity
Center
EuclidTower
OhioBellHur
on
RhodesTowe
r
EatonCenter
MarriottatKe
yCenter
900 770 657 528 450 445 430 420 419 410 389 370 365 363 356 321
1 2 3 4 5 6 7 8 9 10 11 12
Tower Height Comparison
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North Elevations
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North Elevations
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East Elevations
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East Elevations
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South Elevations
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South Elevations
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South Elevations
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West Elevations
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West Elevations
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Elevations
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Hotel Conceptual Schedule
Select Criteria Architect
Select Operator/Brand
Select Design Builder
Cooperative Agreement
Issue COPs
When?
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Public Outreach Meeting August 8, 2013
Project Kickoff Meeting October 7, 2013
Completion of Schematic Design November 8, 2013
Schematic Design Presentation to Council November 12, 2013
Public Outreach Meeting #2 Mid-Late Nov 2013
Design Presentation to City Planning/Landmarks November 21, 2013
Abatement / Demolition Activities Commence Late Nov 2013
Issuance of GMP Document Pricing Package January 10, 2014 Design Development Presentation to Council Mid Jan 2014
Early Construction Start Date (Mass Excavation) February 26, 2014
Receipt of GMP Proposal from Design Builder February 28, 2014
Reconciliation of GMP March 3 - 7, 2014
Revision of GMP Documents and Acceptance of GMP March 7 - 21, 2014
DRC Submission to Hilton March 28, 2014 Construction Document Preparation JanJuly 2014
Substantial Completion April 1, 2016
Hotel Opening June 1, 2016
PROJECT DESIGN SCHEDULE
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Who? Key Project Stakeholders
City of
ClevelandPort Authority
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Workforce/Business Inclusion Goals
20% City Workforce 40% County Workforce
4% Low Income Workforce
25% SBE ( include tracking 8% CSB)
Voluntary MBE/FBE Goals and Reporting
15% MBE; 7%FBE
Prevailing Wage/Section 189 Living Wage)
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Why?
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Direct Economic Benefits to City
Jobs Construction
2800 jobs; 1,600,000 manhours
Income Tax -- $700k +
Operations
366 Employees Annual payroll $9M+
Income Tax--Present Value = $2.5M
$10M contribution forbridge project
Property tax for schools $1.2M annually
Other taxes Bed tax (other hotels)
Admission tax
Parking tax
Sales tax (via Local GovFund)
Car Rental Fee
Taxi License Fee
Increased Business inConvention Center andPublic Auditorium
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How?
Funding Sources Non- School TIF -- $ 12.4M
Combined Bed Tax 15.6M
Net Hotel Revenue 121.6M
Sales Tax Exempt 8.0M
Misc. + Equity 10.0M
City Contribution 8.0M
Convention Center 93.0M
Original Plan
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Original Proposed Sources and Uses for
Hotel
Hotel +Parking
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Original Proposed Sources and Uses for
Group Plan Improvements
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Essential Hilton Deal Points
15-year Term
Base Management Fee - Year 1 $639K; grows to $1.2M after Year 5
Subordinate Incentive Fee - Grows from $267K in year three to $616K in
Year 5, but only payable to the extent that funds are available; that Hotel
has met 95% RevPAR index; and that owner's priority payment is made.
(But unpaid Subordinate Fee paid on termination.)
Owner Priority Payment - $8M Year 3; $9M thereafter
Room Block Agreement
Performance TerminationRevPAR falls beneath 95% of competitive
set for two-year period Financial Contribution (Key Money)
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Hilton Proforma Assumptions
2016
600 Rooms
50% Occupancy
Average Daily Rate $150.17
2020
600 Rooms
70% Occupancy (stabilized)
Average Daily Rate $182.58 (future rate growth 2.5%)
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Hilton Proforma
Stabilized Year 2020 Total Revenue $41,034,000.00 Departmental
Expense 15,088,000.00Overhead Expense 10,480,000.00
GOP 15,466,000.00
Hilton Base Fee 1,231,000.00Hilton Incentive Fee 616,000.00
Income Before Fixed Charges 13,619,000.00Property Tax 1,986,000.00Insurance 247,000.00
EBITDA 11,386,000.00County Replacement Reserve 1,231,000.00
County NOI 10,155,000.00Debt Service 9,000,000.00
County Remainder $ 1,155,000.00
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Possible Uses of City Contribution
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Questions?