032007 Hunter ReportVerbal Report
Verbal Report
to
to
Virginia Beach City Council
Virginia Beach City Council
Real Estate Development
Real Estate Development
Recommendations
Recommendations
Hunter Interests Inc.
Annapolis, MD ?New York City ?Clearwater, FL
March 20, 2007
Who We Are
Who We Are
21 Year Old Company
?
National Professional Practice
?
Real Estate Economics & Development
?
Financing
Don Hunter38 Year Career
?
?
32 Years in Own Company
?
28 Years As a Developer
?
Reputation for Top Quality Professional
?
Services
Our Assignment
Our Assignment
Analyze 3 City-Owned Properties
?
Highest & Best Use –Benefits to City
?
Recommend Action to Take Now
?
The 3 Properties
The 3 Properties
Birdneck Road
?
Rudee Loop
?
The Dome Site
?
Amended Assignment
Amended Assignment
Analyze 4 Proposals for a Convention
?
Headquarters Hotel
Interview the Proposers
?
Analyze and Evaluate
?
Make Recommendations on the
?
Headquarters Hotel Issue
Birdneck Road Property
Birdneck Road Property
. Highest & Best Use No :
Mixed Use Development
Residential/Retail
. Possible Future Altematl e:
Mixed Use Development
Office Park/Retail
Desirable Possible Future
?
Long Shot Use:
Entertainment Attraction that
Supports the Tourism Industry
Overriding Issue
Overriding Issue
There are use limitations—NAS Oceana
?
Deed Restrictions
?
APZ and AICUZ Limitations
?
Inside the “Greater than 75DB”Curve
?
Adjacent to APZ-2 zone: Runways 5L and 5R
?
1/8 Mile from APZ-1 Zone: Runways 5L and 5R
?
City’s 12/20/05 Ordinance
?
Recommendation:
Recommendation:
No Action Now on Birdneck Road Property
?
Can Show the City is Limiting/Controlling
?
Development
Revisit When NAS Oceana is Less An Issue
?
Rudee Loop
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Beachfront Ma Ket Trends
. Entering the 4th Generation of Bea hfront
Hotels
. Upgrading Will Escalate
. Quality Sells Better than Mainstream
. Look F orward, Not Backward
Quality of the Site
Quality of the Site
Absolutely Tops
?
Magnificent—Spectacular
?
The Best Piece of Development-Grade
?
Real Estate on the East Coast of the U. S.
The Development Plan is Reasonable
?
Anchor the South End of the Tourism District
?
Development Potential: Highest Quality
?
on the Beach
How to Sere t Up
. Develop It Prematurely
. Underdevelop It
. View It as a Cash Commodity
How NOT to Sc ~w It Up
. Recognize the Quality and P
. Be Patient
. Leverage It
Recommendation
Recommendation
Do Not Do a Standard City RFP
?
Do a “Soft Solicitation”to Top Quality
?
Developers
Prepare an Elegant “Spec”to Describe the
?
Opportunity
Does not have to be “use-specific”
?
No “submission requirements”
?
No “timetable”or “selection process”
?
Not a headquarters hotel site
?
Invite visitation
?
Receive and Entertain Quality Expressions of
?
Interest
Be Patient
?
The Dome Site
What the Virginia
Area Does
aeh Resort
eJI
Draws Mid-Market Beach-G ers
During the Summer Season
What It Doesn’t Do Well
What It Doesn’t Do Well
Draw Hampton Roads Residents,
—
Summer or Winter
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Characteristics of the Site
Characteristics of the Site
Unique Size, Configuration, Access
?
and Location
Excellent Development Potential for
?
Several Uses
Needs a Larger Window to the Beach
?
(can get)
Best Over i~ Use of the Site
A world class destination en rtainment
complex-Supports tourism; Dra s residents.
. Live Theatre
. Cinema
. Family Fun and Food (Daytime)
. Mid to Upscale Restaurants/Bars/Clubs
. (Lots & Lots of Food & Beverage)
. Music in the Plaza
. Ferris Wheel or Balloon Icon (vertical)
. Condos and Rental Apartments
. Retail
. Parking
Can be phased, but the t hase
MUST PASS THE CRIT AL
MASS THRESHOLD
to establish use, tone, quality an
penetrate the metro market.
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Bayou Place, Houston
The Old Power Plant, Baltimore
Fourth Street Live!
Louisville
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Makers Mark Bourbon
House and Lounge.
Kansas City Power and Light District
How To Get It .
Recent Interest in he Site
. Armada Hoffler Proposal
. Cordish Company Discussions
Recommendations
Recommendations
Describe the Destination Entertainment
?
Complex
Extend an Invitation to both Cordish and
?
Armada Hoffler for a 6-Month
Feasibility Period
Allow Other Proposals, but Don’t Do
?
a Formal RFP Process
. Work closely with develope on the
facilities program.
. Look at the markets of the future.
. Do parallel financial feasibility analy is.
. Set sights high.
Top Priority for
Action
Convention He dquarters Hotel
There are ce ain
Truths, Principles and Certainties
in the convention center\ d
headquarters hotel busines
Convention Center Location:
Convention Center Location:
You Did the Right Thing
You Did the Right Thing
Convention Center B 1Jding:
You Did a Super job
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However,
However,
You Only Have ½of the
You Only Have ½of the
Necessary Facility
Necessary Facility
A headquarters hot ~ is not a
regular hotel
It is the Convention Centers
Sleeping Rooms
The Botto ~ine
. You MUST have a headquarters otel
. It MUST be adjacent to the convent- n center
. It SHOULD be a top quality, full serVl e hotel
. It SHOULD have a top quality operator
. It WILL require public investment
INVESTME 1:
is not a "subsidy~
What Size ?
What Size ?
With your convention center, in the
market you are in, you need a
headquarters hotel of
600 to 750 keys
To balance your center and secure
your niche.
The Mee fnQ~SineSs is
Constantly anging
. 1 0 years ago headquarters ho Is were
less important
. Competition for convention busine s is
intensifying
. Meeting planners are more demandin
. e.g., the 4 trips/day rule
. Sleeping rooms "in the same building'
. Meeting rooms in the hotel
Location
Ideally, the headquarters otel
is at the east end of the
convention center
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The Four Proposals
The Four Proposals
The Korean Investors
?
Armada Hoffler
?
Hyatt/Garfield/SOM/Turner
?
Doubletree/Embassy Suites
?
Recomme dations
. Pursue the 2 Remaining Proposa
. Consider Acquisition of an East Si
(public use)
. Commission a Fiscal and Economic
Impact Analysis
. Set a Timetable for Decision ( 4-6 months)
and Stick to It
Additional Rec mmendations
. Go to IEDC's "If You Buil t..."
Conference in May
. Look at the Performance ofNE
Convention Centers WITHOU
Headquarters Hotels
. Washington, DC
. Knoxville
. Others
Washington, DC,
Convention Center
Knoxville Convention Center
. Talk to City Officials Who Ha e Been
Down This Path
. Houston
. Denver
. Omaha
. Overland Park
Closing Tho ghts
. Other cities that chose to invest get a
headquarters hotel faced similar i ues.
. The ROI will justify the investment.
. Complete the offering. If you build it ...
they will come.