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HomeMy WebLinkAbout020607 Convention Center HotelVirginia Beach Convention Center Headquarters Hotel February 6, 2007 Presented By:Garfield Traub Development SOM Turner Construction Company Hyatt Corporation Piper Jaffray & Co. Proposed Hyatt Hotel -Facilities Program 400 rooms • 20,000 square foot main ballroom • 8,000 square foot jr. ballroom • 12,500 net square feet of additional meeting and banquet space • Specialty restaurant and bar • 130-seat convention bar • Hyatt-branded, stay-fit facilities and spa • Outdoor pool • Business center • Gift shop • Climate-controlled connector to convention center • Proposed Hyatt Hotel -Site Plan PHASE II TO\\8l PHASE I TOIlER EVENT AND SUPPORT 8UILDING SPA Proposed Hyatt Hotel -Ground Level Proposed Hyatt Hotel -Meeting Room Level Team Qualifications Garfield Traub Development National developer of essential facilities for the public sector • Creative financing experts • Developed 27 million SF and financed $11 billion in real estate over past • three decades Developed and/or financed over 100 hotels and $3.5 billion of debt and equity • A pioneer in tax-exempt finance and development of hotels, conference • centers and entertainment facilities for the benefit of the public sector A pioneer in taxable public/private development and finance of convention • and conference center hotels Garfield Traub Development Developer of the $92 million, 412-key Overland Park, KS Sheraton • at the convention center and the $34 million, 154-key Bay City, MI Doubletree and conference center, two of the first tax-exempt hotel developments in history Currently developing the $200 million, 500-key Sheraton • convention center headquarters hotel and mixed-use development in San Juan, Puerto Rico Currently in pre-development for the $60 million, 304-key hotel and • conference center for the City of Lubbock, TX Currently in pre-development for the $182 million, 600-key Westin • Hotel at the Oregon Convention Center in Portland, OR Hospitality Experience Resort at Squaw Creek Sands Hotel & Casino Sheraton at the Puerto Rico Sheraton at Overland Park Lake TahoeAtlantic CityConvention Center Marriott Quorum Dallas Bay City Doubletree Hotel Ritz Carlton San Francisco Loews Vanderbilt Plaza Nashville Hyatt Regency Houston Pan Pacific San Francisco Property Location rton Park Hotel and Conference Center rland Park Sheraton Hotel and Convention Center Westin at the Oregon Convention Center Doubletree Hotel and Convention Center Puerto Rico Convention Center Headquarters Hotel Loews Annapolis Hotel Loews Vanderbilt Plaza Hotel Loews Coronado Resort Regency Ho I M M Di P H H L S Lubbock,TX Overland Park, KS Portland, OR Bay City, MI San Juan, Puerto Rico Annapolis, MD Nashville, TN Coronado, CA New York, NY Henderson, NV Henderson, NV Aruba, Dutch Caribbean San Francisco, CA San Francisco Divi Tamarijn Beach Resorts otel rman's Wharf y San Francisco Airport an Diego at Coronado nd Casino y Houston rum · $92M, 318,000 SF, 412-key first-class full-service "upscale" Sheraton headquarters hotel · City goal for fifteen years and conventional private financing had not been feasible · Garfield Traub Development created tax-exempt financin structure. · Design- MAX delivery · City ge redit not required · City wi ipient of all net cash flows ($92M) and residu of hotel ($140+M) · City t cilit · Garfield Traub chosen as the developer the $200M headquarters hotel and mixed-u development to anchor the new 580,000 SF convention center in San Juan, Puerto Rico · The development is the largest commercial re estate project in Puerto Rico and the I convention center destination in the an includes a 500-room Sheraton Hotel 000 square feet of meeting and facilities, 50,000 s ei h- Oregon Convention Center Westin - Portland, OR GTD and Ashforth Pacific co-developing • this $182M, 600-room first-class Westin The hotel will anchor the existing • Oregon ConventionCenter Goal of the Oregon Convention Center • Urban Renewal Plan since 1989 The 23-floor hotel will include full- • servicedining, banquet and meeting facilities, street-level retail and glass canopy GTD will lead the public/private • financing solution currently in progress · The full service hotel will consist of 304 rooms, a three-meal restaurant with adjacent lounge, swimming pool with hydrotherapy pool, exercise facility, 24-hour business center and a convenience shop ocated on approximately 5 acres of land ross the street from the campus of Texas ch University and Jones Stadium in verton Park, the largest private edevelopment project in . United Sta Skidmore, Owings & Merrill LLP •Established 1936 –70 Years •More than 900 National and International Design Awards •First AIA Firm of the Year Awardrecipient and only firm to receive the award twice •Designed more than 250 hotel and hospitality facilities •Ranked 7th in the worldby Engineering News-Record •Full ServiceA/E -Architecture; planning; interiors; structural, civil, mechanical, electrical and plumbing engineering •AIA “Twenty-five Year”AwardRecipients: •Brunswick Building, Chicago, Illinois (1994) •CrownZellerbach Building, San Francisco, California (1997) •John Hancock Center, Chicago, Illinois (National-1992) •KittPeak, Pima County, Arizona (1990) •Lever House, New York, New York (National-1980) •Oakland-Alameda Coliseum, Oakland, California (1993) •U. S. Air Force Academy Chapel, Colorado Springs (National-1996) •Weyerhaeuser Headquarters, Washington, DC (National-2001) Skidmore, Owings & Merrill LLP -Hotel/Hospitality Skidmore, Owings & Merrill LLP St. Regis Hotel & Residences San Francisco, CA Scope: Architecture, Structural Engineering Completed: October 2005 Rooms: 260 The Peaks Resort Telluride, CO Scope: Architecture, Civil Engineering, MEP Engineering, Interior Design, Mechanical Programming, Project Management, Structural Engineering Completed: December 2008 Rooms: 176 Skidmore, Owings & Merrill LLP W Club Hotel & Residences Denver Denver, CO Scope: Architecture, Interior Design Completed: 2008 Rooms: 175, 100 condos Four Seasons Hotel Manama, Bahrain Scope: Architecture Completed: 2007 Rooms: 300 Skidmore, Owings & Merrill LLP Hilton Resort Kuwait Mangaf, Kuwait Scope: Architecture, Interior Design Completed: 2002 Rooms: 150, 20 –4 unit villas Messilah Beach Hotel Messilah Beach, Kuwait Scope: Architecture, MEP Engineering, Interior Design, Structural Engineering Completed: 2001 Rooms: 350 eading general builder in U.S. · 100+ Year history; financially strong · National network of offices · Uncompromising safety record · I our community ommitted to helping smal rHy, and women-owned businesses grow Support local charities a Turner -Distinguished History in Virginia 20+ years continuous work in Tidewater Area: •VA Beach Conv. Center •NSU Rise 1 •Norfolk Southern Tower •Blair Middle School •Tidewater Comm. College •Granby Tower (in planning) •VA Beach Gen. Hospital •Chesapeake Gen. Hospital •Pinewood Plaza •Lynwood Plaza Design-Build Projects: · National Defense University at Ft. McNair ithsonian National Museum of erican History "Turnkey" Design-Build Projects · Overland Park Sheraton ay City, MI Doubletree regon Convention Center lanta City Courts s Angeles Uni . Turner Hotel Experience Hyatt –Columbus, OHMarriott –Spartanburg, SCHilton –Houston, TX Global Hyatt Corporation Parent company of allPritzker hospitality assets • Spin off to pure lodging company • 214 Hotels and Resorts –94,224 rooms in 43 countries and • Territories Global Hyatt operates full-service hotels under the Hyatt®, • Hyatt Regency®, Grand Hyatt®and Park Hyatt®brands · Hyatt's core brand - classic, contemporary design and unparalleled business service to meet the needs of individual business travelers and major conferences in cities arou d the world Mid e, locally inspired architecture, sta e art convention and conference fa 1m si e' restaurants and bars and H egency Club Hotel Name Hyatt Arlington, VA Hyatt Regency Crystal City at Reagan National Airport, VA Hyatt Dulles, VA Hyatt F airlakes, VA Hyatt Regency Reston, VA Hyatt Regency Baltimore, MD Hyatt Regency Chesapeake Bay, Golf Resort & Marina, MD Hyatt Regency Bethesda, MD Hyatt Regency Washington on Capital Hill, DC Park H att Washington, DC att Washington, DC 1 Hotel s # of Rooms 304 685 316 316 518 486 400 390 834 223 888 5,360 Meeting Space 7,643 sf 30,000 sf 7,500 sf 7,500 sf 32,000 sf 29,200 sf 35,000 sf 20,800 sf 38,000 sf 16,000 sf 40,000 sf 263,643 sf · Hyatt has extensive experience dealing with all aspects of major development projects involving public/private partnerships · Hyatt currently provides managem nt services to the following publicly bond financed and owne s Hyatt’s Conference & Convention Center Hotel Experience Hyatt is the premier operator of convention center hotels in theUnited • States and Canada. Over 50% of Hyatt’s domestic (U.S.) room inventory is in conference and • convention hotels. Location Rooms Location Rooms Hyatt Regency Chicago 2,019 Hyatt Regency Columbus* 631 Manchester Grand Hyatt San Diego* 1,625 Hyatt Regency Miami* 615 Grand Hyatt New York* 1,336 Hyatt Regency St. Louis 550 Hyatt Regency Atlanta 1,279 Grand Hyatt Denver 540 Hyatt Regency New Orleans* 1,184 Hyatt Regency Irvine 536 Hyatt Regency Dallas* 1,123 Hyatt Regency Minneapolis* 534 Hyatt Regency O’Hare 1,099 Hyatt Regency Sacramento* 532 Hyatt Regency Denver CC* 1,100 Hyatt Regency Long Beach* 521 Hyatt Regency Houston* 958 Hyatt Regency Tampa 517 Hyatt Regency Jacksonville 966 Hyatt Regency Cincinnati* 500 Grand Hyatt Washington* 891 Hyatt Regency Indianapolis* 496 Hyatt Regency Washington 834 Hyatt Regency Baltimore* 487 Hyatt Regency DFW Airport 811 Hyatt Regency Milwaukee* 484 Hyatt Regency San Francisco* 803 Hyatt Regency Austin* 448 Hyatt Regency McCormick Place* 800 Grand Hyatt Seattle* 425 Hyatt Regency San Francisco Airport 793 Hyatt Regency Albuquerque* 405 Hyatt Regency Dearborn 771 Hyatt Regency Buffalo* 400 Hyatt Regency Crown Center* 731 Hyatt Regency Louisville* 388 Hyatt Regency Minneapolis 731 Hyatt Regency Lexington* 365 Hyatt Regency Century Plaza 728 Hyatt Regency Calgary* 355 Hyatt Regency Phoenix* 711 Hyatt Regency Rochester* 337 Grand Hyatt San Francisco* 693 Hyatt Regency Greenville 329 Hyatt Regency Crystal City 685 Hyatt Regency Wichita* 303 Hyatt Regency Vancouver 644 The Hyatt Lodge at McDonald’s campus 218 Hyatt Regency San Antonio* 632 (*) Supports convention center Total Conference and Convention Rooms 34,963 76 Managers located in 22 cities: Los Angeles San Francisco Palo Alto Seattle San Diego Omaha Houston Dallas San Antonio Kansas City Palatine, IL Chic Toronto Atlanta Virginia rlando ashington D.C. iladelphia ntral/Northeast NJ ri'g Island, NY onnecticut w York . Year Group Net Rev Rev Per Managers Production Manager 2004 59 $1 O. 6M 2005 62 $11.8M 2006 61 Worldwide Sales Office Comparison # of Net Prod Rev Per # of Domestic Company Managersin 2006ManagerHotels 122 Hyatt61$825M$13.5M ($6.7M per hotel) 416 Starwood85$980M$11.5M ($2.3M per hotel) 405 Marriott137$1.2B$8.7M ($2.9M per hotel) 247 Hilton85$900M$10.5M ($3.6M per hotel) Hyatt’s Worldwide Sales Office Hyatt provides Technical and Pre-Opening Services Hyatt provides Technical and Pre-Opening Services Denver Convention Center Hotel Pre-Opening Sales Worldwide Sales Office Definite Revenue Production YearRoom NightsRevenue 2003127,202$20.8M 2004224,339$34.7M 2005289,943$47.9M Hotel opened in December 2005 15 current members; 25 by the end of 2007 · Strategically placed in corporate populated secondary markets ction in 2006 was $34, 0; 2007 goal = . ed on end user business 0 LEADING MIDDLE MARKET INVESTMENT BANK · Public Finance · Municipal Sales · Municipal Underwriting and Trading · Government Agency and Preferred Issuance · Derivative Products · Loan Participations · Tender Option Bonds · Investment Banking · Institutional Equity Sales · Equity Trading · Equity and Debt Capital Markets · Convertible Securities · High-Yield and Structured Products · Equity & Fixed Income Research · Client-focused, independent, publicly held securities firm founded in 1895 · Leading growth-oriented, middle market investment bank · Full-service capabilities and unparalleled transaction execution · Strong capital position · Built on a 100+ year track record of quality service and customer success . Only firm with dedicated Hospitality Finance practice National leader for convention center hotel financings Underwriter for 17 hotel transactions totaling over $3.1 billion since 1999 · Represents over 8,500 rooms · Completed broad restructurings for Austin and Denver's convention center hotel projects in 2006 Financings include: . . . Senior Manager AustinC onvention Center (Ref.) $260.2 Hilton 2006 800 Den ver Co nven tion Center (Ref.) $ 3 5 6. 2 H ya tt 2006 1,1 00 Baltimore ConventionC enter $300.9 Hilton 2006 752 Erie Conference Center $45.4 She raton 2005 203 Lomb ard Conference Center $161.3 W es tin 2005 500 Coralville Conference Center $86.9 Marriott 2005 286 Denver Convention Center $354.8 Hya tt 2003 1,100 Vancouver, WA ConfCenter $67.6 Hilton 2003 226 Bay City, MI Conference Center $15.5 Doub1etree 2002 150 Omaha ConventionC enter $109.0 Hilton 2002 450 AustinC onvention Center $265.1 Hilton 2001 800 A us tin A irp ort $42.5 Hilton 1999 265 Co- Mana ger Sacramento Convention Center $92.8 She raton 1999 San Antonio Co nvention Center $208.1 Hya tt 2005 Houston Co nven tion Center $ 3 6 2.2 Hilton 2001 Phoenix Convention Center $ 3 5 0.0 She raton 2005 The Lodge at Storm La ke $32.9 Lodge 2005 TO TA L * 53,111.4 Convention Center Hotel Financing Convention Center Hotel Financing Current industry standard approach to convention center hotel road categories: Motivation for Public/Private Approach Political influences outweigh economic benefits • No future funding obligations on City after initial investment • City can share in long term profits/cash flow from hotel • Multiple ways for City to structure participation • City has some control over ballroom and meeting space in hotel through • booking policy agreement Financing/Legal Structure (Public/Private) PrivatePublic Lenders (Debt) Municipal Sponsor* Investors (Equity) (Gap) Private Owner Advisors/Counsel Other Capital Sources Management AgreementDevelopment Agreement Facility OperatorDeveloper Design-Build Agreement Design-Builder Design Agreement *Municipal Sponsor collaborates Architect/Engineer in design/development process Explanation Challenges of the Private Debt & Equity Hotel Financial Model: To build a full service hotel of this quality, including ballroom and meeting space typically 1. costs between $200,000 to $275,000 per room today; The underwriting by senior debt lenders in the hotel industry has changed significantly in 2. the last 10 years, due to overcapitalization in the 1980’s and very large losses on loans, both in absolute dollar amounts and as a percentage of the totalloan: High Loan to Value ratios (85 -90%) in the 1980’s are now low Loan to Cost – ratios (60 -65%); Debt Service Coverage ratio projections at stabilization have increased from – 1.2x to 1.5x; The result is a much lower available loan amount as a percentageof the total – budget, and a correspondingly higher amount of required equity; enges of the Private Debt & Equity Hotel Financial Model: Internal rates of return for hotel equity investors are typically in the 200/0 to 250/0 (pre- tax) range for new hotel construction. - These high IRR's are necessary to c ate for the perceived stabilization / marke risk of the new hotel. New'hotels are considered by inves classes and they require a high ret st markets, average daily rates a rom the hotel 8",among the highest risk real estate Private Ownership Example Conventional Model Mid 1980’s%Today% Total Hotel Budget*$100,000,000 100%$100,000,000 100% Senior Debt$ 85,000,00085%$ 60,000,00060% Equity$ 15,000,00015%$ 10,000,00010% Capitalization Gap$ 00%$ 30,000,00030% TOTAL$100,000,000100%$100,000,000100% * Adjusted to 2006 Dollars low is the ca~ qua ization gap d? Development Cycle 1) Pre-Construction Feasibility (Capitalization gap quantities) 2) Design Development 3) Construction Overall Goals of Pre-Construction Feasibility Period To provide a detailed study of the proposed convention center hotel that 1) results in reasonable, quantifiable and easy to understand options for its financing and development upon which the City can make an educated and informed decision on how to proceed. To provide information to the City throughout the study so that at the 2) end they are totally comfortable with their financing options, their sources of funding any participation and/or investment they may be required to make, and the cash flow streams they can reasonably expect to receive as a result of their participation or investment under each option. How the Pre-Construction Feasibility Process Works City selects Team to develop Hotel. 1) Team and City negotiate for a hotel market study with qualified firms. City enters 2) into agreement with selected firm. Team coordinates and monitors market feasibility study and workswith the 3) selected firm to determine the scope and facilities programming of the proposed project. Team works to develop a preliminary budget and projected P&L forthe proposed 4) hotel. Team estimates the amount of private financing available for theproject in the 5) public/private option and the resulting amount of public financing necessary to complete capitalization. Team works with underwriters and the City's bond counsel to prepare a preliminary bond pricing model for the publicly owned option. 7) Team introduces various options for securing public funding necessary to complete capitalization and reviews the legal, pol nd economic viability of each funding o f n. prepares final presentation of re opriate forum. ",the City and presents to City at the makes informed decisio Duties of the Client Commission the market study within 14 days of selecting the Team. 1) Meet with Team to discuss various alternatives for financing thehotel, as well as 2) political and economic sensitivities surrounding the project. Provide access to City’s bond counsel and financial advisors familiar with the 3) City’s bonding capacity and similar tax-exempt offerings to confirm that the proposed project is qualified and meets state law. Provide all materials related to the project, including any previous studies and 4) zoning and land use issues. Provide contact person to coordinate all issues that come up during the process. 5) st in the negotiation and selection of the market feasibility consultant, including the scope of services and fee. In conjunction with market study firm, architect and operator prepare preliminary facilities program and design analysis and site plan for the project. 3) Prepare preliminary budget and P&L for the .vate lenders and equity source rmine amount of private financing with bond counsel and underwriters t flow projections for the publicly owne fIininary bond pricing models and mpt financed option late overall capitalization Contact Information Turner Construction Company Garfield Traub Development 3865 Wilson Blvd., Suite 300 Two Galleria Tower Arlington, VA 22203 13455 Noel Road, Suite 2150 Jack Rogers Dallas, TX 75240 757-425-4366 Stephen D. Moffett 757-425-3074 Fax 972-716-3843 972-991-5150 Fax Hyatt Development Corporation Skidmore, Owings & Merrill, LLP 71 South Wacker Drive 224 South Michigan Avenue Chicago, IL 60606 Chicago, IL 60604 Marc Sallette Leigh Breslau 312-780-5459 312-360-4368 312-780-5281 Fax 312-360-4548 Fax Piper Jaffray & Co. 2525 East Camelback Road, Suite 925 Phoenix, AZ 85016 James Sult 602-808-5425 602-808-5420 Fax Virginia Beach Convention Center Headquarters Hotel February 6, 2007 Presented By:Garfield Traub Development SOM Turner Construction Company Hyatt Corporation Piper Jaffray & Co.