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Home My WebLink About032007 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 :irl1iilr~:J' ;r~I\JL...~~~;;r;:r2j!':1~~~~!2!E'!::~'fE .' pU~!::~fdff!::~\'J~F:jN:p .- .,__..... "'Fe,,,_' '. ~ ..-~. ,.\. ' 'lI.;:.E:''&''''I2FF .-.,,.,,-.~ ,- ,.- m.. ,~:. , 2,' . i'''' t"i"" !.'.".... ;;" ,,[:;j '<-:' -~""!r _ ..:_!l",'~'vf;.~.~ft"..' ~ ~~~iy",."...,- ,..;'i'~....,:",..~:J2~f~~~~.;'~"::: .~',-, "~,, ~' ~~~~-~~",~........L", "I.i.ol'" /' ~ "~~~ .~:.~' .' -- ~ : '.~. '"' " "../... _ .. --."T"II ~ - --_,p.;;;-,<,;f~ , ., -, 'iii c_~, T....._ - .'..~.' . 1'1. // cj";'j 1;)1 , \, ::"'"tJ '" ~ ,~\Jt4" ... of'. ~. :::\ \'Q,~ ~ · ~ f:E~Y ;~:'?~\ ~~'I , '~'.' \ ~ ":"::i;~~-'~~Z:~~t;;,!i,~ ' ~ ~ \JI!I _ ~.\ =.;:;;,:,~j;:!::.; .- ~ ";;;::=,-:=:-~~~ -- . ':::;.:~;:;:~: 1~\7"~' . -~~,,---- ";'4 ,;: ~I-'''''' .-",~'~.;:- -.'\ ',/:J:'- --'il:\\':::.,,:;'~..~:::ali- ~,~ 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 ". , .- ,.- - --.......... .. '. . -- .. , ,..... . ~"'-:i.. t':-;.. . . 1:-.. I~" ':r..'~ i .... . )"2. . ...~ '. I:- Ih'~ " :.~~~~,-,,=.\_.~!~~,~~~';: '1.~i _...~, ~;#.. .' --,'"C'_C'~~..' ~-~~..... , ).' ~.."- '~ " ......: _n.....:~,. - y;' .j---~~yW....~~-.,~ \:, ~ . ~ \,.- 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. ~-';-~--'-~_"~ '._'""'.f'_..- , I , I .l,": ~ .'*1',"' } ~-' -~rt :";'C - .....} " , ........, .,' "...'';;;~~ '~~ ' ".';'/ ~,t' .......- .-- Bayou Place, Houston The Old Power Plant, Baltimore Fourth Street Live! Louisville r ~~~~;:.~~ ~.;, -....~ u -~. -- -- ,-.. ::: ........ ~.:L:.o'JII ":..~ ~--_. ..:. ... ,.:. - .... .- 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 .- ':...'-- - - -- . .:...:.:..:.:..:1 t 1:11' "'P' '~'-':.~:"'- ~\! . I. _ Ii 1 ,I 1",,~-=, ,- 1I"f.?/ '.'. ., I, n[;~"~ 1', . "\ 1::. :, ,-- - I '. .. _ Ilj__FL~tiJi=I:~' :, " "~-8'__~;ruJ~j-~~'! ',: !tf i , IIII',"~~ .c"'I" ,;, ---.. - "'-'-"" :,,':,]1 i . ~ -":"~!~";-l 11 _ ~ ~... ~\]~1. ~..: \~. - 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 \~::'~ ~. ,- . -'li-. & T .r, - \\~\'::i&. ' j-. /,?~ \ff\~-;~1 ,r:~:-r~~~tJ\~~\,-"ji ,< ~~.~, ~~~~\ ';~~~~i~~:~~~~~~~flZ:.~~\i"" jji" 'r">i 'tiil~' ., \'! - . ':M' <<.. ~ ~'?2"""'" \ ~.~",-~,:>,' '. '::l,..>' t......>::- . '-. JJ.. ~',.--~ ~. ~r{\ ~'.c1"=:-:-'~-4;}~ S,~\ 'J\.~ ';;"."lr;;'\~~"~,.~~..~ ~\,~' ?'-~-- ,~,,~.~; Il);~ '\~f~~~' . :~';;t-{~ "It!~..~~~~~~~:~ ,_;,,;Yf~~i \:~~'~~~i.~:";~ ..~.._ 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.