July 01, 2002
Meetings & Conventions: Newsline newsline.gif (8042 bytes)   SKITTISH INVESTORS KEEP CONVENTION CENTER PROPERTIES IN LIMBO
Financing Stalls Headquarters Hotels
A rendering of Pittsburgh’s skyline shows a completed convention center (the low-rise building at left) but no new affiliated hotel. Obtaining financing for headquarters hotels has become a Herculean task, as developers sit on projects and banks shy away from hotel lending. As construction sites remain quiet, cities can tout only a vision of a convention property when selling themselves to planners. “The lack of a headquarters hotel takes us out of the running for 200 to 300 conventions a year,” said Nicki E. Grossman, president of the Greater Fort Lauderdale Convention & Visitors Bureau. For five years, the city had planned to build a 500-room hotel at the convention center. The deal was killed when Wyndham walked away in late 2001, after disputes over the terms of the lease.

Selling the city remains an uphill battle. “The question often on page one of a contract is, ‘Do you have a headquarters hotel?’ When we say ‘No,’ no one turns to page two,” said Grossman.

Bryan Maher, the New York City-based senior lodging, gaming and leisure analyst at Credit Lyonnais Securities, is not optimistic that Grossman’s predicament will ease. “We have seen multiyear record levels of new room supply,” he said, “but now the market is weak, and lenders are skittish about financing large hotels, especially those in the $100 million range.”

Maher expects little change in the next two years. Among other cities facing similar circumstances: • In West Palm Beach, Fla., plans to build a Starwood-managed, 350-room hotel next to the Palm Beach County Convention Center were shaky at press time. When the center opens in August 2003, it will likely be without a hotel, due to lack of financing.

• After about a year of trying to get a convention hotel built, Denver’s Mayor Wellington Webb said the city would pay for the project. Four management firms are on the short list to run the hotel, which would open in 2005.

• San Antonio’s deal for a new $250 million, 1,000-plus-room hotel, in the pipeline for six years, fell through in May. City officials were set to meet with hotel investors and financiers in June to reassess the market and funding options for a property to open in 2006.

• In Pittsburgh, a design dispute has kept a headquarters property from joining the David L. Lawrence Convention Center, set for completion in March 2003. Competing developers have submitted new proposals, but the city must wait for state approval of public subsidies, according to Robert Imperata, executive vice president of the Greater Pittsburgh CVB.

• In Boston, Starwood Hotels & Resorts has been given until February 2003 an extra year to come up with the monies to build a 1,200-room headquarters hotel at the new 1.7 million-square-foot Boston Convention & Exhibition Center, set to open in June 2004.

• A four-acre plot next to the Baltimore Convention Center has been earmarked for a major hotel for more than three years. Hyatt Hotels Corp. and Peter Angelos, owner of the Baltimore Orioles, plan to develop and manage the hotel, but the project has yet to obtain enough financing. The city needs an 800- to 1,000-room property with 100,000 square feet of function space, said Carroll Armstrong, president and CEO of the Baltimore Area Convention & Visitors Association.


What Association Executives Earn The gender gap in earnings grows in relation to size of organization, according to a 2001 compensation survey. Male CEOs Female CEOs Trade association $136,775 $92,125 Individual membership association $139,241 $85,204 Total staff size: 2 or fewer $75,000 $60,000 3 to 5 $95,640 $77,000 6 to 10 $116,550 $108,000 11 to 20 $138,200 $126,000 21 to 50 $201,923 $159,280 51 to 100 $237,900 $145,518 More than 100 $287,600 $249,233 Total annual budget: $300,000 or less $67,600 $54,789 $300,001 to $500,000 $75,600 $68,579 $500,001 to $750,000 $90,000 $72,800 $750,001 to $1 million $102,000 $87,525 $1,000,001 to $2.5 million $118,800 $112,425 $2,500,001 to $5 million $170,000 $137,100 $5,000,001 to $10 million $227,750 $160,585 $10,000,001 to $15 million $225,994 $171,750 More than $15 million $285,000 $256,269 Source: American Society of Association Executives

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