DATE: Sunday, May 11, 1997                  TAG: 9705100556

SECTION: BUSINESS                PAGE: D1   EDITION: FINAL 

TYPE: Commerical Real Estate 1997 

SOURCE: BY DEBBIE MESSINA, STAFF WRITER 

                                            LENGTH:  130 lines

CONVENTION CENTER: MEETINGS BOOM ATTRACTS ATTENTION

Fueled by one of the longest economic expansions the nation has seen, the commercial real estate market in Hampton Roads is recovering. The signs, created of steel, concrete and glass, are tangible. Sources of funding, which evaporated in the early '90s, are once again flowing

Still, the real estate bust of only a few years ago haunts many. Will there be enough meetings for the new and expanded convention centers? Enough tourists and business travelers to fill the hotel rooms? Enough shoppers to spend money in all the stores?

This time around, some developers and financers say, they're being more cautious about building and lending. But their confidence is unmistakeable.

Chesapeake is building one. Portsmouth is studying one. Norfolk already has one. Virginia Beach has one, but may expand or replace it.

A lot of attention, and money, is being heaped on convention and conference centers.

South Hampton Roads officials are looking to these conference and exhibit halls to draw more visitors to their cities and to cash in on a burgeoning meeting industry.

Industry data indicates there should be enough business to go around.

``It's a boom time for conventions and meetings,'' said Lisa Myers, vice president and publisher of the American Society of Association Executives.

A 39 percent increase is expected in meetings this year, according to the 1997 Meetings Outlook Survey sponsored by the American Society of Association Executives (ASAE) and Meeting Professionals International.

``More groups are forming and meeting, existing groups are holding more meetings, and the meetings they're holding are bigger,'' Myers said.

Considering the upward trend in the industry and the different flavors of the local meeting spaces, officials don't seem worried about over-saturating the region with meeting halls.

``I see us feeding off each other,'' said James B. Ricketts, director of the Virginia Beach Department of Convention and Visitor Development, which operates the Pavilion Convention Center.

``Exposure is important to the region and the city,'' Ricketts said. ``Small groups are part of bigger groups. If we expose them to what this area has to offer, maybe they'll come back with their bigger groups.''

Chesapeake Conference Center manager Bill Lindley agrees: ``We're going after different groups.''

For example, the first large event the $9 million Chesapeake facility will host after its September opening is a national billiards tournament which is expected to draw about 1,000 people.

The event is too small for the Pavilion and too low-budget for the Waterside Marriott Hotel and Convention Center.

Chesapeake's facility is fairly small, suburban and moderately priced. Norfolk's Waterside Convention Center is urban and more expensive. Virginia Beach's Pavilion is in the resort area and is nearly four times larger than the other two. Portsmouth is eyeing a convention center either on the scale of Chesapeake's or Norfolk's. Only Norfolk's center, and the one proposed in Portsmouth, are attached to hotels.

The convention and meeting business is highly competitive, and despite their differences, local facilities will find themselves going head-to-head at times. This is especially true for local groups and state organizations that rotate meetings around the state.

But they'll also be competing nationwide.

``There isn't a major city that isn't expanding or completing expanding or just finished expanding its convention center,'' Myers said.

Meetings and conventions, the 22nd largest contributor to the gross national product, are an $82 billion industry, according to the Convention Liaison Council.

``This doesn't mean all centers are going to do well,'' Myers said. ``Success is dependent on more than just the physical space of the center. It's the entire package the city pulls together around the convention industry.

``The best buildings in the world can't make a convention center successful if the city hasn't got its act together around hosting and being hospitable to groups coming in.''

This means ample hotel rooms, restaurants, entertainment and shopping. And efficient transportation, both getting in and out of town as well as moving around town.

Almost all convention centers around the country are municipally owned, Myers said. And the municipalities typically subsidize the operation.

``At best they break even or are subsidized by the city,'' Myers said.

But that doesn't mean they're not successful. Conventioneers and their host organizations drop a bundle in the cities they visit, which bolsters city coffers and well as line private pockets.

Meeting attendees typically spend about $275 per day for hotels, meals and tips, Myers said. The average association spends another $2 million, she said. So the direct economic impact of a two-night, three-day, 3,000-person convention is $3.65 million, Myers calculated.

Here's a look at what's happening locally with convention and conference centers:

Norfolk is luring the lion's share of the region's meeting business - 1,400 groups in 1995 - with the Waterside Convention Center.

Groups are sometimes turned away because it's booked. In fact, the 30,000-square-foot facility has reservations into 2001. Norfolk markets the convention center jointly with the adjoining Marriott hotel and the nearby Omni hotel, both of which also have meeting space.

The free-standing Chesapeake Conference Center opens Sept. 1 and already has eight groups booked and another 12 finalizing plans. The 51,000-square-foot facility in Greenbrier boasts the largest ballroom in Virginia.

``We're getting calls everyday, mostly on a regional basis,'' Lindley said.

Virginia Beach is considering expanding the region's largest convention showplace, The Pavilion, or building a new one along the Oceanfront.

Ricketts said a consultant has recommended tripling the size of The Pavilion to 262,000 square feet, at a cost of about $100 million. That would place The Pavilion near the top of the second tier of convention centers along with Charlotte, Pittsburgh, Baltimore and Myrtle Beach.

The Pavilion is losing market share because some events are outgrowing the facility.

``We're still having dialogue with the business community on the concept of what to do, and how much, and what the return will be,'' Ricketts said.

A regional partnership is considering assisting Virginia Beach.

Portsmouth is studying building a downtown hotel and adjoining convention center, similar to the Waterside Marriott Hotel and Convention Center.

While city officials considered a small convention center of 15,000 to 25,000 square feet, a consultant has recommended 34,000 square feet. Portsmouth would likely pay for and own the facility, which is expected to cost between $6 million and $10 million, depending on size.

Tentative plans call for a new hotel of at least 250 rooms to be built near the Holiday Inn, with the convention center in the same area so it will be served by both hotels.

``The study says to go larger than smaller,'' City Manager Ronald Massie said. ``We're going to have to balance it against the cost of building the space.'' ILLUSTRATION: [The Pavillion]

Color photo by Motoya Nakamura/The Virginian-Pilot

[ Photo of downtown Norfolk showing highrise buildings including

NationsBank, Crestar, Dominion Tower, Marriott Hotel]

Send Suggestions or Comments to webmaster@scholar.lib.vt.edu