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2005-05-17 Support Documentation Town Council Evening Session
TOWN COUNCIL EVENING SESSION AGENDA 6:00 P.M. TUESDAY, MAY 17, 2005 VAIL TOWN COUNCIL CHAMBERS 75 S. Frontage Road W. Vail, CO 81657 NOTE: Times of items are approximate, subject to change, and ~ cannot be relied upon to determine at what time Council will consider an item. 1. ITEM/TOPIC: Citizen Input (10 min.) 2. JTEM/TOPIC: Consent Agenda: Approval of 04.5.05 and. 04.19.05 Evening Session Minutes. (5 min..) 3. Greg Hall ITEM/TOPIC: Construction Update. (5 min.) I, 4. Lorelei Donaldson ITEM/TOPIC: Local Licensing Authority. (the "LLA") Appointments (5 min.) .ACTION REQUESTED OF COUNCIL:. Appoint three applicants to the LLA; all three members sha11 be appointed to two-year. terms through May, 2007. BACKGROUND RATIONALE: All applicants to the LLA must be citizens of the United States, qualified. electors of the Town of Vail, and have resided in the Town of Vail for not less than two years preceding appointment, and shall have no direct financial interest in any license to sell alcoholic beverages or any location .haying any such license. Duties of the five-member board include review of all Town of Vail liquor license applications. There are currently three vacancies on the LLA. The Town received three (3) applications for the vacancies. Two applicants .are incumbent members of the LLA (noted by asterisks below). One member, Dave Chapin, was term-limited. (8 years) and could not serve on this board another term.. The Council needs to interview each applicant at' the work session and then: .appointment three applicants to the LLA at the evening meeting. The applicants are as follows: Bill. Bishop* Bob Louthan* f Kevin Foley I have also enclosed an attendance summary for the LLA for your review. RECOMMENDATION: Appoint a total of .three (3) members to the LLA for two year terms each. I would also ask the Town Council to recognize and thank Dave Chapin for -his eight (8) years of dedication, service and exceptional leadership on the LLA as past Chairman of the LLA board. 5. Matt Gennett ITEMITOPIC: An appeal of the Town of Vail Design Review Board's approval of a design review .application (DRB05-0040), pursuant to Section 12-11, Design Review, Vail Town Code,. to allow for a new single-family residence, 1345 Westhaven Circle/Lot 50, Glen Lyon, and setting .forth details in regard thereto, (5 min.) ACTION REQUESTED OF .COUNCIL: Approve or Deny. a request for a continuance of this hearing, pursuant to Section 12- 3-3, Vail Town Code, until the. June 7, 2005 Town Council hearing. BACKGROUND RATIONALE: The appellant, Patricia O'Neil, has filed a Request for A Continuance of Hearing, to which the owners of Lot 50 does not object. STAFF RECOMMENDATION:. Staff. recommends the :Town Council approves the request for a Continuance of Hearing until the Council's. next regularly scheduled meeting, June 7, 2005. 6. Russ Forrest ITEM/TOPIC: Conference Center Synopsis (3.0 hrs.) BACKGROUND 1NFORMATION: A presentation on the current status of the project, questions from Council and the opportunity for public input. Council will also be asked to provide direction to the eight-member Oversight Committee and town staff regarding next steps. .Specific information will include financial and construction cost updates, plus overviews on potential operational, marketing and governance options. ACTION REQUESTED OF COUNCIL: Following the update and discussion,. the Oversight Committee will present three options for the Council's consideration: • direct the. Committee and staff to .pursue development review approval of the facility as currently designed, while continuing to research methods of balancing escalating construction. costs with the desired quality of the facility's finishes; • direct the Committee and staff to reduce the size of the facility to counter rising construction costs; or l • direct .the Committee and staff to discontinue all work and expenditures on the conference,center project. 7. Matt Gennett ITEM/TOPIC: Second reading of Ordinance No; #12, Series of 2005, an ordinance repealing and re-enacting Ordinance. No. 8, Series of 1995, Cascade Village, amending and re-establishing the approved development plan for the Westhaven Condominiums- site located within Area A of SDD No. 4, in accordance .with Section 12-9A-10, Vail Town Code, to allow for the construction of thirteen dwelling units; and setting forth details in regard thereto. (20 min.). ACTION REQUESTED OF COUNCIL: Approve, approve with modifications, or deny Ordinance No. #12, Series of 2005. BACKGROUND RATIONALE: On February 8 and April 11, 2005, the Town of Vail Planning & Environmental .Commission (PEC) held public hearings to consider a request for a major amendment to a special development district (SDD) .pursuant to Section 12- 9A-10, Amendment .Procedures, Vail Town Code, to allow for an amendment to Special Development District No. 4, Cascade Village, for an approved development plan of a new condominium building, located at 1325 Westhaven Drive /(Westhaven Condominiums, aka, "The Ruins")/Area A, Cascade Village, and setting forth details in regard thereto, Upon consideration of the request, the Commission voted 6-0-1 (Viele recused) to forward a recommendation of approval with conditions of the applicant's request to the Vail Town Council A copy of the staff memorandum to the Planning and Environmental Commission, dated April 11, 2005, with revised .conditions has been attached for reference. On May 3, 2005,- the Vail Town Council approved with - modifications Ordinance No. #12, 2005, upon first reading STAFF RECOMMENDATION.: The Community Development Department is recommending that the Town Council approves Ordinance No.# 12, Series of 2005, upon first reading. 8. Matt-Mire ITEM/TOPIC: .Second reading of Ordinance #13, Series of 2005. An ordinance providing certain amendments to Title 3, Chapter 4, "Design Review board," of the Municipal code of the Town of Vail; changing the composition of the DRB from five to seven members;. - and setting forth- details in regard thereto. (10 min.) ACTION REQUESTED OF COUNCIL: Approve, approve with amendments or deny Ordinance #13, Series of 2005, on second reading. BACKGROUND RATIONALE: .The Town Council. requested an ordinance that would change the composition of the design review board from five members to seven members. STAFF RECOMMENDATION: Approve,. approve with amendment or deny Ordinance #13, Series of 2005, on second reading... 9. Stan Zemler ITEM/TOPIC: Funding request from Timber Ridge Affordable Judy Camp Housing Corporation (TRAHC). (10 min.) ACTION REQUESTED OF COUNCIL: Consider making, a loan of $700,000 to TRAHC for the purpose of remediating additional units and funding 2005 cash flow requirements. The proposed loan would carry the same terms and .conditions as the town's current loan to TRAHC - 1.5% annual interest;. maturity .date December 1, 2032; repayable from project revenues; subordinate to 2003A and 20036 bonds; no penalty for early repayment BACKGROUND RATIONALE: With only 114. units available .for .rent and increasing interest .rates, The TRAHC board has developed a plan to remediate up to forty-four additional units and has identified a master lessee for those units. The cost to remediate is approximately $370,000. An additional $330,000 is needed for 2005 .expenditures that cannof be covered. by rental from the 414 units currently rented. Following remediation of the additional units, annual rental income will increase by approximately $500,000 which the TRAHC board believes wilt be sufficient to cover annual obligations. STAFF RECOMMENDATION: Approve a loan of $700,000 to TRAHC under the same terms and conditions as the existing promissory note. 10. ITEM/TOPIC: Town Manager's .Report (10 min.) - Art in Public. Places (AIPP) Update on Jesus Moroles' Granite Amphitheatre Although the artist was disappointed the town hired .local .contractors to remove the sculpture, Moroles will work with AIPP to relocate the: Granite Amphitheatre. The Seibert Circle project renovation schedule required the demolition of the area in April Moroles' crew was not available until September to de-install the sculpture. Using local contractors resulted in a small cost savings. AIPP has established a committee to examine potential. sites and set project parameters. The committee will work closely with the artist to determine the future IayouY of the sculpture.. The artist's crew will provide re- installation. 11. ITEM/TOPIC: Adjournment (10:30 p.m:) NOTE UPCOMING MEETING ART TIMES BELOW: (ALL. TIMESARE APPROXIMATE AND SUBJECT TO CHANGE) THE NEXT VAIL TOWN COUNCIL REGULAR EVENING MEETING WILL BEGIN AT 6 P.M. TUESDAY, JUNE 7, 2005, IN VAIL TOWN COUNCIL CHAMBERS Sign language interpretation available upon request with 24-hour notification. Please call 479-21.06 voice or 479-2356 TDD for information ~. Vail Town Council Evening Meeting Minutes Tuesday, Apri15, 2005 6:00 P.M. Vaii Town Council Chamixrs The regular meeting of the. vail Town council was called to order at approximately 6:00 p.m. by Mayor Rod Slifer. Members present: Rod Slifer, Mayor. Dick Cleveland, Mayor Pro-Tam Diana Donovan, Farrow Hitt, Kent Logan Greg Moffat _ Kim Ruotolo, Staff Members: -Stan Zemler, Town Manager Matt Mire, Town Attorney Pam Brandmeyer, Asst. Town Manager Battle Mountain High School (BMHS) Hockey Team Recognition. Slifer began the presentation by stating the BMHS hockey team has only existed for four years and the team was formed and sponsored through the efforts of Vail Junior Hockey. Slifer continued since the team's existence, they have played twice for the state title, 2002 and 2005, and .have been semi-finalists the other two years, 2003 and 2004. This year's team was undefeated through the regular season and ended the season .with a record of 22-1 and as State .Runner Up. Two players, Austin Chow and Brad .Myers, broke the state scoring record with Chow being the new record holder. The Rocky Mountain News and Denver Post recognized Myers and Chow as first team. all-state. Donny Stevens, Evan Sharer and Alex Siegler were named honorable mention all-state. Both newspapers named Austin Chow as Colorado Player of the Year. Ten members of the team were recognized by Colorado High School Activities Association. (CHSAA) as All- State Academic (3.22 + Grade Point Average). The first item on the agenda was Citizen. Input. Jenni Reeks, a LionsHead spa owner, stated she was not a Meadow Drive m_erchant_and has subsequently been-disallowed -from participating in the Vail Farmers' Market, which takes place on Meadow Drive in Vail Village.. Reeks asked if the town could intervene in some way to enable her participation. The second item on the agenda was the Consent Agenda. 03.01.05 and 03.15.05 Minutes Approval. Moffat moved and Ruotolo seconded a motion to approve the minutes without amendments. The motion passed unanimously, 7-0. The third item on the agenda the Design Review Board (DRS), Planning and Enviornmental Commission (PEC}, and Arts in Public .Places (AIPP) Board Appointments. Staff requested Council: 1) appoint two applicants to the DRB for a term of two years. each (through March 31, 2007); 2) appoint three applicants to the PEC for a term of two years each (through .March 31, 2007); 3) appoint three applicants to the AIPP for a term of three years each (through March 31, .2008); and 4) appoint an alternate from the Building and Fire Code Board of .years (through March 31, 2010). BFCBA: As therewperel noBetters)oa~ t rest for the BFCBA vacancy position, and Kathy Langenwalter was already appointed_ as a .first alternate,-staff requested Langenwalter be appointed as a full-time member of this board to serve from April 1, 2005 to March 31, 2010. Ruotolo moved and Moffet seconded the motion to approve the. staff recommendation. The motion passed unanimously, 7-0. DRB:. Cleveland moved and Ruotolo seconded a motion to appoint Sherry Dorward and Lynn Fritzlen to the DRB. Moffet then moved and Hitt seconded to direct staff to begin the process to amend the DRB enabling ordinance so membership would increase from five to seven. Both motions .passed unanimously, 7-0. PEC: Cleveland moved and Hitt seconded to appoint. Chas Bernhardt, Doug Cahill and Bill Jewitt to the PEC. All are reappointments. The motion passed unanimously, 7-0. AIPP: Cleveland moved and Ruotolo seconded to approve Susan Frampton, Timothy Losa and Jennifer. Mason to the AIPP board. The motion passed unanimously, 7-0. The fourth item on .the agenda was the Seibert Circle Redesign. Council was asked to review and respond to the recommendation from the 3treetscape Design Committee (SSDC) to .reconstruct the Seibert Circle area as part of the Village Streetsca a ro'e The SSDC, assisted by Wenk and Associates, and project facilitator, Joe Krac p t ~ out to develop a new design concept for Seibert Circle which would have four-season appeal, be a gathering and seating area, and create a new "post card" image for the town. Kracum reported the SSDC -has developed and unanimously agreed to support such a concept for the inclusion in the Village Streetscape project. The proposed ..concept incorporated a European inspired feature with the four-season attraction of water fountains and fire features into Seibert Circle. The intent of the feature is to honor Vail's legacy. Brent Lloyd, representing Wenk and Associates, stated a variety of approaches for the important honor have been suggested including commemoration of the 10~' Mountain Division and a broader theme of honoring the histo of the co and the Vail Valley. Lloyd continued, in addition to the main feature, warm n ire features are incorporated in the design to promote gathering and numerous additigon seating opportunities are created. .The estimated cost of the al redesign/development is $1.1 million. In response to a question from Logan, Lloyd stated any variability in the cost of the project would most likely occur with the vertical element. Lloyd also assured Council, if approved, the Circle redevelopment would be corn leted by Christmas 2005. Ruotolo inquired if the original artist, Jesus Moroles, would .approve of moving the existing sculpture. Hall and Lloyd stated Moroles had been -made aware of the redesign plans and approved. of movin_ g__his sculpture. During: a -pauses-~-public comment, Pefe Seibert, Jr. stated the conceptual renderings of the circle would be something his father (Pete Seibert,. recognized as one of the original founders of Vail) would have liked and approved of. Alan Kosloff, SSDC member stated the committee make-up represented a "pure" group/representation of the town and the. exisfn sculpture was polarizing, with the proposed recommendation offering the o ortuni ~ 9 bring the town together. Sheika Gramshammer stated the circle design should~be simple and truly represent a space Pete Seibert would have. appreciated. She did not support the inclusion of fire into the. element, as it would upset adjacent neighbors. Rick Mueller, adjacent property owner,. reiterated Gramshammer's remarks, and stated the circle should be worthy of a post card. "If we don't approve this now, I don't think it's going to happen in our lifetime." Barbie Christopher, AIPP Member, reiterating former AIPP recommendations, stated the present circle design is cold and uninviting and does not capture the European charm. of the Village. Slifer thanked Donovan and Cleveland for representing Council on the SSDC. Moffet expressed concern the plan involves 2 moving the Moroles piece without having a designated relocation point. He also stated he was concerned the design resembled a cold former Eastern European bloc. Hitt stated he thought the conceptual design was a move in the right-direction. Donovan acknowledged.-she-would vote for the conceptual design, anty because she had been assured the project would be completed by fall of 2005. Ruotolo. said she thought redesigning the circle was a terrible waste of .money. Cleveland stated he would vote against the proposal even though he liked the design and his decision was based purely on the fiscal ramifications. Logan stated, if we are going to spend money on a site in the town, Seibert Circle is a most appropriate place. Logan moved to approve the recommendation to relocate the Moroles art piece. to a location still to be determined and design and construct the presented concept with. the proviso the project be completed in the fall of 2005. Hitt seconded. Zemler reported for the record, Vail Resorts could contribute up to $500,000 for the circle's feature if the corporation approved the design. Zemler also asked for an "up to" amount of $1,134,000 for the project be designated in the motion. The motion. passed 5-2, with Ruotolo. and Cleveland dissenting. The fifth item on the agenda was a draft agreement between the Town of Vail and the Timber Ridge Affordable. Housing Corporation (TRAHC). Mire- reported the agreement memorializes the reporting and financial disclosures Council requires of the new TRAHC board. It was reported the TRAHC board approved .the agreement at its last meeting and requested a motion for approval by the Council. Moffet moved to approve the draft agreement with Cleveland seconding. The motion passed unanimously, 7-0. The sixth item on the agenda was a Vail Conference Center Update. Forrest reported the Conference Center Oversight Committee had requested permission to proceed through: the development review process with the Conference Center design reviewed. previously by Council on March 15; 2005. Moffet moved to schedule a work session with the PEC to present the current design and develop preliminary opinions. Logan. seconded. The motion passed unanimously, 7-0. The Committee has felt obtaining initial input from the PEC and DRB prior to issuing bonds is important in determining whether the capital budget for the project is adequate. During. a pause for public comment, Nancy Rondeau stated she believed elected officials represented local opinion .only during election time and encouraged Council to (exercise adequate anticipation and well informed perception). Paul Rondeau expressed concem no one on the Oversight Committee had contacted him regarding proposed suggestions presented by him'in various articles in the Vail Daily and at public meetings. He then stated he believed,the Committee is arrogant and (hubris in nature). Logan stated the public process involved _. in the -devefoprrreni; of the conference center was extraordinarily thorough and represented true democratic principles. Logan again thanked Zemler for orchestrating a successful 1•tnancial year and expressed appreciation for Zemler's efforts with the conference center. Logan then emphasized there have been no decisions made to formalize moving forward with the conference center. Hitt reiterated Logan's comments. The seventh item on the agenda was an appeal of the DRB denial of the proposed locations and backlighting of the Vail Happenings Signs (DRB05-0028), located at Slifer Plaza, The Children's Fountain, Crossroads Mall, and the LionsHead bus. stop. Town Planner. Elizabeth Eckel stated on May 21, 2003, the DRB approved an application submitted by the appellant to erect four metal "public information signs" (one of which was already erected). The DRB approved the application with two conditions: there be no lighting and the signs would be temporary. On February 1, 2005, the appellant submitted an application. to backlight all #our signs. Staff reviewed the DRB's previous conditions of approval and determined the proposal's lack of compliance with the standards of Title 11, Section 11-2-1 of the.Vail Town Code. The staff therefore denied the application on February 16, 2005. Staff rescinded the denial previously issued to the appellant and allowed- the appellant to appear before the DRB on March 2, 2005. On March 2, 2005, the DRB denied the appellant's proposal to backlight the Vail Happenings signs installed at these locations on the basis public information .signs should not be exempt from the standards to which all other signs in the town are held accountable, including backlighting. The Community Development Department therefore recommended the Council uphold the DRB's denial of the app{ication. Town Planner Matt Gennett provided various photographs of examples of illuminated .signs currently existing within town limits. Rick Scalpello stated for the past two years he has produced and installed the lighted sign inserts and they only included public messages. Logan and Moffet asked why staff .was recommending the DRB denial be upheld. Gennett clarified the difference between advertising and public. information is open to interpretation. Cleveland moved to overturn the DRB decision. Logan seconded the motion. Themotion passed unanimously, 7-0. The eighth item on the. agenda was the First reading of Ordinance No. #9, Series 2005, an Ordinance making Supplemental Appropriations to the 2005 Budget. Camp stated the ordinance prepared for Council .packets had been developed prior to the decision made earlier in the. evening to include Seibert Circle in p{armed streetscape improvements. Camp stated the contribution would not affect the appropriation. Moffet moved and Cleveland seconded. The motion passed unanimously, 7-0. Donovan then requested Camp provide an overview of the financial success of the town in 2004. Camp responded accordingly. The ninth item on the agenda was the Second reading of Ordinance No. #5, Series of 2005, an ordinance amending Section 6-3C-5C of the Vail Town Code, concerning the possession of liquor by underage persons. Mire announced one amendment had been made between first and second reading. Moffet questioned the inclusion of containing ethyl alcohol as it exists in many household projects. Mire stated it was already in the Town Code and was consistent with other local jurisdictions including the Colorado Revised Statutes. Buck Allen, Vail Municipal Judge, stated over-zealous policing is not commonplace in Vail. Moffet moved with Cleveland seconding the motion to approve. The motion passed unanimously, 7-0. The tenth item on the agenda. was the Second reading _of Or_dinance No #8, Series of- -- - 2005, an ordinance for the conveyance to the. Vail Corporation, d/b/a Vail Associates, Inc., of certain portions of Tract C, VaiULionsHead first filing, and. Tract C, VaiULionsHead third filing, which are owned by the Town of Vail, and for the. vacation and termination of certain existing public utility and drainage .easements within Vail/LionsHead, :first and third filings, all in connection with the development of the LionsHead "Core" site, a/k/a Arrabelle at Vail Square. Due to a predetermined conflict, Slifer voluntarily recused himself from the item. Mire explained the purpose of the ordinance was to: (a) authorize the conveyance by the Town of Vail to The Vail Corporation, d/b/a Vail Associates, Inc., of those portions owned by the town of the approved development site for the LionsHead "Core," also having the project name. of "Arrabelle at Vail Square," such conveyance being conditioned upon the closing under the Core Site Development Agreement, and (b) terminating pre-existing platted easements within the Core development site, conditioned upon the closing under the Core Site Development Agreement and the provision of necessary replacement 4 easements. Moffet moved and Ruotolo seconded a motion to approve the ordinance. The motion passed unanimously, 6-0. The eleventh item on the agenda was Resolution No: #5, Series of 2005, designating authorized signers on the town's investment account to include Stan. Zemler, Pamela A. Brandmeyer, and Judy G. Camp as signers on the Yown's investment accounts held at Charles Schwab. The resolution removed three employees who were no longer with the town and replaced them with three current employees as authorized signers: Moffet moved and Hitt seconded a .motion to approve the resolution. The motion passed unanimously, 7-0. The twelfth item on the agenda was Resolution No. #6, Series of 2005. A resolution, pursuant to Section 8-1-21(6)(2) Vail Town Code, authorizing. street-cut permits to be issued between March 15 and April 15 of each year in certain circumstances. Mire announced the resolution was requested by the Town Manager to allow flexibility in construction timing during the approximately $1 billion of public and private redevelopment scheduled to take place in the town over the next three years: This resolution allows the Town Manager and Public Works Director to issue street-cut permits prior to April 15 in certain instances, for public convenience and necessity. Moffet moved and Logan seconded a motion to approve. The motion passed unanimously, 7-0. The thirteenth item on the agenda was Resolution No. #7, Series of 2005: Resolution designating three properties in the Town of Vail as parks. Forrest reported. on January 25, 2005, the Vail Open Space l3oard of Trustees met at a scheduled meeting and unanimously voted to forward a recommendation to the Vail Town Council that.. the properties in Attachment A of Resolution #7 referenced as A, B, & C be considered for designation as parks (so they could be considered for designated open space in the future). Moffet moved to designate parcels B and C as parks. Ruotolo seconded the motion. Ruotolo asked if park designation further restricted the property's use. Mire and Forrest ,responded the parcel's future use would not be limited. The motion passed passed 5-2, with Hitt and Cleveland opposed." puring a pause for public comment, Jerry Sibley asked why Moffet had singled the two parcels out: Moffet did not respond with a reason. Hitt then. moved to approve Parcel A as a park with Donovan seconding. Wolf Mueller encouraged Council to make parcel A, the Middle Bench at Donovan Park, an official park. The motion passed 5-2, Moffet and Ruotolo opposed. The fourteenth item on the agenda was the Town Manager's Report. Fire Technician Tom Talbot reported the fire department had been contacted by the United States. Forest Service (USES) about a potential "burn" in the Booth Creek area of Vail. The bum could possibly occur during the window of April 15 to May 15: Talbot stated the bum would help to provide expanded grazing lands for bighorn sheep, elk and deer. Donovan expressed grave concern over the potential hazards of a prescribed burn. The fifteenth .item on the agenda was Adjournment. The meeting. was adjourned at approximately 8:40 p.m. Moffet moved and Logan seconded a motion to adjourn. The motion passed unanimously, 7-0. 5 Vail Town Council Evening Meeting Minutes Tuesday, April 19, 2005 6:00 P.M. Vain Town Council-Chambers The regular meeting of the vail Town council was called to order at approximately 6:00 p.m. by Mayor Rod Slifer. Members present: Rod Slifer, Mayor Dick Cleveland, Mayor Pro-Tam Diana Donovan Farrow Hitt Greg Moffat Kim Ruotolo Members Not present: Kent Logan Staff Members: Pam Brandmeyer, Acting Town Manager Matt Mire, Town Attorney The first item on the agenda was Citizen Input. There was none. The second item on the agenda was the Mauri Nottingham Award Presentation. Town Environmental Officer Bill Carlson introduced the 2005 Mauri Nottingham Environmental Awards. Matt Scharr, Executive Director of the Eagle Valley Alliance for Sustainability, also recognized the following "Community Heros." Youth: Rudy Olin Rudy, a student at Eagle Valley High School, designed and installed interpretive signs at ..the Sylvan Lake trailhead, earning him the distinction of an Eagle Scout. These signs describe different wildlife that can be found along the trail, as well as a description of the ~~ Halfway House." Olin thanked all those who helped him with the project, especially Doug Seacrest and his parents. Individual: Allen Best __ __ __ _ _. A en Best, a freelance writer whose stories have appeared in local newspapers for more than a decade, is aself-described environmentalist. Allen. uses. his writing not to preach, but to provide a range of thoughtful perspectives and insights to help raise awareness about environmental matters that have, or will, .impact our lives. His articles and commentary appearing in the Vail Daily and Mountain Town News provide. the foundation for raising the community's environmental consciousness and serve to create a platform for on-going community dialogue and public policy.. Best stated he was honored for receiving the award and sharing the frame path as Mauri Nottingham after whom the award is named. Bestrecommended the tawn onceagain raise the bar in its environmental activity. In particular, Best encouraged Council to pursue new and innovative solutions to improve the f-70 corridor. In response, Donovan thanked Best for helping to place the environment back in the forefront of local conversation. Organization: Eagle River Watershed Council 1 The Eagle River Watershed Council (ERWC) advocates the health and conservation of the Eagle River watershed through- education, research and projects. The -ERWC provides a forum in which everyone can participate and gain a greater understanding of the Eagle River environment. The ERWC won the award for creatively raising awareness and inspiring action toward local water issues. Ann Esson, representing the ERWC Board, thanked Council and the town for the award. Brian Healy, U.S. Forest Service Fisheries Biologist,. thanked the ERWC for its hard work. The following are examples of the achievements and efforts of this valuable community organization:: 1. Steering various public .agencies to clean sand from the beautiful Black Gore Creek that discharges into Vail's Gore Creek. 2. Land preservation at Tennessee Pass in conjunction with the Eagle Valley Land: Trust. 3. The annual highway and river clean-up that doubles as a .great sociai event for the community.. 4• WaterWise Wednesdays that raises awareness of water issues in a way-that makes the incredibly complex and often dreary topic simple and entertaining.. The third item on the agenda was a Request to Proceed through the Development Review Process with a proposal involving the use of Town of Vail owned property.. The applicant, James. King Jr., .represented by Beth Levine, architect, requested to .proceed through the. development review process with a proposal involving the use of town property. The King residence is located at 272 West Meadow Drive/Lot 9, Vail Village. Filing 2. Ruther explained, previously a patio at the rear of the residence was constructed. on town owned property without town approval The property is part of the Gore Creek steam tract and zoned Natural Area Preservation District (NAPD). Levine. asked the patio be "grandfathered" into town code compliance. The applicant recently received town approva! for a remodel of the residence with the condition the patio improvements be removed from the town's property.. Thee- applicant requested continuing the use of the patio on the town owned property. Council serves the role of "property owner" for all town owned property. Therefore as the property owner, Council must consent to the applicant proceeding through the town's development review process with a proposal involving the use of town owned property. Ruther, on behalf of the Community Development Department, recommended Council deny the applicant's request to proceed through the process. Cleveland asked why this was. not an appeal and verified the patio/path was on town property. Ruther clarified he believed it was the applicant's assumption, if the request was approved, it would have greater administrative leverage when approaching the DRB. Hitk_clarified the_:area-was in-the town owned Gore Creek stream tract and was zoned NAPD. Slifer stated he would not want to set a precedent by allowing private use of the stream tract. Moffet moved to deny the request to proceed and. required the owners restore the area to its natural condition. Cleveland seconded the motion. The motion passed unanimously, 6-0. Jim Lamont, representing.-the Vail Village Homeowners Association, supported the decision to preserve the natural environment. Council then directed staff to survey all of the stream tract, not just Gore Creek, throughout the town to ensure no similar encroachments are occurring. The fourth item on the agenda was an Appeal of Denial of Exemption from Real Estate Transfer Tax for the Conveyance of Lodge at LionsHead, Phase III, Unit 7. Mire announced the appellant, Donald L. Erftmier, represented by Daniel F. WoIF, esq., appealed a decision made by the Town Manager on or about February 24, 2005, denying his Real Estate Transfer Tax (RETT) exemption application, Mire reported the appeal letter and relevant supporting documents were contained in Council. packets. 2 Mire stated the transfer was made from a partnership for $1.4 million.. Subsequently, Mire explained, no exemption applies to the transfer. "It is possible that 20% of the requested exemption may be exempt based upon further review and analysis. of additional information." However, at the present time, the request was required to be submitted for the agenda, such a request had not been made and such information had not been provided by the appellant. Mire recommended Council uphold the decision of the Town Manager, denying the exemption request, and. stated he would research the matter further. Moffet moved to deny the exemption and authorized the Town Manager to negotiate the percentage of an amount exempted, if any. Ruotolo seconded. The motion passed unanimously, 6-0. The fifth item on the agenda was a Request for Final Review and Approval of the Vail Resorts/Lionshead Core Site Hotel. Operating Covenant Agreement. Due to a predetermined conflict, .Slifer recused himself from the item. Ruher announced on September 27, 2004, the applicant, Vail Resorts Development Company, was granted final approval with conditions of a major exterior alteration application allowing for the construction of the Arrabelle Hotel in LionsHead. One of the conditions of approval states, "The Developer shall address the following conditions of approval prior to the issuance of a building permit by the Town of Vail Community Development Department: (note: A grading permit shall constitute a building permit.) The Developer finalizes the Rental Program Proposal and then enters into a written agreement with the Town of Vail that is recorded with the .Eagle County Clerk & Recorder's Office, which requires that the Rental Program Proposal is implemented and fully adhered to by the applicant and its assigned and successors for a period of not less then 20 years from the date of the issuance of a temporary certificate of occupancy. The final Rental Program. Proposal shall be reviewed and approved by Council following a recommendation on the proposal from the town's PEC.° Jay Peterson, representing Vail Resorts, stated the only amenity of the Arrabelle which could potentially be removed, was the spa, based on market demand. Peterson ..emphasized hotel amenities would Weyer be removed as .Vail .Resorts was contractually obligated to maintain those amenities in perpetuity. On April 5, 2005, the applicant appeared before the Council for review and approval of the Rental Program Proposal, as required by the PEC. Following discussion on the proposal, Council identified the following issues which must be addressed by the applicant:. • The proposal must ensure the common elements of the hotel operation, (i.e., front desk, reservation system, meeting rooms, great room, .spa, health club, etc.) endure on the site. • The benefits of the proposal shall be long-lasting and endure a transfer of property---- . ownership. _ _ __ Moffet expressed concem over contract language which would not require owners to maintain common areas. Peterson responded it would be the- responsibility of Vail Resorts. "Vl/e are obligated to run this as a hotel." Mire stated it was his opinion the contract fulfilled Council requests, although it was Council's decision as to whether the contract met expectations. Cleveland questioned if the building were partially destroyed, whether Vail Resorts would be obligated to honor the contract. Mire answered yes. Hitt expressed concern certain contract, language might encourage the hotel to become a private club. Peterson and Mire responded all fees for services would be consistent to those charged at any other "luxury .hotel." Moffet moved and Hitt seconded a motion to approve the agreement. The motion passed, 5-0. The sixth .item on the agenda was. a review of a Draft Request for Proposals for Third Party Operation of the Town of Vail Visitor Information Centers and Review of a Town- Run Operation as an Alternative Approach. Public Information Officer. Suzanne Silverthorn reported on April 5, 2005, Council approved a recommendation by the Council Visitor Information Center Committee (CVICC) to direct the committee to draft a request for proposals (RFP) for athird-party operator using the criteria discussed during the presentation and according to the timetable adopted in February. The timetable called for: Council review and approval of the RFP on April 19; issuance of the RFP on April 20; and proposals -due to the Town of Vail on or before 12 Noon on June 1. At the time, Council also. directed the committee to continue its analysis of a town-run operational structure with an update to occur at the April 19 meeting. Silverthorn then stated preliminary groundwork had been conducted with regard to both scenarios. The CVICC, represented by Ruotolo and Hitt on the Town Council, recommended either: • Formalize purpose, goals, operational standards and evaluation measurements for the Visitor Information Centers to be included in the RFP and approve/modify the RFP as needed for release on April 20, 2005. /or • Direct the Town Manager to begin the process to transition to a town-run operation of the Visitor Information Centers effective October 1, 2005. Silverthorn suggested a conversation be held surrounding whether. Council wished to continue with the RFP process. Hitt stated the CVICC had performed an in-depth analysis and subsequently reiterated Silverthorn's comments. Ruotolo and Hitt stated they did not have a preference as to the course to follow and encouraged Council input. Brandmeyer stated town administration, via Town Manager Stan Zemler, was comfortable following either path. Hitt emphasized the CVICC recommended removing "side businesses" (reservation commissions, as an example) from the visitor centers. Donovan supported the town sending out RFPs and maintaining the. first right of refusal. Moffet stated, no matter who runs it, the point of the operation is to provide exceptional customer service. He then articulated a belief government agencies were not known to be able to provide it (exceptional customer service). Cleveland stated he was fatigued by .readdressing the issue of information centers and trusted the town's ability to provide the valuable service. Slifer reiterated Moffet's statements and stated he thought the .town had a "full plate" already (administratively). In response to an inquiry by Donovan, Finance Director Judy Camp advised Council requiring a financial audit of a potential operator. would not be financially burdensome to a potential operator and it further protects the town., Donovan offered several amendments_to the. proposed RFP. __Moffet_ reiterated an interest in including financial incentives for exceptional performance. Hitt made a motion to move forward with an ,RFP including Donovan's modii•;cations, .with Ruotolo seconding. During a pause for public comment, ICelli McDonald, representing the Vail Valley Chamber and Tourism Bureau (WCTB), asked if the RFP evaluation criteria would be weighted. Hitt responded no. Rick Scalpello noted the need to address the circumstances of the LionsHead location, which would be impacted .should construction of the Vail conference center proceed. Hitt and Ruotolo responded the issue had already been addressed in the RFP. Responding to a question from Donovan, Silverthorn stated promotional materials currently provided at the information centers had been reviewed by the CVICC. The motion passed 5-1, with Moffet opposed.- The seventh item on the agenda was the First Reading of Ordinance No. #10, Series of 2005, an Ordinance approving the Commercial Core Construction Mitigation Sign and Construction Fencing Package which will be implemented by the town to mitigate the impacts of 4 construction in the commercial cores over. the next several years.. Senior Planner Warren Campbell announced for the past several months Council had been involved in discussions with town staff regarding the need for ordinances and resolutions which will aid the Gown in mitigating the impacts of forthcoming construction in the commercial core areas over the coming years. Campbell acknowledged, "It has been generally agreed by Council and staff any ordinances and resolutions should resemble those adopted. in preparation and implementation of the 1999 World Alpine Ski Championships." The Community Development Department, Public Works Department and Community Information Office recommended Council approve the ordinance on first reading. Moffet moved with Cleveland seconding a motion to approve. Donovan suggested removal of the billion dollar renewal logo as a component of the sign package, Mire noted a packet will be included in the Town Clerk's office for public viewing since sign illustration graphics would be difficult to display in the town's newspaper publication. During the public comment period, Kaye Feny of the Vail Chamber and Business Association requested town sign appeal requirements be cut down to a shorter time than a ten day review. Moffet amended his motion to two business days,. with a subsequent second. The motion passed unanimously, 6-0. The eighth item on the agenda was a Discussion of the First Reading of Ordinance No. # 11, Series of 2005, an ordinance amending Section 12-1414, Restaurants, Bars, and Similar Uses, Vail. Town Code. Mire stated on March 28, 2005, the PEC voted 5-0 to forward- a recommendation of approval for the proposed text amendment. The purpose of the proposed amendment is to resolve existing conflicts relating to noise regulations in the Vail Town Code. The Community Development Department recommended Council approve the first reading of ordinance. Moffet moved with Hitt seconding a motion to approve. The motion passed unanimously, 6-0. The .ninth item on the agenda .was the Second Reading of Ordinance No. #9, Series 2005, an ordinance making supplemental appropriations to the 2005 Budget, Supplemental Appropriation No. 1. Moffet moved with Hitt seconding a motion #o approve. Donovan .asked for clarification as to why the housing budget is contained within the Community Development Department and why the AIPP budget is contained within. the Public Works Department. Donovan then requested the. AIPP budget be distributed to the Council. Cleveland and Ruotolo stated they would be voting against the ordinance as the supplemental budget included funding for the redevelopment of Seibert Circle, which they have opposed. The motion passed 4-2, with Cleveland and Ruotolo opposed. _ __ __ The tenth item on the agenda was Resolution #2, Series of 2005. A Resolution to Designate the National .Incident Management System (NIMS) as the basis for all incident management in the Town of Vail.. Police Chief Dwight Henninger reported the Federal Department of Homeland Security mandated local agencies adopt NIMS and the Incident Command System (ICS) systems for critical incident management, if they desire to receive grant funds from the federal agency. The town already utilizes the- ICS system to manage small to large scale incidents. The additional requirements of the NIMS system for the town are very limited over and above the ICS requirements. Moffet moved and Ruotolo seconded a motion to approve. The motion passed unanimously, 6-0. Approval of this resolution made the town eligible to receive grant funding from the Department of Homeland Security and. the State of Colorado .Division of Emergency Management. s The eleventh item on the agenda was the Town Manager's Report. - Intermountain Streamside Wildfire Project Brandmeyer stated town .staff would tike to propose sponsoring a defensible space project in cooperation with Intermountain homeowners, USFS, Vail Fire Department, Vail Community Development and Eagle County. Tom Talbot, Fire Technician, reported the project would focus on the ongoing pine beetle mitigation activity and treatment- of hazardous fuels and create a defensible space for a safer environment for homeowners and fire personnel in the event of a wildfire. Talbot said the Intermountain area had been identified as most at risk for wildfire damage. He explained a defensible space as an area surrounding a structure where fuels and vegetation are treated, cleared or reduced to slow the spread ofiwildfire. Defensible space, he said, provides room for firefighters to do their jobs. The suggested treatments in the. Intermountain neighborhood are adopted from the Colorado State Forest Service's "FireWise° program that encourages homeowners to develop landscaping practices of defensible space that create wildfire defense zones. Talbot continued, through the use of a special agreement between the ` USFS and landowners, the- VFD would be able to create defensible space on private land as .well as adjacent public lands within 200 feet from any structure. Vail Fire and Community Development sought initial input from landowners to determine the level of interest in pursuing the creation of defensible space within and around neighborhoods. A homeowner meeting was held with an Intermountain neighborhood group on January 18, 2005.. Although lightly attended, initial response was positive at the end of the information. and education session. It was noted approximately $75,000 from the Town of Vail Rea( Estate Transfer Tax fund had been budgeted for pine beetle mitigation in 2005. Talbot continued, the scope of the project is to reduce fuels build up on properties within the Vail: Fire and Emergency Service Response area of Intermountain.. By generating defensible space, Vail Fire and Emergency Services will increase its ability to protect property and the community. from. the threat of wildfire. Moffet asked how the program would coincide with design review guidelines as he believed the #own encouraged landscaping near home sites. Forrest indicated the guidelines would eventually have to be addressed. Hitt asked if the county had provided any funding for the project. Talbot reported the county had not been contacted, Hitt stated. there is a huge beetle kilt. problem outside. of -town limits and would like to see the program expanded. Talbot stated by becoming a FireWise community the town would qualify for future grant opportunities. Cleveland encouraged working jointly with the county and clarified the program would be voluntary for homeowners. Camp stated, in her opinion, use of RETT,funds for pine beetle mitigation would be limited to public property only. Council authorized Talbot to continue to research.. neighborhood-interest and associated - - costs, but stopped short of committing any cost-share dollars for mitigation on private property. Council also asked Talbot to pursue a partnership with Eagle County to mitigate areas outside the town's boundaries. Donovan expressed concern the program would be intimidating to homeowners and would. be too aggressive in removal of landscaping. Talbot assured Donovan the. program would be flexible and moderate in its scope with great care given to maintain vegetation.. - Police Department Annual Report Council was provided with a copy of the Police Department's 2004 Annual Report. The report documented a very busy year, with a significant reduction in most crime categories during 2004. Brandmeyer reported Go Outside Colorado (LOCO) questioned a stipulation included in the town's letter of support for the Eagle Ranch Preserve open space proposition. As a 6 r board member of the sponsoring organization, the Vail Valley Foundation, Slifer recused himself from the discussion. Council directed staff to leave the letter the same :but in responding to GOCO, restate the original reasoning, as well as the fact the town did not object to the county spending $6 million. The twelfth item on the agenda was. Adjournment. The meeting was adjourned at approximately 9:05 p.m. Moffet moved and Slifer moved to adjourn. The motion passed unanimously, 6-0. 7 TO: Town Council FROM: Community Development Department DATE: May 17, 2005 SUBJECT: A request for a continuance of an appeal of the Town of Vail Design .Review. Board's approval of a design review application. `(DRB05-0040), pursuant. to Section 12-11, Design Review; `Vail Town Code, to allow for a new single-family residence, 1.345 Westhaven Circle/Lot 50, Glen Lyon, and setting forth details in regard thereto. ITEM/TOPIC: An appeal of the Tawn of Vail Design Review Board's approval of a design review application (DRB05-0040), pursuant to Section 12-11, .Design Review, Vail. Town Code, to allow for a new single-family residence, 1345 Westhaven Circle/Lot 50, Glen Lyon, and setting forth details in regard thereto. ACTION REQUESTED OF COUNCIL: ~~ Approve or Deny a request for a continuance of this hearing, pursuant to Section 12-3- ~ 3, Vail Town. Code, until the June 7, 2005 Town Council hearing. BACKGROUND RATIONALE:. .The appellant, Patricia O'Neil, has filed a Request for A Continuance of Hearing, to which the owners of Lot 50 do not object and have agreed to wait until the June 7, 2005, Town Council meeting to hear the appellants appeal (Attachments). STAFF RECOMMENDATION: Staff recommends that .the Town Council approves the request .for a Continuance of , Hearing until the Council's next regularly scheduled meeting, June 7, 2005. ~_ REQUEST FOR A CONTINUANCE OF HEARING APPEAL OF DESIGN REVIEW BOARD DECIS{ON APPLICATION DI~B05-0040 Appellant: Patricia O'Neill Planner: Matt Gennett BA-ChCGROUND 1. On April 21, 2005, the undersigned filed a timely appeal of the Design Review Board. decision of April 6, 2005. On that same date I sent an E mail to the Town Planner stating- that I could not attend a hearing between May 5, 2005 and May 18, 2005 due to the fact that my Father is seriously ill and I am required to bring a Motion for a Conservatorship to be appointed his legal guardian. The Conservatorship hearing is scheduled for Friday, May 13, 2005. lam unable to leave California until the order has been signed, which will be, hopefully, some time the week of May 16, 2005. Further,. I have previously scheduled .appointments with clients who are coming in from. Germany on May 17tH ~~ 2. On May 4, .2005, I received an E mail from the Town Planner with an attachment from architect Kyle Webb. He had met with the Town Planner on May 3~d or 4tH to discuss my appeal and, by follow up~ E mail, expressed his desire that the .hearing go forward on May 17t". Since Mr. Kyle knew of my request for a continuance, it is fair to presume he is objecting to my request. 3. I am appealing two issues: a) The location of the proposed family room and its 28 foot chimney; b) The relocation or removal of my trees to accommodate. the proposed driveway on lot 50. REQUEST FOR CONTINUANCE request a continuance on the following grounds: 1. I have requested a copy of the transcript from the Design Review Board. hearing. To date I have not been advised as to when it will be available. Even if it becomes available prior to May 17t", I will have no ability to read. and analyze it prior to that date. 2. I learned yesterday that there have been .other, similar appeals to the one I am bringing. Though I have searched the Vail Daily archives on .line to inform myself about this, I was only able to locate one article. I would like time to research the actual archives to see what other determinations have been made by the Design Page 1 of 2 Review Board and Town Council in situations similar to this one. 3. The subject property was improperly staked prior to the Design Review Board hearing. The improper staking concerned the. exact portion of the proposed dwelling that is the subject of this appeal. The property should be properly staked. 4. I am presently consulting with an architect to determine other feasible locations for a proposed relocation of the family room. Though I have obtained a portion of the plans, I have just learned that I will need to acquire additional portions of them, and then the architect will need time to review them. 5. Though I have met with the Town Engineer and have agreed to a compromise with regard to the relocation of my trees, the owners and architect of lot 50 have demonstrated no willingness to compromise. At this point in time, therefore, I do not know whether this will be anissue on appeal or not. I believe this appeal and request for continuance is reasonable inasmuch as the plans, as approved, substantially effect my legal right as an adjacent landowner, to privacy, open space, light, air and views in addition to the right to be protected from the harmful. effects of the proposed construction, to wit; the substantial diminution in the value of my' property. have not delayed in my pursuit of this appeal. To the contrary, I have at a1ltimes acted in a timely manner. As a matter of fact, had I waited until April 21, 2005, to file this appeal, as I was entitled to do, this request for continuance would not have been necessary. I would have been within the statutory 40 day time limitation for the hearing. If this continuance is not granted l will, in effect, be penalized for filing early and acting in a responsible manner. To the best of my knowledge, this three. week delay will have no harmful effect on the owners of Lot 50 because, 1 am informed and believe, they do not intend to break ground until later in June. Respectfully submitted, Patricia O'Neill Owner, lot 51 Page 2 of 2 _ .. ~L~IL.EX ~ hETE~®N A PROFESSIONAL CORPORATION Weststar Bank Bldg. 108 South Frontage Road West, Suite 208. Vail, Goiorado 8165? ~~ Telephone (970) 476-0092 ) Facsimile (970) 476-0099 MEMORANDUM TO: •- Town Council of the Town of Vail Attn: Matt Mire, Town. Attorney FROM: Jay K. Peterson DATE: May 10, 2005 ~° RE: Appeal of Design Review Board Decision / Application DRBOS-0040 Dear Matt: Attached to this memo please find a copy of the Request For A Continuance Of Hearing from Patricia O'Neill. On behalf of the owner of Lot 50 Glen Lyon Subdivision I do not object.. to the request for a continuance of the appeal to June 7, 2005 to allow the parties additional time to obtain information based upon'Section 12-3-3 C. 3. of the Town Code for the Town of Vail. • --~ J y K. Pet rson Attachment .Edwards Office Denver Ot'tice P.O. Box 449 1660 Lincoln Street, Suite 3175 175 Main Street, Suite C104 Denver, Colorado 80264 Edwards, Colorado 81632 Telephone (303) 837-1660 Telephone.(970) 926-9255 Facsimile (303) 837-0097 Facsimile (970) 926-9298 ~.~ BAILEY & PETERSON A PROFESSIONAL CORPORATION Weststar Bank Bldg. 108 South Frontage Road West, Suite 208 Vail> Colorado 81657 Telephone (970) 476-0092 Facsimile (970) 476-0099 MEMORANDUM TO: Town Council of the Town of Vail Attn:. Matt Mire, Town Attorney FROM: Jay K. Peterson DATE: May 10, 2005 RE: Appeal of Design Review Board Decision /Application DRBOS-0040 Dear Matt:. Attached to this memo please find a copy of the Request For A Continuance Of Hearing from Patricia O'Neill. On behalf of the owner of Lot 50 Glen Lyon Subdivision I do not object to the request for a continuance of the appeal to June 7, 2005 to allow the parties additional .time to obtain information based upon Section 12-3-3 C. 3. of the Town Code for the Town of Vail . ----~ __ _ J yK.Pe on Attachrrient Edwards Office Denver Office P.O. Box 449 l75 Main Street, Suite C104 1660 Linwln Street, Suite 3175 Edwards, Colorado 81632 Denver, Colorado 80264 Telephone (970} 926-9255 Telephone (303) 837-1660 .Facsimile (970} 926-9298 Facsimile (303) 837-0097 `, Z REQUEST FOR A CONTINUANCE OF HEARING APPEAL OF DESIGN REVIEW BOARD DECISION APPLICATION DRB05-~Q40 Appellant: , Patricia O'Nei11 Planner: Matt Gennett BACKGROUND 1. On April 21, 2005, the undersigned filed a timely appea{ of the Design Review Board decision of April 6, 2005. On that same~date 1 sent an E mail to the Town Planner stating that I could not attend a hearing between May 5, 2005 and May 18, 2005 due to the fact that my Father is seriously ill and I am required to bring a Motion for a Gonservatorship to be appointed his legal guardian. The Conservatorship. hearing is scheduled for Friday, May 13, 2005. 1 am unable to leave California until the order has been signed, which will be, .hopefully, some time the week of May 16, 2005. Farther, 1 have previously scheduled appointments with clients who are coming in from Germany on May 17"'. 2. On May 4, 2005, I received an E mail from the Town Planner with an attachment from architect Kyle Webb. He had met with the Town Planner on May 3ro or 4"' to discuss my appeal and, by follow up E mail, expressed his desire that the hearing go forward on May 17"". Since Mr. Kyle knew of my request for a continuance, it is fair to presume he is objecting to my request. 3. I am appealing two issues: a} The location of the proposed family room and its 28 foot chimney; b) The relocation or removal of my trees to accommodate the proposed driveway on lot 50. _. REQUEST FOR CONTINUANCE f request a continuance on the following grou~de:. _ _._ ___ ___ -__. __ 1. I have requested a copy of the transcript from the Design Review Board. hearing To date I have not been advised as to when it will be available. Even if it becomes available prior to May 17~', I will have no ability to read and analyze it prior to that date. 2. I teamed yesterday thatthere have been other, similar appeals to the one I am bringing. Though I have searched the Vait Daily archives on line to inform myself about this, 1 was only able to locate one article. i would like time to research the actual archives to see what other determinations have been made by the Design Page 1 of 2 Review Board and .Town Council in situations similar to this one.. 3. The subject property was improper staked-prior to the Design Review Board hearing. The improper staking concerned the exact portion of the proposed dwelling that is the subject of this appeal. The property should be properly staked. 4. I am presently consulting with an architect to determine other feasible locations for a proposed relocation of the family room. Though 1 have obtained a portion of the plans, I have just learned that I will need to acquire additional portions of them, .and then the architect will need time to review them.. 5. Though. I have met with the Town. Engineer and have agreed to a compromise with regard to the relocation of my trees, the owners and architect of lot 50 have demonstrated no willingness to compromise. At this point in time, therefare,l do not-know whether this wilF be an issue on appeal or not. I believe this appeal and request for continuance is reasonable inasmuch as the.plans, as approved, substantially effect my legal right as an adjacent landowner, to privacy, open space, light, air and views in addition to the right to be protected from. the harmful effects of the proposed construction, to wit, the substantial diminution in the value of my proPerty• I have not delayed in my pursuit of this appeal. To the contrary, 1 have at all .times acted in a timely manner. As a matter of fact, had 1 waited until April 21, 2005, to file this appeal, as l was entitled to do, this request for continuance would not have been. necessary. I would have been within the statutory 40 day time limitation :for the hearing. If this continuance is not granted I will, in effect, be penalized. for filing early and acting in a responsible manner. To the best of my knowledge, this three week delay will have no harmful effect on the owners of Lot 50 because, I am informed and believe, they do not intend to break ground until later in June. __ _ _ __ __ __ _ _ _ _ _. Respectfully submitted, Patricia O'Neill Owner, lot 51 Page 2 of 2 MEMORANDUM TO: FROM: DATE: SUBJECT Town Council Community Development Department May 17, 2005 Second Reading of Ordinance 12, Series of 2005, An Ordinance repealing and reenacting Ordinance No. 8, Series of 1995, .Cascade Village, amending. and." reestablishing the approved development plan for the Westhaven Condominiums site, located within Development Area A of SDD No. 4, in accordance with Section 12-9A-10, Vail Town Code, to allow for the construction of thirteen dwelling units; and setting forth details in regards thereto, On May 3, 2005, the Town Council approved with modifications the first reading of Ordinance' 12, Series of 2005. The following represents a summary of the modifications (bold italics) which have occurred since. ~; first reading of this Ordinance: Pages 17 - 18, "Development Plans": 4i. The Approved Development Plan for Area A, as attached (Exhibit A) to this Ordinance and containing the following Sheets: wg. # Title utlzor ate: -1. D Title Sheet orter Architects 03-15-OS -1.1 YicinityMap orterArclzitects 01-31-05 -1.2 GRFA Summary orter Architects 03-15-05 -1.3 pring Equinox Sun Shading orter Architects 01-31-05 -1.4 ummer Solstice Sun Shading orter Architects 01-31-OS -1.5 all Equinox Sun Shading orter Architects 01-31-05 -1.6 Winter Solstice Suzt Shading orter Architects 01-31-OS -1.7 ite Plan orter Architects 03-1 S-O5 0001 Cover S/zeet lpine Engineering. 03-14-05 0002 Grading Plan (West Hai lpine Engineering 03-14-05 0003 Grading Plan (East Half lpine Engineering 03-14-OS 0004 torm Drainage Plaz: lpine Engineering 03-14-05 0005 Grading and Drainage Details lpine Engineering 03-14-OS 0006 Utility Plan lpine Engineering 03-14-OS COD7 Utility Details lpizze Engineering 03-14-0~ 0008 emolition Plan lpine Engineering 03-14-OS -1 andscape Plan ennis Anderson Assoc. 03-IS-OS -2 andscape Plan -Cascade Club ennis Anderson Assoc. 03-1 S-OS 2.0 arking Level Plan orterArchitects 03-1 S-OS 2.1 first Floor Plan orterArchitects 03-1S-OS 2.2 econd Level Plarz orterArchitects 03-1 S-OS 2.3 Third Level Plan orterArchitects 03-I S-OS 2.4 ourtlz Level Plan orter ArcJitects 03-15-OS 2.5 oof Plan orterArchitects 03-1 S-OS 3.1 uilding A Elevations orterArchitects 3-1 S-OS 3.2 uilding B Elevations orterArchitects 03-15-OS 4.0 uilding Sections orter Arc/zitects 02-14-05 4.1 uilding Sections orterArchitects 02-14-OS 4.2 uilding Sections orterArchitects 02-14-OS s~ Page 19, "Setbacks": Setbacks A. Area A, Cascade Village Required setbacks shall be as indicated in each development plan with a minimum. setback on the periphery of the property (Area A) of not less than twenty feet, with the exception that the setback requirement adjacent to the existing Cascade parking structure/athletic club building shall be two feet as approved on February 8, 1982, by the Planning -and Environmental .Commission, and wifh the exception that the setback requirement of a portion. of the Westhaven. Condominiums building, as indicated on the approved development plans referenced in this ordinance, .shall be 14 feet. All buildings shall maintain a 50 foot stream setback from Gore Creek. Page 21, "Site Coverage,,. Site Coverage Area A: Not more than 45% of the total site area maybe covered by buildings unless otherwise indicated on the site specific development plans. Page 25: "Area A, Cascade Village" ~ Area A, Cascade Village _ 1. The developer of the Westhaven Condominiums building shall construct a sidewalk that begins at the entrance to the Cascade Club along Westhaven Drive and extends to the. west in front of the Westhaven building to connect with the recreational path to Donovan Park, as indicated on the approved development plans referenced in this ordinance. The walk shall be constructed when a building permit is requested for the Westhaven Condominiums. The sidewalk shall be part of the building permit plans. The sidewalk shall be constructed subsequent to the issuance of a building permit and prior to the. issuance. of a temporary certificate of occupancy for the Westhaven Condominiums. Page 26, "Employee Housing" Employee Housing. The development of SDD No. 4 will have impacts on available employee housing within the Upper Eagle Valley area. In order to help meet this additional employee housing need, the developer(s) of Areas A and D shall provide employee housing on site. The developer(s) of Area A shall build a minimum of 3 employee dwelling units within the Cornerstone. Building and 2 within the Liftside (Waterford .Building).. Each employee unit in the Cornerstone Building shall have a minimum square footage of 600 square feet. There ~° shall be a total of 2 employee dwelling units in the Waterford Building. One shall be a minimum of 300 square-feet and the other a minimum of 800 square feef. The developer of the Westhaven Condominuims building shall provide eight(8) employee units of at least 550 square feet in size offsite pursuant to the terms of an agreement reached with the Town of Vail as described in Condition 3. Pages 27 - 29, "Westhaven Condominiums Conditions of Approval"; Westhaven Condominiums Conditions of Approval 1. That the applicant submits a detailed contractors cost estimate identifying the costs necessary fo relocate the existing overhead utility line along the applicants north property line underground, and thatthe applicantestablish: a financial bond with the Town of Vail in the sum of 125% of said relocating costs fo~ ensure the burial of the utility line prior to requesting a Temporary Certificate of Occupancy, unless the work is otherwise completed by Holy Cross by that time. The work described above and in the bond shall be completed by July 31, 2006. 2. That the applicant re-grades and re-vegetates the knoll located of the northwest corner of the development site in association with a landscaping plan approved through the Design Review Application process. The re-grading shall be reviewed and approved by the Town Engineer and said re-grading shall be completed prior to the issuance of a Temporary Certificate of Occupancy. 3. That the applicant provides eight (8) deed-restricted Employee Housing Units (EHUs) of at least 550 square feet, which comply with the Town of Vail Employee. Housing Requirements, Title 72, Chapter 73, Vail Town Code, and that said deed- restricted housing be in the Town of Vail and made available for occupancy, and that the deed restrictions be recorded at the Office of the -Eagle County Clerk 8 Recorder, prior to requesting a Temporary Certificate of Occupancy for the Westhaven Condominiums. 4. That the applicant submit detailed civil engineering drawings of the required off-site improvements (street lights, drainage, curb and gutter,. sidewalks, grading, etc.) to the Town of Vail Public Works Department for review and approval prior #o ~` the issuance of a building permit 5. That the applicant provides written documentation from the: Public Service Company granting approval of the construction of the Westhaven Condominiums in the location identified on the site plan relative to the high pressure gasline, as depicted on Sheet 0002 of the Approved Development Plan.. Written approvaFshall be granted prior to applying fora building permit. B. That a complete Design Review Board Application be submitted by the applicant, and be reviewed and approved by the Town of Vail Design Review Board, prior to applying for a building permit. 7. That this approval is granted with the understanding there will be no phasing associated with Phis project. By "no phasing'; fhis condition means one building permit will be applied for and issued which will encompass the entire scope of the Westhaven Condominiums project. t 8. That at the time a demolition permit is applied for, the applicant will include a plan detailing how the existing concrete from the "ruins" foundation will be properly recycled. ~ , ORDINANCE N0.12 SERIES OF 2005 AN ORDINANCE REPEALING AND RE-ENACTING ORDINANCE NO. 8, SERIES OF 1995,. CASCADE VILLAGE, AMENDING AND RE-ESTABLISHING THE APPROVED .DEVELOPMENT PLAN FOR THE WESTHAVEN CONDOMIMIUMS SITE, LOCATED WITHIN DEVELOPMENT AREA A OF SDD NO. 4, IN ACCORDANCE WITH SECTION 12-9A-40, VAIL TOWN CODE,TO ALLOW FOR THE CONSTRUCTION OF THIRTEEN DWELLING LIMITS; AND SETTING FORTH DETAILS IN REGARD THERETO. WHEREAS, Section 12-9A-10 of the Zoning Regulations permits major amendments to previously approved development plans for Special Development Districts; and WHEREAS, .Ordinance No. 11, ,Series of 1999, has become null and void, thereby necessitating a new approved development plan for the subject property in order to proceed through the development review process; '~ WHEREAS, Mirus LLC, as the owner of the Westhaven Condominiums property, has submitted an application for a major amendment to Special Development District No. 4, Cascade Village, Development Area A; and WHEREAS, the purpose of this ordinance is to repeal and re-enact Ordinance No. 8, Series of 1985 to amend and re-establish the Development Plan for Development Area A, specifically the Westhaven, a.k.a. the "Ruins" site (Westhaven Condominiums), to allow for the construction of the proposed Westhaven Condominiums; and WHEREAS, the proposed major amendment to the Special Developmenfi District is in the best interest of the town as it meets the Town's development objectives as identified in the Vail Comprehensive Plan; and WHEREAS, in accordance with. the provisions outlined in the Zoning Regulations, the. Planning & Environmental Commission held a public hearing on the major amendment application and has submitted its recommendation of approval. to the Vail Town Council; and WHEREAS, all notices as required 6y the Town of Vail Municipal Code have. been sent. to the appropriate parties; and WHEREAS, the Vail Town Council considers it in the best interest of the public health, safety, and welfare to amend and re-establish the Development Plan for Special Development District No. 4, Cascade Village Development Area A. NOW, THEREFORE, BE IT ORDAINED BY THE TOWN COUNCIL OF THE TOWN. OF VAIL, COLORADO, THAT: (Amended. language indicated in bold italic lettering.) Section 1. Purpose of the Ordinance Ordinance No. 8, Series of 1.985, is hereby repealed and re-enacted by Ordinance No. 12, Series. of 2005. Section 2. Amendment Procedures Fulfilled, Planning Commission Report. The approval procedures described in Section 12-9A of the Vail Town Code have been fulfilled, and the Town Council has received the recommendations of the Planning. & Environmental Commission for an amendment to the Development Plan for Special Development District No. 4, Area A, Westhaven Condominiums. 2 Ordinance 12, Series of 2005 Section 3. Special Development District No. 4 Special Development District No, 4 and the development plans for all sites other. than the development plan for the Westhaven Condominiums therefore, hereby remain approved for the development of Special Development District. No. 4 within the Town of Vail, unless they have otherwise expired. Section 4. Special Development District No. 4, Cascade Village shall read as follows: Purpose Special Development District No. 4 is established to ensure comprehensive development and use of an area in a manner that will be harmonious with the general character of the ~, Town, provide adequate open space and recreational amenities, and promote the objectives of the Vail Comprehensive Plan. Special Development District No. 4 is created to ensure that the development density will be relatively lovv and suitable for the area and the vicinity in which it is situated, the development. is regarded as complementary #o the Town by the Town Council and the Planning & Environmental Commission, and because there are significant aspects of the Special Development District which cannot be satisfied through the imposition of standard zoning districts on the area. Definitions For the purposes of this chapter, the following definitions shall apply: A. "Special attraction" shall be defined as a museum,. seminar or research. center or performing arts theater or cultural center. B. "Transient residential dwelling unit or restricted dwelling unit" shall be defined as a 3 . Ordinance 12, Series of 2005 ~_ ____ dwelling unit located in amulti-family dwelling that is managed as a short term rental in which all such units are operated under a single management providing the occupants .thereof customary hotel services and facilities. A short term. rental shall be deemed to be a rental for a period of time not to exceed 31 days. Each unit shall not exceed 645 square feet of GRFA which shall include a kitchen having a maximum of 35 square feet.. The kitchen shall be designed so that it may be locked and separated from the rest of the unit in a closet. A transient dwelling unit shall be accessible from common corridors,. walks, or balconies without passing through another accommodation unit, dwelling unit, or a transient residential dwelling unit.. Should such units be developed as condominiums, they shall be restricted as set forth in Section 13-7 Condominiums and Condominium Conversions, Subdivision. Regulations.. The unit shall not be used as a permanent residence. fractional fee ownership shall not be allowed to be applied to transient dwelling. units. For the purposes of determining allowable density per acre, .transient residential dwelling units shall be counted as one half of a dwelling unit. The transient residential dwelling unit parking requirement shall be 0,4 space per unit plus 0.1 space per each 100 square feet of GRFA with a maximum of 1.0 space per unit. Established A. Special Development District No. 4 is established for the development on a parcel of land comprising 97.955 acres and Special Development District No. 4 and the 97.955 acres may be referred to as "SDD No. 4.~~ B. The district shall consist of four separate development areas, as identified in this ordinance consisting of the following approximate sizes: 4 Ordinance 12, Series of 2005 Area Known As Development Area Acreage Cascade Village 'A 17.955 Coldstream Condominiums B 4.000 Glen Lyon Primary/Secondary and Single Family Lots C 9.100 Glen Lyon Commercial Site D 1.800 . Dedicated Open Space 40.400 Roads 4.700 TOTAL 97.955 Development Plan--Required--Approval Procedure Each development area with the exception of Development Areas A and D shall be subject to a single development plan. Development Area A shall be allowed to have two development plans for the Cascade Club site as approved by the. Town Council. The Waterford and Cornerstone sites shall be allowed one .development plan each. Development Area D shall be allowed to develop per the approved phasing plans as approved by .the Town Council The developer shall have the right to proceed with the. development.. plans or scenarios as defined in the developmentstatistics section of this ordinance. Amendments to SDD No. 4 shall comply with: Section 12-9A of the Vail Town Code. Permitted Uses A. Area A. Cascade Village 1. First floor commercial uses shall be limited to uses listed in Section 12-7B- 3, (Commercial Core 1), Vail Town Code. The "first floor" or "street level" shall be defined as that floor of the building that is located at grade or street level; t 5 Ordinance 12, Series of 2005 2. All other floor levels besides first floor street level may include retail, theater, restaurant, and office except that no professional or business .office shall be located on street level or first floor (as defined above) unless it is clearly accessory to a dodge or educational .institution except for an office space having a maximum square.. footage of 925 square feet located on the first floor on the northwest corner of the Plaza Conference Center building; 3. .Lodge; 4. Multi-family. dwelling; 5. Single Family dwelling; 6. Primary/Secondary dwelling; 7. Transient residential dwelling unit; 8. Employee dwelling as del'Ined in Section 12-13 of the Municipal Code; 9. .Cascade Club addition of a lap pool orgymnasium.- B. Area B, Coldstream .Condominiums 1. Two-family dwelling; 2. Multi-family dwelling. C. Area C, Gfen Lyon Primary/Secondary and Single-Family Lots 1. Single family dwelling; 2. Two-family dwelling. 3. Type II Employee Housing Unit (EHU) per Chapter 12-13, of the Municipal Code. D. Area D. Glen Lyon Commercial Site 1. Business and professional offices; c 6 Ordinance 12, Series of 2005 ~,. _ .. _ _...,~_~.. ... _......_....,..._.. e._u.,...~ .,_k.. --- -f.~~~.-~.~~.... _..._N..~.~~,~..~.», 2. Employee dwelling as defined. in Section 12-13 of the Municipal. Code. Conditional Uses Conditional uses shall be reviewed per the procedures as outlined in Chapter 12-16 of the Town of Vail Zoning Regulations. A. Area A, Cascade Village 1. Cascade Club addition of a wellness. center not to exceed 4,500 square feet. 2. Special attraction; 3. Ski lifts, 4. Public Park and recreational facilities; ~; 5. Major arcades with no frontage on any public way, street, walkway or mall area. 6. Transportation Business. 7. ~ Temporary Use of the Tennis Facility for Conferences and Conventions B. Area B, Coldstream Condominiums 1. Public Park and recreational facilities; 2. Ski lifts. C. Area C, Glen Lyon Primary/Secondary and Single-Family Lots 1. Public park and recreational facilities; 2. Ski lifts; D. Area D, Glen Lyon Commercial Site 1. Micro-brewery as defined in Town of Vail Municipal code, Chapter 12-2. 7 Ordinance 12, Series.of 2005 Accessory Uses A. Area A. Cascade Village 1. Minor arcade. 2: Home occupations, subject to issuance of a-home occupation permit in accordance with the provisions of Title 12, Zoning Regulations, Town of Vail Municipal Code. 3. Attached garages or carports,. private greenhouses, swimming pools,. tennis courts, patios, or other recreational facilities customarily .incidental. to permitted residential uses. 4. Other uses customarily incidental and accessory to permitted or conditional ~, uses, and .necessary for the operation thereof. B. Area B, Coldstream Condominiums 1. Home occupations, subject to issuance of a home. occupation permit in accordance with the provisions of Title 12, Zoning Regulations, Town of Vaif Municipal Code. 2. Attached garages or carports, private greenhouses, swimming pools, tennis. courts, patios, or other recreational facilities customarily incidental to permitted residential uses. Other uses customarily incidental and accessory to permitted or conditional. uses;. and necessary for the operation thereof. C. Area C, Glen Lyon Primary/Secondary and Single-Family. Lots 1. Home occupations, subject to issuance of a home occupation permit in accordance. with the provisions of Title 12, Zoning Regulations, Town. of .Vail 8 Ordinance 12, Series of-2005 Municipal Code. 2. Attached garages or carports, private greenhouses, swimming pools, tennis courts, patios, or other recreational facilities customarily incidental to permitted residential uses. 3. Other uses customarily incidental and accessory to permitted or conditional uses, and necessary for the operation thereof.: D. Area D, Glen Lyon Commercial Site 1. Home occupations, subject to issuance of a home occupation permit in accordance with. the provisions of Title 12, Zoning Regulations, Town of Vail Municipal Code. 2. Attached garages or carports, private greenhouses, swimming pools, tennis courts, patios, or other recreational facilities customarily. incidental #o`, permitted residential uses. 3. Other uses customarily incidental and accessory to permitted. or conditional uses, and necessary for the operation thereof. 4. Minor arcade. Location of Business Activity A. All offices, businesses, and shall be operated and conducted entirely within a building, except .for permitted unenclosed parking or loading areas, and the outdoor display of goods. B. The area to be used for outdoor display must be located directly in front ofi the establishment displaying: the goods and entirely upon the establishment's own property. ~. 9 Ordinance 12, .Series of 2005 ~ . Sidewalks, building entrances and exits, driveways and streets shall not be obstructed by outdoor display. Density--Dwelling Units The number of ~dwelNng units shall not exceed the following: A. Area A, Cascade Village In Area A, a minimum of three hundred fifty-two (352) accommodation or transient dwelling units and a maximum of ninety-four dwelling units for a dotal density of two hundred seventy (270) dwelling units. B. Area B, Coldstream Condominiums s Sixty-five (65) dwelling units C. Area C, Glen Lyon Primary/Secondary and Single-Family :Lots One-hundred four (104) dwelling units. D. Area D, Glen Lyon Commercial Site Three dwelling units, two of which shall be employee dwelling units as defined Chapter 12-13, of the Municipal Code . Density--F1oor Area A. Area A, Cascade. Village The gross residential floor area (GRFA) for al( buildings shall not exceed 289,145 square feet. B. Area B, Coldstream Condominiums Sixty-five thousand square feet (65,000 sq. ft.) GRFA. 10 Ordinance 12, Series of 2005 _ ...._._ _.._..._._~_.__.._._..A.,..._...,.a..,.w....,...~.....-, _a......~,...~-,p_n...~~_.~...,~, C. Area C, Glen Lyon Primary/Secondary and Single-Family :Lots GRFA shall be calculated for each lot per Section 12-6D-8 (Density Control) for the Primary/Secondary district of the Town of Vail municipal code. D. Area D, Glen Lyon Commercial Site The development plan for this area. has expired: See Ordinance No, 8, Series of 1998 for previous requirements. Commercial Square Footage A. Area A, Cascade Village Area A shall not exceed 35,698 square feet of commercial area. ~: B. Area D, Glen Lyon Commercial Site The development plan for .this area has expired. See Ordinance No. 8, :Series of 1998 for previous requirements. Development Statistics for Area A. Cascade Village, and Area D, Glen Lyon Commercial Site CHART 1: Area A Completed Projects Aus DUs GRFA Retail/ Commercial Square Foot On-Site Parking Cascade Structure Parking MILLRACE I 16 20,000 20 0.00 MILLRACE II 14 17,534 25 0.00 MILLRACE IIII 3 6,450 7 MILLRACE IV 6 10,450 19 0.00 WESTIN 148 55,457. 0.00 115 Alfredo=s 104 Seats Cafe 74 Seats Little Shop 1,250 Pepi Sports 2,491 W & H Smith, Vaurnot 900 CMC BUILDING Cascade Wing 8 15,870 0.00. i6 Clancy=s 1,600 0.00 13.3 Aus DUs GRFA Retail/ Commercial Square Foot On-Site Parking .Cascade Structure Parking Theater 4,220 28 College Classrooms 0.00 40 College Office 0.00 4 Theater/Meeting Room 2J 1,387 0.00 11.5. TERRACE WING Rooms 120 58,069 0.00 105 Retail 5,856 0.00 20 PLAZA 1 Rooms 20 7,205 0.00 16 Retail 1,099.. 0.00 4 PLAZA II Conference 0.00 35 Retail 925 0.00 3 CASCADE CLUB Retail 300 0.00 1 Bar & Restaurant 252 0.00 3.5 Office in CMC 828 0.00 3 Wellness Center Office in Club LIFTSIDE (WATERFORD) Units 27 56 Employee Units 2 1,100 2 TOTALS 27 47,500 58 Cascade Club Addition Wellness Center 4,500 22.5. Pl,oa Offi~~" 925 7 TOTALS 288 AU 76 DU (includes 2 EHUS) 239,680 24,598 129 449.9 **Plaza space has already been counted for a retail parking requirement. The new parking requirementis based on the difference between the retail and office parking requirements. ***For the purposes of calculating GRFA for the Cosgriff parcel (Millrace IV), no credits shall be given except for 300 s.f. to be allowed for each enclosed parking space. 14 Ordinance 12, Series of 2005 1,386 0.00 7 .420 0.00. 1.4 CHART 2: AREA A R€QUiRED PARKING Parking for Completed Projects per Chart 1 Parking Spaces in 461.9 Cascade Parking Structure Less 17.5% Mixed-Use Credit -80.8 Total Required. Parking at Build-Out of Area A in Cascade Structure 381.1 Existing Parking in Cascade Structure 421.0 Required Parking in Cascade Structure at Build-Out of Area A With 17.5% mixed-use credit 381.1 ~, Development Plans Site specific development plans are approved for Area A and Area D. The development plans for Area A are comprised of those plans submitted by Vail Ventures, Ltd. and other developers. The development plans for Area D are comprised of those plans submitted by the Glen Lyon Office Building, a Colorado Partnership. The following documents comprise the development plan for the SDD as a whole,- Waterford, Cornerstone, Cascade Club Addition Scenario 1 and 2, Millrace IV, and Area D-Glen Lyon Commercial Site and is not all inclusive: 1. Waterford,. Sheet #L-2, dated 11-12-92, Landscape Plan, Dennis Anderson. 2. Waterford, Sheet #:1.1, dated 11-13-92, Site/Grading Plan Gwathmey, Pratt, , Schultz. 15 Ordinance 12, Series of 20Q5 __ 3. Waterford, Sheet#2.1, dated 11-13-92, Plan Level 38/43' 3", Gwathmey, Pratt,. Schultz. 4. Waterford, Sheet #2.2, dated 11-13-92, Plan Level 48'-6"/53'-0", Gwathmey, Pratt, Schultz. 5. Waterford, Sheet #2.3, dated 11-13-92 Plan Level 59'-0:/64'-3" by Gwathmey, Pratt, Schultz. 6. Waterford, Sheet #2.4, dated 11-4-92, Plan Level 69'-6"/74'-9'; Gwathmey, Pratt, Schultz. 7. Waterford, Sheet#2.5, dated 11-13-92, Plan Level 8.0'-0"/85'-3" Gwathmey, Pratt, Schultz. 8. Waterford, Sheet #2.6, dated 11-13-92, Plan Level 90'-6" Gwathmey, Pratt, Schultz. 9. Waterford, Sheet #2.7, dated 11-13-92, Plan Level 101'-0°Gwathmey, Pratt, Schultz. 10. Waterford, Sheef #2.8, dated 11-13-92, Plan Level 111'-6" Gwathmey, Pratt, Schultz. 11. Waterford, Sheet #2.9, dated 11-13-92, Plan Level 122'-0" Gwathmey, Pratt,. Schultz. 12. Waterford, Sheet #2.10, dated 12-14-92, Roof-Plan All Levels Gwathmey, Pratt, .Schultz. 13. Waterford, Sheet#3.1, dated 11-13-92, Elevations Gwathmey, Pratt, Schultz. 14. Waterford, Sheet #3.2, dated 11-13-92, Elevations, Gwathmey, Pratt, .Schultz. 15. Waterford, Sheet #4.1, dated 11-4-92, Sections Gwathmey, Pratt, Schultz.... 16. Waterford, Sheet #4.2, dated 11-4-92, Sections, Gwathmey, Pratt, Schultz. 17. Waterford, Sheet #4.3, dated 11-4-92, Sections, Gwathmey, Pratt, Schultz. 18. Waterford, Sheet #9.1, dated 10-20-92, Unit-Plans Gwathmey, Pratt, Schultz. 19. Waterford, Sheet #9.2, dated 10-20-92, Unit Plans, Gwathmey, Pratt, Schultz. 20. .Waterford, Sheet #9.3, dated 10-20-92, Unit Plans Gwathmey, Pratt, Schultz.. 21. .Waterford, Sheet #9.4, dated 10-20-92, Unit Plans, Gwathmey, Pratt, Schultz.. 22. Waterford, Sheet #9.5, dated 10-20-92, Unit Plans Gwathmey, Pratt, Schultz. 16 Ordinance 12, Series of 2005 23. Cascade. Club Addition Site Plan, Roma, 10/10/88. 24. Cascade Club Floor Plan, Roma, 10/10/88. 25. Millrace III, Sheet #1, dated 5/6/93, Site Plan, Steven James Riden. 26. MiArace III, Sheet #2, dated 4/13/93, Floor Plans for Single Family Residence, Steven James Riden. 27. Millrace III, Sheet #3, dated 5/6/93, Elevations for Single Family Residence, Steven James Riden. 28. Millrace III, Sheets #4 and #5, dated 3/20/93, Floor Plans for Duplex Building, Steven. James Riden. 29. Millrace III, Sheets #6 and #7, dated 5/6/93, Elevations for Duplex Building, Steven James Riden. 30. Millrace III, Sheet L1, dated 5/6/93, Site/Landscape Plan, Steven James Riden. 31. Millrace IV; Scenario I, a/k/a Cosgriff Parcel, .Site Plan, Arnold Gwathmey:Pratt, 10/28/91. 32. Millrace IV, Scenario I, a/k/a Cosgriff Parcel, Elevations Arnold Gwathmey Pratt, 10/22/91. 33. .Millrace IV, Scenario I, a/k/a Cosgriff Parcel, Floor Plans Arnold Gwathmey Pratt, 10/23/91. 34. Millrace IV, Scenario I, a/k/a Cosgriff Parcel, Landscape Plan, Dennis Anderson Associates. 35. Cosgriff Parcel, Survey, Alpine Engineering, Inc., 1..0/31/91 stamped... 36. Survey, a part of Cascade Village, Eagle Valley Engineering, Leland Lechner, 6/8/87. 37. Site. Coverage Analysis, Eagle Valley Engineering, 10110/88. 38. Cascade Village Special Development District Amendment and Environmental Impact Report: Peter Jamar Associates, Inc., revised 11/22/88. 39. Topographic Map, Inter-Mountain Engineering,. Ltd, 12/1/94 40. Improvement Location Certificate, Eagle Valley Surveying, Inc., 3/2/92 41. The Approved Development Plan for Area A, as attached .(Exhibit A) to this Ordinance and containing the following Sheets: wg. # Title uthor ate -l.0 Title Sheet orterAz'c/zitects 03-IS-OS -1.1 Vicinity Map orterArchitects 01-31-05 -1.2 GRFA Summary orterArchitects 03-I 5-05 -1.3 pring Equinox Sun Shading orterArchitects. 01-31-OS -1.4 ummer Solstice Sun Shading orterArchitects 01-31-OS -1.5 all Equinox Sun Shadizzg orter Architects 01-31-OS -1.6 Winter Solstice Sun Shading orterArchitects 01-31-05 -1.7 ite Plan orter Architects 03-1 S-OS 0001 Cover Sheet lpine Engineering 03-14-OS 0002 Grading Plan (West Half] lpine Engineering 03-14-OS 0003 Grading Plan (East Half lpine Engineering 03-14-OS 0004 tornz Drainage Plan lpifze`Engineerizzg 03-14-OS COOS Grading and Drainage Details lpine Engineering 03-14-05 0006 Utility Plan lpine Engineering 03-I4-05 0007 Utility Details lpine Engineering 03-14-OS 0008 emolition Plan lpine Engineering 03-14-OS -1 andscape Plan ennis Anderson. Assoc. 03-1 S-OS -2 andscape Plan -Cascade Club ennis Anderson Assoc. 03-I S-OS 2.0 arking Level.Plan orterArchitects 03-15-OS 2.1 first Floor Plan orterArchitects 03-I 5-05 2.2 econd Level Plan orterArchitects 03-1 S-OS 2.3 Third Level Plan orterArchitects 03-15-OS 2.4 ourtlz Level Plan orterArchitects 03-1 S-OS 2.5 oof Plan orterArchitects 03-1 S-OS 3.1 uilding A Elevations orterArchitects 03-IS-OS 3.2 uilding B Elevations orterArchitects 03-1 S-OS 4.0 uilding Sections orterArchitects 02-14-OS 4.1 uilding Sections orterArchitects 02-14-OS 4.2 uilding Sections orterArchitects 02-14-OS * A maximum of 1000 sq. ft. of common area, in addition to the approved plans,. may. be added to the Waterford project to allow for compliance with the Uniform Building Code, Uniform Fire Code and American Disabilities Act. The staff shall review all such .additions to ensure that they are required by such codes. Area C, Glen Lyon Primary/Secondary and Single Family Lots 1. Building Envelopes for Lots 39-1 and 39-2 per sheet, L-1, prepared by Design Workshop, Inc., dated 11-9-98. Area D, Glen Lyon Commercial Site The development plan for this area has expired. See Ordinance No. 8, Series of 1.998 for previous requirements. ~: Development Standards The development standards set out herein are approved by the Town .Council. These standards shall be incorporated into the approved development plan pertinent to .each development area to protect the integrity of the development of SDD No. 4. They are minimum development. standards and shall apply unless more restrictive standards are incorporated in the approved development plan which is adopted by the Town Council Setbacks A. Area A, Cascade Village Required setbacks shall be as indicated in each development plan with a minimum setback on the periphery of the property (Area A) of not less than twenty feet, with the exception that the setback requirement. adjacent. to the existing Cascade parking structure/athletic club building shall be two feet as approved on February 8, 1982, by the Planning and Environmental Commission, and with. the exception #hat the setback requirement of a portion of the Westhaven Condominiums building, as indicated on the approved development plans referenced in this ordinance, shall be 14 feet. All buildings shall maintain a 50 foot stream setback from Gore Creek. 19 Ordinance 12, Series of 2005 The Waterford building shall maintain a minimum 20 foot setback from the north edge of the recreational,path..along Gore Creek. B. Area. B, Coldstream Condominiums Required setbacks shall be as indicated on the development plan. C. Area C, Gleri Lyon Primary/Secondary and Single-.Family Lots Required setbacks shall be governed by Section 12-6D-7 of the Primary/Secondary zone district of the Town of Vail Municipal Code. For single-family Lots 39-1 and 39-2, development shall occur per the approved building envelopes and is subject to the following: All future development will be restricted to the area within the building envelopes. The only development permitted outside the building envelopes shall be landscaping, driveways (access bridge) and retaining walls associated with driveway construction. At-grade patios (those within 5' of existing or finished . ~: grade) will be permitted to project beyond the building envelopes not more than ten feet (10') nor more than one-half (2) the distance between the building envelope .and the property line, or may project not. more than five feet (5') nor more than one-fourth (3) the minimum required dimension between buildings. D: Area D. Glen Lyon Commercial Site _ Required setbacks shall be as indicated on the approved development plans. Height A. For the purposes of SDD No, 4 calculations of height, height shall mean the distance measured vertically from the existing grade or finished grade (whichever is more restrictive), at any given point to the top of a flat roof, or mansard roof, or to the. highest ridge line of a sloping roof unless otherwise specified in approved development plan drawings. B. Area A, Cascade Village 1. The maximum height for the Westin Hotel, CMC Learning Center, Terrace Wing, Plaza Conference Building and Cascade Parking Structure/Athletic Club is 71 feet. 20 Ordinance 12, Series of 2005 _~.~~...e..~..~.-.-~-n--..,-.,_u .......~...._..~,..~...s.. ~...,...~......._.. _..._ o ... 2. Cornerstone Building: Maximum height of 71 feet. 3. .Waterford Building: Maximum height. of feet as measured from finished grade to any portion of the roof along the north elevation shall. be 55' (South Frontage. Road), 56' along the west elevation Westhaven Drive, and 65 feet along the. south and east elevation as measured from finished grade. 4. Westhaven. Building: A maximum of 55 feet.. 5. Millrace III: A maximum of 36 feet. 6. Millrace IV: A maximum of 36 feet. 7. Cascade Club Addition: A maximum of 26 feet. 8. Cascade Entry Tower: A maximum of 36 feet. 9. The remainder. of buildings in Area A shall have a maximum height of 48 feet. C. Area B. Coldstream Condominiums The maximum height shall be 48 feet. D. Area C. Glen Lyon Primary/Secondary and Single-Family Lots The maximum height shall be 33 feet for a sloping roof and 30 feet for. a flat or mansard roof. E. Area D. Glen Lyon Commercial Site 51 % of the roof shall have a height between 32 and 40 feet. 49% of the .roof area shall have a height under 32 feet. On the perimeter of the building for Area D, height is measured from finished grade up to any point of the roof. On the in#erior areaof any building, height is measured from existing grade up to the highest point of the roof. Development plan drawings shall constitute the height allowances for Area D. .Site Coverage Area A: Not more than 45% of the total site area maybe covered by buildings unless otherwise indicated on the site specific development plans. Area B: No more than 35% of the total site area shall be covered. by buildings, provided,. if any portion of the area is developed as an institutional or ~. educational center, 45% of the area may be covered unless otherwise indicated on the site specific development plans. Area C: No more than 25% of the total site area shall be covered by buildings,. unless the more restrictive standards of Chapter 12-21 of the. Vail Municipal Code apply. Area D: No .more than 37% of the total site area shall be covered by buildings and the parking structure. Landscaping At least the following percentages of the total development area shall be landscaped as provided in the development plan. This shall include retention of natural landscape, if appropriate. Areas A and B, fifty percent (50%), and in Areas C and D, sixty percent (60%), of the area shall be landscaped unless otherwise indicated on the site specific ~; development plans. Parking and Loading A. .Area A, Cascade Village 1. Off-street parking shall be provided in accordance-with Chapter_12-10, except that 75% of the required parking in Area A shall be located within a parking structure or buildings with the exception of Millrace IV, Scenario I, where 66.6% and the Westhaven Condominiums, where 71 % of required parking shall be enclosed in a building. 2. There shall be a total of 421 spaces in the main Cascade Club parking structure. A 17.5: percent mixed-use credit per the Town of Vail parking code, fias been applied to the total number of required parking spaces in the Cascade structure. 3. There shall be a total of 58 on-site parking spaces on the Waterford bui!ding site with a minimum of 75% of the required space located below grade.- No mixed use credit shall be applied to this site. 4. There shall be a minimum of 93 enclosed parking spaces located within c" _ 22 , Ordinance 12, Series of 2005 .the Cornerstone building with 37 of the required spaces available to the public fore short-term parking. No mixed use credit has been applied to this lot. 5. The third floor of the Cascade parking structure shall not be used to meet any parking requirements for accommodation units, transient residential dwelling units, employee dwelling units or dwelling units. 6. Phasing: All required parking for Cornerstone and Waterford shall be located on their respective sites. All required parking for the. Cascade Club .Wellness Center Addition Scenario 1 shall be provided in the Cascade parking ..structure. 7. Seventy-five percent of the required parking shall be located within the main building or buildings and hidden from public view from adjoining properties within a landscaped berm for.Millrace IIL 8. All loading and delivery shall be located within buildings or as approved. ~; in the development plan. B. Area B. Coldstream Condominiums Fifty percent of the required parking shall be located within the main building or buildings and hidden from public view from adjoining properties within a landscaped berm. C. Area C, Glen Lyon Primary/Secondary and Single-Family Lots Off-street parking shall be provided in accordance with Chapter 12-10 of the Municipal Code. D. Area D, Glen Lyon Commercial Site 1. Once the parking structure is constructed, the. parking and .access to Area D shall be managed per the TDA Parking Report, Parking Management Section, pages 6 and 7, August 10, 1988, and TDA Report, Vail Brewery Parking Analysis Update, dated January 16, 1990, both written by Mr. David Leahy. 2. No loading or delivery of goods shall be allowed on the public right-of-way ~. ~~ along the South Frontage Road adjacent to the Area D development. 3. The owner of the property and brewery management shall prohibit semi-#ruck and trailer truck traffic to the Glen. Lyon Commercial site. The only truck loading that shall be allowed to the site shall be vans having a maximum `' length of 22 feet. Recreation Amenities Tax Assessed The recreational amenities tax due for the development within SDD No. 4 under Chapter 3.20 shall be assessed at a rate not to exceed twenty-five cents per square-foot of the floor area in Development Area A; and at a rate not to exceed fifty cents per square foot of GRFA in Development Area B; and at a.rate not to exceed fifteen cents per square .foot of GRFA in Development Area C; and afi a rate. not to exceed seventy-five cents. per square foot of floor area in Development Area D; and shall be paid in conjunction with each construction phase prior to the issuance of building permits. Conservation and Pollution Controls A: The developer's drainage plan shall include a provision for prevention of pollution from surface runoff. B. The developer shall include in the building construction, energy and water conservation controls as general technology exists at the time of construction. C. The number of fireplaces permitted shall be as set forth in the Town of Vail Municipal as amended. D. If fireplaces are provided within the development, they must be heat efficient through the use of glass enclosures and heat circulating devices as technology exists at the time of development. E. All water features within Development Area A shall have overflow storm drains per the recommendation of the Environmental Impact Report by Jamar Associates on Page 34. . F. All parking structures shall have- pollution control devices to prevent oil and dirt from draining into Gore Creek: 24 Ordinance 12, Series of 2005 G. In Area D, a manhole. on the brewery service line. shall be provided so that the Upper Eagle Valley Consolidated Sanitation District may monitor BDD strength. H. In Area D, the brewery management shall not operate the brewery ,process " during temperature inversions. It shall be the brewery owner's responsibility to monitor.: inversions. I. All trash compactors and trash storage areas shall be completely enclosed within Special Development District 4. J. Protective measures. shall be used during construction to prevent soil erosion into Gore Creek, particularly when construction occurs in Areas A and D. K. The two employee dwelling units in Area D shall only be allowed to have gas fireplaces that meet the Town of Vail ordinances governing fireplaces. Additional Amenities and Approval Agreements for Special Development District No. 4. A. The developer shall provide or work with the Town to provide adequate private transportation services to the owners and guests so as to transport them from the development to the Village Core area and Lionshead area as outlined in the approved development plan. B. .Area A, Cascade Village 1. .The developer of the Westhaven Condominiums building shall construct a sidewalk that begins at the entrance to the Cascade Club along Westhaven Drive and extends to the west in front of the Westhaven building to connect with .the recreational path to Donovan Park, as indicated on the approved development plans referenced in this ordinance. The walk shall be constructed when a building permit is requested for the Westhaven Condominiums. The sidewalk shall be part of the building permit plans.. The sidewalk shall be constructed subsequent to the issuance of a building permit and prior to the issuance of a temporary certificate of occupancy for the Westhaven Condominiums. 25 Ordinance 12, Series of 2005 2. The developer shall provide 100-year floodplain information for the area adjacent to the Waterford and Cornerstone buildings to the Town of Vail Community Development Department before building permits-are released far either project. 3. Cornerstone The development plan for this area has expired.. See Ordinance No. 8, Series of 1998 for previous requirements. C. Area D, Glen Lyon Commercial Site. The development plan for this area has. expired. See Ordinance No. 8, Series of 1998 for previous requirements.. Employee Housing The development of SDD No. 4 will have impacts on available employee .housing within- the Upper Eagle Valley area. In order to help meet this additional employee housing need, the developer(s) of Areas A and D shall provide employee housing on site.. The developer(s) of Area A shall build a minimum of 3 employee dwelling units within the Cornerstone Building and 2 within the Liftside (Waterford Building). Each employee unit in the Cornerstone Building shall have a minimum square footage of 600 square feet. There shall be a total of 2 employee dwelling units in the Waterford. Building. One shall be a minimum of 300 square feet and the other a minimum of 800 square feet. The developer of the Westhaven Condominuims .building shall provide .eight (8) employee units of at least 550 square feet in size offsite pursuant to the terms of an agreement reached with the Town of Vail as described in Condition 3. The developer of Area D shall build 2 employee dwelling units in the Area D east building per the approved plan for the East Building. In Area D one employee_dwelling .unit shall have a minimum GRFA of 795 square feet and the second employee dwelling unit shall have a minimum GRFA of 900 square feet.. The GRFA and number of employee units shall not be counted toward allowable density or GRFA for SDD No. 4. ~. 26 Ordinance 12, Series of 2005. All Employee Housing Units shall be deed restricted per Chapter 12..13, as amended,. of the Vail Municipal Code prior to issuance of building permits #or the respective project In Area C, Lots 39-1 and 39-2, shall be required to provide a Type II, Employee Housing ; Unit (EHU) per Chapter 12-13 of the Zoning Regulations of at least 500 sq. ft. each, on each lot. These lots shall not be entitled to the 500 sq. ft. of additional GRFA. The 500. sq. ft. shall. be included in the allowable GRFA on these lots. Each lot shall also be entitled to 300 sq. ft. of garage area credit for the employee housing unit, in addition to the 600 sq. ft. garage area credit allowed per residence. The driveway width of 12 is allowed to remain (no increase in driveway width is required) for all allowed/required dwelling units and employee housing units on these lots. Time Requirements t, , SDD No, 4 shall be governed by the procedures outlined in Section 12-9A of .the Town of Vail Municipal Code, unless such time requirement is amended herein Westhaven Condominiums Conditions of Approval 1. That the applicant submits a detailed contractor s cost. estimate identifying the costs necessary fo relocate the existing overhead utility-line along the applicant s north property line underground, and that the applicant establish a financial bond with the Town of Vail in the sum of 125% of saidrelocating costs to ensure the burial of the utility line prior to requesting a Temporary Certificate. of Occupancy, .unless the work is otherwise completed by Holy Cross by that time. The work described above and in the bond shall be completed by July 31, 2006. 2. That the applicant re-grades and re-vegetates the knoll located at the northwest corner of the development site in association with a landscaping plan approved through the Design.Review Application process. The re-grading shah c _ 27 Ordinance 12, Series of 2005 ~_..a ...... ................ be reviewed and approved by the Town Engineer and said re-grading shall be completed prior to the issuance of a Temporary Certittcate of Occupancy. 3. Thaf the applicant provides eight (8) deed-restricted Employee Housing Units (EHUs) of at least 550 square feet, which comply with the Town of Vai! Employee Housing Requirements, Title 12, Chapter 13, Vail Town Code, and that said deed-restricted housing be in the. Town of Vail and made available for occupancy, and that the deed restrictions be recorded at the Office of the Eagle County Clerk & Recorder, prior to requesting a Temporary Certificate of Occupancy for the Westhaven. Condominiums. 4. ..That the applicant submits detailed civil engineering drawings of the required off-site improvements (street lights, drainage, curb and gutter, ~; sidewalks, grading, etc.) to the Town of Vail Public Works Department for review .and approval prior to the issuance of a building permit. 5. That the applicant provides written documentation from the Public Service Company granting approval of the construction of the Westhaven Condominiums in the location identified on the site plan relative to the high pressure gas line, as depicted on Sheet 0002 of the Approved Development Plan. Written .approval shall be granted prior to applying for a building permit. 6. That a complete Design Review Board Application be submitted by the.. applicant, and be reviewed and approved by the Town of Vail Design Review. Board, prior to applying fora building permit 7. .That this approval is granted with the understanding there will be no phasing associated with this project. By "no phasing'; this condition means one building permit will be applied for and issued which wilF encompass the entire scope of the Westhaven Condominiums project 28 Ordinance 12, Series of 2005 ' 8. That at the time a demolition permit is applied for, the applicant will include a plan detailing how the existing concrete from the "ruins." foundation will be properly recycled. Section 5. If any part, section, subsection, sentence, clause or phrase of this ordinance is for any reason held to be invalid,. such decision shall. not affect the validity of the remaining portions of this ordinance; and the Town Council hereby declares it would have passed this ordinance, and each part; section, subsection, sentence, clause or phrase thereof, regardless of the fact that any one or more parts, sections, subsections, sentences, clauses or phrases be declared invalid. m Section 6. The repeal or the repeal and re-enactment of any provisions of .the Vail Municipal Code as provided in this ordinance shall not affect any right which has accrued, any duty imposed, any violation that occurred prior to the effective date hereof, any prosecution commenced, nor any other action or proceeding as commenced under or by virtue of the provision repealed or repealed and reenacted. The repeal of any provision hereby shall not revive .any provision or any ordinance previously repealed or superseded unless expressly stated herein. Section 7. .All bylaws, orders, resolutions and ordinances, or parts thereof, inconsistent herewith are hereby repealed to the extent only of such inconsistency. The repealer. shall not be construed to revise any bylaw, order, resolution or ordinance, or part thereof,' heretofore repealed. INTRODUCED, READ ON FIRST READING, APPROVED, AND ORDERED PUBLISHED ONCE IN FULL ON FIRST READING this 3~d day of May, 2005, and a public..., hearing for second reading of this Ordinance set for the. 17th day of May, 2005, in the .Council Chambers of the Vail Municipal Building, Vail, Colorado. 29 Ordinance 12; Series of 2005 Rodney E. Slifer, Mayor ATTEST:. Lorelei Donaldson, Town Clerk -READ AND APPROVED ONJSECOND READING AND ORDERED PUBLISHED this 17th day. of May, 2005. Rodney E. Slifer, Mayor ATTEST: Lorelei Donaldson, Town Clerk 30 Ordinance 12, Series of 2005 %f ORDINANCE NO. 13 SERIES 2005 AN ORDINANCE PROVIDING CERTAIN AMENDMENTS TO TITLE 3, CHAPTER 4, "DESIGN REVIEW BOARD," OF THE MUNICIPAL CODE OF THE TOWN OF VAIL; CHANGING THE COMPOSITION OF THE DESIGN REVIEW BOARD. FROM FIVE 70 SEVEN MEMBERS; AND SETTING FORTH DETAILS IN REGARD THERETO.. WHEREAS, the Town of Vail, in the County of Eagle and State of Colorado {the "Town"), is a home rule. municipal corporation duly organized and existing under laws of the State of Colorado and .the Town Charter (the "Charter"); and WHEREAS, the members. of the Town Council of the Town (the "Council") have. been duly elected and qualified; and WHEREAS, it is the desire of the Council of the to make certain amendments to the Vail Town Code as it pertains to the composition of the Design Review Board; WHEREAS, pursuant to Sections 8.2 and 8.6 of the Charter, the Council has the authority to provide for terms and conditions of any appointments to the. Town's Boards and Commissions via ordinance. NOW THEREFORE, BE IT ORDAINED BY THE TOWN COUNCIL OF THE TOWN OF VAIL, COLORADO, THAT: Section 1. Section 3-4-1 of the Vail Town.Code is hereby amended to read'as follows: (deletions are shown in eili~ike-tgrsug#, additions are shown in bold an und~)• 3-4-1: BOARD ESTABLISHED: There is established a design review board (DRB) of -the town. The design review board shall be composed ofi€we {•l}) seven 7 members. Each member shall be a resident of the town, and appointed by the town council Section 2. Section 3-42 of the Vail Town Code is hereby amended to read as follows: (deletions are shown in sl~eug#, additions are shown in bold and and=)• 3-4-2: TERMS: The terms of office for the #e~{4) seven 7 .members a#-layge shall be two (2) years on an overlapping basis and shall expire on .March 31 of the year of termination. Ordinance 13, Series of 2005 1 .~\_ '~ ~~ Section 3. Section 3-43 of the Vail Town Code is hereby. amended to read as follows: (deletions are shown in stril4e~#rea~, additions are shown in boid and and=)• 3-4-3: VACANCIES: A vacancy on the design review board shall occur whenever a member of the board is removed by the town council, dies, becomes incapacitated and unable to perform such duties for a period of sixty (60) days, resigns, ceases to be a resident of the town, or is convicted of a felony. In the event that a vacancy occurs, the town council shall appoint a successor to fill the vacancy and serve the remainder of the term of the former member. The board shall select its own chairman and vice chairman from among its members. The chairman, or in his/her absence, the vice chairman, shall be the presiding officer of its meetings. In the absence of both the chairman and the vice chairman from a meeting, the members present shall appoint a member to serve as acting chairman at the meeting. All business of the board shall be held at the municipal building of the town, unless otherwise specified, with adequate notice given to all interested parties. wee{-3~ Four 4 members shall constitute a quorum for the transaction of business, but in the absence of a quorum, a lesser number shalt adjourn any meeting to a later time and date, and in the absence of members, any staff member shall adjourn any meeting to a later time. and date. Section 4. If any part, section, subsection,. sentence, clause or phrase of this ordinance is for any reason held to be invalid, such. decision shall not affect the validity of the remaining portions of this ordinance; and the Town Council hereby declares it would have passed. this ordinance, and each .part, section, subsection, sentence,_ clause _ __ __ _ __ or phrase thereof, regardless of the fact that any one or more parts, sections, subsections, sentences, clauses or phrases be declared invalid. Section 5. The Town Council hereby finds, determines and declares that this ordinance is necessary and proper for the health, safety and welfare of the Town of Vail and the inhabitants thereof. Section 6. The amendment of any .provision of the Town Code as provided in this ordinance shall not affect any right which has accrued, any duty imposed, .any violation Ordinance 13, Series of 2005 2 d~ I that occurred prior to the effective date hereof, any prosecution commenced,. nor any other action or proceeding as commenced under or by virtue of the provision amended. Thee amendment of any provision hereby shall not revive any provision or any ordinance previously repealed or superseded unless expressly stated herein. Section 7. All bylaws, orders, resolutions and ordinances,. or parts thereof, inconsistent herewith .are repealed to the extent only of such inconsistency.. This repealer shall not be construed to revise any bylaw, order, resolution or ordinance, or part thereof, theretofore repealed. INTRODUCED, READ ON FIRST READING, APPROVED, AND ORDERED- PUBLISHED ONCE IN FULL ON FIRST READING this 3rd day of May, 2005, and a public hearing for second reading of this ordinance set for the 17th day of May, 2005, at 6:00 P.M. in the Council Chambers of the Vail Municipal Building, Vail, Colorado,. Rodney Slifer, Mayor Attest: Lorelei Donaldson, Town Cierlc _ _ _ _ INTRODUCED, READ, ADOPTED AND ENACTED ON SECOND READING AND ORDERED PUBLISHED IN FULL this 17th day of May, 2005. ATTEST: Rodney E. Slifer, Mayor Lorelei Donaldson, Town Clerk Ordinance 13, Series of 2005 3 Apri128, 2045 (1(.~ (~fl~. ~'~.N-~ os ~,~,a,d, ~,~, . ~. ~5.3'~5 Rodney Slifer, Mayor and Vail Town Council Town of Vail 148 South Frontage Road West Vail, C0 81657 Mr. Mayor and Council Members: T am writing to you on behalf of the Cascades on Gore Creek Owners Association, representing six single family and. duplex homes in Cascade Village. Our Association twanimously and whole heazteclly support. the development of the "Ruins" site by Mr. Jen Wright. The concept drawings that we have seen show a well thought out utilization of the site in terms of density and the scale of the development. The buildings aze attractive and frt well with the architecture of the neighborhood. We feel fortunate. Mr. Wright is associated with this challenging project. He has the reputation of one of the best and most responsible developers in the azea and .has been associated with quality real estate developments in the Vail Valley for many years. The "Ruins" has a history of Failed opportunities. This is a good and appropriate plan and will be a great improvement for our neighborhood. We urge you to take the necessary action now to approve this project. Sincerely yours, _ Terrance Ferry, President Cascades on Gore Creek Owners Association Showtime 1:00 pm Comedy, Magic ~ ]uggling~ CGCuuie~ ~ ~c~ ~ ~., Br~c,~l ~owNOFVaa~ 292 West Meadow Drive Yait, Colorado 81657 970-479-2184 Fax: 970-479-2192 www vaillibrary, com Summer 2005 Dear Parent, Vail Public Library Welcome to the Vail Library Summer Festival We are delighted to`have your children join us to celebrate the summer in Vail. This year we are celebrating the joys of music. Please see the attached schedule of events. Your children will have the opportunity to meet world-class musicians who will provide fun and informing ways for your children to share in the joys of music. The children will be able to play on string, percussion, woodwind and brass instruments. Ann Lincoln will put on her usual exciting family magic and juggling show for all ages and we are negotiating a children's book author presentation in conjunction with the Vail Symposium. Story hours will continue with Cricket Pyhnan every Tuesday and Wednesday. Don't forget to stop by the bake sale in front of the Library on the 4tb of July. More youth events are planned-for the summer. Keep in touch. Janine Bender Youth Coordinator ~~ RECYCLEDPAPER TOWN OF VAIL REGULAR MUNICIPAL ELECTION ..TUESDAY, NOVEMBER 8, 2005 ELECTION CALENDAR FYI: The General Election is a At-the Polls. Election. The Town of Vail Regular Municipal Election is an At- the-Polls Election. Terms Expiring: Dick Cleveland 4 years Diana Donovan 4 years Farrow Hitt 4 years* Greg Moffet 2 years . *Farrow Hitt replaced Ludwig Kurz in February'04 and will have completed Ku2's term ending Nov. 05. Three terms will be for 4 years and one term will be for 2 years.. Candidates-receiving the three highest number of votes shall be elected for four-year terms and the fourth. highest vote shall be elected #or a twQ- . year term of office. 2005 August 10 (Wed) Deadline for submittal of signatures to the Town Clerk on the citizen initiated 90 days prior to "Amendment to Charter -Article V" 31-2-210 (I Il) Nov 8 2005 election August 10 (Wed) Write Teak Simonton, Eagle County Clerk & Recorder, re:use,of electronic votin equipment* August 10 (Wed) Last day for any changes in the boundaries of election precincts. 90 da s August 10 (Wed) First day that applications for absentee ballots may be filed in writing with 90 days: Clerk. 31-10-1002. Requests may be made either orally or in writing. 31-10- _ 1002. Absentee ballots are to be delivered to applicants as soon as . practicable, but not more than 72 hours after the ballots have been printed. 31-10-2001. Auguste 25 (Thur) _..__ _ _ _- - - Town Clerks deadline to certify to the Town Council as to the validity and sufficiency of the citizen initiated Petition's signatures. If sufficient, the council shall at its next meeting set a ballot title. Signatures. needed: 15% of the 3,587 re istered electors = 539 si natures. 31-2-210 -- (August 16) or First reading of an Ordinance submitting the proposed citizen initiated Sept. 6 (rues) "Amendment#o Charter -Article V" to a Vote and adoption of a Ballot Title 31- (latest TC mt 2-210 IVB Sept 23 (Friday) Deadline for Pro/Con Statements.. Written comments concerning TABOR . 45 .days . issues must be filed with the election official "by 45 days before the election". (Colo. Cons't. Article 10, Section 20, Sections 1-7-90.1{4) and 3'I-10-501.5 provide that because the 45 day before a ballot issue election is a Saturday, written comments stall e filed by the preceding Friday, - Sept 6 or Sept 20 :Second reading of an ordinance submitting the proposed citizen,initiated {latest TC mt "Amendment to Charter -Article V" to a Vote and ado #ion of a Ballot Title 31- ___ ._.~ _~.~.e~.._.._~.....,.b.~.-.~.~.~ .. _ __ - _~,., I ' 2-210 IVB Sept. 16 (Friday) 51 days Last day for clerk to re are nomination petition forms 31-10-302(1) & (2) Sept 19 {Mon) ~ 50 days First day to circulate nomination petitions -10 signatures of registered electors of the TOV required.. (31-10-302(2)) Sept 28 (Wed) by NOON .Publish in the Vaif Trail on Friday Sept 30 "Notice of Election" containing the t en ire. text of the citizen initiated "Amendment to Charter-Article V" 31-2-210 iv 4 Oct 7 {Fri} 3Q days Last day to mail notices for TABOR ballot issue elections (Colo. Const. Article X , Section 20 {3){b) TABOR notices are to be prepared and distributed in a Oct 7 (Fri) manner consistent with 1-7-901, et se Section 31-10-501.5 Last day to circulate and file nomination etition t be 30 days .fans on sin - ist be F"day ber°~e p -mus #umed in to the Town Clerk no later than 5:00 PM. Must be signed AND notarized by m Circulator and Candidate. Candidate Affidavit due within 10 days of becoming October 9 (Sun) a candidate 31-10-301 & 31-10-302 2 Last day that a person can move into a munici al electio i 30 Da s Sept 29 (Fri) p n prec nct and become a resident for ur oses of votin in the election Gi e e .. 12:00 Noon v lection judges names to Corey for inclusion in council packet. At least 3 judges. Council to appoint election judges at evening meeting on Oct 4 31- . 10-401, 403-405 Oct 4 (Tues) Council Meeting -appointment of election Judges. (note: last chance to ' Oct 11 (Tues) a oint ud es. Last day to register to vote (1-2-201(3)) 29 days falls on Monday holidaymove to Tues Oct 11 (Tues) 29 days falls on Monday First day a registered elector may file an affidavit of change of address within the municipality with the county clerk in order to vote at th n holiday (Columbus Day) move to Tues e ew residence. y An elector ma file this affidavit on any day through election day (section 31- 10-208 - Oct 11 (Tues) 28 days - On this date the municipal clerk must, in person, deliver to the office of the County-Clerk the new registration sheets for those persons who live within-the county in which the municipality. is located and who registered with the Oct 14 (Fri) municipal clerk section 31-10-204 . Last day for any person who has accepted a nomi atio t 24 days falls on sat- move to Fri. n n o withdraw from such nomination by written affidavit, signed and filed with clerk 31-10-303 Oct 14 (Fri) If .any candidate should die or withdraw from nomination prior to 23 days 23 days (fans on a sunday) before the election, the. vacancy may be filled by the vacancy committee if , any, or if no vacanc committee is desi Hated, b Y 9 y petition in the same manner Ocf 14 (Fri) required for on final nomination section 31-10-304 1 Last day that nomination petitions that do not contain the re ui it mb 23 days Mans on a Sunday) q s e nu er of names of electors qualified to sign the petition can be amended in this respect Oct 17 (Mon) rior to the election 31-10-302 4 . Draw names from hat for ballot order 9:00 AM Oct 17 Mon Fax ballot ~conten# to M fes Jo ce 303 320 5411 of Ea le Direct COM 1-800- ., ~. . _ .._ ::r. __, ...._~~___...~~..~~.__a_:w~:..-.~:,.~~.~._._,.._.~~....,,....~~,...: :_ _ _. _ _ .....,.~....4._.~.~ 426-5376. Order 3,000??? ballots (same # of ballots as registered voter) & 400 absentee ballots. Sample ballots need to be printed also. Note: ballot names can still Chan a up to Oct 17 20 da s out. Oct 1.8 (Tues) Last day for write in Candidate 31-10-306 21 da s Oct 18 (Tues) Contribution reports due by Fair Campaign Practices Act to Clerk 21 da s Section 1-45-108 2 a Oct 19 (Wed) ~ Last day to fill any vacancies 31-10-304(2) 20 days Oct 21 (Fri) Last day to cancel election 31-10-306, 31-10-507 18 da s Oct 24 (Mon) Last day for the governing body of the municipality to appoint election judges.- The governing body may, by resolution, delegate to the clerk the authority and res onsibilit to do so. take to the October 2 TC evenin meetin Oct 27 (Thurs) Walk-in absentee balloting begins 31-10-1005 12 da s Oct 26 (Wed) Publishing Deadline for Friday, October 28 Vail Daily newspaper B NOON Oct 28 (Fri) Publishing deadline for Notice of Election in the Vail Trail 31-10-501(1) & (2) 10 da S fansonsat RUN IN THE VAIL TRAIL ON OCT 28 AND NOV 4 Oct 28 (Fri) Post Notice of Election at Municipal Bldg On front of building and Clerk's door 10 da S taus on sat 31-10-501 1 & 2 Oct 28 (Fri) Post "POLLING PLACE FOR PRECINCT NO 1"Section 31-10-501(3) 10 days fans on sat .Oct 28 (Fri) Official ballots and Sample ballots must be in possession of Clerk 31-10-902 10 da s taus on sat 31-10-703, 31-10-802, 31-10-806 Nov 3 (Thurs) Certified list of registered voters from. County Clerk due to Town Clerk 5 da s 31-10-205 Nov 4 (Fri) Last day to request absentee ballot by 5:00 PM 31-10-1002(1) Frida before Emer enc Absentee 31-10-1010, 31-10-1004 2 and 31-10-1006 Nov 4 (Fri) Contribution reports due by Fair Campaign Practices Act to Clerk Section 1-45-108 2 a ' Nov 4 (Fri) Last day to vote walk-in absentee 31-10-1005(1) & (2) (3) Frida before _ __ _ .. _ ____ _ _ _ _ _. _ Nov 7 (Mon) Deliver election supplies to judges by 8 PM (get receipt 31-10 206(2) Nov 7 Mon - Test Election countin equi ment 31-10-810 Nov 8 Tues ELECTION DAY! 7 AM TO 7 PM Nov 15 (Tues) Last day to canvass returns with Town Council 7 days after Publication of Statement of Certificate Determination to Vail Trail for publication on Nov. 16 File Certification with Secrets of State Dec 8 (Thurs} Contribution reports due by Fair Campaign. Practices Act to Clerk Section 1-45-108 2 a e TOWN OF VAIL REGULAR MUNICIPAL ELECTION TUESDAY, NOVEMBER 8, 2005. ' ELECTION DATES FOR VOTERS FYI: The General Election is a At the Polls. Election. The Town of Vail Regular Municipal Election is an At- the-Polls Election. Terms Expiring: Dick Cleveland 4 years Diana Donovan 4 years Farrow Hitt 4 years* Greg Moffet 2 years *Farrow Hitt replaced Ludwig Kurz in February '04 and will have completed Kurz's term ending Nov. 05. Three terms will be for 4 years and one term will be for 2 years. Candidates receiving the three highest number of votes shall be elected- for four-year terms and the fourth highest vote shall be elected for a two- year term of office. August 10, 2005 First day to accept oral or written applications for absentee (Wed) ballots. 90 da s Ballots will be available a roximatel October 27 Sept. 19, 2005 (Mon) First day. for candidates to circulate nomination petitions 50 days 10 valid signatures of registered electors of the TOV re wired. Oct 7, 2005 (Fri) Last day for candidates to circulate,nomination petition - 30 days . must be turned in to the town clerk no later than. 5:00 PM. Must be signed and. notarized by Circulator and candidate. Candidate Affidavit due with 10 days of becoming a candidate. Oct 9, 2005 .(Sun) Last day a person can move into a municipal election 30-days falls on Sun- precinct andbecome a resident for purposes of voting in the election. Oct 11, 2005 (Tues) Last day to register to vote 29 days falls on Monday holiday Columbus Da move to Tuesda October 27 (Thurs) Walk-In absentee balloting begins 12 da s November 4 (Fri) Last day to request absentee ballot by 5:00 PM ,~ Last da to vote walk-in absentee November 8 (Tues) ELECTION DAY!- 7 AM to 7 PM AT-THE-POLLS ELECTION ~ ~ C~ .tEw ~ , 5~8•es Apri128, 2005 Rodney Slifer, Mayor and Vail Town Council Town of Vail 108 South Frontage Road West Vail, CO 81657 Mr. Mayor and Council Members: I am writing to you on behalf of the Cascades on Gore Creek Owners Association, representing six single family and duplex homes in Cascade Village. Our Association unanimously and whole heartedly support the development of the "Ruins" site by Mr. 3en Wright. The concept drawings that we have seen show a well thought out utilization of the site in terms of density and the scale of the development. The buildings are attractive and fit well with the architecture of the neighborhood. We feel fortunate Mr. Wright is associated with this challenging project. He has the reputation of one of the best and most responsible developers in the area and has been associated with quality real estate developments in the Vail Valley for many years. The "Ruins" has a history of fair. opportunities. This is a good and appropriate plan and will be a great improvement far our neighborhood We urge you to take the necessary action now to approve this project. Sincerely yours, Terrance Ferry, President Cascades on Gore Creek Owners Association ~ 4 w ~ ,? ,i . ... ».. .,,,~ - ~ ..: S 'F % ,. .. p ~ . ~ 1 ~. if ~ ~ \~ ~` r , +~ ' ` ~ II i ` . ~ ~t ~ ~~ ~ o Y 3w 1 ff , .,' „ A p r ~ ~ ~ P * , ~ ~ i ~ k ~f ~ii~f~ i~ ~4 ;~' w t~~~~ i n '.: ~~i . % e 3~ .,t 1~ N M ~ ~! 1~ .. ~ ~ ~ 1" Sti ~.~ r j 13~~ r Y :, - ~ ~ff } ~. ,Q..,' .y ~ K. 4 _ ~ t~ C. „~.;- a '1i«, ~ _-. ~ _. v ~ .., '. ~ 7~ ~ a a h ~ ~~ '. 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I ~^ ~,, ~\ , ~,,\ r ~_ 1 i; ,..~ . 5~ 3• Gs CvS ~~.~tu-*' (o Vail Homeland Security Ezercise Concept Paper The Vail Homeland Security exercise scheduled for May 21-24, 2005 (Saturday to Tuesday) represents an exceptional opportunity to exercise the local, regional and state assets that will respond to an incident. involving a collapsed structure. The exercise concept is possible because of the goodwill of Vail Resorts and their willingness to schedule the demolition of the gondola building in such a manner as to allow exercise participants four days to work inside the partially demolished structure recovering "victims." The scenario for the exercise involves a building that has collapsed for unknown reasons. This event could occur for a number of reasons to include a construction accident or natural gas explosion. The exercise focuses on the first four days after the incident as the Town of Vail responds and first responders search the rubble for victims. The exercise affords a number of exercise challenges for state and local participants:.. • The Town of Vail will establish their Emergency Operations. Center (EOC) and practice the planning and coordination activities that will take place there. • The Vail first responder community will implement the National Incident Management System (NIMS) and the Incident Command process. There will be opportunities for other Incident Management Teams to integrate with the Town of Vail EOC staff. • The Eagle County Emergency Manager will integrate with the Vail EOC and exercise the application of the various Eagle County inter-governmental agreements to bring other county assets to the scene. This will include activation of the Northwest Regional Mobilization plan and the State of Colorado ROSS system. • The Vail Valley Medical Center and area EMS agencies will. respond to a mass casualty event. • The State will mobilize Colorado Task Force One (CO-TFI), one of two FEMA Urban Search and Rescue teams in FEMA Region VIII, to respond to the disaster. The USAR team will provide valuable training opportunities for Western Slope fire departments to work with them in an actual building collapse situation. • FEMA will participate with both the town of Vail and the State of Colorado to present the issues associated with the Stafford Act and a Presidential Declaration if this incident were to qualify for that assistance. The scenario and location of this exercise creates an outstanding venue to explore the complexities and challenges that will be encountered in a disaster of this type in anylocation outside of the Denver or Colorado Springs metro areas. It will provide many benefits and insights for the participants and it represents a unique opportunitythat we look forward to taking advantage of. If you or your organization is participating in this exercise please contact the functional_representative for your discipline. __ Fire/Search and Rescue Captain James "footer" Overcash, Vail Fire & Emergency Services (970) 949-7057 iovercashnu.vail ov.com Law/IMT/EOC Chief Dwight Henninger, Vail Police (970) 479-2218 dhenninser(a,vail ov.com EMS Fred Morrison, Eagle County Health Services District. (970)926-5270 forrison anechsd.org PIO/lnformation Suzanne Silverthom, Vail Community Information (470) 479-2115 ssilverthorn@vailgov.com FOR IMMEDIATE RELEASE May 3, 2005 ...Contact: .............Dwight-Henninger, (970) 479-2218, dhenninger cz_vailgov.com Vail Police Chief Stuart Pike, (303) 273-1827, stuart.pikeCa~state.co.us Colorado Department of Military and Veterans Affairs AREA EMERGENCY RESPONDERS TO PARTICIPATE IN STATE-SPONSORED TRAINING EXERCISE, MAY 2'1-24 (Vail)-Emergency responders from Vail, Eagle County and throughout Northwest Colorado will take part in astate-sponsored training exercise here this spring. Coordinated by the Emergency Management Division of the Colorado Department of Military and Veterans Affairs, the exercise is scheduled for May 21-24 in Vail. It is the first of its kind to take place on the Western Slope. The training will involve a simulated construction accident at a work site in LionsHead and will involve as many as 200 local, state and federal emergency responders. The construction site is being provided by Vail Resorts. Development Company, which has offered the Sunbird building and the former gondola building for the four-day training. The scenario will involve a simulated building collapse, followed by deployment of search and rescue teams. Stuart Pike, Homeland Security Exercise Coordinator with the Colorado Department of Military and Veterans Affairs, says the exercise represents an exceptional opportunity to put local, state and federal resources. to the test. "This is an excellent Homeland Security exercise opportunity outside of Colorado's major metropolitan areas," he said. "It gives .state and federal participants an opportunity to explore the-complexities and-challenges - -- that can be found in smaller communities while providing a venue for Vail and Eagle County to polish their first responder capabilities," he said. Vail Police Chief Dwight Henninger, who is helping to organize the local response, says the exercise will be beneficial in numerous ways. "This will give us a chance to establish our Emergency Operations Center and practice the planning .and coordination activities that will take place from there," he said. In addition, Henninger says the event creates an opportunity to remind citizens about preparedness planning for the household, which (more) .. .J Add 1/Training Exercise includes maintaining a food and water supply fora 72-hour period. The Town of Vail will lead a community awareness campaign prior to the exercise to inform local residents about the training and to communicate logistics, such as any road closures and detours. Public safety officials also plan to test the reverse 911 system (Intrado Emergency Notifications System) by contacting Vail households and businesses affected by the simulation. Henninger and other agency representatives have been especially appreciative of Vail Resorts Development Company and Shaw Construction for offering to provide the construction site in LionsHead. Demolition of the site will take place beginning in May to make way for the new Arrabelle at Vail Square. Agencies scheduled to participate in the training include: Eagle. County Emergency Management Office, Colorado Division of Emergency Management, Vail Public Safety Communications Center, Vail Police, Vail Fire, Urban Search and Rescue Team, Eagle County Health Service District and other Northwest Colorado emergency responders, Vail Valley Medical Center, Vail Resorts, Federal Emergency Management Agency, Federal Bureau of Investigation, Colorado Department of Public Health and Environment, Colorado Department of Military and Veterans Affairs and Salvation Army. Local and state agencies have been preparing for the Vail training exercise since November 2004. For more information, contact Chief Henninger at (970)479-2218. # # # _ __ VVHA S~udp OS/O1/OS Scheme A Scheme C Scheme li Scheme E Scheme F Scheme G: Scheme B - ww ';h„r, 7ravp# 1 Travel ~ Trowel ; Travef ! Trav$! ! 7ratit~*! sh~a. Lane ! lane ~ Lane ~ ~ Lane !Dana !lane serer 4` 5haulder 4' Si~aalder 2.5' Walkway 2.5' Walkway 54.5' 50.5' "~ MEMORANDUM TO: Vail Town Council FROM: Conference Center Advisory Committee & Town Staff DATE:. May 17, 2005 SUBJECT: Conference Center Update and Decision on Next Steps Staff: Russell Forrest 1. 2 PURPOSE... The Conference Center Advisory Committee (Committee) would like to provide a comprehensive review of work to date on the conference center. In addition the Conference Center Advisory Committee is requesting that the Town CounciL• • Choose a project option as outlined in section 4 of this memorandum.. • To authorize the Town Manager to execute a contract with Mortenson for ~' predevelopment cervices. BACKGROUND On April 20, 2004, the Vail Town. Council authorized a series of next steps which included interviewing owner's representative firms for the Conference Center. On April 29, 2004, the Committee met to interview five owner's representative firms. On May 18, 2004, the-Vail Town Council authorized .the Town Manager to execute a contract with Architectural Resource Consultants, Inc. to be the Town's owner's representative and funding for the first phase of this contractor $8,510. The Vail Town Council also authorized the Committee to negotiate with both Piper Jaffray and Kirtpatrick Pettis to be the Town's investment banker on this project.. On June 1, 2004,. the Vail Town Council voted to approve the following requests from the Committee: • Authorization to engage Piper Jaffray as the Town's investment banker for the Conference Center; • Authorization to issue a request for qualifications. (RFQ) for design team assistance on the Conference Center; • Request to move forward with. a negotiated guaranteed maximum price (GMP) process for engaging a design team and a general. contractor (as opposed to a design build process). This essentially means that both the architect and general contractor will work for the Town of Vail; • Request for the Vail Town Council to approve the next phase of an owner's .representative contract. The preconstruction phase of the contract would cost up to $155,774. However, the Committee is only requesting $9$,212 (includes fees and reimbursables) to fund this function until a decision is made by the Vail Town Council to issue bonds which is anticipated in the November/December 2004 time frame. On June 15, 2004, the Vail Town Council reviewed and approved the following next steps: • Approval of the proposed process for engaging the public in the. design team selection process; ` • Selection criteria for request for proposals; • Consideration of proposed process givens; • Review of updated project budget and. interrelated parking costs; and • .Consideration and review of the major points of the proposed scope of service request for proposals for design services (to be given to the top 3-4 teams selected in the qualification competition).. On July 6, 2004, the Vail Town Council reviewed and approved the fol owing next steps: • Review the recommendation from the Committee on short-fisting the design team candidates and to issue the- Request for Proposals (RFP) to the six recommended design teams; • Review and approve suggested changes to the design team selection process from the Committee; and • Request permission to issue an RFP for a surveyor to survey the Lionshead parking structure site and surrounding area. On July 20, 2004, the Vail Town Council unanimously approved the following: • A contract for design services. with Fentress Bradburn; and • Approval of next steps for master planning the Lionshead parking structure/Conference Center site. On September 21, 2004, the Vail Town Council, the Committee, Design Review Board (DRB) and Planning and Environmental Commission (PEC) reviewed five alternative.. site plans. In addition, the public reviewed the same alternatives on September 22, 2004. The near unanimous opinion from the various groups that reviewed the site plans was that alternative three is the preferred. choice. On October 19, 2004, the Vail Town Council met and reviewed an update on architectural images for the Conference Center and authorized the Committee to move forward with public discussions regarding the alternative styles. The Committee met on October 21, 2004, and reviewed the qualification submitted • by six general contractors.. After reviewing the qualifications, the Committee recommended to the Vail Town Council that three general contractors receive requests for proposals (RFP). Those general contractors include: t Hansel Phelps Construction. ~~ .Hunt Construction Group/Hyder Construction ^ M.A Mortensen Company 2 On November 2, 2004, the Vail Town Council. approved a motion to forward the above mentioned contractors RFPs. The. design team of Fentress Bradburn developed three alternative architectural approaches. These images were not the elevations of the proposed Conference Center but rather provided alternative visions or inspirations that could be considered for the Conference Center. The three styles include: 1. Bavarian/Traditional Vail style 2. Contemporary 3. Natural/Environmentally inspired style The Committee reviewed the public input associated with the three design alternatives on November 18, 2004. After reviewing the. public input and the associated costs with each design option, the Committee forwarded a .recommendation. for the "Architectural Vision .Inspired by Nature." .The Committee felt that this would create an outstanding architectural structure. The materials as envisioned by the design team would utilize "mountain" materials such as heavy stone and timbers. The roof element would be more iconic but is intended to reflect the form of the surrounding mountains. It should also be noted that one member of the Committee, although not present on November 18, 2004, preferred the Traditional Vail Vernacular look. On December 7, 2004, the Vail Town Council voted 6-1 to direct the Conference Center design team to move forward with a "natural/environmentally inspired" design style. The Committee met on December 14, 2004,. and voted to recommend that the Town of Vail purchase (using. Conference Center funds) the water and sewer taps for the charter bus lot site. On December 21, 2004 the Vail Town Council authorized that the Town purchase tap fees with the condition that the Eagle River Water and Sanitation District (District) provide a letter confirming that. a tap fee could be used. on the same site for a different use in the future and that the taps could be moved to another Town of Vail owned land. The District did provide a letter confirming this issue referencing the District's policies for doing tap transfers. The final cost of the tap fee was $297,896.. On January 18, 2005, the Vail Town Council voted to continue to move in the direction of the "natural" design. The Vail Town Council did express concern about the roof. of the facility. They furthermore asked that the design team develop alternative ideas for the roof of the facility. On March 15, 2005 the Vail Town Council received an update on the operational plan, design, and .capital budget for the Conference Center. The Committee also forwarded a recommendation to the Vail Town Council to issue an RFP for. operations, management, and marketing. In addition, the Committee recommended forwarding the design to the general contractors for pricing. Thee Vail Town Council approved both recommendations. 3 3. UPDATE ON THE CONFERENCE CENTER Attachment A provides a presentation that will be presented on May 17`h that is intended to provide a comprehensive review of progress to date on the' .Conference Center. The following is a summary of the four "legs" of the Conference Center. 3.1 Business Plan/Operators HVS Plan The initial step in the Conference Center planning was to engage an independent third party to review the market demand for a Conference Center and to prepare a business plan for the facility. .This Plan. was completed in March 2004. Subsequently, HVS,was asked to update the plan based on issues involving marketing the facility. In addition, the Committee felt the pre-opining budget needed further refinement.. Attachment B includes the full HVS study. The major components of the study include: • Executive summary • Market Demand and input from meeting planners • Proposed operational budget • Economic impact of the facility Attachmenfi C includes a summary of the operational implications of reducing the size of the building. The Committee .asked that the design team evaluate significantly reducing the size of the. facility to reduce the construction costs. The Design team in one scenario eliminated 10,000 sq. feet of meeting space. Based on the -HVS. study a cut. of 10,000 sq. ft. would result in reduced economic impact of the facility and. increase in the operational deficit. Operators Submittal & Follow-up The Committee concluded that the HVS study may be conservative. in its estimated financial operating deficit. However, the only way to further refine an operational budget is to receive proposals from potential operators from the facility. An RFP was issued on March 15, 2005. The Town of Vail received proposals from three leading facility .management firms: • SMG • Global Spectrum • Centerplate After interviewing -all three companies on April 14, 2005, the Committee recommended short listing the field to two operators: t • SMG & • Global Spectrum 4 .,_~_~~~..,.m,.,..~,.~,...~...d_~.~_,o. ~,_..,.~.9,...-,~.a.,....~._~..~_......_. _ . _,~_.r_. ~....,. The Committee was particularly looking for a company that could manage all aspects of the Conference Center operation. SMG and Global. have significant experience in all areas of Conference Center operation. In addition, both companies have experience in event promotion and: entertainment. The Committee asked both SMG and Global Spectrum to respond to both the RFP and a .series of follow-up questions. SMGs qualifications and cost proposal is summarized in attachment D and Global Spectrum is summarized in attachment E. Both companies had operational deficits less than the HVS projected.. operational dei•icit. Discussions continue- with both operators to evaluate their costs and revenue projections. Both companies have expressed in interviews that they believe a Conference Center in Vailwill be financially successfully and will exceed the economic benefits projected in the HVS study. 3.2 Summary of Operator Input The Committee has not yet developed a recommendation for an operator. Both operators are qualified and the committee would like to further examine the costs and revenue .projections of both companies. Both operators are projecting operational deficits less than the HUS report with ~' Global Spectrum projecting a significantly smaller operational deficit based on hosting .more events. Attachment A also provides a summary of how SMG and Global Spectrum compared to the HVS operational plan. A significant issue that has been discussed with both operators is to what extent they. can guarantee their estimated financial operating. budgets result in a lower operational deficit than .what is projected in HVS's study. The primary limitation in providing the Town a guarantee is the .IRS provision... that regulates issuing tax exempt bonds. .Under these regulations,. the operator. may commit to certain operational goals through the incentive fees they propose in their budgets. These incentives can be no more than. 100% of their proposed base fees. Both companies are willing to risk their fees and subject themselves to termination if they operate the Conference Center at an operational deficit above the HVS projections. Governance Attachment F summarizes .the current proposal for Governance of the facility. The structure would involve creating a separate Authority. It would be created through an act of the Vail Town .Council and the Vail Reinvestment Authority. In this way, .Town Counci! members could participate in the Authority as envisioned in Attachment F. This Board would be chaired initially by a Town Council member and would include representation from the Town, lodging community, retail. community, and .community at large. The Town Council would approve the budget for the facility on an annual basis... The Board would have oversight of booking policy and be responsible for the. management .contract of the..facility. A single point of contact may also be wised to coordinate day to day issues with the Conference Center management team. and the Town. This point is still being discussed by the Conference Center Advisory Committee. 3.3 Design Update On March 15~', the. Vail Town Council ,directed to forward the design in to three general contractors: • Mortenson • Hansel Phelps Hyder/Hunt The design includes: 30,000 sq. foot ballroom 10,000 sq. feet of break out space 5,000 sq. ft. kitchen 15,930 sq. ft. preconvene 16,000 sq. foot loading and delivery facility.. 3,000 sq. feet of offices 4, 000 sq. feet of storage 1.3,000 sq. feet of Mechanical Space 25,070 sq. feet back of the house space 122,000 sq. feet of total program (40,000 sq. feet of meeting space) 190 parking spaces for the Conference Center {125. net new spaces - 130 spaces of additional public parking paid for by Vail Resorts. The design also involves creating a new entrance to the Lionshead Parking structure and improving the Frontage Road to improve circulation in and .out of the structure. The design also includes an egress and ingress to the underground parking structure for the Conference Center on the east end.- of the site where the existing entrance and exit is located for the Lionshead Parking structure. Design .Style The design style was selected in December of 2004 from three design alternatives. The design team. of Fentress Bradburn developed three alternative architectural approaches. These images were not the elevations of the proposed Conference Center but rather provided " alternative visions or inspirations that could be considered for the Conference Center.. The three styles include: • Bavarian/Traditional Vail style Contemporary ~ Natural/Environmentally inspired. style 6- ` ' The Committee reviewed the public input associated with the three design .alternatives on November 18, 2004. After reviewing the public input and the associated costs with each design option, the Committee forwarded a recommendation for the "Architectural Vision Inspired by Nature." The Committee felt that this would create an outstanding architectural structure. The materials as envisioned by the design team would utilize "mountain" materials such as heavy stone and timbers. The roof element would be -more iconic but is intended to reflect the form of the. surrounding mountains. It should also be noted that one member of the Committee, although not present on November 18, 2004, preferred the Traditional Vaii Vernacular look. On December 7, 2004, the Vail Town Council voted 6-1 to direct the Conference Center design. team to move forward with a "natural/environmentally inspiredn design style that was further refined by Council, January 18, 2005. CDOT/Frontage Road Issues (Profile of I-70) The Town has proposed improvements on the Frontage Road as-part of the Liosnhead Redevelopment. The Frontage Road is owned and under- the jurisdiction of the Colorado Department of Transportation. Town staff - has met with the Colorado Department of Transportation. The major issues discussed were: • Overal design and alignment of proposed .improvements to the Frontage Road.. • New entrance to the Lionshead Parking structure • Potential location of a transit center on the northwest corner of the existing Lionshead Parking structure. • Entrance to the new Conference Center. The preliminary responses from the Colorado Department of Transportation included: • They felt the design proposed by the Town was overall acceptable. • They were concerned about a left hand turn movement exiting the Lionshead Parking Structure. Since that meeting URS, the projects:. engineer, has provided the Colorado Department of Transportation with additional traffic data to support a left hand turning movement..... • The creation of a Transit Center in such close proximity to new entrance the Lionshead Parking Structure will not meet the minimum. separation requirements between curb cuts. However, an alternative ` design solution may be developed toallow westbound egress from the. Lionshead .Parking Structure to exit onto East Lionshead Circle. A transit center on the parking structure remains problematic due to: a) Expense of structurally reinforcing the existing parking structure. b) Proximity of transit facility entrance to the new Lionshead entry/exit. c) Improvements to create the parking structure westbound exit onto East Lionshead Circle and the costs associated with modifications to the existing structure to allow this. Other Design Challenges Other design issues include: a) PEC and DRB Review: The plans have not yet been reviewed with. the PEC and DRB due to the budget challenges illustrated below. However, the design form is not a traditional style and also has a very steep entrance ramp to the loading and .delivery area.. Staff has reviewed the design with Jeff. Winston... His primary concerns .were focused on the west elevation and how to make the transition between the parking structure and the Conference Center. His overall impression of the facility was favorable. It is probable that the PEC and DRB will add cost to the facility which is why, staff would recommend. a thorough review prior to issuing bonds. In addition, staff has proposed concurrently moving forward an amendment to the Lionshead Master Redevelopment Plan to describe how. the proposed Conference Center and additional parking meets the objectives of the Master. Plan.. This amendment would involve creating a more specific sub area plan in the Lionshead Master Redevelopment Plan. As you may recall there is a specific section of the Lionshead Master Redevelopmenf Plan with specific land use and design recommendation for areas of Lionshead i.e. core site, civic center site, etc.. b) Building Code Issues Creating a new Conference Center adjacent to an existing parking structure and interconnecting the two can create building code issues for the existing parking structure, as well as separation code issues for the existing structure, depending on interpretations of the current code. A building code analysis has been completed for the .Conference Center and the parking structure. .Significant additional costs to upgrade the existing parking structure or deal with separation issues are not anticipated. However, a final decision has not yet been rendered by the Chief Building Official and Fire Marshal of the Town of Vail c) Adjacent Property Owners Staff has met with property owners and managers from both. the :Vail International and Lodge at Lionshead on numerous occasions. Concerns from Vail International include: noise and visual impacts from loading and delivery, pedestrian access to East Lionshead Gircle, vehicular access to their building, impact on .views to the west, and the appearance of the east: elevation of the Conference Center. Lodge at Lionshead property. owners have expressed concern about impacts from the proposed patio of the ` Conference Center and the proximity of the. Conference Center to their building.. Staff and the design team believe changes have been made to the design to respect the adjacent. properties and the concerns. the property .owners have expressed,- Further dialogue is anticipated if the project is - allowed to move forward in the development review process. 3.4 Capital Budaet Current Project Budget The project budget is based on the funds available from the. bond sale, described further in section 3.5 of this memorandum. The project budget covers all "hard" construction costs, as well as "soft" costs including design fees, engineering fees, affordable. housing requirements and contingencies. Available funds are provided and updated by Piper Jaffray and are based on two factors: a constant debf service repayment of $2.7MM/year and current bond market interest rates. The project budget continues to fluctuate. with changes in interest rates. As of March 1St, 2005 the funds available from the bond sale totaled $45.9MM. Currently funds have been reduced to $45.5MM due to interest rates. In addition to the funds from the bond safe, Vail Associates has committed to providing $4.3MM for the design and construction of an additional 130 parking spaces above and beyond what is required by the Conference Center. Accounting for these funds, the current project budget totals $49.8MM. $40.1 MM of which is currently available for construction based. on a $2.7 MM per year debt service. Cost of Construction ARC, Fentress Bradburn and the general contractor candidates have been providing updated construction cost estimates as the design progresses. The currenf construction cost estimate based on the 122,000 SF building and including the Conference Center and Vail Associates parking totals $46.9MM, which exceeds the funds: available by approximately $6.8MM. Ideas for Reducing the Cost ARC, Fentress Bradburn, and Mortenson have been working closely over the past month to identify potential ideas for reducing the. construction cost. A list of approximately $5.8MM cost reduction ideas has been developed, $3.5MM of which do not involve a reduction in program square footage,- and $2.6MM of which the team agrees deserves review and discussion with the Committee. and Council.. Design Costs to Date and Project Cost through November, 2005 3.5 Approximately $1.4 million has been paid for design and consulting services to date since 2002. An additional $600,000 in invoices would be anticipated if the project was concluded at this time. Financing Update Summary of Existing Revenue and Constraints The current project financing through bonds is subject to several constraints, some of which place significant interest rate risk on the ability - to use municipal bonds to meet the complete funding requirements of the- project. The .first set of constraints is based on the ballot question approved by voters in 2002. Listed below is a summary of these parameters: Bond Summa Tax Summary • Levy of a Town lodging tax at 1.50%. • .Increase of Town sales tax by 0.50% to a total Town sales tax of 4.50%. • Sales and lodging tax terminate when the debt is paid in full.. The second set of constraints placed on the bonds is related to the ability to sell the bonds in a cost effective manner. If the debt can be structured so that the bond issue receives an investment grade rating from the national rating .agencies (i.e. Standard & Poor's and Moody's) then the town may. be able to secure an insurance commitment from a national municipal bond insurer... Issuing the bonds under this structure could, substantially lower the borrowing costs to the Town: When the bond issue is presented to the rating agencies they will look at several factors including the coverage ratio of the revenue stream to the bond debt. service. When the rating agencies look at municipal bonds they typically look for at least 1.20 times minimum coverage for investment grade ratings (coverage = annual .revenue -operating and maintenance expenses -annual .debt service). Based on the revenue. projections provided to the Town of Vail the new annual debt service will need to be $2,700,000 or less in order to achieve a 1.20 times debt service coverage ratio • Maximum Principal amount $50,060,000. • Maximum Annual Town Repayment Cost $3,830,000. • Maximum Total Town Repayment Cost $95,610,000.. • No specified term limit on bonds. Since the amount of annual debt service that can be paid is limited by these constraints, the factor that changes with moves in interest rates is the amount of project funds that debt service can support. For example, when interest rates inG1'ease, more of the annual debt service must be used for interest, .thus .limiting the principal that can be repaid. Since the bonds ` were initially approved in 2002 the interest rate environment has gradually risen. While rates have recently decreased slightly there still has been an upward trend and based on comments and actions of the Federal Reserve:' many market participants expect this trend to continue. Displayed in the graph below is the history of the 10-year U.S. Treasury from 1/1/03 through 5/6/05. 10-Year U.S. Treasury Note (January 2003 to May 2005) 5.00 .................................................:.................................:............... ................:. 4.80 ......................................................:........:........ .............:..:........................... 4.60 ......................:..................................... _............ ..: `.:............_...........:...._ .:... 4.40 ...........:.......: .:....... .. .........:............. ................... ,., 4.20 ........................................:... ..:..:. ..:.. ............ ......... :... .. ......... e ... 'a 4.00 .............................................. ....... ....:..........:....... .. ....................:..:. m } 3.80 -..... ....: ......... ..:............................... ........................... 3.60 •--• ............. .:.................:............:............................. 3.40 ---------------•-- --- --•--•---..........:.:...........:...:..:..............:...... 3.20 • .................... ........................................:.......................... ...............::....:....: 3.00 M M M M. M M ~ C ~7' V'. V' V t° O O O O O O O O O O O O O O O O O O O O O O O O O-~ O. O O O N N N N N N ,N~ N N ,N~ N N N M M M M M M CO (h (` M M M ' M r f~'1 to h ~ r r M t[~ !~ ~ .- .'- M Financing Assuming a $2.7 million/year debt service Attachment G provides a detailed summary of the planned cash flow for the Conference Center. This spreadsheet includes:. • Funding and expenditures for the capital project. • Revenue from the lodging and sales tax per Stan Bernstein and Associates study • Interest earnings of cash fund balances • Net operating loss (revenue minus operating expenses) per HVS • Capital maintenance fund contribution per HVS • Pre-opening costs per HVS • Town of Vail management fee (5% of revenue) .Annual debt service payment • Cash fund balances With current interest rates and the $2.7 million constraint on annual debt service, a bond issue would provide approximately $45.5 million for the Conference Center capital project.. Negative cash flows in the start-up years 2007 through 2040 are funded from accumulated cash fund 11 balances. The accumulated cash fund balance reaches $18.5 million by 2035 when the bonds are paid in full and the dedicated taxes are terminated.. The lowest projected cash balance occurs in 2010 when the balance is $7.0 million or 6.7 times that year's projected operating deficit. Stan Bernstein and Associates have been retained to conduct an independent analysis of the dedicated sales and lodging taxes as required. by the bond rating agencies. As noted above, -Stan Bernstein and Associates revenue projections are included in the attached cash flow through 2012, the year of stabilization. An inflation factor of 2% is applied. thereafter. Stan Bernstein and Associates projections are based upon: historical data; review of prior feasibility studies; interviews with the lodging ..community, the Vail Valley Chamber and Tourism Bureau, and Vail Resorts; analysis of redevelopment projects; and use of statistical modeling techniques. Bernstein .and Associates' draft report is dated March 21, 2005 and they acknowledge these estimates may be conservative based upon subsequent information. Revenue projections will be updated when information is available for the 2004/2005 ski season. Operating revenue and costs, including pre-opening expenses, and capital maintenance reserve requirements have been provided by HVS. Bids submitted by potential operators indicate the HVS numbers are also conservative. ' 4. ACTION REQUESTED OF THE TOWN COUNCIL 4.1 General Considerations Given the legal, financial, and pragmatic considerations, the Committee has reached the following conclusions: 1) The building as designed can not be constructed with the cun'ent budget parameters of limitingdebt service to $2.7 million per year. 2) Beginning construction in 2005 is not viable due to a combination of the schedule restraints required by the existence of a petition to repeal the funding for the Conference Center and the time required to modify the entrance to the Lionshead Parking structure entrance prior to the ski season. _ 3) The options for addressing the budget challenge include: A. reducing the cost of the facility B. develop alternative financing ideas to generate additional funds/and or use a percentage of the cash fund balances identified in Attachment G, C. raising additional revenue, D. and/or a combination of the previous three options.: 4) If there is a strong desire to build the project but not ask for additional revenue through a ballot question, a vote may still be required to address the petition that was submitted on the Conference Center. It may be 12 possible to issue bonds with the petition but a premium would be expected on the bonds sale which would decrease the available funds for the project. 4.2 Project Alternatives Given the above mentioned considerations, the Committee believes there are three fundamental options for the Conference Center project: Option A: Discontinue all work and expenditures on the project: If the Vail Town Council is fundamentally uncomofortable with the risks associated with the project, then discontinuing all work on the project is a viable alternative. A future discusion would then be required regarding the disposition of existing funds collected for the Conference Center and how the dedicated lodging and sales tax for. the Conference Center is addressed. Option B: Implement the existing program and obtain additional revenue to pay for the budget overage. The current project design can not be built with the funds available. '~ today and budget parameters that limit debt service at $2.7 million per year. Option B involves bringing ballot language forward to the Council in August of 2005 and keeping the same basic design. if Council chooses to pursue the existing design the following next steps are suggested. • Authorizing staff to pursue approval of the current project design with both the Planning and Environmental Commission and Design Review Boards. Final approval may not be achieved by August 2005. However, it could be a goal to identify any issues having a significant cost implication to the project. This would also allow a thorough review of the design by the community. • Additional work could occur to balance construction costs and quality in the project. The goal would be to reduce construction. cost while maintaining the quality and the same basic design of the project as illustrated in Attachment A. Potentially $2.5 million could be reduced from the existing design without fundamentally affecting the size and scope of the existing design. • Hire a General Contractor to provide preconstruction services to work with ARC and the design team in reducing the total cost of the project. The General Contractor for the facility will further reduce inflation risk by receiving (but not awarding) bids for. construction prior to recommending ballot language to the Town Council in August. • While the project is being refined with. Town Boards and remaining cost implications are resolved, Piper Jaffray will develop appropriate financial options for issuing fthe bonds. - These options will consider the proposed budgets of the 13 perspective operators of the facility, current interest rates, and.. the final projected construction cost factoring in escalation and interest rates. • In August the Committee would come back to the Town Council with proposed ballot language for consideration for a November Batlot. . The proposed schedule for this option includes • PEC and DRB meetings in May, June and July to identify any and all significant cost implications and to determine if the project will receive approval • :Council updates on PEC and DRB meetings in June and July. • Further work on balancing the project's quality and budget with the Committee, Town Council, and the Community. • Further refine the construction budget with. a General Contractor.. • Develop potential ballot language for consideration of the Town Council in August of 2005. • November ballot vote. Issue bonds for the project if ballot initiative is approved in December 2005. • Obtain final CDOT approval The following table summarizes of the budget challenge that exists with the current design. The budget summary for this scenario is: Cost vs. Bud et Hi h Ran a Low Ran e Construction Budget ($2.7 $ 40,078,633.00 $ 40,078,633.00 MM/ ear Construction Cost (Parking, ~ 46,888,.255.00 $ 46,888,255.00 Fronta a Rd, Buildin Cost Difference $ 6,809,622.00 $ 6,809,622.00 Other Costs $ - CDOT Contin enc $ 1,700,000 $ - Code Issues & Sustainable $280,000 $ 280,000.00 Desi n Potential Costs (Interest Rates & $8,400,000 $ - Construction Escalation).. Total- $ 57,268,255.00 $ 47,168,255.00 Grand Totat Difference $ ` 17,'189;622.00 $ 7;089;622.00 Diffference between High and ~ (10,100,000,00) Low This scenario has a total budget overage. if built today of $6,809,622. However, the project will not be built until 2006 14 W._a.._.. _ _. __~ ~_.~._...,..__..._.... _ _ ._.____.~_ given the petition and budget challenge identified above. Therefore additional construction escalation and interest rates must be added into the total cost. The table above has a high and a low scenario for construction and interest rate increases. The actual budget overage, therefore could range from $7 million to $17.2 million. Amid point would be $10 million. In addition to interest rate and construction escalation, staff also added a contingency for CDOT approval since final approval has not yet been obtained. Staff furthermore reviewed several options for addressing the budget shortfall. A high and low scenario for addressing the budget shortfall is provided below. IdeasforAddressing Budget High Range Mid Range Low Range. Overages Value Engineering Ideas $ 2,500,000 $ 2,500,000 $ 2,500,000 Value of additonal tax revenue $ 850,000 $ 850,000 $ 800,000 prior to issuing bonds New construction revenue from reduced operatonal deficit $ 4,375,000 $ .1,375,000 $ .1,375,000 (85,000/year) 50% of 5% of TOV Admin Fee $ 1,850,000 $ 1,850,000 $ 1,850,000 New Lodging Tax .6% (High), ~ 10,614,622 $ 3,525 000 $ 564 622 .2 %(Mid), .03% (Low) , , $ 17,189,622 . $ 10,100,000 $ .. 7,089,622 t -Y ..Staff made several assumptions for using savings from the operational budget of the project which could equate to $85,000 per year and generate $1,375,000 in project proceeds. In addition staff assumed that 50% of the TOV administrative fee could be used for debt. service, which could generate $1,850,000 in project funding. Even under these scenarios additional tax dollars would be required to pay for the project. The additional taxes needed to generate $564,622 of bonding capacity on the low range which assumes no construction escalation to $10,614,622 on the high range. If Lodging Tax was used to address this " shortfall it would equate to a .03% increase on the low side to a .6% increase on the high side. Currently the Lodging Tax is 1.50%. Other financing tools are available to reduce the need for additional tax dollars. However, they all require reducing the fund balance which helps protect against operational deficits. Option C: Reduce the Cost of the Facility and work within the existing revenue budget for the project. This option involves reducing the cost of the exiting facility by cutting the size and scope of the facility. Staff recommends not cutting the facility to below 32,000 sq. feet 15 meeting. space based on the HVS study. The operational. implications of reducing the size and scope of the facility is outlined in Attachment C. It would :increase the operational deficit and reduce room nights from approximately 69,000 to less than 50,000 room nights. Additional design work would be required to modify the design of the facility. Under this option staff and the design team would evaluate the most effective means of eliminating meeting space down to .32,000 square feet. This option may stilt require a vote to address the petition effort underway to avoid an interest rate premium. If this option were pursued, staff would propose evaluating the opportunities and costs of this option in the next two weeks and report back to the Committee and the Town Council on those opportunities and costs. The Design Team believes there are two fundamental options in this scenario: 1. Fundamentally changing the design .and reducing the foot print of the facility, and 2. Keeping the same foot print and constructing the existing core and shell of the proposed. building, but ~; not building the first and second floors of break out space initially. This would effectively. reduce the square footage by 10,000 square feet. This-would .'leave approximately 20,000 square feet for a ball room and 12,000 square feet of break out space on the top level of the Conference Center. It would allow this break out space on the first and second floor (East Lionshead Circle elevation) to be created in the future. This could reduce the construction cost by approximately $2.5 million. Conference Center Committee Consideration The specific areas of .additional cost risk the Committee would like to reduce include:. • Cost generated by review boards • Construction escalation • Interest rate risks • Operational deficit risk The operational risk has been the major concern of the committee to date. The Committee has evaluated specific proposals from SMG and Global Spectrum. Their proposals indicate that the operations(deficit for the facility may be less than projected. However, there is no guarantee that theoperational budget will be - what is projected. The expenses can be managed and the operator :..will need to manage the facility to the revenue realized for the facility. The operator. will be highly incented to achieve or improve 16 upon the budget projections from HVS.. The operational risk as proposed would be contained by: 1) The ability to approve the annual budget for the fee. 2) Limiting debt service to ensure a cash fund balance to pay for operational overages. 3) Incentives for the operator to help ensure operational deficits do not exceed planned levels in the HVS study. This incentive would involve the operator potentially receiving no fee if the facility did not meet its operational budget goals. The obvious area the Committee feels merits more attention is to work on balancing quality and cost for the project. The Committee would also like to further eliminate uncertainty and risk from the project by further reviewing the project with the Town's boards and. brining a General Contractor on to the team to refine the construction cost of the facility and reduce the risk of construcfron cost escalation. Members of the Committee are split on whether to redesign the. building or potentially request more revenue. One member of the committee would recommend discontinuing all work on the project. Staff Recommendation At this time staff would recommend that two weeks be taken to determine if the scope and size of the project could be reduced to effectively reduce the cost of the project and bring it into budget. Staff would. then bring a recommendation back to the Vail Town Council on June 7th with a cost for any redesign and a summary of .next steps. 4.3 Choose a General Contractor If the Town Council chooses option B or C above, the'Committee • recommends choosing Mortenson Construction for the General Contractor (See Attachment H). It is critical to bring a General Contractor on to the r team to.obtain the most accurate cost estimates and obtain actual construction bids prior to considering the issuance of bonds and or ballot language. The Committee is requesting that the Town Council award .Mortenson Construction with apreconstruction contract which would include a monthly payment of $9,000/month. Staff would recommend that this preconstruction cost be capped at $63,000. This would. cover services between May and November of 2005. ATTACHMENTS: A. Powerpoint Presentation B: HVS Conference. Center Business Plan ~ C. HVS study on reducing square footage. 17 ~~.~.:..-.,~.-.~.~. --- - ~ e.......~..~.._... ~ ~.~,..w ~ _..,_~ b~...._.. _ .. _ _ _ _ . ~ _ _~ .~.._... ~.....~.. D. SMG Proposals E. Global Spectrum Proposal F. Governance Summary G. Pro-Forma assuming a $2.7 million/year debt service H. Mortenson Qualifications F:lcdevlCOUNCiLIMEMOS1051conference center051705Finai4.doc 18 r.: z E . _ __ ._ _._ ~ ~. ~ ; 3:'- a .~ - - ~a ~I fi !I ~ ~ i x ~_._ , ,' ~ ~~~` ~~ ~ ~ '~ ~ ~' V ,.~' '-t 1 + '~ ~ _ ~d ~.~ LL C4a'vt h i'~~~ _ _ ~ ~`~~ ~ 4 , _i ~ i y ` ., ~ ~:.. k ~ ~ q4. ~' °: r ~~~ s ~x ~~n ~~,~_ ~~~ ~ f `! r ~ ~ " r. a ~ '~~ - ~ ~ ~ - - e ~ , ~ ! -. _ _ _ ' ~ ~~ ~ 'l' y ~ # r~ . , yy~ y7 _ a \ g if ~ ' i 1. IS A ' ~ ~, ~ ~ S _ - t ~ ~ E4 Vr .r, ~~` 'ry` ~f; `~ ~ ~ ~I +~j t y ~ ~ ~ t I S ~ ! ~ . v ; .. 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' ~~ ~ 1 # ~ - - ~~ T~ { - - .'.; 'G 7 - , r ~}~~ _ ~ ah ~ '_i t:: ~~: _ ;F. „ - ~? ~i - ,~ ~ x` ~)"1`~ -- ' a, z - ~ ~k , ;, , v ~-,rx+~i s- ~__.-__ -_-_. .._._..___ tS-_._. _ r7 i.,,,r Lt. ~ a ~ y ~; '. _ ~- -- s _,_~ -.~._~_.! - -_d-v ~::~.~.. y.~; ,.'~rCv,a:rl ~.d,$-'d r .i P' '.i~' ~4 ~, 2.-,~- ~ r ~,,~. ~~;a ~'7r r ~~~6 ~ ~, ~ ~' ~Y f 1 r~7~,r~ i , i, _t:~,t. -~ w ~ fa~~ ",. fi.;; 5,r r UM.r 1., ~` -~~~',' ff"=r,,y s `n w t.l~,•,t E r ~y.y Vail Conference Center Business Plan Conference Center Oversight Cornrnittee Vail, Colorado ~. ~~~ Submitted to: ~" ° F x~,~1 r i .! ~~~ ~l. F ~ c ~3, x Rod Slifer _~` '~r ~. :~~` Conference Center Oversight Committee '" j ~ ~ ~,'.:,~~j~";y'- ~ ~'~ ' C/O Town of Vail _ .~_ - -- - ``,'~`~ Department of Community Development 75 South Frontage Road Vail, CO 81657 µ, :~; ,~ ,.~ Prepared by: ~,. ~ ~-° HVS Convention, Sports & ~ -' t~~ ri r :` a ,; :. Entertainment Facilities Consulting _ '~ ~~~'~*~ , ~~~ °' 4 'sr A Division of HVS International 445 West Erie, Suite 1-A ~' Chicago, TL 60610 (312) 587-9900 Phone ~ - (312) 58?-9908 Fax ~ ~ ~k.~ I Web Site: www.hvsinternational.com ~ r~' March 18, 2005 .~ ~ ~ ~ ~~ ~.,~. ~ ~ _~ _. _~.~ _ -~~ .. ~~ Table of Contents Transmittal Letter Executive Summary r 1. Introduction 2. Market Overview 3. Convention /Meeting Industry Trends 4. Lodging Analysis 5. Peer Resort Market and Facility Analysis 6. Event Planner Input Z Facility Recommendations and Concept Plan 8. Demand Projections 9. Financial Operating Projections 10. Economic Impact Analysis 11. Statement of Assumptions and Limiting Conditions 12. CertiFcation Appendix: Parking Analysis cam- ..t.<=s~ µ .,. .... March 18, 2005 Rod Slifer Conference Center Oversight Committee C/O Town of Vail Department of Community Development 75 South Frontage Road Vail, CO 81657 ' Re: DRAFT Town of Vail Conference Center Business Plan _ w Dear Mr. Slifer: ~~~ t~'Eac a4'~<' HVS herewith submits this update of our March 16, 2004 conference s"ii" ~-'~ center business .plan. In this updated version of the: report we have ~~aicag"' FL s~~~ia omitted the financing section. Since the Town is working with a {312} ,a7 s~t~~ financial advisor firm on the s ecifics of the debt issuance, the data y p {312} ;i$7 99(l$ F~.X ~;~~at-.~a~,~;,,~~Y,,a~;f,Y~~~.~~,,~, included in this section on the financing plan no longer correspond with the latest information. Also, the tax revenue projections in the financing section. require more detailed analysis and documentation for inclusion in the. debt offering statement, HVS has updated the report to reflect the specific characteristics of the current concept design of the facility. An alternative scenario with a 20,000 square foot ballroom is included as an appendix to this version of w~~~ XcaYk the report. Sara FY'araCISCCJ F30UIcIBY Our conclusions are based on our present knowledge ofthe meetings 1?e,~ynr industry and the fieldwork and research completed to date. It has been ~~ia~a1 a great pleasure working with you and the City's Conference Center • ~~aiia~ fellow Oversight Committee. The considerable. efforts of you .and your r't"~a~" . Committee members have .been instrumental in the efficient and. , effective development of this analysis. v~~•~tG~a ~~ FZilOC721X - ~l~aYICGUVH0.' ~F~f70.'OYita) F.YJIaC'1tD1"a Iv7adrid Nekv I1et4ai SiYigaixare F-Fon1; Korn„ Sao F'axdcJ $taEtYaos E~li'f'.S ' \ Sincerely, DRAFT Paul Sajovec Senior Vice President HVS Convention, Sports & Entertainment Facilities Consulting A Division of HVS International HUS Convention, Sports & Entertainment DRAFT Uail Conference Center Business Plan Executive Summary i ~~ Executive Summary Summary of Key HVS assisted the Town of Vail's appointed Conference Center Advisory -Findings Committee (Committee) in developing a recommendation for.. a new conference center in the Town of Vail. For a complete understanding of the recommendations and estimates and the supporting analysis the reader. should refer to the full report. Table 1 shows a summary of key data on the proposed project. Table 1 Summary of Key Project Data Facility Program Main Ballroom 30,000 Square Feet Breakout Meeting Space 10,000 Square Feet .Estimated Demand at Stabilization (2012) • Number of Events 244 Attendance 75,600 New Room Nights 69,425 Estimated Financial Operations at Stabilization (2012) Revenue $5,186,982 Expenses $6,171,627 Net Income (Loss). ($984,645) Estimated Economic Impact at Stabilization (2012) Total Spending. $34,124,940 Jobs 329 Fiscal Impact $1,481,473 Source: HVS Project History The need .for a new conference center. in Vail has been under consideration for some time. Prior studies and analysis have identified the.. need for a conference center with anywhere from a 20,000 to 40,000 square foot main ballroom. Despite .these findings, Vail has continued to lack a conference facility that can accommodate groups in excess of 500 attendees. HVS Convention, Sports & Entertainment DRAFT Vail Conference Center Business Plan Executive Summary 2 ~~ Recommended Facility Program Size Capacity Square Banquet Theater Reception Classroom U-Shape Feet Ballroom /Exhibit Space 30,000 2,480 3,330 3,160 2,050 800 Meeting Rooms Block 1 5,500 450 610 580 380 150 Block 2 4,000 330. 440 420 27Q 110 Boardroom 500 -- -- 20 10 Mountain Terrace 2,600 210 -- 270 -- __ Total' 42,600 3,470 4,380. 4,430 2,720 1,070 ~ Square feet excludes terrace Source: Fentriss Bradbum Architects LTD The Committee asked HVS to analyze an alternative facility program with a main ballroom measuring 20,000 square feet and a total construction cost that could be adequately funded with annual debt service payments of $2.55 million. HVS analyzed this alternative scenario in detail. After reviewing the i In November 2002 voters in the Town of Vail passed. a public referendum in favor of developing a new conference center with proceeds from an additional 1.5 percent lodging tax and a 0.5 percent sales tax. The Town appointed a Committee to determine the financial feasibility of developing the facility with the available revenues and the appropriate facility. program. In August 2003 the Town of Vail hired .HVS Convention, Sports & Entertainment Facilities Consulting to develop a business plan for a conference center. This .analysis is designed to determine the feasibility of such a development and to measure its .potential economic impact in .the community. The. market study recommended a facility with a 25,000 square foot main ballroom /exhibit space and 20,000 square feet of breakout meeting space. The facility should feature an overall level of quality representative of Vail's reputation as a world-class resort destination. Design features should- . enhance event attendees' sense of being in a remarkable mountainresort. The Town's conference center architectural firm, Fentress Bradburn Architects LTD, has developed a building program plan. that balances the market recommendation with the physical realities of the selected site. Table 2 shows the resultant program. Table 2 Facility Concept Plan Area HVS Convention, Sports & Entertainment DRAFT Vail Conference Center Business Plan Executive Summary 3 .two options the Committee determined that the larger ballroom scenario was preferable due to its greater demand potential.. The Committee also .asked HVS to determine the effects of eliminating all events other than conferences at the recommended facility. A decision to implement a booking policy that restricted all but conferences from occurring at the facility would more than double the estimated annual operating deficit. Site Issues At the direction of the Committee, HVS and its architectural consultant LMN Architects assessed the capacity of two potential sites to accommodate, the recommended facility program. The sites included the Charter Bus Lot adjacent to the Lionshead parking structure and the area above the existing Lionshead parking structure. LMN's analysis of the sites revealed that either could accommodate the recommended facility. The smaller Charter Bus Lot site would require. the construction of a .two-level conference center. The option that calls for building the facility above- the parking structure could accommodate asingle-level facility. Asingle-level conference center generally is more efficient in terms of its special layout; but a properly designed two- .level facility can achieve a high level of efficiency as well. In .addition, building the facility over the parking structure would leave the Town more options for incorporating a .proposed adjacent transit center. Construction consultants working for the Town estimated that the construction. premium for building the facility above the parking structure would be approximately $3 million in hard construction cost. Due to concerns about the useful life of the existing Lionshead parking structure being less than the anticipated life of the conference center to be built above, the Town directed HVS to proceed with the. assumption that the facility would be built on the Charter Bus Lot site. However, the Town continues to evaluate potential solutions that could improve the feasibility of the option of building .above the parking structure. Existing Conditions. Vail has several hotels with conference center space, but .none with a dedicated ballroom space with more than 8,300 square feet. An analysis of six peer resort markets details the facility programs and operations of their. conference. centers. Table. 3 shows .the amount. of function space in these .conference. centers and the number of lodging units in their market areas. ,...,_ .... _ . _,...~. _a ~n,._ ~„_ _-_-.~ ~.... .,,. ~ .. ,. a ;..~. HUS Convention, Sports & Entertainment DRAFT Uail Conference Center Business Plan Executive Summary 4 \, Table 3 Square Feet of Function Space by Type in-Peer Resort Conference Centers and Area Lod in Units acility Square Feet of Meeting Space Square Feet of Largest Single Space Largest Room Banquet Capacity in # of Peo le P Maximum Number of Meeting Rooms Lodging Units in Market Area Estimated Annual Operating Profii (Loss) Banff Cemre' 52,814 5,879 486 53 4,364 ($639,465) Ke stone Conference Center 44,180 19,800 1,636 25 1,300 .($1.,695,565) Montere Conference Center 40,976 19,600. 1,620 15, 4,500 ($1,500,000) Snowmass Conferee Center 18,399 .10,823 894 10 1,300 NIA Telluride Conference Center 10,961 6,069 502 9 1,362 ($600,000) Whistler ConferenceCemre 34,403 16,500 1,364 19 5,200 NIA Peer Facility Average 33,622 13,112 1,084 22 3,004 ($1,108,757) ' BanHCentre Anancia/operating revenue bickrdes 58.9 million in grants sources. MaJorfxhitiirNal/Orcectory2002arMrespective7acilities Input from Event HVS surveyed planners of national and State events to learn about their Planners perceptions of Vail's attractiveness as a location for their events and to gauge. their overall level of interest in bringing events to a new conference center in Vail. HVS received a total of over 50 completed responses to an internet survey, conducted three focus groups; and interviewed several other meeting professionals. One of the key survey questions .asked event planners of national and regional events to rank the relative attractiveness of the set of peer conference centers and the proposed facility in Vail, as shown in Figure 1. HVS Conventlon, Sports & Entertainment DRAFT Vail Conference Center Business Plan Executive Summary 5 ~~ Figure 1 Ratings of Overall Attractiveness of Resorts as Event Locations Val, CO-Conference Gaoler >'. 3.4 (proposed).. ~, Monterey CA-Conference 3.3 .Center Aspen. CO -Snowmass '. 3:2 Conference Center - 1CeysMne, CO -Resort 8 ' -.__...-. ~, 3.0 Conference Center Whistler, BC - Conference ~ ~^^~ 3.0 Center 111 i -i Banff. AB - Bantf Cente III 2.9 1 2 3 4 5 Very Unattractive Average Very Attractive Source: HVS Survey These event planners ranked the proposed Vail facility ahead. of any of the other peers as a potential location for their events. In another key question, HVS asked national event planners to indicate how frequently they believed they would utilize the planned Vail. conference center. Two-thirds of the -event planners indicated that they expected. to utilize the conference center. Approximately 43 percent of the respondents indicated they planned on using the facility at least once every five years. HVS also surveyed State of Colorado event planners and asked them. to rate the overall attractiveness of a set of existing primary convention facilities, conference centers, and hotels with meeting space that frequently host State events. This survey was entirely separate -from the national survey and the respondents and results are distinct and do not overlap with or represent a subset of the national survey. HVS selected the list of facilities based upon an assessment of the one or two facilities in each market that would .compete. most directly with a conference center in downtown Vail .for State events... Figure 2 shows the average ratings of these selected facilities. HUS Convention, Sports & Entertainment DRAFT Vail Conference Center Business Plan Executive Summary 6 \, Figure 2 Relative Attractiveness of Selected Event Locations Among State Event Planners va11 Denver Colorado Springs Aspen Keystone Engfrwood Telluride Grand Junction Fort Collins ' Puebb Greeley eoutler 1 2 3 a 5 Very UnaGradive Average Very ARractive Souse: HVS Survey Event planners rate Vail as easily the most attractive event destination.. It is typical to see some bias in favor of the subject .location in such surveys, ,but the disparity between. the rating for Vail and the other locations in the state is noteworthy. The disparity between Vail and the other resort locations on the. list is indicative of significant demand potential associated with events that typically utilize resort locations. Demand Projections Table 4 shows the projected number of events and attendees by type of event between 2008 and 2012, the point at which the analysis estimates that. the facility would reach a stabilized point of demand.` FIVS Convention, Sports & Entertainment DRAFT Uail Conference Center Business Plan Executive Summa 7 Table 4 Projected Events and Attendance 2008 - 2012 Event Type 2008 2009 2010 2011 2012 Number of Events Corporate Conferences 15 19 21 22 23 Association Conferences 7 15 22 25 26 Banquets 25 30 38 42 45 Meetings 90 100 107 109 110 Entertainment 10 13 14 15 15 , Other 20 22 23 24 25 Total 167 1.99 225 .237 244 ~• Average Attendance Corporate Conferences 433 473. 481. 485 507 Association Conferences 507 498 503 511 517 Banquets 400. 400 400 .400 400 Meetings , 100 110 115 120 125 .Entertainment 500 500 500 500 500 Other 450 450 450 450 450 Total Average 258 281 293 302. 310 Total Attendance Corporate Conferences 6,500 8,995 10,095. :10,675 11,650 Association Conferences. .3,550 7,465 11,070 12,765 13,450 Banquets 10,000 12,000 15,200. 16,800 .18,000 Meetings 9,000 11,000 12,305 13,080 1.3,750 Entertainment 5,000 6,500 7,000 7,500 7,500 Other 9,000 9,900 10,350 10,800 11,250 Total 43,050 55,860 66,020 71,620 75,600 Source: HVS The projection estimates that total attendance would increase from 43,050. in 2008 to 75,600 in 2012. Table 5 shows the estimated percentage of room nights the .conference center would attract that would be new to th e community an d the resultant number of new room nights by type of event. HUS Convention, Sports & Entertainment DRAFT Uail Conference Center Business Plan Executive Summary 8 ~\ Table 5 New Room Niqht Projections Event Type 2008 2009 2010 2011 2012 Percent New to the Market Corporate Conferences 80% 83% 84% 85% 85% Association Cohferences 85% ~ 87% 88% 90% 90% Banquets 50% 55% 60% 65% 70% Meetings 15°~ 18% 20% 20% 20°~ Entertainment 0% 0% 0% 0% 0% Other 15% 15% 15% 15% 15% New Room Nights. ~; Corporate Conferences 15,680 23,406 27,216 28,985 31,875 Association Conferences 8,500 18,.357 28,160. 33,120 34,740 Banquets 950 1,265 1,740 2,080 2,380 Meetings 165 252 300 320 340 Entertainment - - - - Other 75 75 75 75 90 Total 25,370 43,355 57,491 64,580 69,425 Source: HVS The projection estimates that the proposed conference center would attract close to 70,000 new room nights to the market annually by demand stabilization in 2012. Table 6 shows the proje cted operating. revenues and expenses for the: recommended facility. Table 6 Projected Conference Center Revenue and Expenses Revenue/Expenses 2008 2009 2010. 2011 2012 Revenue $2,579,224 $3,502,850. $4,295,984 $4,792,837 $5,186,982 Expenses $3,864,707 $4,637,903 $5,341,964 $5,798,941 $6,171,627 Net Income ($1,285,483) ($1,135,053) ($1,045,980) .($1,006,104) ($984,645) ...Source: HVS The financial operating projections estimate that the facility would operate at a deficit of between $1.3 million in the first year and $984,645 at stabilization in 2012. Operating deficits in this range are typical for .conference center .facilities of this size. After 2012 inflation would cause the annual operating Hl/S Convention, Sports & Entertainment DRAFT Vail Conference Center Business Plan Executive Summary 9 \, deficit to increase slightly as the expenses increase at a greater increment due to the fact that they are greater than revenues. Economic Impact The ability of conference centers to attract new events and attendees from out of town who spend considerable amount of money in the local economy is the primary rationale for municipalities to invest in these facilities. HVS estimates the amount of new spending that the proposed conference center would attract to the Town. The methodology HVS employs is designed to measure only the new spending that the proposed facilities would attract fo the Town and exclude any transfer spending. Using .average spending data from the .International Association of ~; Conference & Visitor Bureaus and several local sources, .HVS estimates the. amount of new direct spending the proposed .facilities would generate. HVS then uses an input /output model to estimate the indirect .and induced spending the Town's economy would capture and the number of jobs this spending would support. Table 7 shows the estimated new spending and the number of jobs the events attracted to -the conference center and headquarters hotel would generate in the Town economy.. Table 7 Total S endin __ (Inflated Dollars in Millions) & Em to ment Im act zoos zoos zoio zo~1 zo~z Type of Impact Spending Jobs Spending Jobs Spendin f Jobs Spending Jobs Spending Jobs Direct Impact $9.0 102 $15.5 170 $21.3 226 $24.4 252 $27.0 268 Indirect' 1.1 10 1.8 16 2.5 21 2.9 24 3.2 26 Induced ~ 1.3 14 2.3 22 3.1 29 3.6 33 3.9 35 Total $11.4 125 $19.6 207 $27.0 277. $30.9 308 $34.1 329 ' Tors! industry oetput Source: HVS The economic impact analysis estimates that: the conference center would attract new events and attendees that would generate approximately $34.1 million in new direct, indirect, and induced spending into .the Town economy and would support 329 jobs. Table 8 shows the estimated fiscal tax revenue that the additional events and attendees would generate for the Town. 7iVS Convention, Sports & Entertainment DRAFT Vail Conference Center Business Plan , .Executive Summary 10 \~ - ~ Table 8 Summa of New Fiscal Tax Revenue 2008 2009 2010 Estimated .Estimated Estimated Tax Tax Base Revenue Tax Base Revenue Tax Base Revenue Local Sales $8,270,958- $372,193 $14;293,330 $643,200 $19,673,985 $885,329 Hotel Lodging 3,890,554 112,826 6,853,659 198,756 9,451,032 274,080 Total $485,019 $841,956 $1,159,409 2011 2012 Estimated Estimated Tax Tax Base Revenue Tax Base Revenue Local Sales $22,558;322 $1,015,124 $25,162,257 $1,132,302 &; Hotel Lodging 10,884,189 315,641 12,040,402 349,172 Total 51,330,766 $1,481,473 Source: Hl/S By the time demand for the proposed conference center stabilizes in 2012, the analysis estimates that the new spending would generate a little over $1.48 million in fiscal tax revenue annually for the Town. Of this new revenue, approximately $306,417 would be allocated to the conference center from the 0.5 percent sales tax and 1.5 percent lodging tax and $168,566 would be allocated to the Vail Local Marketing District (through the 1.4 percent lodging tax), leaving approximately $1.0 million in Town of Vail tax'revenue that isn't directly allocated to the conference center or the marketing district. HVS Convention, Syorts £~ Entertainment DRAFT Vail Conference Center Business Plan Introduction?-1 1. Introduction The need for a conference center in Vail that can accommodate events larger than any existing hotel with function space has been under consideration for. some time. Prior Studies The consulting team of Robert S. Benton & Associates and Hire & Associates completed a marketstudy prepared for the Vail Valley Performance and Conference Center Committee in August of 1993. This study recommended the development of a 94,700 square foot facility with a 950 fixed-seat theater and a 14,600 square foot ballroom. The Town of Vail and the Vail Recreakion District retained Economics Research Associates to evaluate the feasibility of a multi-purpose conference center. The March 2000 report looked at two facility alternatives, which both included a conference learning center with a 20,000 square foot ballroom, an additional ice rink facility, and a family recreation center. Public Referndum & In November 2002 voters in the Town of Vail passed a public. referendum in Study.Process favor of developing a new conference center with proceeds from an additional 1.5 percent. lodging tax and a 0.5 percent sales tax. The Town appointed a Conference Center Advisory Committee to determine the financial feasibility of developing the facility with the available revenues and the appropriate facility program. This .Committee issued a request for proposals for a firm to assist the Committee in developing'a business plan for the proposed facility. The Committee selected HVS Convention, Sports & Entertainment Facilities Consulting (HVS) to conduct a detailed.. analysis of the financial feasibility of the conference center. As part of this work I-IVS: ^ Developed a facility program recommendation, ^ `Projected the demand and financial operations of the facility, ^ Conducted an analysis of the ability of the dedicated revenue to support the estimated development cost of the facility, and HVS Convention, Sports fd Entertainment DRAFT Vail Conference Center Business Pian Introduction 2-2 Summary of Analytical Tasks ^ Estimated the economic and fiscal impact. of the facility. This report details the findings and conclusions of this work. HVS analyzed the .financial feasibility and demand potential for a new conference center in,Vail. The analysis provides a basis for a recommended physical program and for projecting the events,: attendance, room nights, and overall economic impact that the new facility would generate. HVS based its recommendations and projections on the following analysis: ^ A Summary of Vail's destination characteristics in terms. of its overall tourism infrastructure destination appeal, ^ An industry overview that summarizes relevant trends in the market for events and assesses their .implications for facility development in Vail, ^ :Comparable resort market and facility analysis that evaluates Vail as an event location relative to a set of other comparable and competing markets, ^ Review of existing hotel-based conference facilities in Vail, ^ Surveys of state, regional, and national event planners providing valuable insight into the perceived attractiveness of Vail as a conference destination. ^ Focus groups with national and state event planners. ^ Analysis of lost business data maintained by the Vail Valley Chamber & Tourism Bureau and interviews with selected event planners who have considered bringing events to Vail but have ...been unable to because of the lack of a true conference center facility. ^ Interviews with hospitality managers and professionals in Vail with expertise in the market for group events.. Each of these analytical tasks is designed to help the Committee identify and approve an appropriate facility program for a new conference. center and assess the business case for public involvement in the development of such a facility. HVS assisted the Committee in this. process and. estimated the level of potential demand for the facility, recommended any necessary complementary visitor infrastructure improvements, developed a facility HVS Convention,. Sports £d Entertainment DRAFT Vail Confere~ue Center Business Plan Introduction 1-3 _ ~ recommendation, estimated the financial operations of the facility, and estimated the economic and fiscal impact the facility would have on the community.. The time, efforts, and direction. of the Committee were instrumental in the development of this business plan. 1 HVS Convention, Sports f~ Entertainment DRAFT Vail Conference Center Business Plan ' ~ Market Overview 2-1 \, 2 Market Overview Characteristics of the local area surrounding a new conference center in .Vail will influence the ability of the facility to attract attendees to its events, particularly in regard to those events that attract attendees from. out of town. This section focuses on some elements particularly important to the attractiveness of Vail as an event destination. Population,Jncome, The Town of Vail, Colorado is located in Eagle County. Eagle County's :and Sales Data population increased at a high rate between 1990 and 2000, reaching an estimated 42,027 in 2000. Table 2-1 shows estimated historical and forecasted. future population for the State of Colorado, major metropolitan areas in the State and Eagle and Summit Counties. Table 2-1 Po ulation Estimates and Forecasts for the State of Colorado and Colorado Metropolitan Statistical Areas Population Average Annual Percent Change Area 1990 1995 2000 2005 2010 2015 2020 2025 90-95 95-00 00-05 05-15 15-25 State of Colorado 3,304,042 3,811,077 4,339,549 .4,706,754 5,149,140 5,640,005 6,137,456 6,653,284 2.9% 2.6% 1.6% 1.6% 1.7% Denver PMSA 1,628,290 1,858,008 2,143,981 2,320,287.2,525,590 .2,740,410 2,941,679 3,145,526 . 2.7% 2.9% 1.6% 1.7% 1.4% Colorado Springs MSA 397,887 469,693 541,718 584,473 630,541 679,647 730,125 781,622 3.4% 2.9% 1.5% 1.5% 1.4% Boulder PMSA 226,014 257,500 275,071 291,822. 313,198 332,653 352,107 370,974 2.6% 1.3% 1.2% 1.3% 1.1% fort Collins MSA 187,081 221,622 253,131 270,127 294,519 329,028 365,076 403,070 3.4% 2.7°k 1.3% 2.0% 2.1% Greeley PMSA 131,946 157,173 183,560 220,125. 255,378 299,352 349,937 409,381 3.6% 3.2% 3.7% 3.1% 3.2% Pueblo MSA 122,878 130,832 142,054. 153,233 165,686 180,049 195,118 210,337 1.3% 1.7% f.5% 1.6% 1.6% Grand Junction MSA 93,577 105,406 .117,653 129,977 143,946 161,473 181,359 202,554 2.4% 2.2% 2:0% 2.2% 2.3% Eagle County 22,118 30,883 43,355 49,140. 55,246 61,710 68,149 74,183 6.9% 7.0% 2.5% 2.3% 1.9% Summit County 12,940 18,270 25,727 28,259 32,413 36,674 41,283. 45,937 7.1% 7.1% 1.9% 2.6% 2.3% Source: Colorado Oepar6nenr of local Aliairs Between 1990 and 1995 the populations. of both Eagle. and Summit Counties increased at a rate well above those of the State of Colorado as whole or any of the Metropolitan Statistical Areas shown in Table 2-1. Growth in the second half of that decade slowed somewhat and projections call for future growth rates in Eagle and Summit Counties to be somewhat. greater than the State as a whole. .The growth rate. of Eagle County is anticipated to .decline significantly. from 7.0 percent in 1995-2000 to 2.5 .percent in the period " between 2000 and 2005. HVS Convention, Sports & Entertainment DRAFT Vail Conference Center Business Plan Market Ovenriew 2-2 Table 2-Z shows a summary of income and sales data. Table 2-2 Summary of Income & Sales Data Average Annual Compounded Change • 1990 2000 2002 2070 1990-00 2000.02 2002-10 Per•Capita Personal Income' Eagle County $25,977.0 $32,813.0 $32,268.0 $34,413.0 2.4 (0.8) 0.8 State of Colorado 22,983.0 30,785.0 30,921.0 33;863.0 3.0 0.2 1.1 United States 22,856.D 27,712.0 28,066.0 30,680.0 1.9 0.6 1.1 W&P Wealth Index Eagle Gouniy 135.7 159.4 153.8 149.4 1.6 (1.8) (0.4) State of Colorado 103.1 113:8 113:1 113.3 1.0 (0.3) 0.0 United States 100.0 100.0 100.0 100.0 0.0 0.0 0.0 Food & Beverage Sales (Millions)' Eagle County $85.5 $155.7 $179.0 $271.9 6.2 7.2 5.4 State of Colorado 3,365.4 5,361.9 5,942.7 7,639.1 4.8 5.3 3.2 United Siates 216,297.9 282,497.1 306,650.3 .374,944.0 2.7 4.2 2.5 Tataf fletail Sales (Millions)' Eagle County $360.2 $755.9 $838.0 $1,203.6 7.7 5.3 4.6 Sta[e of Colorado 29,778.8 50,749.2 54,510.1 67,093.5. 5.5 - 3.6 2.6 United States 2,089,724.5 2,945,342.0 3,104,584.0 3,636,797.6 3.5 2.7 2.0 • Inflation Adlusted Source: Wands & Poole Economics, Inc. Per-capita personal income in Eagle County, which includes the Town of Vail, is higher than the State of Colorado and the U.S. Sales trends indicate high rates of annual .growth in Eagle County, significantly above State and U.S. levels. Proximity to Potential A key factor for regional and state markets in attracting events and attendees Event Attendees is their location. and overall accessibility. From the perspective. of State events, Vail has he advantage of being fairly centrally located in Colorado and benefiting from good interstate highway access. Figure 2-1 shows a map of Vail and its surrounding area. HVS Convention, Sy orts & Entertainment DRAFT Vail Conference Center Business Ptan Market Overview 2-3 Figure 2-1 Map of Vail and its Surrounding Area 4' /, lnr~t~_n -a it Il;,,at ~ r,o a~ v _ Dino;:~nr _i _ __~ : _ ~- L>n~ m ~i r *I>I~eL.~r .'s ;~ +I-tin lulin'1 -i- .+I.een ;I;LIr] aE,li~~a~r _ . _ i "~ k.. ~ •-.L3L 't;nai~a ~ f_Ilr r.f^i_31 ~- ` cl m ._~ I SF~rin:js .1 i_., iC~ F.i-_r ' _. ' ..+Fniita,, ~~ - - • lima . _ i _'4'i Grin I u ~=ien -- ~,~i y +LI ~r Ita 5p n.cs _ _ -- t -.i... Vail is not located at the geographic center of the. State, but its highway accessibility. makes it relatively .convenient to other major population centers within the state. Colorado's primary east-west .highway,. Interstate-70, runs through Vail and links it to Interstate 25 and the Denver metropolitan area. Interstate 70 crosses the north-central section of Colorado, providing excellent highway access through the mountainous regions of the state. Driving time from Denver to Vail is approximately two hours and 20 minutes via the 1.75- mile Eisenhower Tunnel underlying the 11,992-foot Loveland Pass. The tunnel has made the automotive trip to Vail much safer, .especially during the winter months. Opened in 1973, the tunnel tookover three years to construct. Interstate-70 is Vail's sole highway-grade link to the rest of the State. Winter weather can have a significant affect. on the ease of highway. travel in Colorado. In periods of intense .snowfall Interstate-70 is sometimes temporarily closed. Table 2-3 shows the number of times Interstate-70 was closed between Denver and Vail and the total closure .time by fiscal year HVS Convention, Sports Fj Entertainment ~ DRAFT Vail Conference Center Business Plan Market Overview 1r4 \~ Table 2-3 Data on Interstate-70 Closures by Fiscal Year Year No. of Total Time . Closures Closed 1998/99 7 6 hrs 27 min 1999/20 22 46 hrs 36 min 2000/01 33 27 hrs 13 min 2001/02 16 44 hrs 34 min 2002/03' 45 560 hrs 21 min 2003/04 13 22 hrs 18 min Average 99-02, 04 18.2 29 hrs _28 min ' 494 hrs 16 min for March 03 blizzard. Source: Colorado Department of Transportation Fiscal year. 2002/2003 included. a significant blizzard in March 2003 that had the highway closed for close to 500 hours just for that one storm. Excluding 2002/03 and this remarkable snow event, the average for the other years was 18.2. closures for 29 hours and 28 minutes. In 2003/04 the average closure time. .was one hour and 42 minutes. If such a closure were to occur during the primary arrival time for conference center event attendees it could cause considerable difficulties for an event, but would not force an event to be cancelled. The frequency and length of I-70 closure time does not suggest that weather-related closures will present a major obstacle for conference center operations, but warrants consideration in assessing the perceptions of events.. planners when .considering the potential challenges of getting attendees to and from events. Table 2-4 shows the population of metropolitan statistical areas in Colorado and nearby states and the distance and estimated driving time between each of them and Vail. HVS Convention, Sports t' Entertainment DRAFT Vail Conference Center Business Plan Market Overview 2-5 Table 2-4 Population, Distance, and Drive Time from Vail, CO Market MSA 2000 Miles from Drive Time Population Vail from Vail Colorado Vaih 4,531 na na Denver 2,581,506 97 1:44 Boulder 291,288 108 2:06 Fort Collins 251,494 157 2:39 Greeley 180,936 156 2:41 Pueblo ~ 141,472 207. 3:19 Grand Junction 116,255 148 2:25 Out-of-Sfate ` Albuquerque 712,738 380 .7:47 Amarillo 217,858 527 9:26 Lubbock 242,628 651 11:47 Oklahoma City 1,083,346 773 11:37 ~ Population for Town of Vail as Vail is not part of an MSA Sources: Census Bureau 2000 and Mapquest After Denver, the State's largest market, the next five largest markets are all within a three and a half hour drive or less. Vail's proximity to the State's major population centers makes it an appealing drive-in event destination.. Outside the State, the closest major market is Albuquerque, which is a drive of nearly eight hours. Conference Destination Characteristics of the. local area influence the ability of a conference center Characteristics facility to attract attendees to its events, particularly in regard to those that attract attendees from out of town. This section .details .the market's hotel - .supply, visitor attractions, and overall character and focuses on elements particularly relevant to the attractiveness of the area as a conference destination. Regional Destination Appeal The Rocky Mountains and a generally comfortable climate make Colorado an attractive visitor destination. According to .the Colorado Office of :Economic Development and International Trade, Colorado .welcomed. 26.2 million domestic visitors on overnight trips in 2002. Related marketing studies show that Colorado ranks fifth in the nation behind Hawaii, Florida, California,. and Alaska in States people would most like to visit. Colorado's attractiveness as a .:.vacation destination provides opportunities for the development of resort- FfVS Convention, Sports F~ Entertainment DRAFT Vail Conference Center Business Plan Market Ovenriew 2-6 based meeting and conference facilities, which take advantage of skiing and ..proximity to the Rocky Mountains. Lodging Types and Definitions The quality of hotel .properties ,accessible to conference facilities and .the quantity of rooms are key factors in the demand .potential for events that attract out-of-town attendees. Important questions event planners consider in potential venues are "How many hotel rooms are located close. by?" and "Is there a headquarters hotel attached to the venue?" , Table 2-5 shows the kinds of guest lodging available in Vail and the number of rooms by type. Table 2-5 Vail Lodging Supply by Type of Unit No. of Lodging Type Units Accommodation 1,588 Dwelling Units 704 Condominium Hotel .491 Fractional Fee~meshare 312 Total 3,095 Source: Vail Community Development Dept. The number of lodging units in a market like Vail that .depends heavily on condominium units is a moving target as individually owned units. are moved. in and out of the rental pool. The Vail Valley Chamber & Tourism Bureau (VVTCB) `assisted the Town of Vail in developing the preceding supply figures.. The bureau estimates that the total number of available lodging units in Vail ranges between 3,095 and 3,400. The Town uses the following definitions to classify lodging properties. Accommodation units. are considered to be traditional hotelfmotel style. rooms, and are available on a year-round basis. According to Vail regulations, an accommodation cannot be individually owned. Dwelling units are defined as units that may be individually owned and can exist in many different forms. The term "dwelling units" may be used to ...define single-family residences, duplexes, and multiple family buildings. A dwelling unit may be rented on a short-term basis provided that the period of HVS Conventirnz, Sporfs fd Entertainment DRAFT Vail Conference Center Business Plan Market Overviezu 2-7 rental doesn't exceed 31 days.and the entire unit is rented to the same guests for the duration of the rental period. Condominium hotels are defined- as hotel buildings with a portion of rooms set aside for individual ownership. A condominium hotel may often resemble a traditional hotel in its manner of appearance, marketing. and management. . Fractional Fee/Timeshare units are .defined as properties shared among several people, corporations, or partnerships. The use of the property by any. individual at the exclusion of others is determined in advance by contract. Six Vail properties currently fit this description. ~; Vail Resorts has joined the Vail Valley Chamber & Tourism Bureau to launch the Lodging Quality Initiative. This new program will provide guests with more detailed information on lodging options and will rate the existing inventory in the area. Proposed Vail Lodging Development The Town of Vail has received a number of applications and proposals for the construction of additional lodging facilities. Table 2-6 shows the location and type of lodging proposals Vail has recently received, as well as the number of .units proposed at each location and the total net changes in rooms. Table 2-6 Pro osed Lodgin Development in Vail Net New Lodging Units Net New Function Space Employee SF of SF of # of CorMo- Fractional Accom- Total Net Development Location Dwelling Housing Function Largest. Functton minium Timeshare Units modation Change .Space Room Rooms Core Site 14 125 (90) 23 72 .3,000 NA NA North Day Lot -- -- -- 90 - 90 0 0 0 Marriott Grand Residence 125 44 - -- 46 215 0 0 0 Four Seasons' 18 22 34 - 74 11,726. 4,~0 5 Sonnenalpz 9 -- 14 - (24) (1) -0 0 0 Tivoli 1 -- - 11 12 1,500 1,000 2 Front Door. 13 -- -- -_ p t5 0 0 0 Vad Plaza Hotel 1 50 100 151 6,713 3,857 2 Total 162 188 86 34 158 628 22,939 9 ~ faa Seasons will have 120 accorrvnodatlon units and is replacm0 Ote Chateau VaN, wM'ch had 120 accommodation units. ~ Sonnenalp owner demdished the Swiss Hotel pdor to the 2004.2005 s!d season, but new lodpn0 unuits w!N not be built until ne# season. Sowcas Vail Community Development Dept and Respective Properties and DevePopers These numbers are shown as reported during the development review process of these proposals. The number of units and style of development may change as a result of the development review process. Some of the rooms may drop out of the lodging pool during the"construction process. Some of HVS Convention, Syorts £d Entertainment DRAFT Vail Conference Center Business Plan Market Ovenriew 2-8 \~ these developments have plans to add new function space. However, none of this new function space is large enough to conflict with the potential event demand for a conference center in Vail. Existing Hotel The Vail community does not currently have a true conference center facility.. Conference Centers that features a large multipurpose exhibit/ballroom space and breakout :meeting space appropriate for conferences and other events in excess of 500 people. Vail does have several resort hotels that feature meeting space for in- house group events. Table 2-7 summarizes selected lodging facilities in the Vail area that feature on-site meeting space. Table 2-7 Selected Hotels with Meeting Space in the Vail Area Maximum Total Max. Single SF Total SF Largest Facility Location Lodging Function # of Meeting gailroom Room Rooms ~ Function Room Banquet Space Rooms Capacity Space Capacity Vail Cascade Resort and Spa Vail 292 21,555 17 .1,480 5,940 490 Park Hyatt Beaver Creek Beaver Creek 274 16,350 ` 15 1,120 8,631 710 Ritz-Carlton Bachelor Gulch 237 14,040 12 960 7,200 600 Vail Marriott Mountain Resort & SPA Vaif 344 13,736 16 940 8,286: 690 Manor Vail Resort Vail 144 8,710 7 600 3,496 290 Lodge at Vail Vail 165 7,433 7 510 5,424 450 Evergreen Lodge Vail 128 5,936 5 410 1,942 160 Lion Square Lodge Vail 118 5,380 5 . 370 3,070 250 Sonnenalp Vail 90 4,820 7 330 4,265 350 ' Excludes prelnnction space, terraces, outdoor space, and halhvays Sources: Respective facilities and HVS Four Vail area hotel properties have more than 10,000 square-feet of meeting space, but none have a single ballroom space in excess of 8,700 square feet. Of the hotels presented in .Table 2-7, several have large outdoor areas set aside for outdoor events and meetings. Those spaces. were not included in this summary of meeting space at lodging properties. In addition, the Vail Cascade has a tennis court it uses as an exhibit hall type space for certain events, but this space was not included since it isn't purpose built function space comparable to the other spaces. The following text describes the Vail. facilities with the largest amounts of function space and provides information on their size and capacity, as well as .the overall character of each facility. HVS Convention, Sports & Entertainment DRAFT Vail Con(erepce Center Business Plan Markef Overview 2-9 Vail Cascade Resort and Spa The Vail Cascade. Resort and Spa is located in the .Cascade Village area of Vail. The facility provides ski-in/ski-out access. The resort offers function space and a wide variety of lodging options including suites, condos, homes, and hotel rooms.. The conference center has approximately 21,500. square feet of space divisible into 17 separate rooms. The facility also has the Gore Range Exhibit Hall, which is a converted indoor tennis facility that measures 19,234 square feet. The Centennial Ballroom, the largest purpose-built event space, has 5,940 square feet of function space. The resort has 3281odging rooms and suites in addition to condominiums and private residences. Thee property includes a .78,000 square foot spa and club that includes a swimming pool, basketball court, tennis, .racquetball and squash courts, and a retail shop. Other amenities include a movie theater, restaurant, and general store. According to interviews with management, the facility typically does 65 .percent of its room nights in the group segment. However, the downturn in the economy has lowered the share of group business to below 60 percent. Group demand is roughly composed of 65 percent corporate, 25 percent association, and 10 percent SMERFE (social, military, educational, religious, fraternal, and entertainment). Approximately 35 percent of the group demand at the property originates in Colorado, with Denver serving as the primary feeder market.. Park Hyatt Beaver Creek The Park Hyatt Beaver Creek is located 20 miles from Eagle. County Airport and 10 minutes from Vail. The Hyatt has a total of 274 hotel rooms that include standard guest rooms, panorama kings, and executive kings. The ski- in/ski-out resort. also offers numerous year-round activities and an on-site spa. The facility offers a total of over 16,000 square feet of function space and the. largest single dedicated ballroom space among resort hotels in the Vail Valley at 8,600 square feet. Ritz-CarltonBachelor Gulch The Ritz-Carlton Bachelor Gulch, located in the Beaver Creek resort area, has 237 lodging rooms. The resort offers panoramic views from 90 percent of guestrooms and .suites. The room choices include 29 one, two or three bedroom suites, 102 rooms offering private balconies, 77 guestrooms featuring fireplaces, 49 with window seats and four suites offering windows near the bathtub providing views of the surrounding mountains. The hotel opened in 2003 and offers a 21,000-square-foot spa, ski-in/ski-out convenience and 36 HVS Convention, Sports f~ Entertainment DRAFT Vail Conference Center Business Plan Market Ovenriew 2-70 - ) holes of nearby golf. The spa has 19 different treatment rooms. The overall' development includes a number of large private residences. The"facility has a little over 14,000 square feet of indoor function space. The largest single space is the Ritz-Carlton Ballroom with 7,200 square feet of space. The decor in the function spaces is high end and represents some of the highest-quality space in the Valley. Vail Marriott Mountain Resort & Spa The Vail Marriott Mountain Resort & Spa, which was .purchased. by Vail Resorts,. recently underwent. a major renovation. The renovation significantly upgraded the quality of both the guest rooms and the function space.. The resort has approximately 13,700 square feet of function space and its grand ~ ballroom offers close to 8,300 square feet of space. The maximum size group that the hotel can accommodate for a meet and eat type of event is approximately 500 people. Management reports that the property has an overall group to leisure mix of about 55 / 45. In the peak ski season the share of leisure demand grows to between 60 and 65 percent. Group demand in the summer is approximately 70 percent of total room nights. Continuing education represents the largest share of group demand by type of event.. The resort accommodates most of its association business in the spring and fall when room rates are at their lowest points. Overall, about 30 percent of group business comes from the front range, primarily from Denver-based companies.. Lodge at Vail The Lodge at Vail has a total of 7,433 square feet of function space and 165 lodging 'units, of which 80 are traditional hotel rooms .and the rest are individually owned condo units. The largest single ,event space at the facility is the International Room, which offers -5,424 square feet when all divisible walls are opened. The facility generally lack breakout meeting rooms and ...relies on the divisibility of its International Room when events need smaller .spaces. The largest size group the facility can accommodate is approximately 120 room nights, as anything larger typically exceeds the capacity of their function space and/or exceeds the number of rooms they can assemble for a room block. The non-uniformity of the condo rooms at the facility presents problems for incentive groups that look,for facilities that .can offer each of their attendees comparable rooms. HVS Convention, Sports £~ Entertainment DRAFT Vail Conference Center Business Plan Market Overview 2-11 Management reports a highly seasonal pattern of existing group demand. During the ski season group demand generally only accounts for. about 20 percent of overall room nights. Virtually all group. demand in the winter is corporate groups. Management believes the proposed conference center would generate much needed room demand in the shoulder seasons and Monday to Wednesdays throughout the year .when 'tourist demand is • relatively low. Sonnenalp The Sonnenalp is a high-end, boutique European-style mountain resort located in Vail Village. The property has 90 guest rooms that are all suites: Plans are in place to add 40 more rooms by Fall 2004. The facility offers a total of 4,820 square feet of function space. The largest single ballroom space, the Grand Bavaria, is 4,265.square feet. The on-site spa facilities include heated indoor and outdoor pools, whirlpools, a sauna, and other amenities. The Sonnenalp does very little group business in the ski season because its room rates are typically $700 and up during this period. Management indicates that it devotes as many as half its rooms to group business in the summer and will devote the entire inventory to groups in the shoulder seasons, although. demand for: groups during this time of the year has been very low in recent years. Donovan Pavilion .Opened on August 30, 2003 at a construction cost of $2.8 million, the 5,205 .square foot building accommodates up to 200 people for a sit. down banquet and up to 325 people for a reception. A 3,040 square foot outdoor terrace accommodates another 110 guests. The facility features a meeting zoom for smaller gatherings and a catering kitchen. The facility is designed primarily to accommodate weddings and other social events. The windows do not black out completely, which. limits the ability to conduct presentations and other conference-type activities.. The .Town of Vail uses .the Pavilion for larger meetings and other non-revenue. events when it isri t booked for other uses. Given its much smaller size, the Pavilion would not competedirectly with the conference center for potential events. In the busiest portions of the summer. season, its possible that the conference center may pick up some smaller events that'can't be held in the Pavilion due to scheduling conflicts. Accessibility, Vail is a year-round resort community located in the northwest mountainous Character, and quadrant of the state of Colorado, 100 miles west of the state's capital city of Environment for Event Denver, which is the marketing, transportation, and distribution center of the Attendees Rocky Mountains. The town of Vail is located between two ranges of heavily. HVS Convention, Sports £~ Entertainment DRAFT Vail Conference Center Business Plan Market Overview 2-12 \~ wooded mountains on the north and south sides of Interstate 70. The .town is situated 8,200 feet above sea level. Skiing at Vail The Rocky Mountain region annually attracts more skier visits than any other part of the U.S. Table 2-8 shows U.S. skier visits by region between the 1993/04. and 2003/04 seasons. Table 2-8 Estimated U.S. Ski Industry Skier Visits by Region (millions) Season Northeast Southeast Midwest Rocky Mt. Pacific West Total 2003/04 12,892 5,588 7,773 18,868 11,946 57,067 2002/03 13,991 5,833 8,129 18,728 10,913 57,594 2001/02 12,188 4,994 5,980 18,123 12,126 53,411 200.0/01 13,697 5,458 7,580 19,324 11,278 57,337 1999/00 12,025 5,191 6,422 18,109 10,451. 52,198 1998/99 12,299 4,261 _ 6,005 18,440: 11,084 52,089 1997/98 12,712 4,343 6,707 19,191 11,169 54,f22 1996/97 12,407 .4,231 7,137 18,904 9,841 52,520 1995/96 13,825 5,693 7,284 18,148 9,034 53,984 1994/95 11,265 4,746. 6,907 18,412 11,346 52,676 1993/94 13,718 .5,808 7,364 .17,503 10,244 54,637 Source: National Ski Areas Association The Rocky Mountain region has accounted for an average of 34 percent of the overall U.S: skiervisits over this time period. Table 2-9 shows skier visits at selected Colorado ski resorts. HVS Convention, Syorts £d E~itertainment DRAFT Vail Conference Center Business Plan Market Overvietu 2-23 \~ Table 2-9 Skier Visits at Selected Colorado Ski Resorts Market 2003/04 2002/03 2001/02 2000/01 1999/00 1999/98 1998/97 1997/96 1996/95 1995/94 1944/93 Aspen 298,831 315,130 310,381 319,343 331,121 334,536 345,351 334,512 322,338 329,535 359,846 Aspen Highlands 160,836 157,317 136,136 140,640 127,389 142,090 149,963 157,053 153,764 159,288 106,197 Beaver Creek 768,542 718,353 657,956 676,528 586,004 614,549 668,520 644,451 554,443 538,897. 504,516 Breckenridge 1,402,055 1,424,770 1,468,51.8 1,422,783 .1,444,365 1,385,927 1,300,883 1,341,179 1,357,790 1,227,357 1,215,013 Copper Mountain 931,143 1,058,016 1,005,913 992,888 803,312 867,394 921,065 943,713 967,074 770,973 842,210 Crested Butte 333,011 342,416 ~ 336,483 367,263. 414,642 462,478 549,660 519,250 507,309 485,840. 530,088 Keystone 944,433 • 1,038,942 1,069,111 1,230,100 1,192,198. 1,253,192 1,149,270 1,217,359. 1,057,568 1,042,171 1,095,857 Snowmass 724,753 669,701 676,505 740,241 707,600 777,140. 884,066 788,620 690,067 767,509 814,852 Steamboat 1,002,841 1,001,020. 1,001,003 1,003,317 1,024,832 1,013,254 1,053,145 1,102,751 1,017,342 1,013,606 1,021,149 Telluride 367,775 367,252 341,370 334,506 309,737 382,467 .375,027 306,507 270,916 301,748 300,388 Buttermilk 139,213 141,077 145,683 148,826 158,194 178,089 180,006 154,028 175,940 168,439 172,948 Vaii 1,555,513 1,610,961 1,536,024 1,645,902 1,371,702 1,334,939 1,597,932 1,686,790 1,652,247 1,568,360 1,527,698: Winter Park 955,615 998,772 975,256 978,539. 902,827 980,408 1,042,290 991,393 1,012,580 986,077 1,008,040 Total 9,285,730. w 9,528,597 9,349,958 9,681,533 9,042,802 9,726,463 10,217,178 10,187,606 9,739,378. 9,359,800 9,498,802 Total Colorado' 11,254,231 11,605,777 11,128,131 11,666,672 10,892,263 11,389,561 11,479,719 11,844,523 11,387,058 11,105,106. 11,164,232 Vail Share of Total Colorado 13.8% 13.9% 13.8% 14.1% 12.6% 11.7% 13.3% 14.2% 14.5% 14.1% 13.7% ' Variance is attdbulable to additlonat Colaado resorts nol included in the above list. Sources Colorado Ski Comparry USA .With 1,555,513 skier visits, Vail recorded the highest number of skier visits in the state of Colorado during the 2003/04 ski season. Over the nineteen-year historical period ending in 2003/04, Vail recorded the highest number of skier visits in every season with the exception of the 1998/99 and 1999/00 seasons, when Breckenridge surpassed the resort's. performance. While Vail attracts a significant amount of foreign visitors, Breckenridge attracts more local skiers due in part to its closer proximity to the Denver metropolitan area. Vail has maintained a share of approximately 14 percent of total Colorado skier. visits since the 2000/01 season. Vail is acknowledged as one of the' leaders in North America's ski industry and with 5,289 skiable acres, is among the largest domestic ski resorts. Furthermore, Vail is one of the largest single-mountain ski areas in North America. Vail .also boasts the largest number of high-speed chairlifts in the . world, enabling skiers to spend .more time skiing and less time in lift lines. .The ski slopes on Vail Mountain have a vertical drop of-3,450 feet from the summit to the base of the mountain. The mountain receives an average of 335 inches of snowfall each year and maintains an average depth of 60 to 110 :. inches of snow during the winter months. Snowfall at this high altitude is dry and over 70 percent of skiing days are sunny. Average daily maximum temperatures are 40.7 degrees in winter, 75.3 degrees in summer,. and 55.9 degrees in fall. .Since .1985,.. Vail Associates, Inc.. has undertaken an extensive mountain improvement and expansion program. Vail Associates, Inc. is constantly, HVS Convention, Syorts £~ Entertainment DRAFT Vail Conference Center Business Plan Market Overview 2-14 \~ _ ~ improving and upgrading the facilities on the mountain. In 2002/03, three new ski lifts opened in the mountain's Blue Sky Basin area, further increasing the mountain s uphill capacity. Other Nearby Skiing Nearby Beaver Creek Ski Resort offers a unique mix of skiing for beginners and experts alike on 1,625 acres accessed by fourteen chairlifts in one of Colorado's most secluded valleys. Twenty-seven percent of the terrain is designated for the advanced skier, whlle 39 percent appeals to the intermediate and 34 percent to the beginner skier. Summit elevation is 11,440 feet and an average of 330 inches of snowfall occurs each year. In the 1996/97 ski season, Arrowhead, Bachelor Gulch, and Beaver Creek merged to become one large resort. A $68-million mountain improvement project made skiing in Beaver Creek more competitive with neighboring Vail. Skiers at Beaver Creek enjoy more skiing time due to six express quad chairlifts. McCoy Park is a specially designated. area for cross-country, skiing only, and there are also. specially designated family areas for those who .wish to sef their own pace and ski in a relaxed atmosphere. Other Activities & Attractions Summertime events and attractions are also plentiful in the Vail region. Mountain biking, hiking, golfing, whitewater railing, camping, and fishing are frequent activities by summertime visitors to the area. Summer concerts, ' festivals, museums, and .art .galleries .are also appealing summertime attractions.. The resort nature of the Vail market makes it an attractive location for both event planners and meeting and conference attendees. While skiing and other wintertime recreational activities provide most of-the at#raction to the area for event planners and attendees,. a wide range of summertime events are also available to event attendees. Visitor Attractions Event attendees at conference facilities are often interested in more than simply going to the scheduled events at the facility. Many conferences, trade shows, meetings, and corporate events provide attendees with opportunities to socialize and experience the local attractions that the area surrounding the event site and the host city or town has to offer. One factor event planners .:consider is the .availability of entertainment for their :attendees. in the .afternoon or evening after: the planned activities end. In addition to these HVS Convention, Sports £~ Entertainment DRAFT Vail Conference Center Business Plan Market Overview 2-15 unique attractions, the accessibility of other activities such as golf is also an important factor that event planners consider. The beautiful mountain setting the Vail enjoys provides access to a wide range of outdoor and scenic. activities. Gore Range National Science School This year-round school, established as anon-profit organization in 1998, offers educational classes, seminars and speakers for youth groups and adults. Also available are guided snowshoeing and hiking tours. Art Walks ~, Visitors to Vail can take part in guided, 90-minute tours of Vail's art galleries. Betty Ford Alpine Gardens Established in 1985, the Betty Ford Alpine Gardens. boast four botanical gardens and is the highest botanic garden in the world. More than 600,000 visitors tour the gardens each year. Gerald R. Ford Amphitheatre This outdoor amphitheater, named after former President Gerald Ford, hosts a number of summer concerts and performances each year. Teva Mountain Games The nation's largest competition of outdoor athletic events, featuring events such as freestyle and extreme kayaking, paddlecross, bouldering, speed and dyno .climbing, mountain bike trials, criterion and cross country racing and mountain trail running. VaiLAmerica Days This is Vail's annual four-day event to celebrate the country's Independence .Day with a .series of attractions. Events and .attractions include live music, dancing and a parade.. Oktoberfest A two-weekend festival celebrating the Vail Valley's beer-making heritage. Held every September, the celebration includes a sampling of authentic beers,. Bavarian cuisine, and live. entertainment. HVS Convention, Sports £a Entertainment bRAFT Vail Con(erer2ce Center Business Plan Market Overview 2-16 Beaver Creek Culinary Festival An outdoor festival that includes culinary demonstrations and competitions; tastings from local restaurants, children s activities and entertainment. Area Businesses The density and character of the area's business base largely determines-.the level of demand for corporate events `such as training seminars, shareholder meetings, sales meetings, awards banquets,. and other similar events. Some of these events, particularly training seminars, shareholder meetings, .and employee appreciation events can attract out-of-town visitors and associated spending. As a leisure and resort community, Vail lacks a sizeable commercial presence. The closest major urban center with a large .commercial employment sector is Denver. Table 2-10 shows the largest.. employers in Denver. Table 2-10 , Largest Employers in Denver Employer # of Employees Quest Communications 61,000 First Data Corp. 29,000 Teletech Holdings Inc. 27,000. United GlobalCom Inc. 15,700 Mail-Well Inc. 13,150 Centura Health 12,377 Safeway. 12,000 HealthOne 9,285 United Airlines 7,700 Wells Fargo Bank West N.A. 6,000 Coors Brewing Co. 3,400 Exempla Healthcare 5,420 Kaiser Permanente 4,141 Echostar Communications Copr. 4,000 - Source: Denver Business Journal Among the largest employers in Denver are telecommunications firms and other. technology related businesses. Healthcare companies also employ a large number of Denver-area workers: The technology and healthcare sectors both generate significant levels of demand #or conference space. The healthcare sector is a leading source of continuing education events, which: provide a large portion of the existing group event demand in Vail. HVS Convention, Sports £a Entertainment DRAFT Vail Conference Center Business Plan Market Overoiecu 2-17 \, Employment Employment rates are often a good indicator of the overall strength of a market's economy. Table 2-11 shows labor market data for the Eagle and Summit Counties and the unemployment rates of the State and the US: Table 2-11 Labor Mar ket Data Colorado US Percent Year Lador Force Total Employment Total Unemployment Percent Unemployed Percent Unemployed Unemployed Eagle Summit Eagle Summit Eagle Summit Eagle .Summit County County County County County County County County 1994 16,316 10,567 15,723 10,262 593 305 3.6% 2.9% 4.2~° 6.1 ~° ; 1995 17,452 11,288 16,884 10,955 568 333 3.3% 3.8°k & 4.2~° 5.6% 1996 17,946 11,502 17,393 11,221 553 281 3.1% 2.4% 4.2% 5.4% 1997 .19,127 12,106 18,603 11,845 524 261 2.7% 2.2% 3.3~° 4.9% 1998 20,501 12,494 19,851. 12,164 650 330 3.2°~ 2.6% 3.8~° 4.5% 1999 20,778 12,780 20,257 12,500 521 280 2.5% 2.2% 2.9% 4.2% 2000- 21,299 13,188 20,840 12,920 459 268 2.2% 2.0% 2.8% 4.0% 2001 21,502 13,296 20,894 12,937 608 359 2.8% 2.7% 3.7% 4.6% 2002 21,455 13,274 20,507 12,697 948 .577 4.4% 4.3% 5.7% 5.8% .2003 21,917. 13,339 20,894 12,674 1,023 665 4.7°k 5.0% 5.7% 6.1°~ 2004 21,552 13,132 20,712 12,564 840 568 3.9% 4.3% 5.0% 5.5% Average 19,829 12,383 19,185 12,018 645 366 3.3% 3.0°~ 4.1% 5.1°~ 'Year-end estimates from year-to-date figures through October. Source: Bureau of Labor Statistics The unemployment rate in Eagle and Summit Counties has been consistently below both the State and National rates. Through October of 2004,: the estimated annual unemployment rate in Eagle County .has dropped by 0.8 percentage points to 3.9 percent. Colleges and The presence of institutions of higher learning in an area can generate Universities demand for educational-related seminars, conferences, and other events. The degree to which these .colleges and universities generate demand for a conference center depends upon the number, size, and character of the institutions and whether they. have their own conference/meeting facilities. Table 2-12 shows some Colorado colleges and universities, their locations, enrollments, and distance and drive time from Vail. HVS Convention, Syorts £~ Entertainment DRAFT Vail Conference Center Business Plan Market Overuiezu 2-18 \~ Table 2-12 Colleges and Universities Academic Institutions Location Enrollment Distance Drive Time Colorado Mountain College Glenwood Springs 3,400 61 1:01 Univ. of Colorado at Boulder Boulder 25,355 108 2106 .Colorado State University Fort Collins 22,684 157 2:39 Aims Community College Greeley 3,722 156 2:41. University of Northern Colorado Greeley 10,983 156 2:41 Western State College Colorado Gunnison 2,199 161 3:21 Univ. of Colorado at Colorado Springs Colorado Springs 4,953 164 2:41 Sources: City-Data.com and Mapquest.com Vail has no institutions of higher learning. All of the educational institutions ~' listed here are over an hour from the Vail market, with. most of them exceeding two hours in driving time from the Vail market. These institutions have somewhat moderate enrollment, with none over 30,000 students. Given the distance between Vail and these educational institutions it appears unlikely that many opportunities exist forpotential event demand in the form of educational conferences, seminars, and tradeshows in Vail. Air Service The County of Eagle owns Eagle County Airport and the Eagle County Air Terminal Corporation operates it. The airport is located approximately 45 minutes from Vail and 2.5 hours from Denver. The airport has five gates and one 8,000-foot runway. Table 2-13 shows a list of the commercial airlines servingthe Vail Airport and .the non-stop destinations they offer from Vail by season. HVS Convention, Sports F~ Entertainment DRAFT Vail Conference Center Business Plan Market Overview 2-1A Table 2-13 Airlines Serving Vail and Their Non-Stop Destinations and Number of Weekly Round-Trip Flights Airline Non-Stop Destinations (# of Weekly Round-Trip Flights) Ski Season United Denver (42) American Dallas (17) Chicago (8) Miami (1) Newark (7) New York (1) Los Angeles (5) Continental Newark (10) Houston (7) Delta Atlanta (7) Cincinnati (1) Northwest Minneapolis (7) US Airways :Philadelphia (1) Charlotte (1) Summer United Denver (14) American Dallas (7) Shoulder United Denver (14) Source: Eagle CountyAlrport Currently, the primary gaps in non-stop service are the Northwest and New England. The level of air service is drastically. different in the ski and non-ski seasons. Ski season air service includes 1.15 round-trip flights per week, while non-ski season service includes only 21 round-trip flights between Vail and Denver and seven between Vail and Dallas. Table 2-14 shows historical enplaned passengers and. aircraft departures from 2000 through August of 2003.. Table 2-14 Airport Utilization Data Year Enplanements % Change 2004' 169,179 -- 2003. 170,253 -0.5°k 2002 171,182 0.8% 2001 169,826 -10.0% 2000 188,745 8.9% ~ Through October 2004 Source: Eagle CounryAirport The Vail Airport level of utilization fell off in 2001, likely due to a combination of the slowing U.S. national economy and the September 11, 2001 terrorist attacks. Enplanements are up in 2004 and will equal approximately 186,500 for HVS Convention, Sports £d Entertainment DRAFT Vail Conference Center Business Pian Market Overuiezu 2-20 the. full year given historical seasonal trends. The enplaned passengers are highly seasonal, with large numbers in the ski season and .very limited numbers during the rest of the year, as shown in Figure 2-2. Figure 2-2 Eagle County Airport Average "Enplaned Passengers by Month-2000 Through August 2003 so 000 0 JCe a~ Jacl a~4 ~~.~ ~aa ,oo~ o~0c ~c ~~~a~ ~~r1 9Jy, ~~ ac ~ ~ a , `~ , ~ a PJ a ~ Q ~o 00 50Q Source: Eagle County Airport 51,682 50,000 41,080 42,668 40,000 30,000 20,000 17 352 10,000 7,772 1,151 2,337 4,243 4,153 2,092 1,548 1,539 ~^ The months of December through March account for 87 percent of .the total annual passengers who fly through Eagle .County Airport. Eagle County Airport also tracks total airlift capacity by fiscal year. Between fiscal year 1998- 99 and 2001-02 the average annual total airlift capacity, total number of seats on flights, was 269,203. Relative to other resort markets, this level of air service to is rather significant. However, the level of passengers and air service is lowest during the months when Vail is most interested in attracting group ..demand-the shoulder and summer periods. The Town of Vail and Vail Resorts are implementing programs designed to help increase the level of air service in the non-ski season. One method is to guarantee the airlines a certain minimum level of utilization in exchange for increased service. For instance, in fiscal year 2000-O1 Vail.Resorts guaranteed a minimum level of revenue for flights in and out of five different destinations. A similar program led to the addition of a summer flight to Dallas in 2003. The level of utilization on this flight exceeded expectations. and officials at Eagle County Airport anticipate that the level of summer ervice will continue to increase, Additional such programs. and efforts would enhance the HVS Convention, Sports & Entertainment DRAFT Vail Conference Center Business Plan Market Overview 2-21 accessibility of .Vail in the non-ski seasons. and help provide .:additional transportation options for potential conference center events. ' Lost Business The Vail Valley Chamber & Tourism Bureau (VVCTB) tracks a list of potential events that inquired about coming to Vail but were unable to due to a lack of ~ adequate facilities. Table 2-15 shows the number of groups, by month. Table 2-15 Number of Potential Events, by Month ~~ 30 29 25 21 20 16 5 13 1 13 11 10 9 6 6 6 5 5 0 0 act act N•c ~~ a~ Jce ~~r1 Jyti ~~ mac ~a~ aco ~~ ~a PQ ~ ~ JA a~ Iwo eco co'°o~ ~ ~a P aQ~ p o, g ? O Souroe: Vail Valley Chamber & Tourism Bureau s' Note that the volume of lost business in the Vail market peaks in the summer and fall months -the traditional off-peak tourism season in Vail. This seasonality reflects. the WCTB's focus on attracting events in the periods outside the busy ski season. Other contributing factors include the price- sensitivity of groups relative to the high ski season room rates, the high overall volume of group events that occur in the summer and fall, and the desire to attend a well known resort destination at a time when they will not be competing with large. crowds for lodging, restaurants, and recreational activities. HVS analyzed the WCTB data to determine the various types of groups that. inquired about hosting a meeting in Vail HVS broke the groups into .four categories: Corporate, Association, Medical and Other. Figure 2-3 shows the distribution of events by type for both national and state events. HVS Convention, Sports £d Entertainment ' DRAFT Vail Conference Center Business Plan Market Overviezu 2-22 Figure 2-3 Breakout of Event Types for National and State Events National Other 6% Association Medical 31% 16% Corporate 47% Source: Vail Valley Chamber & Tourism Bureau State Association 39% Corporate 4% .Other 38°~ Medical 19% Source: Vail Valley Chamber 8 Tourism Bureau Corporate events make up the largest share of potential national events, accounting for 47 percent of the national groups that expressed- interest. in Vail. Among state events, corporate groups accounted for far less of the total, at 4 percent. The largest share ofpotential groups among the stateevents was association events, which represents 39 percent of the total. Medical groups made up 19 percent. Other, which includes smaller events such as weddings, reunions and fraternal social events, amounted to 38 percent of the state groups expressing interest in Vail. Among the four categories of groups, national-scale events accounted for at least 70 percent of events with the exception of the other category. The other category is comprised of primarily state events at 67 percent of the. total. Attendees The VVCTB also. compiles data on the number of attendees at these potential events for Vail. These events accounted for more. than 101,000 attendees, an average of 763 attendees per event. National events account for 82 percent of the total attendees to events that inquired as to the possibility of hosting. a meeting in Vail: The high level of interest among National events is indicative of the strength of the reputation of Vail as a resort destination. Figure-2-4 shows the distribution of events by size category in 500 attendee increments. HVS Convention, Sports f~ Entertainment DRAFT Vail Conference Center Business Plan Market Overvieco2-23 ~~ Figure 2-4 Number of Lost Events by Category of Attendance ~o ~4 so so 42 40 30 20 10 5 4 0 < 500 500to 999 1,000 W 1,499 1,500 to 2,000 > 2,000 Sources: Vail Valley Chambar8Tnurism Bureau $~ Among the lost events in the VVCTB data,. 65 percent had between 500 and 2,000 attendees. It is unlikely that the majority. of the lost room nights in the under. 500 category were lost because of the fact that there was not a facility larger enough for them. The VVCTB does not track the reason(s) for losing individual events so there is no way to determine definitively why these lost events elected to go elsewhere. In the case of those with 500 or fewer attendees, it is unlikely that facility size was the primary factor. However, it is likely that many of these events were lost because there either wasn't a single facility available with a sufficient number of breakout rooms or because of date conflicts. Room .Nights The VVCTB database does not include estimates of room nights per. event. HVS estimated'the number of room nights for the events in the lost business data by assuming that 90 percent of the attendees stay in lodging units and that these lodgers stay in the market for one night less than the number of days in the event. The intent of this room night estimate is to get a general sense of the overall volume of room nights and to determine whether the lost events in the 500. to 2,000 attendee range are longer on average, and thus will generate .more. room nights per attendee, than smaller events. Figure 2-5 shows the distribution of room .nights by the same attendance categories as the pervious chart on number of events. HVS Convention, Sports fa Entertainment DRAFT Vail Conference Center Business Plan Market Overview 2-24 Figure.2-5 Number of Lost Room Nights by Category of Attendance 160,000 , 140,000 133,565 120,000 100,000. 8(1,000 ~'~0 56,450 9 49,425:. 40,000 20,000 19,275 0 < 500 500 to 999 1,000 to 1,499 1,500 to 2,000 > 2,000 Sources: Vail Valley Chamber & Tourism Bureau Among the total of 309,404 lost room nights 209,290, or 68 percent of the overall amount come from events of between 500 and 2,000 attendees, indicating that. the average event length is slightly longer for. events in this size range than the overall average. Implications of the The review of Vail's tourist appeal and supporting visitor infrastructure, Market Overview including its hotel supply and year-round supply of attractions, reveals highly , positive attributes in respect to the demand potential for conference center events. Vail has a significant number of visitor attractions and amenities that lend themselves to attracting and bringing back out-of-town event attendees. Vail also has a significant number of full-service hotel and condominium .properties for a community of its size, making it attractive. to groups seeking to host large conferences. The Vail economy, as it is largely based upon: tourism, lacks a traditional corporate presence. However, its proximity to Denver, the State's economic hub, helps support demand for local and state corporate events. The national reputation and appeal of Vail as a premiere resort destination makes it attractive to national association and corporate events. This appeal extends not only to the ski season, but also to the summer. The level. of air service available in the overall area is significant when one considers the options at both Eagle County Airport and DIA. However, the low level of air service to Eagle County Airport in the non-ski seasons and thee. distance of .Vail from DIA present a challenge in respect to transportation. Comparisons. to other mountain resorts and their relative. access to FfVS Cgnvention, Sports £~ Entertainment DRAFT Vail Conference Center Business Plan Market Ovennety 2-25 ~` .transportation are important for evaluating Van's relative demand potential. In addition, surveys and focus groups will shed additional light on the perceptions of event planners regarding Vail's accessibility and the extent to which the Town can augment both its real and perceived accessibility. Review of lost business data reveals there is a significant volume of events that have considered coming to Vail, but Have elected to go elsewhere. The lack of a larger event facility and limitations in the overall supply of function space plays a leading role in the inability of Vail to attract such events, given the average number of attendees at 763 is much. larger than any existing conference faality can accommodate. HVS Convention, Syorts.& Entertainment DRAFT Vail Convention Center Feasibility Study Industry Trends 3-1 \~ 3. Convention /Meeting Industry Trends The purpose. of .this .section is to describe the convention and meeting industry and analyze trends in the number. of events, attendance, and: supply. of meeting andexposition facilities. The definitions provided herein will aid inunderstanding the market analysis, and the overview of industry trends will aid in assessing the demand potential for a conference center in Vail. The section concludes with an assessment of the particular .implications of these trends for the development of a new conference center in Vail. Facility Characteristics In order to properly accommodate a wide range of events, a conference center. facility requires meeting space -divided into both general session space .and meeting /breakout spaces -capable of supporting conferences and meetings. Ideally, conference centers also provide pre-function space suitable fore attendee registration, kitchen facilities for event catering and presentation equipment suitable. for both large group and breakout sessions. The main meeting space should be divisible in order to support simultaneous events. • Main Ballroom /Exhibit space - in conference centers the main ballroom space typically serves as both a large banquet area and an area for exhibits. In order to serve .both roles the space requires high ceilings and clear spans with limited numbers of support columns in the room. The quality .level of this space must be sufficient to be appropriate for formal dinners and social functions, but. also needs to avoid materials or fixtures that are easily damaged by the level of utilization associated with exhibits. The space should have durable carpeting and appear like a true ballroom rather than an exhibit hall. The space should be divisible with soundproof movable walls.. This space. does not need to have direct access to loading docks, but such access should be convenient to accommodate larger exhibits, with high doors that allow easy loading. Sound attenuation and - sophisticated sound systems are also -important features of a ballroom. Close proximity to kitchen facilities is vital for the .efficient delivery of food service. Utilities for exhibition booths are usually provided from boxes in the .floor or dropped from the .ceilings.. Utilities- typically HVS Convention, Sports. Fi Entertainment DRAFT Vail Convention Center Feasibility Study Industry Trends 3-2 include electricity, .telecommunications hookups, water, and sometimes, compressed air and natural gas. • Meeting or breakout rooms -intended for small groups, individual Types of Meetings and Facility. Needs .rooms can vary in size from 500 to 2,000 or more square feet. They are .often divisible into smaller units to provide maximum flexibility. Meeting rooms are characteristically carpeted and have a high level of finish. Most meeting spaces have flat floors and no fixed seating so that they can be configured for an assortment of meeting styles. Meeting rooms offer variable lighting. setups, sound attenuation, and in newer facilities, access to advanced telecommunications technology. Some meeting rooms are designed exclusively for presentations and r' may have fixed tiered theater .style seating and video projection capabilities. Boardrooms are elegant. meeting rooms with the permanent installation of a conference table. • Pre-function space -space located just outside of or adjacent to the event space. Pre-function areas support the circulation of pedestrian traffic through the facility, serve as registration areas, and are essential to the control of access to event spaces. Terraces or other signature function spaces can supplement the typicallobby areas. The meetings industry includes several types of events, from large trade and exhibition events to conferences and corporate meetings. Each type of event has unique facility needs. Certain events require large amounts of contiguous space and others require several smaller meeting rooms. A single event may use different types of space, including exhibit halls, banquet rooms, breakout meeting rooms, and theater seating. Event .facilities need. to offer the proportions of different types of space that are appropriate for their markets. Table 3-1 summarizes the .key attributes of various types of meetings, including facility requirements. HVS Convention, Sports £~ Entertainment DRAFT Vail Convention Center Feasibility Study Industry Trends 3 3 Table 3-1 ..Event Types and Characteristics Event Type Primary Purpose Major Facility Typical Facility Used Requirements Social, Military, Educational, Meeting and/or banquet Religious, Fraternal, & Civic & social Civic center or auditorium Ethnic space Training and Hotels; Conference Centers; Corporate & Other Meetings information Meeting space (minimal) Convention Center Meeting exchange Rooms Information Meeting space and banquet Motets; Conference Centers; Conferences Convention Center Meeting exchange space Rooms Conventions Information Meeting space and banquet Motels; Conference Centers; exchange space Convention Centers Conventions with Exhibits Information. Exhibition, breakout meeting Convention Centers exchange and sales space, and banquet space Exhibition and breakout Convention Centers; Tradeshows Sates meeting space for some Trademarts; Fairgrounds events Consumer Shows Advertising and Exhibition Space Convention Centers;. sales Trademarts; Fairgrounds Combination Shows• Advertising and Exhibition Space Convention Centers; sales Trademarts; Fairgrounds - Information Stage, seating, breakout Convention Centers; Assemblies exchange meeting rooms Arenas; Stadiums; Fairgrounds Stage, seating, lighting, Arenas; Stadiums; Theaters; Concerts .and Entertainment Entertainment concession areas, ticket Auditoriums; booths, lobby Convention/Civic Centers A tradeshow with private access is /ollowed by a consumer show with public access Source: HVS Internaticnal The following is a description of these various types of events: Social, Military, Educational, Religious, Fraternal, and Ethnic .Events = Referred to as "SMERFE" events, these events include weddings, fund-raising events, educational seminars; religious gatherings,.. parties, and other community events that have a civic, social, or entertainment purpose. These events typically require a ballroom or multipurpose space where .food and beverage services and, in some cases, entertainment can be provided. SMERFE events are the most common type of events in most civic centers and. HVS Convention, Sports F~ Entertainment DRAFT Vail Convention Center Feasibility Study Indaistry Trends 3-4 locally .oriented conference facilities. Generally, SMERFE groups are highly price sensitive with respect to hotel room and space rental rates. Corporate and Other Meetings -Corporate meetings include- training seminars, professional and technical conferences, sales meetings, shareholder events, product introductions; and management meetings. Attendance ranges up to 100, with an average of fewer than 50. These meetings are held in hotels with meeting space, conference centers, and sometimes in the meeting room blocks of larger convention centers. Corporate meetings usually require meeting rooms or ballroom space, but not exhibition space. Larger functions are sometimes held. at convention centers. Corporate meeting planners and attendees prefer facilities with business amenities and a high-quality, professional appearance. Conventions -Associations, professional groups, and other membership organizations hold conventions, with attendance ranging from 300 to 30,000 attendees, the average of which is approximately 800-900. The larger of these meetings typically take place in .convention .centers with exhibit halls of 100,000 square feet or more. Smaller events are held in hotels and conference centers. Conventions usually consist of a number of concurrent meetings, with a few general sessions. Facility needs include assembly space for general sessions, banquet facilities, .and numerous breakout-meeting rooms. .Approximately two-thirds of conventions use exhibit space for. displays and booths. Conferences -Conferences are events held by associations, professional groups, and other- membership organizations. These events do not always require exhibit space, and are otherwise similar to conventions. They require meeting space for general sessions, food service areas, and breakout meeting rooms. Hotels and conference centers host the majority of conferences. Conventions and conferences generate a greater amount of new spending in the area economy than consumer shows and local meetings because a large percentage of attendees originate from outside the local area, typically stay several nights in the host city, and spend money on accommodations, food, retail goods,. transportation, and entertainment. Tradeshows -Tradeshows provide a means. for wholesalers and retailers.#o transact business with industry buyers. Trade associations, independent show organizers, and other companies sponsor and produce. trade shows. Similar to conventions, tradeshows require exhibit halls and are generally restricted to HVS Convention, Sports & Entertainment DRAFT Vail Convention Center Feasibility Study Industry Trends 3-5 convention centers, as opposed to hotel or conference center event spaces. Like conventions, tradeshows offer a forum for exchanging industry ideas.. Tradeshows are more product and sales-oriented than conventions. They are exhibit-intensive, and exhibitors prefer column-free, single-story, open-space' facilities. Exhibitors construct temporary custom booths for product display. Tradeshows typically attract a large number of attendees :who originate from outside the host city, but their length of stay is shorter and .their average spending lower- than convention attendees. Many tradeshows are increasing the amount of meetings and other breakout sessions they conduct in order to augment the educational component of their events, attract more attendees, and keep them in the host city for longer periods of time. Consumer Shows -Consumer shows are public,. ticketed events featuring exhibitions of merchandise for sale or display. Consumer shows provide a means of product distribution and advertising. Some, such as auto and boat shows, have recreational and entertainment components as well. Consumer - shows range in size from small local, specialized shows with a few hundred attendees to large shows with many thousands of attendees. The larger consumer shows may occur in convention centers, shopping malls, fairgrounds, and other public-assembly facilities with large. exhibition areas. Mast attendees. are local residents, although. a few large consumer shows have a regional or national draw. Exhibitors often come from out of town and may follow a series of events occurring in different venues. Site selection considerations for consumer shows include the size and income of the local population, availability of facilities, and the number of competitive shows in .the market. Many consumershows are beginning to incorporate educational . seminars, and the availability of meeting space is becoming increasingly important for these events. Assemblies -Assembly events usually involve a ceremony, speech, or other similar activity that attracts a crowd of spectators. These .events attract anywhere .from 200 to 50,000 people or .more and many require. arena or stadium seating. Assemblies stem from many of the same sources as SMERFE events, but .are less likely to involve a food and beverage element. These events do not usually require large amounts of exhibit and meeting-room. space.. HVS Convention, Sport: & Entertai~tment DRAFT Vail Convention Center Feasibility Study ~ Industry Trends 3-6 \~ Industry publications generally categorize conference centers based on the market segment they target.. Four specific types of conference centers are most common. The competitive environment is dominated by four types of conference centers: executive, corporate, educational, and resort. Four Main Types of Conference Centers Given the attractiveness of Vail to event planners as both a resort destination and ideal for corporate /executive meetings, HVS positions the proposed Vail Conference- Center as a combination executive and resort conference center.. Executive Conference Centers Executive conference centers are designed to meet the needs of .mid- to upper-level executive and managerial meetings. These functions may revolve. around strategic planning, forecasting and budgeting, sales. and marketing, estate-of-the-corporation reports, new product introductions, and educational and training seminars. Demand generators. include corporations and. (less frequently) associations and institutions. Executive conference centers are designed to minimize external noise, congestion, the lure of off-site activities, and similar distractions. Large executive conference centers are often characterized by a "think tank" atmosphere and feature full audiovisual capabilities, recreational alternatives, and first-class amenities. They can also offer flexible space that is suitable for a broad range of corporate, association, government, and social uses. Many smaller facilities cultivate a residential ambiance and resemble mansions,. retreats, or park-like estates. Corporate Conference Centers Corporate conference centers are similar to executive conference centers; their distinguishing feature is that they are owned and sometimes operated by a specific corporation and are often located on or near grounds of a large company facility. Many corporations have made their facilities available to outside users during periods of low. demand. A recent trend has. been the conversion of in-house conference centers to public facilities that. cater specifically to the owning company.. Corporate conference centers generally give priority to the affiliated company when booking guestrooms and function. space, and outside users are treated as secondary business. Efficient accommodation of the needs of the affiliated company is often the primary concern of these centers, rather than. profitability. HVS Convention, Sports £a Entertainment DRAFT Vail Convention Center Feasibility Study Industry Trends 3-7 Educational Conference Centers Educational and non-profit .conference centers are similar to corporate centers, but are owned and sponsored by colleges, universities, or medical centers. Educational conference centers are often located on a college, university, or hospital campus. Because the primary goal of these facilities is to serve the educational or institutional organization that owns them, location considerations can be led by .convenience for the primary user group, rather than potential outside users. Although these facilities. .sometimes accommodate outside business, they are generally most .suitable for.. educational and institutional uses such as lectures, classes, trainingseminars, banquets, and receptions. Resort Conference Centers Resort conference centers provide all of the facilities and services available at executive conference centers, but place a greater emphasis on recreational activities in a resort setting. Although small corporate meetings are .the main source of business, recreational activities are regularly .scheduled, integral. components of the program. In many cases, resort conference centers have an advantage over executive conference centers... These properties are flexible enough to accommodate .both resort guests and more serious meeting attendees. Many meeting planners welcome the opportunity to provide breaks during intensive meetings by scheduling golf tournaments or other leisure activities. Some companies also use resort conference. centers when offering incentive trips for employees and their spouses. Number of Meetings There are more than one million meetings booked in the. United States each. year by corporations, associations, and, convention planners. Figure 3-1 shows the total number of meetings held annually in these three specific meeting segments throughout the past 14 years. HVS Convention, Syorts £a Entertainment DRAFT Vail Convention CenterFeasiMlity Study Industry Trends 3-8 .Figure 3-1 Total Number of Meetings (in Thousands] zoo o -r- -, 1989 1991 1993 1995 1997 1999 2001 2003 BCorporateMeetings OAssociationMeetings ^Conventions Source: Meetings & Conventions For more than a decade there have been approximately. one million meetings and conventions annually in the United States. The great majority. of these events are corporate meetings. Associations also generate a large number of meetings. For the past 14 years there have been between 10,200 and 12,600 conventions held annually in this country as well. The total number of meetings and conventions has stayed in a somewhat narrow range during the course. of the past 14 years. The number of meetings in 2003 represents a slight increase over 2001. Attendance Trends Approximately 80 million people participate in meetings and conventions each year in the United States. Figure 3-2 shows total attendance figures for the meeting industry during the past 14 years. HVS Convention, Sports £~ Entertainment DRAFT Vaii Convention Center Feasibility Study Industry Trends 3-9 ~~ .Figure 3-2 Attendance (in Millions) 100 90 aas 77.4 79.5 78.9 79.9 80 70 t_;; 60 t5t t-' as.u t;~ 50 40 30 ~ ,_ r[tz a~ a5 u 20 10 0 T- - 1989 1991 .1993 1995 ..1997-~ 1999 2001 2003 Corporate Meetings ^Association Meetings ^Conventons Source: Meetings & Conventions Total attendance in the meetings industry declined from its peak level in the late 1980s. This downward trend appears to be leveling off or reversing. given a slight increase in 2001 and a larger increase in 2003. Table 3-2 shows the average meeting size for these three market segments over the past 14 years. The compound annual growth rate (CAGR) for each meeting category shows the rate of change in average attendance over each two-year period on an annual basis. HVS Convention, Sports £~ Entertainment DRAFT Vail Convention Center Fensibility Study Industry Trends 3-10 Stand Alone Conference Centers Table 3-2 Average Meeting Size by Event Type Type of Event /Growth 1989 1991 1993 1995 1997 1999 2001 2003 Conventions Average Attendance 1,079 843 907 1,193 1,035 1,060 1,059 1,016 CAGR -- -11.6% 3.7% 14.7% -6.8°~ 1.2% 0.0% -2.0% Associations Average Attendance 116 .105. 91 86 94 90 89 102 CAGR -- -4.9°~ -7.2% -2.6% 4.8~° -2.6% 0.0% 6.5% Corporate Meetings .Average Attendance 67 62 69 62 64 61 61 63 CAGR -- -4.4% 5.7% -5.2% 1.5% -2.1 % 0.0~° 1.9°/° ~; ' Compound annual growth rate Source: Meetings and Conventions, 2004 As attendance has declined, so has the average meeting size over the past 14 years. Conventions drew an average of 1,016 people in 2003, compared to an average attendance of 1,079 in 1989. This figure is cyclical and can fluctuate with other factors in an economic cycle. It peaked in 1995 when the average convention had 1,193 people in attendance. Association meetings drew an average of 102 people in 2003, compared to 116 in 1989. Attendance at corporate meetings is also somewhat lower than it was. in 1989 when the average meeting had 67 people. In 2003 the average corporate meeting had 63 people. These average attendance figures, despite minor fluctuations, have been relatively stable during the past decade. Data from 2003 shows slight increases in average in association and corporate events, but a slight decline in average convention attendance. HVS summarized various industry data on the size and character of conference center demand, event type, and event length as well as summary. income and expense statements far stand alone conference centers-those that do not have attached lodging rooms. Horwath Horizon Hospitality Advisors compiled and analyzed data on .conference centers throughout North America for their "Compass Report North America 2002:' The annual report tracks trends. in conference center event bookings, demand, event. types and revenues and expenses, and the figures. presented here are based upon operational and financial data from. 2001. HVS Convention, Sports £a Entertainment DRAFT Vail Convention Center Feasibility Study Industry Trends 3-11 Among stand-alone conference centers, defined in the report as non- residential centers, corporate events represented the single largest segment of demand, followed by university and college events. Figure. 3-3 presents the segmentation of conference center event bookings by demand. segment. Figure 3-3 Non-Residential Conference Center Event Bookings by Demand Segment Among the uses of conference .centers included in the Compass Report, training sessions and conferences were reported as the most frequent type. of use. Figure 3-4 shows the various types of events held in conference centers. HVS Convention, Sports f~ Entertainment DRAFT Vail Convention Center Feasibility Study Industry Trends 3-12 Figure 3-4 Conference Center Events 35% 30% 30% 25% ° 20% 20% 15% 15% 10% 5% 5% 5% 2% 0% Training Conferences Seminars Tradeshows Retreats Board Other Meetings Source: The Compass Report Training. sessions, conferences and seminars are consistent with corporate- and educational institution use of conference centers. Tradeshows, which account for five percent of the events at conference centers included in the .Compass Report, are more commonly associated with convention centers as those facilities feature more exhibition space than conference centers. Nearly 50 percent of the events booked in conference centers surveyed in the Compass report were approximately one day in length. Nearly 35 percent of the events lasted less than one full day. Figure 3-5 shows the event lengths of the various events booked in the conference centers studied in the .Compass Report. HVS Convention, Sports £a Entertainment DRAFT Vail Convention Center Feasibility Study Industry Trends 3-13 - ) Figure 3-5 Conference Center Event length The Compass Report also amassed information on the finances of the conference centers they .studied. Overall, conference .centers averaged approximately $3.9 million in expenses in 2001,. with $2.1` million of that amount in the form of fixed expenses. Variable expenses amounted to approximately $1.4 million and fixed charges and reserves came to $400,000. Table 3-3 shows a summary of conference center revenues and expenses. I HVS Convention, Syorts £~ Entertainment DRAFT Vail Convention Center Feasibility Study ~~ Industry Trends 3-14 Table 3-3 Summary of Conference Center Revenues and'Expenses Revenue /Expense D aily $ $ Per SF % of per Sales* Revenue Food & Beverage $24.63 $46.61 59.1% Confrence Services Equipment 2.52 4.76 6.0% Other 12.97 24.54 31.1% Total Conference Services $15.49 $29.30 37.1% Other 1.55 2.94 3.7% Total Revenues $41.67 $78.85 99.9% Expenses Footl & Beverage Total Cost of Sales $9.38 $17.76 38.1°~ Payroll & Benefits 4.10 7.75 .16.6% Other 2.10 3.99 8.6% Total food & Beverage Expenses $15.58 $29.50 63.3% Conference Services Payroll& Benefits 5.33 10.09. 34.4% Conference. Equipment 0.81 1.54 5.3% Other 1.20 2.26 7.7% Total Conference Services Expenses $7.34 $13.89. 47.4% Total Departmental Expenses $22.92 $43.39 55.2% Income Before Undistributed Operating Expenses $18.75 $35.46 44.8% Undistributed Operating Expenses Administrative & General. $5.85 $11.07 14.0° Marketing Expenses 2.57 4.87 6.2% Energy Expenses 1.08 .2.05 2.6% Property Operations and Maintenance 2.33 4.41 5.6% Other Y.08 2.03 2.6% TotalUndistributed Operating Expenses $12.91 $24.43 31.0% income Before Fixetl Charges 5.78 10.93. 13.9% Fixed Charges 4.45 8.43 10.7% Reserve for Replacement of Fixed Assets 0.69 1.29 1.6% Total Expenses $40.97 $77.54 98..3% Net Income Before Income Taxes $0.64 $1.21 1.5°~ 'Oepartmentexpenses are presented as a percentage of related sales . All other re v enue and expense items are stated as percentages p/total sates. Source: The Compass Report HVS Convention, Syorts £~ Entertainment DRAFT Vail Convention Center Feasibility Study Industry Trends 3-15 The preceding financial operating statement includes only the direct revenues and expenses of a selected set of conference centers. Additional costs. such as non-facility destination marketing, transportation expenses, and others that municipal facilities may carry are not included. Event Characteristics Various industry organizations track data on different types of events. The International Association of Convention & Visitor Bureaus ("IACVB") conducts research on the distribution of events by sponsoring organization. Figure 3-6 shows the distribution of events identified by the IACVB. Figure 3-6 Distribution of Convention Events by Type of Sponsoring Organization ~~ Other SMERFE* 24% Exposition Tredeshow Medical 5% aoi 3ovemmental 11% Professional & Trade 45% * Social, military, religious, fraternal, and ethnic Source: IACVB Spending Survey Trade and professional events account .for the largest share of events. The other category includes club and corporate events. Tradeshow .Week annually publishes Tradeshow Week' Databook, containing" information on conventions, tradeshows, and consumer shows that require exhibit space. Figure 3-7 shows the distribution of events by the amount of exhibit space they require. HVS Convention, Syorts £~ Entertainment DRAFT Vail Convention Center Feasibility Study , Industry Trends 3-16 Figure 3-7 Distribution of Events by Amount of Required Exhibit Space 50% 45% 40% 35% 30% 25% - 20% 15% 10% 5% 0% 0 to 99,999 100,000 to 200,000 to 300,000 to 400,000 to 500,000 to 600,000 to 700,000 + 199,999 299,999 399,999 499,999 599,999 699,999 Source: TradestawWeek Data Book 2003 Among the events Tradeshow Week tracks, 82 percent use less than. 200,000 square feet of exhibit space. This data focuses on events thatare somewhat urger than the prime candidates for a conference center, but reflects the fact that the majority of events are towards the smaller end of the spectrum. -Event Planner Location Figure 3-8 shows the criteria that convention, association, and meeting event Criteria planners consider as the most important in selecting a destination for their events. FIVS Convention, Sports F~ Entertainment DRAFT Vail Convention Center Feasibility Study Industry Trends 3-17 ~1 Figure 3-8 Share of Event Planners Citing Factors as "Very Important", National vs. Regional The survey asked respondents whether various site selection criteria .were very important. The answers of national /international and regional / .state. / local event planners were very similar. The quality of meeting facilifies, service, affordability, and hotel room supply are key criteriafor both groups. Tradeshow Trends Table 3-4 shows the historical growth of exhibition events, attendees, exhibiting companies, and net square feet (NSF) used by exhibitors. Tradeshow Week data focuses on larger .consumer shows, .trade shows, and conventions in the U.S. and Canada with exhibitions that typically occur in convention and exhibition centers. HVS Convention, Sports £~ Entertainment DRAFT Vail Convention Center FeasiMlity Study Industry Trends 3-18 Table 3-4 Historical Annual Exhibition Growth -Percent Change Exhibiting x Year Exhibition Eventsi Attendees Companies NSF Used 1990 15.0% 4.3% 4.0% 3.6~° 199T 2.7% 0.6% 0.7% -0.6% 1992 4.6% 1.5% 1.7% 0.5% 1993 2.6% 4.9% 4.7% 5.1% 1994 3.5% 5.7% 4.5% 4.6% 1995 0.0% 3.9% 4.3% 6.2% 1996 2.0% 4.0% 3.6% 5.0% .1997 -1.5% 6.4°k 5.1 % 6.8~° 1998 -0:9% 2.3°~ 3.9% 5.8% 1999 4.8% 3.9°~ 2.6% 3.9% 2000 3.0% 4.0% 2.6% 3.1 % .2001 -6.6% -5.8% -2.7°~ -1.5% 2002 0.2% -2.2% -1.8% -5.3% 2003. 5.4% 4.2% 0.5% -0.4% Average 2.5% 2.7% 2.4% 2,6% Exhibition events with more than 30,000 square feet of exhibit space: ZNSF is the net square feet of exhibitspace actualty rented by exhibitors. Source: Tradeshow Week Over the past decade, average growth in demand for the events in the Tradeshow Week database has outpaced the average growth in supply. This. .growth reflects the expansion in the overall economy, but it also reflects an increasing. utilization of exhibitions as a means of marketing and sales.. Various independent surveys of major businesses rank exhibitions as the second or third most common. way companies spend their advertising and marketing dollars. However, the recent slowdown. in the US economy seems. to be having an adverse effect on the supply. of tradeshows, although hard data to support this decline. is .difficult to find. Economic cycles notwithstanding, the' overall long-term trend of growth suggests that the supply of events will recover along with an overall economic recovery. Conference centers can sometimes house smaller tradeshows, but such events typically prefer to use convention centers with dedicated exhibit halls. However, the data is relevant to .conference center demand in .that it underscores the demand potential for exhibits at corporate and association conferences and the need for a multi-purpose main ballroom /exhibit space that can accommodate trade booths as well as banquets. HVS Convention, Sports f~ Entertainment DRAFT Vail Convention Center Feasibility Study Industry Trends 3-19 ~~ Use of Technology in Overall, the meetings and conferences industry uses a moderate amount. of Meeting Facilities technology during events, typically computers with Internet access and audiovisual presentation equipment. The meeting and conference industry lags behind other leading industries in terms of incorporating new technologies. The majority of conventions and conferences'still require only. basic technological amenities like a laptop or video projectors, items that most facilities possess. Multi-media, whiteboards and videoconferencing are the three most commonly used technologies, as shown in Figure 3-9. Figure 3-9 Technology Used to Deliver Meeting Content The variety of methods used for delivering meeting content indicates the need for conference center facilities o be as flexible as possible in their configurations and to have design elements that enable the use of a .wide variety of technologies. The number of different methods suggests that portable elements or easily adaptable elements are preferred to permanent, built-in elements. Implications of a In the article .titled "The Ground Has Shifted" in the October 1, 2001, issue of Continuing Global Meeting News, Equation Research posted the results of a survey of 722 meeting Conflict on the buyers one week after the September: 11th terrorist attacks on New York City Meetings/Conventions and. Washington D.C. This atrocity had an instant impact on the meetings ..Industry industry and the.. willingness of people to travel to events. The survey revealed two trends that may persist: more electronic conferencing via satellite broadcasting and. the web, and an increase in regional meetings. The attacks' immediate effects on the convention and meeting .industry played out differently in various types of markets. In larger national markets FiVS Convention, Syorts & Entertainment DRAFT Vail Convention Center Feasibility Study Industry Trends 3-20 that attract attendees from throughout the country and the world, the weeks immediately .following the attacks brought dramatic reductions in event activity and attendance at events that were. held. The interruption in air service forced the postponement of some national and. international events. Hotel occupancies, particularly in properties that have a significant amount of group business, were extremely low. In second-tier markets that are oriented more towards state groups, the - effects were not as pronounced. Attendees to many state events were able to arrange alternative transportation plans, as evidenced by the increase in car rentals, train and bus ridership during this period. The Meeting News survey asked event professionals whether the terrorist attacks had influenced them to cancel meetings. Figure 3-10 shows the share of responses among four answers the survey provides. Figure 3-10 Influence of Attacks on Events One meeting One meeting cancelled / no cancelled / more expected expects future cancellations cancellations ° 36 /o µl~~ ' ;~ 18% ic: ~:~i ~- -"~°~- °_~~ No cancelled No cancelled _ meetings / meetings / no expects future expected cancellations cancellations ~ ~° 39% Source: Meeting News Among these event professionals, 54 percent .indicated that they -had cancelled at least one of .their events as a result of the terrorist attacks. However, almost 75 percent of the event planners indicated that they. did not expect any future event cancellations. When asked whether their organization will be scheduling .fewer meetings as a result of the attacks, 29 percent indicated that they expected a decrease in events. In addition, 54 percent of the responding meeting professionals indicated that they expected attendance at their meetings to decrease as a result of the attacks. HVS Convention, Sports £j EntertainmenE DRAFT Vail Convention Center Feasibilihj Study Industry Trends 3-21 \~ The survey went on to ask respondents who had cancelled events the reasons for these cancellations. Figure 3-11 shows the. most frequently mentioned reasons for meeting cancellations. Respondents cited more than one reason when applicable. Figure 3-11 Reasons for Meeting Cancellations so % 45 46% 40% 40% 35 30 % 25 20% 20% a 15% 13% 13% 10% ~ 5% 0% Organization's Atterxiees Logistical. Organization's Attendees Changein Concern for Reluctant to Issues' Concern for Reluctant to Business Plans Safety Meet or Travel Safety' Meet or Travel' 'Event was scheduled in New York or Washington D.C. Source: MeeSng News Concerns over travel safety were the most prevalent factor in the cancellation of events in the days following the attacks. If the event was planned to take place in New York City or Washington, D.C., 13 percent of the total number of responses from event professionals who cancelled events .cited the sponsoring organization s concern for attendee safety. Another 13 percent cited attendee reluctance to travel as a reason. for cancellations. However, such safety concerns were not limited to events .scheduled for New York and Washington D.C. Of the responses from those who .cancelled events occurring in other locations, 46 percent cited the organization's concern for attendee safety and 40 percent cited attendee reluctance to travel,. indicating that the events of September 11 were the direct cause of a large majority of event cancellations. An independently produced survey of the meeting industry by the association' Meeting. Professionals International .cited in the discussion produced statistics similar to Meeting News: ^ 24 percent made no meeting cancellations, HVS Convention, Sports £2 Entertainment ~ DRAFT Vai[ Convention Center Feasibility Study Industry Trends 3-22 \~ ^ 49 percent expected to cancel some scheduled programs (of these, 19 percent cited safety issues and 41 percent mentioned financial issues as reasons for cancellation), ^ 39 percent predicted up to 20 percent decrease in future meetings (Fourth Quarter 2001 and First Quarter 2002), .and ^ 24 percent expect no decreases. One of the primary accelerating trends mentioned in the Meeting News survey is the potential increase in alternatives to convention and meeting events, such as video conferencing and other related technologies. Figure 3-12 shows meeting professionals' views concerning whether organizations will increase their use of electronic meeting methods such as video conferencing and web. conferencing. Figure 3-12 Organizations' Future Use of Electronic Meeting Methods Increase Stay about the significantly same o i ~~ "~~ Increase marginally 2I% Increase somewhat 42% Source: Meeting News A majority of respondents, 58 percent, indicated that as a result of the terrorist .attacks they believed that their organization would increase the use of electronic meeting methods. The survey interprets the consensus from interviews with selected meeting professionals to be that the terrorist attacks will only accelerate existing technological trends, as opposed to causing fundamental changes in the industry or these trends. The use of .video and audio conferencing boosted .dramatically .after. the September 11"' attacks, with various sources estimating an increase between 10 to 50 percent. Historically, a similar spike in video conferencing usage HVS Convention, Sports F~ Entertainment DRAFT Vail Convention Center Feasibility Study Industry Trends 3-23 occurred during the Persian Gulf War in 1991 that did not have a permanent effect on the attendance at meetings and conventions. Meeting and convention industry specialists have speculated upon another post-attack phenomenon - an increase in regional meetings. The desire for. safer and more easily accessible drive-in locations for events may encourage planners to use smaller markets. Like video conferencing, this, effect is likely to be temporary. Emerging Industry Over the past few decades, the meeting and convention industry. has evolved Trends dramatically from a budding industry to a more mature one that has become an important driver of the national economy. Currently, industry expenditure ~' estimates are over $40 billion per year, As an established industxy, the rapid growth of the last four decades is not likely to persist. However, continued evolution and growth can be expected on a controlled scale. HVS has identified the following emerging industry trends. • Supply and Demand Equilibrium -Since the majority of convention facilities involve public funding, the expected relationship between supply and demand found in the private sector does not necessarily hold true for the meeting and convention industry. Public entities are motivated to develop conference centers because they seek to stimulate local economic activity by attracting :new visitors to the community. These public entities .are not constrained by the need to achieve a return on investment in the facility. Rather, conference centers are considered "loss leaders" for overall expenditures in the local economy. The .consequence of this disengagement between the rationale for an increase in supply and•the given available demand has the potential to lead to an overbuilt situation, as currently planned new construction and expansions are completed. However, public entities are constrained by limitations on tax resources to support. these developments. If conference centers do not produce the expected economic impacts, the. justification for increasing public support of conference center development will become less politically_ viable. These political constraints are likely, in the long run, to keep the upply of space commensurate with demand. • Quality of Supply - As the industry has matured and. competition , among. cities has become more intense, meeting planner expectations for quality have. increased. For example, proximity of full. service hotels to conferencecenters has become a primary determinant in the FiVS Convention, Sports fj Entertainment DRAFT Vail Convention Center Feasibility Study Industry Trends3-24 decision of whether to locate a meeting at a particular location. Cities lacking suitable hotel properties typically lose business to cities with a good "hotel package." Similarly, advanced communications technologies in conference centers are now routinely expected. Furthermore, surveys of meeting planners -show that expectations for quality of services has become one of the most important site selection criteria. In an oversupplied market, quality expectations are likely to increase in importance. • Emergence of "Destination .Meeting Resorts" - Several resort communities have emerged as primary meeting resort destinations, such as Las Vegas and Orlando,. among others. These cities have ~' .undergone rapid growth in the supply of hotels and resort conference center facilities that are quickly absorbed with new business. They have in common a strong tourist appeal, attractive climate, and offer an appealing experience for the event attendee. Their ability to attract a large number of attendees is a prime consideration in site selection. Cities with such strong appeal are likely to continue to be the most successful conference destinations in terms of .overall number of attendees. However, a location such as Vail may present an appealing alternative to the typical warm weather beach of golf-based resort. • Propensity to Travel -Declining cost of travel (in real terms) and the increase in the propensity to travel has been a primary driver of long- `term growth in the meetings industry. Recent events that temporarily reduced the ability and desire. to travel clearly demonstrated the importance of travel propensity to the industry. However, in the long- run, expansions in the transportation system and continued innovations that reduce costs and increase the ease of travel are likely to support the growth of the meeting industry. • Improved. Communications Technology -Over the past decade, .industry experts have engaged in a great deal of speculation that .improvements in telecommunications technology will-supplant .the need for face-to-face meeting. To date, there is no evidence that video conferencing or the Internet. has become a viable .substitute for in- person communication, Society 'still prefers person-to-person interaction to exchange „ideas and information, and to build relationships. To the extent that. improvements in communications technology have contributed. to overall economic growth, they have more likely fostered the growth of the meetings industry. \` Implications for Vail Continued growth in the meetings industry depends largely upon continued. growth of the national and local economies. The recent economic downturn has brought difficult times for most .industries, and the events. and travel industries are no exception. However, planning efforts must focus on the long term, recognizing the realities of economic cycles. Interviews with local hospitality professionals and meeting planners reveal a demand for events that exceed the capacity of existing facilities in the Vail market, particularly with respect to the need for single larger venue than currently exists. In difficult economic times, the need for meetings, training seminars, corporate retreats, and other such activities does not decrease. However, the capacity for potential :users to afford off-site event spaces declines significantly in difficult economic periods. Such cycles are temporary and facility planning should focus on the longer-term average level of demand for function space. HVS Conve~rtirnt, Syorts £a Entertainment DRAFT Vail Convention Center Feasibility Study Industry Trends 3-25 .Current trends in the meetings industry suggest a shift from national to regional, state, and district events. State associations are increasingly looking towards the development of district meetings and specialized educational programming to keep their members engaged and involved on a more local. level. Vail is well positioned to attract state and local demand due to its great reputation as a destination among state event planners and its proximity to the State's two primary population centers in Denver and Colorado Springs. Vail also has a unique destination appeal capable of attracting national events that are looking for new locations to help attract members who base their decisions on whether to attend events upon its location. National association events that look for new destinations with considerable appeal will take notice of the many natural attractions the Vail area offers. In the .following analysis, HVS will assess Vail' amenities and visitor infrastructure, event planners' perceptions of it as an -event location, and other factors that influence its overall event potential. The answers to these questions will help HVS determine the appropriate type of facility, if any, for Vail and the. volume and character of events likely to occur at .the recommended facility. HVS Convention, Sports £~ Entertainment ~ DRf1fT Vai! Conference Center Business Plan Lodging Analysis 4-1 4. Lodging Analysis The planned conference center will be a stand-alone facility and will not include its own attached lodging units. The facility. will depend upon. a number of proximate lodging facilities for its room blocks. Occasionally, larger events may require the use of rooms in other properties located further away in Vail or even those in nearby Vail Valley resort areas. HVS analyzed data on the lodging market in Vail and the overall Valley. This data reveals trends in rate and occupancy that could influence the overall availability and cost of lodging rooms for potential conference center events. As Vail is a seasonal tourist destination, the occupancy and average daily rate. ("ADR") of Vail lodging properties is expected to show signs of significant seasonal variations and ebbs and flows of overall tourism demand in the region. Accordingly, the ability of Vail to provide blocks of committable rooms for conference center events is likely to vary. with this seasonal change in room demand and supply and with shifts in overall tourism demand. Room Availability The availability of room blocks in Vail will vary. considerably between the peak ski season when tourism reaches its highest level and the shoulder seasons in the spring and fall. The Vail Valley Chamber and Tourism Bureau conducted a survey of lodging property managers. to estimate what the overall availability of rooms for groups was in each month of the year.. The managers reported the .number of rooms that they .would be willing to commit to a group room block in each month, both for weekdays .and weekends. Figure 4-1 shows the month-by-month variation in the number. of .weekday lodging rooms available for group room blocks in Vail. In .other words, this data shows the number of rooms lodging property managers estimate they .are willing to commit to group room blocks in advance for events occurring in the conference center. HVS Convention, Sports Fd Entertainment DRAFT Vail Conference Center Business Plan LodRinR Analysis 4-Z ~~ Figure 4-1 Weekday Rooms Available for Group Room Blocks in Vail by Month 3,000 _..._..--•- --..__ .._._.. ---..._ ^Available Hotel Rooms 2,500 - _,€~ 2,000 __ 1,500 s: is ~,ooo '~ Id 500 0 Jan Feb Mar Apr May .June July Aug Sep Oct Nov Dec Source: Vail Valley Chamber & Tourism Bureau. $; Figure 4-2 shows the month-by-month variation in the number of weekend lodging room blocks available in Vail. Figure.4-2 Weekend Rooms Available for Group Room Blocks in Vail by Month The availability of rooms for group room blocks tracks with-the demand for individual leisure room nights. Availability is highest in the shoulder tourism seasons, in the spring and early. fall .when tourism demand is at it lowest points. Group room availability is lowest in the ski season, December through March, and. the summer, when many families vacation im Vail to take advantage of the mild mountain climate and the many available outdoor activities. The most variation between the weekday and :weekend numbers occurs in the peak. ski season when weekend group rooms are very scarce due to the high demand for weekend lodging for skiers. The data on group room block availability indicates.that even during the peak ski. season there is still lodging available for groups. It should be noted that lodging managers might be tempted to overstate the availability of group room blocks in an attempt to improve the prospects for the conference center. However, HVS interviewed several Vail lodging property managers and asked them specifically about the availability of group zoom blocks in the ski season. These managers indicated they were reluctant to devote large portions of their rooms to group demand in peak tourism periods. However, they also noted that even in the height. of the ski season they still had some excess capacity, especially on weekdays and were supportive of the idea of attracting groups that meet on weekdays during the ski season.. When. considering the overall availability of rooms in Vail it is .important to remember that there are a number of condominium. units that move. in and out of the rental pool for various reasons. One of the primary factors that influence the number of units. in the rental pool is the level of lodging demand. If Vail develops a conference center and the overall demand for rooms nights increases, the percentage of condo units in the rental pool will. increase. These condo units can serve the additional group. demand, but may more often serve individual leisure demand that is compressed away from the hotels due to the higher percentage of hotel rooms devoted to group demand. In addition, as noted in Section 2 of .this report, there are 668 new lodging units proposed and in various stages of the development review process.. The proposed conference center would likely not open before 2007 and many of these proposed lodging units should be available by then. Occupancy and Average Daily Rate Hill & Company track data on occupancy and average daily rate (ADR) among lodging properties in the Vail Valley. There are 13 properties in the Town of Vail that participate in Hill & Compan~s research, including most of FiVS Convention, Sports & Entertainment DRAFT Vail Conference Center Business Plan LodAinR Analysis 4-4 the larger .properties. Table 4-1 shows the Vail .lodging properties that .participate in Hill & Company's data set and the share oftotal properties in the Town. Table 4-1 Lodging Properties in Hill & Company Data Set Number of Number of .Fractional Property Hotel Rooms Condo Fee / ; Total Rooms Timeshare Antlers at Vail 0 92 -- 92 Lion Square Lodge 28 82 -- 110 Lodge Tower/Riva North 48 32 -- 80 Montaneros 0 32 -- 32 Mountain Haus 10 64 -- 74 Simba Resort 0 65 - 65 Vail Raquet Club 0 96 -- 96 .Lodge at Vail 125 0 125 Holiday Inn Chateau Vail 120 0 -- 120 Marriott Resort Vail 344 0 -- 344 Sitrmark at Vail 35 0 -- 35 Vail Cascade Resort & Spa 292 0 -- 292 Total in Hill & Co. Set 1,002. 463. -- .1,465 Total in Vail 1,588 1,195 312 ~ 3,095 % of Rooms in Hill Data 63.1% 38.7% 47.3% Sources: Ni!! & Company, Vail Valley Chamber & Tourism Bureau, Individula Properties & HVS The participating lodging properties include nearly two-thirds of the .total. number of hotel units in Vail. Overall, the data set includes less than -half of the available condo units and 47.3 percent of the total supply. Although it is impossible to know exactly .what the overall occupancy and average daily rates are for. the overall market, given that a higher percentage of the non- reporting units are condos, it is likely that the actual .overall occupancy rate in the market will be lower than the rates reported in the Hill & Company data.. As evidence of this, the overall Vail Valley occupancy rate for Hill & Company's data set was 44.5 percent in 2002 compared to 33.7 percent for condos. Despite the fact that the Hill & Company data may slightly overstate overall occupancy in the market, the data does provide valuable insight into seasonal trends in occupancy and ADR. Hill & Company. occupancy and ADR. data in Vail reveal the degree of - seasonality on the overall demand for lodging and how the :availability of lodging for conference center groups will likely be at different. times of the HVS Convention, Sports £> Entertainment DRAFT Vail Conference Center Business Plan Lod~nAAnalysis 4-5 year. Figure 4-3 shows the seasonal trends in occupancy rate in the Vail market between 1997 and the first three quarters of 2004. Figure 4-3 Seasonal Occupancy Trends, 1997-2004 (Through September) too°i ° 90°l ° 80% 70% 60% 50% ~% 30% 209' ^ Minimum ° 109'° -O-Average • Maximum 0% Jan .Feb Mar Apr May Jun Jul Aug .Sep Oct Nov Dec Sources: Hill & Company and HVS The seasonal trends in occupancy during the analysis. period show that Vail experiences two annual peaks in lodging occupancy. The first peak occurs during the winter months at the height of the ski season. The second occurs in the mid- to late-summer season. Shoulder seasons occur in late spring and fall when average occupancy dips as low as 17 percent. Year-to-year variance is greater in .the peak tourism months, which may indicate that properties have experimented by driving room rates at certain times to test the price sensitivity of demand during peak periods. While Vail has shown a consistent pattern of a dual-peak in lodging occupancy, there has been year-to-year volatility in monthly occupancy rates over tune. Figure 4-4 shows this volatility in monthly occupancy rates from year to year. HVS Conve~:tion, Syorts £a Entertainment DRAFT Vail Conference Center Business Plan LodRinAAnalysis 4-6 \, Figure 4-4 Year-to-Year Volatility in Vail Occupancy Rates ao % 30% 20% 10% 0% -70% - _ -zo % -30% Percent change from -40% prior year 50 - 98 99 ..00 Oi 02 03 04 .. . . la 11 la JI la 11 ,a r la ~ la j1 la it year/month Data Source: Hill & Company Mktg. Y Year-to-year fluctuations in occupancy tended to vary as much as 20 percent through the 2000, when the effects of the downturn in the economy probably contributed to a more substantial decline in occupancy. This downturn was punctuated by a 40 percent decline in occupancy immediately following the September 11, 2001. terrorist attacks. October and November of 2002 showed some degree of recovery from the very low occupancies of the prior year, but this xecovery did not extend into the ski season of late 2002 and early. 2003. January, April, and September of 2004 show large increases in occupancy over.' 2003, but there is no consistent monthly pattern of increased occupancy. . Unlike occupancy, seasonal trends in ADR show only one upward spike, which occurs during the winter. Figure 4-5 shows the seasonal trend in Vail ADR for 1997 through the first nine months of 2004. FIVS Convention, Syorts £~ Entertainment DRAFT Vail Conference Center Business Ptan Locl~inAAnalysis 4-7 \~ Figure 4-5 Seasonal Trends in Vail ADR, 1997-2004 (Through September} $aoo $350 . ^ M inimu m $300 -O- A verag e i $250 • M ax mu m $xoo $150 $~oo 0 $5 $0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Sources: Hill & Companyand HVS ~; Like occupancy, ADR peaks in the ski season. However, unlike occupancy,' ADR remains fairly modest in the summer season, indicating. that lodging properties compete aggressively for occupancy in the summer tourist season. Summer ADR's are marginally higher than those in the shoulder seasons, but the change is minute compared to the shift upward in occupancy during the summer. months. The competition for summer occupancy occurs not only with other Vail properties for tourism demand, but also with other areas of the State and the US for group demand.. The relative lack of an increase in ADR in the peak summer tourist months reveals that overall room demand is much more discretionary, which stands to reason given the variety of tourism options available to the leisure traveler in the summer versus .the more captive skier clientele in the winter. Figure 4-6 shows the year-to-year change in monthly ADR in the Vail market. HVS Convention, Syorts £~ Entertainment DRAFT Vail Conference Center Business Plan LoclAinR Analysis 4-8 Figure 4-6 Year-to-Year Percent Change in Vail ADR 30 25 20 15% - 10 5% 0% _5 -10 -~ 5 % Percent change from -20 % prior year -25 98 . 99 00 01 02 . 03 . 04 . la P k P !a ii ~ A ~ j1 1a .11 ~ d . yearlmonth Data Source: Hill & Company Mk(q. The percent changes in year-to-year ADR have been more modest than those for occupancy. The significant decrease in ADR following September 11, 2001 was met with a much stronger recovery the following year than was evident in occupancy rates. Figure 4-7 plots both ADR and occupancy from 1997 through the first three quarters of 2004. Figure 4-7 Seasonal Trends in Vail ADR and Occupancy, 1997-2004 Through September) ywo toox ~~ ~~ hum ~ $ e a uoo ~g sYao >~ ~AOR xow . S3a ~QCNOMCr 10% ~ ~ s' / sa 1 w i m/ of 1 oz Y av Y a i M a h M M F M h monM The lodging market in Vail has three distinct seasons. Each :season has different implications for. the availability of lodging for conference center events. Assembling .group room blocks in the peak season. will be a challenge, HVS Convention, Sports & Entertainment DRAFTVaiI Conference Center Business Plan LodxinAAnalysis 4-9 ~~ particularly for events requiring rooms on weekend nights. Weekdays will have greater group room availability in the ski season, but rates will still be considerably higher than most groups can. afford. Larger size groups, that require more event space than typical hotels with conference space can provide, that can afford rates in the range of $250-$350 are few and far between. However, it will be relatively easy. to assemble larger group room blocks during the remainder of the year at competitive room rates. In fact, an increase in group room demand during the non-ski period associated with events at the conference center could enable Vail lodging properties to increase rates slightly, particularly in .the peak summer season, and still maintain a competitive position relative to other competing. destinations. ~: Implications for The seasonality of the underlying base of tourism demand in Vail will Conference Center influence the ability of a new conference center to attract groups. The Demand availability of lodging is low and ADR is high in the ski season.. Monthly ADIZ of up to $365 in the ski season will deter most groups from holding events in Vail. However, lower weekday rates are available and.. certain events that attract less price sensitive attendees, such as selected professional groups, will accept higher than normal rates in exchange for the opportunity to hold an event in Vail during the ski season. Most of the demand potential for the conference center exists in the summer and shoulder seasons, when room rates and availability present more opportunities to event planners. HVS Convention, SUorts £a Entertainment DRAFT Vail Convention Center Business Plan Peer Market Analysis 5-i \, 5. Peer Resort Market and Facility Analysis One method of estimating the demand potential and facility needs of a .community is to compare it to a set of peer markets in order to determine whether there are any obvious opportunities or deficiencies. that indicate how: effectively a community should be able to attract and accommodate events. A combination of objective data and subjective comparisons is necessary to accurately assess the relative market potential of various communities. This peer resort market and facility analysis is one of several factors that HVS considers when developing its facility recommendations and demand and operating estimates. HVS compared Vail to a set of resort communities with conference. centers. None of these peer resort markets may completely match the combination of world-class skung and an attractive village atmosphere that exists- in Vail. However, they each have certain similarities that provide opportunities to assess the relative market potentialof a conference center in Vail. HVS selected six resort peer markets to assess as part of a comparable demand analysis. HVS based the selection of peer markets on: ^ The leading role of tourism in the area's overall economy, • Geographic location (cities located in the Rocky Mountains when possible), ^ Accessibility of skiing, ^ Existence of a .stand-alone conference center without attached lodging units, and ^ Markets that function as national and/or international tourist destinations. Each of the markets will not meet all of the preceding criteria, but by using '; these criteria HVS is .able to develop a list of markets that are particularly Summary of Peer Resort Markets and Facilities .informative for. assessing the event potential in Vail. HVS does not intend for the list of peer markets to include all of the markets Vail. will compete with for events, but rather a subset of primary peer markets and facilities that are particularly informative regarding Vail's event potential. For instance, any market with a conference center or hotel with conference space will compete with a wide variety for conference events. However, simply because Vail competes with such cities for events .does not mean that comparisons between their populations, air service, and other factors are .relevant to the potential event demand for Vail. The intent. of the market comparisons that follow is to quantify some objective factors that can serve as indicators of the relative demand potential of Vail and the appropriate conference center facility program necessaryto achieve this potential. In addition, comparisons regarding the supply of available hotel rooms will enable the assessment of .the ability of the existing hotel supply to accommodate potential: future demand. ' Table 5-1 shows the selected resort facilities, key characteristics of their function space, and the area supply of lodging rooms. Table 5-f Summarv of Peer Resort Market Facilities Facility Square Feet of Meeting Space Largest Single Space Largest Room Banquet Capacity Maximum Number of Meeting Rooms Lodging Units in Market Area Banfl Centre 52,814 5,879 486 53 4,364 Ke stone Conterence Center 44,180 19,800 1,636 25 1,300 Montere Conference Center 40,976 19,600 1,620 15 4,500 Snowmass Conterence Center 18,399 10,823 894 10 1,300 Telluride Conference Center .10,961 ~ 6,069 502 9 1,362 Whistler Conference Cenlre 34,403 16,500 1,364 19 5,200 Peer Facility Average 33,622 13,112 1,084 22 3,004 Sources: Major Exhibit Hall Directory 2002 and respective /acilides The conference centers have an average of over 33,000 square feet of function space and a largest single function space of approximately 13,100 square feet. The Banff Centre has the most total function space at 52,814 square feet, but is .set up as a campus .and has a large amount of total. function space located in several small .breakout spaces in a number of different buildings. The Keystone Conference Center has the largest single event space at 19,800. square feet. Whistler has the largest supply of lodging units at approximately 5,200. FiVS Convention, Sports £~ Entertainment DRAFT Vail Convention Center. Business Plan Peer Market Analysis 5-3 Figure 5-1 graphically shows the square feet of function space in the largest. single space and the remaining amount of space in each resort. conference center. Figure 5-1 Square Feet of Function Space in Peer Resort Conference Center Facilities Banff Keystone Monterey Whistler Snowmass Telluride 0 70,000 20,000 30,000 40,000 50,000 60,000 Sources Respective Fadlrties & HVS ~ -- °'52,814 _. _ . •.;-a~r: of ~q ~Si~6 _,x, _, ''..~ ~~ r 44,780 im - -'___---- - - 40,976 y Y c ~34403 ^ l ~ta 3ss ^LargestSpace ~ Other Funct ion Space °SE 10,961 The conference centers in Keystone, Monterey, and Whistler each have similar facility programs with a ratio of breakout space to total function space of 5~ to 55.2 percent. Description of Peer HVS contacted the management staff of each of the peer resort conference Resort Conference centers and conducted interviews to collect information on the facilities and Centers their operations. Banff Centre-Banff, Alberta The Banff Centre began as a conference facility for the University of Calgary. Now as a municipally run venue, the Banff Centre has 32,595 square feet of function space. The facility is in a campus-type setting. with several different function halls. Table 5-2 shows the sizes and capacities of individual halls and function spaces. ' HVS Convention, Sports fd Entertainment DRAFT Vail Convention Center Business Ptan Peer Market Analysis 5-4 ~\ Table 5-2 A Banff Centre Size & Capacity by Function S ace 1 of 2 Size # of Capacity in # of People Square 10'X10' Area Feet Exhibit Banquet Theater Reception Classr oom U- Shape Booths DONALD CAMERON HALL. • The Banff Centre Dining Room 5,879 29 486 653 619 403 157 Main floor 3,864 19 319 429 407 265 103 Mezzanine 1,072 89 119 113 73 29 Private Function Room 3-5 3,225 16 267 358 339 221.. 86 • Private Function Room 3 989 82 110 104 68 26 Private Function Room 4 989 82 110 104 68 26 Private Function Room 5 1,012 - 84 112 107. 69 27 Private Function Room 6 1,786 - 148 198 188 122 48 LLOYD HALL Bourgeau Lounge 2,070 - 171 230 .218 142. 55 THEATRE COMPLEX Eric Harvie Theatre - -- -- 959 -- -- Margaret Greenham TheaVe -- -- -- 246 -- -- -- The Club 2,040 -- -- -- 215 -- -- LF 117 504 -- -- -- 53 35 13 LF 121 870 -- -- 92 60 23 LF 122 2,052 -- -- -- 216 141 55 LF 124 2,052 -- - 216 141 55 LF 123 870 -- 92 60 23 LF 217 270 -- -- 28 18 7 LF 221 870 -- 92 60 23 LF 222 2,943 - -- -- 310 202 78 LF 223 870 -- -- 92 60 23 LF 224 2,943 - -- -- 310 202. 78. PROFESSIONAL DEVELOPMENT CENTRE Royal Bank financial Group Meeting Room 615 - 51 68 65 42 16 BP Canada Energy Company Meeting Room- 1,320 -- 109 147 . 139 90 35 Petro-Canada Meeting Room 615 - 51 68 65 42 16 Lobby Lounge 1,300 -- -- -- 137 -- -- Second Floor Lounge 645 -- -- -- 68 -- -- Canadian Natural Resources Ltd. Lounge 645 -- -- -- 68 -- -- The Molson Companies Ltd. Lounge 1,300 -- -- 137 - -- Video Conference Room (Boardroom for 8) 300 -- -- -- -- -- -- Souroe.• HVS . FIVS Convention, Sports £~ Entertainment DRAFT Vail Convention Center Business Plan Peer Market Analysis 5-5 Table 5-2 B Banff Centre Size & Capacity by Function Space (2 of 2j Size # of Capacity in # of People Square 10'X10' Area Feet Exhibit Banquet. Theater Reception Classroom U-Shape Booths Auditorium 4,488 -- -- 330 -- -- MB 251 1,102 91 122 116 75 29 MB 252 2,040 169 227 215 140 54 MB 253 1,248 - 103 139 131 85 33 MB 150 990 - 82 110 1D4 68 26 MB 151 252 -- 21 28 27 17 7 MB 152 228 19 25 24 16 6 MB 153 228 __ 19 25 24 i 6 6 MB 154 190 16 21 20 13 5 M8155 244 - 20 27 26 17 7 MB 156 600 -- 50 67 63 41 16 MB 157 247 20 27 26 17 7 MB 158 475 39 53 50 33 13 MB 159 1,040 86 116 109 71 28 MB Lounge 744 61 83 78 51 20' TRANSCANADA PIPELINES PAVILION PAV 201 1,119 - 92 124 118 77 30 PAV 202 657 -- 54 73 69 45 18 PAV 101 140 -- 12 16 15 10 4 PAV 102 140 -- 12 16 15 10 4 PAV 103 140 12 i6 15 10 - 4 PAV 104 140 - 12 16 15 10 - 4 PAV 105 140 12 16 15 10 4 PAV 106 140 - 12 16 15 10 4 PAV 107 215 - 18 24 23 15 6 PAV 108 118 -- 10 13 12 8 3 Toial Function Area 52,814 46 2,228 4,526 4,961 2,825 1,097 Source: HVS The largest single space is located in Donald Cameron Hall and has 5,879. .square feet. The Banff Centre features 414 of its own lodging .rooms. The Professional Development Centre offers 171 bedrooms and suites with full hotel amenities. In addition, Lloyd Hall, a converted university residence, has 177 bedrooms. Smaller halls offer a total of 66 additional. bedrooms. An ongoing renovation of some of the lodging at the facility has some of the rooms unavailable at certain times. The Banff Centre serves a number of roles in the region, besides hosting conferences. The facility is home to festivals such as the annual Mountain Film. Fest. There is also a -large arts festival every summer. Several groups HVS Convention, Sports £d Entertainment DRAFT Vail Convention Center Business Plan ~ Peer Market Analysis 5-6 conduct leadership and educational seminars at the facility throughout the year. The Banff Centre also has several facilities for arts performances, including a 900-seat theater venue. The facility hosts considerably more association and university events than corporate events. In fact, the Banff Centre .has a .policy of not accepting private, for-profit groups unless the primary purpose of their event is educational. Most of the event demand at the facility comes from Western Canada, although they do attract some overseas groups, particularly from Japan. The Banff Centre runs as anon-profit organization and receives xoughly 40 percent of its operating budget from government. sources. The .remainder of :the operating budget from the facility comes from fundraising activities and private donors. and .the revenue from the guest rooms, the conference facilities, and the tuition based programs that operate at the venue. Keystone Conference Center The Keystone Conference Center located in Keystone, Colorado is east of Vail, approximately 99 miles from Denver International Airport. The facility offers 44,180 square feet of function space. A recent $11.25 million expansion added a second main 19,800 square foot ballroom space to the facility. Table 5-3 shows the size and capacity by function space at the Keystone Conference Center. HVS Convention, SUorts £a Entertainment DRAFT Vail Convention Center Business Plan Peer Market Analysis 5-7 Table 5-3 Keystone Conference Center Size & Capacity by function Space Size # of Capacity .Square 10'X10' Area Feet Exhibit Banquet Theater Reception .Classroom U-Shape Booths COLUMBINE BALLROOM .19,800 99 1,636 2,200 .2,084 1,356 528 Grays Peak 6,600 33 545 733 695 452 176 Grays Peak I 2,200 11 182 244 .232 151 59 Grays Peak II 2,200 11 182 244 232. . 151. 59 Grays Peak III 2,200 11 182 .244 232 151 5"9 Longs Peak 6,600 33 545 733 695 452 176 Quandary Peak 6,600 33 545. .733 695 452 176 Quadary Peak I 2,200 11 182 244 232 151 59 `"` Quadary Peakll 2,200 11 182 244 232 151 59 , Quadary Peakill 2,200 11 182 244 232 151 59 Colorado Rockies Ballroo m 16,000 80 1,322 1,778 1,684 1,096 427 Red Cloud Peak 4,000 20 331 444 421 274 107 Shavano Peak 4,000 20 331. 444 42i 274 107 Crestone Peak 4,000 20 331 444 421 .274 107 Crestone Peak I 1,000 5 83 111 105 68 27 Crestone Peak II 1,000 5 83 111 105 68 27 Crestone Peak III 1,000 5 83 111 105 68 27 Crestone Peak IV 1,000 5 83 111 105 68 27 TorreysPeak 4,000 20 331 444 421 274 107 Torreys Peak1 1,000 5 83 111 105 68 27 Torreys Peakll 1,000 5 83 1.11 105 68 27 Torreys Peak III 1,000 5 83 1.11 105 68 27 Torreys PeaklV 1,000 5 83 111 105 68 = 27 Crestone Terrace 1,780 -- 147 -- 187 -- -- Shavano Terrace 3,500 -- 289 -- 368 - -- Castle Peak 3,950 - 326 439. 416 271 105 Castle Peak I 1,000 -- 83 111 105 68 27 Castle Peak II 700 -- 58 78 74 48 19 Castle Peak III 1,000 -- 83 111 105 68 27 Castle Peak IV 700 -- 58 78 74 48 19 Belvedere 3,950 -- 326 439. 416 271 105 Boardroom 480 -- ._ .. -_ Total Function Area 44,180 179 3,610 4,856 4,600 2,994 1,165 Source: HVS The total function space at the facility can divide in to 25 separate rooms. The large number of breakout rooms and the. two large ballroom- spaces give the facility a great deal of ..flexibi lity.. H owever, the fact tha t the two larger ballroom spaces are separate limits .the ability of the facility to ..host single larger events. HVS Convention, Sports £a Entertainment DRAFT Vaii Convention Center Business Plan Peer Market Analysis 5-8 Corporations and medical groups account for a large portion of the facility's overall group demand. Management estimates that as much as 60 percent of group demand comes from corporate and medical groups. The facility tracks the estimated number of room nights by specific demand segment, as shown in Figure 5-2. Figure 5-2 Estimated Group Room Nights by Demand Segment for Keystone Conference Center Fiscal Year 2002-03 :Government 24,649 ~'.~~;" ~ ;~'~- Other 2,958 Corporate 34,509 Association 19.719 Source: veil Resorts The other category includes social events such, as weddings. and .family reunions. The demand for medical group events and continuing education is heavier in the ski season and can account for a many as 15,000 room nights during this three-month period. The small amount of international group business at the facility also occurs during the .ski season. Corporate demand is the leading source of event activity in the summer.. The typical event .size for the corporate and association groups is 250 to 300 attendees. Some of these events include exhibitswith up to 50 exhibitors. It is more common for exhibits to include booths in the non-season and tabletop displays during the ski season. In addition to conferences, the facility also hosts one. tradeshow each year, a homebuilders' show. Two annual fundraisers. also draw primarily upon local attendees. The Wine in the Pines evenf attracts approximately 1,000 attendees and the Ski Ball attracts around 700. Other smallerlocal events also occur throughout the year: There are two hotel properties in the resort that offer 150 and 100 rooms, but the majority of the total of 1,300 available lodging units is comprised of condos. Management reports that the primary marketing challenge of the HVS Convention, Sports F~ Entertainment DRAFT Vail Convention Center Business Plan Peer Market Analusis 5-9 facility is that it lacks attached lodging rooms or rooms within a short wallcing distance. Vail Resorts owns and operates the facility. A set of assessments supports the financial operations of the center. Conference center lodging guests pay a 10 percent surcharge on their room rates. In addition, Keystone has a 5.9 percent " surcharge on any type of good or service purchased in the resort, which works much .like a municipal sales tax. Sorne businesses with older leases in the resort still pay the old 4.7 percent rate. Without the revenue from these assessments and surcharges, which amounted to $4.9 million,`the Keystone Conference. Center ran an operating deficit of approximately $1.7 million in fiscal year 2003,. excluding selected report allocations .like .road maintenance and destination marketing that are typically not included in the financial operations of conference centers. Snowmass Conference Center Snowmass Village is a ski resort area located less than ten miles from Aspen. The Snowmass Conference Center, located in Snowmass Village, serves as the primary conference center for the Aspen Snowmass market. The Town of Snowmass. Village sold the conference center to the Snowmass. Village Resort - Association in 2001 for the amount of the outstanding debt on the facility.. The association now owns and operates the facility. There are approximately 1,300. lodging units that belong to the association and directly support the demand for group room nights the conference center generates. The Town estimates.. that there are an additional 303 lodging units. The association charges an assessment to member lodging properties that helps to fund the conference center's operations. The conference center has 18,399 square feet of function space divisible into 11 separate function rooms, as shown in Table 5-4. HVS Convention, Sports £~ Entertainment DRAFT Vail Convention Center Business Plan Peer Market Analysis 5-10 \~ Table 5-4 Snowmass Conference Center Size & Capacity by Function Space Size Capacity Area Square Banquet Theater Reception Classroom U-Shape Feet SNOWMASS BALLROOM 10,823 894 1,203 1,139 741 289 Anderson Section 4,568 378 508 481 313 122 Carroll Room 1,031 85 115 109 71 27 Erickson Room 932 77 104 98 64 25 Sinclair Room 932 77 104 98 64 25 Hoaglund Room 3,337 276 371 ` 351 229 89 Hoaglund + Anderson 7,905 653 878 832 541 211 Hoaglund + Erickson 4,269 353 474 449. 292 114 Erickson+Carroll+Sinclair Rooms 2,918 241 324 307 200 78 BEDFORD BALLROOM 4,400 364 489 463 301 117 Section A 2,180 180 242 229 149 58 Section B 1,890 156 210 199 129 50 JANS AUDITORIUM 956 -- 83 -- -- -- KEARNS ROOM 1,670 138 186 176 i14 45 SNOBBLE ROOM 550 45 61 58 38 15 Total Function Area 18,399 1,441 2,022 1,836 1,194 466 Source: HVS The largest space, the Snowmass Ballroom, has 10,823 square feet of space, enough room for a banquet of up to approximately 895 people. As the first mountain resort conference center built in the region, .the facility is .considerably .older than its competitors in other. mountain resorts and is begging to show some signs of its age. The Town of Snowmass staff reports that conference business at the facility has declined significantly in recent years, by as much as 60 percent by some accounts. Town staff estimates that the facility attracted approximately 50,000 room nights annually as recently as 1998. The Town is responsible for non- group marketing activities and the Snowmass Village Resort Association is the sole marketer of the conference center. Telluride Conference Center The Telluride .Conference Center is located in .Mountain Village, Colorado, which is in the Southwest portion of the State. The Town of Mountain Village. developed the facility, which opened on August 5,1999. The Town owns and operates the .facility, but transferred the responsibility of marketing the. Hl/S Convention, Sports £d Entertainment DRAFT Vail Convention Center Business Plan Peer Markef Analysis 5-11 conference center to the Telluride & Mountain Village Convention & Visitors Bureau in the fall of 2002. The facility has just less than 11,000 square feet of function space and its , largest single room, the Mountain Village Ballroom, has 6,069 square feet of " space. Table 5-5 shows the size and capacity by function space at the Telluride Conference Center. Table 5-5 Telluride Conference Center Size & Capaci by Function Space Size # of Capacity in # of People Square 10'X10' r Area Feet Exhibit Banquet Theater Reception Classroom U-Shape Booths Mountain Village Ballroom 6,069 30 502 674 639 41& 162 East Ballroom 2,120 11 175 236 223. 145 57 West & Center 3,947 20 326 439 415 270 105 Center Ballroom 1.,725 9 143 192 182 118 46 Wesi Ballroom 2,222 11 184 247 234 152 59 Klammer Boardroom 732 - 60 81 77 50 20 Fallon Boardroom 367 -- 30 41 39 25 10 Chipeta Boardroom 312 26 35 33 21 8 Mezzanine 1,189 -- 98 132 125 81 32 Lobby 1,980 -- 164 220 208 136 53 Office 312 - 26 35 33 21 8 Total Function Area 10,961 30 906 ..1,218 1,154 750 293 Source: HVS When the facility is configured at its maximum divisibility it offers .nine separate functions spaces. The Telluride Conference Center is a few minutes. from Telluride Regional Airport, but the closest major airport, in Albuquerque, New Mexico, is over a seven-hour drive away. There is a Wyndham Hotel across the street with 174 rooms and the nearby Mountain Lodge has an additional 250 units. Additional rooms are available at the Inn at Lost Creek, which has 35 units. According to interviews with both management and CVB staff, ..the facility primarily hosts local events and has not been as effective. in attracting conferences and ,generating room nights as originally hoped. The preponderance of local events motivated the Town to take the facility's liquor license in house to increase the net revenue to the facility and help reduce its operating deficit. Most of the event bookings are occurring no further than three months out. The facility hosts various entertainment events including HVS Convention, Syorts £~ Entertainment DRAFT Vail Convention Center Business Plan Peer Market Analysis 5-12 concerts with bands promoted by a local .radio .station; fundraisers, and festivals including a major film festival held annually. When the facility originally opened its mix of group demand was 75 percent corporate. However, the demand fore corporate events has declined dramatically with the downturnin the economy and now the group demand is composed of a more balanced mix of corporate (30 percent), association (40 percent), and Social, Military, Educational, Religious, Fraternal, and - Entertainment (SMERFE) demand (30 percent). The typical group size for association events is approximately 200 attendees and attendance at:corporate events runs between 75 and 120. The facility's 6,000 square foot main ballroom divides into three sections. Management indicates that the primary ~' shortcoming of the facility is its lack of breakout meeting space, particularly small rooms that can accommodate .12, 14, on up to 30 people. Greater flexibility in the limited breakout meeting space the facility does have would greatly improve the marketability of the facility and its ability to effectively accommodate a wider array of events. Prior to shifting the responsibility of marketing the conference center to the area's convention bureau, the facility was running an annual operating deficit of approximately $800,000. Farming out the group sales activities has reduced the annual operating deficit of the facility to approximately .$600,000, although the Town now pays the bureau a fee for marketing the facility.. Whistler Conference Center The Whistler Conference Center recently underwent a significant upgrade and expansion. The re-opening reception for the facility. occurred on September 27, 2003. The telecommunications firm TELUS has signed a 10-year agreement with Tourism Whistler, which gives TELUS :naming rights to the Whistler Conference Centre and designates TELUS as the preferred supplier of Tourism Whistler's telecommunications needs. The renovation started in "October 2002 was a $10.5 million (Canadian) project that modernized the building and increased capacity. The project strived to utilize strong environmental practices in its construction. The new Grand Foyer showcases the facility's 40-foot, Rumford fireplace. A new roof with design elements indigenous to Whistler's mountain resort aesthetics is also part of the renovation. Sustainable building materials have been used in the renovation of the .facility such as natural or recycled fiber carpets, .certified wood products,. and high efficiency lighting systems. Special deconstruction techniques and the recycling of materials helped to minimize waste. HVS Convention, Sports £d Entertainment DRAFT Vail Convention Center Business Plan Peer Market Analysis 5-23 \~ _ ~ Table 5-6 shows a summary of key facility attributes before and after the upgrade and expansion project. Table 5-(i Summary of Whistler Conference Center Renovation and Expansion Project Facility Attribute Before Expansion After Expansion Function Space SF 25,000 34,403 Ballroom SF 13,600 16,500-. # of Meeting Rooms 13 19 Business Centre Capacity.. None Yes Estiamted Economic Impact. $18.5 Million in 2001 $25 Million in 2004 Source: Whistler Conference Center. ~' The emphasis. of the improvement project was to increase the total amount of function space and augment its flexibility, rather than on creating a significantly larger single ballroom space. The expansion increased the size of the main ballroom by 2,900 square feet to 16,500, which is still smaller than the largest single spaces at Keystone and Monterey. Table 5-7 shows the size and capacity by function space at the expanded and renovated. Whistler Conference Center. HVS Convention, Snorts £~ Entertainment DRAFT Vail Convention Center Basiness Plan Peer Market Analysis 5-14 ~~ ) Table 5-7 Whistler Conference Center Size & Capacity by Function Space Size # of Capacity in # of People Square 10'X10' Area Feel Fxhibit Banque) Theater Reception Classroom U-Shape Booths Sea to Sky Ballroom .16,500 83 1,364 1,833 1,737 1,130 440 Sea to Sky Ballroom A 7,032 35 581 781 740 482 .188 Sea to Sky Ballroom B 4,565 23 377 507 481 313 122 Sea to Sky Ballroom C 4,845 24 400 538 510 332 .129 Sea to Sky Ballroom A/B 9,220 46 762 1,024 971 .632 246 Grand Foyer 4,258 21 352 473 448 292 114 Mountain View 1,080 - 89 120 114 74 29 Wedgemoun6A/B 825 68 92 87 57 22 Wedgemount A 405 - 33 45 43 28 11 °~ Wedgemount B 420 35 47 44 29 11 , Sao Valley 405 33 45 43 28 11 Spearhead A/B 887 73 99 93 61 24 Spearhead A 405 33 45 43 28 11 Spearhead B 482 40 54 51 33 13 Fitzsimmons 1,589 - 131 177 .167 109 42 Harmony A/B 1,897 157 211 200 130 51 Harmony A 946 - 78 105 100 65 25 Harmony B 951 79 106 100 65 25 Garibaldi A/B 2,348 - .194 261 .247 161... 63 Garibaldi A 1,143 94 127 120 78 30 Garibaldi B 1,205 100 134. 127 83 32 Tantalus 696 - 58 77 73 48 19 Black Tusk 676 56 75 71 46 18 Symphony (Boardroom for 12) - -- -- -- -- Rainbow Theatre 3,300 -- -- 300 -- -- -- Total Function Area 34,403 104 2,502 3,664 3,187 2,075 809 Source: HVS HVS includes the Grand Foyer in with the rentable function space at the facility because it is designed to serve as a high-end function space as well as prefunction space. The capacity of Sea to Sky Ballroom has grown to over ..1,800 people theater style. The Mountain View room is a new glass enclosed conservatory that will provide natural light and views of the mountains with enough space to serve 89 people banquet style. The expanded facility. can handle events with as many as 2,000 attendees. Management expects that peak room nights for events will be in the 1,200 to 1,500 range. The market has a total of approximately 5,200 lodging rooms. The peak season for the facility has always been the spring .when .many continuing. educational events occur. HVS Convention, Sports & Entertainment DRAFT Vail Convention Center Business Plan Peer Market Analysis 5-15 The Town of Whistler owns the facility and contracts with Tourism Whistler, for its operations. An assessment on area hotels, which is based upon the number of rooms and other factors, helps support the operating and marketing costs of the facility. Management estimates that in the past, prior to the recent expansion and upgrade, the facility .generated approximately 50,000 room nights annually. Figure 5-3 shows the estimated average annual distribution of room nights by demand segment prior to the recent expansion and upgrade. Figure 5-3 Distribution of Whistler Conference Center Room Nights by Segment Corporate Associafic 27,500 Source: Tourism Whistler Incentive / Other 2,000 --__ Corporate demand is down significantly in recent years and association demand accounts for approximately 55 percent of the total business mix at the conference center. Monterey Conference Center The Monterey Conference Center offers close to 41,000 total square feet of function space. Table 5-8 shows the size and capacity by function space at the Monterey Conference Center. enwRFE b0 HVS Convention, Sports & Entertainment DRAFT Vail Convention Center Business Plan Peer Market Analysis 5-16 Table 5-8 Monterey Conference Center Size & Capacit by Function S ace Size # of Capacity in # of People Square 10'X1o' Area Feet Fxhibit Banquet Theater Reception C lassroom U-Shape Boolhs Serra Ballroom 19,600 98 1,620 2,178. 2,063 1,342 523 Serra l 11,200 56 926 .1,244 1,179 767 299 Serra II 8,400 42 694 933 884 575 224 Steinbeck Forum 5,260 26 -- 494 -- 494 -- DeAnza Ballroom 10,665 53 881 1,185 1,123 730 284 DeAnzal 3,275 16 271 364 345 224. 87 DeAnzall 3,275 16 271 364 345 224. 87 DeAnzalll 4,115 21 340. 457 433 282 110 Ferrante Room 2,223 - 184 247 234 152 59 Ferrante I 741 61 82 78 51 20 Ferrante II 741 - 61 82 78 51 20 Ferrante III 741 - 61 82 78 51 20 Colton Room 1,653 -- 137 184 174 113 44 Colton I 551 -- 46 61 58 38 15 Colton II 551 - 46 61 58 38 i5 Colton III 551 46 61 58 38 15 Larkin I 475 - 39 53 50 33 13 Larkin II 600 - 50 67 63 41 16 Dana 500 -- 41 56 53 34 13 Total Function Area 40,976 178 2,952 4,464 3,760 2,939 952 Source: HVS The Serra Ballroom, the' largesfi space in the facility, offers 19,600 square feet and can accommodate a banquet of up to 1,620 people. According, to facility management, the conference center functions primarily as a host for State of California events. National demand has been relatively low, which management partially attributes to the size of the main ballroom. relative to larger ..resort conference centers. Events come from a mix of association, corporate, and SMEIZFE demand, as shown in Figure 5-4. HVS Convention, Sports £~ Entertainment DRAFT Vail Convention Center Business Plan Peer Market Analysis 5-17 \~ Figure 5-4 Monterey Conference Center Number of Events by Demand Segment The other category is comprised largely of municipal events and local community use. The Monterey Conference. Center tracks the .number o£ groups and .the. total attendance the facility accommodates, as shown in Table 5-9. Table 5-9 Monterey Conference Center Number of Groups and Attendees Year Groups Attendees ~~ Change in Attendees _ 99-00 362 602,398 -- 00-01 408 565,560 -6.1% 01-02 280. .469,070 -17.i~o 02-03 210 383,923 -18.2°k Average. 315 505,238 Source: Monterey Centerence Center The number of conference center attendees has declined significantly in recent years. The downturn in the economy and the State of California's .budget crisis have contributed to this decline as associations and corporations have. slashed expenses. on meetings and overall travel. Management reports that health care and law groups are two of the leading sectors for group demand at the facility. Any group seeking to book events in the facility 90 days out or more must require sleeping rooms, otherwise he dates will be left open for other events that generate room nights. HVS Convention, Sports F~ Entertainment DRAFT Vail Convention Center Business Plan Peer Market Analysis 5-18 Management praised the overall layout of the conference center and the availability of the 496-seat auditorium. Additional plans call for renovating the nearby 1,200-seat State Theater. If the facility has a shortcoming it's that the main ballroom space wasn't designed to enable trucks to back directly up to it for ease of loading and unloading. The demand .for exhibits in this .main ballroom space has far exceeded the expectations of those who originally _ designed the facility. The City of Monterey includes the operations of the conference center in its overall public facilities budget. The City's financial statements include total for facility. revenue, as shown in Table 5-10. Table 5-10 Monterey Conference Center Annual Operating Revenue .Year Revenue 99-00 1,428,365 00-01 1,545,600 01-02 1,280,387 02-03 (proj.) 1,.503,494 Average 1,439,462 Source: Monterey Conference Center According to information obtained from management staff at the facility, the annual operating subsidy for .the facility has averaged about $1.5 million recently. Operating expenses of just over $3 million would have produced such a deficit in fiscal year 2001-2002. Finattciat Operating Estimated financial operations were only .available for selected peer resort :Summary conference center facilities, as many of them are privately managed and do .not release such data. Table 5-11 shows a summary of estimated revenues and expenses o£the facilities for which such data was available. Table 5-11 Estimated Revenues and Expenses for Selected Peer Resort Facilities Expenses / Keystone Telluride Monterey Banff Revenues $6,972 NA $1,503 $30,142 - , Expenses $8,668 NA $3,003 $30,782 Net Income (Loss) ($1,696)' ($600) ($1;500) ($639) ~ Does not include surcharges or resort allocations Sources: Individual Facilities &HVS HVS Convention, Sports & Entertainment DRAFT Vail Convention Center Business Plan ' Peer Market Analysis 5-19 Skier Days Each of the peer markets, except for Monterey, relies on the ski industry-for a considerable portion. of their overall tourism demand. The volume of skier days is one measure of the relative attractiveness of these peer markets. However, these markets generally focus primarily on attracting groups in the non-ski season when tourism is not at its peak level. Relative volume of skier days doe's provide some insight into the capacity of a market'to host large numbers of visitors and its general destination appeal. Table 5-12 shows a summary of skier days in peer ski resorts for three between. fiscal years 1999 and 2001. Table 5-12 Skier Days in Peer Ski Resorts Market 2003/04 2002/03 2001/02 2000/01 1999/00 Vaih 1,555,513 1,610,961 1,536,024 1,645,902 1,371,702 Snowmass 724,753 669,701 676,505 740,241 707,600 Telluride 367,775 367,252 341,370 334,506 309,737 Banff 550,000 540,000 350,000 490,000 Keystone 944,433 1,038,942 .1,069,111 1,230,100 1,192,198 Whistler-Blackcomb 2,044,000 .2,112,000 2,240,000. 2,180,000 2,160,000 PeerAverage2 1,020,240 947,579 973,397 - 966,969 971,907 Subject ~o of Average 152% 170% 158% 170% 14t% Sources: Colorado Ski Company USA Vail is one of the busier ski resorts am©ng the .peer markets with over 1.5 million skier days. Some of the markets also have other nearby ski resorts the further augment the level of skier days. For instance, Vail has Beaver Creek .nearby and Snowmass is close'to Aspen. If the number of skier days at nearby. Beaver Creek is included, .the total for the Vail area increases to over 2.2 million. Population The local population is a much less important factor for resort conference centers relative to potential event demand than in more typical. market areas. However, the local area population does have the potential. to support local revenue generating events that can help improve the financial operations of a facility. Although there is no direct .correlation between population and the demand for events, this data reveals trends in the overall economic climate of an area and its ability to support both local public events and provide and maintain sufficient visitor-related infrastructure and attractions. High population or growth rates can indicate significant capacity to support local public events: and a likelihood that the ..area will. add #o its existing. urban attractions. Strong population growth also suggests an increasing commercial HVS Convention, Sports £a Entertainment DRAFT Vail Convention Center Business Plan Peer Market Analysis 5-20 and .fiscal base to support conference facilities. Population changes often reflect underlying trends in business activity and the attractiveness of an area as a place to live and as a place to visit. Table 5-13 shows population figures for the peer markets. Table 5-13 Population of Peer Markets .Municipal Municipal Compound Market Population Population Annual 2000 1990 Growth Vail 4,531 3,659. 2.2°'0 ~; Banff 7,716. 5,688 3.1 % Keystone 825. 568 3.8% Monterey. 29,674 31,954 -0.79'0 Snowmass 1,822 1,449 2.3% Telluride 6,666 3,732 6.0°'0 Whistler 9,000 4,459 7.3°i^o Peer Average 9,284 7,975 3.6% Subject % of Average 49% 46% 59.7°~ Source: Census eueau Vail has the 3"' smallest population of the peer markets at 4,531 residents. Vail's annual compound rate of population growth of 2.2 percent is the 2„a lowest and is well below the peer average of 3.6 percent. Air Service & Accessibility The accessibility and affordability of a destination via. air travel is an important consideration for' planners of national and certain regional events because it affects a destination's ability to attract attendees. This is particularly true for resort conference centers that cater to national and international .events. The overall accessibility of resort destinations is comprised of three key factors: ^ Level of air service at the nearest commercial airport,. ^ Level of air service a the nearest hub airport, and ^ brive time from these airports. HVS Convention, Sports £d Entertainment DRAFT Vail Convention Center Business Plan Peer Market Analysis 5-21 \, Table 5-14 shows a comparison of the distance from the closest major commercial hub airport and the level of air service at that airport. The able then shows the distance from the closest commercial airport, regardless of whether it is a hub airport or not, and the level of air service available at that airport. Table 5-14 .Comparison of Distance and Drive Time from Closest Hub Airport and Closest Commercial .Airport and Air Service Levels Closest Major Commercial Hub Drive Total Total Market Airport Miles .Time Passengers Flights Vail Denver International Airport 122 2:20 35,651,098 494,834 Banff Calgary International Airport 88 1:39 7,884,194 223,132 . Whistler Vancouver International Airport 83 2:21 14,877,536 296,626 Snowmass Denver International Airport 196 3:32 35,651,098 494,834 Keystone DenverlnternationalAirport 99 2:05 35,651,098 494,834 Monterey San Francisco International Airport 102 1:47 34,632,474 387,594 Telluride Albuquerque International Support 352 7:22 6,117,646. 130,475 .Peer Average 153 3:07 22,469,008 337,916 Vail as % of Peer Average 80% 75% 159% 146% Market Closest Commercial Airport Miles Drive Total Total Time Passengers Flights. Vail -Eagle County Airport 35 .0:40 243,196 1,637 Banff Calgary International Airport 88 1:39 7,884,194. 223,132 Whistler Vancouver Intemational Airport 83 2:21 14,877,536 296,626 Snowmass Aspen/Pitkin County Airport 4 0:10. 361,983 8,018 Keystone Eagle County Airport 68 1:35 243.,196 1,637 Monterey Monterey Peninsula Airport 3 0:06 375,362 NA Telluride Telluride Regional Airport 5 0:15 34,245 3,488 Peer Average 42 1:10 .3,962,753. 106,580 Vail as % of Peer Average 84°~ 57% 6% 2% Sources: Individual Airports, Airports Council Intemational, and Rand McNalty Vail's proximity to its nearest large hub airport is superior to the peer market average. If .Telluride is removed, the average drive time to the nearest commercial hub falls to 2:17, which is still comparable to Vail. The level of air service at its nearest hub airport, DIA, is significantly higher than that of its Canadian peers and roughly equal to that of Monterey (San. Francisco International). Vail is closer to Eagle County Airport than the average distance among the°peer set. Since some of the resorts'. closest commercial airport is a major hub the average level of air service is much greater. than Eagle County Airport. However, these larger hub airports are located an hour-and-a-half or more away, which is further than DIA is to Vail HVS Convention, Sorts f~ Entertainment DRAFT Vail Convention Genfer Business Plan Peer Market Analysis 5-22 ~` Relative to this set of resort peers, Vail's overall accessibility compares .:favorably. The challenge far marketing conference center events in Vail will . be to convince meeting planners that the attractiveness of Vail makes it worth the extra effort to get there relative to more easily accessible, but perhaps less impressive destinations. Monterey has an advantage because it is located. closer to both a major hub airport and a regional airport.. Keystone benefits from being 23 miles closer to DIA, but is 33 miles further from Eagle County Airport than Vail. Vail has clear accessibility advantages relative to Whistler and. Telluride. Although Snowmass is located closer to a commercial airport than Vail that has a superior volume of service, Snowmass is 74 miles further from DIA, the nearest commercial hub airport. In summery, Vail compares favorable to the peer resorts on average in respect to overall accessibility to air travel Marketing Budgets The budget of the convention and visitors bureau and/or. other organizations that sell a particular market is .one. measure of the 'marketing resources available for promoting a conference facility. Comparisons between various resort markets is considerably complicated. due to the fact that most such markets have multiple organizations promoting the destination or particular attractions. Vail, for instance, has a local convention bureau, a local marketing district, and Vail Resorts which .each market the destination in varying degrees. Vail Resorts generally focuses its marketing efforts on the ski season and individual vacationers. HVS collected data on the annual budget for the organization that either has the primary responsibility for marketing each respective conference center facility or the brganization that is charged with marketing lodging units in the destination generally, and thus would have a direct interest in increasing group room nights in the market. Table 5-15 shows the annual budgets for the identified organizations in each market for which such data was available. HVS Convention, Sports & Entertainment DRAFT Vail Convention Center Business Plan Peer Market Analysis 5-23 ~1 Table 5-15 Annual Budgets of Selected Marketing Organizations in Vail and its Peers Market Organization Annual Budget Vaih Vail Valley Chamber & Tourism Bureau & Local Marketing District $2,774,814 Monterey Monterey CVB !Monterey Convention Auth. $2,800,000 Snowmass Snowmass Village Marketing and Special Events Board $2,500,000 Keystone Keystone Resort $1,208,194 Telluride Telluride & Mountain Village Convention & Visitors Bureau $1,000,000 Banff Banff/Lake Louise Tourism Bureau $920,246 Peer Averagez $1,685,688 Subject % of Average 164.6°~ ' Vail figure includes the group events budget of the Local Marketing Distdct '~ s Average of peers not including Vaif Sources: Respective organizations and HVS Implications of Peer Resort Market and Facility Analysis If is important to note that the preceding budget figures include expenditures on overall destination marketing in addition to any specific conference center related marketing. The private resort associations that operate and market. the conference centers in Whistler and Snowmass were unwilling to share data on their. marketing budgets: Vail and Monterey have the ,most significant. marketing resources among the peer markets for which data is available. This review of a set of six peer resort markets with .conference facilities. provides information on the type, size, and character of conference centers in these markets. Generally, these facilities consist of a main ballroom/multi- purpose space of less than 20,000 square feet and a considerable supply of breakout meeting space. The Banff Centre is the most unique, and perhaps least relevant facility relative to what Vail hopes to accomplish with a new conference center, as it is designed to function under and academic model rather than as an engine for economic impact. The facilities in Telluride and Snowmass have somewhat. smaller main ballroom spaces .than the other peers. Two of the most relevant peer markets in terms of destination appeal and the availability of lodging units are Whistler and Monterey. The conference centers in each of these markets have a ratio of breakout meeting space to main ballroom space of 52 percent. Interviews. with the managers of each of these facilities indicate that a high volume of flexible meeting space is critical to their success. in attracting and retaining events.. Both facilities rely largely on stateJprovincial and regional demand.: Management of the 'Monterey Conference Center believes that .their main ballroom space is a little HVS Convention, Sports £~ Entertainment DRAFT Vail Convention Center Business Plan Peer Market Analysis 5-24 undersized for national associations and many national corporate events. .Whistler, with a slightly smaller main ballroom space, also lacks a significant volume of national (or North American) demand. However, their recent expansion is cited as the impetus for landing an ADP corporate event that will bring 6,400 room nights to Whistler in August 2004. Analysis of facility programs and interviews with .the managers of these. facilities reveal a number of key points that are relevantto the Town of Vail as it considers the development of a new conference center: ^ Breakout meeting space and flexibility of overall function space is critical-Managers of these facilities eitherreferred to the amount of breakout space and the flexibility of their space as a key strength or weakness relative to their demand potential. ^ Non-facility revenues subsidize the financial operations of,each of these facilities-Each of these facilities requires an outside source of revenue to cover the cost of their operations. This outside revenue comes in different forms including municipal taxes, assessments, and grants. ^ In an increasingly competitive environment for attracting events, the quality of the conference facility "and the .accessibility to lodging units. is more critical than ever-In the past a mountain resort. conference center may have been able to attract a segment of event demand simply due to the attractiveness of its location. However,. with the increasing number of facilities in different mountain resort locations, event planners are less and less likely to .make concessions on the layout and .overall functionality of conference venues. Similarly, event planners are also less likely to settle for less than .appropriate accommodations for their event attendees. Vail compares favorably to the peer mountain resort markets in terms of the number of ski visits. Furthermore, Vail is generally regarded as one of the more attractive ski destinations in the world. This .attractiveness as a ski destination translates not only in its drawing power during the ski season, but the overall character and quality of the resort. Tn part because of the quality of the ski experience in Vail, the .Town's European .village :atmosphere and the quality of its lodging properties are generally superior to the peer ski resort markets with conference centers. As long as Vail .lodging properties do not. HVS Convention, Sports £d Entertainment DRAFT Vail Convention Center Business Plan PeerMarket Analysis 5-25 price themselves out of the group market, the Town's attractivenessprovides an advantage relative to the other peer markets. Accessibility is a key concern among event planners. Vail's accessibility. relative to conference center locales is a challenge. However,. Vail compares favorably to the set of peer resort markets with conference centers. The level of air. service to the smaller commercial airports in the peer ski communities is highly seasonal. Monterey is the exception because its attractions are less seasonal. As a result, these communities must depend heavily on the air service of the nearest commercial hub airport in the non-ski seasons. None of the. peer markets are located within a short drive of the closest hub airports, but Vail compares. favorably to the peer average. This peer market analysis provides a base of information to help guide the facility recommendations and demand. and operating projections, which are detailed in the subsequent report sections. The analysis suggests hat a facility with a program similar to .those of Whistler, Monterey, .and Keystone could. accommodate a wide range of regional and state business. Access to national business may improve with a slightly larger main ballroom than these peers. Other factors that are more difficult to quantify, such as overall destination appeal, are also relevant to conference center demand potential. Section 2 includes descriptions of the very strong collection of visitorattractions Vail offers. Surveys and focus groups with event planners, detailed in Section 5 of this report, provide insight into the more :subjective .aspects of Vail's conference center demand potential. HVS Convention, Syorts fd Entertainment - DRAFT Vail Conference Center Business Plan Event Planner Inyut 6-1 ~~ _ ~ 6. Event Planner :Input A thorough analysis of conference- center demand potential and the development of facility recommendations relies in part on direct, detailed input from event planners.. Event planners play a leading role in selecting event locations and provide valuable insight regarding the overall attractiveness of a market and its convention facilities relative to other potential event locations. - HVS engaged in several research tasks designed to obtain input from a variety of event planning professionals, including: ^ Surveys and interviews with event planners who plan events for state associations and corporations in located in Colorado, ^ Surveys and interviews with event planners who plan events for .national associations and corporations that plan events. throughout the US, and ^ .Focus groups with national and state event planners. HVS surveyed state, regional, and national event planners to determine their facility needs and impressions of Vail as a potential location for their events. A - total of 53 event planners responded to the survey. The survey. process included an Internet survey form and phone interviews. HVS does not intend for these surveys to serve as a statistically. valid measure .for he future. demand for the facility, but rather as a tool to measure the general interest level in a new conference center facility and to determine how event planners view Vail as a potential location for their events. The national and state surveys are distinct and one does not represent a subset of the other. .Input from National HVS conducted a survey of national and regional event planners fo collect Event Planners and assess their views concerning Vail's potential to attract various types of events. HVS received 32 completed responses from national event planners through a combination of responses to :the internet survey and phone. HVS Convention, Syorts £~ Entertainment DRAFT Vail Conference Center Business Plan Bvent Planner Input 6-2 \` interviews.. Vail's reputation as a premiere resort destination provides it_with the potential to attract national and even international events. The input from event planners. reveals some of the opportunities and challenges that would face Vail in its efforts to attract these types of events to a new conference center. HVS developed a list of national and regional event planners from a variety of sources including: ^ Meeting Professionals International, ^ The Vail Chamber & Tourism Bureau, and ^ .Other industry sources. .The list of event .planners included those working with both national associations and various corporations. Figure 6-1 shows the- frequency in which the survey respondents. indicated they plan or manage various types of events.. Figure ~6-1 Most-Eommon Event Types Planned or Managed by National .Event Planner Survey Respondents The respondents indicated that they were involved in a variety of events, with meetings and training seminars mentioned most frequently. Respondents indicated the. geographic scope(s) of the events that they planned, as shown in Figure 6-2. HVS Convention, Sports £~ Entertainment DRAFT Vail Conference Center Business Plan Event Planner Input 6-3 Figure 6-2 Geographic Scope(s) of Events Planned by National Event Planners The event planners indicated they planned national/international events most frequently. However, several of these national event planners also plan regional (multi-state) events such as a Rocky. Mountain regional association meeting. The survey. addressed whether the national event planners expect attendance at their events to increase, decrease, or remain the same over the next five years. Figure 6-3 shows the result of the question regarding trends in attendance. Figure 6-3 National Event Planner Expected Trend in Event Attendance Over the Next Five Years Decrease 4% Stay fhe Same 48% iui' °„~iu . ~,A.. Increase - 48% :,u~~r, ~~~"~ ~~ „~ - ~~~; w~x~~~- Source: HVS Survey Despite the difficult economy and the downturn in travel nationally, only 4 percent of responding .national event planners surveyed anticipate attendance at their .events will decrease over the next five years. Half of the respondents believe attendance will increase over the next five years: HVS asked event planners to rate their level of knowledge of Vail as a convention/meetings destination: Vail -has not had. a conference center HVS Convention Sports F~ Entertainment DRAFT Vail Conference Center Business Plan Event Planner Input 6-4 capable of accommodating larger events (in the 500 to 1,500 attendee range) in the past, and as a result, it is possible that some event planners may not have a thorough knowledge of what Vail .offers as an event location.. Figure 6-4 shows the results of the question concerning event planner knowledge of .Vail. Figure 6-4 National Event Planner Knowledge of Vail as a Convention /Meetings Destination Not Somewhat Knowtedgable : ' Knowledgable 28% ''aT, 59% .'~~'~~~;= s. R~~~~~_~~a. z;x~~xa ~,r„ , , tips ~~ ~~„ ~~~~m~iw sv~,,,~m~~^~~e Very -~;a°° ^ra, Knowledgable pac; 13% Sourw: HVS Surrey Given Vail's well-established reputation as a premiere resort,. it is somewhat surprising that only 10 percent of respondents consider themselves to be very knowledgeable of Vail and close to 30 percent consider themselves not knowledgeable. The lack of a larger conference center facility probably has much to do with this relative lack of familiarity with Vail as an .event destination. The survey asked event planners a series of questions concerning their. facility needs, event attributes, and hotel room needs. Table 6-1 shows the average,. median, and maximum responses for the various attributes covered in the survey. HVS Convention, Sports.F~ Entertainment DRAFT Vail Conference Center Business Plan Event Planner Input 6-5 \` .Table 6-1 National Event Planner Facility Requirements, Event Attributes,. and Hotel Room Needs Event Characteristics Average Median- Maximum Facility Requirements Square Feet of Exhibit Space 14,538 0 .100,000 Square Feet of Meeting Space 14,316 9,450 90,000 Square Feet of Ballroom Space 13,669 11,000 60,000 Theater Seating Capacity 1,114 600 6,500 -Event Attributes Number of Attendees 862 350. 6,000 Number of Exhibitors 41 28 200 . Show Days 3.2 3.0 5.0 Move In /Move Out Days 2.3 2.0 6.0 Hotel Room Needs Number of Peak Hotel Rooms 583 313 3,200 Source: HVS Survey The national .event planner responses indicate that the average facility requirements exceed the capacity of any existing hotels with meeting space in Vail. Events require an average of slightly less than. 15,000 square feet of exhibit space. Taking the average. of the sum of exhibit, .meeting, and ballroom space required by each event, the average event requires simultaneous use of over 48,000 total square feet of .function space. The average and .median required room block size also approaches or exceeds the group room block capacity of any single hotel in Vail Event planners consider several criteria when selecting a location for their event. HVS asked national event planners to rate various attributes of Vail in comparison to other. cities in which they have held, or may hold, events. Figure 6-5 summarizes the survey responses .regarding Vail's event destination characteristics relative to other. markets where. the .event planners have held events. HVS Convention, Syorts f~ Entertainment DRAFT Vail Conference Center Business Ptan Event Planner Inyut 6-6 Figure 6-5 National Event Planner Ratings of Vail Event Destination Characteristics .The criteria relating to Vail's recreational opportunities, tourist and cultural activities, and restaurants and bars received the highest ratings. Criteria relating. to transportation received the lowest ratings. Ability to attract attendees received a high rating, but was ranked below the criteria relating to destination appeal. It appears that perceived logistical challenges lead .event planners to rank the ability of Vail to .attract attendees lower' than its destination appeal would otherwise suggest.. The ability to attract attendees characteristic is particularly important for events that draw large portions of their attendees from out-of-town. The cost and availability of air service received the lowest ratings from responding event planners. The next lowest ratings went to the availability of .function space. The event planner responses indicate an overall perception that Vail as a destination is highly appealing, but that the logistics. of .executing events there make it somewhat challenging. HVS asked survey respondents to indicate which. types of locations they prefer for their events. Respondents could indicate multiple locations. Figure 6-6 shows the responses regarding preferred ocation type. FiVS Convention, Syorts £a Entertainment DRAFT Vail Conference Center Business Plan Event Planner Inyut 6-7 ~' Figure 6-6 Reported Preferred Event Location Among National Event Planners National event planners indicated a preference for a resort location for their events, followed closely by a downtown location. The willingness of event planners to consider resort locations is an indicator of strong event potential for Vail. A key criterion for selecting a location for am event is the event planner's perception of the relative attractiveness of a destination relative to other peer alternatives. HVS asked event planners to rank the relative attractiveness of a set of resort destinations with conference centers -and a new facility in Vail. Figure 6-7 shows the average ratings of these markets and their facilities. HVS Convention, Syorts £a Entertainment DRAFT Vail Conference Center Business Plan Event Planner Inyut 6-8 Figure 6-7 National Event Planner Ratings of the Relative Overall Attractiveness of Selected Resort Conference Center Markets The responses do not indicate much variance among the six .facilities, although Vail is ranked slightly above Monterey and Snowmass. The fact that respondents. on average ranked none of the destinations and their facilities much above average reveals that the events planners may be .somewhat dissatisfied with certain elements of these existing facilities and/or destinations. The survey "also asked event planners to rate the relative importance of potential improvements to Vail's attractiveness as a location for their events.: Figure 6-8 shows the results sorted from most to least important. HVS Convention, Syorts £a Entertainment DRAFT Vail Conference-Center Business Plan Event Planner Inyut 6-9 ~` Figure 6-8 National Event Planner Ratings of Relative Importance of Potential Improvements The strong desire for improved air service is indicative of the attractiveness of Vail as an event destination and the perception that it is difficult for attendees to get to Vail. Since most events. overall are small enough tofit into hotels with meeting .space, it isn't surprising that event planners rate hotel space -and lodging above conference center space in importance.. Event planners ..indicate that a new conference center is important, but on average are more concerned with hotel-based space since the majority of events overall are. small enough to fit in hotel meeting spaces. The. survey asked event planners to indicate how often they would likely utilize the planned conference center in Vail for their events. Figure 6-9 shows the frequency in which the respondents estimated they would Vail for their events assuming that the town developed a new conference center. HVS Convention, Sports & Entertainment DRAFT Vail Conference Center Business Plan Event Planner Input 6-10 _ ~\ - _ ~ Figure 6-9 National Event Planner Estimated Frequency of Utilizing Vail for Events Two-thirds of the event planners. indicated that they expected to utilize Vail for their- events assuming the conference center is developed. Approximately 43 percent of the respondents indicated they planned on coming o Vail. at least once every five years. -The survey invited event planners to provide comments on the strengths and weaknesses of Vail as a location for their events. HVS consolidated these comments into major topics, which are shown in Table 6-2 in the order of frequency. Table 6-2 Summary of National Event Planner Comments on the Strengths and Weaknesses of Vail Strengths Weaknesses Overall attractiveness Transportation Year-round activities Cost Reputation Weather at time of event Weather Altitude Village Size of market Unique alternative .Prefer hotel-based space Skiing Source: HVS Survey HVS Convention, Sports £~ Entertainment DRAFT Vail Conference Center Business Plan Event Planner Input 6-11 \~ The strengths event planners mentioned most frequently are primarily oriented towards Vail's overall appeal as a visitor destination and its many recreational amenities. Many of the comments signaled out the year-round appeal of Vail and the wealth of activities it offers in the summer months, in addition to the skiing in .the winter. Transportation was far and away the most frequently mentioned weakness, with over 70 percent of the respondents who commented on weaknesses citing` transportation specifically, Most of the transportation comments focused on either the level of air service into Eagle County Airport and/or the distance from Denver's airport. The overall impression that emerges from the comments is that event planners lament'the fact that the logistical challenges of getting to Vail make it a tougher sell to potential event, attendees than it would be otherwise. The following are excerpts from the comments from national event planners on the strengths and weaknesses of Vail: ^ Strengths are the beauty of Vail, the activities, the village. Weaknesses would be flight service. Travel to and from DIA: ^ I love Vail. & our guests would too if flight availability increased. ^ Infrequent air service into Vail doesn't allow much flexibility, but beauty of location and 'things to do outweigh the negative of travel ^ Vail is a destination-that is desirable because of it's natural beauty and great summer and winter weather. It has all the components .visitors look for....mountains, sun, snow all at one time to enjoy. The biggest weakness is the transportation. Need more connecting flights to Vail .throughout .the year. The cost of moving people in time and transportation costs are a big factor in site selection. ^ We never hold meetings at Convention Centers due to the cost. At large hotels we pay nothing .for meeting room space based on occupied guest.. rooms and food & beverage. Under no .circumstances would we split up our conference between several properties. ^ Key. strength is scenic location both summer and winter. Key weakness is transportation to location. Too far from major airport. HVS Convention, Sports £~ Entertainment DRAFT Vail Conference Center Business Plan Event Planner Input 6-12 The comments on Vail's key strengths .and weaknesses as an event destination were very consistent. Respondents lauded Vail's year-round attractiveness and also lamented the lack of air service and the distance from DIA. A few event planners with smaller events indicated .they would not consider a conference center. that did not have an attached hotel. HVS State Event HVS also surveyed a set of association event planners located in the State of Planners Survey Colorado to gain their perspectives on the suitability of a conference center in ..Vail for their events. HVS identified survey. recipients from databases maintained by the Colorado Society of Association Executives and augmented the list with other industry sources. HVS received 21 completed responses through a combination of responses to the Internet survey and phone. interviews. Figure 6-10 shows the frequency in which the survey respondents indicated they plan or manage various types of events. Figure 6-10 Mast Common Event Types Planned or Managed by State Survey Respondents / i, 13 1U 6 5 ~ --- 3 2 --~ - ~-. Meetings Canventbre Training Banquets Trace Shows Other Consumer Serranars Shows Source: HVSSurvey The :respondents indicated that they were involved in a variety of events, with meetings and conventions mentioned most frequently. Respondents indicated the geographic scope of the events they planned. Figure 6-11 shows -the frequency in which respondents indicated they planned events of various geographic scope. HVS Convention, Syorts £a Entertainment DRAFT Vail Conference Center Business Plan Event Planner Inyut 6-13 \~ Figure 6-11 Geographic Scope(s) of Events Planned by State Survey Respondents The event planners who indicated they planned events that were regional or national in scope either plan events that draw from outside Colorado, despite ' being primarily State events, or they plan events other than those of the state association they represent. The survey addressed whether the planners expect-attendance at their events to increase, decrease, or remain the same over the next five years. Figure 6-12 shows the result of the question regarding trends in attendance. Figure 6-12 Expected Trend in State Event Attendance Over the Next Five Years None of the responding event .planners surveyed anticipate attendance at their events will decrease over the next five years. Approximately. 44 percent of the respondents believe attendance will increase over the next five years. HVS Convention, Sports £d Entertainment DRAFT Vail Conference Center Business Plan Everit Planner Input 6-14 ~~ HVS asked event planners to rate their level of knowledge of Vail as a convention/meetings destination. Figure 6-13 shows the .results of the. questionconcerning event planner knowledge of Vail. Figure 8-13 State Event Planner Knowledge of Vail as a Convention/Meetings Destination The fact that .only .slightly more .than half of the state survey respondents characterized themselves as being very knowledgeable of Vail as a convention / meeting destination is indicative of the absence of a true conference center and the inability of event planners with larger events to consider Vail. The survey also asked event planners a .series of questions concerning their facility needs, event attributes, and hotel .room needs. Table 6-3 sh©ws the average, median, and maximum responses for the various attributes covered in the survey. HVS Convention, Syorts F~ Entertainment DRAFT Vail Conference Center Business Plan ~ EventPlanner Inyut 6-15 ~~ _ ~ Table 6-3 Facility Requirements, Event Attributes, and Hotel Room Needs of State Event Planners Event Characteristics Average Median Maximum Facility Requirements Square Feet of Exhibit Space 14,400 5,600. 100,000 Square Feet of Meeting Space 8,557 4,900 50,000 Square Feet of Ballroom Space 3,993 2,000. 20,000 Theater Seating Capacity 458 438. 900 Event Attributes Number of Attendees 482 275 2,500 Number of Exhibitors 60 48 200 Show Oays 2.7 3.0 5.0 Move In 1 Move Out Days 1.4 1.8 3.5 HoteLRoom Needs Number of.Peak Hotel Rooms 297 200 1,000 Source: HVS Survey J The survey responses are indicative of the fact that there are a larger number of smaller events, which creates low median figures relative to the mean. Despite the larger number of smaller events in the sample, the average facility requirements exceed the capacity of most hotels with meeting space. Taking the: average of the sum of exhibit, meeting, and ballroom space required by each event, the average event requires simultaneous use of over 26,950 total square feet of :function space. The average event also exceeds the typical capacity of any of the Town's hotels in terms of the required room block size. Event planners consider several criteria when selecting a location for their event. HVS asked event planners to .rate various attributes of Vail in comparison to other cities in which they have held, or may hold, events. Figure 6-14 summarizes the survey responses regarding Vail's event .destination characteristics relative to other event locations. HVS Convention, Sports £d Entertainment DRAFT Vail Conference Center Business Plan Event Planner biput 6-16 Figure 6-14 State Event Planner Ratings of Vail Event Destination Characteristics Ability to Attract ~, 4.4 Attendees !~ Recreational II '- 4.4 Opportunities i Restaurants & Bars it 4.4 Availability of Lodging,) ~ 4.4 4 ~ 7 Tourist 8 Cultural ', 4,0 Activities I Climate J 3.9 Availability of Meeting ~, 3.4 SPace ~ Availability of Exhibit ', 3.4 Space j Availability of Air Travel ~~ 2.8 ' i Cost of Air Travel ~ 2.4 - -- 1- 2 3 4 5 Very Poor Average Excellent Source: HVS Survey Attractiveness to attendees is one of the more important qualities analyzed in this survey, as it can be the defining factor for event planners in scheduling an event at a facility. In rating the overall allure of locations for their events, event planners consider a host of factors including both their own perceptions of the desirability of the market and the perceptions of potential attendees. Respondents rated Vail's ability to attract attendees quite high,. indicating that its appeal is likely to outweigh any logistical obstacles related to transportation or other issues The criteria relating to Vail's recreational opportunities and overall destination appeal received the highest ratings, along with theavailability of lodging. Air travel, particularly its cost, received the lowest ratings. , HVS asked survey respondents to indicate which types of locations they prefer for their events. Respondents could indicate multiple locations.: Figure 6-15 shows the responses regarding preferred~location type. HVS Convention, Sports £~ Entertainment DRAFT Vail Conference Center Business Plan Event Planner Input 6-17 Figure 6-15 State Event Planner Reported Preferred Event Location ~~ Respondents indicated a preference for resorts and downtown locations. This result is partially indicative of the existing supply of event facilities in the State, as many of the nicer facilities are located in resort and suburban areas. A conference center in Vail would benefit. from this familiarity: with, and reliance upon, resort locations among state event planners. A key criterion for selecting. a location for an event is .the event planner's perception of the overall quality of the destination in question. HVS asked event planners to rate the overall attractiveness of a set of existing primary convention facilities, conference centers, and hotels with" meeting space that frequently host State events. HVS selected the list of facilities based upon an assessment of the one or two. facilities in each market that would compete most directly with a .conference center in downtown Vail for State events.. Figure 6-16 shows the average ratings of these selected facilities. HVS Convention Syorts F~ EntertainmenE DRAFT Vail Conference Center Business Plan Event Planner bzyut 6-IS Figure 6-16 Relative Attractiveness of Selected Event Locations Among State Event Planners Event planners rate Vail as easily the. most attractive event destination. It is typical to see some bias in .favor of the subject location in such surveys, but the disparity between the rating for Vail and the other locations in the state is noteworthy. The disparity between Vail and the other resort locations on the .list is indicative of significant demand potential associated with events that typically utilize resort locations. The survey also asked event planners to .rate the relative importance of , potential improvements to Vail's attractiveness as a location for their events. Figure. 6-17 shows the results sorted from most to least important. HVS Convention, Sports £~ Entertainment DRAFT Vail Conference Center Business Plan' ~ Event Planner Inqut 6-19 ~~ Figure 6-17 State Event Planner Ratings of Relative Importance of Potential Improvements Singlet3ookingContad + 4.1 New Hotel Event - 4.0 gpyce NewConference 3.6 Center ~ si 3.4 Improved AirService 1 3.2 More Lodgng 1 2 3 4 ~ 5 VeryPOOr Average Excellent Source: HVS Survey .HVS added a specific question regarding .the importance of having a single contact person for booking conference space and lodging to the state survey in response to the comments received in a set of focus groups, which are detailed later in this section. Respondents rated the need for a single contact at the top of the list of potential improvements. This is a very important finding of .the survey and indicates that ease of booking an event and securing the necessary room. block is a critical concern among event planners considering holding events in a resort. destination. More. hotel event space and a new conference center. followed in order of importance. Improved air service, which is perceived as critical among many national event planners, is less important to state planners due to the high propensity for event .attendees at state events to drive. Figure 6-18 shows state .event planner estimated frequency of utilizing Vail. for their events. HVS Convention, Sports fj Entertainment DRAFT Vail Conference Center Business Plan Event Planner hspuE6-20 Figure 6-18 .State Event Planner Estimated Frequency of Utilizing Vail for Events 10 10 8 6~ 3 3 4 2 ~ -- 0 - 0 - -- -- _ ,- -- - _ _ -- _-- -~-' - - _ _ ---, Never Less than Once Once Every 6- Once Every 2-5 .Annually -Every 11+ 10 Years Years. Years Source: HVS Survey Over 82 percent of the event planners responding to the question indicated that they intended to utilize Vail for their events. Approximately two-thirds of ahe responding event planners. indicated that they intended to bring events to Vail at least once every five years. The survey invited event planners to provide comments on the strengths and weaknesses of Vail as a location for their events. HVS consolidated these comments into major topics, which are shown in Table 6-4. Table 6-4 Summary of State Event Planner Comments on the Strengths and Weaknesses of Vail Strengths Weaknesses Overall Attractiveness Cost Location Lack of Larger Facifiites Weather. Transportation. Reputation Prefer Hotel-Based Space Source: HVS Survey The strengths event planners mentioned most frequently are primarily oriented towards Vail's overall appeal as a destination. Unlike the .national survey respondents, state respondents. mentioned cost most #requently as a weakness of Vail, with transportation being much further down the list. The preference for hotel-based space was noted by a couple of event planners HVS Convention; Sports ~ Entertainment DRAFT Vail Conference Center Business Plan Event Planner Input 6-21 who deal with smaller events that can fit into existing hotel conference facilities in reference to the ability of a new conference center to compete for their business. HVS asked the state event planners to provide comments about the overall strengths and weaknesses of Vail. as an event destination and any suggestions they had for .the development of a conference center in Vail. The following are selected excerpts from these comments that provide a general. sense of the opinions of responding event planners. ^ Strength is Vail's reputation. as a premier vacation destination and meeting location. Weakness is Vail's general lack of size. and «' flexibility of existing meeting/convention space to attract large convention groups. ^ The climate and the town are attractive.. Restaurants and night spots are attractive. Hotel-based meeting space is inadequate for our conference at .this time. A convention 'center would be attractive, but we would probably not come to -Vail with a conference center which is not hotel-based if there is a separate charge for meeting space. We are used to having meeting space' provided at no charge .because of our large sleeping room block and food and A/V charges. We are not willing to go where there would be meeting room charges. Also, food and lodging costs in Vail are unattractive to us. We find banquet costs and sleeping rooms are significantly higher in Vail than in other resort areas where we go. ^ Room rates are too high and overall costs too high for our group. ^ Average person doesn't feel like they can afford Vail, need special rates for golf and other mountain activities. Overall, these comments reflect that Vail would be an attractive option for state .event planners if it had a true conference center facility. Vail's many natural attractionsand the appeal of its European village atmosphere creates a unique setting for events. The current lack of a conference center, restricts the ability of Vail to attract and host events that are too large for a single hotel with. meeting space. State event planners are concerned about the potential additional events costs associated with astand-alone conference center HVS Convention, Syorts £~ Entertainment DRAFT Vail Conference Center Business Plan Event Planner Inyut 6-22 because many of the hotel facilities they. currently use discount or comp event: space. Implications of the The following points summarize the primary conclusions that emerged in the Event Planner Surveys course of analyzing the survey results:. ^ Event planners have a very positive overall perception of Vail as a location for events. ^ Planners stressed the year-round attractiveness of Vail as an event destination. ^ Vail's reputation makes it a very strong draw for attendees in the opinion of event planners. ^ Single hotel properties with meeting rooms are not capable of hosting a significant portion of the events that respondents plan. ^ Transportation is the overriding concern among national event planners when .considering the merits of Vail as a potential location for their events. The lack of flights in and out of Eagle County Airport in the non-ski season and the distance of Denver s airport are viewed as significant, though. not insurmountable, hurdles. ^ Cost is the key perceived weakness of Vail among state event planners. Room rates and the cost of restaurants was a concern to event planners who were weary that potential attendees might be scared off because of perceived high costs in Vail. These respondents were also .particularly concerned about the need to pay separately for event space and lodging, as some indicated they typically get hotel based-event space for free. This is only likely to affect the demand potential for Vail in respect to events that have been small enough for hotel-based event space but are .growing out of such venues, as events that are small enough for hotel spaces will likely prefer to stay in hotel anyway..: ^ .Event planners rate Vail above other resort and intrastate event locations, but are concerned about the logistical' challenges of holding events in Vail. HVS Cwzvcmtion, Sports £a Entertainment DRAFT Vail Conference Center Business Plan Event Planner Input 6-23 \, - ) ^ Responding national event planners required an average of 48,000 square feet of total function space. Overall, the event planner surveys and interviews indicated a :high level of interest in a new conference center facility in Vail. The overriding message from the responses is that Vail is a great event destination, assuming that the logistics of getting attendees there and its. cost do not overwhelm its attractiveness. Despite. its attractiveness, difficulties in .arranging transportation from DIA, booking event space and lodging separately, and other logistical concerns could restrict a conference center's ..demand potential. It is apparent that the Town of Vail needs to make planning events in a conference center facility. a seamless process. Event planners must be able to negotiate event space rental, lodging, food & beverage, and services charges with a single central contact. Otherwise, the additional burden on event planners to bring an event in Vail together will outweigh the obvious benefits Vail offers in its attractiveness to attendees. The responses regarding the amount of required function space indicate that national events require an average. over 48,000 square feet of function space, compared to 26,950 square feet for, state events. Therefore, the facility will likely be.more effective in capturing a national event demand if it can offer approximately 48,000 square feet, of function space. Given the disparity in the size requirements. of national and state events, it would beneficial for the facility to be large enough to accommodate national events and also segment into halves to accommodate simultaneous smaller state events. Event Planner Focus `I-IVS conducted two focus .groups with the assistance of Strategy One, a Groups research firm specializing in focus groups. The first group with national event planners was held in Chicago and a second group with state event planners was held in' Denver: These .groups each included ten event planners representing a variety of associations, corporations, and independent event planning companies. The groups occurred in specially designed rooms where HVS consultants could observe the groups behind one-way glass. The sessions were video taped and made available to the client. :Respondents in both groups included a mix of corporate, association, and independent meeting planners, and were recruited according to the following specifications: ^ Must consider a resort destination for at least one meeting/event planned per year, HVS Convention, Sports F~ Entertainment DRAFT Vail Confereiace Center Business Plan Event Planner Input 6-24 ^ Must not have, any constraints placed upon them that prevent. them from planning meetings/events in the state of Colorado, ^ Must plan at least one meeting/event per year for between 400 and 1,500 attendees, and ^ Must plan at least one meeting/event per year that requires up to 40,000 square feet of main ballroom and exhibit space and up to .20,000 square feet of meeting room space. -Both groups included an upfront discussion of the overall requirements of the meeting planning profession, followed by the participants' feedback on Vail as a meeflng/event destination in general. The .groups then saw the preliminary conference center site plan, and 'heard additional information on specifics related to planning a meeting there, including transportation access and lodging availability and rates. Finally, the groups commented on the positives and negatives of the conference center in .relation to both the . destination of Vail itself and the preliminary site plan. They also stated their preferences concerning what would make their job as seamless as possible if they chose to plan a meeting at the proposed conference center. The professional opinions of the event. planners were very helpful in highlighting the primary opportunities and potential challenges associated with the operation of a conference center. in Vail. The following text describes the primary. lessons learned from these groups and the implicationsfor the proposed conference center. Vail's greatest strength is its reputation as a world-class resort-Participants from both groups stressed the importance of Vail's reputation as a premiere destination and its overall attractiveness to attendees. Implication: The attractiveness of Vail as a resort destination is well - established. Marketing can focus on the attributes of the facility and its ability to host larger events than individual hotel properties. Vail is attractive year-round and not just in the ski season-Both groups stressed the year-round attractiveness of Vail and were especially intrigued by the prospect of being able. to use the facility in the. summer months. Many planners felt. that the summer months would be the most attractive period for conference center events due to the lower room rates and the more universally appealing natural attractions of Vail in the summer, as opposed to HVS Convention, Sports fa Entertainment DRAFT Vail Conference Center Business Plan Event Planner Inyut 6-25 the more targeted appeal of skiing in the winter. The following points summarize some of the perceived advantages of Vail in the non-ski season the event planners stressed: ^ Lower rates and more room to negotiate, ^ Less potential .for weather and transportation problems and delays, ^ Attractive summer. activity options -golf, hiking, mountain biking; white-water rafting, rock climbing, and ^ Non-tourist season means less crowds, allowing conference attendees to feel as though they have the town to themselves. The State group noted that they would avoid the "mud season" in the spring. Another concern was that the Town not be closed down in the less popular tourist periods. Implication: Vail inmost attractive to meeting planners at the time of year the Town of Vail is most interested in increasing occupancy. However, if the most of the restaurants, bars, and retail stores are closed or close early during these times event attendees may not be disappointed. Event planners perceive Vail as being very expensive-Both groups of event planners consider Vail to be expensive - in terms of lodging, retail stores, and restaurants. Given the upscale reputation of .Vail, meeting planners see it as a prime and ideal destination for many physician,. pharmaceutical and lawyer professional groups as well as for corporate meetings. They feel the costs may - prohibit other types of audiences, such as certain association groups and public sector professionals who must adhere to stricter budgets. Implication: Some groups and associations may not be appropriate for Vail. because an event in such a highly regarded resort would create the impression of a boondoggle. Communication and marketing messages and materials need to emphasize reduced .summer and shoulder season lodging rates. In the absence of discount packages that include meals and recreational activities the overall costs of an event u1 Vail may. still be beyond the reach of many groups, HVS Convention, Syorts £~ Entertainment DRAFT Vail Conference Center Business Plait Event Planner Inyut 6-26 \~ so efforts to help. pull together such packages. will be needed i£ Vail wishes to attract such groups. The overriding concern among national event planners regarding events in Vail is transportation-National meeting planners anticipate transportation challenges in Vail -both air and ground transport -and therefore, consider this issue somewhat of a deterrent to planning a meeting there. The lack of direct flights .into Eagle County Airport in the off-season and the- two-hour drive from Denver International Airport (DIA) are viewed by national event planners as significant, although not insurmountable, obstacles to holding. events in Vail. The prospect of significant snow storms further concerns these planners. Many of the participants. assumed that Vail's closest airport was '" only capable of handling small commuter planes. The participants discussed at length. how nice it would. be if there were a train that .connected DIA to Vail. In contrast, nearly all the state .planners feel transportation to Vail is a non- issue, and for a few, a minimal issue at best. Any concerns regarding transportation from the state planners dissipate even further when considering a Vail meeting in the warmer (and off-season) months. This is true despite the fact that most of the state planners coordinate meetings with: attendees coming in from out of state, so they must consider both air and ground travel. Implication: The input from the national focus group participants indicates that transportation is the single greatest challenge to attracting their events to a new conference center. in Vail. A concerted. effort to publicize the transportation options that are available is necessary. Concurrently, efforts. to increase the volume of service. in and out of Vail should continue, as their success will have a direct impact on the attractiveness of the center to national event planners. Marketing and sales efforts should include education and support materials on the many air and ground transport options that are available, and .guidance on which of those options might fit best with their particular needs for any given event. In addition, the Town should explore creative .ways to make the trip .from .DIA .more appealing such as luxury coaches and tours of attractions along the way. A large percentage of attendees to state events .drive, and therefore transportation is not a major concern for state. event planners. HVS Convention, Sports £~ Entertainment DRAFT jail Conference CenterBusiness Plan Event Planner Input 6-27 \` Vail's .lodging supply will be adequate for most events, but process for assembling room blocks must be simplified-Most meeting planners prefer a .variety of lodging options and rates because attendees like the flexibility of choosing what best suits their personal needs. However, planners do not want to negotiate with each individual property, and believe the responsibility of pulling this together falls with the host community's tourism professionals to assemble room blocks and negotiate rates for. the various hotels and condos. Implication: The multiple lodging properties and .types available in Vail will work very well with the needs of meeting planners, provided there is one point of contact to coordinate all of the properties used for ~: any one meeting when booking rooms. If meeting planners are forces to negotiate individually with several different hotels to assemble room blocks they will search elsewhere for larger hotel conference centers that can furnish both .the event .space and lodging they require. If Vail is "closed" during slow tourism. periods event attendees will not be satisfied with their event experience-Although the periods outside the busy ski season are more attractive to event planners, their concern lies with the availability of recreational .activities during these. periods. Specifically, they worry retail stores and restaurants may not be open for business during the- off-season. Additionally, they express apprehension about hotels and condos ensuring attentive service to conference attendees due to reduced staff, since many lodging properties give vacation time to employees in the off-season. Implication: Building a conference center has the potential to significantly increase the level of tourism activity in the summer and shoulder seasons in Vail, but unless the Town takes steps to ensure that event attendees will experience a vibrant and welcoming environment during these .periods. they won t be pleased with their :.experience .and event .planners will .refrain from booking events during these times. Vail needs to avoid the "chicken or the egg" trap by making special .arrangements at restaurants,. bars, and various attractions so they. are adequately staffed to accommodate larger events. If attendees come before the Town is ready to accommodate them a couple of bad experiences will quickly. peg- Vail with a reputation as a place to avoid in its "off" seasons. HVS Convention, Sports £a Entertainment DRAFT Vail Conference Center Business Plan Event Planner Input 6-28 HVS also conducted a third focus group at the Ritz-Carlton Bachelor Gulch iri conjunction with a Meeting Professionals International .event that was occurring there in late October. The intent of this third focus group was to delve deeper into the main themes that emerged from the prior focus gxoups and event planner surveys and interviews. It also provided an opportunity to present a revised set of facility program recommendations to them and get their opinions on them. The- group included ten meeting planners representing a variety of event types and sizes. HVS conducted this focus group session and asked a set of questions tailored to further pursue some primary themes that had :emerged from the prior research, The following points summarize the main topics of discussion and the implications for the proposed conference center. Vail's is attractive as a year-round destination, but will experience considerable competition from warm-weather resorts-The participants recognized the attractiveness of Vail as a year-round resort. Among its many attractions the skiing, while an amenity to some event attendees, is less important overall than the mountain views, European village setting, restaurants and night life, and other forms of outdoor recreation like golf, hiking, and rafting. This is particularly true for larger events that will attract a potentially diverse group of attendees ranging from young to old and affluent to middle-class. However, a -great challenge to marketing the facility will be to compete with warm-weather resorts that feature more easily accessible, family-oriented recreational activities such as the beach and the. pool.. Many such facilities also offer sufficient event space and lodging in one integrated hotel conference center, making them a somewhat easier sell at the outset than a package including astand-alone conference center and two or more difference lodging facilities. Implication: A conference center in Vail will offer .attendees a very unique experience relative to the .many warm-weather resort conference centers it will compete with. In order to .help make this uniqueness a strength, .the conference center should maximize attendee exposure to the mountains and Vail's European. village atmosphere. Vail should be attractive both as a unique alternative for annual events that otherwise use warm-weather locations and as a more environmentally varied alternative than a beach orgolf resort. .Transportation was once again the major concern, but the group concluded there are ways to mitigate the challenges associated with traveling. to Vail- HVS Convention, Sports f~ Entertainment DRAFT Vail Conference Center &usiness Plan Evertf Planner Input 6-29 The participants quickly zeroed in on transportation as a key challenge to attracting events to a conference center in Vail. They discussed the differenfi methods they used for getting to the Vail Valley and. the challenges they faced in terms of overall travel time, which was as much as 12 hours, cost, and convenience. After acknowledging the difficult time some of the participants had getting to the Vail Valley, HVS pressed them to think of ways in which the community could make the trip easier. The first reaction was that an increase in the volume of direct air service into Eagle County Airport would_ greatly improve the situation. After an invitation to consider additional ways to improve the overall experience of getting to and from Vail,. the participants came to the conclusion that there were some other things that could greatly improve the overall travel experience to and from Vail. Those who. utilized the Colorado Mountain Express service from DIA to the Vail Valley expressed frustration that there was only one van every two hours and that if you just missed one by a couple of minutes you had to wait another two hours for .the next one. They indicated that the addition of a few more shuttles during the peak.. .arrival times would go a long way toward making the trip over from DIA more palatable. Another method for improving the .experience they. noted was a welcoming station or registration booth at the airport. Greeting stations and/or registration booths. at DIA would enable event attendees to pick up conference materials to look over during the ride in and provide an opportunity for them Participants felt that the mere recognition of an attendee's arrival at the :airport, and perhaps a modest amenity. such as a bottle of water, would go a long way towards creating a sense that the attendee has arrived at the event even hough there is still some distance between them and the event location. Implication: Concerns regarding transportation to and from Vail will be at the top of nearly every event planners list of concerns. An increase in direct flights to Eagle .County Airport would help, but unless the frequency of flights increased dramatically in the .non-ski seasons many attendees are likely to still opt to fly into DIA and wank their way to Vail from there. Arranging special dedicated shuttles and augmenting the. typical daily shuttle. service from the airport would. dramatically improve the travel experience of ..event attendees. Greeting /registration booths at DIA and is another strategy that has significant potential for easing the transition in from the airport. The implication for demand potential is that the challenges related to transportation can be muted if the Town takes certain steps to help HVS Convention, Syorts £~ Entertainment DRAFT Vail Conference Center Business Plan Event Planner Input 6-30 \~ make the trip in smoother. lvent attendees should -not. feel like they are on their own to navigate their way to Vail once the arrive at DIA. Cost is another key concern among event planners, especially for larger events-The participants expressed .concerns about the costs of holding events in Vail, in terms of the lodging rates, the cost of recreational activities, and the amount they would need to pay .for event space at the conference center. There was a discussion about ways in which the facility could package lodging rates and recreational activities together to provide. potential event attendees with a better overall value than they would be able to get individually as tourists in Vail. Implication: Despite Vail's overall destination appeal, the conference center needs to be as competitive on price as possible in order to draw a reasonable share of event demand. Costs will. fluctuate significantly. depending upon the season, but need to be reasonable relative to other resort destinations. Single level versus multi-level facility design-HVS asked the participants to comment on the relative functionality of single level and multiple level facility layouts. The first reaction among the participants was that he single- - level design is far superior.. When HVS questioned them. further as to what specifically was superior about it they changed their emphasis bystating that. either facility layout could work as long as it"was designed properly. The concerns expressed regarding the multiple level facility centered on way finding and ease of vertical circulation. They acknowledged that way finding could be problematic in a single-level facility as well. The participants expressed a preference for escalators over an exclusive reliance on elevators for vertical circulation for attendees in a multiple-level scheme. When asked specifically whether they would prefer asingle-level facility over a.multiple- level facility they responded by saying that it depends on the layout and functionality and declined to indicate a blanket preference for single-level layouts. Implication: Despite the inherent design challenges associated with multiple-level conference center layouts, the key selection criterion for event planners is the overall functionality of a particular venue. If the facility is designed efficiently with good way finding and vertical circulation amultiple-level facility is not inherently less .appealing than asingle-level facility. FIVS Convention, Sports F~ Entertainment. DRAFT Vail Conference Center Business Plan Event Planner Input 6-31 Attractiveness of Vail as a destination versus the .appeal of the conference center facility itself-HVS sought the reaction of the participants to -the statement that the destination appeal of Vail is the critical selling point and that the attractiveness and .features of the conference center are secondary. Participants were quick to stress that both elements-an attractive destination and a top notch conference center-would be necessary to make a conference center in Vail effective in attracting events. HVS then posed the possibility that the facility could include various elements to accentuate the mountain views the site affords and integrate the facility with its natural surroundings. The group was particularly supportive of the idea to develop an outdoor function space such as a terrace that enabled event attendees to experience the magnificent mountain views and climate. The space could serve either as ~' a function area with outdoor receptions or even overflow exhibit space or as a pre-function space where event attendees could go on breaks between event activities. Implication: Simply developing a conference center facility in Vail and depending upon the attractiveness of the destination to support demand for events is unlikely to produce the desired level of event activity: The conference center should accentuate the overall appeal of Vail and be integrated with .its mountain setting and village atmosphere. Some sort of signature design element that .provides mountain views and enables event attendees to be outside. in .the beautiful Vail climate, particularly in .the late spring, summer, and early fall deserves strong consideration. When asked their opinion of the primary element necessary to make .the .conference center successful, the participants stressed the importance of a coordinated seamless process for booking the facility and acquiring. room blocks-The participants .stressed the importance of having a seamless process for booking event space at the conference center and assembling.: necessary room blocks that went through a single point of contact. The availability of multiple lodging options can be an advantage for Vail, but not if -each event. planner is required to do the legwork of negotiating with multiple properties for room blocks and rates.' Implication: If event planners are required to book event space in the conference center and deal individually with multiple hoteliers for. their lodging needs they .are unlikely to utilize .the facility. The hospitality community in Vail needs to provide a seamless booking experience for event planners interested in the conference center. This HVS Convention, Syorts fa Entertainment DRAFT Vail Conference Center Business Plan Event Planner Input 6-32 \, should include simple rate structures for facility rental with discounts for events that generate large lodging room. blocks. and guaranteed .competitive room rates for lodging in a variety of properties convenient to the facility that do not require function room rental or food and beverage expenditures in individual lodging.properties. Implications of the The focus .groups were instrumental in unveiling some key considerations for Focus Groups what the Town needs to do to make the conference center successful. ^ Vail's reputation as a world-class resort enables it to be highly attractive to events planners interesting in providing their attendees with a unique and highly enjoyable event experience. ~; ^ Vail will compete not only with other mountain resorts for. conference center events, but also with warm-weather resorts that make up a large portion of the competition for national events. As a result, Vail must offer event planners a facility that reflects the environment Vail is famous for and provides a strong connection with its surroundings. The facility should also provide a highly efficient layout and ample function space so that it is superior or at least equal to other leading resort conference centers. ^ In order to compete effectively with hotel resort conference centers in popular destinations that offer both event space and accommodations under a single roof, Vail must make the process of booking the conference center and assembling the necessary room block as seamless and simple as possible. A single point of contact for negotiation the terms of facility rental and accommodations is crifical to the market potential of the facility. The use of condos isn t viewed as a drawback, but only if they are just as easy to assemble as part of room blocks as typical hotel rooms. ^ Transportation is a hurdle, but not an insurmountable .one. The perception of the difficulty of getting o Vail via air is somewhaf worse than the reality, so marketing efforts must stress the available options. Ongoing efforts to augment the level of air service in the non-ski seasons have the potential to greatly.. improve the overall marketability of the facility. Other strategies to improve the overall experience of getting to Vail such as providing `more frequent shuttle service from DIA during peak arrival and HVS Convention, Sports £t Entertainment DRAFT Vail Conference Center Business Plan Evenf Planner Inqut 6-33 departure times for events. and airport welcoming and registration booths would make a big difference for attendees. Overall, the focus groups indicated than there is significant untapped potential for conferences in Vail. The development of a first-class resort conference center will enable the Town to compete for a large segment of events that previously could not consider Vail. However, the community as a whole also needs to implement associated .improvements to its overall accessibility and the ease in which event planners can obtain necessary room blocks at acceptable rates to maximize the demand potential of this facility. ~, HVS Convention, Sports & Entertainment DRAFT Vail Confere~ice Center Business Plan Facility Recommendations and Concept Plan 7-1 ~~ 7. Facility Recommendations and Concept Plan This section identifies the conference center facility program that would best serve the demand potential in the market. This program takes into account unaccommodated demand and potential future demand for .conference center space in Vail. HVS has developed a demand projection tailored to the market potential and the recommended facility program.. This demand " projection provides the basis for the projected number of room nights: this. -new facility would generate in the market. Recommended HVS. utilized the information in the preceding market and demand analysis Conference Center to develop a recommended conference center facility program for Vail. This. facility Program recommended program identifies .the size. and characteristics of the most appropriate facility to serve the demand for event space in Vail. This recommended facility program can serve as a guide for subsequent architectural analysis aimed at providing the desired program elements. HVS tailors its facility program recommendation to enable the facility to fulfill the market's demand potential. .The facility must be capable of accommodating a wide array of events, which include small meetings, large conferences, .exhibits, banquets, and civic functions that can require the. simultaneous use of .exhibition, ballroom, and meeting space. The .overall character and quality level of the facility should be comparable to the most modern conference facilities and. should present. a welcoming atmosphere fore attendees. The focus groups revealed a strong desire among event planners for a conference center in Vail to reflect the upscale reputation of the • community and create a unique sense of place and a connection to its _ .beautiful mountain environment. Placing the .desired quality level in the context of existing Vail hospitality facilities, the overall quality level should .reflect an appearance somewhere below the Sonnenalp, but not below the Marriott Mountain Resort & Spa. The specific design .elements that can accomplish these objectives will not be specified until detailed plans are developed. However, .the purpose of the work that HVS and LMN conducted as part of this. study was designed to HVS Convention, Syorts £a Entertainment L)RAFTVaiI Conference Center Business Plan Facility Recommendations and Concept Plan 7-2 ~~ define the appropriate size and character of Vail's conference, center and make certain that it can be effectively accommodated on the selected site. The quality of the design elements and general physical appearance of certain. elements of the facility are more crucial than others. HVS recommends that specific care be taken to enhance the appeal of the following program elements /areas: ^ Mountain Terrace, ^ Main Ballroom, ; w ^ Main Pre-Function Area,. and ^ Boardroom. The emphasis on the preceding selected program elements should not be construed as a license to allow other areas to be substandard. Rather, given the heightened capacity of these selected areas to create the desired impression of the facility it makes sense to enhance .them accordingly. However, the overall facility still needs to present a consistent level of physical quality such that event planners and attendees do not get the .impression that they are leaving one facility and entering. another as they circulate through the facility. Several key factors, highlighted below, influenced I-iVS' facility. program recommendations: ^ Program Flexibility-Managers of conference centers HVS interviewed stressed the importance of developing .flexible meeting space that can accommodate the widest range of event types and sizes possible. Rather than .devoting the majority of space to fixed wall smaller rooms, HVS recommends building a large main ballroom spacethat is divisible into multiple sections This larger main ballroom / .exhibit space will enable Vail to host the occasional. large.. conference and still have. the .ability to :provide multiple breakout spaces. for smaller training seminars and continuingeducationalevents. ^ Need to Distinguish .Facility From 'Area Competition-The nearby Keystone Conference Center has two ballrooms with close to 20,000 square feet of space. in each. A similarly sized space in i HVS Convention, Sorts fd Entertainment DRAFT Vait Conference Center Business Pian Facility Recommendations and Conce{~t Ptan 7-3 \~ - ) - Vail will be more attractive to event planners than the Keystone facility because of the attraction of Vail Village and the area's most acclaimed ski slopes. However, any competitive situation in which there are three main event spaces with nearlythe same amount. of space within 30 miles invites a bidding war-for potential events. If the Keystone facility .has the capacity to host the exact same spectrum of events as a new facility in Vail it will likely attempt to undercut on rental rates, lodging rates, and other event costs to increase its attractiveness to potential events for a new facility in Vail. If however, Vail is able to accommodate a subset of events that cannot fit into either of Keystone's two main ballroom spaces it could target such events without fear of be2ng underbid by another nearby facility. ^ Ability to Attract National Events-The conference centers. .detailed, in the peer market analysis in Section 5 of this report host relatively few national events. In discussions with the managers of these facilities it became apparent that their main ballroom spaces were undersized for a large portion of regional and.. national associations. A larger main ballroom /exhibit space alone does not guarantee that a facility would be capable of garnering more national events, but it does increase the number of .potential events that can consider utilizing the facility and would set Vail apart from its peers in that respect. Ability to Accommodate Simultaneous Events-The. highly seasonal nature of overall tourism demand and group demand in Vail makes it especially important that the facility be capable of hosting simultaneous events during the peak demand period in the summer. One of the primary goals in the recommended .facility. program is to enable the facility to host two simultaneous conferences that each are larger than what any existing facility in Vail can currently accommodate. As a significant portion of the annual event demand is anticipated to occur in the summer season, the facility must accommodate simultaneous events in ....order to achieve a sufficient .level of total events and attendees. If the facility is not large enough to host two simultaneous events .that are each larger than what can currently occur in the market it .will be forced to increasingly compete :with existing hotels with function space for group demand in the summer. HVS Convention, Sports £~ Entertainment DRAFT Vail Conference Center Business Plan Facility Recommendations and Concep t Plan 7-4 - \~ Table 7-1 shows the recommended function spaces for Vail's .conference center, Table 7-1 Recommended Vail Conference Center Function Spaces Size Capacity Area Square Feet Banquet Theater Reception Classroom U-Shape Main Ballroom /Exhibit Space 25,000 2,070 .2,780 " 2,630_ 1,710 670. Ballroom A 8,400 690 930 880 580: 220 Ballroom B 4,100 340 460 430 280 110 Ballroom C 8,400 690 930 880: 580 220 Ballroom D 4,100 340 460 430 280 110. Mountain Terrace 5,000 410 560 .530 -- Meeting Rooms 20,000 1,650 2,220 2,110 1,370 530 Block 1 /Junior Ballroom .10,000 830 1,110 1,050 680 270 Junior A 2,500 210 280 260 170 70 Junior B 2,500 210 280 260. 170 ]0 Junior C 2,500 210 280 260 170 70 Junior D 2,500 210 280 260 170 70 .Block 2 6,000 500 670 630 41.0 .160 Room 2-A 3,000 250 330 320 210. 80 Room 2-B 1,500 120 170 160 100 40 Room 2-C 1,500 120 170 160 100 40 Block 3 4,000 330. 440. 420 270 110 Room 3-A 1,000 80 110 110. 70 30 Room 3-B 1,000 80 110 110 70 30 Room 3-C 1,000 80 110 110 70 30 Room 3-D 500 40 60 50 30 10 Boardroom 500 -- -- -- 20 10 Total ~ 45,000 3,720 5,000 4,740 3,080 1,200. Lobby /Prefunction Space- Ballroom 10,000 Lobby/.Prefunction Space- Meeting Rooms 10,000 ~ Square feet excludes terrace Sources: LMN &HVS HVS recommends that Vai l. develop a conference center with 45,000 square feet of indoor function space and an outdoor terrace .space with approximately :5,000 square feet. The main ballroom space should be di visible into two 12,500 halves to accommodate simultaneous events. Each half should also be divisible to provide two breakout or small ballroom spaces.. The ability to divide the main ballroo m into two .halves. is important for the demand potential in Vail because it enables the conference center to accommodate two HVS Convention, Syorts f~ Entertainment DRAFT Vail Conference Center Business Plan Facility Recommendations and Concept Ptan 7-5 simultaneous events that each are larger than the maximum capacity of any single existing hotel-based event space. Each half of this main ballroom space could efficiently accommodate an event in the 900 to 1,110 attendee range. As a result the facility can accommodate simultaneous events in peak. periods of group demand in Vail in the summer and. early fall rather than losing them to other markets. In~addition, it is important that portions of the main ballroom are capable of serving as breakout meeting rooms to supplement the total amount of meeting room space in the facility. The larger main ballroom space. will enable Vail to compete for a larger segment of national event demand than its peers. Interviews with facility managers indicate that facilities with main ballroom /exhibit hall areas of up to 20,000 square feet of space have difficulty attracting and accommodating many national events. A .slightly larger main function space increases the flexibility of the facility to attract larger events and also be able to segment parts of the main ballroom into breakout meeting space when necessary. The facility should also feature 20,000 square feet of breakout meeting rooms.... Block A should be capable of functioning both as meeting space and as a 10,000 square foot junior ballroom. The remaining 10,000 square feet of space should include dedicated breakout .meeting space :divisible into at least 12 separate rooms. The meeting room block should be designed to enable convenient access from either half of the main ballroom so that the breakout space can be divided. unevenly between two simultaneous events to accommodate varying meeting space needs. The key to the overall facility layout is to maximize the flexibility of the function .space. The ratio of breakout to total function space is important because events are requiring an increasing amount of breakout space to .accommodate targeted educational sessions and more detailed and advanced programming. Events are also requiring., more .capacity for simultaneous use of main ballroom/exhibit space and meeting space, reducing the ability of the main ballroom space to serve breakout space needs. The recommended facility program achieves a ratio of breakout to total function space of 44.4 percent, which is sufficient given the size of the main ballroom relative to its peers: The.;ability of portions of the main ballroom to also serve as breakout space. can increase the functional ratio of breakout space to main ballroom space. HVS anticipates that the size of events in Vail will fluctuate greatly in different seasons. Summer events will be the .largest as corporations and HVS Convention, Sporfs £a Entertainment DRAFT Vail Conference Center Business Plan Facility Recommendations and Concept Plan 7-6 associations take advantage of Vail's destination appeal at that time of year and relatively affordable non-ski .season room rates. Shoulder season events will be slightly smaller, as more price sensitive and perhaps less established events benefit from the market's lowest room rates. Ski season events will be smaller on average, but require considerable amounts of breakout. space for continuing educational sessions and similar uses. HVS also recommends that the Town plan for future expansion of the facility. The specific capacity of future expansion will be dependent upon .the site constraints and the condition of .and plans for any adjacent. structures. The recommended site is discussed in detail later in this section. Ideally, the Town should. plan for future expansion that would expand the main ballroom space a to 30,000 square feet or more and add up to another 10,000 square feet of meeting .space. It is vital to the long-term economic impact potential of the facility that the selected site allows for some degree of future expansion. The timeframe #or future expansion is difficult to .predict, but new conference centers can reach the point where expansion is warranted in as ittle a seven years after opening. For reference, Figure 7-1 shows the amount of function space the recommended new Vail conference center .would have relative to the peer resoxt conference facilities in the set of peer markets, presented in Section 3, HVS Convention, Sports f~ Entertainment DRAFT Vail Conference Center Business Plm1 Facility Recommendations and Concept Plan.?-7 \~ _ ~ Figure 7-i 'Recommended Vail Conference Center Function Space Relative to Peer Market Facilities Banff Vail (proposed) Keystone t .Monterey t Whistler Snowmass Telluride 0 10,000 20,000 30,000 40,000 50,000 60,000 Sources: Respective Facilities 8 HVS ~;"e~&~~ ~'J~ ~ 52814 45:000 - - ~'~ 44.180 40,976. ' 34,403 ";~"" 18. _ 399 ^ Largest Space n~-"~i 1o,ss1 :exr~^ ®Other Function Space The recommended facility program for the new Vail Conference 'Center would position it as the largest single-building facility (Banff is a collection of different smaller buildings) and provide it with the largest single function space among the- peer markets. The relatively larger main ballroom space in the proposed Vail facility grants it the flexibility to attract larger events than any of the other .peers and also to host simultaneous- events. that each require up to 12,500 square feet of main ballroom or exhibit space-something none of the other facilities can accommodate. Technology ° As a high-end conference center that will target larger conferences and events Infrastructure with a national scope, this facility should Have the latest technology. In general, mobile and easily adaptable systems are preferred over fixed and "built-iri' technology services. Wireless Internet service should be available in several if not all of the main function area. The facility should have the capability of .hosting video conferences and the. latest in audio and visual technology. These requirements are reflected in the construction cost estimates and the capital maintenance reserve fund and the necessary expenditures to keep such technology up-to-date. HVS Convention, Syorts £a Entertainment DRAFT Vail Conference Center Business Plan Faciliky Recommendations and Conceyt Plan 7-8 Fixed-Seat Theater Some conference centers of a similar size and market orientation to the recommended facility for Vail feature a raked, fixed-seat theater space. Such spaces are a nice option when a group has the need for lectures or technical presentations. However, the drawbacks of these .spaces are that they lack flexibility and they are expensive to construct. In the event planner surveys, detailed in Section 6, HVS asked national and state planners about their need for such affixed-seat theater space. Table 7-2 shows a detailed summary of the responses in each survey group. Table 7-2 . Summary of Survey Responses Regarding Fixed-Seat Theater Space Survey Group Yes No Average Median Maximum a' Capacity Capacity Capacity National 11 22 1,114 600 6,500 State 6 15 458. 438 900 Total 17 37 882 500. 6,500 Source: HVS One=third of national event planners and 30 .percent of state planners indicated they would use affixed-seat theater space .for their event if it were available. It is relatively rare that an event planner would require such a space, as its usually possible to use a flat floor meeting room for such sessions: Raked, fixed-seat theaters are often built when there are local demands for ..such space. Locating them in a conference center or similar event facility enables them to be used for out-of-town events when they are not booked with local uses. These .theater spaces are sometimes designed to host symphony performances, musical .productions, and/or plays. The Telus Whistler Conference Centre has a 300-seat fixed seat theater positioned alongside its meeting rooms on the lower level of the facility, below the main ballroom .space. However, the conference center's website does not include this space in its summary table of function spaces and amenities, an indication that its not featured prominently in the marketing of the facility. The Monterey Conference;Center has a .theater space called the Steinbeck Forum, a 494-seat venue with a 22' x 30' stage. The stage has two quick- change dressing rooms on either side to accommodate theater performances. The theater is located. on the third level of the facility, adjacent to meeting rooms and a terrace. There is a large projection screen at the rear of the stage to enable multi-media presentations. HVS Convention, Sports f~ EntertainmenC DRAFT Vail Conference Center Business Plan Facility Recommendations and Concept Plan 7-9 Use of Dobson Ice Arena Fixed-seat theater spaces are relatively expensive to construct and .generally do not pay for themselves .through an increase in .out-of-town conference .events. that require such spaces. If sufficient local .demand is present to generate significant rental revenue and/or a nearby institution such as a hospital or university has the need for such. a space on a regular basis; this base. of "demand can enable such a space to cover its costs. However, unless there is sufficient space in the .building program' of the facility to accommodate affixed-seat theater without a corresponding reduction in meeting or ballroom space,. it wouldri t be prudent to alter the building program to add a theater. The lack of flexibility in such fixed-seat venues limits the ability to utilize them for the wide variety of event types and sizes that typically occur in such a conference center. In addition, the adjacent Dobson Ice Arena, can be used for larger plenary sessions and can accommodate far more attendees than affixed-seat theater located in the conference center. The. selected site for the conference center provides an opportunity to utilize Dobson Ice Arena in conjunction with the facility for selected events, Dobson's ice arena has approximately 16,000 square feet of floor space and a surrounding lobby that can provide supplemental floor space. In the paste Dobson has served as a ballroom and exhibit hall for larger events that wanted to come to Vail but were too large for any of .the existing hotel properties. These events typically brought in decorators that temporarily transformed the interior of the facility from an ice arena into a function space. HVS anticipates that certain events using the conference center would utilize the arena for larger. assembly sessions or fora themed function. The projections in this report assume. that no physical connection exists between the two facilities, although it would be possible to add one for an additional cost. Given the anticipated level of utilization of Dobson in conjunction with conference center events and the need to maintain available resources for the conference center itself, HVS does not recommend that the Town. build a physical connection between the two facilities. If sufficient revenues. are available from the dedicated revenue sources after demand at the facility has. stabilized the Town could examine the feasibility of adding such a connection. The operating projections for the conference center do not include any. rental revenue for Dobson, as it would fall under a separate account. It is likely that the rental costs for Dobson for most events that require use of both facilities would be included in their overall rental agreement at little or no additional cost above and beyond food and beverage charges. HVS Convention, Syorts £d Entertainment DRAFT Vail Conference Center Business Plan Facility Recommendations and Conceyt Plan 7-10 \~ Potential Future Beyond the potential future expansion of the conference center there are Development some additional improvements that the Town of Vail may consider that could influence the performance of the conference center. Prior studies have looked at the feasibility of developing a performing arts. center space with fixed seating for up to 1,000 people. Such a facility could be utilized in conjunction with the conference center as an assembly space. and lecture hall. The availability of a performing arts -venue located adjacent or very close to the conference center would increase the demand potential for conferences and .other events. However, this business plan does not include an analysis of a performing arts center and all of the projections assume that no .new performing arts venue is available. A recent study conducted .for the Monterey Conference Center estimated that the redevelopment of a nearby 1,200-seat theater would enable the facility to attract 13 or more new events. It is unlikely that the additional demand a performing arts center would enable the Town to attract would be sufficient to justify the development of such a facility on purely financial criteria. More likely, the decision to develop such a facility would hinge on the perceived benefits of such a venue from a cultural perspective, with the bonus of additional demand potential at the conference center. weighing into the analysis. Site Considerations ~ The Town of Vail has identified a site for the proposed conference center that is located between. Vail Village .and Lionshead Village by the Lionshead Parking Structure. The South Frontage Road borders the site on the south and East Lionshead Circle borders the site on the north and .west, where it intersects with the South Frontage Road. Several lodging properties surround .the site and larger hotels such as the Mamott ,(344 units) and the Lodge at Vail (165) are within walking distance. The Town of Vail's :free shuttle bus system connects these and other properties likethe Vail Cascade (292) to the site. The site is also proximate to the Dobson Ice Arena, which could serve as an assembly .space or auxiliary exhibit space in conjunction with events occurring at the conference center. The Town has considered two specific site layouts: • Charter Bus Lot-This site is Located. directly east of the existing :Lionshead Parking Structure and west of Vail International Condominiums. The site is currently vacant. This options would require atwo-level structure. • Air Rights -over :Lionshead Parking Structure=The other option the Town considered at this site was to build the. conference center HVS Convention, Syorts f~ Entertainment DRAFT Vail Cor2(ereasce Center Business Pian Facility Recommendations and Conceyt Plan 7-11 above the existing parking structure. -This option could achieve a single-level structure. The Town commissioned the firm of ARC to develop preliminary estimates. on the cost premium for building the conference center above the existing parking structure. This analysis resulted in an :estimate that the hard construction cost premium for .building the conference center over the parking structure would be .between 5 and 7 percentrelative to a two-level facility adjacent to the parking structure. In addition, the Town considered the current condition of the parking structure and determined that without a major refurbishment the structure's remaining lifespan was considerably less than that of the proposed conference center. Given the cost premium for building onto the structure and the deficit in the lifespan of the. parking structure, the Committee determined that building the facility over the parking structure might not be advisable. The Committee directed the Consulting Team to determine whether the Charter Bus Lot Site was capable of accommodating the recommended facility program. However, building the conference center above the parking structure would have certain advantages. The greater size of the potential footprint would enable asingle-level facility, which generally provides a .more efficient program-layout than amulti-level facility. In addition, building the facility over the parking structure would leave the Town more options for incorporating a proposed adjacent transit center. For these reasons, the Town continues to analyze. the option of building the facility above the parking structure. For the purposes of this analysis, the Town has, directed HVS to assume that the facility will be constructed on the Charter Bus Lot site. Concept Plan-Charter Subsequent to receiving HVS' March 2004 business: plan, the Town of Vail Bus Lot Site conducted a selection process for a project architect. The Town selected the firm of Fentress Bradburn Architects LTD to design the conference center... Fentress Bradburn developed a building program plan that balances the market recommendation with the physical realities of the selected site. Table 7-3 shows the resultant program. HVS Convention, Sports £a Entertainme~it DRAFT Vail Conference Center Business Plan Facility Recommendations and Concept Plan 7-12 \` Table 7-3 Vail Conference Center Program Plan Size Capacity Area Square Banquet Theater Reception Classroom U-Shape Feet Ballroom /Exhibit Space 30,000 2,480 3,330 3,160 2,050 800 Main Ballroom 21,000. 1,740 2,330 2,210. 1,440 560 Junior Ballroom 9,000 740 1,000 950 620 240 Mountain Terrace 2,600 210 -- ~ 270 -- -- Meeting Rooms 0 0 0 0 0 Block 1 5,500 450 610 580 380 150 ~, Block 2 4,000 330 440 420 270 110 Boardroom 500 -- -- -- 20 10 Total ~ 40,000 3,260 4,380 4,180 2,710 1,060 ~ Square feet excludes terrace Source: Fentriss Bradburn Architects LTD The Fentress Bradburn concept differs slightly from HVS' original facility program recommendations. Such slight variations from program recommendations are typical. The concept plan achieves the basic principles of the program recommendations: The main ballroom is slightly larger and is divisible into sections that can accommodate simultaneous events. that each has a higher attendance than: any. existing Vail facility can accommodate. The terrace is directly accessible to the main ballroom space and offers view of the mountain. The concept has more .space in the main ballroom and less dedicated .breakout meeting space than the original recommendation. In order for the facility to have sufficient breakout meeting space, the moveable walls in the main ballroom space need to be particularly adept at blocking sound. HVS Convention, Sports F~ Entertainment DRAFT Vail Conference Center Business Plan Demand Projections'8-1 8. Demand Projections The facility recommendation sets the .stage for demand, and financial operating projections. The recommended conference center will provide Vail with a facility that is capable of attracting and accommodating a new. subset of event demand for the market. ~' Distinction Between The development of a conference center in Vail would represent a significant Conference Center and shift in the capacity of the market to attract events. In the past, Vail has relied Existing Vail Facilities on a combination of hotels with meeting spaces and Dobson Arena to provide with Function Space venues for larger conferences, in excess of .500 attendees and other types of events. Vail's ability to compete for events in excess of approximately 500 attendees is currently very poor due to the fact that event planners almost always avoid situations where their events .need to be conducted in more than one .facility.. As a result, Vail has largely been unable to attract larger events of 500 and more attendees into the market. These larger events are uniquely efficient at filling up rooms in multiple lodging properties, creating a significant increase in downtown activity, and generating the level of overall economic impact that motivates resort communities to invest in conference centers. A conference center is designed to attract the type of events that - generate significant economic impact by hosting events that bring in far more attendees than any single hotel in the market can accommodate. In addition, these facilities serve as a type of living room for the community, hosting a variety of banquets, entertainment. events, fundraisers, and local civic events, when there are: no room night generating events, scheduled in the facility. Individual hotels or hotel resort facilities typically develop meeting space to generate group room night demand in periods when other. higher-rated corporate or leisure demand is not sufficient to provide adequate levels of occupancy,., In periods when corporate or high-end leisure travel is at its peak-either due to seasonal patterns or economic cycles-these facilities may elect to leave their meeting spaces vacant or rent them for day meetings: because they can command higher room rates from other demand segments.. Hotels are also reluctant to provide room. blocks in excess of a certain percentage of their total room counts so as to avoid turning away more HVS Convention, Sports f~ Entertainmcmt DRAFT Vail Conference Center Business Plan Demand Projections 8-2 \~ profitable corporate business. As a result, the size of events that individual. properties can accommodate is constrained.. Conference centers can accommodate larger events that :attract room nights not only to nearby properties, but also to other facilities in the market area. The fact that selected events have spent considerable time and effort to convert Dobson Ice Arenainto a function space for their events is evidence of the strong demand for larger events in Vail. However, Dobson was not designed for these types of events and lacks the breakout space, business amenities, audio /visual capabilities, and overall quality level to effectively accommodate most conferences and professional meeting events. Demand Projections for For the purposes of this demand projection, HVS estimates that .the Vail the Vail Conference Conference Center will open on .January 1, 2008. HVS bases its demand Center projections on the several key factors analyzed in the preceding report sections, including: ^ The levels and character of event demand at existing hotels with meeting facilities in the market, ^ Surveys, interviews, and focus groups with event planners, ^ Comparative analysis of the Vail market relative to a set of peer markets, ^ The actual event demand in selected peer markets with conference center facilities, ^ Lost business data maintained by the Vail Valley Chamber & Tourism Bureau, and ^ Interviews with the Vail Valley Chamber & Tourism Bureau .sales staff.. Table 8-1 shows event projections for the new Vail Conference Center .for 2008 through 2012...... HVS C t' S t £~ E t t' t C B Pt D d P 8 3 onven :on, por s n er ammen DRAFT Vail Conference enter ustness an eman roiechons - Table 8-1 New Vail Conference Center Projected Events and Attendance 2008 - 2012 Event Type 2008 . 2009 2010 2011 2012. Number of Events Corporate Conferences 15 19 21 22 23 `Association Conferences 7 15 22 25 26 Banquets 25 30 38 42 45 Meetings 90 100 107 109 110 Entertainment 10 13 14 15 15 Other 20 22 23 24 25 Total 167 199 225 237 244 Average Attendance ~ Corporate Conferences 433 . 473 481 485 507. Association Conferences 507 498 .503 511 517 Banquets 400 400 400 400 400 Meetings 100 110 115 120 125 Entertainment 500 500 500 500 500 Other 450 450 450 450 450 Total Average 258 281 293 302. 310 Total Attendance Corporate Conferences 6,500 8,995 10,095 10,675 11,650 Association Conferences 3,550 7,465 11,070 12,765 13,450. Banquets 10,000 12,000 15,200 16,800 18,000. Meetings 9,000 11,000 12,305 13,080 13,750 Entertainment 5,000 6,500 7,000 7,500 7,500 Other 9,000 9,900 10,350 10,800 11,250 Total 43,050 55,860 66,020 71,620 75,600' Source: HVS The projection assumes that demand will stabilize in 2012. The term "stabilized demand" does not mean that the demand stops increasing. Rather, a new facility reaches stabilized demand after sufficient time has passed since the announcement and the completion of a project so that its. demand potential is no longer restricted by the .fact that it is a planned or a new facility. Booking a facility that is under development presents .challenges because potential tenants must consider the possibility that. the facility will not open. as scheduled. In addition, some potential .tenants are cautious of being one of the first events booked into a recently opened facility,. due to concerns regarding the potential for operational problems associated with new facilities. When a facility reaches its stabilized level of demand, it has achieved its demand potential relative to its peer facilities. HVS Convention, Sports & Entertainment DRAFT Vail Conference Center Business Plan Demand Projections 8-4 ~~ The time it takes to reach a stabilized level of demand for different events varies by event type. Association conferences have longer booking windows and are less. likely to risk booking a newly opened facility because their sponsoring associations often depend greatly upon such events for their.: overall annual revenue. Some association events have booking lead times of three to five years. Smaller meetings, banquets, and certain corporate events may book within three months or less. ;Assuming that the recommended facility opens on January 1, 2008, .the facility will complete .five years of operation and reach its stabilized demand by the end of 2012. The reluctance among event planners to schedule events in newly: opened facilities has grown in recent years as a result of the recent influx of new facilities. The greater number of available conference facilities .enables event planners to be more selective and -less likely to assume the risk inherent in scheduling an event in. a facility soon after its scheduled opening. Delays in the opening of conference centers are relatively common and there will be considerable uncertainty among evenf planners concerning the actual opening date until its construction is well underway. In recognition of this, HVS has projected a modest level of demand in the first. years of operations and an accelerated increase to the .point of stabilized demand in years four and five. The following points provide details on HVS'. demand projections for the various event categories. Corporate Conferences Vail's appeal to corporations conducting employee seminars, training, sales meetings, product launches, and incentive functions is significant. Interviews with hotels with meeting space in Vail indicate that these events provide a significant source of their group room night demand. Many such events are too large for any of the existing facilities in Vail. The lost business reports maintained by the Vail Chamber & Tourism Bureau -and interviews HVS conducted with selected examples reveal a significant volume of events that are in excess of 500 attendees that have expressed interest in coming to Vail. Vail's reputation as a premiere resort location has an obvious appeal for high- end professional groups such as doctors, lawyers, and business executives. The strong orthopedic medical presence in Vail suggests that it would be an ideal location for larger medical conferences .and continuing educational activities than existing hotel venues can .accommodate. The Town should consider the possibility of developing relationships with area universities and HVS Convention, Sports f~' Entertainment DRAFT Vail Conference Center Business Plan Demand Projections 8-5 a leading medical center that is interested in conducting a series of programs and seminars. Such affiliations are beneficial for facilities because they serve as a source of demand in less busy. years or seasons and cost little in . marketing once the relationship is established. For example, the conference center could serve as the home for. continuing medical education in the field of orthopedics and draw upon the significant local talent in this field. Other natural affiliations could. include environmental and geological studies- programs at universities in the region.. Table 8-2 shown HVS' demand projections for `corporate conferences by season and scope. Table 8-2 Projected Corporate Conferences by Season and Scone of Event Season/Scope 2008 2009 2010 2011 2012 . Summer National 5 33% 6 32% 7 33% 7 32% 8 35% State & Regional 4 27% 6 32% 6 29% 6 27% fi 26q° Shoulder National 2 13% 3 i6% 3 14% 4 18% 4 17% State & Regional 3 20% 2 11% 2 10% 2 9% 2 9% Ski National - 0°k 1 5% 2 10% 2 9% 2 9% State & Regional t 7% 1 5% 1 5% 1 5% 1 4% Total 15 100% 19 100% 21 100% 22 100% 23 100% Sources: HVS .The facility is projected to initially attract roughly the same amount of state demand as national demand. As the facility becomes more established in the market the ratio of national corporate demand increases.. The summer is expected to be the busiest season for corporate conferences, followed by the shoulder season. Demand during the ski season is expected to be 'no more_ than three events per year due to the very high room rates during this period. However, the events that do occur will be highly lucrative to the Town in terms of both room revenue and other spending. Association Conferences The new. conference center would enable Vail to compete much more effectively for association business. The input HVS received from association. planners in the focus groups and surveys indicates that Vail has tremendous.. appeal as an event location. HVS anticipates that a greater number of sate HVS Convention, Sports f~ Entertainment DRAFT Vail Conference Center Business Plan Demand Projections 8-6 associations will utilize the conference center, but the .national associations will generate more total room nights because. of their larger size and longer average stay. in the market. National association conferences will account for a larger portion of total event demand in Vail than in other peer resort locations due to the strength of Vail's reputation as a premiere resort destination. Vail's wealth of visitor attractions makes it a particularly, appealing event location for a wide variety. - of rotating national conferences. The facility .recommendation for the .conference center is tailored in part to capture a larger share of national association events than the other peer resort facilities can accommodate. y The demand potential for state association. events is considerable. One of the biggest challenges for Vail as a destination for association events is the cost and convenience of transportation. However, the focus .groups. and surveys indicated that concerns regarding transportation to Vail are minimal. among. state event planners. Furthermore, the State of Colorado is somewhat lacking in larger facilities to host state association events, although the City of Colorado Springs is considering the development of a new convention center. Denver's Colorado Convention Center focuses primarily on national conventions and tradeshows and consumer shows because few State events are large enough to need the amount of exhibit space it offers. Outside of .Denver's primary convention center, the State's largest facilities capable of handling. conventions and. tradeshows are. Denver s larger hotels with meeting space. The recommended conference center in Vail is large enough to compete effectively with these Denver hotels for the larger state association events. Examples of such larger State Association events include the annual conferences of the Colorado Pharmacists Association and the `Colorado Association of School Executives, which require more exhibit space than any of the resort peer conference centers offer but can fit nicely into the recommended conference center in Vail. Table 8-3 shows the estimated annual number of association conferences by season and geographic scope. HVS Convention, Syorts £d Entertainment DRAFT Vail Conference Center Business Plan Demand Projections 8-7 ~1 Table 8-3 Projected Association Conferences by Season and Scope of Event Season/Scope 2008 2009 2010 2011 2012 Summer National 2 29% 4 27% 6 27% 7 28% 7 : - 27% Slate &Regional 4 57% 6 40% 8 36% 9 36% 10 38% Shoulder National - . 0% 1 7% 2 9% 2 8% 2 8% State &Regional 1 14% 3 20% 4 18% 5 20% 5 19% Ski National 0% - 0% 1 5% 1 4% 1 4% State &Regional - 0°k 1 7% 1 5~° 1 4% 1 4% Total 7 100% 15 100% 22 100% 25 100q° 26 100% Source: HVS The projected number of association events reflects the increasing difficulties that ,new facilities are having in booking ..events soon after they open. Demand eventually increases to 26 events per year, 17 of which would. occur in the summer season. Seasonality of Conference Demand The high degree of seasonality of conference demand has some important implications for the facility program and marketing efforts. With a projected total of 31 conference events in the summer season, the conference center needs to be able to accommodate simultaneous events. HVS developed a mock event schedule for the summer season that indicated the facility would need to have at least eight simultaneous events during the summer to reach its projected level of event demand. This need to accommodate simultaneous events is one of the primary rationales for the recommendation of a 25,000 to 30,000 square foot, divisible main ballroom space that is capable of handling simultaneous events of between 10,000 and 20,000 square feet. This demand seasonality provides a uniquely. appealing market opportunity for Vail, as the peak seasons for group event demand, the summer and to a lesser extent the shoulder season, are during periods of relatively lower occupancy and average daily room rates. Even in the summer ..when occupancies can be fairly high, the injection of additional group demand into the market. has the potential to significantly bolster room rates as properties can become more selective in terms of the rates they offer and. the demand segments they target. HVS Conve,ttion, Syorts fj Entertainment DRAFT Vail Conference Center Business Plan Demand Projections 8-8 ' ~` Banquets The. main ballroom at the conference center would be the largest. and one of the premiere banquet spaces in the Vail market, both in terms of size and overall quality of the space. The ballroom would not only serve as a main exhibit and food service area for conferences, but also as astand-alone banquet hall for weddings, fundraisers, and various food functions. Examples of such events include receptions, holiday parties, civic .luncheons. and dinners, chamber of commerce functions, and others. The new facility should be particularly successful in attracting stand-alone events that utilize the ballroom spaces, impart because of the current small supply of hotel-based ballroom space in downtown Vail lacks a larger ballroom such as -the one recommended for the conference center. The main ballroom would also host .some smaller banquets, however the number of events in this projections assumes that the .facility would not aggressively :compete for banquets requiring less than 10,000 square feet so that it doesri t compete directly with existing hotel properties. Interviews with managers of existing ballroom facilities in the Town indicate that. there is a significant volume of potential business: for a larger facility. Existing hotels indicate that they have to turn away a lot of potential groups because they are. either too large for their main ballroom or because their space is booked. One individual. Vail property indicated that in 2005 it is budgeting to generate the equivalent of 88 percent of the total banquet and meeting event gross food and .beverage revenue HVS has estimated for.. the conference center at stabilization. on a constant dollar basis from day group (non-room night business) alone. Another indication of the volume of demand for this type of event is the initial, performance of the Town's Donovan Pavilion. The Pavilion. was quite busy in its first year of operation in 2004, particularly in the summer months... Weekend dates are already booked up for the entire summer. Weddings accounted for 95 percent of the facility's initial. event demand. Pavilion staff has not marketed to corporate events, but plans to in 2005. Weekends have been .busy for the shoulder season as well. Staff indicates that they have had - to turn away approximately five, events that were too large for the facility in the initial yearof operation. Meetings The new Vail Conference Center's. meeting rooms would not only serve as "breakout .meeting space for conferences and events with exhibits, but also HVS Convention, Syorts £~ Entertainment DRAFT Vail Conference Center Business Plan ".Demand Projections 8-9 serve as space .for smaller .meetings. Meetings as defined in this market analysis include various smaller gatherings such. as business seminars, employee. training sessions, civic events, classes, and other similar events. HVS .considered the existing supply of meeting spaces in area hotels and other facilities in determining reasonable. levels of meeting demand. The . analysis also considered the number of meetings at conference centers in peer markets. The conference center would likely get most of its meeting demand during peek group demand periods when space at hotel-based facilities was booked. Considering. that-most meetings are smaller in size than conferences, many meeting planners will tend to prefer to use smaller .venues with meeting _- space that is oriented specifically for their types of events.' At an average attendance between 100 and 125 per meeting, the HVS projections assume that the conference center focuses on larger sized meetings... Entertainment Entertainment events that could occur in the proposed conference center range from indoor arts or musical performances to cultural festivals. These events would .occur in theconference center's main ballroom space, which could provide temporary seating arrangements for different types of setups: Most of these events would occur in the winter season when Vail has the largest number of potential attendees to draw from and the .demand for conferences is at .its lowest point due to high .lodging room rates and. occupancies. The facility .would not host rock concerts or consumer shows . that are likely to cause significant wear and tear on the ballroom's amenities. Other The other category includes events such as assemblies and various civic functions. HVS based its projections of other types of events on the levels of .demand at comparable facilities and an assessment of events currently occurring at other facilities that may be more appropriate. for a conference center. In addition, there are some types of events that may not be occurring at~ all that .would occur if .the proposed facility were available. Assemblies ,. include functions such as religious gatherings. and graduations. The other category also includes any unique events that do not fall into one of the prior categories. One example of such an event is the World Ski Championship. The conference center could be utilized as a media center for #his event if it should return to Vail: In the past, the organizers have erected temporary tents to house the media center for this event at a significant cost. HVS Convention, Sports £d Entertainment DRAFT Vail Conference Center Business Plan Demand Projections 8-10 Projected Room Nights HVS has estimated. room night generation by multiplying .the number of from Conference estimated attendees by two factors: 1) the percent of attendees requiring Center Demand lodging and 2) the average length of stay in the market. The projection presents attendance by type and scope of event, and .the assumptions regarding lodging demand vary accordingly. The assumptions regarding the percentage of attendees requiring lodging is based on the experience of .comparable facilities and CVBs in booking national, state, and local events.. This assumption also factors in the share of event attendees who are likely to share a room.. during an event. For instance, national events are likely to have a higher percentage of event attendees requiring lodging than state events. However, lodging room rates in the winter may motive a higher percentage of event attendees to doubleoccupancy. HVS weighs these various factors in w its estimates for the percent of attendees requiring a distinct lodging room.. The average length of stay is calculated according to assumptions regarding data on event length. Information from the actual event statistics of existing conference centers in other markets, event planner surveys and interviews, .and industry standards inform these assumptions regarding average event length. HVS tailored these assumptions specifically for Vail based. on the characteristics of .events appropriate for the market and the likelihood that attendees to state events would come from far enough away to require overnight lodging. Table 8-4 shows the assumptions regarding the percentage of attendees requiring lodging and the number of room nights per lodger. Table 8-4 Assam tions for Number of Nights in Market and Percent of Attendees Re uirin Lodging Length of Stay (Nights in Vail) ~~ Attendees Requiring Lodging Event Season/Scope Corporate Association Corporate Association Conferences Conferences Conferences Conferences Summer National 4..25 4.00. 90% ~ 95% State & Regional 3.25. 3.00 75% 80% Shoulder National 3.25 3.25 95% 95% State & Regional 2.50 2.25 75% 80% Ski National 4.50 4.00 90% 90% State & Regional 3.75 3.50 70% 70% Source: HVS HVS Convention, Sports £~ Entertainment DRAFT Vail Conference Cenfer Business Plan Demand Projections 8-11 The preceding assumptions reflect the average total number of room nights in: Vail by season and type of event. HVS has factored in information- from interviews with Vail lodging facility managers with meeting space, data from .the Vail Chamber & Tourism Bureau, and industry data in these assumptions. On average, event attendees will spend less .time in a resort market like Vail because the primary purpose of their trip is typically .for business or professional reasons rather than recreation. However, there will be some ,event attendees who choose to extend their stay in Vail because of its overall appeal. Precise data on length of pre and post stays is difficult to quantify and. attempts to do so are often influenced by the policy goals of those sponsoring such .studies. In light of this, HVS views the preceding assumptions as reasonable, but also recognizes that: some upside potential exists, particularly if marketing efforts focus on .providing affordable lodging rates for event. attendees who elect to extend their stays. Table 8-5 shows the resulting projection of room nights generated by event type from 2008 through 2012, the year when HVS estimates that demand will stabilize. Table 8-5 Projected Room Nights 2008 - 2012 Event Type 2008. 2009 2010 2011. 2012 Corporate Conferences 19,600 28,200 32,400 34,100 37.,500 Association Conferences 10,000 21,100 32,D00 36,$00 38,600. Banquets 1,900 2,300 2,900 3,200 3,400 Meetings 1,100 1,400 1,500 1,600 1,700 Entertainment - - - - Other 500 500 500 500 600 Total 33,100 53,500 69,300 76,200 81,800 Source`. HVS HVS estimates that the new conference center would generate approximately 33,100 room nights in the market in 2008 and 81,800 by 2012. A small portion of these room nights comes from events that may have been in the market at other facilities. HVS made assumptions about the percentage of room nights from each event category that would be transferred from existing facilities in the market. These ratios will be small because the proposed conference. center will provide a new type of event space in the Vail market, opening up new categories of demand. Additionally, HVS assumes that the management of - the. conference center will not focus its marketing efforts on smaller HVS Convention, Sports F~ Entertainment DRAFT Vail Conference Center Business Plan Demand Projections 8-12 ~' conferences that could fit into lodging facilities with event space, except for periods when group demand is at its highest and event space is sparse. Table 8-6 shows the assumptions of the ratio of room nights that will be new to the market. and the total number of new room nights. Table 8-6 .Ratio of Conference Center Room Nights New to Market and Total New Room Nights _ Event Type 2008 2009 2010 2011 2012 .Percent New to the Market Corporate Conferences 80% 83% 84% 85% 85% Association Conferences 85% 87% 88% 90% 90°k Banquets 50% 55°k 60% 65% 70% ~' Meetings 15% 18°~ 20% 20% 20% Entertainment 0~° 0°k 0% 0°~ 0°~ Other 15q° 15% 15% 15°1° 15% New Room Nights ..Corporate Conferences .15,680 23,406 .27,216' 28,985 31,875 Association Conferences 8,500 18,357 28,160 33,120 34,740 Banquets 950 1,265 1,740 2,080 2,380 Meetings 165 252. 300 320 340 Entertainment - - - _ . Other 75 75 75 75 90 .Total 25,370 43,355 57,491 64,580 69,425 Source: HVS The ratio of new room nights increases for certain categories of demand as the facility is expected to attract a higher share of new events to the market as it approaches demand stabilization and the .effects of its targeted event marketing are fully realized, As the facility establishes itself in the market for conferences it will be able to attract large events that have longer planning horizons and larger events are more likely. to be new to the market. Over time the facility will develop its own marketing contacts and attract interest from potential events that may have not considered Vail in the absence of a true conference center. facility. HVS based the assumptions regarding the share of new room nights on the following: ^ A detailed analysis of the existing Vail hotels with conference center facilities in Section 2, ^ Interviews with managers of existing hotels with conference center space to determine the degree to which they can compete HVS Convention, Syorts F~ Entertainment DRAFT Vail Conference Center Business Plan Demand Projections 8-13 ` \, for events approaching 500 attendees and their views on the relative market position of the conference center, ^ The input from event planners indicating their preference for a self-contained hotel conference center whenever one is large enough to accommodate their events, ^ ..Event planner survey- responses .that indicated the need for simultaneous use of more function space than is currently available in any existing facility in Vail, ^ Vail Valley Chamber & Tourism Bureau lost business reports which demonstrate a significant volume of events that are too large for existing Vail facilities, ^ -The demand projections, which call for a modest umber of larger events rather than more smaller ones, and ^ An overall assessment by HVS of the ability of the conference center to complement existing conference' facilities rather than compete with them for a finite supply of events. The projection of .Vail Conference Center event-related .room nights new to the market serves as a primary input in the analysis of the economic impact associated with the event activity at the facility. Potential Negative Impact on Existing Facilities Anew facility~with the amount of function space recommended in this report will cause the market to shift and affect existing lodging properties with meeting facilities to some extent. The magnitude of this impact is extremely difficult to quantify and depends upon the target. market of the facility and the share of demand that is either too large for any existing facilities oroccurs during times when larger .existing event spaces are fully utilized. The recommended conference. center in Vail is designed to target events of 500 attendees and above, which reduces the direct competition between it :and ..existing facilities. However, the conference center will fill in open spans in its event schedule with smaller events if they are available. In general, any event .that can fit into one of the existing lodging properties with event space will prefer to be in such a facility since their entire event could occur under one roof. So, in many cases the conference center will only be .competitive for HVS Convention, Sports £a Entertainment bRAFT Vail Conference Center Business Plan Demand Projections 8-14 smaller events: when the larger lodging properties with event. space do not have adequate capacity to accommodate the full event demand. " The negative impacts on existing facilities that do occur will be largely focused on the least attractive event spaces in the market that currently serve as overflow event space or as second choices of events that would prefer to be elsewhere if there .were sufficient availability. Another consideration regarding the .issue of negative effects on existing properties is that in the absence of the development of the conference center the underlying growth in the demand for events. as the economy expands would motivate existing properties to develop new or expanded event spaces and new properties to include event space in their facility programs. If however, the conference center is built, the impetus for developing such new event space will decrease somewhat. As a result, over the long term the development of the conference center will have as much or more effect on the .type and maximum capacity of new event space in the market than its overall supply. HVS' projections estimate that in the stabilized year of demand 85 percent of the total room nights occurring in the conference center would represent net new group room nights in the market. The remaining 12,375 room nights would be those that- may .have occurred elsewhere in the market even without the existence of this new facility. However, one should not consider all of these transferred room nights to represent a net loss of room nights to existing properties. These existing properties will react to the increased competition in a number of ways to seek new sources of group room demand on their own. If one assumes that they would be able to replace at least half of these transferred room nights, the net effect on existing properties would be 6,188. Underlying growth in the demand for group room nights over time will gradually reduce the portion of transferred room nights that are not replaced by new demand. The conference center is projected to achieve much lower levels of event demand in its. first years of operation and this will further mitigate negative effects on existing properties. It is also possible that the increased event activity associated with .the conference center will increase the exposure of Vail as an event destination and cause the underlying rate of growth in group room night demand to increase. The potential for negative effects on existing lodging properties with event space. deserves careful consideration and was one of the primary rationales for the recommended facility program and suggested target market of events in excess of 500 attendees. If the conference center project included a new full-service attached hotel designed to accommodate .most of the net new HVS Convention, Syorts f3 Entertainment DRAFT Vail Conference Center Business Plan Demand Projections 8-15 group demand the potential .negative effects on existing lodging properties would be considerably greater. However, given .that the entire supply of net new group room nights associated with. conference center .events will enter the existing group demand pool the project represents a net benefit to existing properties in the form of increased -group room night demand. Approach to Marketing The demand projections assume that Vail will maintain certain key policies Efforts and procedures that are typical of booking practices currently implemented in peer markets with resort conference centers. These policies grant priority to events that generate substantial numbers of room nights. Typically, certain types of events and/or events that generate. a minimum number of room nights are given booking priory 18 months and out so -that events that do not meet a minimum room night threshold will not preclude the booking of events that have more economic impact potential. HVS recommends that Vail adopt a booking policy that reserves conference center dates for 18 months in advance for events that attract a total of at least 500 room nights and. for 12 months in advance for events that attract a total of at least 200 room nights. The average advance booking times for group events has been decreasing in recent years and it is important that the conference center. reserve events dates for the most productive events in respect to their ability. to generate . economic impact. This type of booking policy insures that conference facilities do not lose out on the most lucrative events in terms of economic impact: because the facility's schedule is filled with less productive local events that attract relatively less new spending. Within 12-to-18 months, facilities are usually free to book any type of business deemed worthwhile for the community, regardless of the number of room nights it generates. This policy has implications for the financial operations of the facility. Local events and banquets typically generate more revenue on a .per square foot utilized basis than conferences because so many. facilities with event space are willing to discount or waive space rental fees for events that generate room night stays. In most cases, sales and marketing for conference facilities is the. joint responsibility of the local convention & visitors bureau and the management staff of the facility. These entities are expected to cooperate on .proposals for group business. The bureau focuses its efforts on events such as corporate and association conferences, employee training, sales meetings, seminars, continuing education, and incentive functions that generate a substantial number of room nights. The conference center sales staff is usually more focused on attracting events that generate net operating income and help to mitigate any operating deficits of the facility. These dual marketing aims help HVS Convention, Syorts £d Entertainment ~ DRAFT Vail Conference Center Business Plan Demand Projections 8-16 maintain a balance betweenthe desire to utilize the conference center as a tool for attracting event attendees from out-of-town and the resulting economic impacf they generate and the need to keep any necessary operating subsidies for the. facility to a minimum. However, the specific characteristics . of the marketing arrangements for such facilities can vary considerably from market to market, particularly in the case of resort markets such as Vail that .. have large resort companies that are actively engaged in their own marketing efforts. Without a larger conference facility, the Vail Valley Chamber & Tourism Bureau's (WCTB) prior marketing and sales efforts have been largely directed at hotel-based events. This analysis assumes that .the WCTB or ~' another entity designated by the Town will begin conference center marketing and sales :efforts in earnest immediately. In certain instances a .municipal department of tourism markets conference facilities rather than a visitor bureau.. However, the VVCTB's group marketing budget and marketing materials for 2004 includes an effort to being marketing the conference center. Regardless of the specific marketing .arrangement, HVS assumes that these marketing efforts will be comparable to the efforts of other peer. markets assessed. in this report. This will require an increase. over existing marketing resources devoted to promoting Vail as a destination for. state, regional, and national conferences. The degree to which these increased resources come from an increase in existing funding sources, new funding sources, and/or a reallocation of existing sources is a matter for the Town, the designated marketing organization, and other interested parties to assess. HVS estimates that the total costs of~marketing the conference center to corporate .and. association events will be between $600,00 and $700,000 annually in 2003 dollars including salary and benefits costs. If the WCTB were to take on a portion or all of the marketing responsibilities, the necessary increase in conference-oriented marketing efforts would not only be a function of .resources, but would also require a change in the emphasis of .overall bureau activities. The emergence of Vail as a truly competitive and. active in participant in the market for conferences between 500 and 1,500 attendees will require a similar shiftin the functions and focus of the WCTB. The-City should consider various ways of assisting the efforts of the WCTB or whatever entity markets .the facility and providing incentives to help protect the community's, investment in a new conference center. Currently, the WCTB collects commissions from lodging properties on rooms it books.. Some similar form of commissions on conference center related room HVS Convention, SUorts F~ Entertainment DRAFT Vail Conference Center Business Plan Demand Projections 8-17 nights could, in conjunction with a portion of the group marketing resources the VVCTB already has, provide the .necessary financial .resources to .effectively market the conference center. Due to the increasing propensity of event attendees to book lodging through alternative .means such as the Internet and various discount lodging companies, HVS recommends that the Town consider establishing a system for tracking the number of conference center room nights booked by the VVCTB and. establish a commission system with the lodging community based on the estimated share of total conference center room. nights rather than those booked directly by the VVCTB into individual lodging properties. As discussed.: in the section on event planner input in this report, a single point of contact for establishing zoom blocks for conferences is critical for the success of the facility. The Town of Vail should implement a system. that encourages event planners and attendees to utilize such a central reservation system. There are several ways to accomplish such a system, and the specific characteristics of it are dependent upon the type and structure ofthe entity responsible for marketing the facility. However, it is important to stress that the marketing of the conference center. and the .process of booking group room blocks must be seamless and convenient for both event planners and. attendees. fIVS Conventron, Sports & Entertainment DRAFT Vail Conference Center Business Plan Financial Operating Projections 9-1 9. Financial Operating Projections The demand estimates are a key input into the financial operating model for the proposed facility. HVS. uses a detailed financial operating model to estimate revenues and expenses. This software quantifies the key variables and operating ratios that determine the income and expense of a conference facility. This model separates the fixed and variable components of revenues and expenses. Variable components of expenses are estimated based on the level of anticipated conference center revenue. The model projects fixed expenses based on data from the. historical operations of comparable facilities in other markets. HVS calibrated its. operating model to project future income and expenses for the recommended new Vail conference center by adjusting the income and expense assumptions to resemble similar facilities in other markets. HVS collected financial operating data from the set of peer resort conference centers for which such: data was available to provide a better understanding of the financial operations of facilities that are the most similar to the proposed facility. Eachof the facilities HVS assessed for which financial data was available had an annual operating deficit. These deficits are largely the result of policy decisions made regarding the return on investment for discounting facility rent to conference events that generate significant demand for room nights and bring associated spending into a local community. The deficits in these facilities range from approximately $600,000 to $1.9 million annually. The financial operations of conference centers are dependent upon a variety of factors such as the character of demand they attract, existence of competing facilities, local labor costs, and other factors.. However, analysis of other conference center facilities provides an important basis for comparison to help evaluate the reasonableness of projections for the proposed new Vail conference center. Income and Expenses HVS'.. conference center model estimates individual line-item .income and expense items. The model assumes an annual inflation rate of 3.0 percent, _ unless indicated otherwise. FIUS Convention, Sports.& Entertainment DRAFT Vail Conference Center Business Plan Financia] Operating Projections 9-2 .~~ . Income Event Services-includes revenue for the use of various types of equipment.. and services that the facility provides to events, such as event set-up and take-down services, equipment such as display materials and forklifts, certain types of furniture, and various other items. The model estimates equipment rental on a per square foot of occupied space basis so that this item varies with the level of event activity. Event services include fees charged to tenants for services such as security, cleaning, set-up and take down of function spaces, electrical, .commissions. from decorators, and other services provided to events. The HVS model uses a series of income assumptions on a per attendee or per square foot of rented exhibit space basis. Event Space Revenue-reflects the rental revenue the facility receives from clients that reserve the facility. Conference centers typically .charge conferences and other events that utilize the main ballroom /exhibit hall at a rate per occupied gross square foot of function space. Facilities often charge - other events, such as smaller conferences, meetings, and banquets, a fixed: daily rental fee. In certain cases, a facility will waive the space: rental fees if the event reaches a certain threshold of food and beverage charges. Gross Food &Beverage-includes charges to events for food and beverage , services. Most events that .utilize conference center function space will .arrange for food service for their attendees during their events. This food service can range from light snacks associated. with a meeting. to a full dinner associated with a conference or banquet. The estimates in the HVS model represent a per cap for the entire event, rather than a single food function. In .addition to these per caps, HVS assumes that the conference. center will gross another $115,000 in food and beverages for selected special events,. which could include additional activities associated with conference center .events and/or outside functions. Because food & beverage revenue is a key contributor to total facility revenues, HVS compared the .estimates of gross revenue to actual performance of leading hotels with banquet facilities in the Town of Vail. The gross food & beverage revenues from banquets and event catering generated by these facilities easily exceeds the amount HVS has projected for the conference center, despite their smaller size. This reality:. check indicatesthat the estimated levels of food & beverage revenue for the conference center should be attainable, and that there could be some upside potential. HVS Convention, Sports & Entertainment DR.9FT Vail Conference Center Business Plan Financial Operating Projections 9-3 ~' Audio Visual /Information Technology-includes the provision of audio visual presentation equipment and services, telecommunications, Internet, and computer services. to events. For instance, wireless Internet service fees would generate revenue for the facility. The model estimates information technology revenue on a persquare foot of occupied space basis so that this - item varies with the level of event activity. Parking-The parking revenue associated with the event activities at the conference center is estimated by employing assumptions, provided by the Town of Vail, regarding the share ofattendees who would park at the facility (10 percent), the amount of revenue per parked car ($10), and the net to gross ratio for parking revenues (70 percent). ~' Advertising &Sponsorships-includes revenue from interior .and exterior signage, promotional activities, program advertisements, licensing fees, and exclusive. vendor contracts. The model assumes that .the facility generates $1.15 per event attendee in advertising and sponsorship revenue. Certain items of operating income vary by type of event. Table 9-1 shows the operating income assumptions for the conference center by type of event. . Table 9-1 Operating Income Assumptions by Type of Event in Year 2003 Dollars Audio Visual) Event Flat Rate Rent per Info F&B Per Caps Event. Type Services per Rent per GSFD. .GSFD Technology Event ~GrOSS) per GSFD Corporate Conferences $0.060 $0.135 50.110 $0 $40.00 Association Conferences $0.053 $0.125 $0.100 $0 $38.00 Banquets $0.000 $0.080 $0.045 $0 $39.00 Entertainment $0.000 $0.080 $0.055 $7,000 $19.00 Meetings $0.000 $0.090 $0.100 $0 $35.00 Other $0.040 $0.080 $0.045 $4,500 $16.50 Source: HVS The preceding assumptions reflect aggregate assumptions for each major event category. Figures for items such as rent per gross square foot day reflect the propensity of such facilities to discount or waive space rental fees. H[/S Convention, Sports & Entertainment DRAFT Vail Conference Center Business Plad Financial Operating Projections 9-4 Expenses The HVS model includes assumptions for fixed and variable components of operating expenses. The variable expenses are dependent upon the level of event activity in the facility, measured by occupied gross square foot days or as a percentage of operating revenue. Event Labor (Part Time)-expense covers the annual. salary expense of part time event labor incurred by the facility. Food &Beverage-represents the costs associated with providing food service to events at the facility. The food service costs vary with the level of ~, food and beverage revenue. Utilities-include heating, cooling, electricity, and water charges paid by the. facility. Supplies-includes computers, office materials, furniture, and other items required to support the operations of the facility. Town Services-includes additional Town services required by the operation of the facility, such as dedicated or expanded shuttle bus service for event attendees, security, landscaping, snow removal,.and other services. Sales &Marketing-includes expenses for marketing the facility to event planners and local sources of event. demand. The sales and marketing for -the facility must. include things such as printed marketing materials, tradeshows, direct marketing, and providing and augmenting shuttle services for events. This also includes advertising in various trade publications and other activities designed to attract demand to the facility. This line item includes promotional activities for both local. day :group and conference sales and marketing activities. The actual structure for sales and marketing may call for a portion of this sales and marketing effort to be conducted by another. entity outside the direct control of the conference center manager. Repairs &Maintenance-includes both routine and one-time expenses for maintaining the facility and repairing damaged or worn-out equipment... Telephone-Includes telephone and mobile phone costs. HVS Conventlon, Sports & Entertainment DRAFT .Dail Conference Center Business Plan Financial Operating Projections 9-5 \` Training-Training for, conference center employees to learn how to operate new equipment and implement new services.. This could be for .new employees and existing staff. Administrative Salaries-includes the salaries of .full-time administrative, marketing, and operations staff .responsible for'. operating the facility, managing events, marketing, and scheduling events. Benefits-includes fringe benefits like health care premiums, retirement plan contributions,. worker's employer's share of income. taxes, and any other benefits. w Insurance,. Legal, & Professional Services-includes the costs for insurance and various professional services that may be required, such as legal, accounting, consulting, and others. Contracted Services-covers various services that the facility would contract with outside providers for such as certain routine cleaning, trash removal, and certain maintenance activities. General Overhead .and Other-includes various costs associated with the general operations of the facility. Examples of these costs include travel, printing, postage, data processing, consulting, equipment leases. association dues, licenses, entertainment, and others. Table 9-2 shows a summary of the expense assumptions that include fixed components and/or variable components based either on per square foot of occupied exhibit space or as a percent of total revenue. HVS Convention, Sports & Entertainment DRAFT Vail Conference Center Business Plan Financial Operating Projections 9-6 Table 9-2 Summary of Expense Assumptions Expenditure Variable Expense Percentage Expense Fixed. Expense -for Base Year Event Labor (Part Time) $0.032 per GSFD 5.4% of Event Services Food & Beverage 70.0°~ or Gross Food & Beverage Utilities $0.033 per GSFD $150,000 Supplies $0.005 per GSFD 5.0% of .Total Event Revenues Town Services $0.035 per GSFD $20,000 Sales & Marketing $0.032 per GSFD 4.0°~ of Total Event Revenues $1.75,000 Repairs & Maintenance $O.OOfi per GSFD $16,000 Telephone $0.011 per GSFD $28,500 Training $0.003 per GSFD $10,000 .Other 5.0% of Total Event Revenues Administrative Salaries $835,000 Benefits 25.0°k of Total Wages Insurance/Legal/Prof Svcs. 4.9% of Event. Related Rent, F&B, & Other Contracted Services $102,000 General Overhead & Other 3.0% of Event Related Rent; F&B, & Other $15,000 Source: HVS Financial Projections Table 9-3 displays projected financial operations for the facility from opening to a stabilized point of demand in the fifth year.- HUS Convention, Sports & Entertainment DRAFT Uail Conference Center Business Plan Financial Operating Projeclions 9-~ Table 9-3 Projected Financial Operations in Inflated Dollars 2008 2009 2010 2011 Stabilized .REVENUES Event Space Revenue $273,561. $361,129 $419,480 $462,320. $490,475 Gross Food & Beverage 1,690,733 2,266,855 2,787,927 3,117,373 3,397,122 Event Services 290,572 418,181 522,715 582,847 623,147 Audio visual /Info Technology 232,029 333,284 415,642 462,447 493,746 Parking 34,935 46,692 56,840. 63,510 69,051 Advertising & Sponsorships 57,394 76,709. 93,380 104,339 113,441 Total $2,579,224 $3,502,850 $4,295,984 $4,792,837 $5,186,982 OPERATING EXPENSES Event Labor (Part Time) $103,499 $145,693 $180,396 $200,775 $214,439 ~` Food & Beverage 1,183,513 1,586,798 1,951,549 2,182,161. .2,377,985 Utilities 264,443 .306,067 341,406 364,607 382,155 Supplies 53,528 74,866 91,668 101,834 108,617 Audio Visual /Info Technology 150,819. 216,635 270,167 300,591 320,935 Town Services 119,226 158,534 191,033 210,509 223,834 Sales & Marketing 322,527 346,723 390,964. 419,621 440,800 Repairs & Maintenance 35,012 42,188 48,210 52,012 54,774 Telephone 63,223 76,350 87,360 94,300 99,332 Training 19,825 23,482 26,565 28,540 29,997 Other 39,808 55,630 67,892 75,381 80,368 Total .$2,355,424 $3,032,967 $3,647,211 $4,030,332 $4,333,237 TOTAL OPERATING INCOME $223,801 $469,884 $648,773 $762,505 $853,745 NON•OPERATING EXPENSES Administrative Salaries $967,994 $997,034 $1,026,945 $1,057,753 $1,089,486 Benefits 241,998 249,258. 256,736. 264,438 272,371 Insurance/Legal/Prof Svcs. 101,508 135,798 165,717 184,963 200,884 Contracted Services 118,246 121,793. 125,447 129,211 133,087 General Overhead & Other 79,537 101,053 119,908 132,244 142,567 Total $1,509,283 $1,604,937 $1,694,753 $1,768,610 $1,838,390 NET INCOME ($1,285,483) ($1,135,053) ($1,046,980) ($1,006,104) ($984,645) Source: Hl/S The projection estimates that the conference ..center will operate with an annual deficit, which is typical for this type of facility. The estimated net operating loss ranges"from a high of $1.3 million in the first year to $984,645 at " demand stabilization, which increases slightly in subsequent .:years with inflation due to the fact that expenses are greater than revenues. Detailed Operating In order to .provide an additional level of detail on the operations of the Budget for Stabilized proposed facility, HVS developed a detailed operating budget for the Year of Operations stabilized year of demand. This budget follows a structure typical of facility ..operators in that is divides the operating expenses into different departments HUS Convention, Sports & Entertainment DRAFT Vail Conference Center Business Plan Financial Operating Projections 9-8 \~ and activities. The budget also includes a staff and salary schedule. It is important to note -that .until the facility is actually designed and a management structure is defined attempts to produce a detailed budget should be viewed as preliminary in nature and intended primarily to provide the reader with a better sense of the composition of various .aggregated line items in the preceding operating model. Summary Table 9-4 shows a summary of the operating budget with the expenses, including salaries and benefits, broken out into different categories. HUS Convention, Sports & Entertainment DRAFT Uail Conference Center Business Plan Financial Operating Projections 9-9 \` Table 9-4 Summary of Detailed Operating Budg et for a Stabilized Year 2003 Dollars 2012 Dollars Revenues Event $3,835,524 $5,004,489 Other 139,866 $182,493 Total Revenues $3,975,390 $5,186,982' Expenses Executive Salaries & Benefits $175,500 $228,988 Other 46,300 $60,411 Total - $221,800 $289,399 Sales & Marketing Salaries & Benefits $292,500 $381,646 Other 337,300 $440,100 Total $629,800 $821,746 Event Services Salaries & Benefits $158,600 $206,937 Other 421,170 $549,531 Total $579,770 $756,468 Facility Operations Salaries & Benefits $418;600. $546,178' Other 232,750 $303,686 Total $651,350 $849,864 General & Administrative Total $824,640 $1,075,968 Food & Beverage Total $1,822,528 $2.,377,985 Total Expenses $4,729,887 $6,171,430 Net 0 eratin Income (Loss) ($754,498) ($984,449) Source: NVS There is a slight variation in the amount from the preceding operating model due to .rounding errors. The su mmary shows that in year 2003 dollars the facility is expected to run an operating deficit. of $754,498 at demand stabilization, which occurs in 2012. This analysis assumes an annual rate of inflation of 3.0 percent. HVS Convention, Sports & Entertainment DRAFT Vail Conference Center Business Plan Financial Operating Projections 9-10 Salaries & Benefits HVS developed a staffing schedule for the facility by position.' The actual salaries for individual positions are difficult to estimate. at this .point in the development process and the actual salaries for individual positions mayend up to be materially different from these. estimates. However, the overall level of salary expense should be similar to the budget assuming a typical. operating structure for this type of facility.. Table 9-5 shows the preliminary staff schedules and estimated salaries. Table 9-5 Preliminary Staff and Salary S chedule v 2003 Dollars 2012 Dollars Category /Positions Salary .Benefits Total Salary Benefits Total General Administrative ' Conference Center Manager $100,000 $30,000 $130,000 $130,477 $39,143 $169,621 Administrative Assistant I 35,000 10,500 45,500 $45,667 $13,700 $59,367 Sub Total $135,000 $40,500 $175,500 $176,144 $52,843 $228,988' Event Services Event Supervisor $65,000 $19,500 $84,500 $84,810 $25,443 $110,253 Event Coordinator 57,000 17,100 74,100 $74,372. $22,31.2 $96,684 Sub Total $122,000 $36,600 $158,600 .$159,182 $47,755 $206,937 Facility Operations Operations Supervisor $60,000 $18,000 $78,000 $7$286 . $23,486 $101,772 Technical Services Manager 45,000 13,500 58,500 $58,715 : $17,614 $76,329 Technical Services Coordinator 40,000 12,000 52,000 $52,191 $15,657 $67,848 Chief Engineer 50,000 15,000 65,000 $65,239 $19,572 $84,810 Setup & Hkpg Supervisor 39,000 . 11,700 50,700 $50,886 $15,266 $66,152 Setup /Technician 25,000 7,500 32,500 $32,619. $9,786 $42,405 Security Agent I 32,000 9,600 41,600 $41,753 $12,526 $54,279 Senior Facility Attendant 31,000 9,300 40,300 $40,448 $12,134 $52,582 Sub Total $322,000 $96,600 $418,600 $420,137 $126,041 $546,178 Sales & Marketing .Director of Sales & Marketing $85,000 $25,500 $110,500 . $110,906 $33,272 $144,177 National Sales Manager 63,000 18,900 81,900 $82,201 $24,660. $106,861 Local Sales Manager 44,000 13,200 57,200 $57,410 $17,223 $74,633 Additional Staff Support 33,000 9,900 .42,900 $43,058 $12,917 $55,975 Sub Total $225,000 $67,500 $292,500 $293,574 $88,072 $381,646 Total $804,000 $241,200.$1,045,200 $1,049,038 $314,711 $1,363,749 Source: HUS HVS Convention, Sports & Entertainment DRAFT Vail Conference Center Business Plan ~~ Financial Operating Projections 9-I L HVS presents the remaining budget detail for a stabilized year of demand in year 2003 dollars. Marketing Table 9-6 shows the estimated marketing expenses for the facility. Table 9-6 Marketing Expenses in a Stabilized Year of Demand in Year 2003 Dollars Category /Line Item Expense Total Salaries & Benefits Director of Sales & Marketing $85,000 ~; National Sales Manager 63,000 Local Sales Manager 44,000 Additional Staff Support 33,000 Total Benefits 67,500 Total $292, 500 Technology & Communications Computers $8A00 Mobile Phone 1,800 ' Printing 15,000 Postage 10,000 Total $34,800 Travel & Entertainment Sales Trips $40,000 Marketing Manager s Meeting 2,000 Clients Entertainment 7,500 Total $49, 500 Meetings/Conventions $25,000. .Training 3,000 Dues & Subscriptions 5,000 Promotions 15,000 Shuttle Services 45,000 Tradeshows 15,000 ' Regional /National Advertising & Marketing 85,000 Internet Site Design /Maintenance /Related Marketing 20,000 Local Events Advertising 30,000 Consulting 5,000 Photogrophy/Design 5,000 Total Non-Salary Marketing Expense $337,300 Total $629,800 Source: Hl/S HUS Convention, Sports & Entertainment DR.9F"T Vail Conference Center Business Plan Financial Operating Projections 9-12 ~\ The marketing budget includes staff and expenses necessary to market the facility to conferences and to local sources for banquet and meeting events. Depending upon the specific management and marketing structures. in place for the facility, the overall marketing efforts could be segmented by local and out-of-town events or performed by a single organization that is governed by an agreement with the Town that includes incentives to balance the desire for events that generate the most economic impact (conferences) with those that generate the best financial operating margins (banquets and meetings). Event Services Table 9-7 shows the estimated event services expenses for the facility. Table 9-7 Event Services Expenses in a Stabilized Year of Demand in Year 2003 Dollars Category /Line Item Expense Salaries Event Supervisor $65,000 Event Coordinator 57,000 Total Benefits 36,600 Total $158,600 Audio Visual /Info Tech $245,970 .Part-Time Labor $170,000 Mobile Phone 1,800 Travel & Entertainment 1,000 Dues & Subscriptions 500 Postage 400 Promotions 1,500 Total Non-Salary Event Services Expens $421,170 Total $579,770 Source: HVS The Event service division handles the needs of event coordinators and their attendees in the logistical aspects of conducting .their events. The event services staff will require additional personnel from time to time to help coordinate events and assist in providing a consistent level of overall service. Executive -Table 9-8 shows executive expenses for the facility, .which include.. general management and oversight. activities. HUS Convention, Sports & Entertainment DRAFT Uail Conference Center Business Plan Financial Operating Projections 9-13 Table 9-8 Executive Expenses in a Stabilized Year of Demand inYear 2003 Dollars Categoryl.Line Item Expense Salaries Conference Center Manager $100,000 Administrative Assistant I 35,000 - Total Benefits 40,500 ; Total $175,500 Mobile Phone $1,300 Travel & Entenainment 15,000 Meetings & Conventions 1,000 ~; Training . 3,000. Audit Fees 15,000 Bad Debt Expense 10,000 Dues & Subscriptions 1,000 Total Non-Salary Executive Expense $46,300 Total " $221, 800 Source: HUS Facility Operations Table 9-9 shows the estimated facility operations expenses. HUS Convention, Sports & Entertainment DRAFT Uail Conference Center Business Plan Financial Operating Projections 9-14 Table 9-9 Facility Operations Expenses in a Stabilized Year of Demand in Year 2003 Dollars Category /Line Item Expense Salaries Operations Supervisor $60,000 Technical Services Manager 45,000 Technical Services. Coordinator 40,000 Chief Engineer 50,000 Setup & iikpg Supervisor 39,000 Setup /Technician 25,000 Security Agent I 32,000 ~ Senior Facility Attendant 31,000 ~ Total Benefits 96,600 Total $418,600 Part-Time /Temporary Labor $20,000 Mobile Phone 2,500 Dues and Subscriptions 1,500 Training. 22,000 Uniforms 7,000 Computer Equipment /Supplies 3,750 Repairs & Maintenance 20,000 Contracted Services 50,000 ' Building. Supplies 60,000 Equipment Rental 7,000 Equipment Maintenance Agreements 18,000 Auto Expense 1,000 Trash Expense ~ 20,000 Total Non-Salary Facility Operations Expense $232,750 Total $651,350 Source: HVS Facility operations include the daily operation of the facility itself, including its technology systems, HVAC, general maintenance, set-up, and security. General & Administrative / F&B Table 9-10 shows the general and administrative expenses and also the cost of food and beverage operations for the facility. HUS Convention, Sports & Entertainment DRAFT Vail Conference Center Business Plan Financial Operating Projections 9-15 Table 9-10 General & Administrative / F&B Expenses in a Stabilized Year of Demand in Year 2003 Dollars Category /Line Item Expense General & Administrative Equipment Lease Expense $5,000 Equipment Maintenance Agreement 3,750 Data Processing Fees 19,000 Contracted Services 13,000 Postage 5,000 Printing _ 4,500. Office Supplies 10,000 Telephone 68,000 a Utilities 292,890 Employee Benefits 5,500 Relocation 12,000 Insurance Expense 150,000 Liability Deductibles 7,000 Town Services 172,000 Other 57,000 Total $824,640 .Food & Beverage Food & Beverage Cost $1.,822,528 Source: HVS The general and administrative expenses include various. expenses that do not fall under any of the preceding categories. The food and beverage cost is estimated to be 70 percent of the gross food and beverage revenue. If the facility contracted out the food service operation this line item would not be included in the operating budget. Event Revenue ...Table 9-11 shows the estimated event revenues the facility is expected to generate. i HUS Convention, Sports & F'ntertainment DRAFT Uail Conference Center Business Plan Financial Operating Projections 9-16 Table 9-11 Event Revenue in a Stabilized Year of Demand in Year 2003 Dollars Category Revenue Event Space Revenue $375,908 Event Services 477,590 Audio Visual /Info Technology 378,415 Food & Beverage (Gross) 2,603,611 Total $3,835,524 Source: HVS Other Revenue Table 9-12 shows estimated other, or non-event revenue. Table 9-12 Other Revenue in a Stabilized Year of Demand in Year 2003 Dollars Category Revenue Parking (Net) $52,922 Advertising 86,943 Total $139,866 Source: HVS Other revenue includes income that is not collected from the event planners or sponsoring organizations that utilize the facility. Management Options The preceding operating projections assume that an experienced management team operates the conference center in an efficient and effective manner. If the Town contracted with a private management firm a management fee would be paid and .the amount of administrative salary expenses would decrease. The decision regarding whether to operate the facility as a department of the Town or part of an existing department or to contract .the management out depends on several. factors including the_ Town's employment structure and benefits -and the competition .for the contract to operate. the facility. In general, it is beneficial for municipalities to investigate both public -and outside management and accept bids from various potential operators. The decision regarding public or private management carries implications for the risk and reward associated with the facility's operations. All other things being equal, the most .efficient .operating structure for management of public assembly facilities is for .the owner to assemble a HVS Convention, Sports & Entertainment DRAFT Vail Conference Center Business Plan Financial Operating Projections 9-17 \~ management team that is well qualified and efficient. If however, a municipality has certain conditions that limit its ability to assemble a qualified and efficient management team, private management companies may offer a more cost efficient and effective alternative. Factors that can limit a municipality's ability to manage a facffity include:. _ ^ Higher than market average benefits package, ^ Union provisions that limit the ability of a municipality to implement flexible shifts or part-time labor, ^ Smaller municipalities may have a difficult time overseeing the operations of a large facility that may have a large budget and / or number of employees relative to the municipality itself, and ^ A municipality's human resources department may not have the capacity. or expertise to assemble a well-qualified management team. If one or more of these conditions exist it may be beneficial for the municipality to contract out the management of the facility rather .than mange it internally. One of the primary reasons municipalities elect to contract out the management of large public assembly facilities like conference centers is to isolate themselves from some of the risk associated with the financial operations of the facility. Management firms are sometimes willing to enter into agreements that. provide both incentives for efficient operations and guarantees on maximum levels of operating subsidies.. In effect, municipalities trade some upside financial opportunity for insurance against downside financial risk. In cases where a municipality's financial resources are. particularly limited, a management agreement that protects against operating losses in excessof a certain threshold can be highly attractive. The analysis of conference center facilities in peer markets in Section 5 of this report is evidence of the variety of potential management structures, as each facility is managed differently. -The peer markets included examples. of public. and private management, each with a slightly different structure. Resort associations operate the facilities in Keystone, Whistler, and Snowmass. The Town. of Mountain .Village operates the Telluride Conference Center and contracts its .marketing to the area's visitor bureau. The City. of Monterey HUS Convention, Sports & Entertainment DRAFT Vail Conference Center Business Plan Financial Ooeratine Proiections 9-18 owns and operates its conference center and a separate City department markets the facility. Table 9-13 shows a summary of the pros and cons in key issue areas. relevant to the two basic management options: municipal .and ..private facility management. w HVS Convention, Sports & Entertainment DRAFT Vail Conference Center Business Plan Financial Operating Projections 9-19 Table 9-13 Summary of Facility Management Options Pros & Cons Issues /Pros & Cons Municipal Managemer Private Management Administration Pros Avoids necessity of seeking private management firms and negotiating a Private firms with extensive experience managing such (aciliites can management agreement - utilize their corporate resources to increase management efficiency and may require less administrative staff on-site Cons Given the size of the Town of Vail's municipal staff it may be difficult to Less direct control over day-to-day management of the facility and adequately oversee an operation the size of the proposed conference requires coordination between municipal and management company center. Existing [own staff lacks industry knowledge and would need [o staff. devise a new accounting system for the department that operates the facility. Personnel Pros Town can hire and fire staff a[ its sole discretion. Could more easily assemble qualified management staff throgh a combination of transferring existing employees at other facilities and. recruiting outside talent.. Cons Attracting quality management staff may require a relatively substantial Nature of facility management firms may contribute to higher rates of invesment of Town resources to conduct a national search. Town employee turnover. employees may receive more lucrative benefits tharrthose of a private operator, which could increase operating costs. Efficiency Pros The Town would no[ need [o pay a management fee to an outside private A private management Firm could bring national expertise to bear that operator. would improve the efficieny of facility operations. Cons The Town may not be able to operate the facility as efficiently as a firm The need to pay aprivate-fee would make the operations of the that speacilizes in operating this type of facility and shares methods and conference center more expensive than equally competent public information between facilities. management General Oversight Pros The Town would have direct control over the operations of the facility. An experienced management firm would be responsible for the daily operations of the facility and could bring [heir experience and expertise to bear on routine issues and concerns. Cons The time and effort required to manage the conference center could The Town would need to develop a system for overseeing the private detract from other more essential Town services and activities. management and ensuring: that the Town's interests and not those of just the management firm were being served. Risk Pros With more direct control over faciliyt management the Town has. sale In certain cases, management firms may be willing to guarantee certain discretion to make decisions that affect operating deficits like rental fianncial performance levels in exchange for fees or incentives. rates, personnel changes, and booking policies. Cons The Town would be solely responsible For any increases in operating A management firm would have little incentive to increase operating deficits over projected levels efficiency above certain levels unless an aggressive incentive sUUdure was in place to reward increasingly improving financial performance. Source: HVS HUS Convention, Sports & Entertainment DRAFT Uail Conference Center Business Plan Financial Operating Projections 9-20 \~ Sensitivity Analysis It is important to stress that the best approach to management is a function of each. individual municipalities' administrative capabilities' and their willingness to accept or desire to avoid risk. HVS recommends that the Town consider both options and issue a request for qualifications for firms that manage such facilities if and when it elects to move forward with the project. A request for qualifications from potential management firms would initiate a review process that would enable the Town to determine the most effective management approach. Potential management firms would be motivated to compete with each other in ,regard to their fee and .the conditions of a management agreement, especially if the Town leaves open- the possibility of municipal management if it cannot reach an attractive agreement with any of the potential firms. Given that variation from the projected demand figures and subsequent operating .income statement of the proposed facility is highly likely, HVS performed a sensitivity analysis to determine the extent to which deviation from the projected level of demand might impact the number of new room nights the facility would generate and its financial performance: HVS analyzed a high and a low demand scenario, termed a planning scenario to reflect the desire to adequately prepare for less-than-estimated event demand, for both 2008 (the first year of operation) and 2012 (the projected stabilized year). The intent of this sensitivity analysis is to evaluate the influence on demand and financial operations of scenarios that represent the lowest and highest performance of the facility within a reasonable range of possibility, which could be characterized by a 95 percent confidence level. HVS' estimates that there is a 95 percent chance that the actual demand for the facility will fall somewhere between the planning and high scenarios. The planning scenario in this sensitivity analysis does not represent a catastrophic scenario that wipes out the majority of elective travel in the US for a year or more. In the planning scenario, HVS assumes that the facility is largely unable to attract .conference events in the shoulder seasons. Certain input from event planners suggested that marketing the facility during. the shoulder season might be difficult because of the relative lack of destination appeal and outdoor activities. There is also some concern about the number of restaurants and bars that are open and their operating hours during. these shoulder periods.. This scenario alsocalls for a slight decrease in the number of conferences in the summer that could occur if marketing efforts are not effective in .communicating the appeal of Vail during this season to those who may be unfamiliar with it. In addition, 'HVS reduced the number of banquets and conferences to reflect what may happen if the service quality of HUS Convention, Sports & Entertainment DRAFT Uail Conference Center Business Plan Financial Operating Projections 9-21 \~ the facility is not as high as planned and the demand for such .events declines accordingly.. In the high demand scenario, HVS assumes that the. conference .center is more successful than anticipated in attracting conferences in the shoulder season due to the ability of the conference center to spur additional activity in traditionally low tourism periods in' Vail. This scenario also assumes that the conference center is more effective in attracting events in the ski season, which could occur if lodging properties offered. a greater number of rooms at relatively affordable rates in mid-week when, there is .greater room availability. In .addition, .HVS assumes in the high scenario that the conference center is particularly effective in attracting meeting events, perhaps as a result of affiliations with regional .universities and/or corporations that could provide more locally-driven event demand. Table 9-14 shows the effects of the planning and high demand scenarios. on the projected number of events by type for those that are different in the three scenarios. Tabte 9-14 Number of Events in Plannin ,Base, and. Hi h Demand Scenarios 2008 2012 Event Type /Scope Planning Base High Planning Base High Corporate Conferences National 2 7 9 7 14 17 State 7 8 9 8 9 17 Total 9 15 18 15 23 34 Association Conferences National 1 2 3 6 10 12 State 5 5 7 12 16 18 Total 6 7 10 18 26 30 -Total Conferences. National 3 9 12 13 24 29 State 12 13 16 20 25 35 Total 15 22 28 33 49 64 Meetin s' 75 90 100 95 110. 130 Banquets 20 25 25 35 45 45 Source: HVS HUS Convention, Sports & Entertainment DRAFT Uail Conference Center Business Plan Financial Operating Projections 9-22 Table 9-15 shows the number of new room nights and net operating income of the facility in each of the scenarios. Table 9-15 Sensitivity Analysis on .Conference Center Demand Planning .Base High Year /Data Point Value fromaBase Value Value from Base 1.5,665 . (9,705) ($1,369,017) ($83,534) 25, 370 ($1,.285,483) 30,890 5,520 ($1,.213,736) $71,747. 80,065 10,640 ($834,135) $150,511 2008 New Room Nights Net Income (Loss) 2012 New Room Nights Net Income (Loss) 44,295 (25,130) .69,425 ($1,185,835) ($201,189) ($984,645) Source: Hl/S The effects on room nights and operating income are .far greater in the stabilized year because the projections already estimate a low level of demand in the first year of operations. In the stabilized .year, the planning scenario generates 25,130 fewer new room nights and a deficit that is $201,189 greater than the base scenario. Because the model assumes that conferences pay relatively little in space rental fees the impact on the facility from changes in demand is less than the change in room nights might otherwise suggest. Other Operating Risks In addition to the risks associated with the possibility that the. facility would not attract the anticipated level of events, there are other operating risks that the Town should consider. The Town will either. operate the facility or enter into a contract with another entity to operate the facility on its .behalf. If for some reason the operating structure for the facility is mismanaged or ineffective for any reasori the performance of the facility could be .adversely affected. Given that the Town's overall budget and number of employees is small relative to other communities that generally develop conference facilities of this size, it could be difficult for the Town to manage such a large and complex operation itself. Alternatively, if the Town contracts out -the management of .the facility without the proper safeguards in its management agreement. an outside operator could be .negligent in its activities and the Town could have difficulty in expeditiously terminating the poorly performing manager. Such management contracts are complex documents with highly detailed HVS Convention, Sports & Entertainment DRAFT Vail Conference Center Business Plan Financial Operating Projections 9-23 provisions designed to safeguard the Town's interest in the operations of the facility. The Town can mitigate some of the operating risk inherent in the facility by contracting its management out to an established firm that has a sufficient amount of resources. to guarantee a minimum level of financial operating performance. Another potential operating risk that is worthy of note is that the revenue from the dedicated tax revenues for the project could fail to meet anticipated revenue levels. If this dedicated revenue is inadequate to cover both debt service and operating deficits the Town could elect to reduce .the operating budget and/or management fee for the facility. This reduction in available operating funds could cause the facility to falter in its attempts to attract `' .events. The Town can take several steps to mitigate these risks.. The development of an efficient and effective management .and operating structure would provide significant safeguards against unforeseen circumstances and ensure. that quick corrective measures can be implemented if the quality of management lapses. The risk of having .inadequate tax revenues to support the debt service and / or operating deficit of the facility would be reduced significantly if the Town structures a financing plan that sets aside ample .operating reserves. HVS Convention, Sports £~ Entertainment DRAFT Vail Conference Center Feasibility Study Economic Impact Analysis 10-1 ~) 10. Economic Impact Analysis The potential for increased positive economic impact. provides a primary rationale for public investment in conference center projects. These facilities can enable a community to attract and retain more events and out-of-town visitors and their resultant spending, due. to the increased availability and quality of local meeting and lodging options. Event attendees who come from outside the area and stay in hotels spend significant amounts of money. during conferences, meetings, and. other events. These attendees also spend money as tourists both before and after events. This economic and fiscal impact analysis incorporates the demand projections. for. the recommended conference center in Vail and estimates the amount of :total spending, tax revenue, and employment that the new facility would. generate in the Town. Summary of Results HVS estimated the total direct, indirect, .and induced spending: in the economy and the increase in fiscal impact. (tax revenues} that would result .from this new spending. The fiscal impacts include the Town's incremental tax revenues associated directly with the increased spending. HVS uses an annual infla~ion rate of 3.0 percent in the estimates of future impacts. The estimates reflect annual demand for each year up to market stabilization. Table 10-1 shows a summary of the impact the proposed conference center would have on the Town. economy. Table 10-1 Annual Impact Summary-Inflated Dollars Type of Impact 2008. 2009 2010 2011 2012 City Total New Spending $11,379,480 $19,620,770 $26,988,790 $30,935,363 $34,124,940 Fiscal Revenue, $485,019 $841,956 $1,159,409 $1,330,766 $1,481,473 Jobs 125 207 277 308 329 Source: HVS The conference center would attract an estimated $11.4 million in ...new spending and .$485,019 in new fiscal tax revenue to-the Town in its first year of .operation. This spending would support approximately ,125 jobs in thee. - HVS Convention, Sports £a Entertainment DRAFT Vail Conference Center~Feasibility Study Economic Impact Analysis 10-2 ~~ Town. HVS estimates that demand for the conference center will stabilize in its fifth year of operations. The analysis considers a portion of the demand at the conference center and the headquarters hotel to be transferred from other properties in the Town. These assumptions are designed to remove transfers of spending from existing facilities to the proposed conference center a headquarters hotel from the calculation of new spending impacts.. The analysis estimates that the annual spending impact from the new facilities at market stabilization would be $34.1 million and $1.48 million in fiscal tax revenue. This spending would support approximately 329 jobs in the Town. This new annual spending includes the direct, indirect, and induced spending impacts from new overnight -group demand and the day visitors attracted by conference. center events.. The fiscal impacts include the Town tax revenue this new spending generates, including local sales and occupancy taxes. The preceding estimates do not include spending from room nights. that are transferred from existing event facilities in the Town. Methodology .HVS estimates the spending and fiscal impact of the conference center. by calculating the spending associated with the new room nights, day-trip .visitors, and overall new spending it would attract to the Town. HVS defines .new spending as that which would only occur in the Town if this conference center were successfully developed. The conference center would attract a certain portion of demand .from existing hotels and event facilities in the Town. However, since the proposed facility is unlike any currently located in Vail in terms of its overall quality, service level, and supply of function space, HVS estimates that the ratio of new demand would be high, particularly in respect to larger events such as conferences and meetings. The methodology HVS employs in its impact analysis avoids the primary problems that frequently plague such studies. Only new spending .within the Town that originates from demand associated with the conference center is included in the estimate of direct spending. By including .only the net new spending, the model excludes transfer spending. By excluding transfer spending, the spending projections represent the. net. new economic impact created by the new demand at the proposed facility -amore accurate projection :,methodology than counting the. gross economic impact. Thee exclusion of transfer spending in economic impact analyses is important because it isolates. the new spending that the proposed facility attracts. into the Towri s economy. The analysis calculates the total spending resulting from the demand at the proposed conference center, the fiscal impact (tax revenue to the Town), and the number of jobs this spending would support in the economy. HVS Convention, Sports ~ Entertainment DRAFT Vail Conference Center Feasibility Stucly Economic Impact Analysis 70-3 Description of HVS estimates three types of spending impacts in the analysis: Spending Types ^ Direct impacts include the spending resulting from .the. events and activities that the new conference center would induce in the market. For example, a conference attendee's expenditure on a restaurant meal is a direct economic impact. ^ Indirect impacts are. the supply of goods and services resulting from the initial direct .spending attracted by the conference. center. For example, a conference attendee's direct expenditure on a restaurant meal causes the restaurant to purchase food and other items from suppliers. The portion of these restaurant purchases that arewithin the Town economy is counted as an indirect economic impact. ^ Induced impacts represent the change in local .consumption due to the personal spending by employees whose incomes are affected by direct and indirect spending. For example, a waitress at the` restaurant may have more personal income as a result of the conference attendee's visit. The amount of the increased ~ income that .the waitress spends in the local economy is considered an Inputs for Economic Impact Analysis mduced impact Indirect and induced impacts are often referred to as multiplier effects. These . effects, which vary based upon the specific .characteristics of a market's economy, typically make up approximately 20 to 40 percent of the total economic impact. Figure 10-1 shows the types of new spending activities and associated economic and fiscal impacts HVS estimated in this. analysis. i. 1-IVS Convention Sports Entertainment DRAFT Uail Conference Center Business Plan Economic Impact Analysis 10-4 Figure 10-1 ; Conference Center New Events Attracted Transfer Demand from by the Convention Existing City Facilities Center No New Impact Associations Event Attendees Exhibitors R. ;, $20.76 per conference $81.74 per conference attendee day attendee day j j . ~ ~ .National Events State Events Local Events Ski-$417.08 Ski-345.39 In Town-$34.91 Summer-$249.49 Summer-$206.61 Shoulder-$183.73 Shoulder-$152.15 In-Town-$34.91 In-Town-$34.91 4,: f. Source: HVS f HVS Convention, Sports £~ Entertainment DRAFTVaiI Conference Center Feasibility Study Economic Impact Analysis 10-5 \, New event demand the conference center would attract includes the spending associated with conferences, meetings, .and other types of events occurring in conjunction with events at the conference center. Most of this demand will be new to the Towri s economy since the conference center represents a new type of facility in the market thaf~s designed to attract events .that single hotels or exposition halls can't effectively attract and accommodate. Table 10-2 shows the assumptions regarding the. share of room nights for each event type that would represent new demand in the Town and the resulting number of new room nights. Table 10-2 Projected New Room Nights Attracted by the Vail Conference Center by Season Year Ski Season % of Summer % of Shoulder ~ °f Total Total Total Total 2008 966 4% .20,095 79% .4,322 17% 25,383 2009 3,003 7% 32,492 75% 7,785. 18% 43,279 2010 5,560 10°~ 41,931 73% 9,980 17% 57,471. 2011 5,890 9% 46,484 72% 12,236 19% 64,610 2012 6,134 9% 50,.183 72% 13,101 19% 69,418. Source: HVS The projections show that the conference center would attract approximately 69,418 new room nights to the Town by the time demand stabilizes in 2011. The conference center would also attract non-lodger visitors who' attend events or functions but do not stay in Vaii. overnight. These non-lodger visitors contribute to the economy by spending money on meals, stores, attractions, etc. Table 10-3 shows the. estimated number of non-lodger spending days associated with the. conference center. Table 10-3 Total Non-Lodger Spending Days Year Ski Season % of Total Summer % of Total Shoulder % of Total Total 2008 . ; 6,960 24% 16,390 56% 5,980 20°k 29,330 2009 8,421 23% 20,372 57% 7,196 20% 35,9$9 2010 9,826 24% . 23,612 57% 8,337 20% ` 41,775 2011 10,525 23% 25,329 56% 9,136 20% 44,990 2012 11,104 23% 26,913 56% 9,623 20% 47,640 ....Source: HVS HVS Convention, Sports £a Entertainment DRAFT Vail Conferertce Center Feasibility Study Economic Impact Analysis 10-6 Direct Spending The direct spending estimates for conference center .event attendees and related spending are based on the demand projections and average daily spending assumptions. HVS drew upon multiple data sources to develop assumptions for the different categories of spending, including national visitor spending surveys and other sources. HVS adjusted these figures to reflect the characteristics of the different demand segments.`. The .analysis estimates daily spending for each of the five demand segments by type of expenditure, as shown in Table 10-4. s HVS Convention, Syorts £~ Entertainment DRAFT Vail Conference Center Feasibility Study Economic Impact Analysis 10-7 Table 10-4 Room Night Daily Spending Assumption by Season and Geographic Scope of Event Type Ski Season National State Daily ~° Daily °~ Spending Spending Summer National State Daily ,/° Daily °~ Spending Spending Lodging and Incidentals 158.96 38.1% 131.64 38.1% 150.85 60.5% 124.93. 60.5% Hotel Restaurants 57.08 13.7° 47.27 13.7% 25.23 10.1%° 20.90 10.1% Other Restaurants 53.62 12.9% 44.41 12.9% 23.70 9.5% 19.63 9.5% Tours /Sightseeing 10.38 2.5% 8.59 2.5% 4.59 1.8% 3.80 1.8°k Admission to Museums, etc. 5.19 1.2% 4.30 1.2% 2.29 0.9% 1.90 0.9% Recreation 5.19 1.2% 4.30 1.2% 2.29 0.9~° 1.90 0.9°~ Sporting Events 1.73 0.4% 1:43 0.4~° 0.76 0.3% 0.63 0.3% Retail Stores 43.24 10.4% 35.81 10.4% 19.12 7.7% 15.83 7.7% Local Transport 10.38 2.5% 8.59 2.5% 4.59 1.8% 3.80 1,8% Auto Rental 15.57 3.7% 12.89 3.7% 6.88 2.8% 5.70 2.8% Gas, Tolls, Parking 6.92 1.7% 5.73 1.7% 3.06 1.2°k 2:53 1.2% Other 13.84 3.3% 11.46 3.3% 6.12 2.5% 5.07 2.5% Skiing (Total on Mountain) 34.98 8.4% 28.97 8.4% - 0.0% - 0.0% Total $417.08 100.0.x° $345.39 100.0% $249.49 100.0% $206.61 100:0% ~ Shoulder ~ National State TYPe Daily % Daily % Spending Spending Lodging and Incidentals 109.14 59.4% 90.38 59.4°k Hotel Restaurants 19.08 10.4% 15.80 10.4° Other Restaurants 17.93 9.8% 14.84 9.8% Tours /Sightseeing 3.47 1.9% 2.87 1.9°k Admission to Museums, etc. 1.73 0.9% 1.44 0.9% Recreation 1.73 0.9% 1.44 0.9% Sporting Events 0.58 0.3% 0.48 0.3% Retail Stores 14.46 7.9% 11.97 7.9°~ Local Transport 3:47 1.9% 2.87 1.9% Auto Rental 5.20 2.8% 4.31 2.8% Gas, Tolls, Parking 2.31 1.3% 1.92 1.3% Other 4.63 2.5% 3.83 2.5% Skiing (Total on Mountain) - 0.0% - 0.0% Total $183.73. 100:0% $152.15 100.0% Sources: fACV B, Town o/ Vail, Vail Resorts, Hill & Company, Vail Valley C hamber & Tourism Bureau, &HVS The differences between the spending habits associated with the various. seasons and event scope are reflected in the .distribution. among the individual -types of spending .and the .total daily expense. The hotel services line item includes both the rental of the room and any other incidental costs such as parking, telephone, etc. The analysis assumes that in-town attendees spend an average of $34.91 regardless of time of year and type of event. HVS Convention, Sports £~ Entertainment DRAFT Vail Conference Center Feasibility Study - Economirlmpact Analysis 10-8 Conference Center Room Nights The conference. center room nights category includes spending by attendees to events at the conference center who stay overnight in the Town. Such attendees typically spend money on lodging, food,- local transportation, .recreation and entertainment, and other items. HVS based the average daily spending figures on a number of different sources of information on the spending patterns and visitor costs in Vail. The. data on the local hotel rates from Hill & Company (detailed previously in the. :report) served as a partial guide for .assumptions on average .lodging spending. Both Vail Resorts and the Vail Valley Chamber & Tourism Bureau maintain data on average spending by visitors to Vail. In .addition, HVS obtained data from local hoteliers on the multiple occupancy rates of events attendees to help determine per person lodging costs for various event types. The International Association of Convention and Visitor Bureaus ("IACVB") conducts surveys on group event spending. Delegates who were involved in 67 U.S. and six Canadian cities .participated in the study. IACVB last conducted the full survey 1998 and is currently working on a new survey. The survey reports average daily spending figures for three. metropolitan market population-large (1.5 million plus), medium (500,000 to 1,499,999), and small (less than 500,000). IACVB updated the spending assumptions for inflation in 2000. The average traveling party size was. 1.6 people. HVS uses the distribution among. the various non-lodging spending categories in this survey to allocate the various types of spending. Non-Lodger Event Attendees The conference center .will also attract a number of day-trip visitors.. Day-trip visitors include people who attend an event at theconvention center but do not atay in Vail overnight. The IACVB spending .survey. distinguishes between spending by out-of-town and in-town delegates. HVS uses the in- _ town figure for event attendees who do not require hotel rooms. Both people who stay in hotels outside Vail and those who do not require lodging, such as .people attending an event who reside in the southern portion of the Denver metropolitan area, are included among .the day-trip. visitor category. The .estimated spending figure for in-town visitors inflated to 2003 dollars. is $34.91 per day for each attendee. FNS Convention, Sports £~ Entertainment DRAFT Vail Conference Center Feasibilitu Studu Economic Imvact Analusis 10-9 Association and Exhibitor Spending Conferences and certain types of meetings bring association executives and exhibitors into the market. These associations and exhibitors spend money before, during, and after events. Association spending is the local spending .within the area by organizations that sponsor conventions, tradeshows, and certain meetings: Associations make expenditures for lodging, exhibit space rental, meeting room rental, food and beverage services, equipment rental, staff living expenses, and other services. The IACVB convention income survey estimates that the average association expenditure per attendee is $20.76 in year 2003 dollars. Exhibitor spending includes the local. spending by exhibitors at conferences and meetings for services, as well as their personal expenditures: Exhibitors make expenditures for lodging, meeting room rental, food and beverage service, hospitality suites, equipment rental, .and .other services. Certain exhibitor expenditure categories, such as drayage .and promotion, are not included because the analysis assumes that they areprimarily non-local and occur outside the Town. HVS adjusted the IACVB convention income survey .estimates for average exhibitor expenditure per attendee day to account for the fact that not all corporate and association conferences will have exhibits. The resultant assumption is $81.74 per corporate and association attendee day in year 2003 dollars.. Estimated Direct All direct spending originating from outside the Town represents a net new Impacts spending impact. However, a portion of the direct spending would occur outside the Tbwn. To address this issue, HVS employs a set of assumptions regarding the proportion of spending that would occur outside the Town, based on the volume and quality of the area's tourism infrastructureand the proximity and attractiveness of surrounding communities. The new spending that occurs within the Town constitutes the net new direct economic impacts. In order to estimate the ratio of direct spending that would occurwithinthe Town, HVS considered the level of visitor attractions available both in Vail and neighboring areas. The Town's wealth of visitor amenities, including a renowned collection of restaurants and retailstores influences the estimates. .Also, the proximity of Denver, particularly its airport, factors into the assumptions regarding. how much direct .spending .will ..occur. in certain categories in Vail. The assumptions for some types of .spending .are less dependent upon the specific characteristics of the local market. For instance, the ratio of gasoline and .local transportation expenditures occurring in the host municipality is FNS Convention, Sports £~ Entertainment 'DRAFT Vail Conference Center Feasibility Study Economic Impact Analysis 10-10 relatively staticacross dif#erent markets. Table 10-5 shows the total estimated direct event attendee. spending, the portion of direct spending assumed to occur in .Vail, and the total direct .spending. in Vail in its opening .and stabilized years. Table 10-5 Total Direct Event Attendee S ending and Portion Occurring in Vail in its Opening and Stabilized Years in 2003bollars Opening Year Stabilized Year Total Direct °~ °f Direct Total Direct Spending % of Spending Direct Spending Type Delegate Spending In Delegate Occurring Occurring In Vail Spending in Vail Vail Spending in Vail Lodging and Incidentals 3,383,937 90% 3,045,543 9,342,445 90°~ 8,408,200 Hotel Restaurants 887,746 90°~ 798,972 2,225,748 90% 2,003,173 Other Restaurants 810,746 95% 770,209 2,053,174- 95% 1,950,516 Tours /Sightseeing 107,935 85% 91,745. 317,827 85% 270,153 Admission to Museums, Theaters. Etc. 53,968 90% 48,571 158,913 90% 143,022 Recreation 71,281 95% 67,717 187,034 95% 177,683 Sporting Events 24,937 25% 6,234. 64,255 25% 16,064 Retail Stores 700,605. 95% 665,575 1,731,765 95% 1,645,177 Local Transport 129,880- 95% 123.,386 353,471 95°~ 335,797 Auto Rental 161,903 10% 16,190 476,740 10% 47,674 Gasoline, Tolls, Parking (within event city) 111,987 90% 100,788. 276,903 90% 249,213 Other 283,411 95% 269,240 423,769. 95°k 402,580 Skiing (Total on Mountain} 27,980 90% 25,182 427,641 90% 384,877 Total 6,756,315 89% 6,029,352 18,039,685 89°~ 16,034,128' Source: HVS The assumptions concerning the percentage of direct spending that occurs in Vail are constant throughout the projections.. Table 10-6 shows the total estimated. direct spending .associated with the event attendees at the proposed conference center that would occur within the Town by season.. FIVS Convention, Sports £~ Entertainment DRAFT Vail Conference Center Feasibility Study Economic Impact Analysis 20-i1 Table 10-6 \, Estimated Direct Spending for Opening Year 2003 Dollars Type Ski ~° of Summer °~ of Shoulder % of Total Total Total Total Lodging and Incidentals 114,435 3.8% 2,546,173 83.6% 384,935 12.6% 3,045,543 Hotel Restaurants 103,904 13.0% .573,798 71.8% 121,270 15.2% , 798,972 Other Restaurants 97,800 12.7% 556,653 72.3% 115,756 15.0% ' 770,209 Tours /Sightseeing 7,056 7.7% 73,132 79.7% 11,557 12.6°~ 91,745 Admission to Museums, Th eaters. Etc. 3,736 7.7°~ 38,717 79.7% 6,118 12.6°~ 48,571 Recreation 7,846 11.6° 50,059 73.9% 9,812 14.5% 67,717 Sporting Events 758. . 12.2% 4,555 73.1% 921 14.8% 6,234. Retail Stores 89,416 13.4% 473,747 71.2% 102,412 15.4% 665,575 Local Transport 12,834 10.4% 93,385 75.7% 17,167 13.9% 1.23,386 Auto Rental 1,245 7.7% 12,906 79.7°~ 2,039 12.6% 16,190 Gasoline, Tolls, Parking (within event city) 13,530 13.4q° 71,755 71.2% 15,503 15.4% 100,788. Other 41,963 15.6°~ 183,036 68.0% 44,242 16.4% 269,240 Skiing (Total on Mountain) 25,182 100.0% 0 0.0% 0 0.0% 25,182 Total 519,705 8.6% 4,677,914 77.6% 831,733 13.8% 6,029,352 Source: HVS Table 10-7 shows the estimated event attendee spending in the stabilized year of demand.' Table 10-7 Estimated Direct Event Attendee Spending for Stabilized Year in Year 2003 Dollars TYPe Ski Summer Shoulder Total Total Total Tot I Lodging and Incidentals 822,314 9.8% 6,384,692 75.9% 1,201,194 . 14.3°~ 8,408,200 Hotel Restaurants 395,498 19.7% 1,310,812 65.4% 296,863 14.8% 2,003,173 Other Restaurants 383,825 19.7°~ 1,279,557 65.6% 287,133 14.7% 1,950,516 Tours /Sightseeing 50,706 18.8% 183,383 67.9% 36,064 13.3% 270,153 Admission to Museums, Theaters. Etc. 26,844 18.8% 97,085 67.9% 19,093 13.3% 143,022 Recreation 34,563 19.5% 117,570 66.2% 25,550 14.4% 177,683 Sporting Events 3,143 19.6% 10,583 65.9% 2,338. 14.6% 16,064 Retail Stores 326,361 19.8% 1,072,677 65.2% 246,139 15.0% 1,645,177 Local Transport 64,564 .19.2% 224,086 66.7% 47,147 14.0% 335,797 Auto Rental 8,948 18.8% 32,362. 67.9% 6,364 13.3% 47,674 Gasoline, Tolls, Parking (within event city) 49,432 19.8% 162,504 65.2% 37,277 15.0% 249,213 Other 75,562 18.8% 273,276 67.9% 53,742 . 13.3% 402,580 Skiing (Total on Mountain) <228;484 59.4°k 115,201 29.9q° 41,191 . 10.7% 384,877 Total 2,470,245 15.4% 11,263,788 70.2% 2,300,095 14.3°~ 16,034,128 Source: HVS The analysis initially uses constant year d ollars bec ause the estimates of indirect and- :induced spending impacts use a base year and adjust for inflation for specific sectors in the specific Town economy. HUS estimates that HVS Convention, Syorts & Entertainment DRAFT Vaii Conference Center Feasibility Study Economic ImpactAnalysis 10-12 the proposed conference center would attract approximately $16.0 million in new direct .event attendee spending to the .Town's economy after stabilization. In addition to event attendee spending, the events the conference center attrac#s to Vail will generate spending by associations and exhibitors. Using _ the per event attendee day spending assumptions described earlier in this section, HVS estimates the amount of association and exhibitor spending that would occur in Vail, as shown in Table 10-8. Table 10-8 Total Direct Association and Exhibitor Spending and the .Portion Occurring in Vail. in Opening and Stabilized Years in 2003 Dollars Opening Year Stabilized Year of Direct % of Direct Type Total Direct Spending Spending In Total Direct Spending Spending In Spending Occurring Vail Spending .Occurring Vail in Vail in Vail Association Eating and Drinking. .290,397 100% 290,397 776,429 100% 776,429 Miscellaneous Retail 97,684 95% 92,800 261,176 95% 248,118 Other Business Servi ces 52,518 100% 52,518: 140,416 .100% 140,416 Advertising & Promotion .21,033 100% 21,033 56,236 100% 56,236 Hotel. 66,602 95% 63,272 178,073 95% 169,169 EquipmentRenta( 61,175. 1.00% 61,175 163,564 100% 163,564 Exhibitor Eating and Drinking 519,629 90% 467,666 1,389,324 90% ..1,250,392 Other Business Servi ces 290,209. 95% 275,699 775,929 95°k 737,132 Advertising & Promotion 53,753. 85% 45,690 143,720 85% 122,162 Hotel 196,951 95% 187,104 526,586 95% .500,257 Equipment Rental 171,631 100% 171,631 458,888 100% 458,888 Total 1,821,584 95% 1,728,986 4,870,341 95% 4,622,763 Source: HVS Association and exhibitor spending add another $1.7 million in the opening year, which increases to $4.6 million by the stabilized year.. The preceding figures do'not include the spending associated .with demand .that would transfer from other facilities located in the Town to the new convention center and headquarters hotel or transfer spending by Town of Vail residents who attend local events. Indirect and Induced HVS utilized the IMPLAN input-output model to estimate indirect and ..Impacts induced impacts. IMPLAN is a nationally recognized model commonlyused HVS Convention, Syorts £~ Entertainment DRAFTVaiI Conference Center Feasibility Study Economic Imyact Analysis 10-13 ~, to estimate economic impacts. An input-output model generally describes the commodities and income that normally flow through the various sectors of the .economy. The indirect and induced spending. and employment effects shown here represent the estimated changes in the. flow of income and goods caused by the projected direct spending. The IMPLAN model accounts for the_ specific characteristics of the Towri s economy and estimates the share of indirect and induced spending that it will retain. The base IMPLAN data on the Vail economy is from the year 2000, the most recent year available aY the time of this analysis. Given the rate at which the Towri s economy is growing, ' the time lapse between the IMPLAN data and the point at which the impacts :from the project commence may cause the model to slightly underestimate the ratio of indirect and induced spending that ..the Town economy will capture. HVS categorized the projection of net new direct expenditures into various sectors of the economy. These categorized direct-spending numbers provided the inputs for the IMPLAN model. HVS then used the model to calculate the indirect and induced spending resulting from the direct spending. Because all input data are net new direct expenditures, the indirect and induced impacts are also net new effects and exclude transfer spending. The IMPLAN model projects the indirect and. induced effects generated by the estimated net new spending that occurs in the Town. Table 10-9 shows the projected. net new direct, indirect, and induced economic. impacts. and' jobsin the Town that are attributable to he increased event activity and hotel demand. Table 10-9 Total Net New Spending (Inflated Dollars in Millions) & Em ployment Impact 2008 2009 2010 2011 2012 Type of Impact Spending Jobs Spending Jobs Spending Jobs Spending Jobs Spending Jobs Direct Impact $9.0 102 $15.5 170 $21.3 226 $24.4 252 $27.0 268 Indirect' 1.1 10 1.8 16 2.5 21 2.9 24 3.2 26 Induced' 1.3 14 2.3 22 3.1 29 3.6 33 3.9 35 Total $1i.4 125 $19.6 .207 $27.0 277 $30.9 308 $34.1 329 ~ Total industry output Source: HVS HVS projects. that the conference center would generate $34.1 :million in additional direct, indirect, and induced spending into the Town economy at stabilization. The additional spending would support an estimated 329 jobs in the Town on an annual basis. HVS Convention, Syorts F~ Entertainment DRAFT Vail Conference Center Feasibility Study Economic ImYaet Analysis 10-14 ~~ .The ratio of indirect and induced spending to direct spending in Vail is approximately 27 percent. This ratio is somewhat low relative to other markets as a result of the lack of manufacturing, raw materials, and corporate headquarters activities in the Town. A larger and more diverse market could Fiscal Impacts have a ratio of indirect and induced to direct spending of 40 percent or more. Fiscal impacts consist of tax revenues that result from the net new spending and income related to the project. The analysis estimates the increase in tax revenues the spending will generate. within the Town. These fiscal impacts represent the incremental tax revenue collected by the. Town associated with the net new economic activity related to the operations of the recommended facilities. For example, the analysis estimates the occupancy tax revenue from an overnight stay by a conference attendee. and considers it to be a fiscal impact. The fiscal impacts are the government's share of total economic benefit. Fiscal impacts represent only a fraction of the overall .spending impact to the. economy, as they are only the public sector's increase in tax revenue resulting from the overall increased spending in the economy. Fiscal impacts partially offset-the capital and operating expenditures required to support the publicly developed facilities. Although the incremental tax revenues. are rarely sufficient to pay for a project in full, fiscal impacts are important because they improve the public sector's ability to pay for projects and reflect the positive effects that new development has. on a municipality's tax base. The overall economic impacts, including the fiscal impacts, provide the primary rationale for public participation in the project. Since the direct spending impacts reflect only the new. spending in the Town, the fiscal impacts similarly reflect only the tax revenue generated from the spending that is new to the Town economy. The total fiscal revenue the Town realizes from the gross spending generated by these facilities will be greater than .the .share of this revenue that is derived from the net new spending. Table 10-10 summarizes the relevant tax rates, method of calculation, tax base, and resulting estimated tax revenue associated with the project. Table 10-10 ; ` Town Tax Rates and Methods of Calculation Tax Rate Method of Calculation Local Sales 4.5% of sales of tangible property Hotel Lodging 2.9% gross revenue from rental of hotel rooms Source: Town olVail HVS Convention, Sports £~ Entertainment DRAFT Vail Conference Ceater FeasibilitU Studio $conomic ImUact AnalUSis 10-15 This analysis considers the two major categories of tax.. revenue that the additional spending associated with the conference center will influence.. In some cases; fiscal impacts include a share or property taxes associated with potential additional development associated with the increased spending in the local economy. HVS did not include such spending in this. case for two reasons. First, the highly seasonal. nature of tourism in Vail means that there is considerable availability of tourism infrastructure in the months when the majority of the projected demand for this conference center occurs. Therefore, new demand is likely to utilize existing infrastructure for the most part rather than directly spur additional development. Secondly, the volume of planned retail and hotel development already proposed in the Town is likely to be more than capable of accommodating the additional demand generated by the conference center in the summer and shoulder seasons. .Sales Tax Vail levies a local sales tax of 4.5 percent, including the 0.5 percent tax for the conference center. For the purposes of estimating the sales tax base, the analysis considers only the taxable portions of direct spending as part of the tax base including: ^ Restaurants, ^ Retail; ^ Lodging, and ^ Selected services. Hotel Lodging The local hotel tax rate is 2.9 percent; including the 1.5 percent tax for the conference center. The estimates of local hotel tax revenues are based on the number of new room nights attracted by the conference center; multiplied by the average daily spending on the rental of hotel rooms; multiplied by the applicable local tax rate. HVS estimates that the portion of overall hotel expenditures that is spent on the rental of rooms, excluding incidentals, is approximately 97 percent. Estimate of Fiscal Impact Table 10-11 shows the estimates of the tax. base and Town tax revenue from 2007 through market stabilization.. HVS Convention, Sports Fa Entertainment DRAFT Vail Conference Center Feasibility Study Economic Impact Analysis 10-16 Table 10-11 Fiscal Impact Estimates in Inflated Dollars 2008 2009 2010 Tax Estimated Tax Base Estimated Tax Base Estimated Tax Base Revenue Revenue Revenue Local Sales $8,270,958 $372,193 $14,293,330 $643,200 .$19,673,985 $885,329 Hotel Lodging 3,890,554. 112,826 6,853,659 198,756 9,451,032 274,080 Total $485,019 $841,956' $1,159,409 2011 2012 Tax Estimated Tax Base .Estimated Tax Base Revenue Revenue. r Local Sales $22,558,322 $1,015,124 $25,162,257 $1,132,302 Hotel Lodging 10,884,189 315,641 12,040,402 349,172 Total $1,330,766 $1,481, 473. Source: HVS The Town would collect over $1.48 million a year in additional fiscal tax revenue after market stabilization. Of this new revenue, approximately $306,417. would be allocated to the conference center from the 0.5 percent sales tax and 1.5. percent lodging-tax and $168,566 would be allocated to the Vail Local Marketing District (through the 1.4 percent .lodging. tax). ,This leaves approximately $1.0 million in Town of Vail tax revenue that isri t directly allocated to the conference center or the marketing district. County Impacts HVS estimated the economic impact on Eagle County by using the estimated direct spending estimates and entering them into a County model to determine the amount of additional spending that the County economy .would capture. This County analysis differs slightly from the Town estimate in that the analysis does not use a unique set of assumptions regarding. the amount of spending that comes from outside the County. Table l0-12 shows a summary of the estimated County spending and employment impacts. HVS Convention, Sports ~ Entertainment DRAFT Vail Conference Center Feasibility Study Economic Impact Analysis 10-17 Table 10-12 Total County Spending (Inflated Dollars in Millions) & Employment Impact 2008 2012 Type of Impact Spending Jobs Spending County Direct Impact $9.0 110. $27.0 Indirect' 1.5 12 4.4 Induced' 1.8 17 5.3 Total $12.2 139. $36.7 ~ Total industry output. Source` HVS Summary of the. Economic and Fiscal Impact Analysis Jobs 290 34 45 369 0 Broadening the geographic area to the County level increases the amount of spending captured by $2.6 million dollars and 40 jobs by 201E By enabling the Town of Vail to host larger conferences; meetings, and other events that attract out-of-town attendees the conference center would. increase. the amount of spending in the Towri s economy. Table 10-13 shows the estimated annual economic, employment, .and fiscal impacts to the Town from 2007 through 2011. Table 10-13 Summary of Annual Economic, Employment, and Fiscal Impacts (Inflated Dollars) Spending % % Fiscal Year Impact Increase Jobs Increase Impact Increase 2008 $11,379,000 -- 125 -- $485,019 -- 2009 $19,621,000 72.4% 207 65.4% $841,956 73.6% 2010 $26,989,000 37.6% 277 33.6% $1,159,409 37.7% • 2011. $30,935,000 14.6% 308 11.2% $1,330,766 .14.8% 2012 $34,125,000 10.3% 329 6.8% $1,481,473 11.3°/a Source: HVS This analysis reveals that the proposed conference center would attract approximately $34.1 million in new spending into the Towri s economy after market demand has stabilized in 2012. This infusion of new spending into the local economy would support approximately 329 .jobs in the Town and generate approximately $1..48 million in additionalannual fiscal tax revenues. HVS Convention, Snorts & Entertainment \, DRAFT Vail Conference Center Business Plan Assumytions 6 Conditions 11-1 11. Statement of Assumptions & Limiting Conditions 1. This report is to be used in whole. and not in part. 2. No responsibility is assumed for matters of a legal nature. 3. We have not considered the presence of potentially hazardous.. materials on the proposed site, such as asbestos, urea formaldehyde foam insulation, PCBs, any form of toxic waste, polychlorinated biphengyls, pesticides, or lead-based paints. The appraisers are not qualified to detect hazardous substances, and we urge the client to retain an expert in this field if desired. 4. We have .made no survey of the property, and we assume no responsibility. in connection with such matters. Sketches, photographs, maps, and .other exhibits are included to assist the reader in visualizing the property. It is assumed that. the use of the land and. improvements is within the boundaries of the property described, and that there is no encroachment or trespass unless noted. 5: HVS has made a reasonable effort to use third-party data sources that are well established and accurate. All information, estimates, and opinions obtained from parties not employed by HVS are assumed to be true and .correct. We can assume no liability resulting from misinformation. . 6. Unless noted, we assume than .there are no encroachments, zoning violations, or building violations encumbering the subject property. 7. All mortgages, .liens, encumbrances,. leases, and servitudes .have been disregarded unless specified otherwise. 8. We are'notrequired #o give testimony or attendance in court by reason of this analysis without previous arrangements, and only when our standard per diem fees, and travel costs are paid prior to the appearance. HVS Convention, Sports £~ Entertainment DRAFT Vail Conference Center Business Plan Assumptions £d Conditions 71-2 \~ 9. If the reader is making a fiduciary or individual investment decision and has any questions concerning the material presented in this report, it is recommended that the reader contact us. 10. We take no responsibility for any events or circumstances that take place subsequent to the date of our report. 11. The quality of a conference .center facility's on-site management and the .organization that markets. the facility have a direct affect on a center s economic viability. The forecasts presented in this analysis assume responsible ownership, competent management and effective marketing and sales. Any departure from this assumption may have a significant impact on the projected operating results. 12. Many of the figures presented in this report were generated using sophisticated computer models that make calculations based on numbers carried out to three or more decimal places. In the interest of simplicity, most numbers have been rounded to the nearest tenth of a percent. Thus, these figures maybe subject to small rounding errors. 13. It is agreed that our liability to the client is limited to the amount of the fee - paid as liquidated damages. Our responsibility is limited to the client, and use of this report by third parties shall be solely at the risk of the client and/or third parties. The use of_this report is also subject to the .terms and conditions set forth in our engagement letter with the client. 14. This report was prepared by HVS Convention, Sports & Entertainment Facilities Consulting, a division of HVS International. All opinions, recommendations, and conclusions expressed during the course of this assignment are rendered by the staff of these two organizations, as employees, rather than as individuals. 15. This report is set forth as a market study of the proposed subject project;. this is not an appraisal report. HVS Conventirnt, Sports f~ Entertainment DRAFT Vail Conference Center Business Plan Certification 12-1 ~~ 12. Certification The undersigned, hereby certify: 1. that the statements of fact presented in this report are true and correct to the best of our knowledge and belief; ~` 2. that the reported analyses, opinions, and conclusions presented in this report are limited only by the assumptions and limiting conditions set #orth, and are our personal, impartial, and unbiased professional analyses, opinions, and conclusions; 3. that Tom Hazinski and Paul Sajovec personally inspected the market area described in this report. 4. that we have no current or contemplated interests in the real estate that is the subject of this report; 5. that we have no personal interest or bias with ..respect to the subject matter of this report or the parties involved; 6. that this report sets forth all of the limiting conditions (imposed by the terms of this assignment) affecting the analyses, opinions, and conclusions presented herein; 7. that the fee paid for the preparation of this report is not contingent upon our conclusions, or the occurrence of a subsequent event directly related to the intended use of this report; 8. that our engagement in this assignment was not contingent. upon developing or reporting predetermined results; and 9. that no one other than those listed above and the undersigned, prepared the analyses, conclusions, and opinions concerning the real estate that are set forth in this market study. HVS Convention, Sports F~ Entertainment DRAFT Vail Conference Center Business Plan Cerhjicatimz 12-2 Paul Sajovec Senior Vice President, HVS Convention, .Sports & Entertainment Facilities Consulting . Thomas Hazinslci Managing Director, HVS .Convention, Sports Entertainment Facilities Consulting HVS Convention, Sports & Entertainment DRAFT Vail Conference Center Business Plan Appendix: Parking Analysis 1 Appendix: Parking Analysis HVS analyzed the demand for parking the proposed Vail Conference Center would generate in each of the three seasons identified in the business plan. Felsburg Holt & Ullevig, the Town parking consultant, provided data on base parking demand by season and time of day in the Lionshead structure. This data provided the "base" parking demand assumptions, upon which HVS layered in the additional parking demand associated with conference center event activity. Estimated Conference The analysis looked at two demand scenarios:. design day and a peak day, Center Parking which are defined below:. Demand ^ Design Day.-The direction provided by the Town on the design day estimates was to find a point where approximately all but one of the likely events would be at or below this level in -terms of attendance. This corresponds approximately to the 90th percentile of parking demand for each event type in each season. ^ Peak Day-The peak day reflects the 100th percentile of parking demand. The. exception is the exclusion of the 4"' of July, as there would likely be an insufficient. number of available lodging rooms to host a major conference that occurs on that date. It is standard. practice for parking analysis to look at the 75"' to 85`'' percentile as a design day. Rather than providing sufficient parking so that there is never excess demand, typical practice is to plan for a design day so that there are sufficient parking spaces on the majority of days. Providing sufficient spaces for peak day demand is considered to be inefficient because of the larger number of spaces that would sit vacant for most. of the year. However, because of the Town of Vail's desire to limit. the number of excess cars that end up parked on the frontage road, it instructed HVS to use the 90"' percentile as a gauge. HUS Convenlion, Sports & Entertainment DRAFT Vail Conference Center Business Plan Appendix: Parking Analysis 2 In both cases, the parking demand is divided into two segments.. The first segment is the base demand from skiers, other visitors; and general demand.. The second segment is the demand associated with the conferencecenter and its event attendees and employees. Facilities located in areas that necessitate paid. parking typically manage their employee parking to minimize the need " .for on-site spaces. HVS assumes that there would be ten spaces allocated for ' on-site employee parking. The analysis addresses the demand for employee parking in detail later in this appendix. The analysis estimates demand at four time intervals during the day. HVS' .focused on the events that would generate he largest number of attendees in both the daytime-conferences-and the evening hours- w' entertainment/civic or banquet events. A day in which the facility hosts a conference during the daytime and an entertainment/civic event in the evening represents the greatest demand for parking in the ski season. In the summer and shoulder seasons, a day in which. the facility hosts. a conference in the daytime and a banquet in the evening presents the largest demand for ' .parking. By assessing such days for both design and peak day scenarios, HVS was able to determine the number of additional parking spaces that should be provided to accommodate the conference center ~ demand.. and the .implications of conference center event activity on available parking in thee. Lionshead parking structure. The estimates of design day. and peak day attendance by type of event required HVS to develop a mock distribution of events by attendance .for each event type in each season that comprised part of the greatest single-day parking demand. HVS' actual attendance estimates were developed on an average basis, and not .built from a compilation of the attendance of individual events. As a result, the process of arriving at a distribution of events by attendance for each type was somewhat arbitrary... However, industry information on typical distributions of attendance by event type helped to inform these assumptions. The resulting detailed distributions are presented at the end of this parking appendix section. .Design Day Table 1 shows the estimated parking demand for the. conference center on a Design Day {approximately the 90"' percentile) in each season. The table~also shows the base parking demand and. the estimated excess (deficit) of parking spaces in the Lionshead parking structure assuming its current capacity. HUS Convention, Sports & Entertainment DRAFT Vail Conference Center Business Plan Appendix: Parking Analysis 3 ~~ Table 1 Estimated Parking Demand for the Vail Conference Center, Ba se Demand, and Lionshead Capacity-Design Day1 Design Day Percent Persore Per Event Total Cars 9:00 AM 12:00 PM 3:00 PM 7:00 PM Driving Car Attendance Summer Conference 25% 1.50 850 142 120 137 135 71 Banquet 80% 2.00 900 360 0 0 18 360 Additional Employee 28 28 28 25 Sub Total -- -- -- 148 165 .181 456 Base Demand -_ •- -- 110 400 575 475 ?otal Demand -- -- •• 258 565 756 931 Excess (Deficit) -- -- -- -- 787 480 289 114 Shoulder Conference 30% 1.50 550 110 105 107 94 44 Banquet 70% 2.00 550 193 0 0 6 193 x Additional Employee 23 23 23 19 Sub Total -- -- -- 128 130 122 256 Base Demand. -• -- -• 60 300 525 290 Total Demand -- -- -- •- 188 430 647 546 Excess (Deficit) -- •- -- -• 858 615 398 500 Ski Conference 15% 1.75 500 43 42 39 41 21 r.,,e..~~.,...o.,,in,,;~ asst ~u inn ~u n n ~ ii pia AdditionalEmployee V_.. -.._ .,._ -._ 11 11 11 9 Sub Total -- -- -- 53 50 63 247 Base Demand •• - •• 400 1,125 980 550 Total Demand -- -- •- -- 453 .1,175 1,043 797 Excess (Deficit) -- -- •- -- 497 (225) (93) 153 ~ Assumbig current supply olparking spaces in tionshead Parking Structwe Sources: felstxrg Noll & Ullevig & NVS Design day conference center parking demand during the ski day reaches its highest poinf at 3:00 PM with demand for 63 total spaces. The highest parking demand occurs at 7:00 PM, when there is conference center demand for 247 spaces. Parking in the evening hours, after the ski day has concluded,. is plentiful relative to the available supply during the day. Peak Day Planning for parking associated with the conference center should focus on the Design Day. However, it is also prudent to assess the parking demand that would occur on a peak day.. The purpose of looking at a peak day scenario is to identify how intense the demand for parking would be under the very unlikely scenario. thaf base and conference center parking demand .reach their highest points on the same day. This peak day reflects the following scenario:. ^ Base parking demand is at its highest point during the ski season, HUS Convention, Sports & Entertainment DRAFT Uail Conference Center Business Plan Appendix: Parking Ana]ysis 4 ^ The largest conference event .the facility is likely to hold during the ski season occurs on the same day, and ^ The largest entertainment/civic event also occurs on this same day. - Table 2 shows the parking demand on this unlikely peak day. -Table 2 Estimated Parking Demand for the Vaif Conference Center, Base Demand, and Lionshead Capacity-Peak Day1 Peak Day Parking Percent Persons Per Event Total Cars 9:00 AM 12:00 PM 3:00 PM 7:00 PM Driving Car Attendance Summer Conference 25% 1.50 2,100 350 298 340 333 175 Banquet 80% 2.00 2,000 600 0 0 40 800 Additional Employee 48 48 48 44 Sub Total -- -- •• •- 346 388 421 1,019 Base Demand -- -- -- 125 475 675 575 Total Demand -- -- -- -- 471 863 1,096 1,594 Excess (Deficit) -- -- -- 575 183 (51) (549) Shoulder Conference 30% 1.50 1,800 360 342 349 306 144 Banquet 70% 2.00 1,700 595 0 0 18 595 Additional Employee 43 43 43 39 Sub Total -- -- -- -- 385 392 367 778 Base Demand -• •• 75 350 575 325 Total Demand -- -- -- 460 742 942 1,103 Excess (Deficit) •_ •• -- -- 585 303 103 (58) Ski Conference 15% 1.75 1,250 107 104 96 102 54 EntertainmentlCivic 85% 2.75 1,700 525 0 0 26 525 Additional Employee 17 17 17 15 Sub Total -- -- -• -- 121 113 145 594 Base Demand -- -- -- 550 1,350 1,100 $00 Total Demand -- -- -- _- 671 1,463 1,245 1,394 Excess (Deficit) -- -- -- - 279 (513) (295) (444) Assuming current supply of parking spaces in Lionshead Parking Structure Sowces: felsbwg Hah & Ullevig & HVS .:The estimates show .that the peak conference center parking demand during the ski day, when parking spaces are. at a premium, is 145 spaces at 3:00 PM. The peak day scenario shows parking deficits in the ski season at noon, 3:00 PM, and 7:00 PM. Deficits occur with or without the .conference.. center demand in. the peak scenario at noon and 3:00 PM. Deficits also occur in the. peak scenario at 3:00 PM and 7:00 PM in the summer and at 7:00 PM in the shoulder season. Parking deficits in the summer and shoulder seasons are less problematic than deficits in the ski season because there is more capacity at the Vail Village lot to handle overflow conference center demand. HUS Convention, Sports & Entertainment DRAFT Vail Conference Center Business Plan Appendix: Parking Analysis 5 ~~ Conference Center The detailed staff schedule HVS prepared for the facility estimates that there .Employee Parking will be 18 permanent full-time employees. In addition, the kitchen would have two full-time employees, which are not included in the staff schedule for the facility because the model estimates food and beverage revenues and. expenses on a net rather than gross basis. The business plan for the facility is designed such that staff levels increase during larger events with temporary staff so that a minimum of permanent staff is required. There should be approximately 10 parking spaces on site for facility staff and visitors. The balance of employees would either park remotely and walk or commute via public transportation. Total staff levels at the facility will vary with the size of events. Events that have plated dinners are the most labor :intensive. The typical ratio of guests to serves ranges from 30 to 20 to one, depending upon the specific characteristics of an event. Larger events with 1,000 or more attendees would require two captains, eight additional kitchen personnel, and .two restroorn attendants. These events can require 70 to 80 part-time personnel. However, the facility would not need to provide on-site parking for. all of .these employees. For the largest ski-season events, the facility would need to provide remote parking options for attendees, which could also serve employees if necessary. The cost of such service is included in the Town Services line item in the business plan (estimated at $210,000 in year 2003 dollars). During non-ski season periods when .parking is free of charge, a higher ratio of facility employees would drive to work and such. shuttle service would not be necessary, as the Vail Village lot could. help to handle excess demand for the largest events. HVS estimated the total number of employees at the conference center during the day. and evening hours for each scenario and season, as shown in Table 3. HVS Convention, Sports & Entertainment DRAFT Vail Conference Center Business Plan Appendix: Parking Analysis 6 ~~ Table 3 Estimated Total Number of Employees at the Conference Center by Scenario & Season Resultant On-Site Employee Related Parking Demand Total Day On-Site ..Total Evening On- Scenario /Season Attendees Employees- Parking Employees- Site Parking Day Demand Evening Demand Design Day Summer 900 71 28 62 25 Shoulder 550 57 23 48 19 Ski 700 55 11 46 9 ..Peak Day. Summer 2,100 119 48 110 44 Shoulder 1,800 .107 43 98 r 39 Ski 1,700 85 17 76 15 Sources: felsburg Holt & Ullevig &HVS The estimated number of employees at the conference center is highest in the summer and shoulder seasons. The daytime employee estimates assume that a sit-down lunchtime meal that requires servers occurs, which would 'note. always be the case. Recommended The number of parking spaces the Town should add to the Lionshead. Conference Center parking structure is a function of the design day demand in the ski. season. Parking Spaces The prior tables demonstrate that the additional demand associated with the conference center would not cause parking demand to exceed design-day. supply in the summer and shoulder seasons. The daytime demand is the critical period for the recommended number of additional spaces, since that is the time when. both of the Town's major parking structures are at or near capacity in the ski season. If the combined parking demand at Lionshead exceeds the capacity in .the evening, the Vail Village lot could effectively serve the excess demand, as people shuttle. to and from the conference center on .the Town's bus service. Assuming that ten spaces are allocated for employee parking, the design day scenario suggests that the conference center creates the demand .for 73 additional .parking spaces. (63 spots for conference daytime demand and additional `employees plus the ten reserved employee spots).. Previous analysis on the number of spaces the conference .center would require has. recommended 125 additional spaces. Assuming that the intent of.adding the parking spaces is to avoid increases in overflow. parking at the Lionshead structure, this analysis shows that the 125 figure exceeds the. number of HVS Convention, Sports & Entertainment DRAFT Vail Conference Center Business Plan Appendix: Parking Analysis 7 \, - _ ) spaces necessary to accomplish this goal. However, the 125 additional. spaces would decrease the number of overflow cars related primarily to base parking demand in the ski season and provide additional capacity to handle peak conference center demand. For the purposes of the following demand and capacity analysis, HVS uses the 125 figure to allow for some unanticipated demand and to remain consistent with .prior analyses. Table 4 shows the estimated demand and supply of parking assuming that 125 spaces are added to the Lionshead parking structure. Table 4 ` Estimated Parking Demand for the Vail Conference Center, Base Demand, and Lionshead Capacity-Design Day With 125 Additional Spaces (10 for Employees). Design Day Parking Percerd Persons Per Event Total Cars 9:00 AM 12:00 PM 3:00 PM 7:00 PM Driving Car Attendance Summer Conference 25% 1.50 850 142 120 137 135 71 Banquet 80% 2.00 900 360 0 0 18 360 Additional Employee 28 28 28 25 -Sub Total -- -- -- -- 148 165 181 456 Base Demand -- -- -- 110 400 575 475 Total Demand -- -- -- 258 565 756 931 Excess (Deficit) -- -- -• -- 896 589 399 223 Shoulder Conference 30% 1.50 550 110. 105 107 94 44 Banquet 71ri6 2.00 550 193 0 0 6 193 Additional Employee 23 23 23 19 Sub Total -- - -• -- 128 130. 122 256 Base Demand. -• 60 300 525 290 Total Demand -- •- -- 188 430 647 546 Excess (Deficit) -- •- -- 967 725 507 609 Ski Conference 15% 1.75 500 43 42 39 -01 21 Entertainment /Civic 85% 2.75 700 216 0 0 11 216 Additional Employee 11 11 11 9 Sub Total -• -- -- -- 53 50 63 247 Base Demand -- -- -- -- 400 1,125 9$0 550 Total Demand -- -- -- 453 1,175 .1,043 797 Excess (Deficit) -- -- •- -- 612 (110) 22 268 Sources: fehburg Holt & UlMvig & HYS On a design .day, the only day and time when estimated demand exceeds capacity is in the ski season at noon. Figure 1 shows graphically the estimated Lionshead parking demand on a design .day in the ski season with the existing and proposed capacities of the parking structure. • HUS Convention, Sports & Entertainment DRAFT Vail Conference Center Business Plan Appendix: Parking Analysis 8 Figure 1 Lionshead Parking Demand -Ski Season Design Day t,zoo t,too t,ooo soo aoo ~~ 600 500 400 300 200 700 0 9:00 AM ~ 72:00 PM 3:00 PM 7:00 PM Sources: felsburg Holt & UlMwg, Town of Vail, & HPS Base parking deficits occur with or without the additional spaces in the ski season, but the additional 115 spaces would reduce excess demand and be more than sufficient to accommodate the additional demand associated with the conference center at the times when demand exceeds supply. Table 5 shows the amount of excess parking. demand at the Lionshead structure with and without the conference center, its additional. attendee demand, and the additional .125 spaces (assuming ten are used for employee parking) in the design day scenario, - HUS Convention, Sports & Entertainment DRAFT Uail Conference Center Business Plan Appendix: Parking Analysis 9 Table 5 (Deficit) of Lionshead Parking Spaces With and Without Conference Center & 125 New Spaces-Design Day Scenario 9:00 AM 12:00 PM 3:00 PM 7:00 PM W/o Conference Center & 125 Spaces N/A (175) (30) N/A W Conference Center & 125 Spaces N/A (110) N/A N/A Sources: felsburg Holt & Ullevig &HVS Adding conference center demand and 125 spaces to .the parking structure. results in a decrease in excess parking demand, from 175 spaces at noon to ~ . 110 spaces. This analysis reveals that the addition of 125 parking spaces. is more than sufficient to accommodate the event related demand projected for the conference center at the highest demand periods when spaces are at a premium. The additional parking spaces would create the added benefit of reducing overall excess parking demand at the. Lionshead structure, as the base design day demand or less will occur on 90 percent of the days during the ski season. Implications of One possible method of addressing conference center parking demand Restricting Event Dates during the ski season .would be to .restrict the facility from hosting larger in Ski Season events during Fridays, Saturday,. and .Sundays-the busiest ski days: Conferences present a possible conflict with ski season parking because the demand for parking spaces peaks during the daytime. when ski-related demand is also at its peak. HVS estimates there will be five conferences during the ski season at demand stabilization. These events often prefer to have at least one if not more weekend. dates. A frequent event pattern is to conduct move-in activities on a Saturday, hold an opening session on Sunday evening, and conclude on a Tuesday. Other .events .may run from Wednesday through Friday. A prohibition of larger conference events Friday through Sunday would negatively affect the ability of the facility to attract such events. Removing 3/7 of the potential :event days during this period would increase the likelihood of scheduling conflicts. The inability to use weekend dates would deter events that depend upon. minimizing the number of days attendees need to miss work. An alternative approach might be to encourage .events to. use non-peak ski days by providing lower facility rental rates for. Monday through Thursday. This could increase the likelihood that events would schedule on non-peak HVS Convention, Sports & Entertainment DRAFT Vail Conference Center Business Plan Appendix: Parking Analysis 10 \, ski days without decreasing .the .event potential of the facility. Another ::strategy would be to set an upper limit on the attendance of an event that would occur on a Friday, Saturday, or Sunday during the busiest ski periods. However, given the anticipated high ratio of event attendees o parking demand, such a policy would forfeit significant .economic development benefits in exchange for relatively small reductions in parking demand. For " example, the estimates show that a conference. of 850 attendees would generate demand for a maximum of 137 spaces. A .preferred option -would be ; to arrange for remote parking and shuttle service during events that occur on weekend days during the ski season.. Evening events present less of a potential parking problem. because the ~` . demand .for ski-related .parking decreases after the slopes close for the day. Amorig the events projected to occur in the facility during the ski season, entertainmentlcivic events would generate the largest potential demand for parking in the evening. The estimated peak parking demand for these events in the ski season is approximately 650 cars. Since this demand would occur primarily in the evening, there should be little need to restrict the size of these events to a point below the maximum occupancy of the facility. The Lionshead structure would be able to accommodate the majority of these cars in the evening hours and the Vail Village structures could serve overflow demand. Lead times for Town bus service during the ski season are generally short enough to serve as shuttles between the Vail Village structure and the conference center. A slight increase. in peak service could be necessary for the largest events. Scheduling In order for the analysis, of conference center parking demand and capacity to Coordination Between accurately reflect actual conditions, the Town would need to ensure- that the Conference Center & event schedules at Dobson Ice Arena and the conference center are Dobson Ice Arena coordinated. The .conference center parking .analysis assumes that the.. ..parking demand associated with Dobson in the ski season peak day scenario is minimal, reflecting .typical uses such as public skating or a local amateur hockey game. The Town would need to coordinate the scheduling of the two facilities to avoid simultaneous events that would .generate parking .demand well in excess of capacity. Even so, only the largest of events .held ..simultaneously in the two facilities would approach or exceed the daytime demand associated with skiing. The significantly shorter booking window for .Dobson simplifies the coordination of these two facility's schedules. Most of the larger. conference center events-those that exceed 500 attendees-will have booking windows HVS Convention, Sports & Entertainment DRAFT Vail Conference Center Business Plan ~ Appendix: Parking Anaiysis 11 \, Conference Center Parking In Whistler of six months or more. Conference events are often scheduled years in advance and larger .banquets are typically scheduled several months in advance. Management at Dobson indicates that most of their larger concerts and evening events. are scheduled approximately 60 days in advance. The Town would also need to coordinate the scheduling of shorter-term entertainment and civic events in the conference center with Dobson's schedule.. The Town could maintain a master event schedule throughout the year that included events in both facilities. The type of event and estimated attendance would indicate. a range of parking demand and the Town could preclude the booking of simultaneous events that generated an excessive amount of parking demand at any particular time. Given that Dobson management reports holding 1-2 large concerts and/or other evening eventspermonth,.: there would be sufficient scheduling flexibility to coordinate events in the two facilities. The level of parking demand that the Town should refrain from exceeding will vary with the. season and time of day. The Telus Conference Center in Whislter, British Columbia is in-many. ways the most similar facility to the proposed Vail conference center. HVS interviewed facility operations staff and Resort Municipality of Whistler staff to learn how they address conference center parking demand. Conference center staff indicated that parking is not a major operational issue at the facility, due to the high percentage of event attendees that either stay in nearby lodging units, live in the nearby area, or park remotely in day lots that are afive-minute walk from the facility. The majority of event attendees walk to the center, although some use a municipal parking structure that is adjacent to the facility. According to municipal staff, the :parking garage adjacent to the conference center has 217 underground spaces and 75 surface spaces. The surface spaces run on a pay for use system. The underground spots are. free, but limited to three hours. It is very rare that an event at the conference center generates sufficient parking demand to cause shortages, even during the ski season. If there. is an .especially large event that is expected to generate significant parking demand the municipality may restrict entry into the parking lot for a few hours prior to the event so that the lot is largely available for use by attendees. The municipality maintains approximately 3,100 parking spaces. There are a total of 6,581 spaces, municipal and private, in the. Village core. The HVS Convention, Sports & Entertainment DRAFT Vail Conference Center Business Plan Appendix: Parkin~Analysis 12 ..conference center has seven dedicated employee parking spaces. Municipal staff stressed the need for space for-truck parking in the process of loading or :unloading and adrop-off area accessible to buses. Also, any surface parking areas should be covered or located far enough away from the facility to avoid being covered by snow shed. Detailed Mock HVS developed mock .distributions of events by attendance for the purposes Distribution of of estimating. the peak and design day attendance and parking demand Attendance by Type of associated with conference center events. Figure 2 shows the resulting mock Event distribution of events by size category for each of the three event types that comprise the highest levels of parking demand associated with conference center events for afull-year at stabilized demand. &~ Figure 2 Summary of the Distribution of Events by Attendance ~ ^ Conferences 26 ¢n Banquets . 25 a Entertainment /Civic 1A 20 - 15 9 11 10 5 7 5 ~ ~ ".A 6 3 ____ 5 . ~ 2 2 ~ ~ ~i .- -- - _ -- ~,ooo + goo ro sss aoo ro sss zoo ro 3ss <zoo ' Source: HVS The estimated distribution of events by attendance shows that the majority of events will have below 700 attendees and that nine will be larger the 1,000 attendees. Conference Center Board DRAFT L Recommendation to form Board for the Conference Center A. The Town of Vail's Conference Center Advisory Committee recommends the Town Council authorize the formulation of a Board whose membership, role and responsibilities are outlined below. B. It is a further recommendation of the Conference Center Advisory Committee. that this Board should be formed. before and become active following the project's bonds sale. IL Structure of the Board A. The Conference Center Advisory Committee would suggest that the Board be a nine (9) member board appointed by the Town Council. The nine (9) members should be distributed as follows: • Two (2) Town of Vail Council Members (elected) • .The Town of Vail Town Manager (ToV staff) • One (1) member from a retail\restaurant business in the Town of Vail • Two (2) members fror~~ lodging businesses in the Town of Vail • Three (3) members at large who work or reside in the Town of Vail • The three (3) business and three (3) at-large members should be appointed by ToV Council from a public applicant process B. It is further suggested. the terms of the initial Board be staggered in thirds with: two (2), three (3) and four (4) year increments to prevent the replacement of the entire Board.. in any single year. Terms for members afterthe initial appointments would be for three (3) years. The three (3) year term .limit shall also apply to Council members serving on the board. No person may serve longer than six consecutive years. In the event of a person serving less than their term, the replacement shall serve out the person's origins( term. C. The Town Council shall not at any time appoint a majority of the members of the Board from one industry. D. The Council will appoint one of the two Council members as the initial chairman. • Subsequently, the Board will elect the chairman from the current Board. III. Responsibilities of the Board E A. Implement an appropriate organizational structure to operate the Conference Center in a manner that will minimize operational deficits. B. Negotiate annual operating budget and financial. performance goals with the Town of Vail Council C. Provide semi-annual comprehensive written reports to the Town of Vail Council on performance. against the budget and annual goals. D. Provide annual audited financial statements to the Town of Vail Council. E. Implement annual operating plans and budgets within the limits of monies received. from operations, the dedicated Conference Center taxes, negotiated reserve fund withdrawals and any unspent bond proceeds. It shall be the boards responsibility to manage the conference center within a defined budget and in a fiscally prudent manner. F. Implement written operating policies, including, but not limited to, pricing & discounting practices, booking policies, community usage, etc. G, Develop and implement financial controls and business controls to ensure that the Conference Center operates in a fiscally, legally and ethically responsible manner. H. Develop and implement an incentive system that fosters entrepreneurial management. I. Host an annual public meeting to inform the business and residential communities on the State of the Vail Conference Center. J. Budget for and fund a capital reserve to execute a major remodeling of the Conference Center with a suggested goal of approximately 15 years. K. Fund an independent annual survey of the business and residential communities regarding their satisfaction with the operations of the Conference Center. L. Put in safeguards so that excess funds can not be used for any purpose other than promoting the goals of the Conference Center such as marketing, reserve for capital expenditures, prepaying debt -all for the Center. t.._.,..~,._..,.,,...~.... .....::......:c:,w+....;x~..,~:;,m-_x..~.;:; ..:..dom.... >.:~~ccw~,;: aaa~;::~~„c.:::.;.:w.MZ ~~ ~ _ - _ - : .: :.~: « . ., . _......a........ , ..,..,...,.,.-..,..,~,. .,...e-...._°___ .. ,~._,._._ _ .. ...-. .~. .._ _, ...,...,.m._~ , ._»._..., .....,A..., ,,w....~.~....,~._,. .,....,. ...,.....,.,.. .....~..~,..,. - ..,~,....._.., .. DRAFT TOWN OF VA IL REVENUE,. EXPENDITURES, AND CHANGES IN FUND BALANCE - CONFE RENCE CENT ER FUND , Project Costs and Financing 2019 2020 2021 2022 2023 2024 .2025 2026 2027 2028 ~ 2029 2030 2031 2032 2033 2034 2035 Bond Proceeds Costs of Issuance Interest on Investment of Bond Proceeds Net Cash Proceeds from Bonds Capital Project Costs Financing Over (Under) Project Costs OPERATIONS AND DEBT SERVICE Revenue from Taxes and Interest Sales Tax PubiicAccomodatiorrsTax 2,347,000 2,393,900 2,441,800 2,490,600 2,540,400 2,591,200 2,643,000 2,695,900 2,749,800 2,804,800 2,860,900 2,918,100 2,976,500 3,036 000 3,096,700 600 3 158 3 221 800 Penalties and Interest on Delinquent Taxes 2,253,100 2,298,200 2,344,200 2,391,100 2,438,900 2,487,700 2,537,500 2,588,300 . 2,640,100 2,692,900 2,746,800 2,801,700 2,657,700 , 2,914,900 2,973,200 , , 3,032,700 , , 3,093,400 Total Conference Center Taxes Interest on Fund Balance 4,600,100. 4,692,100 .4,786,000 4,881,700 4,979,300 .5,078,900 5,180,500 5,284,200 5,389,900 5,497,700 5,607,700 5,719,800 5,834,200 5 950 900 6,069,900 300 6 191 6 315 200 Total Revenue 116,000 4 716 100 118,000 4 81 122,000 126,000 131,000 137,000 143,000 151,000 159,000 169,000 179,000 191,000 203,000 , , 217,000 232,000 , , 247,000 , , 264,000 , , , 0,100. 4,908,000 5,007,700 5,110,300 5,215,900 5,323,500 5,435,200. 5,548,900 5,666,700 5,786,700 5,910,800 6,037,200 6,167,900 6,301,900 6,438,300 6,579,200 Operating Expenditures Conference Center Operations per HVS Transfer to Capital Maintenance Fund 1,210,900 1,247,200 1,284,600 1,323,100 1,362,800 1,403,700. 1,445,800 1,489,200 1,533,900 1,579,900 1,627,300 1,676,100 1,726,400 1,778,200 1,831,500 1,886,400 1,943 000 Town of Vaii Management Fee 415,000 230 005 420,000 234 605 435,000 239 300 435,000 244 08 435,000 248 9 5 435,000 2 435,000 435,000 435,000 435,000 440,000 440,000 440,000 440,000 440,000 440,000 , 440,000 Professional and Design Fees / Mtg expense , . , , , 5 , 8 53,945 259,025 264,210 269,495 274,885 280,385 285,990 291,710 297,545 303,495 309,565 315,760 Total Operating Expenditures 1,855,905. 1,901,805 1,958,900 2,002,185 2,046,765 2,092,645 2,139,825 2,188,410 2,238,395 2,289,785 2,347,685 2,402,090 2,458,110 2,515,745 2,574,995 2,635,965 2,698 760 , , ~ .Debt Service 2,699,300 2,700,143 2,697,943 2,697,645 2,698,970 2,701,630 2,700,330 2,700,000 2,700,335 2,696,910 2,698,798 2,701,410 2,699,000 2,701,520 2,699,000 2,696,440 2,698,600 Total Expenditures for Operations and Debt Service Revenue Over (Under] Operating Expenditures And Debt 4,555,205 4,601,948 4,656,843 4,699,830 4,745,735 4,794,275 4,840,155 4,888,410 4,938,730 4,986,695 5,046,483 5,103,500 5,157,110 5;217,265 5,273,995 5,332,405 5,397,360 Service 160,895 208,152 251,157 307,870 364,565 421,625 483,345 546,790 610,170 680,005 740,217 807,300 880,090 950,635 1,027,905 1,105,895 1,181,840 ,evenue Over (Under) Expenditures Including Project Costs and Financing 160,895 208,152 251,157 307,870 364,565 421,625 483,345 546,790 610,170 680,005 740,217 807,300 880,090 950,635 1,027,905 1,105,895 1,181,840 Beginning Fund Balance 7,765,677 7,926,572 8,134,724 8,385,881 8,693,751 9;058,316 9,479,941 9,963,286 10,510,076 11,120,246 11,800,251 12,540,468 13,347,768 14,227,858 15,178,493 16,206,398 17,312,293 E din n g Fund Balance 7,926,572 8,134,724 8,385,881 8,693,751 9,058,316. 9,479,941 9,963,286 10,510,076 11,120,246 11,800,251 12,540,468 13,347,768 .14,227,858 15,178,493 . 16,206,398 17,312,293 18,494,133 Analysis of Ending Fund Balance. Cash Available forOperaOons Reserved for Capital Project. 7,926,572 8,134,724 8,385,881 8,693,751 9,058,316 9,479,941 .9,963,286 10,510,076 11,120,246. 11,800,251 12,540,468 13,347,768 14,221,858 15,178,493 16,206,398 17,312,293 18,494,133 Total Ending Fund Balance 7,926,572 8,134,724 8,385,881 8,693,751 9,058,316 9,479 941 9 9 3,286 10,510,076 11,120,246 11,800,251 12 540 468 13 347 768 14 227 858 15178493 16 206 398 17 312 293 18 494133 ( ,~ Cash Flaw 050511 SB HVS ( ~ . 051 1 S8 Rev HVS Ops 5111/05 Project Costs and Financing Total Project Bond Proceeds 45,285,000 Costs of Issuance (947,270) Interest on Investment of Bond Proceeds 1,196,922 Net Cash Proceeds from Bonds 45,534;652 Capital Project Costs- 45,533,325 Financing Over (Under) Project Costs 1,327 OPERATIONS AND DEBT SERVICE Revenue from Taxes and Interest Sales Tax Public AccomodationsTax Penalties and Interest on Delinquent Taxes Total Conference Center Taxes Interest on Fund Balance Total Revenue Operating Expenditures Conference Center Operations per HVS Transfer to Capital Maintenance Fund Town of Vail Management Fee Professional and Design Fees 1 Mtg expense Total Operating Expenditures Debt Service Total Expenditures for Operations and Debt Service Revenue Over (Under) Operating Expenditures And Debt Service ,evenue Over (Under) Expenditures Including Project Costs and Financing Beginning Fund Balance Ending Fund Balance Analysis of Ending Fund Balance Cash Available for Operations Reserved for Capital Project Total Ending Fund Balance 2003 2004 2005 - ) Stabilirtion Actual Unaudited Projection 2006 2007 2008 2009 2010 2011 2012 2013 2014 201.5 2016 2011 2018 45,285,000 (947,270) 205,035 906,051 85,836' 44,542,765 906,051 85,836 784,484 13,213,417 26,598,501 4,936,923 (784,484) 31,329,348 (25,692;450) (4,851,087 1,703,864 1,832,269 1,805,700 1,828,900 1,844,800 1,894,700 ' 1,944,500 1,977,400 2,010,300 2,043,200 2,084,100 2,125,800 2,168;300 2,211,700 2,255,900 2,301,000 1,573,289 1,730,378 1,733,500 1,755,800 1,771,100. 1,818,900 1,866,800 1,898,400 1,929,900 1,961,500 2,000,700 2,040,700 2,081,500 2,123,100 2,165,600 2,208,900 4,598 4,423 3,281,751 3,567,070 3,539,200 3,584,700 3,615,900 3,113,600 3,811,300 3,875,800 3,940,200 4,004,700 4,084,800 4,166,500 4.,249,800 4,334,800 4,421,500 4,509,900 18,824. 67,603 95,000 110,000 113,000 110,000 105,000 104,000 104,000 105,000 106,000 107,000 108,000. 110,000 112,000 113,000 3,300,575 3,634,673 3,634,200 3,fi94,700 .3,728,900 3,823,600 3,916,300 3,979,800 4,044,200 4,109,700 4,190,800 4,273,500 4,357,800 4,444,800 4,533,500 4,622,900. 227,834 972,745 1,285,483 1,135,053 1.,045,980 1,006,104 984,645 1,014,200 1,044,600 1,075,900 1,108,200 .1,141,400 1,175,600 40,000 70,000 80,000 100,000 135,000 220,000 250,000 275.,000 300,000 350,000 aoD,a6o 169,599. 180,394 176,960 179,235 180,795 185,680 196,565 193,790 191,010 200,235 204,240 208,325 212,490 216,740. 221,075 .225,495 104,438 4,600 49,271 3,000 3,000 - - 274,037 185,194 226,231 , 410,069. 1,156,540 1,511,163 1,395,618 1,319,770 1,303,114 1,319,880 1,438,440 1,502,925 1,563,390. 1,624,940 1,712,475 1,801,095 ; 2,698,472 2,700,603 2,698,128 2,698,483 2,696,833 2,698, 03 2,697,040 2,698,555 2,697,365 .2,698,852 2,698,252 2,699,998 2,699,348 2,700,685 1 274,037 185,194 2,924,703 3,110,672 3,854,668 4,209,646 4,092,451 4,017,873 4,000,154 4,018,435 4,135,805 4,201,777 4,261,642 4,324,938 4,411,823 4,501,780 3,026,538 3,449,479 709,497 584,028 (125,768) (386,046) (176,151) (38,073) 44,046 91,265 54,995. 71,723 96,158 119,862 121,677. 121,120 3,026,538 2,664,995 32,038,845 (25,108,422) (4,976,855) (386,046). (176,151) (38,073) 44,046 91,265 54,995. 71,723 96,158 119,862 121,677 121,120 - 3,026,538 5,691,533 37,730,378 12,621,956 7,645,101 7,259,055 7,082,904 7,044,1331 7,088,877 7,180,142 .7,235,137 7,306,860 7,403,018 7,522,880 7,644,557 3,026,538 5,691,533 37,730,378 12,621,956 7,645,101 7,259,055 7,082,904 7,044,831 7,088,877 7,180,142 7,235,137 7,306,860 7,403,018 7,522,880 7,644,557 7,765,677 3,026,538 5,691,533 7,185,514 7,769,542 7,643,774 7,259,055 7,082,904 7,044,831 7,088,877. 7,180,142 7,235,137 7,306,860 7,403,018 7,522,880 7,644,557 7,765,677 30,544,864 4,852,b14 1,327 3,026,538 5,691,533 37,730,378 12,621,956 7,645,101 7,259,055 7,082,904 7,044,831. 7,088,877 7,180,142 7,235,137 7,306,860 7,403,018 7,522,880 7,644,557 7,765,677 (1) Sales and Lodging Tax Projections are per Bernstein and Associates through 2012; inflated 2% thereafter (2) Does not include additional parking funded by Vail Resorts (3) Level debt service of $2.7 million (4) Operating losses per NVS (5) Pre-operatng marketing included in conference center operations line (6) Project costs per ARC as of 04/07105