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HomeMy WebLinkAboutMinutes 12/15/2003 CALL TO ORDER: ROLL CALL: Introductions Approval of Minutes Oak Street Conference Center and Hotel LODGING TAX ADVISORY COMMITTEE Port Angeles, Washington December 15, 2003 Councilman Campbell called the meeting of the Lodging Tax Advisory Committee to order at 3 :05 p.m. Members Present: Councilman Campbell, Councilmember Rogers, Carol Griffith, Bob Harbick, Jack Harmon, Michael Luehrs, Dave Neupert, Steve Oliver, and Bill Rinehart. Members Absent: Jim Haguewood and Patty Hannah. Staff Present: Economic Development Director Smith and Clerk Upton. Others Present: John Platt, Tony Griffith, Randal Ehrn, Richard Leider, Brian Gawley, and Jan Harbick. At Councilman Campbell's request, Randal Ehmintroduced himselfto the Lodging Tax Advisory Committee members, indicating he was present to submit a progress report on the Oak Street Conference Center and Hotel. He shared his plans to submit regular progress reports to the group at 60-day intervals, and he also planned to involve the Chamber of Commerce and the Port Angeles Business Association in the regular reporting as well. Mr. Ehm then introduced Mr. Richard Leider, Trinity Real Estate, who is serving as an advisor on Mr. Ehm's project. The committee members then introduced themselves. Approval of Minutes: Bill Rinehart moved to approve the Lodging Tax Advisory Committee minutes of October 23, 2003. The motion was seconded by Dave N enpert and carried unanimously. Oak Street Conference Center and Hotel: Tim Smith opened the discussion by reviewing the decisions made at the last meeting of the Lodging Tax Advisory Committee to monitor the conference center project and receive regular status reports. Mr. Ehm is to provide monthly status reports to the City, and he is to visit the community every sixty days to address the Lodging Tax Advisory Committee, the Chamber of Commerce, and the Port Angeles Business Association. A visitation schedule may also be worked out with the Port Angeles Downtown Association as well. Mr. Smith reported that substantial progress has been made to date, and Mr. Ehm just finished meeting with City staff regarding the development of the building permit application package for submittal on or before March I". Randal Ehm advised the members of the conunittee that drawings and specifications are being worked on at the present time, and he stated his full intention to build the hotel / conference center. He indicated that engineering and mechanical systems must be complete in order to cost out the project and, as those two issues are further defined, a value engineering exercise will be launched regarding design. The cost information is critical to getting the project fmanced, so every effort is being made to get the plans fmalized as quickly as possible. Mr. Ehm reported that mechanical and structural engineers have been engaged, and a general contractor has been identified for the work. He felt he had developed a strong team of people who are working together on the project. -1- LODGING TAX ADVISORY COMMITTEE December 15, 2003 Oak Street Conference Center and Hotel (Cont'd) Mr. Ehm contracted with Richard Leider, who then provided the group with information concerning his background. Mr. Leider will be serving as an adviser on development and capitalization and will be providing a financial structure for the project. All of the elements must be well in process, well understood, and well quanitifed. In addressing current market conditions, Mr. Leider felt the market situation is marginally improving. Mr. Ehrn discussed his efforts to seek financial partners for the project and his reliance of Mr. Leider for input. At this point, he indicated the numbers are being refined, and Mr. Leider has expressed confidence that the project is buildable. Mr. Ehrn then discussed how he has narrowed the field for contractors in terms of electrical engineering, mechanical and plumbing engineering, civil engineering, envirornnental engineering, landscaping, and fire and life safety. He indicated he is also working on interiors, the propane system, and the cable system. Mr. Ehrn stressed that he is working in the direction of success. He met with City departments to detennine what needs to be accomplished in terms of refinement of plans, etc., in order to gain a building permit. Mr. Ehrn further discussed the issue of financing, feeling that because the market is on the upswing this is a good time to secure financing. Mr. Smith inquired as to revenue projections, and Mr. Ehrn indicated that past numbers are being revised and will be more solid. Carol Griffith asked about private investinent and whetherthe potential investors realize there is a 51 % occupancy rate in Port Angeles. Mr. Leider explained the different types of investors that might step up to this project and, in view of current and potential occupancies, he felt the resurgence in travel and an improving economy would positively impact the financing for this project. He also indicated that the conference center would likely be viewed as a complementary addition to the existing market. Mr. Ehrn felt that, because this is a conference oriented hotel, groups from around the State and surrounding states will be attracted to the area. Mr. Smith referenced the original proposal wherein it was felt that the right kind of facility would attract people who weren't otherwise traveling to Port Angeles. Steve Oliver asked if Marriott is still the flag hotel. and Mr. Ehrn responded affirmatively, indicating that Marriott is presently reviewing the project at this time. He emphasized that Marriott's standards must be met. Further questions were posed by the committee, and Tony Griffith indicated that tourism in this area has decreased every year for the past twelve years. Tourism in Victoria has also decreased. He asked Mr. Ehrn how he felt he could increase tourism. Mr. Ehrn responded that he had reviewed conference centers in Washington only, not Victoria. Mr. Leider indicated that numbers put together had been gleaned from the Chambers Group; he acknowledged that hotels have had it difficult of late. However, hotels are also the first to come back from a downturn. People are beginning to travel more and more, and there is more emphasis on regional conference facilities. Mr. Leider indicated regional conference sites are in demand, more so than tourism-related facilities, and Mr. Ehrn stated that the Chambers Group took into account that the hotel/conference center would be bringing people in for conferences. He felt that Port Angeles provides one of the best opportunities in the State. Mr. Ehrn also expressed a desire to become involved in the various festivals held in the area. Brief discussion centered around the upcoming departure of Horizon Air from Port Angeles, and Mr. Ehrn indicated he had talked to Alaska Air on the matter of their formula used in determined which markets they will serve. He felt that, once specific numbers are known, the City could open discussion with Horizon on the matter of returning to the area. However, Mr. Ehrn pointed out that many of the target groups for conferences are willing to drive 2 - 3 hours to reach their destination. Mr. Smith advised the group that Jim Haguewood and Manager Quinn are meeting with the airline task force that has been formed to satisry the void left by Horizon. Mr. Smith asked Mr. Ehrn to provide the group with an idea as to what will be involved - 2- LODGING TAX ADVISORY COMMITTEE December 15, 2003 Oak Street Conference Center and Hotel (Cont'd) in the next report to be submitted. Mr. Ehm felt the engineering system should be more complete, construction costs should be better identified, and there should be more of an idea as to what the lending institutions are willing to do. Further, he plans to have a more developed model. He felt he would not necessarily have commitments by that time. Mr. Leider added that updated market information should be available for the next meeting as relates to occupancy and trends. In response to a question from the committee, Mr. Ehm felt he would have no problem meeting the schedule set by the committee earher. Brief discussion was held concerning the March 28th deadline for the submission of the building permit, as well as the September 4'" deadline for construction. Next Meeting Next Meeting: The next meeting will be held on Monday, February 23,2004, at 3:00 p.m., in the Public Works Conference Room at City Hall. Councilman Campbell advised the group that this was his last meeting, as his term on the City Council expires as of December 31. He indicated that Councilmember Rogers would provide continuity from the City Council on this committee, and he expressed confidence that the committee would continue to support and follow this project. The members of the committee thanked Councilman Campbell for his guidance and leadership. Adjournment Adjournment: There being no further business, the meeting adjourned at 3 :50 p.m. 4:w\'A~01:"O<;vJ Ch ir ~(lJp,~ J..~A Becky 1. Up , Ci lerk - 3-