TO: Urban Renewal Agency Board
THROUGH: Steve Powers, Executive Director
FROM: Kristin Retherford, Urban Development Director
SUBJECT:
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Benefit Cost Analysis for Potential Salem Convention Center Expansion
Ward(s): 1
Board Member(s): Kaser
Neighborhood(s): CANDO
Result Area(s): Strong and Diverse Economy
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ISSUE:
Shall the Urban Renewal Agency Board authorize the use of up to $80,000 of unallocated Riverfront-Downtown Urban Renewal Area funds for a benefit cost analysis for a potential future expansion of the Salem Convention Center?
RECOMMENDATION:
recommendation
Authorize the use of up to $80,000 of unallocated Riverfront-Downtown Urban Renewal Area funds for a benefit cost analysis for a potential future expansion of the Salem Convention Center.
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SUMMARY:
The Salem Convention Center (Convention Center) includes an expansion area that is currently used for outside seating and a sculpture garden. Convention Center Management believes a substantial expansion to the facility is needed to accommodate diversity in demand and remain competitive as new and expanded convention centers are entering the regional market.
Based on very preliminary estimates from City staff, Convention Center staff, and consultants, an expansion project would be in the range of $10,000,000 to $12,000,000.
The benefit cost analysis would include the Convention Center’s revenue growth potential, community benefit of the public investment, the economic risk of not expanding the facility, and other factors. The analysis would inform the Downtown Advisory Board and Urban Renewal Agency Board’s future decisions regarding a Convention Center expansion.
FACTS AND FINDINGS:
Convention Center Management estimates that the expansion would result in additional annual revenue in the range of $1,350,000 to $1,925,000 per year by securing larger events that the current facility cannot accommodate. Such events typically book on a rotation between multiple venues (e.g. Portland, Bend, Salem), and are booked one to three years in advance. It is projected to take three years to fully achieve the additional revenue projections.
The benefit cost analysis is consistent with the Riverfront-Downtown Plan, Project #1102 Hotel, Community Convention Center, and Parking.
Sufficient budget authority exists within the FY 2018-19 adopted budget for the Riverfront-Downtown URA for the analysis from funds allocated for future, unspecified projects.
BACKGROUND:
The Urban Renewal Agency has invested in the Salem Convention Center to help meet the City and Agency’s economic development goals and support downtown business and properties. The City and those who use the Convention Center value its contributions to the downtown Salem economy and vibrancy.
The Convention Center opened in 2005 and is owned by the Urban Renewal Agency and operated by an independent manager. The Convention Center has been successful in its operation since it opened, showing a profit each year.
Sheri Wahrgren
Downtown Revitalization Manager
Attachments:
1. None