CLS Study Report

FEASIBILITY STUDY OF A NEW CONVENTION CENTER AND PERFORMING ARTS CENTER Presented to the: Fairbanks Convention and Visitors Bureau and the Fairbanks Arts Association June 15, 2012

June 15, 2012 Ms. Deb Hickok President and CEO Fairbanks Convention and Visitors Bureau 550 First Avenue Fairbanks, Alaska 99701 Dear Ms. Hickok: Conventions, Sports and Leisure (CSL) has completed a report related to a feasibility study concerning the potential development of a convention center and performing arts center in the Fairbanks area. The attached report presents our research, analysis and findings and is intended to assist the Fairbanks Convention and Visitors Bureau and Fairbanks Arts Association, collectively referred to as (Client) in evaluating the viability of facility development.

The analysis presented in this report is based on estimates, assumptions and other information developed from industry research, data provided by the Client, surveys of potential facility users, discussions with industry participants and analysis of competitive/comparable facilities and communities. The sources of information, the methods employed, and the basis of significant estimates and assumptions are stated in this report. Some assumptions inevitably will not materialize and unanticipated events and circumstances may occur. Therefore, actual results achieved will vary from those described and the variations may be material. All primary market research conducted for this study was completed in late 2009.

The findings presented herein are based on analysis of recent and near-term conditions in the Fairbanks area as well as existing interest levels by a new convention center and performing arts center’s potential base of users. Any significant future changes in the characteristics of the local community, such as growth in population, corporate inventory, competitive inventory and visitor amenities/attractions, could materially impact the key market conclusions developed as a part of this study. As in all studies of this type, the estimated results are based on competent and efficient management of the potential facilities and assume that no significant changes in the event markets or assumed immediate and local area market conditions will occur beyond those set forth in this report. Furthermore, all information provided to us by others was not audited or verified and was assumed to be correct.

This report has been prepared for the internal use of the Client and should not be relied upon by any other party. The report has been structured to assist the Client in evaluating event market demand, supportable programmatic components and the potential financial and economic impact characteristics of a potential convention center and/or performing arts center in Fairbanks and should not be used for any other purpose. This report, its findings or references to CSL may not be included or reproduced in any public offering statement or other financing document.

Conventions, Sports and Leisure International 520 Nicollet Mall  Suite 440  Minneapolis, MN 55402  Telephone 612.294.2000  Facsimile 612.294.2045

Ms. Deb Hickok Page 2 of 2

We sincerely appreciate the assistance and cooperation we have been provided in the compilation of this report and would be pleased to be of further assistance in the interpretation and application of our findings.

Very truly yours,

CSL International

TABLE OF CONTENTS ______

Executive Summary 1.0

Introduction ................................................................................................. 1

2.0

Analysis of Local Market Conditions ................................................................ 3

3.0

Analysis of Competitive and Comparable Facilities .......................................... 38

4.0

Industry Characteristics and Trends ............................................................ 100

5.0

Market Demand Analysis ............................................................................ 128

6.0

Supportable Facility Program and Development Options................................ 159

7.0

Site / Location Analysis .............................................................................. 165

8.0

Analysis of Estimated Event and Use Levels ................................................. 169

9.0

Analysis of Construction and Operating Costs ............................................... 171

10.0 Economic Impact Analysis .......................................................................... 178 11.0 Assessment of Funding Alternatives ............................................................ 183 Appendix A: List of Survey Samples and Organizations Appendix B: Telephone Survey Open-Ended Question Responses

FEASIBILITY ANALYSIS OF A NEW CONVENTION CENTER and PERFORMING ARTS CENTER IN FAIRBANKS TABLE OF CONTENTS

EXECUTIVE SUMMARY This summary outlines the key findings associated with a feasibility study of a potential new convention center and performing arts center in Fairbanks, Alaska. Conventions, Sports and Leisure International (CSL) was retained in 2009 by the Fairbanks Convention and Visitors Bureau, in collaboration with Fairbanks Arts Association, collectively referred to as (Client), to conduct the study. The full report should be reviewed in its entirety to gain an understanding of the study methods, limitations and implications.

Introduction and Methods A new convention center, as envisioned, would act as an economic generator and a public resource for the local Fairbanks community, hosting conventions, conferences, tradeshows, public/consumer shows, meetings and other events of both a non-local and local nature. An important goal of the facility would be to attract non-local events to the area that presently cannot be accommodated by existing local facilities, providing new visitation and related economic impact in the local area.

A new performing arts center could offer new entertainment, cultural, educational and civic options for local and regional area residents, while serving as a vehicle to house and further cultivate and grow the local arts in Fairbanks. Many of the benefits of performing arts facilities are qualitative in nature, relating to quality of life issues; however, facilities in communities such as Fairbanks often have the opportunity to attract attendees and performers that reside outside the local community.

The study process consisted of detailed research and analysis, including a comprehensive set of marketspecific information derived from local market site visits, in-person interviews with more than 50 local individuals, 150 completed telephone and email surveys of potential facility users, interviews with more than 30 comparable facilities, and analysis of local market conditions, industry trends, competitive/comparable communities, supportable facility program, funding and cost/benefit aspects of the two potential subject facilities.

Local Market Conditions The strength of the local market, in terms of its socioeconomic and demographic attributes, can provide an indication of an event facility’s ability to draw and accommodate convention, conference, tradeshow, consumer show, spectator, arts and entertainment attendees and participation. Fairbanks represents the second largest metropolitan area in Alaska; however, the city’s estimated population is just over 35,000 and the borough’s is just under 100,000 (including the city). Additionally, centrally-located in Alaska’s Interior, Fairbanks is significantly geographically-isolated from other concentrations of population. While this would be expected to have negative implications in terms of attracting driving attendees (from Anchorage, for instance), Fairbanks does provide significant airlift from its international airport—which, relative to other small to mid-sized Alaskan (or geographically-remote) communities with convention/conference/civic centers—provides a competitive benefit in attracting some state, national and possibly certain niche international events. Further, it is important to recognize that, relative to other areas in the country, driving or flying long distances to end destinations is much more prevalent in Alaska.

A community’s hospitality infrastructure in terms of hotels, restaurants, entertainment, transportation amenities and other such factors contribute heavily to the potential success of any convention facility,

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and indirectly impact the market viability of a performing arts facility. Relative to other communities throughout the country of a similar size, Fairbanks benefits from a larger than typical supply of fullservice hotel properties, which is directly attributable to the cruise industry and associated seasonal tourism. As an example, without cruise service in Fairbanks, it is easily argued that the community’s two largest conference hotels—the Westmark and Princess hotels—would not exist. Additionally, Fairbanks also offers a diversity of other types of hotel properties beyond full-service hotels, such as small and midsized limited service hotels, focused/quasi-full-service hotels, lodge-oriented properties and bed-andbreakfasts. For definition and distinguishing purposes, “full-service” hotels normally consist of upscale lodging properties with a three-meal per day restaurant with room service plus other amenities including business center, fitness center, etc. (i.e., brands such as Hilton, Marriott, Westin, Hyatt, etc.).

“Focused/quasi-full-service” hotels normally represent mid-priced products with more limited food and beverage offerings (i.e., brands such as Hilton Garden Inn, Courtyard by Marriott, Hyatt Place, Cambria Suites, etc.). “Limited-service” hotels tend to be economically-priced hotels that may only offer continental breakfasts (i.e., brands such as Days Inn, Super 8, Econo Lodge, etc.).

Fairbanks has a mix of existing event facilities offering flat floor meeting space. The two largest facilities, the Carlson Center and the Fairgrounds, offer substantial square footage and while they are serving specific industry niches, neither are positioned well to attract traditional non-local conventions, conferences and meetings. A number of the area’s hotel properties also integrate meeting space; however, even the largest existing venue, the Westmark, has limitations in terms of the size of its largest single room. Lost business information obtained from the FCVB and other industry participants suggest that existing facility limitations are preventing the accommodation of a number of non-local events.

Likewise, there are a number of theaters and auditoriums in Fairbanks that serve the performing arts.

There is a fairly wide variety of facility types, with many serving specific niches. For instance, the Davis Concert Hall is best suited for musical presentations and the Salisbury Theatre primarily serves universityrelated theatrical uses. Overall, each of the theaters/auditoriums have certain limitations, whether they relate to aging aesthetics, functionality, seating capacity/configuration, stage sizing, fly/wing space, lack of an orchestra pit, box office/lobby/dressing rooms or back-of-the-house issues. Further, some of these facilities are highly-utilized and have limited date availability, preventing additional usage and could be constraining the growth of certain areas of the local arts community.

Industry Trends and Characteristics The market success of a convention center and performing arts center can be partially attributed to the characteristics of the industry as a whole. Broad industry changes, characterized by—sometimes significant—retraction and expansion in convention/tradeshow and arts event demand and attendance/participation characteristics have taken place within the industry over the past decade. In 2009, the U.S. economy fell into a significant recession. Metrics for 2008 illustrated deteriorating economic conditions that led to a decline in macro industry-wide demand. The speed in which the U.S. economy recovers will determine the extent of the likely negative impact on convention and arts industry demand.

With respect to the convention and tradeshow industry, however, the practical manifestations for smaller communities of the downturn in the economy should be more limited, as they tend to be more economical regional destinations. These types of third-tier destinations often have lower costs of living (including lower priced hotels, restaurant meals, taxes, etc.) that become more appealing during hard economic times. Likewise, for destinations like Fairbanks that have significantly unique brands and appeal, macro industry characteristics and trends also tend to have less correlation on these destinations’ performance and success.

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Additionally, it is critical to recognize that every community and destination is unique, and application of blanket industry-wide, macro assessments of convention/meeting supply and demand phenomena do not consider the uniqueness of individual markets. Like nearly everything in a free market society, individual convention centers operate in a “survival of the fittest” environment. Destination appeal is normally the common denominator with successful projects. Convention centers located in the strongest destinations tend to be the most successful, while facilities located in destinations with weak appeal and/or deficient visitor amenities more often struggle or underperform industry averages.

Recognizing that the convention center facility itself is only one piece of a larger puzzle that non-local event planners tend to consider when selecting sites, more and more communities have been focusing on ways to strengthen the appeal of the proximate area surrounding the “box.” This often involves comprehensively master planning a mixed-use or entertainment district containing the convention center, whereby an attractive pedestrian-friendly environment is created to welcome convention center attendees, through offerings of restaurants, retail, nightlife, entertainment and attractions.

“Connectivity” issues are often addressed that physically and perceptually bring together the district to other nearby attractions and districts. Healthy, vibrant and exciting environs surrounding the convention center are normally viewed very attractively by event planners and can provide important advantages in marketing a destination and its convention center.

Likewise, with respect to the performing arts industry, the health and characteristics of the local host community has a significant bearing on the success of individual facilities. For a community like Fairbanks, and given the type of facility that would likely represent a viable development option, the orientation of the facility will most certainly be largely “local” in nature (i.e., housing local arts groups and largely drawing attendance from the local area). As such, the most important characteristics influencing event/use levels, attendance, participation and financial viability are those relating to: (1) the breadth, vitality and growth potential of local arts organizations; (2) market population; (3) resident income levels; (4) resident educational attainment; and (5) funding and support opportunities by public and private sector entities and individuals. While the population of the Fairbanks area (both in terms of residents and corporate base) is relatively low, there are relatively limited competitive entertainment options/venues located in a larger regional area. Additionally, other socioeconomic characteristics of the Fairbanks populace are considered stronger than average—in particular, educational attainment and income levels.

Market Demand An initial step in analyzing market demand involved detailed research and analysis of competitive and comparable facilities and their host communities. Overall, 35 competitive and comparable convention center and performing arts facilities were identified, researched and analyzed as a part of this effort.

In terms of competition for the convention center, most of the competitive venues in Alaska are concentrated in the largest cities within the southern half of the state. The markets with the highest number of individual venues include Anchorage and Juneau. Overall, the number of event facilities in Alaska, as compared to population levels, is consistent with or slightly higher than other states in the country; however, the ratio of square footage offered at these facilities per population and hotel rooms is significantly higher than the average U.S. state. Additionally, as the number of in-state convention and conference events that rotate is normally relatively correlated with population (on a state-by-state basis), these issues contribute to the observation that many Alaskan convention/conference facilities operate at lower occupancy per square foot than comparable convention centers in other states in the country. This also tends to influence higher annual financial operating deficits (on a square footage basis) for Alaskan facilities.

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In addition to competitive facilities, 25 comparable convention centers and performing arts centers located in communities throughout Alaska and the country were also identified, and various physical facility and operational characteristic information was obtained. Further, the demographic attributes of each of these facilities’ host communities were also comparatively analyzed with that of Fairbanks and the surrounding area. Certain inferences can be made from these projects, including providing important context and benchmarks for the evaluation of market demand associated with potential Fairbanks facilities.

Overall, with respect to market demand for a new Fairbanks convention center, existing facilities in Fairbanks are limited in their ability to attract non-local conventions, conferences and tradeshows. The results of telephone and email surveys of potential users indicated a strong demand from in-state groups, moderate demand from targeted national groups and a limited to moderate demand from targeted international groups. A significant portion of non-local demand is believed to be “unmet” by existing local facilities. While demand is estimated to be negatively impacted by Fairbanks’ remote location and cost/logistics associated with travel, it is believed that this is partially mitigated by the uniqueness of the destination and the “fit” for many groups within specific industries.

As much of the event activity and attendance of a convention center and performing arts center is typically generated by local area residents, this will likely have implications concerning each of the potential facilities’ overall use and attendance levels. Therefore, demand by local groups is estimated to be lower than the average comparable facility (due to population levels within practical driving distance), but will be an important component of facility utilization.

Similarly, the number of arts organizations active in the Fairbanks area is moderate to strong, relative to the area population. There are a variety of existing performing arts venues in the Fairbanks area, each possessing some physical and date availability limitations in accommodating certain types of arts groups.

Additionally, the area lacks a suitable performing arts facility to effectively compete for many types of non-local touring productions and shows. The majority of the demand for a new Fairbanks performing arts center would be expected to be driven by local arts groups. However, affordability, scheduling availability and physical characteristics will be critical in their consideration of the venue. Therefore, the analysis suggests that sufficient market demand exists (particularly from local arts groups) to generate use levels consistent with the average comparable performing arts theater evaluated.

Supportable Program and Development Options Based on the previous analyses undertaken, key aspects of a market supportable program for a potential Fairbanks convention center include:

• • •

Multipurpose Hall – 25,000 SF (carpeted, column-free, subdividable)

•

Parking is often the biggest “x-factor” in overall site acreage planning (i.e., surface versus structured parking, shared parking opportunities with hotel, etc.), that could add many acres to the site requirements.

•

At least 250 quality hotel rooms (preferably full-service) either attached or located adjacent to the facility.

Breakout Meeting Space – 10,000 SF (carpeted, subdividable) Estimated facility footprint would approximate 70,000 square feet (less than 2.0 acres), with additional acreage required for parking, ingress/egress, green space, loading/marshaling, etc.

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Any new convention center will require the support of a quality headquarters hotel in order to attract non-local events. Ideally, the headquarters hotel would be physically attached to the convention center.

An adjacent parcel (without a physical connection) would be next desirable, but it should not be located any further than practical walking distance, which, for a community like Fairbanks, is considered to be within two to three city blocks. It is further believed that enticing a new, appropriate hotel development (unrelated to the cruise industry) to Fairbanks to serve as a headquarters hotel would be extremely challenging without significant public sector incentive for the foreseeable future, particularly in the current difficult economic environment and associated ensuing credit market upheaval. As such, it is believed that if a new convention center project is pursued in Fairbanks, it should involve a location that is adjacent to one of four existing hotel properties (Westmark Hotel, Princess Riverside Lodge, Wedgewood Resort, or Pike’s Waterfront Lodge).

A stand-alone convention center is normally a publicly-led and publicly-owned project (i.e., public sector contribution normally consists of 90 to 100 percent of the total development costs). A stand-alone convention center does have high construction costs and normally requires an annual operating subsidy; however, it is generally best positioned to attract economic impact-generating events and protecting usage by local events.

A public/private partnership convention center model is normally developed in partnership with a new or existing hotel located in the community. In comparison to stand-alone convention centers, overall public sector funding contribution is typically lower for hotel/convention centers developed under public/private partnerships (however, many projects of this nature involve the necessity for the public sector to fully fund the construction of the convention/conference space component, but often relieves them from an annual ongoing operating funding obligation). While the operating risk usually rests with the hotel partner, in some cases it may be borne in part or in full by the public sector. The level of public sector control over booking, marketing and/or operating policies tends to be commensurate with level of contribution to the overall project. Relative to other communities throughout the country, there may be a stronger opportunity in Fairbanks to partner with one or more Native corporations to assist in defraying some public sector costs.

Key aspects of a market supportable program for a potential Fairbanks performing arts center include:

•

A flexible, proscenium stage PAC, that needs to be a “practical” facility that “fits” the identity of Fairbanks (i.e., open, welcoming, inclusive, not overly ornate, etc.).

• • •

Between 1,250 and 1,500 seats.

• • • • •

A minimum 50’ x 30’ proscenium opening.

Stage with a minimum of 60-foot width and 45-foot depth.

Consider the ability to “create” a thrust retractable/removable seating or stage pieces.

stage

via

portable

staging

and

Plentiful fly space and wing space with a minimum of 20 feet (left and right).

Inclusion of a full-sized orchestra pit (able to accommodate 70 or more musicians).

Inclusion of between five and ten dressing rooms.

Other components: gallery space, reception/banquet space, rehearsal space, studio space, cultural/education classrooms, circulation and storage space, handicap-accessible, and outdoor “green” space.

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Involvement by local arts groups in the use of any developed Fairbanks performing arts facility will be critical, as measured demand from significant touring shows would be expected to be somewhat limited.

In other words, the identity and focus of the performing arts center should “lean� towards a local arts orientation. However, like in nearly all communities, local arts organizations often lack significant funding available to pay expensive facility rental charges. This normally means strong discounts on facility rental for local arts groups.

It is believed that the City or the Borough represent the only logical candidates for ownership of any new performing arts center in Fairbanks. Given the estimated attributes of a potential Fairbanks performing arts project (its type, focus, user base, and potential financial characteristics), along with the characteristics of the Fairbanks community itself (in terms of its population, corporate base, local arts, etc.), it is believed that the most appropriate management model would consist of a newly-created 501(c)(3) non-profit organization. The non-profit organization should have a board of directors with a diversity of representation, including municipal government, the business sector, local arts community and other local leadership.

There are a number of important issues that are noteworthy pertaining to physical co-location of the convention center and performing arts center (i.e., physically attached and located on a shared site), if both facilities are developed.

Potential strengths of a concept involving the physical co-location of both facilities include: (1) operational synergies through shared overhead and shared staffing; (2) single site with shared parking, shared common areas, shared central plant, etc.; (3) convention events could use theater for assemblies and entertainment; (4) performing arts groups/events could use convention center for banquets, workshops, pre/post show receptions/meet-and-greets, etc.; and (5) a single project can simplify approach to funding/financing and public relations and reduce redundant, separate efforts. The Fairbanks community has recently demonstrated the power of such a partnership with the Morris Thompson Cultural and Visitors Center. Opened in 2008, the center houses six organizations within the building, including two Alaska Native non-profit organizations and the convention and visitors bureau.

Conversely, potential weaknesses of a concept involving the physical co-location of both facilities include: (1) important booking/scheduling challenges can arise due to required lead time in scheduling, needs of primary tenants for performances and rehearsals, etc.; (2) inconsistencies can arise between users (i.e., rock concert occurring across the hall from a convention final banquet), including the possible comingling of patrons in facility common areas and/or entry and exit points; (3) differences in the optimal management and service philosophy and delivery of services between the two types of facilities; (4) convention groups could use a theater, but it is typically not a requirement; and (5) while there will be certain construction and operational cost efficiencies, costs will most certainly be higher than any single facility project and therefore could face more challenges to raise sufficient public and private funds.

The following three facility development scenarios have been assumed for the remaining analyses: Scenario 1: Stand-alone convention center and stand-alone performing arts center Scenario 2: Co-located convention and performing arts center Scenario 3: Public/private partnership for a hotel and conv. center, and a stand-alone PAC

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Site/Location As important as size and configuration, the site of a convention center and performing arts center can have a significant impact on their success. Five general site areas were identified in collaboration with the Fairbanks Convention and Visitors Bureau and the Fairbanks Arts Association.

With respect to a potential new convention center, adjacency or very close proximity to a suitable headquarters hotel is the more important issue when considering the potential location for the facility. It is considered unlikely that a large, new full-service hotel development (i.e., 200 to 250 rooms) would be viable in Fairbanks in the foreseeable future. Therefore, for purposes of this analysis, we have assumed that an existing Fairbanks lodging property would be required to serve as the convention center’s headquarters hotel.

A riverfront location near Pike’s and Princess Hotels offers the benefit of two large, proximate hotel properties and a location on the expressway and near the airport. A location at Wedgewood also provides a significant supply of hotel rooms. However, both of these locations lack the proximity to Fairbanks’ downtown. While just outside the central business core, the Westmark provides the closest link to downtown amenities. Under these three site locations, it is assumed that the convention center would be physically connected to the associated lodging property (and may or may not be operated by the hotel under a public/private partnership).

The Vision Fairbanks site area also offers some interesting possibilities, given its location downtown.

However, without an adjacency to an appropriate hotel, this area loses attractiveness as a host location for a convention center. The only currently viable site within the Vision Fairbanks area might be the parcel located in the northeast portion of the designated plan (which could theoretically provide close proximity to the Westmark). However, given that the center would not be physically attached to the Westmark under this scenario, it is unlikely that the Westmark would have an interest in a public/private partnership to operate the space.

A Carlson Center location lacks any proximate hotel rooms and it does not have a tie-in to downtown.

While it possesses a large amount of concrete floor exhibition space, the facility primarily functions as a spectator/sports venue. As such, it would be difficult to add on to any of its existing space to create an upscale “convention/conference center” that would be best positioned to attract the incremental non-local convention, conference and meeting events identified in this analysis.

Focusing on the performing arts center, as previously mentioned, adjacency/proximity to a supporting hotel property is typically relatively unimportant. The more important factors typically include proximity to concentrations of retail, restaurants, bars, cafes, nightlife, and other entertainment, as well as visibility and accessibility. Therefore, a downtown location for the performing arts center is considered to be the preferred location. A downtown location would also enhance the ability to market other components, such as office space, short-term or permanent housing, and cultural space.

In conclusion, under Scenario 1 (two separate stand-alone facilities), the preferred location for the convention center would be adjacent to the Westmark, with the secondary preferences be adjacent to the Princess, Pike’s or Wedgewood. Being separated from the convention center, the preferred site for the performing arts center would be a location in downtown, possibly the Polaris Building or other site that has close proximity to the downtown’s core offerings of restaurants, bars, cafes and retail.

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Under Scenario 2 (co-located facilities), the two most important site requirements of each facility will need to be met—appropriate existing hotel support and downtown location. Therefore, the only apparent location is one that is near the Westmark.

Under Scenario 3 (public/private partnership convention center and stand-alone performing arts center), the driving requirement will be to identify a willing hotel partner to participate in the project (and would ideally include the hotel assuming operating control, and operating risk/gain, of the convention center).

The Westmark would be the preferred choice (given its downtown location and large complementary supply of hotel rooms and banquet and breakout meeting space). A partnership with Wedgewood or Princess and/or Pikes could also represent options to explore. Like under Scenario 1, the preferred site for the performing arts center would be a location in downtown, possibly the Polaris Building or other site within walking distance of downtown amenities.

Construction and Operating Costs The exhibit below presents the estimated order-of-magnitude hard construction costs (presented in 2009 dollars) for each of the three facility development scenarios, adjusted for current economic conditions and local conditions in Fairbanks. Importantly, architectural design and site/infrastructure analysis will be required to fully estimate ultimate development costs. In addition to the estimated order-of-magnitude hard costs, soft construction costs, costs associated with land purchase and improvement, other potential infrastructure improvement costs and potentially annual operating costs will also need to be considered in the ultimate planning scheme.

Hypothetical Order-of-Magnitude Hard Construction Costs by Facility Scenario

Total Gross Square Feet (GSF) Hard Costs/GSF - Low Hard Costs/GSF - High Hard Costs - Low Hard Costs - High

Stand-alone CC

Stand-alone PAC

Combined CC & PAC

70,000

75,000

125,000

$250 $350

$350 $450

$300 $425

$17,500,000 $24,500,000

$26,250,000 $33,750,000

$37,500,000 $53,125,000

As shown, order-of-magnitude hard construction costs could range between $17.5 million and $24.5 million for the convention center and between $26.3 million and $33.8 million for the performing arts center. When a co-located facility is considered, hard construction costs could range between $37.5 million and $53.1 million. Soft costs (i.e., financing costs, legal, architectural, consulting, permitting, etc.) would be in addition to these estimates, and could add 25 to 30 percent to total construction costs. Site acquisition and preparation costs, as well as any necessary infrastructure costs would also be additional.

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The following exhibit presents a summary of the estimated financial operating results for a stand-alone, publicly-owned and operated convention center, stand-alone publicly-owned and operated performing arts center, and a combined convention and performing arts center in a stabilized year of operation (assumed to occur by the fourth full year of operation) and presented in 2009 dollars.

Estimated Financial Operating Results for a New CC and PAC Stand-Alone CC

Stand-Alone PAC

Combined CC & PAC

Operating Revenues Space Rental Ticket Fee Box Office Fee Food & Beverage (net) Contract Service Donations/Memberships Advertising/Sponsorships Other Total Operating Revenues

$194,000 0 0 213,000 90,000 0 15,000 10,000 $522,000

$90,000 31,000 10,000 85,000 7,000 15,000 18,000 7,000 $263,000

$270,000 31,000 10,000 313,000 102,000 15,000 26,000 18,000 $785,000

Operating Expenses Salaries, Wages & Benefits Utilities Repair & Maintenance General & Administrative Insurance Materials & Supplies Professional Fees Other Total Operating Expenses

$423,000 160,000 35,000 72,000 35,000 37,000 51,000 68,000 $881,000

$319,000 125,000 32,000 68,000 34,000 30,000 38,000 45,000 $691,000

$631,000 205,000 60,000 106,000 55,000 61,000 81,000 102,000 $1,301,000

($359,000)

($428,000)

Net Operating Deficit

($516,000)

As shown in the exhibit, upon stabilization, a new stand-alone convention center in Fairbanks (under Scenario 1) is estimated to generate an operating deficit of approximately $359,000 per annum (in 2009 dollars). A stand-alone performing arts center in Fairbanks (under Scenario 1 and 3) would be estimated to operate at a deficit of approximately $428,000 per annum (in 2009 dollars), and if the two facilities were combined/co-located (under Scenario 2), the joint facility would be estimated to operate at a $516,000 per annum deficit. These figures only represent the annual operations of the facilities and do not include construction debt service payments, capital repair/replacement reserve funding obligations, additional CVB marketing budget needs or other non-operating expenses. They factor in the higher than average energy costs in the Interior.

On a square foot and seat basis, these types of operating losses are slightly higher than comparable convention centers and performing arts centers throughout the country (partially due to somewhat lower event levels and higher energy costs); however, they are consistent with comparable facilities operating in Alaska.

As expected, the analysis indicates that a combined/co-located facility would realize operating efficiencies and operate at a smaller operating deficit than the sum of the deficits for each of the two stand-alone

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facilities. However, under Scenario 3 (stand-alone performing arts center and a public/private partnership with a hotel), the operating risk or gain associated with the convention center would theoretically rest with the hotel partner. Therefore, the performing arts center would be the only deficit that would need to be annually considered via outside public and/or private sources.

Economic Impacts and Other Benefits For the quantitative portion of this analysis, only “net new” economic impact has been considered. This impact is derived solely by visitors attending or participating in facility events that do not reside in the Fairbanks area. For conservative purposes, this approach to economic impact estimation does not consider any spending by facility attendees/participants if they reside in the Fairbanks area. It has been assumed that any spending by these local individuals would represent “displaced” spending, that would have otherwise been spent locally on other products and services.

Given the nature of performing arts centers, the vast majority of performing arts event attendance is generated from the local market. There are some visiting artists that represent non-local visitors, but their impact is relatively small. Some visitors may be in attendance at an event/show at the performing arts center, but it is often difficult to demonstrate that the performing arts center and its event/show was the primary reason for their visit to the community (i.e., the show may be one of the several entertainment/leisure activities they take in as part of a multi-day vacation, etc.). Therefore, for purposes of this analysis, we have not attempted to quantify net new economic impact for the performing arts center facility. The qualitative (or non-quantifiable) benefits of a performing arts center tend to be the most important aspects during discussions of project benefits.

Convention centers, on the other hand, have an easily identifiable subset of events where the majority of their attendance is non-local (many times requiring overnight accommodations over multiple days). Much of a convention center’s attendance, however, is still local in nature, but it is the subset of conventions, conferences and tradeshows that generate the net new visitation and economic impact for communities.

The exhibit below summarizes the overall estimated new annual economic impacts within Fairbanks associated with estimated levels of potential event activity at a new convention center.

Potential New Fairbanks Convention Center Estimates of Annual New Economic Impacts (Stabilized Year of Operations, in 2009 Dollars)

Total Direct Spending $7,412,000

Total Output $11,859,000

Earnings $5,188,000

Employment 205

FEASIBILITY ANALYSIS OF A NEW CONVENTION CENTER and PERFORMING ARTS CENTER IN FAIRBANKS EXECUTIVE SUMMARY Page ES–10

Upon stabilization, the estimated total net new output (direct spending, indirect spending and induced spending) for the convention center totals approximately $11.9 million per annum (in 2009 dollars).

Additionally, this spending is estimated to annually support $5.2 million in net new personal income (or “earnings”) in the local Fairbanks economy, along with 205 full and part-time jobs (estimation of FTE (full-time equivalent) positions is not possible with IMPLAN economic modeling data).

In addition to these quantifiable benefits, there are a number of potential benefits generated by both types of facilities that cannot be quantified. Some of these include: 

Quality of Life for Residents – The performing and visual arts are often essential components of the fabric of modern communities. Infrastructure that support the arts, culture, history and higher learning are often the very things that work to attract families (and even companies) to live in specific communities. A typical performing arts center not only provides quality entertainment for local residents, it fosters artistic and cultural education and often facilitates the growth of the local arts community over time.



Construction Period Impacts – While not specifically quantified herein, there is normally a substantial short-term economic impact (including many jobs created) during the construction phase of major public assembly facility projects of this nature.



New Visitation – New visitors will be attracted to the area because of an event in the new convention center. These attendees, in turn, may elect to return to the area later with their families, etc. for a vacation after visiting the area for the first time and/or extend their stay during their time in the destination beyond the length of the convention center event they are attending.



Spin-Off Development – New retail/business tend to invariably sprout up near convention centers



Community Marketing – Non-local attendees of certain convention center events (particularly,



Anchor for Revitalization – New convention center and performing arts center developments can



Other Benefits – There are a number of other intangible benefits of having a new convention

and performing arts facilities spurred by the increased traffic to the nearby area, representing additions to the local tax base.

conventions/conferences/tradeshows) often represent decision-makers and executives from a broad cross-section of industries. This exposure can benefit the area from a long-term business development perspective.

oftentimes be the base of community-wide master development plans (i.e., Vision Fairbanks) to enhance and revitalize markets, serving as strong anchors that draw local and non-locals into a concentrated area.

center and/or performing arts center in a community that have not been quantified, including their ability to enhance community reputation and image, provide a local gathering point for residents, new advertising opportunities for local businesses and offset the seasonality of summer tourism business.

FEASIBILITY ANALYSIS OF A NEW CONVENTION CENTER and PERFORMING ARTS CENTER IN FAIRBANKS EXECUTIVE SUMMARY Page ES–11

Funding Alternatives Types of public sector financing/funding vehicles that are commonly used in public assembly projects throughout the country include: 

General Obligation Bonds



Revenue Bonds



Tax Increment Financing (TIF)



Pay-As-You-Go Financing



Certificates of Participation



State/Federal Assistance



Private/Public Equity and Grants

These common financing vehicles have been used for many convention centers and performing arts centers across the country, with the use of bonds and tax increment financing being the most prevalent.

Over the years, relative to similar projects in other U.S. states, Alaskan convention center and performing arts center projects have tended to have a greater level of State and Federal assistance with respect to initial development funding. Particularly, facilities including the Carlson Center, Alaska Center for the Performing Arts, Wrangell Center, Ted Ferry Civic Center and Egan Center have all used State and/or Federal grants or other contributions as part of their initial funding. Further, there are many State-wide foundations that have assisted in funding Alaska-based public assembly facilities, including the Denali Commission and Rasmuson Foundation. Overall, from a public sector standpoint, it appears that at least partial State funding for one or both of these projects in Fairbanks will be critical.

Service on locally-bonded debt is often supported by tax revenue, which has included the following: 

Hotel/motel taxes



Sales and use taxes



Property taxes



Restaurant/food and beverage taxes



Auto rental/taxicab taxes/fees



Sin taxes (alcohol, cigarette, etc.)



Admissions/entertainment taxes

Hotel taxes are frequently used to fund public facility projects such as convention centers, as the tax is borne by visitors and convention centers are normally considered visitor industry investment projects.

Sales taxes are also frequently utilized for the construction of public assembly facility projects.

While there has been some discussion in recent years about instituting a local option sales tax in Fairbanks, there is plentiful evidence that doing so for the purpose of funding a convention center and/or a performing arts center project, particularly in these challenging economic times, may be difficult.

Nevertheless, for most comparable convention center projects throughout Alaska and the country, close to 100 percent of initial development funding is typically borne by the public sector. For comparable performing arts center projects throughout Alaska and the country, it is typical that between 50 and 75 percent of initial development funding is contributed by the public sector.

FEASIBILITY ANALYSIS OF A NEW CONVENTION CENTER and PERFORMING ARTS CENTER IN FAIRBANKS EXECUTIVE SUMMARY Page ES–12

In recent years, a growing number of communities have explored ways in which the private sector can participate in reducing the overall funding burden borne by the public sector. This participation has taken the form of: 

Naming rights and sponsorships



Upfront service provider fees and facility component build-outs.



Exclusive facility use agreements.



Private donations of capital and/or land.

Private donations from philanthropic individuals and organizations are often critical in the fundraising efforts for performing arts centers. Local capital campaigns (many times via the establishment of a dedicated endowment fund) tend to be instrumental in establishing seed money and demonstrating local interest in a project. The relatively small population of residents and corporations in Fairbanks, as well as limitations in the number of very wealthy individuals/families that make it their home, will likely pose challenges for a capital campaign. Nevertheless, attempts should be made to identify seed money of this nature if a determination to pursue a performing arts center project is made.

Each of these opportunities for private sector participation in funding the facility should be evaluated.

Given the potential costs for construction and the annual costs to operate, such private sector participation may be a necessary component of a successful project.

FEASIBILITY ANALYSIS OF A NEW CONVENTION CENTER and PERFORMING ARTS CENTER IN FAIRBANKS EXECUTIVE SUMMARY Page ES–13

1.0. INTRODUCTION Conventions, Sports and Leisure International (CSL) was retained in 2009 by the Fairbanks Convention and Visitors Bureau, in collaboration with Fairbanks Arts Association, collectively referred to as (Client), to conduct a feasibility study of a potential new convention center and performing arts center. This report outlines the key findings associated with the analysis of local market conditions, competitive/comparable facilities and host communities, market demand, supportable facility program and development scenarios, event levels, site/location issues, preliminary construction costs, financial operations, economic impacts and funding options.

A new convention center, as envisioned, would act as an economic generator and a public resource for the local community, hosting conventions, conferences, tradeshows, public/consumer shows, meetings and other events of both a non-local and local nature. An important goal of the facility would be to attract non-local events to the area that presently cannot be accommodated by existing local facilities, providing new visitation and related economic impact in the local area.

A new performing arts center could offer new entertainment, cultural, educational and civic options for local and regional area residents, while serving as a vehicle to house and further cultivate and grow the local arts in Fairbanks. Many of the benefits of performing arts facilities are qualitative in nature, relating to quality of life issues; however, facilities in communities such as Fairbanks often have the opportunity to attract attendees and performers that reside outside the local community.

The study process, outlined herein, consisted of detailed research and analysis, including a comprehensive set of market-specific information derived from the following: 

Experience garnered through more than 400 event facility projects throughout the country.



Local market visit at the outset of the project, including community and site tours.



In-person interviews, meetings and public forums with more than 50 Fairbanks area individuals, including representatives of municipal government, performing and visual arts groups, convention and visitor industry, local companies, event producing organizations and community groups. Additionally, follow-up telephone interviews were conducted with a number of individuals who were not able to meet with project staff at the time of the initial visit.



Research and analysis of local market conditions and regional, national and international trends as they relate to the convention and performing arts industries.



Analysis of facility data obtained from more than 30 comparable convention center and performing arts facilities and an assessment of competitive/regional facilities.



Comparative analysis of socioeconomic data from competitive/regional and comparable facility markets.



Completed approximately 150 telephone and email surveys of representatives of organizations and groups that represent potential users of a new convention center and/or performing arts center. Surveys and their respective target groups included: o

A random sample survey of organizations with convention/meeting events that rotate within Alaska (which include professional and non-professional groups such as associations, social, military, government, educational, non-profits, corporate and other such organizations).

FEASIBILITY ANALYSIS OF A NEW CONVENTION CENTER and PERFORMING ARTS CENTER IN FAIRBANKS Introduction Page 1

o

A targeted sample survey of national organizations with convention/meeting events that rotate within the United States.

o

A targeted sample survey of international organizations with convention/meeting events that rotate globally.

o

Telephone interviews with national and state promoters of arts, entertainment and spectator event productions.

The overall purpose of this study is to evaluate the feasibility of a potential new Fairbanks convention center and performing arts center. Conclusions of a particular event facility project’s feasibility can be assessed in various ways, including: 

Market feasibility – the facility’s ability to attract and support levels of event activity and patronization that are consistent with or in excess of industry standards.



Financial feasibility – the ability of the facility to “break-even” or generate an operating profit focusing only on direct facility-related operating revenues and expenses.



Economic spending – the facility’s ability to generate new spending activity in the local community (i.e., direct and indirect spending that is attributable to out-of-town visitors that would not otherwise occur in the local area).



Tax generation – the ability of the facility to generate new tax revenue for the local area (i.e., tax revenue resulting from direct, indirect and induced spending that is attributable to out-of-town visitors that would not otherwise occur in the local area).



Costs/benefits/return on investment – the facility’s ability to generate new revenues (i.e., from taxes, operating income and ancillary facility-related revenues, etc.) in excess of quantifiable facility-related costs (i.e., construction costs, operating costs, marketing costs, public sector contribution, etc.).



Intangible benefits/public good – the ability of the facility to represent an important resource for the local community, regardless of financial or economic concerns. These types of benefits add to the local community’s “quality of life” in the same way that libraries, museums and recreational parks do, without consideration of the economic impacts that the facility might generate.

When evaluating the feasibility of a public assembly facility, such as convention centers and performing arts facilities, communities throughout the country have differed in the specific criteria that best reflects the definition of “feasible” for their community. For instance, one community may focus more on the ability of the project to be operationally self-supportive or require below a certain threshold of public sector contribution, rather than the intangible “public good” aspects the project would provide local residents. The research, data, information and analysis provided through this study is intended to allow the Client and other community constituents to draw their own informed conclusions concerning the “feasibility” of a new convention center and performing arts center in the Fairbanks area.

FEASIBILITY ANALYSIS OF A NEW CONVENTION CENTER and PERFORMING ARTS CENTER IN FAIRBANKS Introduction Page 2

2.0. AN NALYSIS OF LOCA AL MARKE ET CONDIITIONS The strength of the loccal market, in n terms of itss socioeconom mic and demo ographic attributes, can prrovide ent facility’s ability a to draw w and accom mmodate convvention, confe erence, tradeshow, an indicattion of an eve consumerr show, specctator, arts and entertainment atten ndees and p participation. Furthermo ore, a communitty’s hospitalitty infrastructture in termss of hotels, restaurants, entertainme ent, transporrtation amenities and other such factors contribute c heavily to the p potential succcess of any cconvention fa acility, ectly impact th he market via ability of a performing arts facility. and indire a wass conducted as a they relatee to a potenttial new convvention cente er and An analyssis of these attributes performing arts cente er in Fairban nks. Specificcally, the an nalysis of exxisting local market cond ditions addressess the following g areas:     

ocation and transportation n Lo Demographics D Lo ocal Lodging and Event Fa acility Inventory Visitation CVB bookingss FC

Location and Transpo ortation i the e location of the Fairbanks area and its proximity to o other marketss.

Exhibit 1 illustrates Exhibit 1 Location an nd Transporttation - Roadw ways/Nearby y Cities

FEASIBILITY Y ANALYSIS OF A NEW CONVENT TION CENTER an nd PERFORMING ARTS CENTER IIN FAIRBANKS Analysis of Local L Market Con nditions Page 3

Exhibit 2 summarizes the approximate driving distance in road miles and flight times to Fairbanks from select communities in Alaska and surrounding regions. Anchorage is the closest large metro area, with an estimated drive time of approximately seven hours. Fairbanks International Airport also provides significant airlift for a market the size of Fairbanks. Estimated flight times to selected destinations are also provided in the exhibit. As shown, Anchorage is reachable in less than an hour, while other mainland U.S. markets such as Seattle, Portland, San Francisco and Los Angeles are serviced non-stop or with one stop.

Exhibit 2 Location and Transportation - Travel Times

Driving Distance To/From Fairbanks Destination North Pole, AK Fox, AK Nenana, AK Delta Junction, AK Healy, AK Tok, AK Glenallen, AK Talkeetna, AK Circle, AK Valdez, AK Anchorage, AK Eagle, AK Dawson City, YT Coldfoot, AK Whitehorse, YT Haines, AK Skagway, AK Seattle, WA

Distance Drive Time 18 minutes 26 minutes 55 minutes 90 minutes 1 hour 45 minutes 3 hours 4 hours 4 hours 15 minutes 6 hours 6 hours 15 minutes 7 hours 9 hours 9 hours 30 minutes 10 hours 15 minutes 10 hours 45 minutes 12 hours 30 minutes 13 hours 15 minutes 42 hours

Flight Times To/From Fairbanks Distance in Miles 13 11 54 98 111 206 249 274 162 364 360 379 393 260 602 653 710 2,313

Destination Anchorage, AK Barrow, AK Prudhoe Bay, AK Nome, AK Dawson City, YT Juneau, AK Seattle, WA Whitehorse, YT Portland, OR (1) Vancouver, BC (1) San Francisco, CA (1) Phoenix, AZ (1) Las Vegas, NV (1) Los Angeles, CA (1) San Diego, CA (1) Minneapolis, MN (1) Washington, DC (1)

2 hours 3 hours 3 hours 3 hours 6 hours

7 hours 7 hours 7 hours 8 hours 11 hours

Time 50 minutes 90 minutes 90 minutes 2 hours 15 minutes 15 minutes 30 minutes 45 minutes 6 hours 50 minutes 7 hours 7 hours 10 minutes 45 minutes 45 minutes 50 minutes 15 minutes

(1) Includes connections. Approximate times. May vary in accordance w ith revisions in airline schedules.

Source: Fairbanks Convention and Visitors Bureau, 2011; Mapquest.com, 2011.

Located on the following page, Exhibit 3 outlines the historical traffic at Fairbanks International Airport in terms of annual passengers boarded. Following a slight decline in passengers from 2000 to 2002 (which was less dramatic than in other destinations throughout the country), Fairbanks International Airport has experienced a gradual growth of passengers each year, with approximately 456,900 reported in 2008. As shown in the exhibit, 2009 traffic was down due to the nationwide economic recession and drop in Fairbanks cruise attendance. 2010 saw some recovery, primarily in independent and international markets, but not near peak 2008 levels.

FEASIBILITY ANALYSIS OF A NEW CONVENTION CENTER and PERFORMING ARTS CENTER IN FAIRBANKS Analysis of Local Market Conditions Page 4

Exhibit 3 Location and Transportation - Fairbanks International Airport

500,000 449,076

Passengers

400,000

388,733

384,828

380,576

2000

2001

2002

456,947 435,392

420,394

420,597

424,816

2004

2005

2006

2007

2008

2009

2010

130

126

122

120

122

424,496

388,841

300,000

200,000

100,000

0 2003

Year US Airport Rank (out of 575): 130

124

126

127

126

129

Source: FAA, 2011.

Demographics An important component in assessing the potential success of a new Fairbanks convention center and performing arts center is the demographic and socioeconomic profile of the local area. Specific demographic and socioeconomic information that can provide an indication of the ability of a market to support event facilities of these types includes population, age, household income and corporate base.

Additionally, educational attainment and ethnicity typically also serve as key indicators when considering a performing arts facility in particular. Promoters/planners of certain events such as spectator events, performances and public/consumer shows (and other events that tend to draw largely from the local driving area) often consider these factors when selecting the appropriate markets for their events.

Likewise, the proximate corporate base to an event facility is often an important indicator of the ability of a facility to attract corporate event activity.

FEASIBILITY ANALYSIS OF A NEW CONVENTION CENTER and PERFORMING ARTS CENTER IN FAIRBANKS Analysis of Local Market Conditions Page 5

Exhibit 4 demonstrates d s the marketss and land are ea captured w within the Fairrbanks North Star Borough h, 25-, 100- and 200-mile concentric rings around the Fa airbanks areaa. These ring gs will be utilizzed throughout the hile analyzing and compariing demograp phic and socio oeconomic va ariables. The e data source e used report wh to aggreg gate demogra aphic statisticss within these concentric rings for all of CSL studie es is Claritas,, Inc., which utilizes U.S. Cen nsus data as a benchmark k and then pro ojects statistiics for years in between ccensus nd those into the future. The T maximum m ring radius available is 2 200 miles. W While appropriate to periods an represent “tertiary” driiving marketss for most “lo ower 48” stattes, it is unde erstood that tthe tertiary m market draw will be larger for an Alaskan destination succh as Fairban ks.

Exhibit 4 Demographics D s - Demograp phic Rings

On the fo ollowing page e, Exhibit 5 provides p a sum mmary of keyy demograph hic characteristics estimate ed for the city of o Fairbanks,, Fairbanks North N Star Borough, B marrkets capture ed in 25-, 10 00-, and 200 0-mile concentricc rings around d the city of Fairbanks, F the e state of Alasska and a United States be enchmark.

FEASIBILITY Y ANALYSIS OF A NEW CONVENT TION CENTER an nd PERFORMING ARTS CENTER IIN FAIRBANKS Analysis of Local L Market Con nditions Page 6

Exhibit 5 Demographics - Fairbanks Area Summary

Demographic Variable

City of Fairbanks

Fairbanks North Star Borough

Population (1990) Population (2000) Population (2011 est.) % Change (1990-2011)

30,851 30,182 35,858 16.2%

77,720 82,769 99,085 27.5%

76,833 81,759 97,685 27.1%

84,440 89,493 106,003 25.5%

90,766 97,134 114,755 26.4%

550,043 248,709,873 626,932 281,421,906 715,859 309,038,974 30.1% 24.3%

Population (2016 est.) % Change (2011-2016)

38,105 6.3%

105,441 6.4%

103,919 6.4%

112,441 6.1%

121,609 6.0%

749,300 321,675,005 4.7% 4.1%

Avg. Household Inc. (1990) Avg. Household Inc. (2000) Avg. Household Inc. (2011 est.) % Change (1990-2011)

$38,846 $51,005 $64,991 67.3%

$44,605 $58,561 $78,041 75.0%

$44,512 $58,638 $78,173 75.6%

$44,264 $58,074 $77,690 75.5%

$43,194 $56,587 $76,000 76.0%

$49,586 $62,475 $79,159 59.6%

$38,453 $56,644 $71,071 84.8%

Avg. Household Inc. (2016 est.) % Change (2011-2016)

$67,554 3.9%

$81,725 4.7%

$81,878 4.7%

$81,456 4.8%

$79,779 5.0%

$82,072 3.7%

$77,465 9.0%

29.0

30.5

30.4

30.7

31.2

33.3

37.0

Median Age (2011, in years)

25-Mile 100-Mile 200-Mile Ring Ring Ring

State of Alaska

U.S.

Source: Claritas, Inc., 2011

As shown above, the population of the city of Fairbanks was approximately 30,200 in 2000, was estimated to be approximately 35,900 in 2011 and is projected to be 38,100 in 2016. The estimated population within 25 miles of Fairbanks was approximately 97,700 in 2011, while the 100- and 200-mile rings were estimated at 106,000 and 114,800, respectively. Population growth in Fairbanks over the past 21 years has been around 16.2 percent with the surrounding 25-mile ring around Fairbanks growing at a rate of 27.1 percent.

Further, the average household income in Fairbanks has grown over the last 21 years at a moderate rate compared to the rest of Alaska and the United States. In 1990, the average household income in Fairbanks North Star Borough was approximately $44,600, which was $6,100 more than the average U.S. household income. Currently, Fairbanks North Star Borough’s average household income is estimated to approximate $78,000. Compared to the other areas analyzed, the Borough’s median age of 30.5 is relatively young compared to the rest of Alaska and the United States’ median age.

FEASIBILITY ANALYSIS OF A NEW CONVENTION CENTER and PERFORMING ARTS CENTER IN FAIRBANKS Analysis of Local Market Conditions Page 7

In Exhibit 6, the densitty of populatio on in central Alaska A is pressented, contra asted by denssity by zip cod des.

Exhibit 6 Demog graphics - Pop pulation Denssity by Zip Co ode

As repressented in the exhibit, the population within w centrall Alaska is he eavily concen ntrated aroun nd the Fairbanks and Talkeetn na market areas. It should be noted, however, tha at certain zip code areas w within ave a sizable e difference in the land area a covered,, providing ssomewhat de eceiving popu ulation Alaska ha density indications.

FEASIBILITY Y ANALYSIS OF A NEW CONVENT TION CENTER an nd PERFORMING ARTS CENTER IIN FAIRBANKS Analysis of Local L Market Con nditions Page 8

The follow wing map illu ustrates the median houssehold incomee by zip code in central Alaska, identtifying concentra ations of highe er and lower income levelss in the region n.

Exhibit 7 Demograph hics - Househ hold Income D Density by Ziip Code

c zip co odes in the we estern portion n of the Fairba anks North Sttar Borough a and to As shown in the map, certain es within the a area. the south of the Borough have conccentrations off higher houseehold income

FEASIBILITY Y ANALYSIS OF A NEW CONVENT TION CENTER an nd PERFORMING ARTS CENTER IIN FAIRBANKS Analysis of Local L Market Con nditions Page 9

The populations among the city of Fairbanks, Fairbanks North Star Borough, 25-, 100- and 200-mile concentric rings around the city of Fairbanks and the State of Alaska are presented in Exhibit 8, broken apart by age.

Exhibit 8 Demographics - Fairbanks Population by Age

Demographic Variable Population by Age Younger than 10 10-17 18-24 25-34 35-44 45-54 55-64 65-74 75 and Older Total Population Population by Age Younger than 10 10-17 18-24 25-34 35-44 45-54 55-64 65-74 75 and Older

Fairbanks City of North Star Fairbanks(1) Borough(1)

25-Mile 100-Mile 200-Mile Ring Ring Ring

State of Alaska

6,269 3,633 5,237 6,975 4,264 3,545 3,127 1,511 1,297

15,553 10,757 13,655 17,495 12,019 12,515 10,284 4,403 2,404

15,369 10,600 13,500 17,304 11,877 12,298 10,073 4,307 2,357

16,629 11,609 14,272 18,260 12,833 13,662 11,252 4,863 2,623

17,761 12,553 15,071 19,244 13,901 15,197 12,572 5,520 2,936

107,702 83,458 76,388 108,403 91,994 105,245 84,189 37,712 20,768

35,858

99,085

97,685

106,003

114,755

715,859

17.7% 14.0% 21.2% 15.9% 11.5% 9.5% 5.0% 2.9% 2.3%

16.0% 15.0% 18.4% 15.2% 14.1% 11.9% 5.5% 2.5% 1.3%

15.7% 10.9% 13.8% 17.7% 12.2% 12.6% 10.3% 4.4% 2.4%

15.7% 11.0% 13.5% 17.2% 12.1% 12.9% 10.6% 4.6% 2.5%

15.5% 10.9% 13.1% 16.8% 12.1% 13.2% 11.0% 4.8% 2.6%

15.0% 11.7% 10.7% 15.1% 12.9% 14.7% 11.8% 5.3% 2.9%

Source: Claritas, Inc., 2011

As shown, the large majority of population within the city of Fairbanks is under the age of 55. The age group with the highest percentage of population in the city of Fairbanks and the Fairbanks North Star Borough is between 18 and 24, while the concentric rings around Fairbanks and the state of Alaska have the highest percentage of population between 25 and 34 (partially a reflection of the influence of the military bases and UAF).

FEASIBILITY ANALYSIS OF A NEW CONVENTION CENTER and PERFORMING ARTS CENTER IN FAIRBANKS Analysis of Local Market Conditions Page 10

i the e median age by zip code of o surrounding g area of the Fairbanks No orth Star Boro ough.

Exhibit 9 illustrates Exhibit 9 Demographics D s - Median Ag ge Density

atively little va ariation in me edian age thro oughout the ccentral Alaska a market area a, with As shown, there is rela y of populatio on under the age a of 50. a majority

FEASIBILITY Y ANALYSIS OF A NEW CONVENT TION CENTER an nd PERFORMING ARTS CENTER IIN FAIRBANKS Analysis of Local L Market Con nditions Page 11

The level of education attainment is another demographic variable of interest when considering the development of a new event facility in a community and, in particular, a performing arts facility as people that have an attained education level exceeding high school or some college are generally more apt to partake in arts programs. Exhibit 10 presents the level of education attained for populations over 25 years of age for the city of Fairbanks, Fairbanks North Star Borough, concentric rings and the state of Alaska.

Exhibit 10 Demographics - Fairbanks Area Education Attainment

Demographic Variable Education Attainment (Pop 25+) Less than 9th Grade Some High School (No Diploma) High School Grad (inc Equivlency) Some College Associate Degree Bachelor Degree Master's Degree Professional School Degree Doctorate Degree Total Population Over 25 Education Attainment (Pop 25+) Less than 9th Grade Some High School (No Diploma) High School Grad (inc Equivlency) Some College Associate Degree Bachelor Degree Master's Degree Professional School Degree Doctorate Degree

City of Fairbanks

Fairbanks North Star Borough

662 1,014 6,810 6,768 1,624 2,451 949 303 138

1,151 2,251 16,956 17,874 5,491 8,965 4,462 872 1,098

1,137 2,212 16,629 17,577 5,405 8,898 4,396 866 1,096

1,303 2,473 18,298 19,372 5,840 9,571 4,643 879 1,115

1,573 2,910 20,296 21,054 6,131 10,411 4,939 904 1,152

14,743 25,291 126,156 128,087 35,131 77,180 29,678 7,105 4,940

20,719

59,120

58,216

63,494

69,370

448,311

3.2% 4.9% 32.9% 32.7% 7.8% 11.8% 4.6% 1.5% 0.7%

1.9% 3.8% 28.7% 30.2% 9.3% 15.2% 7.5% 1.5% 1.9%

2.0% 3.8% 28.6% 30.2% 9.3% 15.3% 7.6% 1.5% 1.9%

2.1% 3.9% 28.8% 30.5% 9.2% 15.1% 7.3% 1.4% 1.8%

2.3% 4.2% 29.3% 30.4% 8.8% 15.0% 7.1% 1.3% 1.7%

3.3% 5.6% 28.1% 28.6% 7.8% 17.2% 6.6% 1.6% 1.1%

25-Mile 100-Mile 200-Mile Ring Ring Ring

State of Alaska

Note: Elementary/Middle School is defined as schooling completed up to 8th Grade Source: Claritas, Inc., 2011

As shown, of the 20,700 people older than the age of 25 residing in the city of Fairbanks approximately 59 percent have either completed some college, or more. This percentage is similar to the state of Alaska, which has 63 percent of the population over 25 completing some college or more. However, as will be shown in the subsequent chapter, educational attainment in the Fairbanks area is higher than in many of the communities that have developed comparable performing arts centers.

FEASIBILITY ANALYSIS OF A NEW CONVENTION CENTER and PERFORMING ARTS CENTER IN FAIRBANKS Analysis of Local Market Conditions Page 12

The number of corporations in a market is an important characteristic to evaluate when determining the viability of any event facility. For a convention center, it would be expected that a significant portion of the events would represent local event activity such as corporate meetings, banquets, conferences and training. For performing arts facilities, local companies tend to be important purchasers of sponsorships and tickets to performances, as well as often playing a key role in upfront and ongoing facility funding through donations and endowment contributions. Indirectly, the size of a local corporate base also tends to be correlated with the level and breadth of supporting community amenities (i.e., hotels, restaurants, transportation infrastructure, etc.), which are relevant when considering non-local events.

Based on information provided by the Alaska Department of Labor and Workforce Development, Exhibit 11 lists the largest employers in the Fairbanks area (not including U.S. military) ranked by estimated number of employees.

Exhibit 11 Demographics - Fairbanks Top Employers

Company Name University of Alaska Fairbanks Federal Government Local Government State Government (Adminstration) Banner Health System Wal-Mart Associates, Inc. ASRC Energy Svcs-Houston Contracting Co. Fairbanks Gold Mining, Inc. Tanana Chiefs Conference, Inc. Fred Meyer Stores Inc Fairbanks Resource Agency Golden Valley Electric Assoc. Inc. Fountainhead Development, Inc. Ambrose LLC Fairbanks Native Association, Inc. 1st Student Transit Tanana Valley Medical Surgical Group Inc. Nana Management Services LLC Everts Air Alaska/Air Cargo Home Depot USA, Inc.

Number of Employees 3,570 3,500 3,100 1,900 1,250 to 1,499 500 to 749 250 to 499 250 to 499 250 to 499 250 to 499 100 to 249 100 to 249 100 to 249 100 to 249 100 to 249 100 to 249 100 to 249 100 to 249 100 to 249 100 to 249

Type/Product Government Government Government Government Health Care Retail Oil & Gas Mining Health Care Retail Social Services Utility Leisure & Hospitality Leisure & Hospitality Health Care Transportation Health Care Leisure & Hospitality Transportation Retail

Source: State of Alaska, Department of Labor and Workforce Development, Research and Analysis, 2010

As shown, there are five companies that employ more than one thousand people and 15 companies employing between 100 and 750 people. The top employer for the Fairbanks area is the University of Alaska, with 3,570 employees. Other companies employing more than one thousand people include the Federal Government (3,500), Local Government (3,100), State Government (1,900) and Banner Health System (between 1,250 and 1,499). The small number of large employers (and public sector orientation of the largest) in Fairbanks will likely have implications as to the local demand characteristics for the convention center and potential funding opportunities for both the convention center and performing arts facilities. These implications will be discussed further in a subsequent chapter of this report.

FEASIBILITY ANALYSIS OF A NEW CONVENTION CENTER and PERFORMING ARTS CENTER IN FAIRBANKS Analysis of Local Market Conditions Page 13

Local Lodging and Event Facility Inventory As previously mentioned, a community’s hospitality infrastructure, in terms of hotels, restaurants, entertainment infrastructure and other such factors, contributes heavily to the potential success of a new convention center and performing arts center. The marketability of any event facility increases when there exists a support of amenities and infrastructure within close proximity.

This supporting hospitality infrastructure also plays a key role in generating the desired economic impact of added event space, particularly when considering a convention center project. A paramount component of this hospitality infrastructure is the local inventory of quality hotel properties. As shown by Exhibit 12, there are approximately 22 lodging properties in the Fairbanks area with 50 or more rooms, including three properties that opened in 2009.

Exhibit 12 Local Facilities - Primary Fairbanks Hotels

Facility 1

Westmark Hotel and Conference Center

2

Rooms

Facility

Rooms

400

16 Chena Hot Springs Resort

80

Fairbanks Princess Riverside Lodge

326

17 Super 8 Motel

77

3

Wedgewood Resort

275

18 Comfort Inn at Chena River

74

4

Pike's Waterfront Lodge & Cabins

236

19 Klondike Inn

73

5

Bear Lodge

157

20 Hotel North Pole

71

6

Sophie Station Suites

147

21 Best Western Chena River Lodge

67

7

Fairbanks Springhill Suites by Marriott

142

22 Golden North Motel

60

8

Regency Fairbanks Hotel

130

9

Alpine Lodge

115

10 Holiday Inn Express

114

11 Hampton Inn

102

12 Extended Stay

97

13 River's Edge Resort

94

14 Bridgewater Hotel

94

15 College Inn

80

Total Estimated Fairbanks Guest Room Inventory = 3,650 Guest Rooms (During Peak Summer Months) Note: only hotels with more than 50 rooms are displayed.

Source: Fairbanks Convention & Visitors Bureau, 2011.

As shown in the exhibit, it is estimated that the Fairbanks area offers 3,650 hotel guestrooms during the peak summer months (and an estimated 3,275 rooms the rest of the year). The largest hotel properties in Fairbanks are the Westmark Hotel (400 rooms), Fairbanks Princess Riverside Lodge (326), Wedgewood Resort (275) and Pike’s Waterfront Lodge (236). Further, there are three smaller properties that opened in 2009.

Relative to other communities throughout the country of a similar size, Fairbanks benefits from a larger than typical supply of full-service hotel properties, which is directly attributable to the cruise industry and

FEASIBILITY ANALYSIS OF A NEW CONVENTION CENTER and PERFORMING ARTS CENTER IN FAIRBANKS Analysis of Local Market Conditions Page 14

associated d seasonal to ourism. As an n example, without w cruise service in Fa airbanks, it is easily argued d that the comm munity’s two largest confe erence hotelss—the Westm mark and Princess hotels— —would not exist.

Additionallly, Fairbanks also offers a diversity of other o types o of hotel prope erties beyond full-service h hotels, such as small and mid-sized m limited service hotels, focussed/quasi-full-service hote els, lodge-oriiented nd-breakfastss. For defin nition and diistinguishing purposes, “ffull-service” hotels propertiess and bed-an normally consist of up pscale lodging g properties with w a three--meal per dayy restaurant with room service ncluding busin ness center, fitness f centerr, etc. (i.e., b brands such a as Hilton, Ma arriott, plus otherr amenities in Westin, Hyatt, H etc.). “Focused/qu uasi-full-servicce” hotels no ormally repre esent mid-priced productss with more limitted food and beverage offferings (i.e., brands b such aas Hilton Garrden Inn, Cou urtyard by Ma arriott, Hyatt Placce, Cambria Suites, etc.). “Limited-se ervice” hotels tend to be economically-priced hotelss that may only offer continental breakfastts (i.e., brand ds such as Daays Inn, Super 8, Econo Lo odge, etc.). E Exhibit nts the locatio on of all existing lodging prroperties in Faairbanks.

13 presen Exhibit E 13 Local Facilities – Location of Primarry Fairbanks H Hotels

As shown n, the locatio on of hotel properties p in Fairbanks is generally sccattered. Ho owever, prom minent concentra ations of notable propertiess can be foun nd near the aiirport at the w western edge e of the comm munity and down ntown Fairbanks. Some of the large est propertiess can be fou und near the ese concentra ations, including the Fairbank ks Princess Hotel and Pike’s Waterfrront Lodge iin the Airporrt Way area, and k Hotel, Sprin nghill Suites and a Bridgewa ater Hotel in d downtown Fa airbanks. The ese concentra ations Westmark of hotels will w play an im mportant partt in our site/lo ocation analyssis that will be e presented la ater in this re eport.

FEASIBILITY Y ANALYSIS OF A NEW CONVENT TION CENTER an nd PERFORMING ARTS CENTER IIN FAIRBANKS Analysis of Local L Market Con nditions Page 15

Exhibit 14 summarizes the total city of Fairbanks hotel and motel tax collections from 2006 through 2010.

Exhibit 14 Local Facilities - City of Fairbank Hotel/Motel Tax Collections

Month January February March April May June July August September October November December

2006

2007

2008

2009

$59,700 $68,900 $92,500 $82,600 $235,600 $515,600 $500,200 $536,600 $246,700 $95,900 $83,200 $89,200

$75,100 $74,900 $108,800 $104,000 $176,000 $577,700 $525,700 $543,300 $236,800 $133,200 $71,100 $58,700

$46,400 $81,800 $99,600 $102,400 $277,300 $520,600 $433,400 $611,400 $305,700 $99,900 $79,400 $92,500

$74,400 $86,900 $115,300 $89,500 $198,400 $407,400 $395,300 $521,000 $227,100 $80,200 $95,900 $72,800

2010 % of Total

5-yr Avg. Annual % Change

10-yr Avg. Annual % Change

$81,000 $88,100 $119,300 $94,700 $240,200 $449,900 $431,500 $537,400 $229,700 $111,100 $81,800 $53,800

2.6% 3.1% 4.1% 3.7% 8.7% 19.1% 17.7% 21.3% 9.6% 4.0% 3.2% 2.8%

8.9% 7.0% 7.2% 3.7% 0.5% -3.2% -3.4% 0.0% -1.7% 4.0% -0.4% -9.9%

6.6% 6.4% 5.8% 9.2% 5.7% 2.0% 0.4% 3.9% 4.0% 1.7% 2.5% 0.0%

Summer Winter

$2,034,600 $2,059,600 $2,148,500 $1,749,200 $1,888,800 $572,100 $625,800 $602,000 $614,900 $629,800

76.4% 23.6%

-1.8% 2.5%

2.7% 4.3%

Total

$2,606,700 $2,685,300 $2,750,400 $2,364,200 $2,518,500

-0.8%

1.2%

Source: Fairbanks Convention and Visitors Bureau, 2011

As shown, hotel and motel tax collections in the city of Fairbanks has totaled between $2.4 million and $2.8 million each year from 2006 to 2010, experiencing a 0.8 percent average annual decrease in collections over the time span. Over the five years reviewed, the summer months of May through September accounted for approximately 76 percent of the city’s total, reflecting a large influx of cruise and other summer season tourism.

Exhibit 15 presents the hotel and motel tax collections in the Fairbanks North Star Borough (including the city of Fairbanks) from 2006 to 2010.

Exhibit 15 Local Facilities - Combined City of Fairbanks and Fairbanks North Star Borough Hotel/Motel Tax Collections

2006

2007

2008

2009

2010

% of Total

5-yr Avg. Annual % Change

$106,700 $116,200 $126,400 $146,800 $277,100 $983,000 $808,200 $536,000 $563,100 $272,600 $119,600 $134,900

$124,400 $119,600 $173,400 $182,900 $231,300 $758,500 $860,600 $881,900 $584,600 $333,000 $138,800 $99,900

$101,200 $131,200 $159,000 $204,000 $332,800 $695,200 $765,100 $906,000 $694,900 $321,100 $132,900 $122,300

$114,100 $147,900 $179,600 $158,200 $219,000 $552,200 $666,800 $802,100 $526,200 $272,200 $164,300 $124,400

$136,200 $133,000 $165,800 $190,200 $269,900 $689,000 $725,200 $841,500 $566,000 $249,100 $191,500 $95,900

2.7% 3.0% 3.8% 4.1% 6.2% 17.2% 17.9% 18.5% 13.7% 6.8% 3.5% 2.7%

6.9% 3.6% 7.8% 7.4% -0.6% -7.5% -2.6% 14.2% 0.1% -2.2% 15.0% -7.2%

4.7% 6.2% 4.7% 8.2% 4.6% -1.2% 1.6% 11.5% 7.5% -3.9% 6.7% 0.7%

Summer Winter

$3,167,400 $1,023,200

$3,317,000 $1,172,100

$3,393,900 $1,171,800

$2,766,300 $1,160,600

$3,091,600 $1,161,800

73.4% 26.6%

-0.6% 3.4%

3.5% 1.8%

Total

$4,190,600

$4,488,900

$4,565,700

$3,927,000

$4,253,300

0.4%

4.0%

Month January February March April May June July August September October November December

Source: Fairbanks Convention and Visitors Bureau, 2011.

FEASIBILITY ANALYSIS OF A NEW CONVENTION CENTER and PERFORMING ARTS CENTER IN FAIRBANKS Analysis of Local Market Conditions Page 16

10-yr Avg. Annual % Change

Collectively, the Borough and City received nearly $4.3 million in hotel and motel tax collections in 2010.

Over the five-year span, an average annual increase of 0.4 percent occurred, while an average annual increase of 4.0 percent occurred over the ten-year span.

Using the most recent data available concerning market-wide Fairbanks hotel performance, Exhibit 16 summarizes overall occupancy, average daily rates (ADR) and revenue per available room (RevPAR) for Fairbanks lodging facilities from 2001 through 2005.

Exhibit 16 Local Facilities - Fairbanks Lodging Market Review

Occupancy

ADR

RevPAR

$140

100%

$120 $102 $96

$100

$80

50%

50%

$106

$107

80%

59%

57%

60%

$62

$61

40%

$100

52%

$60

$40

$50

$48

$52 20%

$20

0%

$0 2001

2002

2003

2004

2005

Source: Kennedy & Mohn, P.S., 2005.

Community-wide, it is estimated that the Fairbanks lodging market experienced relatively flat occupancy, ADR and RevPAR levels over from 2001 to 2003 (reflective of the hesitancy of travel immediately following 9/11 and the subsequent national economic downturn), while all saw a significant increase from 2003 to 2004. In 2005, Occupancy and RevPAR figures decrease slightly while ADR increased from $106 to $107.

FEASIBILITY ANALYSIS OF A NEW CONVENTION CENTER and PERFORMING ARTS CENTER IN FAIRBANKS Analysis of Local Market Conditions Page 17

The number of potentially competitive event facilities in the local market is also an important consideration with respect to the overall viability of any potential event facility. The Fairbanks market currently offers a number of meeting facilities, including meeting space within hotel facilities and event space at specialized area facilities. Exhibit 17 presents a listing of the primary Fairbanks facilities that offer flat floor meeting space for rental. Other facilities, including UAF facilities, are often rented out for events (or used in conjunction with other facilities to accommodate certain event functions), but most of the space represents fixed-seating venues such as Davis Concert Hall and the Salisbury Theater that don’t offer traditional or significant flat floor meeting/conference space.

Exhibit 17 Local Facilities - Fairbanks Meeting Facilities

Venue

Number of Sleeping Rooms

Number of Meeting Rooms

Largest Banquet Room Capacity

Est. Lgst.

Room Square Footage

Estimated Total Square Footage

0

4

2,300

35,000

44,200

0

-

-

-

21,000

400

11

400

5,400

17,000

0

5

400

6,200

13,700

1

Carlson Center

2

University of Alaska Museum of the North

3

Westmark Hotel and Conference Center

4

Pioneer Park

5

Fairbanks Princess Riverside Lodge

326

5

320

4,800

9,100

6

Wedgewood Resorts

275

4

180

2,700

6,700

7

Chena Hot Springs Resort

80

4

150

2,300

5,400

8

Alpine Lodge

115

4

200

3,000

5,200

9

Pike's Waterfront Lodge

208

4

190

2,800

4,800

(1)

10

River's Edge Resort

94

5

130

2,000

4,700

11

Regency Fairbanks Hotel

130

3

75

1,200

2,200

12

Sophie Station Hotel

147

2

100

1,500

2,000

13

Hotel North Pole (Opened Summer 2009)

71

2

125

1,200

1,200

14

Extended Stay

97

1

75

1,100

1,100

15

Fairbanks SpringHill Suites by Marriott

142

2

40

550

860

16

Hampton Inn and Suites

101

1

35

700

700

17

Comfort Inn at Chena River

74

1

50

660

660

(1) Event space at the University of Alaska Museum of the North includes atypical space such as lobby, hallw ay, gallery and other such space.

Auditorium of fers 125 retractable seats that open to approximately 1,900 square feet of flat floor space (2) Event space at Pioneer Park includes atypical space such as lobby, hallw ay, gallery and other such space. Also offers a 384-seat Theatre.

As presented, there are 17 primary meeting facilities that exist in Fairbanks. The Carlson Center represents the largest facility in the area that has flat floor square footage available for events, but it is not ideally suited to host traditional conventions, conferences or meetings. The Carlson Center, as will be presented in a subsequent case study, is a sports and entertainment event-oriented facility offering plenary seating. Its primary use comes from spectator events such as sporting events, concerts and family shows. It also accommodates public/consumer shows and some meetings. However, it importantly lacks one or more quality hotel properties attached, adjacent or within close proximity, as well as lacks high-finish spaces and plentiful breakout meeting space.

FEASIBILITY ANALYSIS OF A NEW CONVENTION CENTER and PERFORMING ARTS CENTER IN FAIRBANKS Analysis of Local Market Conditions Page 18

Other facilities in Fairb banks offering g meeting and conferencee space includ de several ho otel/resort faccilities.

Two of th he largest hottels offering meeting m spacce include thee Westmark FFairbanks Hottel and Confe erence Center an nd Fairbanks Princess Rive erside Lodge. The Westm mark is effecctively the largest “conferrence” facility in the Fairbank ks area (due to t its attache ed lodging, u pscale finish and differenttiated space), with ately 17,000 square feet of total mee eting and baanquet space.. Its largestt single room m is a approxima ballroom offering 5,40 00 square fee et of contiguo ous space. T The relativelyy small size o of its largest single o the conven ntions, conferrences and tra adeshows it ccan accommo odate. room has implications on the size of vention eventss require multtiple event sp paces concurrrently (i.e., sp pace for exhib bition, In addition, most conv general asssembly, food d function and d breakout ne eeds).

The locatiion of the exissting primary local meeting g facilities is p presented in Exhibit 18.

Exhibit E 18 Local Facillities - Locatio on of Primary y Meeting Faccilities

o the location n of Fairbanks’ primary hotels, the m meeting faciliity inventory is well disp persed Similar to throughou ut the community. Locatted on the fo ollowing pagee, Exhibit 19 9 presents the location off both Fairbanks’ existing prim mary hotels an nd meeting fa acilities. It sh hould be note ed that there are currently three y opened in the Fairbankks area as w well. Location issues will have hotel properties that have recently p sitess for both eve ent facilities u under conside eration importantt implications during the diiscussion of potential (particularly the conven ntion center),, as will be prresented in a subsequent cchapter.

FEASIBILITY Y ANALYSIS OF A NEW CONVENT TION CENTER an nd PERFORMING ARTS CENTER IIN FAIRBANKS Analysis of Local L Market Con nditions Page 19

Exhibit E 19 Loc cal Facilities - Location of Primary Hote el and Meetin ng Facilities

As previously discussed, the Carlso on Center offe ers the largesst amount off flat floor squ uare footage of all F faccilities, while the Westma ark and Prin ncess hotels offer the grreatest amou unt of existing Fairbanks “traditiona al” convention n space. As such, s we have e prepared so ome additiona al information n related to ea ach of these thre ee facilities, which w is prese ented on the pages p that folllow.

FEASIBILITY Y ANALYSIS OF A NEW CONVENT TION CENTER an nd PERFORMING ARTS CENTER IIN FAIRBANKS Analysis of Local L Market Con nditions Page 20

Carlson Center

The Carlson Center opened in 1990, under the ownership of the Fairbanks North Star Borough and operation of a private management company, currently SMG. The structure today offers nearly 4,900 fixed and retractable seats in the main arena, with capacity to seat up to 6,500 for concerts (with additional temporary floor seating) and 4,600 for ice events. The arena floor offers approximately 35,000 square feet of concrete, flat floor space and located throughout the building are four meeting rooms that offer a total of approximately 15,400 square feet of space.

The Center is home to the University of Alaska – Fairbanks Nanooks ice hockey team and the Fairbanks Grizzlies. The Alaska Nanooks are part of the Central Collegiate Hockey Association and the Grizzlies are an Indoor Football League. Other events commonly held at the Center include University of AlaskaFairbanks commencement ceremonies, men’s/boys and women’s/girls basketball tournaments, concerts, ice shows, family shows, public/consumer shows and other such events.

The Carlson Center currently operates at an approximate $500,000 per year deficit, which is consistent with other facilities of its nature throughout North America.

Fairbanks Princess Riverside

The Princess Riverside Lodge originally opened in 1993 and was expanded in 2001. Princess Tours operates the Lodge, offering guestrooms to its cruise ship and other vacationers. Princess also operates two lodges in the Denali National Park and Preserve, one in the Kenai National Wilderness Area, and one near the Wrangell-St. Elias National Park and Preserve.

The Lodge currently offers 326 hotel rooms, as well as 4,300 square feet of meeting space, and a 4,800 square foot ballroom. Public space at the Princess Riverside can accommodate up to 25 exhibit booths; however, the booths cannot be secured as the space is open to the public.

The Princess Riverside primarily serves leisure travelers during the May through September cruise season, operating effectively at capacity during this time. During these summer months, the largest banquet room at the Princess Riverside is converted into a second restaurant and is unavailable for meetings or events.

FEASIBILITY ANALYSIS OF A NEW CONVENTION CENTER and PERFORMING ARTS CENTER IN FAIRBANKS Analysis of Local Market Conditions Page 21

Westmark Fairbanks Hotel

The Westmark Hotel originally was developed in the 1960’s as a Traveler’s Inn. The facility was renovated and rebranded in 1984 as the Westmark Hotel, and was subsequently expanded in 2004.

There are 400 guest rooms at the Westmark, as well as 11,600 square feet of meeting space and 5,400 square feet of ballroom space. Currently, the Westmark offers the largest amount of meeting space of all Fairbanks hotels; however, there is no traditional concrete floor exhibit space offered.

The largest contiguous space at the Westmark is the 5,400-square-foot Gold Room, which is ideal for banquets up to 400 people. However, it has been suggested the lack of exhibit space limits Fairbanks market’s ability to attract larger non-local conventions or tradeshows that require significant levels of exhibit space or a mixture of exhibit and ballroom space. ****** With regard to facilities capable of housing various performing arts events and related uses, the Fairbanks market currently offers a number of theater and auditorium facilities. Exhibit 20 presents a summary of existing primary Fairbanks performing arts venues.

Exhibit 20 Local Facilities - Fairbanks Performing Arts Venues

Seating Capacity

Facility

Facility Type

1

Hering Auditorium

Theater (indoor)

1289+18wc

2

Charles W. Davis Concert Hall

Theater (indoor)

886+11wc

3

Lee H. Salisbury Theatre

Theater (indoor)

468

4

Alaska Centennial Center for the Arts Theatre

Theater (indoor)

354

5

Carlson Center

Arena (indoor)

6

West Valley Performing Arts Center

Theater (indoor)

520

7

Alaska Centennial Center for the Arts Exhibit Hall

Exhibit hall (indoor)

500

Source: Fairbanks Convention & Visitors Bureau, industry publications, facility website information, 2011. wc = wheelchair seating

FEASIBILITY ANALYSIS OF A NEW CONVENTION CENTER and PERFORMING ARTS CENTER IN FAIRBANKS Analysis of Local Market Conditions Page 22

6,500

As shown, there are se even perform ming arts venu ue facilities in n Fairbanks, ranging in sea ating capacityy from 500. The loca ations of thesse venues are located in Exxhibit 21.

354 to 6,5 Exhibit E 21 Local Facilitie es - Location of Primary F Fairbanks Artss Venues

FEASIBILITY Y ANALYSIS OF A NEW CONVENT TION CENTER an nd PERFORMING ARTS CENTER IIN FAIRBANKS Analysis of Local L Market Con nditions Page 23

Exhibit 22 2 presents the e location of the t Fairbanks area hotels, meeting and theater/audittorium facilitie es.

Exhibit E 22 Local Facilitties – Locatio on of Primary y Fairbanks H otels, Meetin ng and Arts Fa acilities

o meeting ven nues, descripttions are pro ovided of fourr of the more e prominent theater/audittorium Similar to facilities in n Fairbanks to o illustrate an nd contrast ch haracteristics,, capabilities and typical uses. Presentted on the follow wing pages, these include the Davis Co oncert Hall, H Hering Audito orium, Lee H. Salisbury Th heatre and Pione eer Park.

FEASIBILITY Y ANALYSIS OF A NEW CONVENT TION CENTER an nd PERFORMING ARTS CENTER IIN FAIRBANKS Analysis of Local L Market Con nditions Page 24

Davis Conncert Hall

he mid 1970’’s as part of the universitty’s expansion n, the Conce ert Hall is parrt of the Fine e Arts Built in th Complex on o the Univerrsity of Alaska a Fairbanks ca ampus. In 19 984, the Fine Arts Concertt Hall was ren named the Charle es W. Davis Concert Hall. It has a to otal capacity of 897 seats (which inclu udes 11 whee elchair accessible e seats) and is considered d by many to o be the bestt acoustical ve enue in the sstate of Alaskka for non-amplified concertss. h been the resident hom me of the Faiirbanks Symp phony Orchesstra and the Arctic Since its opening, it has h venue for f many con certs and reccitals produced by the Univversity Chamber Orchestra, ass well as the home a host to many m visiting leecturers, artissts and performers from around of Alaska Music Departtment. It is also d. Recently, the Hall hass been upgraded with han ndicapped acccess and sea ating. The H Hall is the world highly utilized, primarrily by UAF groups; how wever, theree have been challenges with limited date y for outside events. Th he Concert Ha all also has ccertain physiccal limitations (i.e., stage e size, availability fly/wing space, s etc.) th hat limit its su uitability for non-musical peerforming artts.

Hering Auuditorium

uditorium is attached a to th he Lathrop High H School caampus and ffunctions prim marily as a co oncert Hering Au hall, as well as a lecturre and genera al-entertainme ent location. Hering is currrently the larrgest auditoriium in wheelchair acccessible seatss.

Fairbanks, with a capaccity of 1,307 seats, which includes 18 w The Audittorium hosts an a array of plays, concertss, dance recitaals and a variiety of other ccommunity evvents, and is home to most Fairbanks F Concert Associa ation performaances. As th he Auditorium m is located o on the H School ca ampus, the schools s within n the district have first prio ority for use of the Audito orium, Lathrop High with the Concert C Assocciation having second priorrity, thus leavving limiting a availability for other eventss. ents received during the in nvestigative p phase of this study regarding the Audittorium Some aessthetic comme include itss aging appea arance and lacck of state-off-the-industryy amenities, shallow stage depth (that m makes it difficult to accommo odate dance performancess, for instancce), too large e a seating ca apacity for sm maller production ns, inadequatte backstage and dressing areas, and lim mited restroo om and food/b beverage faciilities.

FEASIBILITY Y ANALYSIS OF A NEW CONVENT TION CENTER an nd PERFORMING ARTS CENTER IIN FAIRBANKS Analysis of Local L Market Con nditions Page 25

Lee H. Salisbury Theatre

The Lee H. Salisbury Theatre is located inside the Fine Arts Complex on the University of AlaskaFairbanks campus. The Theatre was built in 1969 and originally dedicated in 1970 as the Fine Arts Theatre for the University. The Theatre seats 468 in steep-sloped seating, has a hydraulic orchestra pit, advanced sound system and computerized lighting.

Further, the Theatre houses the UAF Theatre Department (Theatre UAF), which typically produces two annual theatrical performances that run ten days each. These productions are held once in the spring and again in the fall. The Theatre is heavily utilized, primarily for University events, including Theatre UAF and other student group meetings, performances, recitals and competitions.

Noted concerns regarding the Theatre have included limited parking and date availability issues for nonUniversity events. Additionally, there are some functionality issues, as the Lab Theatre and Lee H. Salisbury Theatre are connected through relatively thin walls, causing certain instances of restrictions concerning concurrent use of both spaces.

Pioneer Park / Alaska Centennial Center for the Arts

The 44-acre historic park was created in 1967 to provide a taste of Interior Alaska history. The Park offers historic buildings, small shops, food, entertainment, playgrounds and picnicking, as well as the Alaska Centennial Center for the Arts. Further, the Park has no admission fee and is open year-round, although most attractions within the park are open only from Memorial Day to Labor Day, including daily concerts in the Gazebo.

The Alaska Centennial Center for the Arts Theatre offers 354 seats and flat floor exhibit space. The Center’s Exhibit space can be converted into an event venue to host up to approximately 500 attendees.

However, the exhibit hall offers substandard acoustics, there is no raised stage and seating is in folding chairs. Despite its challenges, this venue is used regularly, often times having limited availability.

FEASIBILITY ANALYSIS OF A NEW CONVENTION CENTER and PERFORMING ARTS CENTER IN FAIRBANKS Analysis of Local Market Conditions Page 26

Visitation As a destination, Fairbanks offers a number of attractions and recreational opportunities. These attractions and others have positioned the market as a thriving regional hub and visitor destination.

Prominent attractions and events are displayed in Exhibit 23.

Exhibit 23 Visitation - Primary Fairbanks Area Attractions and Events

Primary Fairbanks Area Attractions Alaska Bird Observatory Alaska Public Lands Information Center Alaska Railroad-Tanana Valley Model Railroad Club Alaskan Tails of the Trail with Mary Shields Arctic National Wildlife Refuge Aurora Ice Museum at CHSR Aurora Viewing Birch Hill Recreation Area Calypso Farm and Ecology Center Chena and Tanana Rivers Chena Hot Springs Chena Hot Springs Resort Cold Climate Housing Research Center Creamers Field Migratory Waterfowl Refuge & Visitor Center Cross the Arctic Circle, by car or by plane Dalton Highway Denali Highway Denali National Park and Preserve Dog Mushing Doyon Chiefs' Court El Dorado Gold Mine Fairbanks Community Museum

Fairbanks Ice Museum @ Lacey Street Theater Fairbanks International Friendship Day Farthest North Brewery Farthest North Golf Course Flightseeing Mt. McKinley Fountainhead Antique Auto Museum Gates of the Arctic National Park & Preserve Gold Dredge 8 Golden Heart Park Great Alaskan Bowl Company Hot Licks Homemade Ice Cream Ice Alaska Large Animal Research Station Manley Hot Springs Moose Mountain Ski Resort Morris Thompson Cultural and Visitors Center Pioneer Air Museum Pioneer Museum & Big Stampede Show Pioneer Park River Cruises on the Sternwheeler Tanana Chief Riverboat Discovery

Santa Claus House Santa's Letters and Gifts Silver Gulch Brewing and Bottling Company Skiland-Mt Aurora Tanana Chiefs Conference Cultural Programs Tanana Valley Farmers Market Tanana Valley Railroad Museum and Steam Engine #1 The Alaska Salmon Bake The Knotty Shop The Palace Saloon Trans-Alaska Oil Pipeline/Pump Station No 9 UAF Geophysical Institute UAF Georgeson Botanical Gardens UAF International Arctic Research Center UAF Large Animal Research Station UAF Poker Flat Research Range Univ. of AK Virtual Discovery Lab & Supercomputer Ctr. University of Alaska Museum of the North World Ice Art Championships Wrangell-St. Elias National Park Yukon Quest Headquarters

Primary Fairbanks Area Events Alaska Dog Mushers Association Alaska International Senior Games Anderson Bluegrass/Country Music Festival Arctic Man Ski & Sno-Go Classic Athabascan Fiddlers Festival Ballroom Dance Club of Fairbanks Beluga Nights Brown Bear Music and Arts Festival Chatanika Days Chatanika Music Festival Delta Festival of Lights Deltana Fair Equinox Marathon Fairbanks Arts Association Fairbanks Choral Society Fairbanks Community Band Fairbanks Concert Association Fairbanks Curling Club Fairbanks Dance Theatre Fairbanks Drama Association & Fairbanks Children's Theatre

Fairbanks Junior Dog Mushing Association Fairbanks Light Opera Theatre Fairbanks Running Club Fairbanks Shakespeare Theatre Fairbanks Summer Arts Festival Fairbanks Summer Folk Fest Fairbanks Symphony Association Fairbanks Winter Carnival Fairbanks Winter Folk Fest Fairbanks Youth Sports Farthest North Jewish Film Festival Festival Fairbanks Festival of Native Arts GCI Annual North American Championship Sled Dog Race Golden Days Iron Man Ski/Snow Machine Races Junior Yukon Quest Midnight Sun Midnight Sun Baseball Game Midnight Sun Festival

Midnight Sun Fun Run Midnight Sun Intertribal Powwow Nenana Ice Classic Tripod Days Nordic Ski Club of Fairbanks North Pole Summer Festival and Parade Northern Lights Council of Dancers Northland Children's Choir Opera Fairbanks Red Green Regatta Santa's Square Dance Club Spring Concert Tanana Valley Sandhill Crane Festival Tanana Valley State Fair UAF Athletics Winter Solstice Celebration Winterfest in Denali National Park & Preserve World Eskimo Indian Olympics World Ice Art Championships Yukon 800 Boat Race Yukon Quest International Sled Dog Race

Source: Fairbanks Convention and Visitors Bureau, 2011

According to research provided by the Alaska Visitor Statistic Program (AVSP), over 1.6 million people visited Alaska during the summer months from May 2006 through September 2006. That number decreased slightly to 1.56 million people from May 2011 through September 2011. Of this number, approximately 57 percent (883,000) were cruise ship passengers, 39 percent (604,500) arrived and departed by air, and 4 percent (69,300) arrived or departed by highway or ferry. Respectively, these numbers represent a 2 percent decrease in cruise travel, a 3 percent increase in air travel and a 1 percent decrease in highway/ferry travel from 2006 statewide figures.

FEASIBILITY ANALYSIS OF A NEW CONVENTION CENTER and PERFORMING ARTS CENTER IN FAIRBANKS Analysis of Local Market Conditions Page 27

In 2006, Fairbanks saw 385,000 of the summer visitors to Alaska and 55 percent of these were cruise ship passengers. Approximately 325,000 people visited Fairbanks between May and September of 2011.

Of these, 58 percent were cruise passengers. The most popular activities among Fairbanks summer visitors included a cultural component.

The 2011 AVSP study also has information regarding the purpose of Fairbanks summer visitors’ trips, which included: •

Vacation/pleasure – 80 percent

•

Visiting friends and/or relatives – 10 percent

•

Business – 6 percent

•

Business/pleasure – 4 percent

Summer visitors to Fairbanks spent more nights in the state (12.5 nights) than the average visitor to Alaska (9.2 nights). The average Fairbanks visitor is 53.4 years old, is a college graduate and reports an annual income of $103,000. Forty-eight percent of Fairbanks visitors categorize themselves as retired or semi-retired.

Exhibit 24 presents the summer visitor volumes experienced by Fairbanks according to the AVSP studies in 2006 and 2011.

Exhibit 24 Visitation - Estimated Fairbanks Visitor Volumes (May – September)

500,000 Non-Cruise

400,000

Cruise

385,000

Visitors

325,000 300,000

173,250 136,500

200,000

100,000

211,750

188,500

2006

2011

0

Year Note: The AVSP study for winter 2011/2012 should be available by August 2012. This study will allow comparisons to the previous AVSP winter study which included information on winter 2006/2007. Winter is defined as October through April.

Source: 2006 and 2011 Alaska Visitor Statistic Program Studies

Between 2001 and 2006, the number of summer visitors who traveled to Fairbanks increased at an average annual growth rate of 8.4 percent. The total number of summer visitors to Alaska and to Fairbanks has decreased between 2006 and 2011. The national economic climate as well as cruise ship pattern variations account for this decrease. Although studies differ on specific numbers, with a slow but

FEASIBILITY ANALYSIS OF A NEW CONVENTION CENTER and PERFORMING ARTS CENTER IN FAIRBANKS Analysis of Local Market Conditions Page 28

steady economic recovery and additional cruise itineraries across the Gulf of Alaska, most forecasts indicate a gradual increase in summer visitation numbers to Fairbanks and the Interior of Alaska in the years to come.

Fairbanks Convention and Visitors Bureau Bookings To understand existing usage of existing Fairbanks area facilities, an analysis was performed concerning convention, conference, consumer show and tradeshow event and utilization characteristics, as indicated by events booked and/or tracked by the Fairbanks Convention and Visitors Bureau (FCVB) from 2006 to 2014. This data represents a snapshot of definite/confirmed and pending business “on the books” as of July 2011. It is important to recognize that this information does not represent the entirety of meeting events that have taken place or are booked over this time period in Fairbanks. A significant number of conventions, conferences and meetings are booked independently by individual hotels and meeting facilities, and are not reflected in these numbers. This type of data is useful as one of many pieces of information that help shape our base understanding of existing convention, conference and meeting business in Fairbanks.

Exhibit 25 presents a summary of the number of events, both definite and pending, from 2006 to 2014 for Fairbanks facilities.

Exhibit 25 Fairbanks CVB Bookings - Total Number of Events (2006-2014) 45 39

40

40

39

Pending

36 33

Number of Events

35

Definite / Confirmed

11

30 25

22

20 15

28

9

10

5

5

2 4

1

0 2006

2007

2008

2009

2010

2011

2012

2013

2014

Note: Figures include both definite/confirmed and pending bookings for 2009-2014.

Source: FCVB, 2011

As shown, based on FCVB bookings, over the past five years (2006 to 2010), Fairbanks has hosted between 22 and 40 conventions/conferences/tradeshows. Further, at the time of this data pull, for 2011, the FCVB had 28 booked and 11 “pending” events scheduled, totaling 39 events and 12 events (five confirmed and seven pending) events booked for 2012 through 2014.

FEASIBILITY ANALYSIS OF A NEW CONVENTION CENTER and PERFORMING ARTS CENTER IN FAIRBANKS Analysis of Local Market Conditions Page 29

Exhibit 26 presents the number of total event days, both definite and pending, that Fairbanks event facilities were or will be used from 2006 to 2014.

Number of Event Days

Exhibit 26 Fairbanks CVB Bookings - Total Number of Event Days (2006-2014) 160 150 140 130 120 110 100 90 80 70 60 50 40 30 20 10 0

146

Pending Definite / Confirmed

82

50 40

36

39 11 28

2006

2007

2008

2009

2010

2011

9

2012

2

1

2013

2014

Note: Figures include both definite/confirmed and pending bookings for 2011-2014.

Source: FCVB, 2011

The total number of event days for FCVB events varies each year. The number of event days has ranged from 36 to 146 event days per year between 2006 and 2010. At the time of this data’s collection, 18 event days were pending for 2011 through 2014 with 33 definite/confirmed event days scheduled.

FEASIBILITY ANALYSIS OF A NEW CONVENTION CENTER and PERFORMING ARTS CENTER IN FAIRBANKS Analysis of Local Market Conditions Page 30

Exhibit 27 presents the estimated total attendance of the FCVB-booked convention/conference/tradeshow events held in Fairbanks over the past five years and planned for the next four.

Exhibit 27 Fairbanks CVB Bookings - Estimated Total Attendance (2006-2014)

14,000

13,096

Pending

Number of Attendees

12,000

Definite / Confirmed

10,000 7,670

8,000 6,000

6,150

5,568

4,970

3,872 4,000

4,250

3,590 3,000

890

2,260

2,000

2,982

1,900

0 2006

2007

2008

2009

2010

2011

2012

2013

2014

Note: Figures include both definite/confirmed and pending bookings for 2011-2014.

Source: FCVB, 2011.

Attendance figures have varied since 2006, ranging between 13,096 in 2008 to 2,260 in 2006. Future bookings remain steady, ranging between 6,150 pending and definite attendees in 2012 to 3,000 definite attendees in 2014.

FEASIBILITY ANALYSIS OF A NEW CONVENTION CENTER and PERFORMING ARTS CENTER IN FAIRBANKS Analysis of Local Market Conditions Page 31

Exhibit 28 presents the total room nights associated with FCVB-booked convention/conference/tradeshow events held or to be held at Fairbanks facilities between 2006 and 2014.

Exhibit 28 Fairbanks CVB Bookings - Estimated Total Room Nights (2006 – 2014) 12,000

10,325

Number of Room Nights

10,000 8,268

Pending Definite / Confirmed

8,698 7,935

8,000

7,598 1,128

6,261

6,375

6,000

5,250

4,000 6,470

2,400

2,205

2,000

3,950

0 2006

2007

2008

2009

2010

2011

2012

2013

2014

Note: Figures include both definite/confirmed and pending bookings for 2011-2012.

Source: FCVB, 2011.

As shown, between 2006 and 2010, the total number of room nights associated with FCVB-booked convention/conference/tradeshow events held at Fairbanks event facilities ranged from 2,400 to 8,698.

Future years are expected to have higher room night generation, including nearly 7,600 in 2011 and over 10,300 in 2012.

FEASIBILITY ANALYSIS OF A NEW CONVENTION CENTER and PERFORMING ARTS CENTER IN FAIRBANKS Analysis of Local Market Conditions Page 32

A wide variety of facilities throughout Fairbanks are used to accommodate these events. Exhibit 29 presents the number of FCVB-booked convention/conference/tradeshow events by facility between 2006 and 2014.

Exhibit 29 Fairbanks CVB Bookings - Most Frequently Booked Facilities (2006 – 2014)

90 81

80

Number of Events Hosted

70 60 50

47 43 39

40 32

30 21

21

20 10 0

7

7

Sophie Station University of Suites AK Fairbanks

8

Regency Fairbanks Hotel

10

City Wide

10

River's Edge Alpine Lodge Resort

Springhill Suites by Marriott

Wedgewood Resort

Other

Pike's Waterfront Lodge

Fairbanks Princess Lodge

Westmark Fairbanks Hotel & Conf Center

Note: Figures include both definite and pending bookings for 2011-2014.

Source: FCVB management, 2011

As shown, ten different facilities had seven or more FCVB booked events from 2006 to 2014. These facilities include the Sophie Station Hotel, University of Alaska-Fairbanks, the Regency Fairbanks Hotel, city-wide events, River’s Edge Resort, the Alpine Lodge, Springhill Suites by Marriott, the Wedgewood Resort, Pikes Waterfront Lodge, the Fairbanks Princess Riverside Lodge and the Westmark Fairbanks Hotel and Conference Center. Of these, the Westmark booked the highest number, with 81 FCVB-booked events. There are also 39 events that will be held in “other” facilities throughout Fairbanks.

Exhibit 30, on the following page, presents the number of events booked at Fairbanks facilities, shown as a percentage of all FCVB-booked events. It is important to note that, as with the data outlined in Exhibit 29 above, data in Exhibit 30 only includes those events booked by the FCVB and does not include events booked independently by the individual properties.

FEASIBILITY ANALYSIS OF A NEW CONVENTION CENTER and PERFORMING ARTS CENTER IN FAIRBANKS Analysis of Local Market Conditions Page 33

Exhibit E 30 Fairbank ks CVB Bookiings - Most Frrequently Boo oked Facilitie es (2006 – 20 014)

1 presents the e total peak ro oom nights pe er event from m 2007 to 201 12.

Exhibit 31 Exhibit E 31 Fairbanks CVB C Bookings - Summary of o Per Event P Peak Room N Nights (2007 – 2012)

The avera age peak room m nights per event was 10 00 rooms and d the median was 40 room ms. The totall peak room nigh hts per eventt ranged from m zero to nearly 1,200 roo oms for all the events, deffinite and pen nding, booked by y the FCVB.

FEASIBILITY Y ANALYSIS OF A NEW CONVENT TION CENTER an nd PERFORMING ARTS CENTER IIN FAIRBANKS Analysis of Local L Market Con nditions Page 34

Lost business information can be an important indicator concerning the need for additional and/or more appropriate event space in a community. Like many destination marketing organizations (DMOs), the FCVB maintains a log of lost convention and other non-local event business, along with its bookings.

While it is important to recognize that the lack of sufficient facility space may have been only one of a number of contributing factors that prevented Fairbanks from securing these events and that many pieces of “potential” business never reveal themselves on such lists, lost business lists can provide an important base and “starting point” for an understanding of any new event facility’s market potential.

Exhibit 32 presents the FCVB’s lost business events from 2005 to 2012 with corresponding estimated event days, attendance, hotel room nights and estimated economic impact figures.

Exhibit 32 Fairbanks CVB Bookings - Summary of Lost Business by Year (2005 – 2012) Number

Event

Room

Economic

Year

of Events

Days

2005

4

17

Attendance

Nights

Impact (1)

630

1,005

2006

15

$942,900

61

5,990

18,083

$6,829,200

2007 2008

16

84

2,527

9,003

$2,609,000

13

48

6,601

13,108

$6,782,880

2009

25

81

16,814

12,583

$8,299,040

2010

12

36

2,106

4,581

$1,280,560

2011

3

10

4,160

5,270

$4,436,800

2012

1

2

400

850

$288,000

Totals

89

339

39,228

64,483

$31,468,380

(1) Based on FCVB estimates.

Source: FCVB, 2011.

As shown, FCVB data suggests 89 events were lost between 2005 and 2012, accounting for nearly 340 event days, 39,200 people in attendance, 64,500 room nights and $31.5 million in economic impact.

Exhibit 33 presents a summary of lost business by general reason from 2005 to 2010.

Exhibit 33 Fairbanks CVB Bookings - Summary of Lost Business by Reason (2005 – 2012)

Number

Event

Room

Economic

of Events

Days

Attd.

Nights

Impact (1)

Costs (i.e., airline, hotel, etc.)

8

22

1,521

2,885

$1,387,680

Chose another location

33

112

22,285

23,386

$13,516,400

Event cancelled/postponed

15

70

6,180

19,321

$7,634,600

Misc/No Response

33

135

9,242

18,891

$8,929,700

89

339

39,228

64,483

$31,468,380

Reason Lost

Totals (1) Based on FCVB estimates.

Source: FCVB, 2011

FEASIBILITY ANALYSIS OF A NEW CONVENTION CENTER and PERFORMING ARTS CENTER IN FAIRBANKS Analysis of Local Market Conditions Page 35

Of the 89 events of losst business, eight e events were w due to th he cost of tra avel and accommodations, while her location. The remainin ng events eith her were can ncelled or posstponed, or “o other” 33 eventss chose anoth reasons. FCVB data su uggest the la argest categorry of lost bussiness, eventss being lost to o another loccation, onsible for the e loss of over $13.5 million n in economicc impact for th he Fairbanks community. was respo 4 presents the e summary off lost businesss by reason, sshown on the e basis of room m nights lost..

Exhibit 34

Exhibit E 34 Fairbanks F CVB B Bookings - Segmentation S n of Room Niights Lost by Reason (200 05 – 2012)

oom nights losst was from eevents choosing another lo ocation and evvents As shown, the highest amount of ro T catego ories account for 66 percen nt of the totall room nights lost. that were cancelled or postponed. These

Summaryy The strength of the loccal market, in n terms of itss socioeconom mic and demo ographic attributes, can prrovide an indicattion of an eve ent facility’s ability a to draw w and accom mmodate convvention, confe erence, tradeshow, consumerr show, specta ator, arts and d entertainme ent attendeess and participa ation. Fairba anks represents the second largest metrop politan area in n Alaska; how wever, the citty’s estimated d population iis just over 3 35,000 b is just j under 10 00,000 (includ ding the city)). Additionallly, centrally-located in Ala aska’s and the borough’s Interior, Fairbanks F is significantly s geographically y-isolated from m other conce entrations of population. While acting driving this would d be expecte ed to have negative n implications in tterms of attra g attendees (from Anchorage e, for instancce), Fairbankss does provid de significantt airlift from iits internation nal airport—w which, relative to other small s to mid-sized m Ala askan (or g geographically-remote) ccommunities with e/civic centerss—provides a competitivee benefit in a attracting som me state, na ational convention/conference onal events. Further, it is important to recognize tha at, relative to other and possibly certain nicche internatio t country, driving or flying long disstances to en ons is much more prevale ent in nd destinatio areas in the Alaska.

FEASIBILITY Y ANALYSIS OF A NEW CONVENT TION CENTER an nd PERFORMING ARTS CENTER IIN FAIRBANKS Analysis of Local L Market Con nditions Page 36

A community’s hospitality infrastructure in terms of hotels, restaurants, entertainment, transportation amenities and other such factors contribute heavily to the potential success of any convention facility, and indirectly impact the market viability of a performing arts facility. Relative to other communities throughout the country of a similar size, Fairbanks benefits from a larger than typical supply of fullservice hotel properties, which is directly attributable to the cruise industry and associated seasonal tourism. As an example, without cruise service in Fairbanks, it is easily argued that the community’s two largest conference hotels—the Westmark and Princess hotels—would not exist. Additionally, Fairbanks also offers a diversity of other types of hotel properties beyond full-service hotels, such as small and midsized limited service hotels, focused/quasi-full-service hotels, lodge-oriented properties and bed-andbreakfasts.

Fairbanks has a mix of existing event facilities offering flat floor meeting space. The largest facility, the Carlson Center, offers substantial square footage; however, it is not positioned well to attract traditional non-local conventions, conferences and meetings. A number of the area’s hotel properties also integrate meeting space; however, even the largest existing venue, the Westmark, has limitations in terms of the size of its largest single room. Lost business information obtained from the FCVB and other industry participants suggest that existing facility limitations are preventing the accommodation of a number of non-local events.

Likewise, there a number of theaters and auditoriums in Fairbanks that serve the performing arts. There is a fairly wide variety of facility types, with many serving specific niches. For instance, the Davis Concert Hall is best suited for musical presentations and the Salisbury Theatre primarily serves university-related theatrical uses. Overall, each of the theaters/auditoriums have certain limitations, whether they relate to aging aesthetics, functionality, seating capacity/configuration, stage sizing, fly/wing space, lack of an orchestra pit, box office/lobby/dressing rooms or back-of-the-house issues. Further, some of these facilities are highly-utilized and have limited date availability, preventing additional usage and could be constraining the growth of certain areas of the local arts community.

FEASIBILITY ANALYSIS OF A NEW CONVENTION CENTER and PERFORMING ARTS CENTER IN FAIRBANKS Analysis of Local Market Conditions Page 37

3.0. COMPETITIVE/COMPARABLE FACILITIES & COMMUNITIES ANALYSIS This chapter provides a review of the various physical characteristics and resources of competitive and comparable convention centers and performing arts centers and their host communities. In terms of potential competitive facilities, the information detailed herein will assist in the identification and analysis of conference, convention and similar event facilities that could provide primary in-state competition to a potential Fairbanks convention center. Competition with respect to “local” events for a convention center is primarily relegated to the existing and planned facilities in the local community or marketplace, and was discussed in the previous chapter. Competition for a potential Fairbanks performing arts center is also primarily “locally” oriented and does not require the same consideration on a state-wide basis. In addition, a set of convention centers and performing arts facilities throughout the country and abroad were identified and analyzed to obtain insight into the physical and operational characteristics of facilities located in comparable communities. Included in this chapter, are the following sections:      

Competitive Convention Centers Comparable Convention Centers Comparable Performing Arts Centers Comparable Facility Space and Seating Extrapolations Comparable Facility Case Studies Comparable International Facilities

Competitive Convention Centers As a part of this analysis, 16 competitive convention centers were identified. The competitive facilities represent venues that may be competitive with a potential Fairbanks convention center with respect to one or more key flat floor event segments (i.e., conventions, conferences and tradeshows held by professional associations, SMERF [social, military, educational, religious, fraternal] groups, corporations, government, international organizations, etc.). Exhibit 1 presents a summary of selected competitive facilities and markets analyzed. For purposes of this analysis, facilities offering in excess of 4,000 square feet of sellable (rentable) event space were considered.

Exhibit 1 Competitive Convention Facilities

Market Talkeetna, AK Anchorage, AK Anchorage, AK Anchorage, AK Anchorage, AK Anchorage, AK Anchorage, AK Anchorage, AK Valdez, AK Girdwood, AK Soldotna, AK Juneau, AK Juneau, AK Juneau, AK Sitka, AK Ketchikan, AK

Driving Dist. to Fairbanks Facility (in miles) Talkeetna Alaskan Lodge 274 Sheraton Anchorage Hotel 359 Hilton Anchorage 359 Egan Center 359 Sullivan Arena 359 The Dena'ina Convention Center 359 Anchorage Marriott Downtown 359 Hotel Captain Cook 359 Valdez Center 363 Alyeska Prince Hotel 395 Soldotna Sports Center 504 Centennial Hall Center -Westmark Baranof - Juneau -Alaska Native Brotherhood Hall -Sitka Centennial Hall -Ted Ferry Center --

Exhibit Space (SF) 0 0 0 0 32,000 50,000 0 0 0 0 20,000 0 0 0 0 0

Meeting Space (SF) 5,087 6,335 13,228 14,740 0 10,729 14,000 9,507 1,710 9,251 4,352 3,010 5,102 6,156 4,441 680

Multipurpose/ Ballroom Space (SF) 0 9,375 7,680 19,306 0 25,332 0 9,000 6,464 13,432 0 11,275 0 0 0 4,263

FEASIBILITY ANALYSIS OF A NEW CONVENTION CENTER and PERFORMING ARTS CENTER IN FAIRBANKS Analysis of Competitive/Comparable Facilities and Communities Page 38

Sellable Space (SF) 5,087 15,710 20,908 34,046 32,000 86,061 14,000 18,507 8,174 22,683 24,352 14,285 5,102 6,156 4,441 4,943

As shown n on the prev vious page, seven s of the competitive ffacilities are located in An nchorage, an nd the distances of all of thesse facilities fro om Fairbankss range from 274 miles to o 1,085 miles.. The amoun nt and ellable space offered at the e competitive e/regional fac ilities reviewe ed varies as w well. Only three of type of se the facilitiies offer traditional “prime” exhibit spacce, ranging frrom 20,000 to o 50,000 squa are feet. The e total sellable sp pace (exhibit, ballroom, an nd breakout meeting m spacee) ranges from m 4,441 square feet at the e Sitka Centennia al Hall to 86,,061 square feet f offered at the Dena’’ina Conventiion Center in n Anchorage. The characteriistics and mix m of the se ellable space e offerings w within each of these competitive faccilities underscorres the impo ortance of offfering a suffficient volumee and mix o of functional facility space es for convention, tradeshow w, conference and meeting events. p the location of ea ach of the com mpetitive facillities.

Exhibit 2 presents Exhibit 2 Competitive Convention F Facilities

e venues are concentrated c in the largesst cities within n the southern half of the state.

As shown, most of the The mark kets with the highest numb ber of venuess include Ancchorage and JJuneau. Ove erall and as w will be discussed later in this chapter, c the number n of ev vent facilities iin Alaska as ccompared to p population levvels is htly higher th han other states in the co ountry; howevver, the ratio of square fo ootage consistentt with or sligh offered att these facilitties per popu ulation and hotel rooms iss significantlyy higher than n the average e U.S. state. Ad dditionally, ass the number of in-state convention c an nd conference e events thatt rotate is norrmally relatively correlated with w populattion (on a state-by-statee basis), these issues contribute to o the on that many y Alaskan con nvention/confference facilitties operate a at lower occu upancy per ssquare observatio

FEASIBILITY Y ANALYSIS OF A NEW CONVENT TION CENTER an nd PERFORMING ARTS CENTER IIN FAIRBANKS Analysis of Competitive/Com C mparable Facilitiess and Communitiies Page 39

foot than comparable convention centers in other states in the country. This also tends to influence higher annual financial operating deficits (on a square footage basis) for Alaskan facilities, as will be discussed in a subsequent chapter of this report.

Comparable Convention Centers Additionally, certain inferences can be made by reviewing convention facilities operating in markets throughout the country of a similar size or geographic positioning. The facilities reviewed were selected based on their characteristics, total space offered and the size and location of the markets in which they are located. Several Alaskan convention center facilities were also included for comparative evaluation.

Exhibit 3 presents a summary of selected comparable facilities and markets analyzed.

Exhibit 3 Comparable Convention Markets and Facilities

Market

Facility

Anchorage, AK Anchorage, AK Bismarck, ND Coralville, IA Davenport, IA Dubuque, IA Fort Smith, AR Grand Junction, CO Juneau, AK Ketchikan, AK Layton, UT Niagara Falls, NY Ogden, UT Sitka, AK St. Charles, MO St. George, UT Valdez, AK Wenatchee, WA

Egan Center Dena'ina Civic & Convention Center Bismarck Civic Center Coralville Marriott Hotel & Conference Center Rivercenter/Adler Theatre Grand River Center Fort Smith Convention Center - America's Best Corp PAC Two Rivers Convention Center Centennial Hall Ted Ferry Civic Center Davis Conference Center The Conference Center Niagara Falls Ogden Eccles Conference Center/Peery Theater Harrigan Centennial Hall St. Charles Convention Center Dixie Center Valdez Convention & Civic Center Performing Arts Center of Wenatchee - Wenatchee Convention Center

Each of the listed facilities is located in a market that is similar to the Fairbanks area, with respect to population size, geographic proximity to other metropolitan areas and/or facility size/characteristics.

Facilities included range from hotel/convention centers (operating under a public/private partnership model) to stand-alone convention centers or convention/civic centers (including some that are part of arts districts). As available, operational data was obtained and analyzed from these facilities and host communities to assist in the understanding of the operational characteristics of a potential convention center. Case studies of the selected facilities are presented later in this chapter, highlighting the physical facility, use, funding and operational data that was obtained.

FEASIBILITY ANALYSIS OF A NEW CONVENTION CENTER and PERFORMING ARTS CENTER IN FAIRBANKS Analysis of Competitive/Comparable Facilities and Communities Page 40

Physical Space Characteristics The following exhibits provide comparisons of the space offerings at the selected comparable convention facilities, including exhibit, ballroom, breakout meeting and total sellable space.

Exhibit Space Exhibit 4 presents a comparison of total prime exhibit space offered at the comparable facilities reviewed.

For purposes of this analysis, only “prime” exhibit space has been included in the exhibit. “Prime” space refers to the dedicated exhibition area that is column-free or with minimal columns, has a concrete floor and high ceilings. While space in certain facilities may be termed “exhibit space,” only space fitting the aforementioned description is considered exhibit space. Other sellable areas of facility space would be either considered as “ballroom/multipurpose” or “meeting space” (to be subsequently discussed).

Exhibit 4 Convention Facility Characteristics – Prime Exhibit Space

Anchorage, AK (1) Bismarck, ND St. George, UT Fort Smith, AR St. Charles, MO Davenport, IA Niagara Falls, NY Dubuque, IA Coralville, IA Layton, UT Wenatchee, WA Valdez, AK Sitka, AK Ogden, UT Ketchikan, AK Juneau, AK Grand Junction, CO Anchorage, AK (2)

50,000 48,600 46,600 40,000 35,700 33,400 32,200 30,000 30,000 18,000 7,600 0 0 0 0 0

Average = 33,800 Median = 33,400

0 0 0

10,000

20,000

30,000

40,000

50,000

60,000

(1) Dena’ina CC; (2) Egan Center Note: Average figures do not include facilities not offering exhibit space Source: Facility management and industry publications.

As presented, the Dena’ina Convention Center in Anchorage, Alaska incorporates the largest amount of prime exhibit space with 50,000 square feet. Seven comparable facilities do not offer any prime exhibit space. The average amount of exhibit space offered at facilities offering prime exhibit space is approximately 33,800 square feet and the median square feet of exhibit space among the facilities offering it is approximately 33,400 square feet.

FEASIBILITY ANALYSIS OF A NEW CONVENTION CENTER and PERFORMING ARTS CENTER IN FAIRBANKS Analysis of Competitive/Comparable Facilities and Communities Page 41

Meeting/Ballroom Space Sufficient modern meeting and ballroom space is very important in attracting and accommodating events in the convention, conference and meetings industry. Event organizers see it as an important factor in their selection of host cities. Civic, exhibition, or public show-focused facilities tend to have more limited offerings of breakout meeting and ballroom space.

However, the inclusion of some meeting/banquet/multipurpose space is typically necessary to allow the facility to compete for important economic impact generating events with attendees originating from outside the local area. Exhibit 5 compares the square feet of ballroom space offered at the comparable facilities.

Exhibit 5 Convention Facility Characteristics – Ballroom Space

Anchorage, AK (1) Coralville, IA Ogden, UT Anchorage, AK (2) Grand Junction, CO St. Charles, MO St. George, UT Layton, UT Dubuque, IA Fort Smith, AR Juneau, AK Niagara Falls, NY Wenatchee, WA Davenport, IA Valdez, AK Ketchikan, AK Sitka, AK Bismarck, ND

25,300 22,200 19,600 19,300 18,600 16,200 13,200 12,600 12,000 11,400 11,300 10,500 10,100 8,200 6,500 4,300

Average = 13,800 Median = 12,300

0 0 0

5,000

10,000

15,000

20,000

25,000

30,000

(1) Dena’ina CC; (2) Egan Center Source: Facility management and industry publications.

Ballroom/multipurpose space is an important characteristic that event planners review when selecting a potential facility. Planners have increasingly placed a premium on such space in their selection of host cities. Ballrooms tend to be the versatile and highly-utilized spaces in convention/conference facilities, accommodating a diversity of functions such as food functions, general assemblies, meetings and even exhibits. Development of dedicated, state-of-the-art ballroom/multipurpose space has taken place in many recently-built centers, while many older centers do not offer such dedicated space. As presented, the Dena’ina Convention Center in Anchorage, Alaska offers the most ballroom square footage with 25,300 square feet. All but two facilities included in this analysis offer ballroom space, the average ballroom space offered is 13,800 square feet, with a median of 12,300 square feet.

FEASIBILITY ANALYSIS OF A NEW CONVENTION CENTER and PERFORMING ARTS CENTER IN FAIRBANKS Analysis of Competitive/Comparable Facilities and Communities Page 42

Exhibit 6 compares the square footage of breakout meeting space offered among the comparable facilities.

Exhibit 6 Convention Facility Characteristics – Breakout Meeting Space

Bismarck, ND St. George, UT Anchorage, AK (1) Dubuque, IA Davenport, IA Niagara Falls, NY Layton, UT Fort Smith, AR Wenatchee, WA Anchorage, AK (2) Ogden, UT St. Charles, MO Coralville, IA Sitka, AK Juneau, AK Grand Junction, CO Valdez, AK Ketchikan, AK

17,300 16,900 14,700 13,200 13,200 12,800 12,800 12,600 11,600 10,700 9,000 6,500 5,400 4,450 3,000 2,100

Average = 9,400 Median = 11,150

1,700 700 0

4,000

8,000

12,000

16,000

20,000

(1) Egan Center; (2) Dena’ina CC Source: Facility management and industry publications.

The level of meeting space ranges from 700 square feet in Ketchikan, Alaska at the Ted Ferry Civic Center to 17,300 square feet at the Bismarck Civic Center in Bismarck, North Dakota. The average meeting space offered at the facilities is 9,400 square feet, and the median among the comparable facilities is 11,150 square feet.

FEASIBILITY ANALYSIS OF A NEW CONVENTION CENTER and PERFORMING ARTS CENTER IN FAIRBANKS Analysis of Competitive/Comparable Facilities and Communities Page 43

Total Sellable Space Exhibit 7 outlines a comparison of the total sellable space (i.e., exhibit, ballroom and breakout meeting space) offered at the comparable facilities reviewed.

Exhibit 7 Convention Facility Characteristics – Total Sellable Space

Anchorage, AK (1) St. George, UT Bismarck, ND Fort Smith, AR St. Charles, MO Coralville, IA Niagara Falls, NY Dubuque, IA Davenport, IA Layton, UT Anchorage, AK (2) Wenatchee, WA Ogden, UT Grand Junction, CO Juneau, AK Valdez, AK Ketchikan, AK Sitka, AK

86,000 76,700 65,900 64,000 58,400 57,600 55,500 55,200 54,800 43,400 34,000 29,300 28,600 20,700 14,300 8,200

Average = 42,300 Median = 49,100

5,000 4,450 0

20,000

40,000

60,000

80,000

100,000

(1) Dena’ina CC; (2) Egan Center Source: Facility management and industry publications.

The amount of total sellable space (exhibit, ballroom and breakout meeting space) offered at the comparable facilities reviewed varies widely, averaging 42,300 square feet, with a median of 49,100 square feet. The largest facility in terms of total sellable space is the Dena’ina Convention Center, with approximately 86,000 total sellable square feet. Harrigan Centennial Hall in Sitka, Alaska offers the least amount of total sellable space, with approximately 4,450 square feet.

FEASIBILITY ANALYSIS OF A NEW CONVENTION CENTER and PERFORMING ARTS CENTER IN FAIRBANKS Analysis of Competitive/Comparable Facilities and Communities Page 44

Demographic and Socioeconomic Market Characteristics A primary component in assessing the potential success of a new convention center in Fairbanks is the demographic and socioeconomic profile of the local market. To gain an understanding of the relative strength of the Fairbanks market area, it is useful to compare various demographic and socioeconomic characteristics among the comparable markets supporting similar venues.

Hotel Rooms Exhibit 8 presents the estimated total number of hotel rooms offered in each of the comparable markets reviewed.

Exhibit 8 Convention Market Characteristics – Total Hotel Rooms Anchorage, AK

8,700

Niagara Falls, NY

5,000

Davenport, IA

5,000

Fairbanks, AK

3,275

Grand Junction, CO

2,850

Bismarck, ND

2,350

St. George, UT

2,300

Coralville, IA

2,250

St. Charles, MO

2,000

Fort Smith, AR

2,000

Dubuque, IA

1,770

Ogden, UT

1,700

Layton, UT

1,600

Wenatchee, WA

1,100

Juneau, AK

947

Ketchikan, AK

400

Valdez, AK

385

Sitka, AK

200 0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

Source: CVB websites and industry publications

As shown in the exhibit, the highest inventory of hotel rooms within the comparable markets can be found in Anchorage, Alaska, with 8,700 rooms. The 200 rooms offered in Sitka, Alaska represent the smallest number of rooms offered within the comparable markets reviewed. The Fairbanks market offers approximately 3,275 year-round rooms, which ranks fourth of the comparable markets reviewed.

FEASIBILITY ANALYSIS OF A NEW CONVENTION CENTER and PERFORMING ARTS CENTER IN FAIRBANKS Analysis of Competitive/Comparable Facilities and Communities Page 45

Population Exhibit 9 presents population statistics among the comparable markets reviewed.

Exhibit 9 Convention Market Characteristics – Total Population

Market St. Charles, MO Niagara Falls, NY Layton, UT Ogden, UT Davenport, IA Coralville, IA Anchorage, AK Fort Smith, AR Dubuque, IA Grand Junction, CO St. George, UT Bismarck, ND Fairbanks, AK Wenatchee, WA Juneau, AK Ketchikan, AK Sitka, AK Valdez, AK Average (Excluding Fairbanks) Fairbanks Rank (Out of 18)

City 61,206 50,358 66,743 83,284 104,307 19,978 296,964 86,229 58,157 49,792 76,464 60,936 35,858 29,571 31,208 7,180 8,810 3,766

County/ Borough

25-Mile

100-Mile

200-Mile

363,113 1,913,911 4,047,787 9,502,396 211,939 913,683 2,823,645 12,464,538 306,062 714,791 2,481,442 3,268,034 229,837 542,339 2,480,109 3,278,147 170,542 383,470 2,596,410 20,598,398 135,796 358,848 2,034,500 14,392,560 296,964 305,580 430,779 455,083 125,420 252,062 2,115,248 8,152,256 94,642 153,837 3,091,927 20,195,654 148,772 145,243 368,917 3,818,724 143,782 138,597 282,108 2,831,855 84,431 106,964 236,370 871,729 99,085 97,685 106,003 114,755 73,433 95,199 3,743,354 9,065,243 31,208 31,216 45,988 52,196 13,100 14,502 20,719 33,801 8,810 8,783 45,882 69,792 9,323 3,853 99,060 455,742

64,400

144,000

12

11

357,800 1,585,000 6,441,500 13

14

15

Sorted by 25-Mile Population.

Source: Claritas, Inc., 2011

The population of the comparable markets varies widely. Among the selected comparable markets reviewed, Valdez, Alaska’s population represents the lowest in terms of city population, while Anchorage Alaska’s city population of 297,000 is the largest. The overall average city population (excluding Fairbanks) approximates 64,400. Within a 25-mile radius, the population ranges from a low of 3,900 in Valdez, Alaska to a high of 1.9 million in St. Charles, Missouri and a market average (excluding Fairbanks) of 357,800. Within a 200-mile radius, the population ranges from a low in Ketchikan, Alaska of 33,800 to 20.6 million in Davenport, Iowa. Approximately 114,800 people reside within 200 miles of Fairbanks.

The overall average population (excluding Fairbanks) within a 200-mile radius approximates 6.4 million people.

FEASIBILITY ANALYSIS OF A NEW CONVENTION CENTER and PERFORMING ARTS CENTER IN FAIRBANKS Analysis of Competitive/Comparable Facilities and Communities Page 46

Exhibit 10 presents each comparable market’s calculated “strength of visitor orientation” ratio. This ratio is developed by dividing total hotel rooms by population, and then multiplying by 100. This analysis provides an indication of each community’s existing level of tourism and general desirability as a destination, as inferred through its ratio of hotel rooms to population.

Exhibit 10 Convention Market Characteristics – Strength of Visitor Orientation*

Coralville, IA Niagara Falls, NY Valdez, AK Fairbanks, AK Grand Junction, CO Ketchikan, AK Davenport, IA Bismarck, ND Wenatchee, WA St. Charles, MO St. George, UT Juneau, AK Dubuque, IA Anchorage, AK Anchorage, AK Layton, UT Fort Smith, AR Sitka, AK Ogden, UT

12.2 9.7 9.6 9.3 6.3 5.5 5.0 4.1 3.8 3.2 3.2 3.1 3.1 3.0 3.0 2.5 2.4 2.2 2.2 0

2

4

6

8

10

12

14

*Ratio represents number of hotel rooms in a market divided by population, multiplied by 100.

Source: Claritas Inc., 2011. CVB management and industry publications, 2011.

As shown, Fairbanks ranks fourth among the comparable markets reviewed when considering its ratio of hotel rooms to population. Fairbanks’ ranking is well above the median among the set of convention markets, suggesting that the community is positioned strongly as a “visitor destination.” It should be noted that Coralville, Iowa’s top ranking is somewhat deceiving as it is adjacent to Iowa City, which is home to the University of Iowa, which has driven significant hotel development in Coralville itself.

FEASIBILITY ANALYSIS OF A NEW CONVENTION CENTER and PERFORMING ARTS CENTER IN FAIRBANKS Analysis of Competitive/Comparable Facilities and Communities Page 47

Average Household Income Average household income reflects a household’s income that is remaining after taxes have been paid, which is available for disposable spending and saving. This statistical figure can be valuable when evaluating consumer capacity and propensity to expend personal income on leisure goods and services, such as attending certain events at public assembly facilities. Exhibit 11 shows the average household income within a 25-, 100- and 200-mile radius of the comparable convention markets adjusted for costof-living within the City, County/Borough and 25-mile radius measurements.

Exhibit 11 Convention Market Characteristics – Average Household Income Adjusted for Cost-of-Living

City

County/ Borough

25-Mile

100-Mile

200-Mile

Ogden, UT St. Charles, MO Layton, UT Valdez, AK Bismarck, ND Anchorage, AK Coralville, IA St. George, UT Juneau, AK Grand Junction, CO Davenport, IA Dubuque, IA Wenatchee, WA Fairbanks, AK Niagara Falls, NY Fort Smith, AR Ketchikan, AK Sitka, AK

$55,860 $72,884 $77,322 $68,993 $63,059 $65,245 $65,613 $62,767 $62,446 $59,735 $54,356 $56,819 $55,943 $48,389 $40,417 $60,582 $50,855 $55,371

$69,458 $87,432 $84,060 $58,847 $66,922 $65,245 $68,044 $63,557 $62,446 $62,297 $62,611 $61,020 $60,100 $58,106 $55,919 $61,594 $58,349 $55,371

$76,270 $75,605 $73,270 $68,679 $65,805 $64,753 $64,237 $63,545 $62,438 $62,184 $60,631 $59,784 $59,659 $58,204 $57,204 $57,070 $57,051 $55,484

$70,676 $62,557 $70,672 $89,574 $55,867 $82,290 $57,181 $56,854 $81,525 $65,447 $58,390 $61,126 $77,548 $77,690 $59,009 $53,172 $68,589 $81,759

$67,511 $56,798 $67,455 $81,354 $54,850 $81,398 $70,525 $64,987 $80,110 $73,703 $68,664 $69,390 $69,966 $76,000 $58,539 $53,330 $70,591 $77,389

Average (Excluding Fairbanks)

$60,500

$64,900

$63,700

$67,800

$68,600

17

16

14

5

5

Market

Fairbanks Rank (Out of 18) Sorted by 25-Mile Average Household Income.

Source: Claritas, Inc., 2011

The comparable markets’ 25-mile average household income ranges from a low of $55,500 in Sitka, Alaska, to a high of $76,300 in Ogden, Utah when adjusting for cost-of-living factors. If the data are not adjusted for cost-of-living, the Alaska markets all rank among the top of the markets reviewed. However, considering the higher cost of living experienced throughout much of Alaska, the actual relative value of a given household’s income is lessened. The adjusted average household income among the comparable convention markets (excluding Fairbanks) with respect to the 25-mile ring is $63,700, which is $5,500 more than Fairbanks’ adjusted average household income. The 100 and 200-mile radius metrics are somewhat skewed because there was no adjustment for cost-of-living made.

FEASIBILITY ANALYSIS OF A NEW CONVENTION CENTER and PERFORMING ARTS CENTER IN FAIRBANKS Analysis of Competitive/Comparable Facilities and Communities Page 48

Median Age Exhibit 12 presents the median age for the selected comparable convention facility markets.

Exhibit 12 Convention Market Characteristics – Median Age

Market

City

County/ Borough

25-Mile

100-Mile

200-Mile

Ogden, UT Fairbanks, AK Layton, UT Anchorage, AK St. George, UT Coralville, IA Bismarck, ND Fort Smith, AR Grand Junction, CO Ketchikan, AK Sitka, AK Juneau, AK St. Charles, MO Wenatchee, WA Davenport, IA Dubuque, IA Valdez, AK Niagara Falls, NY

31.3 29.0 29.4 32.9 33.7 34.5 37.2 36.0 38.6 37.6 37.4 37.9 38.8 37.0 35.6 39.2 38.9 40.6

31.5 30.5 29.4 32.9 32.9 33.2 36.3 36.2 37.1 38.0 37.4 37.9 37.1 39.2 37.0 38.4 39.4 41.4

30.3 30.4 31.1 33.0 33.1 35.3 36.6 36.9 37.1 37.4 37.4 37.9 37.9 37.9 38.6 38.8 38.8 40.3

29.6 30.7 29.6 33.8 31.5 38.6 40.0 36.8 37.7 37.9 37.9 38.4 38.0 36.6 38.4 37.7 34.4 39.9

30.0 31.2 30.0 34.0 35.9 37.3 36.7 36.8 35.4 37.7 38.3 38.6 38.2 37.4 36.7 36.8 34.0 40.3

Average (Excluding Fairbanks)

36.3

36.2

36.4

36.3

36.1

1

2

2

3

3

Fairbanks Rank (Out of 18) Sorted by 25-Mile Median Age. Source: Claritas, Inc., 2011

As illustrated, the median age ranges from 29.4 years of age in Layton, Utah to 41.4 years of age in Niagara Falls, New York, when comparing the market’s county/borough median age. Fairbanks North Star Borough’s median age of 30.5 years of age is much lower than the average comparable convention markets (excluding Fairbanks) median age of 36.2 years of age. This trend remained consistent throughout the city, county/borough, primary and secondary markets analyzed, all falling within one year.

FEASIBILITY ANALYSIS OF A NEW CONVENTION CENTER and PERFORMING ARTS CENTER IN FAIRBANKS Analysis of Competitive/Comparable Facilities and Communities Page 49

Corporate Inventory The number of corporations in a market is an important characteristic to evaluate when determining the viability of a convention center. From a direct standpoint, local corporations tend to provide a substantial amount of utilization for convention centers, through conferences, meetings, banquets, training and other such events. Indirectly, the size of a local corporate base also tends to be correlated with the level and breadth of supporting community amenities (i.e., hotels, restaurants, transportation infrastructure, etc.).

Exhibit 13 presents the number of businesses within the comparable convention markets analyzed.

Exhibit 13 Convention Market Characteristics – Corporate Inventory (Number of Businesses)

City

County/ Borough

25-Mile

100-Mile

200-Mile

St. Charles, MO Niagara Falls, NY Layton, UT Anchorage, AK Davenport, IA Ogden, UT Coralville, IA Fort Smith, AR Dubuque, IA Grand Junction, CO Bismarck, ND Fairbanks, AK St. George, UT Wenatchee, WA Juneau, AK Ketchikan, AK Sitka, AK Valdez, AK

3,963 1,617 2,796 17,449 5,099 4,267 1,534 4,964 3,097 5,525 4,343 3,417 4,050 1,763 2,367 927 713 398

11,289 6,857 8,349 17,449 7,551 7,130 5,044 5,719 4,196 6,852 4,539 5,201 5,381 3,446 2,367 1,240 713 1,014

72,307 33,578 27,998 17,497 16,657 15,745 14,353 9,716 6,991 6,729 5,551 5,167 5,118 3,854 2,367 1,328 713 408

153,147 105,034 82,393 24,187 105,493 82,231 85,922 79,941 131,339 23,218 14,299 5,702 10,188 159,734 3,721 1,808 3,523 4,844

372,155 478,880 118,693 26,472 779,859 119,405 562,731 318,733 763,885 183,212 50,886 6,483 110,572 384,219 4,253 2,849 5,809 26,366

Average (Excluding Fairbanks)

3,820

5,830

14,170

63,000

253,470

9

10

12

14

15

Market

Fairbanks Rank (Out of 18) Sorted by 25-Mile Corporate Inventory.

Source: Claritas, Inc., 2011

St. Charles, Missouri has the highest number of businesses within 25 miles with 72,300, while Valdez, Alaska’s 25-mile radius only has 400 businesses. The average number of businesses among the comparable convention markets 25-mile radius (excluding Fairbanks) is 14,200, which is larger than Fairbanks’ 25-mile number of businesses of approximately 5,200. Under the 200-mile ring, Fairbanks ranks fifteenth among the average comparable convention markets, with 6,500 businesses, which is 247,000 less than the comparable convention market average (excluding Fairbanks).

FEASIBILITY ANALYSIS OF A NEW CONVENTION CENTER and PERFORMING ARTS CENTER IN FAIRBANKS Analysis of Competitive/Comparable Facilities and Communities Page 50

Market Education Attainment Exhibit 14 presents the education level attained by the 25-mile population over 25 years of age for each comparable convention market analyzed.

Exhibit 14 Convention Market Characteristics – Market Education Attainment

Market

Professional Some High High School School Doctorate Less than School Grad Some Associate Bachelor Master's Degree Degree Degree Degree 9th Grade (No Diploma) (inc Equivlency) College Degree

Bachelor Degree or Higher

Coralville, IA Juneau, AK St. Charles, MO Anchorage, AK Bismarck, ND Layton, UT Niagara Falls, NY Ogden, UT Fairbanks, AK Grand Junction, CO Sitka, AK Davenport, IA Ketchikan, AK Dubuque, IA Wenatchee, WA St. George, UT Valdez, AK Fort Smith, AR

2.3% 1.0% 3.8% 2.3% 4.4% 4.4% 3.5% 2.9% 2.0% 3.8% 1.8% 3.6% 2.5% 4.3% 8.9% 2.9% 1.3% 8.1%

4.2% 2.4% 7.7% 4.7% 3.9% 6.0% 8.4% 5.2% 3.8% 7.2% 6.4% 7.2% 7.8% 6.1% 7.9% 6.6% 4.6% 12.7%

25.1% 25.8% 26.1% 24.7% 24.6% 25.4% 31.4% 27.3% 28.6% 31.5% 27.9% 31.3% 30.1% 39.1% 28.2% 27.9% 21.8% 34.2%

21.8% 29.2% 22.9% 28.8% 23.5% 26.1% 19.0% 28.2% 30.2% 23.5% 27.3% 23.7% 28.1% 19.3% 22.3% 30.2% 39.2% 23.0%

10.2% 6.4% 7.1% 8.1% 13.7% 8.8% 10.5% 9.6% 9.3% 7.9% 10.7% 9.3% 7.2% 8.1% 9.9% 10.0% 10.7% 7.6%

23.4% 23.2% 19.8% 20.8% 22.9% 19.5% 15.1% 19.0% 15.3% 17.1% 14.4% 17.2% 15.1% 14.7% 14.8% 15.3% 15.2% 9.8%

8.3% 7.9% 9.0% 7.5% 5.1% 6.8% 8.9% 5.9% 7.6% 6.3% 7.3% 5.8% 6.2% 5.9% 5.9% 5.0% 5.6% 3.1%

2.3% 2.8% 2.3% 2.0% 1.4% 1.8% 1.9% 1.2% 1.5% 2.0% 2.3% 1.3% 1.5% 1.5% 1.6% 1.3% 0.4% 1.1%

2.4% 1.3% 1.3% 1.0% 0.5% 1.3% 1.2% 0.7% 1.9% 0.5% 1.8% 0.7% 1.6% 1.1% 0.7% 0.9% 1.2% 0.5%

36.4% 35.3% 32.4% 31.3% 29.9% 29.4% 27.1% 26.9% 26.2% 26.0% 25.9% 24.9% 24.3% 23.1% 22.9% 22.5% 22.4% 14.4%

AVG (Excl. Fairbanks)

3.6%

6.4%

28.4%

25.7%

9.2%

17.5%

6.5%

1.7%

1.1%

26.8%

15

17

7

2

10

11

5

10

2

9

Fairbanks Rank (out of 18)

Based on 25-Mile Population (25 years and older) Source: Claritas, Inc., 2011

Currently, 26.2 percent of Fairbanks’ 25-mile population over 25 years of age has obtained a bachelor’s degree or higher, which ranks ninth out of the 18 comparable convention markets. Coralville, Iowa has the highest percentage of population over 25 years of age that has attained a bachelor degree or higher, with 36.4 percent, while Fort Smith, Arkansas’ population has the lowest percentage of bachelor degrees or higher at 14.4 percent.

FEASIBILITY ANALYSIS OF A NEW CONVENTION CENTER and PERFORMING ARTS CENTER IN FAIRBANKS Analysis of Competitive/Comparable Facilities and Communities Page 51

Comparable Convention Center Summary Exhibit 15 presents a summary comparison of the market, facility, type of facility, amount of sellable event space, total market hotel rooms, year of opening, estimated initial construction costs, owner/operator, total number of hosted events, and total operating profit/deficit at the selected comparable convention center facilities reviewed in a recent year.

Exhibit 15 Convention Facility Characteristics – Summary Comparison

Type

Sellable Market Event Hotel Year Space Rooms Open Const. Cost

Facility

Anchorage, AK

Egan Center

CC

34,000

8,100

1984

City

SMG

n/a

($419,400)

Anchorage, AK

Dena'ina Civic & Conv. Center

CC

86,000

8,100

2008 $111 million

City

SMG

225

($124,000)

Bismarck, ND

Bismarck Civic Center

CC

65,900

2,350

1969

n/a

City

City

292

($199,250)

Coralville, IA

Coralville Marriott Hotel & Conf. Ctr. (1)

Hotel/CC

57,600

2,250

2006

$60 million

City

Hotel

n/a

n/a

Davenport, IA

Rivercenter/Adler Theatre

CC/PAC

54,800

5,000

1983

n/a

City

Compass

239

($805,000)

Dubuque, IA

Grand River Center (2)

Hotel/CC

55,200

1,770

2003 $51.3 million

City

Hotel

n/a

n/a

Fort Smith, AR

Fort Smith Conv. Ctr. / PAC

Hotel/CC/PAC

64,000

2,000

2001

$27 million

City

City

250

($500,000)

Grand Junction, CO Two Rivers Convention Center

CC

20,700

2,850

1975

n/a

City

City

954

($126,000)

Layton, UT

Davis Conference Center

Hotel/CC

43,400

1,600

2004 $10.5 million

County

Hotel

700

($400,000)

Ogden, UT

Peery Thtr & Ogden Eccles Conf. Ctr.

CC/PAC

28,600

1,700

1997

n/a

County

SMG

72

($549,900)

Sitka, AK

Harrigan Centennial Hall

CC/PAC

4,450

200

1967

n/a

City/Borough

City/Borough

n/a

($300,000)

St. Charles, MO

St. Charles Convention Center

CC

58,400

2,000

2005

$35 million

Authority

Global Spectrum

463

($220,000)

St. George, UT

Dixie Center

CC

76,700

2,300

1998

$26 million

City/County

City/County

200

($500,000)

n/a

Owner

Operator

# of Operating Events Prof/Def.

Market

(1) & (2) Construction cost figures include hotel costs Source: Facility management and industry publications, 2011.

As shown, of the 13 facilities presented, each varies in size, structure, cost and operations. All facilities are owned by the public sector, while operations are handed via a mix of public and private (under contract by third party private management firms or a hotel operator). Each of the stand-alone (i.e., not physically and operationally integrated with a hotel) convention centers operate at an annual operating deficit, requiring public sector subsidy. Three of the facilities are operated under contract by the attached hotel property, one of which (Layton, UT) receives an operating subsidy allocation for its conference center component which is financially allocated separately from the hotel component (however, this is not the norm for public/private partnerships). The financial operations for the remaining two hotel/convention centers are inextricably tied together (with shared staffing, overhead, etc.) and are operated without ongoing public subsidy.

FEASIBILITY ANALYSIS OF A NEW CONVENTION CENTER and PERFORMING ARTS CENTER IN FAIRBANKS Analysis of Competitive/Comparable Facilities and Communities Page 52

Comparable Performing Arts Centers Additionally, certain inferences can be made by reviewing performing arts facilities operating in similarsized markets throughout the country.

The facilities reviewed were selected based on their characteristics, mission/market orientation, total seating, and the size and location of the markets in which they are located. Exhibit 16 presents a summary of selected comparable performing arts facilities and markets analyzed.

Exhibit 16 Comparable Performing Arts Markets and Facilities

Market

Facility

Type

Anchorage, AK Appleton, WI Charleston, WV Davenport, IA Fort Smith, AR Green Bay, WI Kodiak, AK Ogden, UT Paducah, KY San Luis Obispo, CA Sitka, AK Valdez, AK Wenatchee, WA

Alaska Center for the Performing Arts Fox Cities Performing Arts Center Clay Center Rivercenter/Adler Theatre Fort Smith Convention Center/America's Best Corp PAC Edward W. Weidner Center Gerald C. Wilson Auditorium Peery Theater & Ogden Eccles Conference Center Luther F. Carson Four Rivers Center Christopher Cohan Center Harrigan Centennial Hall Valdez Convention & Civic Center Wenatchee Convention Center & PAC

PAC PAC PAC CC/PAC CC/PAC PAC PAC CC/PAC PAC PAC CC/PAC CC/PAC CC/PAC

Physical Space Characteristics The following exhibits provide comparisons of the key characteristics at the selected comparable performing arts facilities, including the number of seats in the main performance space and additional components that can range from additional theaters to meeting and rehearsal space.

Exhibit 17 Comparable Markets and Facilities Market

Type

Year Built

Main Seats Other Components

Anchorage, AK Appleton, WI Charleston, WV Davenport, IA Fort Smith, AR Green Bay, WI Kodiak, AK Ogden, UT Paducah, KY San Luis Obispo, CA Sitka, AK Valdez, AK Wenatchee, WA

PAC PAC PAC CC/PAC CC/PAC PAC PAC CC/PAC PAC PAC CC/PAC CC/PAC CC/PAC

1988 2002 2003 1982 2001 1993 1986 1923 2004 1996 1967 1982 2000

2,000 2,100 1,883 2,347 1,331 2,012 500 800 1,806 1,298 500 487 605

Secondary theater, black box theater, rehearsal & meeting space Secondary theater, two reception/rehearsal rooms Black box theater, museum, planetarium Convention/meeting space Convention/meeting space Two additional smaller multipurpose theaters, rehearsal studio Two 'pods' that can either join main theater or separate into own space Convention/meeting space Secondary theater and two reception spaces Secondary theater and multipurpose pavilion Convention/meeting space Convention/meeting space Convention/meeting space

FEASIBILITY ANALYSIS OF A NEW CONVENTION CENTER and PERFORMING ARTS CENTER IN FAIRBANKS Analysis of Competitive/Comparable Facilities and Communities Page 53

Number of Seats Exhibit 18 presents a comparison of the total number of seats offered in the primary performance space of the comparable facilities selected for review.

Exhibit 18 Performing Arts Facility Characteristics – Number of Seats Davenport, IA

2,347

Appleton, WI

2,100

Green Bay, WI

2,021

Anchorage, AK

2,000

Charleston, WV

1,883

Paducah, KY

1,806

Fort Smith, AR

1,331

San Luis Obispo, CA

1,298

Ogden, UT

800

Wenatchee, WA

605

Sitka, AK

500

Kodiak, AK

500

Valdez, AK

487 0

500

Average = 1,360 Median = 1,331

1,000

1,500

2,000

2,500

Source: Facility management and industry publications.

Davenport, Iowa’s Adler Theater has the highest amount of seating in its venue with 2,347 seats, while the Valdez’s Civic Center in Valdez, Alaska incorporates the lowest amount of seats, with 487. The total seat average among the comparable performing arts facilities is 1,359 seats and the median among the facility set is 1,331 seats.

There has been a long-standing perception in the performing arts industry that 2,000 seats is effectively considered a “magic number” in terms of being one of several key facility characteristics necessary for attracting prominent, national touring productions, such as Broadway-type shows. As such, it is interesting to note the stratification of the selected comparable facilities shown in the exhibit. The top six venues have seating capacities that approximate the 2,000 seat figure. Based on conversations with management of each of these facilities, all attempt to attract national touring theatricals and musicals.

The remaining smaller facilities are much more focused on accommodating local arts groups.

FEASIBILITY ANALYSIS OF A NEW CONVENTION CENTER and PERFORMING ARTS CENTER IN FAIRBANKS Analysis of Competitive/Comparable Facilities and Communities Page 54

Demographic and Socioeconomic Market Characteristics Even more so than for a convention center project, a primary component in assessing the potential success of a new performing arts facility in Fairbanks is the demographic and socioeconomic profile of the local market. To gain an understanding of the relative strength of the Fairbanks market area, it is useful to compare various demographic and socioeconomic characteristics among the comparable markets supporting similar venues.

Population Exhibit 19 presents population statistics among the comparable performing arts markets reviewed.

Exhibit 19 Performing Arts Market Characteristics – Total Population

City

County/ Borough

25-Mile

100-Mile

200-Mile

Appleton, WI Ogden, UT Green Bay, WI Davenport, IA San Luis Obispo, CA Anchorage, AK Charleston, WV Fort Smith, AR Paducah, KY Fairbanks, AK (1) Wenatchee, WA Kodiak, AK Sitka, AK Valdez, AK

70,962 83,284 100,400 104,307 43,269 296,964 51,412 86,229 25,742 35,858 29,571 6,626 8,810 3,766

178,500 229,837 249,111 170,542 267,044 296,964 194,716 125,420 66,384 99,085 73,433 13,860 8,810 9,323

559,273 542,339 442,298 383,470 306,243 305,580 292,037 252,062 158,905 97,685 95,199 13,350 8,783 3,853

3,772,342 2,480,109 2,693,994 2,596,410 1,741,858 430,779 2,200,138 2,115,248 2,151,419 106,003 3,743,354 13,858 45,882 99,060

18,243,485 3,278,147 16,958,070 20,598,398 24,775,351 455,083 20,132,047 8,152,256 13,591,642 114,755 9,065,243 45,918 69,792 455,742

Average (Excluding Fairbanks)

70,100

144,900

258,700

1,852,700

10,447,800

9

9

10

11

12

Market

Fairbanks Rank (Out of 14) Sorted by 25-Mile Population.

Source: Claritas, Inc., 2011

The population of the comparable performing arts markets varies widely. Sitka, Alaska’s population represents the lowest in terms of county/borough population with 8,800, while Anchorage Alaska’s county/borough population of 297,000 represents the largest. The overall average county/borough population (excluding Fairbanks) approximates 144,900. Within a 100-mile radius, the population ranges from a low of 13,900 in Kodiak, Alaska to a high of 3.8 million in Appleton, Wisconsin and a market average (excluding Fairbanks) of 1.9 million.

FEASIBILITY ANALYSIS OF A NEW CONVENTION CENTER and PERFORMING ARTS CENTER IN FAIRBANKS Analysis of Competitive/Comparable Facilities and Communities Page 55

Average Household Income Exhibit 20 shows the average household income within the city, county/borough, and a 25-, 100- and 200-mile radius of the comparable performing arts markets.

Exhibit 20 Performing Arts Market Characteristics – Average Household Income Adjusted for Cost-of-Living

City

County/ Borough

25-Mile

100-Mile

200-Mile

Ogden, UT Valdez, AK Green Bay, WI Appleton, WI Anchorage, AK Kodiak, AK Davenport, IA Charleston, WV Wenatchee, WA Fairbanks, AK Fort Smith, AR Sitka, AK Paducah, KY San Luis Obispo, CA

$55,860 $68,993 $53,967 $67,424 $65,245 $61,523 $54,356 $70,866 $55,943 $48,389 $60,582 $55,371 $50,550 $38,345

$69,458 $58,847 $66,534 $69,184 $65,245 $63,568 $62,611 $59,456 $60,100 $58,106 $61,594 $55,371 $58,576 $45,462

$76,270 $68,679 $67,743 $67,431 $64,753 $64,585 $60,631 $59,744 $59,659 $58,204 $57,070 $55,484 $55,076 $43,356

$70,676 $89,574 $62,358 $63,548 $82,290 $80,669 $58,390 $45,743 $77,548 $77,690 $53,172 $81,759 $49,588 $66,948

$67,511 $81,354 $68,850 $68,765 $81,398 $70,265 $68,664 $56,247 $69,966 $76,000 $53,330 $77,389 $57,248 $81,434

Average (Excluding Fairbanks)

$58,400

$61,200

$61,600

$67,900

$69,400

13

12

10

5

5

Market

Fairbanks Rank (Out of 14) Sorted by 25-Mile Average Household Income.

Source: Claritas, Inc., 2011

The comparable markets’ 25-mile average household income ranges from a low of $43,400 in San Luis Obispo, California, to a high of $76,300 in Ogden, Utah. The average household income among the comparable performing arts markets (excluding Fairbanks) with the respect to the 25-mile ring is $61,600, which is $3,400 greater than Fairbanks’ average household income.

FEASIBILITY ANALYSIS OF A NEW CONVENTION CENTER and PERFORMING ARTS CENTER IN FAIRBANKS Analysis of Competitive/Comparable Facilities and Communities Page 56

Median Age Exhibit 21 presents the median age for the selected comparable performing arts facility markets.

Exhibit 21 Performing Arts Market Characteristics – Median Age

Market

City

County/ Borough

25-Mile

100-Mile

200-Mile

Ogden, UT Fairbanks, AK Kodiak, AK Anchorage, AK San Luis Obispo, CA Green Bay, WI Fort Smith, AR Appleton, WI Sitka, AK Wenatchee, WA Davenport, IA Valdez, AK Charleston, WV Paducah, KY

31.3 29.0 33.9 32.9 29.6 35.5 36.0 36.7 37.4 37.0 35.6 38.9 42.5 41.4

31.5 30.5 32.3 32.9 38.6 36.2 36.2 37.2 37.4 39.2 37.0 39.4 41.8 41.6

30.3 30.4 32.4 33.0 35.4 36.8 36.9 37.2 37.4 37.9 38.6 38.8 41.3 41.3

29.6 30.7 32.3 33.8 31.7 38.8 36.8 38.1 37.9 36.6 38.4 34.4 40.4 38.4

30.0 31.2 37.5 34.0 34.6 36.9 36.8 36.9 38.3 37.4 36.7 34.0 39.2 37.5

Average (Excluding Fairbanks)

36.1

37.0

36.7

35.9

36.1

1

1

2

2

2

Fairbanks Rank (Out of 14) Sorted by 25-Mile Median Age. Source: Claritas, Inc., 2011

As illustrated, the median age ranges from 29.0 years of age in Fairbanks, to 42.5 years of age in Charleston, West Virginia, when comparing the market’s city median age. The average comparable performing arts markets (excluding Fairbanks) median age was 36.1 years of age, with respect to the city analysis. Fairbanks ranked either first or second in all the market variables analyzed.

FEASIBILITY ANALYSIS OF A NEW CONVENTION CENTER and PERFORMING ARTS CENTER IN FAIRBANKS Analysis of Competitive/Comparable Facilities and Communities Page 57

Corporate Inventory Exhibit 22 presents the number of businesses within the comparable performing arts markets analyzed.

Exhibit 22 Performing Arts Market Characteristics – Corporate Inventory (Number of Businesses)

Market Appleton, WI Anchorage, AK Green Bay, WI Davenport, IA Ogden, UT San Luis Obispo, CA Charleston, WV Fort Smith, AR Paducah, KY Fairbanks, AK Wenatchee, WA Kodiak, AK Sitka, AK Valdez, AK Average (Excluding Fairbanks) Fairbanks Rank (Out of 14)

City

County/ Borough

25-Mile

100-Mile

200-Mile

4,282 17,449 4,919 5,099 4,267 4,677 4,969 4,964 2,931 3,417 1,763 721 713 398

7,763 17,449 10,180 7,551 7,130 15,981 9,119 5,719 3,620 5,201 3,446 825 713 1,014

22,575 17,497 17,049 16,657 15,745 15,372 11,684 9,716 7,217 5,167 3,854 802 713 408

150,899 24,187 106,986 105,493 82,231 63,256 75,080 79,941 81,571 5,702 159,734 825 3,523 4,844

694,407 26,472 656,378 779,859 119,405 947,071 734,805 318,733 505,614 6,483 384,219 3,667 5,809 26,366

4,400

6,960

10,710

72,200

400,220

9

9

10

11

12

Sorted by 25-Mile Corporate Inventory.

Source: Claritas, Inc., 2011

Appleton, Wisconsin has the highest number of businesses within 25 miles with 22,600, while Valdez, Alaska’s 25-mile radius only has 400 businesses. The average number of businesses among the comparable markets 25-mile radius (excluding Fairbanks) is 10,700, which is larger than Fairbanks’ 25mile number of businesses of approximately 5,200. Under the 200-mile ring, Fairbanks ranks twelfth among the average comparable markets, with 6,500 businesses, which is 393,700 less than the comparable market average (excluding Fairbanks).

FEASIBILITY ANALYSIS OF A NEW CONVENTION CENTER and PERFORMING ARTS CENTER IN FAIRBANKS Analysis of Competitive/Comparable Facilities and Communities Page 58

Market Education Attainment Exhibit 23 presents the education level attained by the 25-mile population over 25 years of age for each comparable performing arts market analyzed. As previously mentioned, there normally is a relatively strong correlation between level of educational attainment and interest/participation in the arts.

Exhibit 23 Performing Arts Market Characteristics – Market Education Attainment

Market

Some High High School Professional Less than School Grad Some Associate Bachelor Master's School Doctorate 9th Grade (No Diploma) (inc Equivlency) College Degree Degree Degree Degree Degree

Bachelor Degree or Higher

Anchorage, AK Ogden, UT San Luis Obispo, CA Fairbanks, AK Sitka, AK Appleton, WI Davenport, IA Green Bay, WI Wenatchee, WA Valdez, AK Charleston, WV Kodiak, AK Paducah, KY Fort Smith, AR

2.3% 3.0% 4.8% 3.6% 2.0% 8.1% 3.5% 5.6% 2.9% 6.2% 9.8% 1.8% 1.3% 8.9%

4.7% 6.1% 9.3% 7.2% 3.8% 12.7% 5.7% 5.1% 5.2% 11.3% 8.4% 6.4% 4.6% 7.9%

24.7% 36.0% 39.0% 31.3% 28.6% 34.2% 36.6% 27.7% 27.3% 34.7% 22.4% 27.9% 21.8% 28.2%

28.8% 20.0% 19.2% 23.7% 30.2% 23.0% 19.9% 30.6% 28.2% 22.8% 23.9% 27.3% 39.2% 22.3%

8.1% 9.7% 6.0% 9.3% 9.3% 7.6% 10.2% 10.3% 9.6% 8.4% 9.2% 10.7% 10.7% 9.9%

20.8% 18.1% 13.4% 17.2% 15.3% 9.8% 17.7% 15.2% 19.0% 10.1% 16.7% 14.4% 15.2% 14.8%

7.5% 5.1% 5.4% 5.8% 7.6% 3.1% 4.8% 2.8% 5.9% 5.2% 5.9% 7.3% 5.6% 5.9%

2.0% 1.3% 2.1% 1.3% 1.5% 1.1% 1.2% 0.8% 1.2% 1.0% 2.1% 2.3% 0.4% 1.6%

1.0% 0.6% 0.8% 0.7% 1.9% 0.5% 0.5% 1.8% 0.7% 0.3% 1.6% 1.8% 1.2% 0.7%

31.3% 26.9% 26.3% 26.2% 25.9% 25.1% 24.9% 24.1% 22.9% 22.4% 21.8% 20.7% 16.6% 14.4%

AVG (Excl. Fairbanks)

4.6%

7.1%

29.5%

26.1%

9.1%

15.4%

5.6%

1.4%

1.0%

23.4%

7

6

6

8

8

5

7

7

10

4

Fairbanks Rank (out of 14)

Based on 25-Mile Population (25 years and older) Source: Claritas, Inc., 2011

The comparable performing arts market average (excluding Fairbanks) of population within 25 miles, that is 25 years or older and has attained a bachelor degree or higher is 23.4 percent. This is 2.8 percent lower than Fairbank’s 25-mile population over 25 years of age that has obtained a bachelor’s degree or higher, of 26.2 percent. Fairbanks ranks fourth out of the 14 comparable performing arts markets. This is considered a significant positive for the Fairbanks market as it pertains to supporting a potential new performing arts facility.

FEASIBILITY ANALYSIS OF A NEW CONVENTION CENTER and PERFORMING ARTS CENTER IN FAIRBANKS Analysis of Competitive/Comparable Facilities and Communities Page 59

Comparable Performing Arts Center Summary Exhibit 24 presents a facility and operations summary for 13 of the comparable performing arts facilities.

Exhibit 24 Performing Arts Facility Characteristics – Summary Characteristics

Market

Facility

Type

Year Main Built Seats Other Components

Market Year Hotels Open Const. Cost

Owner

Operator

# of Operating Events Prof/Def.

Anchorage, AK

Alaska Center for the PA

PAC

1988 2,000 2 thtrs, rehers, mtg space

8,100

1988

$70 million

Foundation

City

n/a

n/a

Appleton, WI

Fox Cities Perf. Arts Ctr

PAC

2002 2,100 1 thtrs, 2 rehers/mtg rms

3,200

2002

$45 million

Foundation

Foundation

323

($263,143)

Charleston, WV

Clay Center

PAC

2003 1,883 1 thtr, others

3,840

2003 $109 million Foundation

Foundation

n/a

n/a

Davenport, IA

Rivercenter/Adler Theatre

CC/PAC

1982 2,347 Mtg space

5,000

1930

Compass

239

($805,000)

$2 million

City

Fort Smith, AR

Fort Smith CC/PAC

Hotel/CC/PAC 2001 1,331 Mtg space

2,000

2001

$27 million

City

City

250

($500,000)

Green Bay, WI

Edward W. Weidner Center

PAC

1993 2,021 2 thtrs, rehers

4,600

1993

$18 million

State

UWGB

n/a

n/a

Kodiak, AK

Gerald C. Wilson Auditorium

PAC

1986

500 Other space

150

1986

n/a

School Dist.

School Dist.

n/a

n/a

Ogden, UT

Peery Thtr/Ogden Eccles CC CC/PAC

1923

800 Mtg space

1,700

1924

$250,000

County

SMG

72

($549,900)

Paducah, KY

Four Rivers Center

($90,300)

PAC

2004 1,806 1 thtrs, 2 rehers/mtg rms

2,400

2004

$38 million

Non-Profit

Non-Profit

376

San Luis Obispo, CA Christopher Cohan Center

PAC

1996 1,298 1 thtrs, other space

1,800

1996

$30 million

Non-Profit

Non-Profit

n/a

n/a

Sitka, AK

Harrigan Centennial Hall

CC/PAC

1967

500 Mtg space

200

1967

n/a

n/a

($300,000)

Valdez, AK

Valdez CCC

CC/PAC

1982

487 Mtg space

385

1982

n/a

Wenatchee, WA

Wenatchee CC & PAC

CC/PAC

2000

605 Mtg space

1,100

1980 $2.6 million

City/Borough City/Borough City

City of Valdez

n/a

($250,000)

City

Coast Hotels

n/a

n/a

As shown, the comparable performing arts center reviewed under this analysis are owned and operated under a mix of models. All are owned by a public sector entity, academic institution or non-profit organization/foundation. Day-to-day management is handled by these entities and also participants including third party private management and other firms. In a subsequent chapter of this report, we will discuss the ownership and operator model that is believed to be most appropriate for a potential Fairbanks performing arts center.

As with the comparable convention center projects, of the facilities that provided detailed financial operating statements, all presently operate at an annual deficit, requiring some level of public sector support for ongoing operations.

Comparable Facility Space and Seating Extrapolation One method of beginning to evaluate potential size parameters for any new event facility that could be developed in Fairbanks is to consider the sizes of comparable facilities relative to their demographic and socioeconomic characteristics. Located on the following page, Exhibit 25 presents a market and facility ratio analysis for a potential new convention center and performing arts center in Fairbanks using the average ratio of total convention center event space to population and hotel rooms in the comparable convention markets, as well as the average ratio of total primary theater seats to population in the comparable performing arts markets.

FEASIBILITY ANALYSIS OF A NEW CONVENTION CENTER and PERFORMING ARTS CENTER IN FAIRBANKS Analysis of Competitive/Comparable Facilities and Communities Page 60

Exhibit 25 Market/Facility Ratios – Hypothetical Space and Seating Extrapolation for a Potential Convention Center and Performing Arts Center in Fairbanks (figures for CC in SF, for PAC in seats)

CC Event Space to Population Exhibit Space to Population Meeting Space to Population Ballroom Space to Population Sellable Space to Population

City

County/ Borough

25-Mile

Extrapolation Based on Avg. Metric

20,255 7,118 136 31,603

23,758 10,730 15,761 39,258

14,177 8,855 16,471 31,772

19,396 8,901 10,789 34,211

CC Event Space to Hotel Rooms Exhibit Space to Hotel Rooms Meeting Space to Hotel Rooms Ballroom Space to Hotel Rooms Sellable Space to Hotel Rooms PAC Seats to Population Non-Alaska Venues to Population Alaska Venues to Population All Venues to Population

45,585 17,903 24,507 66,269

1,009 2,319 1,412

1,091 3,696 1,893

488 4,799 1,815

863 3,604 1,706

Source: Claritas, Inc., Facility management and industry publications, 2011.

While this type of hypothetical space level extrapolation is only one of many methods used to understand the market demand and sizing of a potential new convention center and performing arts center in Fairbanks, it does serve to provide some initial insight into potential sizing parameters for a new facility.

Nevertheless, it does not take into consideration the specific demand generators unique to each community. These issues relative to Fairbanks will be discussed in a subsequent chapter of this report.

A potential new Fairbanks convention center’s estimated sellable space based upon the comparable market population average is 34,200 square feet. Based on comparable market hotel rooms, a Fairbanks center’s estimated sellable space is considerably higher at 66,300, which would be expected given the community’s higher than average number of hotel rooms per resident population.

A potential new Fairbanks performing arts’ estimated seating level based on comparable market population average, is 1,700 seats. However, when considering only non-Alaska facilities, this hypothetical extrapolated figure drops considerably to 860.

Comparable Facility Case Studies Case studies of each of the comparable convention centers and performing arts center reviewed for this study are included on the following pages.

FEASIBILITY ANALYSIS OF A NEW CONVENTION CENTER and PERFORMING ARTS CENTER IN FAIRBANKS Analysis of Competitive/Comparable Facilities and Communities Page 61

Comparable Facilities – Convention Centers Egan Center Anchorage, Alaska

Constructed in 1984, the William A. Egan Civic and Convention Center was named after Alaska’s first governor, William Allen Egan. The Center is located in the heart of downtown Anchorage, and is part of the Anchorage Civic and Convention District. The District consists of the Egan Center, Dena’ina Civic and Convention Center and Alaska Center for the Performing Arts.

The three facilities are located in downtown Anchorage, connected via skyway and within walking distance to Anchorage’s downtown shopping, hotels, entertainment and restaurants.

The Center has 34,000 square feet of sellable space throughout 22 function rooms. Specifically, the Center offers 14,700 square feet of meeting space and a 19,300-square foot ballroom. Additionally, the building features a unique glass front that spans the entire length of the facility’s lobby.

The Center is managed by the private management firm SMG and typical events held there include: the Alaska Forum on the Environment, Apple, Inc., Make-it-Monday Forum Luncheon, Anchorage Downtown Rotary, Anchorage Daily News Job Fair, East High School Prom and Holland America.

In 2010, the Center operated at a $419,400 deficit.

FEASIBILITY ANALYSIS OF A NEW CONVENTION CENTER and PERFORMING ARTS CENTER IN FAIRBANKS Analysis of Competitive/Comparable Facilities and Communities Page 62

Comparable Facilities – Convention Centers Dena’ina Civic and Convention Center Anchorage, Alaska

Located in downtown Anchorage, the Dena’ina Civic and Convention Center is the newest facility in the Anchorage Civic and Convention District. The $111 million Dena’ina Center opened in 2008, ahead of schedule and under budget. The completion of the Center increased Anchorage’s civic and convention space by approximately 300 percent.

The Dena’ina Center includes: 

86,000 square feet of sellable event space



50,000-square foot exhibit hall



10,700 square feet of meeting space



25,300-square foot ballroom

The Center is located two blocks or less from six hotels, including the 395-room Anchorage Marriott downtown, 111-room Clarion Suites, 600-room Hilton Anchorage, 26-room Historic Anchorage Hotel, 547room Hotel Captain Hook and 200-room Westmark Anchorage Hotel. The Center’s design and décor reflects the Dena’ina Athabascan cultural heritage, which gives visitors an opportunity to learn about the Dena’ina people who lived in the Cook Inlet Region following the Ice Age. The Center is utilized for conventions, trade shows, receptions, meetings, concerts and other meeting events. Typical events held at the Dena’ina Civic and Convention Center include: the Anchors Aweigh Boat Show, American Marketing Association, Safari Club International, Brand New in Concert, the Alaska Outdoor Adventure Show and University of Alaska Anchorage College and Career Fair.

In 2010, the Center operated at a $124,000 deficit.

FEASIBILITY ANALYSIS OF A NEW CONVENTION CENTER and PERFORMING ARTS CENTER IN FAIRBANKS Analysis of Competitive/Comparable Facilities and Communities Page 63

Comparable Facilities – Convention Centers Bismarck Civic Center Bismarck, North Dakota

Construction on the original Civic Center commenced in 1967 and took two years to complete. Over 20 years later, the exhibit hall was added at a cost of $11.2 million and was funded by a one percent City sales tax. Ten years later, in 2000, the last phase of construction took place adding a new south end to the Arena, 1,060 seats, sound and light improvements, a box office, food court and main entrance.

Today, the Center incorporates a 7,590-seat Arena (30,100 square feet of flat floor space), a 48,600square foot exhibit hall, 17,300 square feet of meeting space and 1,185 parking spaces.

Further, the Center is home to the Dakota Wizards, a D-League professional basketball team. In addition to the Wizards’ practices and games, the Center hosts hundreds of other spectator and flat floor events annually. The Center also manages the nearby 833-seat Belle Mehus City Auditorium.

In 2007, the Center hosted 292 events, accounting for 552 utilization days. Of the 292 events, the Center welcomed the following: 

28 conventions/tradeshows;



13 public/consumer shows;



69 athletic games or practices;



85 meeting/banquets/receptions;



70 concerts or rehearsals for concerts; and



27 other events.

Also, in 2007, the Center reported an operating deficit of $199,250. It was also at this time that Center management started to consider an expansion or renovation, which is currently being discussed.

FEASIBILITY ANALYSIS OF A NEW CONVENTION CENTER and PERFORMING ARTS CENTER IN FAIRBANKS Analysis of Competitive/Comparable Facilities and Communities Page 64

Comparable Facilities – Convention Centers Coralville Marriott Hotel and Conference Center Coralville, Iowa

The Coralville Marriott and Conference Center was constructed in 2006 and offers 280 oversized guestrooms and six suites. All the rooms are equipped with high-speed internet, plasma TVs and work spaces. On-site services include walking trails, indoor pool, 24-hour fitness center, Iowa Writer’s Library and two bar and grilles.

In addition to the full-service hotel/conference center services, the Center offers the following event space: 

30,000-square foot exhibit hall



22,200 square feet of multipurpose ballroom space



5,400 square feet of meeting space

The estimated $60 million Hotel and Conference Center is located along the Iowa River and adjacent to the University of Iowa, and in easy reach of downtown Iowa City and the Eastern Iowa Airport.

Constructed as part of the City of Coralville’s Iowa River Landing project, the Landing is located on a former site of an industrial park and is still undergoing redevelopment. Recently, the project won the United States Environmental Protection Agency’s Phoenix Award. The master development plan is envisioned to include space for retail, restaurants, water features, gathering, entertainment and offices.

In addition to the Marriott and Conference Center, the Antique Car Museum of Iowa, Johnson County Historical Society and River Bend commercial and residential complex also are located within the Landing.

The project was funded with $20 million in revenue bonds supported by the hotel tax, $33 million in taxpayer backed bonds and $5 million contributed by the State of Iowa. In 2005, the City and Marriott agreed to a 15-year contract to operate the hotel and conference center.

FEASIBILITY ANALYSIS OF A NEW CONVENTION CENTER and PERFORMING ARTS CENTER IN FAIRBANKS Analysis of Competitive/Comparable Facilities and Communities Page 65

Comparable Facilities – Convention Centers Grand River Center Dubuque, Iowa

The Grand Harbor Resort and River Center is located in Dubuque, Iowa along the banks of the Mississippi River, and opened in 2003. The Center incorporates a 30,000-square foot exhibit hall, 12,000-square foot ballroom, 13,200 square feet of meeting space and 193 hotel rooms, with a total project cost of $51.3 million.

Platinum Holdings, Inc. contributed $25 million to fund the construction of the Resort with the City of Dubuque contributing the remaining $26.3 million to fund the construction of the Center. The City’s portion of funding was financed with a combination of state grants, general obligation bonds, sales tax dollars and other general fund dollars. The Conference Center is owned by the City of Dubuque, while the Hotel is owned by Platinum Holdings. Platinum manages the hotel and center at its own risk/gain.

The Center is connected by a covered skywalk to the new 193-room Grand Harbor Resort and Waterpark.

Including the Grand Harbor Resort, there are over 500 hotel rooms located within three blocks of the Center, including two other full-service hotels, the Holiday Inn and Julien Inn. Within a five-minute shuttle ride, there are an additional 300 full-service hotel rooms available.

The project was a part of the $188 million Grand River Center and America’s River Project, which included the addition of a museum, aquarium, Spirit of Dubuque paddleboats, casinos and an outdoor amphitheater and is located at the Port of Dubuque.

FEASIBILITY ANALYSIS OF A NEW CONVENTION CENTER and PERFORMING ARTS CENTER IN FAIRBANKS Analysis of Competitive/Comparable Facilities and Communities Page 66

Comparable Facilities – Convention Centers Two Rivers Convention Center Grand Junction, Colorado

The Two Rivers Convention Center opened in 1975. Renovation and expansion of the facility was completed in 2001 and the facility now offers approximately 20,700 square feet of total sellable space, including 18,600 square feet of multipurpose ballroom space; and 2,100 square feet of meeting space throughout six meeting rooms.

In fiscal year 2006, the Center hosted 954 total events with an estimated attendance of 135,400 total people. The facility reported revenues of nearly $2.1 million and total overall expenses of nearly $2.2 million for a net operating loss of approximately $126,000 for the year. Revenue increases in 2006 are in part due to the implementation of service charges on equipment and services, which were previously only applied to food and beverage sales. Additionally, increases reflect the implementation of sliding scale pricing for room and space rental.

However, new markets have developed to help spur this increase in revenue such as boxing and mixed martial arts public events, expanded demand for weekly safety meetings, parties and other events for local oil and gas companies, increased demand from the energy industry as a whole to conduct trade shows and employment recruiting events and other such events.

According to the Two Rivers Organization, City Parks and Recreation Department, 2006 fiscal year events at the TRCC accounted for approximately 4,000 total hotel room nights, nearly $275,000 in hotel guest room revenue and a total economic impact of nearly $444,000.

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Comparable Facilities – Convention Centers Centennial Hall Juneau, Alaska

Located three blocks from the heart of downtown Juneau, the Centennial Hall Convention Center has been a staple of the downtown landscape of Juneau since its completion in 1983. This downtown location has the Center within a short distance of the historic town center, hotels, restaurants, shopping, art galleries, theaters, museums and other entertainment.

Further, the proximity of Centennial Hall to the State’s office buildings has made it ideal for governmentrelated meetings. The Center offers 14,300 square feet of total event space, including the 11,300-square foot Sheffield Ballroom, and 3,000 square feet of meeting space.

In addition, the Center has two lobbies that offer 4,200 square feet of congregation space and a commercial kitchen for catered events. There are seven hotel properties within a ten minute walk of the Hall, including the 195-room Westmark Baranof Hotel, 61-room Prospector Hotel, and 106-room Goldbelt Hotel.

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Comparabble Facilities – Convention Centers Ted Ferrry Civic Cen nter Ketchikan n, Alaska

hikan commu unity for 15 yyears.

Constructed in 1994, the Ted Ferrry Civic Centter has serveed the Ketch d, the Centerr is situated h hillside above the downtow wn Ketchikan area, Designed with multipurpose in mind g views. The T hillside lo ocation also has h positioned d the Center to be situate ed near Ketch hikan’s offering great historical attractions an nd shopping. The commun nity of Ketchi kan offers 40 00 guest room ms.

The Cente er is owned and a operated by the City of Ketchikan aand event spa ace incorporatted into the C Center includes a 4,300-squarre foot multip purpose ballro oom and 700 square feet o of meeting sp pace. Additio onally, the Cente er has a stage e adjacent to the ballroom m/multipurposse area, fully--equipped kitcchen, and A/V V and teleconferrence equipment.

C has op perated at a deficit d rangin g from $220,000 to $300 0,000. Opera ational In recent years, the Center ge have reach hed up to $8 0,000, while the balance required to m match revenues for the Center on averag ures has been n covered by general fund ds money fro om the City a and sales and d bed tax revvenue. expenditu The Ketch hikan CVB ha as one emplo oyee dedicate ed to conven ntion sales; aand estimatess that the Ce enter’s convention and meetin ng events ha ave generated d slightly greaater than $1 million each h year in economic nity. impact forr the commun

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Comparable Facilities – Convention Centers Davis Conference Center and Hilton Garden Inn Layton, Utah

Located off of Interstate 15 in Layton, Utah, this state-of-the-art conference center opened in September 2004. Just three years following the Center’s opening, the County broke ground for an expansion that nearly doubled the Center’s size. In May 2008, the Center opened a new 18,000-square foot exhibit hall and an additional 7,000-square foot junior ballroom, which have the ability to open into each other.

Following the expansion, the facility offers 18,000 square feet of exhibit space, 12,600 square feet of ballroom space and 12,800 square feet of meeting space. The Davis Center is attached to the Hilton Garden Inn which offers 145 sleeping rooms, and additional outdoor event space, including the Solstice Courtyard and Cirrus Atrium.

The Conference Center is owned by Davis County, but operated by Western States Lodging, which also owns and operates the attached Hilton Garden Inn. A public/private partnership was established to make the Conference Center and hotel a reality. Since its opening, the Davis Conference Center has hosted an estimated 700 events per year on average, with the vast majority consisting of small, local meetings, banquets, receptions and conferences.

Typical organizations that hold events at the Davis Conference Center include: Utah State Office of Education Conference, Evergreens and Things, Boy Scouts of America Auction, F-16 Commanders Conference, Layton Christian Academy, Shipley Associates Sales Retreats, US Foods, Pfizer, Avalanche International Karate Tournament, Utah State Insurance and America Online Conference.

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Comparable Facilities – Convention Centers The Conference Center Niagara Falls, New York

The Conference Center Niagara Falls opened in 2004 and is located within two blocks of the breathtaking natural beauty of Niagara Falls. The facility incorporates 55,500 square feet of sellable event space, including 32,200 square feet of exhibit space, 12,800 square feet of meeting space and 10,500 square feet of ballroom space.

Additional features of the Center include 5,000 square feet of pre-function/lobby space, 2,000 guest rooms located within a few blocks and 4,000 parking spaces in close proximity. Specifically, there are 12 hotels or bed and breakfast facilities that are located within one mile of the Center.

The Conference Center Niagara Falls is an in-house, one-stop shop facility, offering their own exclusive CCNF Culinary Team, onsite engineers that provide utilities and telecommunication services, shipping and receiving, custom signage, audio-visual, technology and plant and floral services. Additionally, the Center offers a Conference Concierge, Ambassador Greeter program, Executive Business Center, and nearby shopping, dining and entertainment.

The Center is operated by Global Spectrum, a private management firm, and operated with an estimated $130,000 deficit in a recent year of operations.

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Comparabble Facilities – Convention Centers St. Charrles Conven ntion Cente er St. Charle es, Missouri

harles Conven ntion Center is i a $35 millio on multi-functtional facility that opened in April 2005. The The St. Ch Center is owned by the St. Charles County Conv vention and S Sports Facilitie es Authority and the City of St. T Center iss presently ma anaged underr contract by Global Spectrrum.

Charles. The The Cente er provides 58,400 5 square e feet of sella able event sp pace, including g 35,700 squ uare feet of e exhibit space, 6,5 500 square fe eet of meeting g space and 16,200 1 squaree feet of ballrroom space. Additionally, there are 1,200 free parking spaces at the e Center. h 463 ev vents and atttracted 190,0 000 people w who used app proximately 2 20,000 In 2007, the Center hosted hts in local ho otels. Specificcally, the Cen nter hosted 1 0 conventions, 25 tradesh hows, 19 conssumer room nigh shows, 98 8 banquets, 287 meetings and 24 misce ellaneous even nts.

The ere are 2,600 0 hotel roomss in the greate er St. Charless area.

Ma ajor propertiess include a 2 296-room Embassy Suites Hotel tha at is attached to the Cente er, which is ow wned and ope erated

by John Q. H Hammons.

The $36 m million hotell and nvention cen nter unite ssales and m marketing sta aff to con cen ntralize promo otions of both h facilities.

Larrgely viewed as a result off the Center’ss success, app proval for a $55 milllion tax incrrement finan ncing subsidyy was reccently approvved to fund a $385 million economic dev velopment prroject to be located a few w blocks from m the Cen nter. This co 18-floor resid dential omplex is to include an 1 tow wer, several condominiu um buildings with lowerr-floor sho ops and restaaurants and o offices, a 10 tto 14-story ho otel, a mo ovie theater a nd an outdoo or ice rink.

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Comparable Facilities – Convention Centers Dixie Center St. George, Utah

The $26 million Dixie Center of St. George opened in 1998. Designed for flexibility, with versatile space for trade shows, conventions, public/consumer shows, meetings, banquets, and spectator events, this Center has served as an economic generator for the St. George area. The Center is jointly owned by the City of St. George and Washington County. The City is responsible for managing the day to day operations, while the County is responsible for the marketing of the Center.

In early 2006, the Dixie Center completed a renovation which added an additional 22,500 square feet of meeting and support spaces to the original convention center. Following this expansion, the facility now offers 46,600 square feet of exhibit space, 16,900 square feet of meeting space, 13,200 square feet of ballroom space and a 178-seat auditorium. Recent conversations with management have indicated that there are preliminary plans to add 46,000 square feet of exhibit space and up to 20,000 square feet of meeting space to the Center within the next six years.

St. George is a relatively small, resort-oriented community located in southern Utah, approximately 120 miles north of Las Vegas and 310 miles south of Salt Lake City. There are more than 2,000 hotel rooms in the St. George area.

On average, the Center hosts 200 events each year resulting in attendance figures reaching 120,000 people. The majority of events held at the Dixie Center are meetings and banquets. Typical events held at the Center include: Utah League of Cities and Towns Road School, Utah Hospitals and Health Systems Association, Utah Association of Public Treasurers, “What Women Want” Expo, Utah Division of Real Estate, USU Extension Services seminars and meetings. In a recent year of operations, the Center generated a deficit of approximately $388,400.

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Comparable Facilities – Performing Arts and Convention Centers RiverCenter and Adler Theater Davenport, Iowa

The RiverCenter is part of the RiverCenter-Adler Theater Complex, located in downtown Davenport, Iowa, along the Mississippi River. The Center originally opened in 1983 as a state-of-the-art convention center offering 20,500 square feet of meeting space. Ten years later, the Center expanded, adding more event space and a skywalk connecting the two buildings. The skywalk was the first skywalk constructed in Davenport’s history. The Complex, a City of Davenport facility, is managed privately under contract by VenuWorks.

Further expansion and renovations were completed in 2002. In total, the Center offers approximately 54,800 square feet of sellable event space, in addition to the Adler Theater. Specifically, the following space is incorporated into the complex: 

33,400 square feet of exhibit space



8,200 square feet of ballroom space



13,200 square feet of meeting space



2,400-seat Adler Theater

The Theater also serves as additional assembly and function space for events held at the RiverCenter.

Both the RiverCenter and Adler Theater are connected via skyway to the 221-room Radisson Quad City Plaza.

In 2007, the RiverCenter and Theater hosted 239 events, the majority of which were meetings, conferences and banquets. Typical events held at the Theater include: movies, Broadway shows, the Quad City Symphony Orchestra performances, concerts, Ballet Quad Cities performances, speakers, comedians, and meetings. The facility operated with an estimated $805,000 deficit.

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Comparable Facilities – Performing Arts and Convention Centers Fort Smith Convention Center and America’s Best Performing Arts Center Fort Smith, Arkansas

The $27 million Fort Smith Convention Center opened in January 2001, and received a $34 million expansion in 2007 to enlarge the First National Bank of Fort Smith Exhibit Hall. Located in downtown Fort Smith, the Center is within walking distance of the National Cemetery, National Historic Site and adjacent Fort Smith Museum and a short distance from River Front Park, antique shops, trolley rides and a variety of restaurants.

Attached to the Convention Center are the 1,331-seat Arkansas Best Corporation Performing Arts Theater, and the 255-room Holiday Inn Fort Smith-City Center. In 2007 John Q. Hammons opened the $25 million 138-room Courtyard by Marriott to support the Center’s recent expansion. Following the expansion, the Center and adjoining Holiday Inn incorporate 64,000 square feet of event space, including: 

40,000 square feet of exhibit space



12,600 square feet of meeting space



11,400 square feet of ballroom space

The Center hosts 250 events per year, including conventions, conferences, meetings, sporting events, concerts, Broadway shows, Bridal shows, ballet and dance productions, martial arts presentations, Fort Smith Symphony presentations, Home Builders shows, University of Fort Smith theatrical and music performances and receptions. The facility operated with an estimated $500,000 deficit.

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Comparable Facilities – Performing Arts and Convention Centers Ogden Eccles Conference Center and Peery Theater Ogden, Utah

Located in downtown Ogden, Utah, the Ogden Eccles Conference Center is a two level structure offering 19,600 square feet of ballroom/multipurpose space and 9,000 square feet of meeting space. The Conference Center complex is also home to the Peery’s Egyptian Theater, an ornately furnished 750-seat performing arts theater, which hosts live theater, dance and music performances as well as film showings. Further, located adjacent to the Complex is the 137-room Ogden Marriott Hotel.

The Theater was originally constructed as a movie showplace in 1924 after a fire demolished the Arlington Hotel. Since then, the Theater underwent remodels and renovations in 1951 and 1961, only to close in 1984 for health code violations. After many years of being closed, it took a unique partnership between Weber County, Ogden City, Weber State University, Egyptian Theater Foundation and the Ogden/Weber Chamber of Commerce to restore the Theater and reopen it alongside the new Conference Center development in 1997.

The day-to-day operations of the Center are handled by the private management company, SMG. In 2007, the Conference Center and Theater hosted 72 events, accounting for 716 event days. Specifically, in the month of December alone, the Conference Center held 32 events, and was utilized 44 event days, bringing nearly 5,800 attendees to the complex and accounting for over $163,000 in event revenue, while the Theater hosted six events, being in use 12 event days, bringing in over 5,950 attendees and accounting for $18,050 in event revenue. The dance rehearsal room accounted for the remaining 16 event days. The facility operated with an estimated $549,900 deficit.

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Comparabble Facilities – Performing Arts A and Convention Centeers Harrigan n Centenniial Hall Sitka, Ala aska

The Sitka Harrigan Centennial Hall was built in 1967, and iss located on the ocean sh horeline and w within opping, attracctions and ho otels. The faccility is a pub blicly-owned ffacility walking distance to resstaurants, sho us on social a nd cultural evvents. that is utilized for a varriety of eventts, with a focu The multipurpose facility incorpora ates a 4,340-square foot auditorium, which seats 500 in a th heater o commu unity visitor information bo ooth, wildlife d display, Sitka Historical Socciety’s setting, ass well as an onsite Isabel Milller Museum and in the summer s montths, a live-feeed from St. Lazaria Island National W Wildlife Reserve, which w is home e to thousand ds of nesting marine birds..

The eventt space is use ed for a varietty of events, including meeetings, conve entions, tradesshows, worksshops, seminars, concerts, reccitals, family shows s and fe estivals. Addiitionally, the N New Archang gel Dancers ca all the H home durring the summer months,, when not ttouring acrosss the globe iin the Harrigan Centennial Hall T facility’s la argest event is the Sitka Summer S Musicc Festival, wh hich is a three e-week celeb bration winter. The held in June since 1972 2.

The Hall is owned and operated by the City and Borough of S Sitka. In rece ent years, the e Hall has ope erated ng from $250 0,000 to $300 ,000. at an annual operating deficit rangin

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Comparabble Facilities – Performing Arts A and Convention Centeers Valdez Convention C n and Civic Center Valdez, Alaska A

nd operated by b the City off Valdez, the Convention C a nd Civic Centter was dediccated in 1982. The Owned an Center is situated betw ween the mountains and Prince P William m Sound, offe ering great views of the V Valdez communitty.

The Cente er offers 8,200 square feett of event spa ace, including : 

6,,500 square feet f of multipu urpose ballroo om space



1,,700 square feet f of meetin ng space



48 87-seat theatter

ed at the Center include: green g room, llobby, concesssion area, m modern lighting and Other amenities offere essing rooms and a Steinw way piano. The main ba allroom can b be subdivided d into sound equipment, dre arate rooms and a the hallw way has often been used fo or additional e exhibit space. three sepa The Valde ez Convention n and Civic Center C hosts hundreds of events each h year, and h has accommo odated many mee etings, banqu uets, conferen nces, trade shows and pro ofessional mo odern dance, theater and ballet groups. According A to facility f manag gement, the Center C operattes at an averrage annual d deficit of $250 0,000.

The annual operating budget is approximately $380,000, $ witth payroll exp penses comp prising the gre eatest ( to 70 pe ercent). Each h year, the Center’s C goal is to genera ate $120,000 in revenuess from expense (65 rental fees. The remaiining balance is subsidized by the City’ss General Fun nd.

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Comparable Facilities – Performing Arts and Convention Centers Wenatchee Convention Center and Performing Arts Center Wenatchee, Washington

Located in downtown Wenatchee, the Wenatchee Convention Center and Hotel and Wenatchee Performing Arts Center are adjoined by skyway. The Convention Center was constructed in 1980 through a $2.6 million Economic Development Administration grant. Since that time, the Center has evolved, being renovated and expanded upon, to what it is today. The Center incorporates a 7,600-square foot exhibit hall, 11,600 square feet of meeting space, 10,100 square feet of ballroom space and 147 guest rooms.

The Center is part of a public/private partnership between the City of Wenatchee and Coast Hotels. The Center is owned by the City and operated by Coast Hotels, which also operates the Wenatchee Coast Hotel that is part of the complex. The PAC was built in October 2000 for $7.5 million and is owned and operated by a board of directors. A local group of thespians spearheaded the project back in 1989. Over the next eleven years, the group raised and received all but $1 million of the total price, resulting in the acquisition of a construction loan through US Bank. In 2008, the Board celebrated making the final loan payment and the Center being debt-free.

The PAC’s main theater has a fixed audience capacity of 496, while there is additional space to add temporary seats to reach a max capacity of 605. During the initial startup years, the Center was only being utilized once or twice a month. In 2008, the Center was expected to host over 80 local and touring events. The Center offers five specific touring series, including: entertainment, children’s, rhythm, classical and mixer series, each of which bring a diversity of groups to the Wenatchee market each year.

Additionally the community hosts a Festival of Trees each year and a summer youth theater program.

Total attendance at the Center has continued to grow each year; the 2005-2006 season reached 23,000 patrons, and the 2006-2007 season grew to 28,000 people.

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Comparable Facilities – Performing Arts Centers Alaska Center for the Performing Arts Anchorage, Alaska

The $70 million Alaska Center for the Performing Arts opened its doors in 1988 and was constructed along with the Anchorage Museum of History and Art, Egan Civic and Convention Center, Sullivan Arena and Z.J. Loussac Library.

Center components include: 

2,000-seat Atwood Concert Hall



700-seat Discover Theatre



340-seat Sydney Laurence Theatre



1,800-square foot Elvera Voth Hall



25,000 square feet of lobby space

Alaska Center for the Performing Arts, Inc. is a non-profit organization hired by the Municipality of Anchorage to manage the Center. The ACPA schedules the space in the building, provides production management and technical expertise, and sells tickets and other services.

The Center now attracts more than 240,000 attendees each year to performances, whereas in its first year of operation, only 89,000 patrons attended Center productions. The Center is owned by the Municipality of Anchorage, and through Anchorage’s contract with the ACPA, provides approximately 58 percent of the operating revenue required to run the facility. The remaining 42 percent is raised through rentals, ticket services and contributions from corporations and donors.

The ACPA houses eight resident companies, which include the Alaska Dance Theater, Alaska Junior Theater, Alaska Theatre of Youth, Anchorage Concert Association, Anchorage Concert Chorus, Anchorage Symphony Orchestra, Anchorage Opera and Whistling Swan Productions.

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Comparable Facilities – Performing Arts Centers Fox Cities Performing Arts Center Appleton, Wisconsin

The $45 million Fox Cities Performing Arts Center is located in Appleton, Wisconsin. The city of Appleton is one of 19 municipalities that make up the Fox Cities area in Wisconsin. The Center was funded with public and private participation, including private contributions of over 2,700 local residents and businesses. After 31 months of construction, the Center opened on November 25, 2002.

The Center components include the 2,100-seat Thrivent Financial Hall, 4,160-square foot Kimberly-Clark Theater, Founders Room - a private party room that can accommodate 75 people, and Entrance 21 - a private lounge available for small gatherings.

The Center is home to the Broadway Across America – Fox Cities series, the Boldt Art Alive! Series, Thrivent Financial for Lutherans Education series and the Fox Valley Symphony.

Last summer, the Center was completing its fifth operating season. In the last five years, the Center has hosted 13 Wisconsin premiers of Broadway touring titles, including Disney’s The Lion King and High School Musical.

Also during this time, the Center celebrated its one millionth ticket sold.

In the 2007/2008 year, the Center welcomed 60 commercial events, 64 Broadway series performances, 39 Arts Alive! and Education series, 88 local community partners and 72 community non-profit events.

Additionally, in the 2007/2008 year, the Center earned $8.3 million in gross event revenues and generated $8.55 million in gross event costs. An endowment fund was established prior to construction to create an operating reserve to cover annual operating deficits.

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Comparable Facilities – Performing Arts Centers Clay Center for the Performing Arts and Sciences Charleston, West Virginia

Located in downtown Charleston, West Virginia, the Clay Center for the Arts and Sciences opened in 2003. The project cost $109 million. The Clay Center includes the 1,883-seat Maier Foundation Performance Hall, 200-seat black-box Walker Theater, Avampato Discovery Museum and Electric Sky Planetarium.

The Clay Center is the result of a public/private partnership between the City, County, State and private sector. Public sector for the Center includes: 

$22.2 million from the State of West Virginia



$8.35 million from the Federal government



$5.5 million from the City



$2 million from the County

Private sector monies came in the form of foundation support and land donation. The Center is owned by the 501(c)3 foundation – the Clay Foundation.

The West Virginia Symphony calls the Clay Center home. Along with Center-run arts and science programs, the Symphony receives priority scheduling. Third priority scheduling goes to Jam Productions, which the Center has out-sourced to bring in touring Broadway shows. The entire Center, including museum components can be rented for non-profit and commercial events. The Center has continued to get ongoing support aided by a $15 million operating endowment.

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Comparable Facilities – Performing Arts Centers Edward W. Weidner Center Green Bay, Wisconsin

The Edward W. Weidner Center opened its doors in 1993, on the University of Wisconsin – Green Bay’s campus in Green Bay, Wisconsin. The Center was made possible by a seed gift to start the planning stages of the project by Dr. David Cofrin. With this sizable gift came two conditions for the project – one, it must be located on the U of W-GB campus; and two, its purpose must be to serve the entire community. Upon this donation, a fundraising campaign started in the late 1980’s, which ended up generating $18.4 million. The State of Wisconsin also contributed to the project’s funding, and currently is the owner of the facility.

The Center is named after Dr. Edward W. Weidner, who was the university’s founding chancellor at the time of the fundraising campaign. In 1998, the Center underwent an expansion, which enlarged the ticket office and lobby space and added restrooms, a studio theater, dressing rooms, storage space and a new elevator.

Performance spaces in the Center include: 

2,021-seat Cofrin Family Hall



200-seat Fort Howard Hall



1,156-square foot Studio One

The Center is operated by dedicated University staff as a self-sustaining auxiliary and does not receive any support from the University or State. To become self-sustaining, the Center employs: 

Center run entertainment programs, including Broadway productions, local, state and regional cultural and entertainment shows.



600 volunteers.



Private sector fundraising and grants.

The Center is home to the Green Bay Symphony and utilized often by the University Music and Theater departments.

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Comparable Facilities – Performing Arts Centers Gerald C. Wilson Auditorium Kodiak, Alaska

The Gerald C. Wilson Auditorium was built in 1986 and located adjacent to Kodiak High School in Kodiak, Alaska. The main auditorium has a seating capacity of 500. Additionally, there are two additional “pods”, which can seat 125 each and be configured to be used independently or joined to the main auditorium, creating a seating capacity of 750. Other amenities include a green room, band room, set construction shop, rehearsal room and dance studio.

The Wilson Auditorium is owned by the Kodiak Island Borough School District, and administered by the community schools program. School performances get priority in scheduling; however, scheduling of the facility takes community needs into consideration. In addition to school district performances making the Auditorium its home, the Kodiak Arts Council presents all of its events there as well. For the 2008-2009 schedule, events include: Baltimore Consort concert, Baka Beyond concert, a circus, and Yuval Ron music ensemble.

The Wilson Auditorium is utilized nearly every day, between community and school performances and rehearsals. The Kodiak Arts Council accounts for eight programs, with nearly 20 performance days.

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Comparable Facilities – Performing Arts Centers Luther F. Carson Four Rivers Center Paducah, Kentucky

Following the recognition of the need for a performance venue for the Paducah Symphony Orchestra in 1994, community leaders spearheaded an effort to create a new performing arts venue for the region, including western Kentucky, southern Illinois, southeast Missouri and northwest Tennessee. Originally named the Four Rivers Center for the Performing Arts, after the four rivers—Tennessee, Ohio, Cumberland and Mississippi—located in the area, the Center’s name changed in 2004 to the Luther F. Carson Four Rivers Center. The name change was set in honor of the late Luther F. Carson in recognition of the family’s substantial support of the Center and its mission.

Thirteen counties supported the construction of the Center through passed resolutions. The Grand opening of the Center was held the weekend of February 27 and 28, 2004. The Center is a 501(c)3 notfor-profit organization. The Center is located in downtown Paducah, and overlooks the confluence of the Ohio and Tennessee Rivers.

The main hall seats 1,806 people, with the furthest seat being located only 112 feet from the stage.

Other facility features include the Paxton Family Foundation Lobby, River Room that is ideal for small performances and private parties, Riverview Terrace reception area and the Ingram Founder’s Room, which is located on the second floor and often used for small receptions and gatherings.

In 2007, the Center hosted 376 events (which was up 16 percent from 2006). Nineteen percent of the attendees at the Carson Center are from 50 miles or more outside of Paducah. During this past fiscal year, the Center operated at a $90,300 deficit. Currently the Center draws from targeted regional areas, in addition to southern Indiana and eastern Arkansas.

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Comparable Facilities – Performing Arts Centers Christopher Cohan Center San Luis Obispo, California

The Christopher Cohan Center opened on September 27, 1996 in San Luis Obispo, California. Total development costs for the project reached $30 million. The Center was developed under a joint agreement between California Polytechnic State University, the City of San Luis Obispo and the Center’s Foundation. The Partnership became 501(c)3 with weighted representation. Agreement terms included: 

$20 million was paid for by the State of California for the University through G.O. Bonds as it qualifies as a State-owned instructional building.



$5 million came from the City’s General Fund.



$5 million was secured against the Foundations’ assets, with repayment scheduled to come through ticket surcharges earmarked for debt service.

The Center consists of Harmon Hall, a multipurpose pavilion and 170-seat recital hall. Harmon Hall’s characteristics include 1,298 seats – 607 main floor, 201 orchestra pit, 152 dress circle, 169 balcony and 152 gallery seats, occasional stage boxes, a stage size of 48’ x 44’, and eight dressing rooms.

The Cohan Center has 11 FT employees, 17 PT employees and 100 PT, on-call stage technicians. The Center has an operating income of nearly $600,000 each year, which includes more than $400,000 in ticket surcharge revenue. The Center operates as a rental facility to avoid competing with its resident users and has a guaranteed 33 percent of use days reserved for local arts organizations.

FEASIBILITY ANALYSIS OF A NEW CONVENTION CENTER and PERFORMING ARTS CENTER IN FAIRBANKS Analysis of Competitive/Comparable Facilities and Communities Page 86

Comparable International Facilities Given the unique nature of the Fairbanks destination and its location in the world, it is believed that the potential exists for the community to attract certain types of international convention, conference and meeting events. This prospect was evaluated further through a survey of international events, the results of which are presented in a subsequent chapter.

Therefore, it was believed that some insight could be obtained through investigating certain convention center facilities located in similar-sized, cold-climate communities located outside the United States. In collecting information, an area of emphasis was to gain an understanding of the types, numbers and niches of international events that the facilities are accommodating. Certain non-U.S. subarctic destinations that might have seemed to be logical candidates for inclusion in this analysis were not considered due to their lack of a convention center facility that is comparable in size to a facility that could be reasonable in Fairbanks.

Exhibit 26 presents a summary of selected comparable international facilities and markets analyzed.

Exhibit 26 International Markets and Facilities

Market

Facility

Type

Exhibit Space

Meeting Space

Ballroom Space

Sellable Space

Aberdeen, Scotland Edmonton, AL Halifax, NS London, ON Malmo, Sweden Penticton, BC Reykjavik, Iceland Victoria, BC

Aberdeen Exhibition and Conference Centre Shaw Convention Centre World Trade and Convention Centre London Conference Centre Malmo Exhibition and Convention Centre Penticton Trade & Conference Centre Icelandic National Concert & Conference Centre Victoria Conference Centre

CC CC CC CC CC/PAC CC CC/PAC CC

94,950 69,800 13,000 0 118,700 0 15,000 14,700

13,800 32,550 17,400 10,550 12,900 5,400 7,900 9,200

0 23,600 20,000 33,000 32,300 28,700 8,600 25,000

108,750 125,950 50,400 43,550 163,900 34,100 31,500 48,900

Market

Facility

Type

Main Seats

Malmo, Sweden Reykjavik, Iceland Thunder Bay, ON Vernon, BC Whitehorse, YT

Malmo Exhibition and Convention Centre Icelandic National Concert & Conference Centre Thunder Bay Community Auditorium Performing Arts Centre Yukon Arts Centre

CC/PAC CC/PAC PAC PAC PAC

1,000 1,800 1,500 750 428

Source: Facility management, w ebsites.

It is important to note that additional international cities that may be more comparable to Fairbanks from a “destination” and geographic perspective were investigated; however, many of the events in these cities are held in quite small venues and/or hotel-based facilities and, therefore, provide little value for the purpose of inferring information pertinent to a larger convention center in Fairbanks. Finding a perfect destination match with Fairbanks (i.e., a market that possesses a comparably sized convention center facility, is located in a remote location relative to major population centers, located in a comparable climate, etc.) is obviously a challenge considering Fairbanks’ uniqueness. While some of the comparable facilities presented are located in destinations that may be larger than Fairbanks or located more proximate to larger cities, there are still some useful inferences we can extract from their event profiles.

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The Malmo Exhibition and Convention Centre offers the most space among the selected facilities with 163,900 square feet of sellable space. The facility with the least amount of space is the Icelandic National Concert and Conference Centre with 31,500 square feet of sellable space. There are two convention centers without exhibit space, including the London Conference Centre and the Penticton Trade and Conference Centre. The Aberdeen Exhibition and Conference Centre is the only facility that does not offer ballroom space.

The Malmo Exhibition and Convention Centre and Icelandic National Concert and Conference Centre also have performance space, offering seating for 1,000 people and 1,800 people, respectively. Three other facilities located in Canada offer seating levels between 428 and 1,500.

Event information obtained from these facilities did suggest certain types of international niche markets that appeared to be recurring users of their facilities. Many of these events corresponded to industries and events that matched well with the subarctic orientation of the host communities, including events focusing on industries such as cold climate research, environmental issues and green technology, petroleum and energy, native populations, geological, outdoors/recreation, and other such industries.

This information assisted in informing the development of a targeted survey sample of candidate international events. Survey results are discussed in a subsequent chapter.

Exhibit 27 presents the market population for all International markets presented on the previous page, as well as a hypothetical market extrapolation for a new Fairbanks convention center and performing arts center. As the methodologies for estimating population vary among individual countries, attempts were made to identify reported figures that would best represent figures comparable to “city” and “greater metropolitan area” measurements.

Exhibit 27 International Demographics and Market Extrapolations

Market Aberdeen, Scotland Edmonton, AL Halifax, NS London, ON Malmo, Sweden Penticton, BC Reykjavik, Iceland Thunder Bay, ON Vernon, BC Victoria, BC Whitehorse, YT

City

Population Metro Area

202,370 752,412 282,900 352,395 282,904 31,909 120,200 109,140 35,944 78,659 20,461

202,370 1,081,300 385,000 457,720 628,388 41,574 201,850 122,907 35,944 337,411 22,898

Extrapolation Based on City Metric CC Event Space to Population Exhibit Space to Population Meeting Space to Population Ballroom Space to Population Sellable Space to Population

PAC Seats to Population

8,410 2,665 8,024 15,763

520

Source: Facility data, Industry publications; Municipal government websites and referenced Wikipedia entries.

As shown, under this hypothetical analysis, a potential new Fairbanks convention center’s estimated sellable space based upon the comparable international market population average is 15,800 square feet, a facility less than half the size as suggested through the hypothetical extrapolation performed with domestic comparable convention centers.

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A potentiial new Fairbanks perforrming arts center’s c estim mated seating g level base ed on compa arable international market population p av verage, is nea arly 500 seatts, which is likewise a sm maller facilityy than d extrrapolation pre eviously preseented. indicated through the domestic dy summaries of the international facilities can be fou und below and on the follo owing pages.

Case stud

Comparabble Internationnal Facilities Aberdee en Exhibitio on and Con nference Ce enter Aberdeen n, Scotland

The Aberrdeen Exhibition and Confference Centtre opened in n 1985. square fee et of sellable event space, including: 

94 4,950-square foot exhibit hall h



13 3,800 square feet of meeting space

The e Center incorporates 10 08,750

00,000 people. The conve m populous city in Scotlland with app proximately 20 ention Aberdeen is the third most way from the city center, with w the Holid day Inn Exprress Aberdeen n Exhibition C Centre center is five miles aw djacent to the e Centre with h 135 guest rooms r to supp ndees. Furthe er, there are many port its atten located ad hotels in the t downtown n Aberdeen area, a all appro oximately fivee to seven miiles from the conference center, with a to otal of appro oximately 800 0 guest room ms. Addition nally, the Abe erdeen International Airp port is approxima ately six miless from the conference centtre.

2 the Cen ntre complete ed a $23 milllion renovati on and expa ansion that ad dded more e exhibit In April 2003, space and d plenary capa acity. With open o space and fixed theaatre seating, tthe facility is a able to host e events from sma all meetings to t large concerts. For 20 009, 48 eventts accounting g for 60 even nt days have been booked.

FEASIBILITY Y ANALYSIS OF A NEW CONVENT TION CENTER an nd PERFORMING ARTS CENTER IIN FAIRBANKS Analysis of Competitive/Com C mparable Facilitiess and Communitiies Page 89

Comparable International Facilities Shaw Conference Centre Edmonton, Alberta

The Shaw Conference Centre is situated in the heart of the city of Edmonton’s downtown core. This location gives easy access to Edmonton's major hotels, fine restaurants, theatre, and downtown shopping district through direct pedway connections. The Shaw Conference Centre opened in 1983 at a cost of $81.8 million.

In May 2006, a $28 million expansion was complete, adding Hall D, a 23,600-square foot ballroom to the facility. Currently, the Center is starting to look at expansion plans for the future. The Shaw Convention Center offers 125,950 square feet of event space including 69,800 square feet of exhibit space, 32,550 square feet of meeting space and the 23,600-square foot ballroom.

The Shaw Conference Centre is located steps away from the Edmonton Westin (413 guest rooms) and Sutton Place Hotel (313 guest rooms) via pedways, and the center is located approximately two miles from the Edmonton Municipal Airport.

According to facility management, the Shaw Center welcomes 500,000 annual attendees from the 600800 events the Center hosts. Additionally, the Center has witnessed occupancy levels up-to 65% and has started to have to turn away some business. As such, goals of the currently discussed expansion plan including the ability to add and retain larger events and increase the Center’s ability to host smaller events simultaneously. Each year, the facility faces an operating deficit of $1.2 – $1.5 million; the City of Edmonton provides a subsidy to cover the deficit.

FEASIBILITY ANALYSIS OF A NEW CONVENTION CENTER and PERFORMING ARTS CENTER IN FAIRBANKS Analysis of Competitive/Comparable Facilities and Communities Page 90

Comparable International Facilities World Trade and Convention Centre Halifax, Nova Scotia

The World Trade and Convention Centre is located in the regional municipality of Halifax, Nova Scotia.

The municipality has a population of 385,000 people, and the urban area has a population of 283,000 people. The Centre is owned by the Province and is operated by Trade Center Limited.

The World Trade Convention Centre has 50,400 square feet of sellable space. Specifically, the Centre has 20,000 square feet of ballroom space, 17,400 square feet of meeting space, and 13,000 square feet of exhibit space. The largest column free space is the Grand Ballroom with 20,000 square feet of space.

The additional space is distributed throughout the three floors of the facility, and there is also a restaurant on level eight of the facility, which available for private bookings.

The Centre hosted 624 event bookings in the 2007/2008 year, and attendance reached 93,856 people.

Events hosted at the Centre range from one night dinners and business training seminars to week long conventions. Halifax is now on the national and international radar having hosted past large scale events such as the Global Microcredit Summit and the G-8 Summit. The economic impact on the provincial economy was approximately $55 million. Additionally in 2007/2008, the Centre generated revenues greater than $5.3 million.

The Centre is conveniently connected via the Downtown Halifax Link, a climate controlled pedway system linking the Centre to over 1,000 four-diamond hotel rooms, dining, entertainment, and shopping options.

There are also 1,400 additional hotel rooms in the greater downtown area.

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Comparable International Facilities London Convention Centre London, Ontario

Located in London, Ontario, the London Convention Centre opened in 1993. The Centre offers 43,550 square feet of sellable event space, including: 

10,550 square feet of meeting space



33,000 square feet of ballroom space

The London Convention Centre hosts approximately 450 events per year, and held exactly 453 events in 2007; 47 of which were multi-day conventions/conferences that required overnight accommodations.

From these 453 events, 157,668 delegates were hosted. Approximately 42 percent of these delegates lived outside of London, and 21 percent of these were new delegates to the Centre.

On average: 

30 percent of the Centre’s revenue comes from convention and conference events,



20 percent of the revenue comes from one day meeting events,



and 40 percent comes from food and beverage events such as dinners, weddings, and Christmas parties.

The economic impact from the Centre in 2007 was over $13 million. Although the types of events vary greatly for the facility, the London Convention Centre does have a few event niches, including: medical, agricultural, and automotive events. The medical niche also attracts international events because of the presence of local doctors taking roles in research that attracts the international medical community.

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Comparable International Facilities Malmö Exhibition and Convention Centre Malmö, Sweden

Located in Malmö, Sweden, the Malmö Exhibition and Convention Center is centrally located in one of Europe’s fastest growing areas: the Öresund Region. The venue is close to the water’s edge, but is still close to communications and entertainment. Copenhagen and Kastrup Airport are only an hour away.

The Malmö Exhibition and Convention Centre offers 163,900 square feet of total event space, including: 

118,700 square feet of exhibit space



32,300 square feet of ballroom space



12,900 square feet of meeting space.

The Centre also offers a 2,100-square foot film viewing style room that accommodates 200 people and a theatre that has 1,000 fixed seats.

MalmöMässan AB operates the Malmö Exhibition and Convention Center. The company focuses on making its facility one of the leaders in the Öresund Region by customizing the premises and offering customers the related services they want. Creating powerful meetings is the vision of the company and a goal of every event.

Events typically held at the Malmö Exhibition and Convention Centre include: Mila trade and public fair, Golfmassan Malmö, Malmö International Dog Show, easyFairs HORECA, Property Fair Malmö, Scandinavian Sci-Fi, and Game and Film Convention.

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Comparable International Facilities Performing Arts Centre Vernon, British Columbia

The Vernon and District Performing Arts Centre was welcomed to Vernon community in October 2001.

The Centre is situated along Swan Lake Creek and has become a cornerstone in the North Okanagan arts community.

Events generally held at the Centre include local artists, theatrical events, family entertainment and concert series from the Okanagan Symphony Orchestra and the North Okanagan Community Concerts Association. The Vernon and District Performing Arts Centre has two performance venues, as well as administrative offices and “Ticket Seller,” Vernon’s official ticket agent. The two performance spaces include the 750-seat proscenium arch theater that offers orchestra and balcony seating, and Marie Fleming Hall, which is a flexible ‘black box’ space with potential seating for 100 persons.

The main hall’s features include: 

A 43’ x 26’ proscenium arch opening



Grid height of 65’



Stage has a working sprung floor surfaced in black painted masonite and nine traps



1 chorus dressing rooms with stations for 21 persons, 1 chorus dressing rooms with stations for 18 persons, 2 principals’ dressing rooms with stations for 4 persons each.

In an average year, the Centre welcomes 175 events (28 presentations). In a recent year, the Centre had a $780,000 annual budget, broken down by $120,000 support from the Regional District, $350,000 in presentations and ticket sales and $310,000 in rentals and other income.

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Comparable International Facilities Icelandic National Concert and Conference Centre Reykjavik, Iceland

The Icelandic National Concert and Conference Center is located in Iceland’s capital city, Reykjavik. The Centre will be situated along the coast of the Atlantic Ocean in the downtown core of the city. Envisioned to be the core of a downtown renaissance master-planned development for the community, the 258,000square-foot facility will incorporate the following: 

The Concert and Conference Centre o

15,000-square foot exhibit hall

o

8,600 square feet of ballroom space

o

7,900 square feet of meeting space

o

1,800-seat main Concert Hall

o

2 rehearsal/music halls that can accommodate 450 and 200 people, respectively (also can be used for additional meeting space)



250 to 400-room hotel



1,600 car park (located underneath the Centre)



172,200-square foot office building complex

The project originally broke ground in 2007, with an expected completion date of December 2009.

However, the holding company responsible for the construction of the Centre, Portus Group, went bankrupt at the end of November 2008, putting a halt to construction. The Centre was envisioned to be a public/private partnership between Austurhofn-TR (owned 54 percent by the Icelandic State and 46 percent by the City of Reykjavik and was established to coordinate efforts of the project and its principal promoter) and Portus, who was to be the owner and operator of the Centre through support by the State and City with a fixed annual contribution of $6.5 million for 35 years. The delay is expected to cost between $52 and $172 million. The State and City were in negotiations with the Portus Group to take over the project, or purchase the Group; however, the Centre re-started construction and opened in May 2011.

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Comparable International Facilities Thunder Bay Community Auditorium Thunder Bay, Ontario

The Thunder Bay Community Auditorium opened on October 16, 1985, and is owned and operated by the City of Thunder Bay. The facility is located on Paul Shaffer Drive – and has a vestibule in the Auditorium that proudly displays memorabilia of the Thunder Bay native, and Late Show with David Letterman band leader.

The main theater within the Auditorium seats 1,511 people. While other features the Auditorium offers include eight dressing rooms, three meeting rooms - with a capacity for 450 people, parking for 1,000 cars, state of the art equipment, an orchestra pit that can be lifted to become an extension of the stage and a ceiling that can be lowered or raised and draperies that can be altered to adjust or modify the reverberance of the Auditorium.

The Auditorium is home to the Thunder Bay Symphony Orchestra and welcomes more than 150,000 patrons each year and hosts more than 100 live performances annually. The City of Thunder Bay gives the Auditorium a $475,000 subsidy each year to cover the operating deficit.

In 2007 and 2008, the City started searching for ways to ease the burden from the tax payers, by issuing an Expression of Interest for an individual or corporation to become a naming sponsor. While two companies responded, they failed to follow up on the March 27, 2008 deadline.

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Comparable International Facilities Penticton Trade and Convention Centre Penticton, British Columbia

The Penticton Trade and Convention Centre is situated in the heartland of the Okanagan Valley and Wine Country, just 40 miles from the United State border. The Center currently offers 34,100 square feet of sellable event space, including 5,400 square feet of meeting space, a 443-seat lecture theater, and 28,700 square feet of ballroom space.

Over 1,000 hotel rooms are located within the surrounding area of downtown Penticton, within walking distance of the Penticton Trade and Convention Centre. The entire community of Penticton offers 2,400 sleeping rooms.

The Centre is owned by the City of Penticton and operated by Global Spectrum, a private management firm. In 2008, the City constructed an attached sports and ice arena to the Centre, called the South Okanagan Event Center. The Event Center will primarily be used for ice and sporting events, but when not in use by athletics, the Center can provide 25,000 square feet of exhibit space for use by the Penticton Trade and Convention Centre events. In a recent year, the Center hosted 132 events, welcoming more than 1.6 million attendees. Additionally, the Center operates at an $114,000 deficit.

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Comparable International Facilities Yukon Arts Centre Whitehorse, Yukon Territory

The Yukon Arts Centre is a not for profit charitable organization “dedicated to the development of the arts as an important cultural, social and economic force in the Yukon.” The Centre is comprised of a 428seat proscenium theatre and 4,200-square foot public art gallery. Other features include: 

2 community dressing rooms.



2 individual dressing rooms.



A production room that can be used for rehearsals or small presentation room that can accommodate 40 people.



The green room – a lounge area equipped with a kitchen.



Foyer large enough for receptions seating 250 people.

The Centre works with the Whitehorse schools to administer art programs, and Culture Quest, an art creation program funded by Yukon Tourism and Culture. Additionally, the Centre foundation manages The Old Fire Hall, an event venue located in downtown Whitehorse.

Typical events held at the Centre include: Skookum Jim Folklore Show, Jazz on the Wing, Bellows and Brass, Frostbite Music Festival, The Invisible Life of Joseph Finch, Lunch Dance with Jude Wong, Light Film Festival, KidzKreate – Create a Book, Yukon Rotary Music Festival, Whitehorse Community Choir concert series, and many more.

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Comparable International Facilities Victoria Conference Centre Victoria, British Columbia

Victoria, British Columbia, located on Vancouver Island, has a population of 80,000 people. Located in downtown Victoria, British Columbia, the Conference Centre has approximately 14,700 square feet of exhibit space and 9,200 square feet of meeting space. More than 3,200 hotel rooms are within walking distance of the Centre.

In 2008, the Centre hosted 262 events and generated more than $50 million in direct spending. The Canada-B.C. Municipal Rural Infrastructure Fund gave the Centre $2 million to upgrade the Crystal Garden in early 2008, and the Centre and Garden are currently undergoing a renovation. The Garden, located adjacent to the Centre, will add 25,000 square feet of additional exhibit, ballroom, and meeting space once complete. This building is expected to attract not only more conferences, but larger conferences as well. This acquisition is expected to have an impact of $35 million into the local economy.

The Victoria Conference Centre celebrated its 20th anniversary in 2009. Over the past 20 years, the Centre has hosted 6,495 events and has generated more than $670 million in economic impact for Victoria.

The Conference Centre also hosted the 47th ICCA Congress and Exhibition. This opportunity presented not only $500,000 in direct delegate spending during the event, but the event also brought attention to the Centre as a possible host for other international meeting opportunities.

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4.0. INDUSTRY TRENDS ANALYSIS The market success of a public assembly facility can be partially attributed to the characteristics of the industry as a whole. In order to assess the current and future strength of the market with regard to event activity that could utilize a potential Fairbanks convention center or performing arts center, it is important to evaluate the industry trends from a national and regional perspective. Broad industry changes, characterized by—sometimes significant—retraction and expansion in event demand and attendance/participation characteristics have taken place within the industry over the past decade.

Within this chapter, we present an evaluation of the following areas: 

Convention Industry Characteristics and Trends



Performing Arts Industry Characteristics and Trends



Summary/Conclusions

Convention Industry Characteristics and Trends The convention, trade and meetings industries are diverse and dynamic, consisting of a wide variety of events, many of which focus around a collection or gathering of individuals for the purpose of entertainment/recreation and/or face-to-face communication and the transmission of ideas/information.

Typical industry event segments include: 

Conventions – Events traditionally held by professional associations of international, national, regional, state or local scope. Many of these groups tend to hold annual events that rotate among various destinations within a particular region. In addition, certain large corporations hold annual conventions.



Conferences – Meetings held by professional associations, non-local corporations and local area companies. While sometimes used interchangeably with the term “convention,” these events tend to be smaller, on average, than conventions and are also less exhibition-focused.



Tradeshows – Events traditionally held by professional associations of international, national, regional, state or local scope, as well as private events hosted by one or more corporations.

Some of these groups tend to hold annual events that rotate among various destinations within a particular region, similar to conventions, while others are fixed in specific cities each year.



Consumer Shows – Exhibit-based shows are typically open to the general public and generally draw from the local area. These events tend to charge a nominal fee for entry and typically include events such as home and garden shows, boat shows, auto shows, gun shows, antique shows, career fairs, etc.



SMERF (Social, Military, Educational, Religious, Fraternal) – Events include reunion-type meetings of groups and members, educational conferences and other such events. These events tend to be more sensitive to cost aspects than association and corporate groups.



Meetings/Banquets – Events include functions hosted by local service clubs (Rotary, Shriners, and Elks) intended to share information, generate interest and spur membership. Other private events include local corporate meetings/training, exams, wedding receptions, anniversary/birthday parties and private banquets.

FEASIBILITY ANALYSIS OF A NEW CONVENTION CENTER and PERFORMING ARTS CENTER IN FAIRBANKS Industry Trends Analysis Page 100

Exhibit 1 illustrates a summary of traditional event types along with their key characteristics.

Exhibit 1 Summary of Industry Event Types

Event Types

Primary Purpose

Key Facility Requirements

Typical Facility Used

Attendee Characteristics

Conventions

Information exchange, sales & networking

Exhibit, Ballroom & Meeting space

Convention Center, Conference Center

Predominently non-local

Conferences

Information exchange, sales & networking

Ballroom and Meeting space

Conference Center, Hotel, Convention Center meeting space

Depends on scope of group, many are predominently non-local

Tradeshows

Sales & Advertising

Exhibit space

Convention Center, Exhibition Center, Tradeshow Facility

Depends on scope of show, can have large percentage non-local

Consumer Shows

Sales & Advertising

Exhibit space

Convention Center, Exhibition Center

Mostly local

Information exchange, civic, social, networking

Meeting, banquet, multipurpose space

Civic/Community Ctr., Exhibition Center, Conv./Conf. Center

Depends on scope of group, some are predominently non-local

Information exchange, training, incentive

Meeting and Ballroom

Conference Center, Hotel

Typically local

Social, Military, Educational, Religious, Fraternal Events Meetings / Banquets

A variety of types of public assembly facilities exist in communities across the country that accommodate some or all of these types of events. Certain events tend to possess very specific facility and community requirements.

Located on the following page, Exhibit 2 illustrates differences in the physical characteristics and event profiles of traditional “flat floor� event facilities.

FEASIBILITY ANALYSIS OF A NEW CONVENTION CENTER and PERFORMING ARTS CENTER IN FAIRBANKS Industry Trends Analysis Page 101

Exhibit 2 Typical Public Assembly Facility Characteristics Convention Center

Conference Center

Expo Center

Community/ Civic Center

Equestrian Center

Fairgrounds Complex Multiple Indoor & Outdoor Facilities, Dirt & Concrete, Spectator Seats Fair, Ag., Horse, Livestock, Public Shows, Festivals, Other

Type of Space

Exhibit, Meeting Ballroom

Meeting, Ballroom

Exhibit, Limited Meeting

Multipurpose Space

Multiple Indoor & Outdoor Facilities, Dirt & Concrete, Spectator Seats

Typical Events

Conventions, Tradeshows, Meetings, Banquets, Public Shows

Conferences, Meetings, Banquets

Public Shows, Tradeshows, Miscellaneous

Local Meetings & Banquets, Recreation, Other Events

Horse, Rodeo, Ag., Livestock, Public Show

Adjacent Headquarter Hotel

Adjacent Headquarter Hotel

Parking, Accessibility, Visibility

Parking, Accessibility, Visibility

Parking, RV, Parking, RV, Hookups, Large Hookups, Large Acreage Acreage

High

Moderate

Limited to Moderate

Limited to Moderate

Typical Ancillary Characteristics

Economic Impact Generating Ability

Moderate

Limited to Moderate



Convention centers, under the traditional model, typically incorporate exhibit, meeting and ballroom space. Usually located in medium- to large-sized cities, convention centers tend to focus on attracting non-local economic impact-generating events such as conventions and tradeshows. It is imperative that convention-quality hotel inventory is located close to the center. Convention centers also tend to host a large number of secondary events, such as corporate meetings, public shows and banquets.



Conference centers tend to represent smaller facilities than convention centers, usually containing both flexible and dedicated meeting space, in addition to banquet space. Most traditional conference centers do not incorporate prime exhibit space and instead focus on accommodating local and non-local corporate meetings/conferences along with other local event activity such as private receptions and banquets. Many conference centers are situated within hotel facilities. Conference centers are often broken into several categories related to their type/focus: executive, corporate, resort and college/university.



Expo centers, or exposition/exhibition centers, traditionally consist of large exhibit-focused structures possessing limited or no breakout meeting and banquet space. Expo facilities tend to be lower cost facilities (i.e., construction cost per gross square foot) than convention and conference centers. Most of the events accommodated by traditional expo centers are local in nature and include events such as public/consumer shows, festivals and other large flat floor space using events.



Community/civic centers tend to vary widely in terms of their physical and operational characteristics. Many centers offer multipurpose space that can accommodate a wide variety

FEASIBILITY ANALYSIS OF A NEW CONVENTION CENTER and PERFORMING ARTS CENTER IN FAIRBANKS Industry Trends Analysis Page 102

of events. The large majority of event activity represents events and attendees from the local area and, as such, adjacent/nearby hotel inventory does not tend to be a primary concern for most events. Communities tend to develop these types of facilities for the good and benefit of the local community rather than for economic impact generating purposes. 

Equestrian centers are typically multi-facility complexes, often located in rural or non-urban settings. Most equestrian centers focus on accommodating horse-related shows, events and exhibitions. Typical equestrian centers include a variety of event, show and stable areas, such as arenas, exhibition facilities, show arenas, warm-up arenas, rodeo arenas, horse barns, livestock barns and other such areas.



Fairgrounds complexes are often similar to equestrian centers, including a variety of indoor and outdoor facilities suitable for equestrian, livestock, agricultural, exhibition and recreational events and activities. The primary role of these facilities is often to play host to an annual fair (i.e., County or State Fairs, etc.). Many fairgrounds complexes also integrate horse racetracks and grandstands for outdoor spectator events.

Exhibit 3 illustrates a summary of the typical importance of various facility characteristics by event segment.

Exhibit 3 Typical Event Facility Requirements High Quality Finish

Exhibit/ Lg. Event Facility

Upscale Banquet Hall

Breakout Rooms

Spectator Seating

Parking

Nearby Hotels

Secondary Facilities

Nearby Visitor Amenities

Conventions

HIGH

HIGH

HIGH

HIGH

LOW

MED

HIGH

LOW

HIGH

Conferences

HIGH

MED

HIGH

HIGH

LOW

MED

HIGH

LOW

HIGH

Meetings

HIGH

LOW

MED

HIGH

LOW

LOW

LOW

LOW

MED

Banquets/Receptions

HIGH

LOW

HIGH

MED

LOW

MED

LOW

LOW

MED

Tradeshows

MED

HIGH

LOW

LOW

LOW

HIGH

MED

LOW

HIGH

Consumer/Public Shows

LOW

HIGH

LOW

LOW

LOW

HIGH

LOW

LOW

MED

Agricultural Shows

LOW

HIGH

LOW

LOW

LOW

HIGH

LOW

HIGH

LOW

Equestrian Events

LOW

HIGH

LOW

LOW

MED

HIGH

LOW

HIGH

LOW

Rodeos

LOW

HIGH

LOW

LOW

HIGH

HIGH

LOW

MED

LOW

Tractor Pulls

LOW

HIGH

LOW

LOW

HIGH

HIGH

LOW

MED

LOW

Sporting Events

LOW

HIGH

LOW

LOW

HIGH

HIGH

LOW

LOW

LOW

Concerts

LOW

MED

LOW

LOW

HIGH

HIGH

LOW

LOW

MED

Festivals

LOW

HIGH

LOW

LOW

LOW

HIGH

LOW

LOW

LOW

As shown in the exhibit, different types of events can have very different preferences and requirements with regard to facility characteristics. For example, conventions typically place high premiums on high quality finish of event space, adjacent/proximity full-service hotel rooms and other visitor amenities (i.e., restaurants, retail, entertainment, etc.) in close walking distance, while consumer/public shows typically focus predominately on large, low-finish space to accommodate exhibits.

FEASIBILITY ANALYSIS OF A NEW CONVENTION CENTER and PERFORMING ARTS CENTER IN FAIRBANKS Industry Trends Analysis Page 103

This discussion begins to lay the groundwork for some important issues that will likely affect the types of events that will be attracted to a potential new Fairbanks convention center. The type, level of finish, configuration and amenities of the space offered in any potential new facility will play a strong role in determining the ability of the facility to attract and accommodate certain types of events.

Macro Domestic Convention Industry Demand and Supply Issues Over the past 20 years, there are numerous industry statistics that point towards an overall linkage between growth in the convention and tradeshow industry and changes to the overall performance of the domestic economy. During this time, there have been three noteworthy periods of economic retraction— one during the first Gulf War and recession of the early 1990’s, a significant drop following the events of 9/11 and the subsequent economic downturn, and finally the downturn in the economy that the nation is experiencing now.

Tradeshow Week has created an industry growth metric that tracks the performance of the largest 200 conventions and tradeshows in the country. The base of events included in these statistics include those that generally require exhibit, meeting and ballroom space, and are produced by associations or private tradeshow companies such as Reed Exhibitions, DMG and Advanstar. Importantly, the Tradeshow Week data do not include events produced by individual corporations for their own training, marketing, incentive and other purposes. These events and their impact on the industry are discussed later.

The following exhibit summarizes cumulative yearly percentage changes for various measures of large convention and tradeshow performance as measured by Tradeshow Week against changes in U.S. GDP since 1987. Convention and tradeshow statistics are presented for net square feet of exhibit space used, number of exhibiting companies and number of event attendees.

Exhibit 4 Macro Issues – Large Tradeshow Demand Growth 190

Net Square Feet Exhibiting Companies Attendance Real GDP

180 170 160

Growth Index 1987=100 Base Year

150 140 130 120 110

Source: Tradeshow Week, U.S. Department of Commerce, Bureau of Economic Analysis, 2010

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2009

2008

2007

2006

2005

2004

2003

2002

2001

2000

1999

1998

1997

1996

1995

1994

1993

1992

1991

1990

1989

1988

1987

100

As previously noted, three nationwide economic events have led to a retraction or growth moderation in the convention/tradeshow industry since 1987. During these periods (early 1990’s, early 2000’s and today), companies and associations cut spending on discretionary expenses including those for conventions/tradeshows. It is important to note that the recessionary period in the early 2000’s carried with it the dramatic impacts of decreased demand for air travel due to the particular aspects of 9/11.

Similarly, the current economic conditions carry with them two unique aspects that magnify the dampening of convention business. The first is characterized as the “AIG effect”, or a broad public condemnation of group events, particularly those held in traditionally-attractive visitor destinations. The second relates to hyper growth in travel costs associated with dramatic increase in fuel prices in 2008.

As a result, it does appear that the large convention and tradeshow event industry is experiencing downturns more significant than overall economic conditions would have predicted. For comparison, the more “traditional” (yet significant) recession of the late 1980’s resulted in much less severe impacts on various measures of the convention and tradeshow industry.

Ultimately, the force of change in Gross Domestic Product (as a measure of overall economic performance) does appear to have historically moved the convention and tradeshow industry. Consistent annual growth in GDP appears to have foreshadowed the return to positive growth in the convention and tradeshow industry. Assuming that this linkage remains, future growth in GDP starting in 2010 would also serve to pull the convention and tradeshow industry back into a growth pattern.

In an effort to assess possible performance for the industry over the next several years, it is useful to consider a variety of the projections for economic and related industry metrics. Exhibit 5 displays the demand characteristics of the largest convention and tradeshows with various nationwide economic metrics, as shown previously in this discussion.

Exhibit 5 Macro Issues – Projected Growth of Key Nationwide Metrics (Shown with Largest Tradeshows) 130

Net Square Feet Exhibiting Companies Attendance Hotel Room Demand GDP Real Tourism Output Airline Passengers

125

120

Growth Index 1999=100 Base Year

115

110

105

100

95

90 1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

Source: Tradeshow Week, US Bureau of Economic Analysis, US Bureau of Labor Statistics, Smith Travel Research, US Bureau of Transportation Statistics, 2010.

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2009

While the convention and visitor industry performance measures rebounded significantly, they did not fully rebound to the extent that GDP did. As a result, we characterize the events of the early 2000’s as resulting in a “resetting” of the relationship between real GDP and various measures of the convention and tourism industry. GDP performance, real tourism output and hotel room demand stabilized in 2010, and preliminary estimates suggest a positive upward rebound in 2011 through 2012.

We firmly believe that the linkage between the convention/tradeshow industry and various economic measures remains intact, and we therefore, once final data is available, expect a significant rebound to convention and visitor industry activity starting slowly in 2010 and emerging more substantially in 2011 and 2012.

While the previous exhibits demonstrated the industry in terms of the largest conventions and tradeshows across the country, and as previously mentioned does not consider events produced internally by corporations or the wide variety of smaller association and private events. In Exhibit 6, broader measures of the convention and tradeshow industry inclusive of these events are shown based on research developed by the Center for Exhibition Industry Research (CEIR). Since 2000, CEIR has conducted a detailed, annual survey of more than 300 events that represent a broad cross-section of exhibit-based events, including events produced by corporations.

Exhibit 6 Macro Issues – Growths in All Exhibit Event Demand 125

Net Square Feet 120

Exhibitors Attendees

115

Growth Index 2000=100 Base Year

GDP

110

105

100

95

90

85 2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

Source: CEIR, US Bureau of Economic Analysis, US Bureau of Labor Statistics, US Bureau of Transportation Statistics, Smith Travel Research, 2011.

As shown above, each of broader measures of the convention and tradeshow characteristics has experienced significant downturns as a result of the recession in the early 2000’s, compounded by the events of 9/11. During the subsequent economic recovery, measures of convention and tradeshow performance, particularly net square feet of space used, increased at a somewhat faster pace as FEASIBILITY ANALYSIS OF A NEW CONVENTION CENTER and PERFORMING ARTS CENTER IN FAIRBANKS Industry Trends Analysis Page 106

compared to real GDP. The most current data demonstrate that the convention and tradeshow industry has taken a significant downturn, largely as a result of the recessionary impacts starting in 2008. It has been suggested that the current significant reaction of the convention and tradeshow industry to economic conditions has been magnified by a reluctance on the part of corporations to send employees to meetings, particular those held in leisure destinations – referred to earlier in this analysis as the “AIG effect”.

Digging deeper into the CEIR survey data indicates that certain sub-industry sectors have been impacted more significantly than others. Specifically, seven of the eleven industry sectors analyzed saw declines from 2007 to 2008. The sector that recorded the largest decline was Building/Construction (10 percent), followed by Consumer Goods (7 percent) and Transportation (6 percent). However, four sectors experienced growth in 2008—Information Technology (10 percent), Raw Materials (3 percent) and Medical/Health Care (1 percent).

In Exhibit 7, CEIR data incorporating broader measures of the convention and tradeshow industry are presented. The data again highlight the significant downturn in visitor industry statistics, including convention and tradeshow performance, starting primarily in 2008 in advance of the drop in GDP. As the economic conditions continued to worsen, visitor industry statistics also trended downwards, and as economic recovery began to take place in late 2010 and early 2011, once updated data is available, we expect to see a rebound in these measurements of convention and tradeshow activity.

Exhibit 7 Macro Issues – Projected Growth of Key Nationwide Metrics (Shown with All Exhibit Events) 125

120

115

Growth Index 2000=100 Base Year

Net Square Feet Exhibitors Attendees GDP Real Tourism Output Hotel Room Demand Airline Passengers

110

105

100

95

90

85 2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

Source: CEIR, US Bureau of Economic Analysis, US Bureau of Labor Statistics, US Bureau of Transportation Statistics, Smith Travel Research, 2011.

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Tradeshow Week also produces yearly reports that inventory the supply characteristics of the industry.

The data reflect the addition, renovation and removal of exhibit space within facilities nationwide that offer exhibit space. The Tradeshow Week data suggests a general increase in supply each year since 1990 with two exceptions of years in which supply generally remained stagnant (less than one percent decreases). When overlaid with the demand of net square footage required by conventions and tradeshows, the results indicate a supply “echo effect.” Demand in this case reflects data for the TS200, or the largest 200 tradeshows in the industry.

The echo effect demonstrates that when there is an increase in demand and occupancy of existing facilities, communities start planning an increase of space to their markets. However, as there are several years of lag time for planning and construction until the supply comes to fruition, an echo effect between supply and demand takes place.

The supply and demand is shown as a cumulative change from year to year in Exhibit 8.

Exhibit 8 Macro Issues – Convention Center Supply vs. Large TS Demand

200 Supply: Venue Exhibit Space 175

Demand: Net Square Feet

Growth 150 Index 1989=100 Base Year

125

100

75 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Source: Tradeshow Week, Tradeshow Week Major Exhibit Hall Directory, 2010.

The cumulative growth of both supply and demand, presented in the previous exhibit, further demonstrates the echo relationship of industry supply and demand. Overall, industry trends have demonstrated that the demand will adjust to meet supply, and vice versa. There is potential concern that the sizable gap between supply and demand in the last few years indicates a general oversupply in the industry. Latest industry reports and metrics (not available yet for this chart) suggest that industry demand has begun to rebound significantly in 2011 with the strengthening economy, while industry supply (presently in the construction pipeline) has abated over the past couple years, which should work to close the gap between supply and demand noted in the chart’s most recent years.

FEASIBILITY ANALYSIS OF A NEW CONVENTION CENTER and PERFORMING ARTS CENTER IN FAIRBANKS Industry Trends Analysis Page 108

Exhibit 9 presents the supply and demand characteristics as tracked by the CEIR data, which represents a greater portion of exhibit-based events and the industry as a whole.

Exhibit 9 Macro Issues – CC Supply vs. All Exhibit Event Demand

140

CEIR Demand Index vs. Tradeshow Week Exhibit Supply

130 Growth Index 2000=100 Base Year

Exhibit Space Supply Net Square Feet

120

110

100

90 2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

Source: CEIR Index Report, 2010; Tradeshow Week Major Exhibit Hall Directory, 2009.

Similar to the previous exhibit focusing on the largest convention and tradeshow events, the above exhibit shows a general lag in demand of exhibit square feet to industry exhibit space supply in the last four years. However, it is more important to note that the sizable supply/demand gap in 2004 and 2005 is less pronounced when considering a broader measure of demand as presented by CEIR. While it is believed that challenges have and will continue to exist in certain localized markets, every community and destination is unique and application of blanket industry-wide, macro assessments of supply and demand phenomena are often ill-advised. To the contrary, an experienced, thorough approach in measuring the unique demand generators and associated costs and benefits in a specific community is the most effective way in which to evaluate potential development projects requiring public investment, which is the aim of this study.

While much of this chapter has focused on national industry demand and supply trends, it is critical to consider this information in appropriate context. While most relevant for large, top-tier convention destinations, most information pertaining to the health of the national convention industry holds little relevance for small and mid-sized destinations. The most important event segments for many of these smaller markets tend to be local events and state and regional events (rather than national events). This is normally reflected in the event profiles of convention facilities operating in these markets.

FEASIBILITY ANALYSIS OF A NEW CONVENTION CENTER and PERFORMING ARTS CENTER IN FAIRBANKS Industry Trends Analysis Page 109

International Meeting Events Given the characteristics of Fairbanks, there have been some discussions regarding the possible positive positioning of a potential new Fairbanks convention center to attract certain types of international events.

In order to better understand this event market, industry data has been assembled related to tracked international events within this section. Each year the Union of International Associations (UIA) produces the Yearbook of International Organizations report. The report inventories thousands of international meetings that regularly take place across the globe each year. In fact, in 2007, the report included 8,871 meetings. Exhibit 10 presents the international market event locations. As shown, in 2007, of the 8,871 international meetings that were held, the majority took place in Europe with 5,245 events followed by Asia with 1,353 events and North America with 1,302 events. More specifically, of the North America events, 894 were held in the United States, 230 in Canada and 81 were held in Mexico.

Exhibit 10 International Meetings – Geographic Distribution Europe, 5,245 Asia, 1,353

Africa, Australia/ South Pacific, America, 399 338 234

Source: Union of International Association, 2007.

North America, 1,302

USA: 894 MEXICO: 81 CANADA: 230

It is believed that the global geographic isolation of North America relative to much closer geographic proximity of individual countries in Europe contributes to the relatively small percentage of international event activity attracted to North America and the United States, in particular.

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To expand on this, Exhibit 11 presents the exact countries of where these international events were held.

Exhibit 11 International Meetings – Top International Meeting Countries 1000 900

894

Number of International Events

800 700 634

600 500 434 391 382

400

362

350 325 324 298 288

300

239 230

52

51

Croatia

66

Malaysia

68

Thailand

81 75

Mexico

87

Russia

91 90

Norway

93

Poland

Denmark

Czech Rep

Brazil

Hungary

Portugal

Japan

Greece

Sweden

Australia

South Korea

Canada

China, HK

Belgium

Switzerland

Italy

Singapore

UK

Finland

Spain

Austria

Germany

Netherlands

USA

France

0

93

South Africa

118 110 108 106 105

100

India

136

Argentina

185 176 166

Turkey

204 202

200

Source: Union of International Association, 2007.

Exhibit 12, on the following page, presents the location within the United States where the international events were held. The cities listed only account for 599 of the 894 events held in the United States in 2007, as the exhibit only includes locations that hosted at least nine events.

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Exhibit 12 International Meetings – Top USA Markets 100 93

90

70 60 52

52

50 36 30 19 14

13

13

13

12

12

11

11

10

9

9

9

Scottsdale, AZ

19

Rochester, NY

21

Minneapolis, MN

22

20

Tampa, FL

23

New Orleans, LA

26

Boulder, CO

31

30

San Antonio, TX

39

40

Los Angeles, CA

Number of International Events

80

San Jose, CA

Pittsburg, PA

Denver, CO

Philadelphia, PA

Las Vegas, NV

Dallas, TX

Seattle, WA

Orlando, FL

Honolulu, HI

Miami, FL

Boston, MA

San Francisco, CA

Chicago, IL

Washington, DC

San Diego, CA

New York, NY

0

Atlanta, GA

10

Source: Union of International Association, 2007.

New York, New York was presented as having the highest amount of events hosted in its market in 2007, with the accommodation of 93 international meetings. Following New York was San Diego, California and Washington, DC with 52 international meetings. Other notable markets include: Chicago, Illinois with 39, San Francisco, California with 36 and Boston, Massachusetts, with 31 events.

Located on the following page, Exhibit 13 presents the distributed size of the international meetings market, based on number of participants per meeting, broken down by each world region.

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Exhibit 13 International Meetings – Size of International Meetings Africa

America

Asia

Australia/Pac.

Europe

1,200 1,000 800 600 400 200 0 0 to 100 101 to 500

501 to 1,000

1,001 to 3,000

3,001 to 5,000

5,001 to 7,000

>7,001

Note: 3,475 events of the total 8,871 provided event detail.

Source: Union of International Association, 2007.

For all the regions, aside from America, the highest number of meetings occurred with participation levels between 101 and 500. In contrast, for America, meetings that had 501 to 1,000 and 1,001 to 3,000 were most common. This can be further seen in Exhibit 14.

Exhibit 14 International Meetings – Size of Meetings in America

120 101

Number of Meetings

100

100

80 69 60 40 20

19 10

9 2

0 0 to 100 101 to 500

501 to 1,000

1,001 to 3,000

3,001 to 5,000

5,001 to 7,000

> 7,001

Number of Participants Note: 310 events of the total 1,640 provided event detail.

Source: Union of International Association, 2007.

It has been estimated that more than 90 percent of the international meetings held in the Americas had less than 3,000 participants. Further, 60 percent of the international meeting market held in the Americas had a meeting attendance of less than 1,000 participants. Of that 60 percent, the largest subcategory is 501 to 1,000 participants, followed by 101 to 500 participants. The smallest participant sub-

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category is 5,001 and up, which only accounts for less than four percent of all the surveyed international meetings in the Americas.

This macro industry data does not directly address the attractiveness and/or suitability of Fairbanks as a host destination for international events. There are a number of reasons to believe that the uniqueness of the Fairbanks destination and its geographic location could be attractive to certain international market niches. Results related to a survey of select international events will be presented in the subsequent chapter of this report.

Performing Arts Industry Characteristics and Trends In order to better understand the characteristics and trends of the performing arts industry, industry participation survey/research data has been assembled, research regarding performing arts companies and nonprofit theaters was conducted, and arts/culture tourism statics are presented within this section.

Participation Trends Every few years, the Survey of Public Participation in the Arts (SPPA) is conducted, collecting arts participation data from the American population. In the latest study conducted in 2008, over 17,000 adults (defined as people over 25 years of age) were surveyed. The study included questions about attendance and participation in arts events. Exhibit 15 presents the rates at which American adults participated at least once in a 12-month period in arts events by demographic group, including sex, race/ethnicity and age.

Exhibit 15 Performing Arts – Participation Adult Population (in millions)

Jazz

Classical Music

Opera

Musicals

Plays

Ballet

Other Dance

All Adults

224.8

7.8%

9.3%

2.1%

16.7%

9.4%

2.9%

5.2%

Sex Male Female

108.6 116.3

7.7% 7.9%

8.5% 10.0%

1.8% 2.4%

14.4% 18.9%

8.2% 10.6%

2.2% 3.6%

4.4% 5.9%

Race and Ethnicity Hispanic Non-Hispanic White Non-Hispanic African Americ Non-Hispanic Other

30.4 154.5 25.6 14.3

3.9% 8.8% 8.6% 4.0%

3.8% 11.3% 4.3% 8.8%

1.1% 2.6% 0.7% 2.2%

8.1% 20.0% 8.6% 13.4%

4.3% 11.4% 5.5% 6.1%

2.2% 3.5% 1.1% 1.8%

3.2% 5.9% 3.0% 5.0%

28.9 39.9 41.8 43.9 33.3 19.9 17.1

7.3% 7.7% 7.2% 9.8% 9.7% 6.1% 4.0%

6.9% 7.0% 8.9% 10.2% 11.6% 12.2% 9.7%

1.2% 1.7% 2.5% 2.4% 2.4% 2.9% 1.8%

14.5% 16.0% 18.2% 17.4% 19.5% 18.0% 10.0%

8.2% 9.2% 8.9% 8.7% 12.3% 11.0% 7.4%

2.5% 2.3% 3.4% 3.2% 3.1% 4.3% 1.4%

5.7% 4.7% 4.7% 5.2% 6.6% 6.1% 2.6%

Group

Age 18-24 25-34 35-44 45-54 55-64 65-74 75+

Note: Adult population is defined as people 25 years of age and older.

Source: 2008 SPPA Survey of Public Participation in the Arts.

FEASIBILITY ANALYSIS OF A NEW CONVENTION CENTER and PERFORMING ARTS CENTER IN FAIRBANKS Industry Trends Analysis Page 114

As shown in the exhibit on the previous page, among the estimated 224.8 million adults, participation in musicals is most prevalent with 16.7 percent, while participation in opera is the least prevalent, with 2.1 percent. Further, participation varies under each race/ethnicity demographic, as the Hispanic, NonHispanic White and Non-Hispanic/Other participation is highest for musicals and Non-Hispanic African American participation is highest at jazz events and musicals.

Expanding on this data, Exhibit 16 presents the rates at which American adults participated at least once in a 12-month period in arts events by demographic group, broken down by education and income levels.

Exhibit 16 Performing Arts – Participation Adult Population (in millions)

Jazz

Classical Music

Opera

Musicals

Plays

Ballet

Other Dance

Education Grade school Some high school High school graduate Some college College graduate Graduate school

11.2 22.1 68.3 61.4 41.3 20.5

1.5% 2.4% 3.9% 8.1% 13.7% 17.4%

1.8% 2.3% 3.1% 9.1% 16.7% 27.1%

0.2% 0.5% 0.7% 1.7% 4.1% 7.3%

1.7% 5.2% 8.1% 17.1% 30.1% 37.9%

0.7% 2.8% 4.0% 9.0% 17.5% 24.3%

0.1% 0.6% 1.0% 3.0% 5.4% 8.2%

1.2% 2.2% 2.2% 5.8% 8.0% 12.7%

Income Under $10,000 $10,000 to $19,999 $20,000 to $29,999 $30,000 to $39,999 $40,000 to $49,999 $50,000 to $74,999 $75,000 to $99,999 $100,000 to $149,999 $150,000 or more

11.6 19.3 23.4 22.6 18.8 40.7 27.2 21.4 16.0

4.3% 3.6% 4.1% 7.1% 8.9% 7.6% 8.7% 13.4% 15.4%

4.0% 3.9% 4.4% 6.8% 8.7% 9.5% 11.7% 14.8% 22.8%

0.3% 0.9% 1.5% 1.1% 1.6% 2.1% 2.1% 3.3% 6.8%

6.6% 6.3% 7.7% 11.0% 15.4% 15.4% 21.8% 32.0% 40.1%

4.1% 3.7% 4.1% 6.7% 7.4% 8.6% 13.4% 14.1% 24.2%

0.9% 0.6% 1.4% 2.6% 1.7% 3.4% 3.7% 5.0% 7.8%

2.0% 2.5% 2.6% 3.8% 4.1% 5.3% 6.8% 8.3% 12.5%

Group

Note: Adult population is defined as people 25 years of age and older.

Source: 2008 SPPA Survey of Public Participation in the Arts.

According to the SPPA, more than any other demographic factor, attending/participating in performing arts events is highly correlated with an individual’s education attainment. While the majority of the adult population has completed high school, the highest levels of participation among the arts groups comes from adults that have completed graduate school. Similarly, adults that have higher levels of income have reported higher levels of participation for all arts categories compared to adults making less than $50,000.

Both of these metrics have particular relevance with regard to the socioeconomic characteristics of Fairbanks (as discussed in a previous chapter), as Fairbanks ranks high among both educational attainment and income levels with respect to comparable markets housing performing arts venues.

FEASIBILITY ANALYSIS OF A NEW CONVENTION CENTER and PERFORMING ARTS CENTER IN FAIRBANKS Industry Trends Analysis Page 115

Exhibit 17 presents the percentage of adults attending a performing arts event at least once each year, by type of performing arts event.

Exhibit 17 Performing Arts – Participation

Percentage of U.S. Adults Attending a Performing Arts Activity at Least Once Per Year Musical Plays

16.7%

Non-musical Plays

9.4%

Classical Music

9.3%

Jazz

7.8%

Other Dance (1) Ballet Opera

0.0%

5.2% 2.9% 2.1% 5.0%

10.0%

15.0%

20.0%

Percent of Adult Respondents (1) “Other dance” refers to dance other than ballet, including Modern, Folk and Tap Note: Adult population is defined as people 25 years of age and older Source: 2008 SPPA Survey of Public Participation in the Arts

As shown, musical plays have the highest percentage of attendance, with 16.7 percent, while opera has the lowest with 2.1 percent. Following musical plays, non-musical plays, classical plays and jazz events have the next highest attendance percentages with 9.4 percent, 9.3 percent and 7.8 percent, respectively.

FEASIBILITY ANALYSIS OF A NEW CONVENTION CENTER and PERFORMING ARTS CENTER IN FAIRBANKS Industry Trends Analysis Page 116

As mentioned previously, education attainment has the most correlation of any demographic variable to arts attendance among adults. Exhibit 18 expands the education attainment analysis, presenting the percentage of adults that have attended at least one performing arts event per year by education attainment.

Exhibit 18 Performing Arts – Participation

Percentage of U.S. Adults Attending at Least One Performing Arts Event per Year, by Education 80%

67.3%

70%

57.2%

60% 50%

38.1%

40% 30%

19.0%

20% 10%

14.5% 6.5%

0% Grade School

Some High School

High School Graduate

Some College

College Graduate

Graduate School

Note: Adult population is defined as people 25 years of age and older Source: 2008 SPPA Survey of Public Participation in the Arts

The proportion of adults that have attended one arts event each year steadily increased with each additional level of education attainment. In fact, adults with a graduate school education are ten times as likely to attend arts events as someone with a grade school education.

FEASIBILITY ANALYSIS OF A NEW CONVENTION CENTER and PERFORMING ARTS CENTER IN FAIRBANKS Industry Trends Analysis Page 117

Performing Arts Companies The National Endowment for the Arts (NEA) has assembled an overview of the nation’s nonprofit theater network, including growth and challenges. According to the NEA, in 2002, there were 9,303 US based performing arts companies, which was an increase of just over 100 companies in 1997. Of the 9,303 companies, 35 percent were theater-based. The largest share of arts companies were based in California, with approximately 18 percent of American companies concentrated there. While California had the largest amount of companies, the District of Columbia had the greatest number of companies per 100,000 people and North Dakota had the greatest increase of companies from 1997 to 2002.

In 2002, the group tracked 23 performing arts companies in Alaska, which was a 9.5 percent increase from 1997. Of the 23 companies, 78 percent were tax-exempt, which was the fourth highest share among the States. Exhibit 19 presents the performing arts companies in the United States and Alaska, based on type. It is important to note that other performing arts companies exist in Alaska and throughout the country; however, this data representing tracked nonprofit arts companies with paid employees does illustrate useful information in terms of the overall distribution of company types.

Exhibit 19 Performing Arts – Performing Arts Companies

Performing Arts Companies Opera companies Theater companies Dinner companies Dance companies Symphony orchestras/chamber groups Other music groups and artists Circuses Other performing arts companies Total

United States Count % 1.9% 178 34.6% 3,222 2.0% 183 6.0% 557 9.0% 841 40.3% 3,753 0.6% 58 5.5% 511 9,303

Alaska Count % 4.3% 1 52.2% 12 4.3% 1 4.3% 1 13.0% 3 13.0% 3 4.3% 1 4.3% 1 23

Note: Tabulations presented exclude establishments with no paid employees.

Source: 2006, National Endowment for the Arts

Over half of the performing companies in Alaska are theater companies. The next highest category is symphony/orchestras/chamber groups and other music groups and artists, each with 13 percent.

Similarly, these three categories were the three highest among US groups.

FEASIBILITY ANALYSIS OF A NEW CONVENTION CENTER and PERFORMING ARTS CENTER IN FAIRBANKS Industry Trends Analysis Page 118

0 illustrates th he concentratiion of perform ming arts com mpanies throu ughout the Un nited States.

Exhibit 20 Exhibit E 20 Pe erforming Artts – Concentrration of Perfo forming Arts C Companies

econd highesst category, indicating it has a highe er number o of performing g arts Alaska falls in the se companies in relation to its popu ulation. Oth her states fa lling in this category incclude Washin ngton, H Monta ana, North Da akota, Minnessota, Wisconssin, Connecticut, Rhode Island, California,, Colorado, Hawaii, New Ham mpshire, Vermo ont and Maine. States hav ving the higheest concentra ation of comp panies in relattion to their popu ulation are Ne evada, Tennesssee and New w York.

FEASIBILITY Y ANALYSIS OF A NEW CONVENT TION CENTER an nd PERFORMING ARTS CENTER IIN FAIRBANKS Industry Tre ends Analysis Page 119

Exhibit 21 presents the t growth in performing g arts compaanies from 1 1997 to 200 02. As prevviously d, the State of o Alaska had an increase of o 9.5 percentt over this tim me in compan nies. mentioned Exhibit E 21 Performing Arts – Growtth of Perform ming Arts Com mpanies

The increa ase of 9.5 percent of perfo orming arts co ompanies for the state of Alaska placess it with the m middle group. The highest in ncrease in perrforming arts occurred in tthe states off North Dakotta, Utah, Arka ansas, ggest decreasse in compan nies can be se een in the sta ates of Florida, New Hampshirre and Maine,, while the big on, Wyoming, South Dakotta, Nebraska,, Iowa, Conneecticut and Ve ermont.

Washingto

FEASIBILITY Y ANALYSIS OF A NEW CONVENT TION CENTER an nd PERFORMING ARTS CENTER IIN FAIRBANKS Industry Tre ends Analysis Page 120

Non-Profit Theater In addition to the inventory of performing arts companies, the National Endowment for the Arts also produces a publication providing an overview of the nation’s nonprofit theater network. This report has indicated there has been a wide expansion of the nonprofit theater across the country, including rural areas outside the traditional cultural centers. According to the NEA, on a per capita basis of number of theaters, Vermont and Alaska have recently overtaken New York, while the highest growth rates of theaters has occurred in the states of Nevada, Arkansas, Utah, Colorado and Idaho. Exhibit 22 presents this data.

Exhibit 22 Performing Arts – Non-profit Theater Growth

Top 10 States Ranked by Number of Non-profit Theaters per Capita in 2005

Top 10 States Ranked by Growth in Number of Non-profit Theaters, 1990-2005

Rank 1 2 3 4 5 6 7 8 9 10

State Nevada Arkansas Utah Colorado Idaho Mississippi Alaska Montana Missouri Alabama Nebraska Virginia Minnesota Delaware Oregon Wisconsin Texas

Theatre Growth 6.0X 4.0X 4.0X 3.0X 2.0X 2.0X 1.8X 1.8X 1.6X 1.5X 1.5X 1.5X 1.4X 1.3X 1.3X 1.3X 1.2X

Rank 1 2 3 4 5 6 7 8 9 10

Number of theaters per Index to Population 100,000 people US Base (in millions) United State 0.7 1.0 297.0 Vermont 2.2 3.4 0.6 Alaska 1.7 2.5 0.7 New York 1.3 2.0 19.3 Maine 1.2 1.8 1.3 Montana 1.2 1.8 0.9 Rhode Island 1.1 1.7 1.1 Oregon 1.1 1.6 3.6 Connecticut 1.0 1.5 3.5 New Hampshire 1.0 1.5 1.3 Minnesota 1.0 1.5 5.1

So urce: Natio nal Center fo r Charitable Statistics at the Urban Institute; P o pulation Divisio n, US Census B ureau; Natio nal Endo wment fo r the A rts.

As shown, the state of Alaska has 1.7 theatres per every 100,000 people, ranking it second on the index in terms of theaters per capita, while over the fifteen years between 1990 and 2005, the growth rate of 1.8 has the state tied for fifth.

FEASIBILITY ANALYSIS OF A NEW CONVENTION CENTER and PERFORMING ARTS CENTER IN FAIRBANKS Industry Trends Analysis Page 121

Another indication of the performing arts industry is the amount of economic impact it generates for the country and various local markets. Recently, the Americans for the Arts foundation compiled the Arts and

Economic Prosperity III: The Economic Impact of Nonprofit Arts and Culture Organizations and Their Audiences which documents the key role played by the nonprofit arts and culture industry in

strengthening the United States’ economy. The publication demonstrated the level at which the nonprofit arts and culture industry drives economic impact in markets, generating revenue, creating and supporting jobs and enhancing tourism. In total, the US nonprofit arts and culture industry generated $166.2 billion in economic impact in 2005, including $63.1 billion in spending by organizations and $103.1 billion in event-related spending by the attendees. Exhibit 23 presents the overall economic impact of the industry for the US in 2005.

Exhibit 23 Performing Arts – Economic Impact Growth

ECONOMIC IMPACT OF THE NONPROFIT ARTS & CULTURE INDUSTRY (2005)

IMPACT

OVERALL

ORGANIZATIONS

AUDIENCES

$166.2 billion

$63.1 billion

$103.1 billion

5.7 million

2.6 million

3.1 million

Resident Household Income

$104.2 billion

$57.3 billion

$49.6 billion

Local Government Revenue

$7.9 billion

$2.8 billion

$5.1 billion

State Government Revenue

$9.1 billion

$3.5 billion

$5.6 billion

Federal Income Tax Revenue

$12.6 billion

$6.9 billion

$5.7 billion

Total Expenditures Full-Time Equivalent Jobs

Source: Arts & Economic Prosperity III, 2005; Americans for the Arts.

As shown, in addition to spending, the nonprofit arts and culture industry generated nearly six million full-time equivalent jobs, $104.2 billion in resident household income, $7.9 billion in local government revenue, $9.1 billion in state government revenue and $12.6 billion in federal income tax revenue.

It is important to recognize that Americans for the Arts Foundation employed its own methodology in the calculation of these economic impact estimates. In general, these figures represent “gross” impacts, inferring that spending from all attendees/participants were considered.

In the economic impact analysis conducted by CSL for this report (in a later chapter), a more conservative approach was taken focusing on “net new” impacts generated in the local Fairbanks marketplace. As such, spending by attendees/participants who happen to reside within the Fairbanks area were not considered (as the dollars they spent would likely be spent locally on other items). While there are some non-local attendees and participants involved with performing arts venues of the type that might be possible for Fairbanks, the large majority will likely be residents of the local area. As such, the quantifiable net new economic impact (i.e., new spending, new tax dollars) generated by many small to mid-market performing arts centers tends to be limited. Instead, their impacts more significantly relate to their intangible and non-quantifiable benefits to the local community and its residents.

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In addition to spending data, the Arts and Economic Prosperity III received data pertaining to audiences’ zip codes which enabled a comparison of event-related spending on the attendees. For the US as a whole, the ratio of local to nonlocal attendees was 39 percent of attendees traveled from outside of the county in which the event took place (non-local) and 61 percent resided inside the county (local). While this was the ratio for the nation as a whole, each community varies. Findings included that non-local attendees spend more than the local attendees. On average, non-profit arts and culture attendees spend $27.79 per person above the cost of admission. As shown in Exhibit 24, local audiences only spent $19.53 above the cost of admission, while non-local audience members spent over $40.

Exhibit 24 Performing Arts – Audience Spending

Further, as expected, non-local attendees spent higher amounts in categories including lodging, meals and transportation, while local attendees spent the highest amount of their spending on food or refreshments.

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In 2003, the Fairbanks community took part in the Americans for the Arts, Arts and Economic Prosperity survey, creating a local profile of the economic impact created by the non-profit arts and culture industry.

Exhibit 25 presents the economic impact of the industry in Fairbanks during 2003, as well as similar communities identified throughout the country.

Exhibit 25 Performing Arts – Fairbanks Economic Impact

ECONOMIC IMPACT OF THE NON-PROFIT ARTS & CULTURE INDUSTRY IN FAIRBANKS (2003) FAIRBANKS IMPACT

OVERALL

ORGANIZATIONS

AUDIENCES

Total Expenditures

$3,314,956

$2,344,737

$970,219

74

50

24

Resident Household Income

$1,691,000

$1,191,000

$499,808

Local Government Revenue

$83,000

$51,000

$31,988

State Government Revenue

$178,000

$111,000

$67,188

Full-Time Equivalent Jobs

SIMILAR COMMUNITY* IMPACT

OVERALL

ORGANIZATIONS

AUDIENCES

Total Expenditures

$8,531,208

$3,677,397

$4,508,109

274

109

153

Resident Household Income

$4,977,615

$2,458,467

$2,264,231

Local Government Revenue

$372,615

$124,467

$234,615

State Government Revenue

$411,923

$161,333

$236,846

Full-Time Equivalent Jobs

Note: Fairbanks data was estimated from 11 local nonprofit arts organizations; Similar communities have been identified as communities with less than 50,000 residents in its population base.

Source: Arts & Economic Prosperity, 2003; Americans for the Arts.

As presented, over $3.3 million in local Fairbanks economic activity was created in 2003, as well as 74 full time equivalent jobs, $1.7 million in household income to local residents and $261,000 in local and state government revenue. While similar communities generated more impact as a whole, it should be noted that the organizations themselves are estimated to create the most impact for the Fairbanks market, while audience members created a higher percentage of similar communities’ impact.

As previously mentioned, this particular methodology differs from that employed by CSL in this study which conservatively approaches the issue of what is a “net new” impact to the local area.

FEASIBILITY ANALYSIS OF A NEW CONVENTION CENTER and PERFORMING ARTS CENTER IN FAIRBANKS Industry Trends Analysis Page 124

Spending associated with Fairbanks non-profit arts event attendees was also analyzed, the results of which are presented in Exhibit 26.

Exhibit 26 Performing Arts – Fairbanks Audience Spending

FAIRBANKS NON-PROFIT ARTS EVENT ATTENDEES SPEND AN AVERAGE OF $18.21 PER PERSON ABOVE THE COST OF ADMISSION ALL ATTENDEES

RESIDENT ATTENDEES

NON-RESIDENT ATTENDEES

Refreshments/Snacks During Event

$2.08

$2.09

$1.71

Meals Before/After Event

$7.44

$7.39

$8.58

Souvenirs and Gifts

$1.63

$1.60

$2.27

Clothing/Accessories

$3.32

$3.33

$3.17

Ground Transportation

$1.81

$1.66

$5.09

Event-Related Child Care

$0.60

$0.55

$1.62

Overnight Lodging (one night only)

$0.81

$0.62

$4.75

Other

$0.52

$0.51

$0.70

Total

$18.21

$17.75

$27.89

CATEGORY

ALL ATTENDEES Refreshments/Snacks During Event, 11%

ATTENDEE MAKEUP

Meals Before/After Event, 47%

Local, 96%

Non-local, 4%

Other, 3% Lodging, 5% Child Care, 3% Ground Transportation, 10%

Souvenirs/ Gifts, 9% Clothing/Accessories, 18%

Note: Residents are attendees who live within the country in which the cultural event occurred; non-residents live outside of the country.

Source: Arts and Economic Prosperity III, 2005; Americans for the Arts.

The vast majority of 96 percent of Fairbanks arts and culture attendees reside in the Fairbanks North Star Borough. However, relative to most other counties/boroughs throughout the country, the FNSB is relatively large in total land area. This was significantly higher than the national average of 61 percent local attendees. However, similar to the national average, the highest amount of spending from the attendees was in the form of meals. On average, the Fairbanks non-profit arts event attendee spent $18.21 above the cost of admission.

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Arts/Culture Tourism The Arts and Economic Prosperity III publication also looked at the spending habits of arts attendees and compared them to other travelers. The publication found, that arts and culture event travelers tend to on average spend more ($623 vs. $457), use a hotel, motel or bed and breakfast more often (62 percent vs.

55 percent), be more likely to spend more than $1,000 (19 percent vs. 12 percent), and travel for a longer period of time (5.2 nights vs. 3.4 nights) than other US travelers.

Further, another study that was conducted by the Travel Industry Association of America and Partners in Tourism indicated that 

65 percent of all adult travelers attended an arts and culture event while on a trip that was more than 50 miles away from home.



32 percent of these cultural travelers stayed longer because of the event.



Of those that stayed longer, 57 percent extended their trips by one or more nights.

Summary/Conclusions The market success of a convention center and performing arts center can be partially attributed to the characteristics of the industry as a whole. Broad industry changes, characterized by—sometimes significant—retraction and expansion in convention/tradeshow and arts event demand and attendance/participation characteristics have taken place within the industry over the past decade. In 2009, the U.S. economy fell into a significant recession. Metrics for 2008 illustrated deteriorating economic conditions that led to a decline in macro industry-wide demand. The speed with which the U.S. economy recovers will determine the extent of the likely negative impact on convention and arts industry demand.

With respect to the convention and tradeshow industry, however, the practical manifestations for smaller communities of the downturn in the economy should be more limited, as they tend to be more economical and regional destinations. These types of third-tier destinations often have lower costs of living (including lower priced hotels, restaurant meals, taxes, etc.) that become more appealing during hard economic times. Likewise, for destinations like Fairbanks that have significantly unique brands and appeal, macro industry characteristics and trends also tend to have less correlation on these destinations’ performance and success.

Additionally, it is critical to recognize that every community and destination is unique, and application of blanket industry-wide, macro assessments of convention/meeting supply and demand phenomena do not consider the uniqueness of individual markets. Like nearly everything in a free market society, individual convention centers operate in a “survival of the fittest” environment. Destination appeal is normally the common denominator with successful projects. Convention centers located in the strongest destinations tend to be the most successful, while facilities located in destinations with weak appeal and/or deficient visitor amenities more often struggle or underperform industry averages.

Recognizing that the convention center facility itself is only one piece of a larger puzzle that non-local event planners tend to consider when selecting sites, more and more communities have been focusing on ways to strengthen the appeal of the proximate area surrounding the “box.” This often involves comprehensively master planning a mixed-use or entertainment district containing the convention center, whereby an attractive pedestrian-friendly environment is created to welcome convention center attendees, through offerings of restaurants, retail, nightlife, entertainment and attractions.

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“Connectivity” issues are often addressed that physically and perceptually bring together the district to other nearby attractions and districts. Healthy, vibrant and exciting environs surrounding the convention center are normally viewed very attractively by event planners and can provide important advantages in marketing a destination and its convention center.

Likewise, with respect to the performing arts industry, the health and characteristics of the local host community has a significant bearing on the success of individual facilities. For a community like Fairbanks and given the type of facility that would likely represent a viable development option, the orientation of the facility will most certainly be largely “local” in nature (i.e., housing local arts groups and largely drawing attendance from the local area). As such, the most important characteristics influencing event/use levels, attendance, participation and financial viability are those relating to: (1) the breadth, vitality and growth potential of local arts organizations; (2) market population; (3) resident income levels; (4) resident educational attainment; and (5) funding and support opportunities by public and private sector entities and individuals. As previously mentioned, while the population of the Fairbanks area (both in terms of residents and corporate base) is relatively low, there are relatively limited competitive entertainment options/venues located in a larger regional area. Additionally, other socioeconomic characteristics of the Fairbanks populace are considered stronger than average—in particular, educational attainment and income levels.

FEASIBILITY ANALYSIS OF A NEW CONVENTION CENTER and PERFORMING ARTS CENTER IN FAIRBANKS Industry Trends Analysis Page 127

5.0. MARKET DEMAND ANALYSIS The purpose of this chapter is to provide an analysis of the estimated market demand for a potential new convention center and performing arts center in Fairbanks. To form a basis for the analysis, a variety of techniques were used. Specifically, we conducted in-person interviews of local groups and individuals, follow-up telephone interviews, a telephone survey of state groups, a telephone survey of targeted national groups, an email survey of targeted international groups and telephone interviews with promoters of touring events. These all represent key event segments that could use either or both a convention or performing arts facility. This survey-based technique provides a detailed understanding of potential user needs, their willingness to use a potential Fairbanks facility, as well as overall perceptions of Fairbanks as a potential host community for their event. This chapter is presented in five sections, including: 

State/National Convention Center Survey



International Convention Center Survey



Local Arts Survey



Promoted Arts Survey



Market Demand Conclusions

The market analysis has also been supplemented with data from previous studies, operating results from competitive/comparable facilities and our review of local market conditions and visitor amenity infrastructure in Fairbanks.

State/National Convention Center Survey The purpose of this section is to provide a summary of the survey research conducted with respect to a potential new convention center in Fairbanks. Specifically, detailed telephone interviews were completed with event planners representing key event segments that could use a potential new Center in Fairbanks.

This survey-based technique provides a detailed understanding of potential user needs, their willingness to use a potential Fairbanks facility, as well as overall perceptions of Fairbanks as a potential host community for their event.

Given Fairbanks’ local market characteristics and the event profiles of other comparable convention facilities in similar markets, it is believed that the primary non-local event markets for a potential new convention center in Fairbanks would be events hosted by state and niche national groups. While local events tend to be the largest users of facilities, they generate little new economic impact for host communities (as opposed to the room nights and new spending generated by non-local event attendees and exhibitors). As such, estimation of the market demand associated with non-local state and niche national groups is of particular interest for communities like Fairbanks who are evaluating new convention center development.

In order to test the potential event market for a new convention center in Fairbanks, a detailed telephone survey was conducted with planners of state and targeted national conventions, conferences and tradeshows. The survey resulted in 100 completed interviews with individual planners, representing more than 150 rotating events. Surveyed groups included professional associations, SMERF (social, military, education, religious, fraternal) groups, government groups, non-profits and other producers of rotating state and select national events. A targeted list of national groups was assembled based on a

FEASIBILITY ANALYSIS OF A NEW CONVENTION CENTER and PERFORMING ARTS CENTER IN FAIRBANKS Market Demand Analysis Page 128

determination of whether the focus or industry serviced by the individual organization might have some linkages or similarities with the unique nature of the Fairbanks destination and product. For instance, groups that deal with industries or topics such as cold weather research, environmental/climate change issues, American Indian/native populations issues, resource development, oil/gas, and other such topics.

A listing of the groups included in this sample (and for others) is provided in Appendix A of this report.

A primary objective of the survey of the state and select national organizations was to ascertain their perceived interest in using a potential new convention center in Fairbanks for one or more future events.

The events identified through the state surveys were analyzed in terms of potential for being held in Fairbanks and in terms of attributes unique to the individual events. The survey results produced information on the likelihood concerning state and select national organization planners rotating their event(s) to Fairbanks, as well as specific event characteristics of those events that represent the potential event markets.

Survey respondents were asked how many recurring off-site events their organizations produce annually.

As presented in Exhibit 1, survey results indicate that 85 percent of the state and select national organizations produce one major off-site event annually, while 14 and one percent hold two and three events annually, respectively. Secondary events, beyond the primary annual event held by all the respondents, tend to be smaller events that are important, nonetheless, to communities through their generation of economic impacts.

Exhibit 1 State/National Convention Center Survey – Total Number of Events Produced Annually

One

Two

Three

0%

20%

40%

60%

80%

100%

Source: CSL State & Niche National Organization Survey, 2009.

One of the initial questions posed to survey respondents focused on groups’ past experience hosting events in Fairbanks. As illustrated in Exhibit 2 on the following page, 52 percent of the state and select FEASIBILITY ANALYSIS OF A NEW CONVENTION CENTER and PERFORMING ARTS CENTER IN FAIRBANKS Market Demand Analysis Page 129

national organizations o surveyed ha ad used Fairrbanks as a site for an e event in the past. While e this indicates that roughly half of the sampled s mark ket has not h held an eventt in Fairbankss, the level of past elatively high compared to o telephone su urveys of thiss nature comp pleted for oth her similar ma arkets. users is re Of those who w have helld events in Fairbanks, F the e most commo only utilized vvenue was W Westmark Hote el and Conferencce Center with 36 percent of responden nts indicating they have he eld an event at this locatio on. A measurem ment of group ps that have not n held an event in Fairbaanks is imporrtant as it rep presents a “sttarting point” forr evaluating what portion n of the pottential markeet would be “incrementall” business tto the Fairbanks area.

Exhibit 2 State/Nationa S al Convention n Center Surv vey – Past Utiilization of Fa airbanks Area a Facilities

Likelihoodd of Utilizing a New Convenntion Center inn Fairbanks d targeted national n orga anization plan nners were asked to in ndicate the llikelihood of their State and organizatiion using a Fairbanks F conv vention cente er, assuming it and the arrea’s hotel in nventory meetts the needs of their t event(s)). Responsess related to sttate and selecct national grroups surveye ed are presented in Exhibit 3, on the follow wing page.

FEASIBILITY Y ANALYSIS OF A NEW CONVENT TION CENTER an nd PERFORMING ARTS CENTER IIN FAIRBANKS Market Dem mand Analysis Page 130

Exhibit 3 State/National Convention Center Survey – Likelihood of Utilizing a New Fairbanks Convention Center

Definitely

20% Positive Response = 53% Negative Response = 47%

Likely

13%

Possibly

20%

Not Likely

32%

Definitely Not

15% 0%

5%

10%

15%

20%

25%

30%

35%

Source: CSL State & Niche National Organization Survey, 2009.

The overall positive interest by respondents in rotating one or more events to Fairbanks if sufficient facility space and hotel inventory existed is 53 percent. As will be discussed, approximately 52 percent of respondents have already held an event in Fairbanks, of which, 73 would consider hosting future events in Fairbanks. Specifically, 20 percent indicated their group would "definitely" hold an event in Fairbanks, 13 percent "likely," 20 percent "possibly," 32 percent "not likely," and 15 percent "definitely not." Based on other surveys that CSL has completed in recent years, Fairbanks’ response is characterized as a moderate to strong overall interest level.

FEASIBILITY ANALYSIS OF A NEW CONVENTION CENTER and PERFORMING ARTS CENTER IN FAIRBANKS Market Demand Analysis Page 131

Exhibit 4 presents Fairbanks’ likelihood figures shown according to whether the group surveyed was a state group or a targeted national group.

Exhibit 4 State/National Convention Center Survey – Likelihood of Utilizing a New Fairbanks Convention Center

State Groups

National Niche Groups

Definitely

Likely

13%

Possibly

Positive Response = 59% Negative Response = 41%

10%

20%

27%

39%

16%

Definitely Not

14%

0%

14%

Likely

Not Likely

27%

Definitely Not

Positive Response = 45% Negative Response = 55%

Possibly

14%

Not Likely

4%

Definitely

32%

30%

40%

0%

10%

20%

30%

40%

50%

Source: CSL State & Niche National Organization Survey, 2009.

As shown, state groups had a 59 percent positive response rate, while the targeted national groups indicated a 45 percent response rate. Thirty-two percent of state groups answered that they would be “definitely” interested in utilizing a Fairbanks convention center, which is a strong cue of in-state demand.

The targeted national groups showed openness to the possibility of utilizing a Fairbanks facility, although only four percent indicated they would “definitely” use a facility, an additional 41 percent still considered use of a facility with “likely” or “possibly” responses. The relatively higher rate of respondents indicating “definitely not” or “not likely” is to be expected, as some of these groups may be fixed in a particular community (i.e., do not rotate) or have other specific reasons that would prevent them from considering the Fairbanks destination.

FEASIBILITY ANALYSIS OF A NEW CONVENTION CENTER and PERFORMING ARTS CENTER IN FAIRBANKS Market Demand Analysis Page 132

Exhibit 5 presents the likelihood of utilizing a new Fairbanks convention center broken apart by whether the planners interviewed had held an event in Fairbanks in the past or not. This is an important indication of interest levels of groups that have never been to Fairbanks in the past (thereby representing the "incremental" business that would likely be a critical target for facility investment).

Exhibit 5 State/National Convention Center Survey – Likelihood of Utilizing a New Fairbanks Convention Center

Held Event in Fairbanks in Past

2%

Definitely

37%

Definitely

Have Not Held Event in Fairbanks

Positive Response = 31% Negative Response = 69%

19%

Likely

17%

Possibly

2%

Definitely Not

0%

10%

30%

40%

Not Likely

Positive Response = 73% Negative Response = 27%

20%

23%

Possibly

25%

Not Likely

6%

Likely

40%

50%

29%

Definitely Not

0%

10%

20%

30%

40%

50%

Source: CSL State & Niche National Organization Survey, 2009.

A review of the data suggests that past Fairbanks’ users hold the destination in relatively high regard, with 73 percent indicating that they would consider future events if convention facilities were available that were suitable for their event(s). Of those groups that have not held an event in Fairbanks in the past, 31 percent indicated that they would consider the area if suitable convention and hotel facilities existed to accommodate their event(s) and attendees. Relative to other surveys conducted of this nature, this response (by groups that have not held an event in Fairbanks) is somewhat higher than typical, and represents an important indicator of potential "incremental" business that a new Fairbanks convention center could attract, if a sufficient facility and appropriate support amenities existed.

FEASIBILITY ANALYSIS OF A NEW CONVENTION CENTER and PERFORMING ARTS CENTER IN FAIRBANKS Market Demand Analysis Page 133

In order to provide a comparative basis (or context) for the Fairbanks’ measured level of interest, Exhibit 6 presents a summary of interest levels measured through a number of similar state organization telephone surveys recently-conducted for comparable CSL studies. For purposes of this comparison, responses related to the targeted national groups surveyed for the Fairbanks study were removed to provide a more consistent comparison of data. Each of the communities listed represents small or medium-sized communities.

Bemidji, MN

Temple, TX

Stillwater, OK

Midland, TX

Davis County, UT

Hammond, LA

Richmond, IN

Boise, ID

Grand Junction, CO

Muskegon, MI

Provo, UT

Owatonna, MN

Branson, MO

Jackson, MI

St. Cloud, MN

11% 24% 24% 19% 22%

17% 12% 17% 17% 37%

3% 12% 28% 30% 28%

0% 4% 17% 44% 35%

15% 19% 38% 19% 9%

5% 11% 30% 25% 29%

21% 16% 25% 25% 13%

12% 11% 42% 25% 10%

1% 3% 33% 31% 32%

6% 4% 24% 35% 31%

11% 6% 36% 32% 15%

5% 10% 21% 23% 41%

11% 16% 40% 20% 13%

3% 4% 36% 30% 28%

10% 13% 17% 27% 33%

9% 4% 34% 24% 29%

8% 10% 27% 28% 27%

Positive Response

59% 59%

Average (1)

Homer, AK

32% 13% 14% 27% 14%

Boulder, CO

Appleton, WI

Interest Levels: Definitely Use Likely Use Possibly Use Not Likely Use Definitely Not Use

Carbon County, UT

Fairbanks, AK (4)

Exhibit 6 State Convention Center Survey – Fairbanks Comparison of Interest Levels with Other Similar Studies

6% 8% 40% 15% 32%

6% 13% 26% 23% 32%

8% 11% 29% 26% 26%

46% 43% 21% 72% 46% 62% 65% 37% 34% 53% 36% 67% 43% 40% 47% 45% 54% 45%

48%

Strength of Interest (2) 4.13

2.78

2.64 1.46 0.54 3.21 1.65 3.40 2.59 0.91 1.28 2.12 1.42 2.70 1.22 1.99 1.78 1.84 1.80 1.77

1.95

Population Basis (3)

0.38

1.47

0.38 1.24 2.29 0.61 2.29 0.58 0.87 1.23 0.61 1.18 1.74 0.58 1.24 1.10 1.74 1.24 0.58 1.18

1.17

Demand Index

1.57

4.09

1.00 1.81 1.24 1.96 3.78 1.97 2.25 1.12 0.78 2.50 2.47 1.57 1.51 2.19 3.10 2.28 1.04 2.09

2.28

Note: Data represented includes all state and regional organizations interview ed (1) Average excludes Fairbanks (2) Comparative strength rating that applies w eighting to positive responses, w ith higher w eight applied to “definitely use” vs. low er w eight for “possibly use.”

Strongest possible score under this rating equals 10 (i.e., if “definitely use” = 100%) (3) Represents estimated size of state/regional event population (average state = 1.00) (4) For comparison purpose, results pertaining to in-state groups are show n.

Source: Recent CSL International state/regional organization telephone surveys, CSL International research.

As presented in the exhibit, Fairbanks’ overall positive response percentage (“definitely,” “likely,” and “possibly”) of 59 percent is higher than the average of the similar study surveys conducted. Further, while the overall positive response percentage is useful in comparatively evaluating the general interest in a particular destination, it is important to recognize differences in the “strength” of specific stated interest. To better assess these variations, a formula was developed to consider the “strength of interest,” whereby a weighting system is applied to positive responses. The highest weight is applied to a “definitely use” response, while the lowest weight is applied to a “possibly use” response. Using this method, Fairbanks measures the highest of all surveys included in this comparison in terms of its “strength of interest” score (4.13 versus an average survey score of 1.95), reflecting stronger than average positive response percentages among the highest weighted categories (i.e., “definitely” and “likely”). It is believed this is a factor of (1) Fairbanks’ status as the second largest city in Alaska, (2) it being the only significantly-sized community north of Anchorage, (3) the limited facility options throughout the state, and (4) the general appeal of the Fairbanks destination and its amenities.

However, this high strength of interest measurement for Fairbanks is somewhat mitigated by the relatively significant percentage of these groups who indicated having held an event in the market in the past; thereby, suggesting that existing venues in Fairbanks are currently capable of addressing some of the potential market.

FEASIBILITY ANALYSIS OF A NEW CONVENTION CENTER and PERFORMING ARTS CENTER IN FAIRBANKS Market Demand Analysis Page 134

As each convention destination has a different population of rotating state/regional events, a “demand index” was formulated. The “demand index” uses the “strength of interest” score for each market and weights it against the estimated population base of rotating events. Specifically, it is estimated that the number of rotating events that have Alaska within their rotation region is significantly lower than that of the average U.S. state. The resulting demand index for a potential new Fairbanks convention center is 1.57, which is below the average survey score of 2.28 among the telephone surveys completed for comparable projects throughout the country. However, importantly, this index does not account for the level of competition in terms of appropriate convention venues relative to the number of rotating events.

Reasons for Not Choosing Fairbanks Event planners who indicated that they would not likely use a potential new convention center in Fairbanks were asked to expand on their reasons. Based on survey results, reasons for not likely rotating to Fairbanks for a future event varied among respondents. A graphical summary of the reasons that state and select national organization planners indicated for not anticipating choosing Fairbanks as a future destination are illustrated in Exhibit 7.

Exhibit 7 State/National Convention Center Survey – Reasons for Not Considering a New Fairbanks Convention Facility Preference for Anchorage

33%

Membership Location/Too Far

31%

Facility Needs/Preferences

13%

Travel Cost

12%

Rotation

5%

Weather

3%

Traditions

3%

Other

0%

1%

5%

10%

15%

20%

25%

30%

35%

Note: Of those respondents with a negative interest in Fairbanks.

Source: CSL State & Niche National Organization Survey, 2009.

As shown, the majority of state and targeted national organizations stated that the main reason they do not choose to hold their events in Fairbanks is many organizations have a preference for Anchorage and Fairbanks is too far away or there is a lack of membership in the area. Other common reasons for not choosing Fairbanks include facility needs/preferences, travel cost, group’s rotational policy, the preference for a nicer climate and traditions of the organization which prevent it from relocating an event to Fairbanks.

FEASIBILITY ANALYSIS OF A NEW CONVENTION CENTER and PERFORMING ARTS CENTER IN FAIRBANKS Market Demand Analysis Page 135

Facility Usage Characteristics Rotating events typically have specific preferences and/or requirements regarding the months in which their event can occur. Likewise, organization planners typically employ a particular rotational policy that allows the event to return to a specific location only after a certain period of time.

Exhibit 8 presents the seasonality patterns for those state and select national events that represent the potential market demand for a potential new convention center in Fairbanks.

Exhibit 8 State/National Convention Center Survey – Event Seasonality

18% 16%

16%

14%

14% 12%

12%

11%

11%

10% 8% 6% 4%

7%

7% 6% 5% 4%

5% 4%

2% 0% January

February

March

April

May

June

July

August

September October

November December

Peak Cruise Season = 32% Note: Of those respondents with a positive interest in Fairbanks Source: CSL State & Niche National Organization Survey, 2009.

Of the 59 percent of interviewees responding with a positive interest toward a potential new facility in Fairbanks, it was found that event seasonality tends to peak in the spring (March and April) and fall months (September, October and November) and subside in the other summer and winter months of the year. This type of spring and fall seasonality pattern is typical within the industry. Additionally, highlighted are the peak Fairbanks cruise months from May to September. Without additional hotel capacity, accommodating additional convention groups during the peak cruise season would be expected to be very challenging. Data results illustrating that nearly 70 percent of interested groups with events occurring outside the cruise summer window is considered quite positive.

FEASIBILITY ANALYSIS OF A NEW CONVENTION CENTER and PERFORMING ARTS CENTER IN FAIRBANKS Market Demand Analysis Page 136

It was also found that the average number of days the facility would be used, per event, among those expressing a positive interest in Fairbanks is four days. Exhibit 9 illustrates the distribution of average estimated move-in, move-out and meeting/event days indicated through the survey via interested respondents.

Exhibit 9 State/National Convention Center Survey – Use Characteristics and Requirements

Move-Out Days, 0.5

Move-In Days, 0.9

Event Days, 2.5 Note: Of those respondents with a positive interest in Fox Cities Source: CSL State & Regional Organization Survey, 2008.

Hotel Requirements As discussed throughout this report, one of the most important aspects in attracting conventions and conferences is the availability of committable, convention-quality hotel rooms. “Convention-quality” is a term that varies based on the particular community and type of group considered. Some state organizations with an interest in Fairbanks would likely be willing to use a significant portion of the local area’s existing and planned quality properties. However, some state and many national organizations will likely require one or more full-service hotel properties of a quality consistent with or higher than Fairbanks’ few premiere full-service lodging properties.

FEASIBILITY ANALYSIS OF A NEW CONVENTION CENTER and PERFORMING ARTS CENTER IN FAIRBANKS Market Demand Analysis Page 137

Although a headquarters hotel ma ay be require ed, state and select natio onal organizattion events w with a embership basse may also use additiona al hotel propeerties in orde er to achieve their room b blocks. larger me Exhibit 10 0 presents a summary s of th he number off hotels that sstate and sele ect national o organization e events are willing g to use to fill their room blocks. b Exhibit E 10 State/National Conve ention Center Survey – Nu umber of Hottel Propertiess Willing to Us se to Fulfill B Block

n above, 40 percent p of th he state and select nation nal organizatiion market w would be williing to As shown assemble a room blocck in more than t one hotel property. Generally, groups with h a large dellegate ple hotel pro operties, while a smaller group will ttypically onlyy use one or two attendancce use multip propertiess. The majorrity (60 perce ent) of respondents indicaated that theiir event is wiilling to only use a single hottel (the vast majority of which w are relatively smalll to mid-sized d events thatt could reaso onably expect to o fit in a sin ngle hotel prroperty). Ad dditionally, 76 6 percent off respondentss agreed tha at the headquartter hotel musst be within close walking proximity. p

FEASIBILITY Y ANALYSIS OF A NEW CONVENT TION CENTER an nd PERFORMING ARTS CENTER IIN FAIRBANKS Market Dem mand Analysis Page 138

Exhibit 11 presents a summary of peak night hotel room requirements by events representing the primary market for a new convention center in Fairbanks.

Exhibit 11 State/National Convention Center Survey – Total Hotel Rooms Required

700 Average = 100 Median = 50

Peak Hotel Rooms Required

600 500 400 300 200 100

100%

95%

90%

85%

80%

75%

70%

65%

60%

55%

50%

45%

40%

35%

30%

25%

20%

15%

10%

5%

0 Percent of Market Capture Note: Of those respondents with a positive interest in Fairbanks.

Source: CSL State & Niche National Organization Survey, 2009.

As shown, 90 percent of Fairbanks’ potential state and select national organization event market requires 200 hotel rooms or less, while 75 percent of potential events require less than 100 peak night rooms.

This is a reflection of the small-sized nature comprising Fairbanks’ estimated state and select national market.

FEASIBILITY ANALYSIS OF A NEW CONVENTION CENTER and PERFORMING ARTS CENTER IN FAIRBANKS Market Demand Analysis Page 139

Exhibit 12 presents the number of hotel rooms required by groups who are not willing to use more than a single hotel to accommodate their event’s room block.

Exhibit 12 State/National Convention Center Survey – Hotel Rooms Required by Groups Requiring a Single Hotel

250 Average = 60 Median = 50

Peak Hotel Rooms Required

200

150

100

50

100%

95%

90%

85%

80%

75%

70%

65%

60%

55%

50%

45%

40%

35%

30%

25%

20%

15%

10%

5%

0 Percent of Market Capture Note: Of those respondents with a positive interest in Fairbanks.

Source: CSL State & Niche National Organization Survey, 2009.

The average room block required by groups requiring a single hotel for their room block was 60 rooms and the median was 50 rooms. The average figure is 40 rooms lower than the room block required by all potential Fairbanks events, while the median is the same. This data begins to provide context for the potential sizing requirements for a headquarters hotel property associated with a new Fairbanks convention center.

FEASIBILITY ANALYSIS OF A NEW CONVENTION CENTER and PERFORMING ARTS CENTER IN FAIRBANKS Market Demand Analysis Page 140

Facility Sppace Requirem ments nducting inte erviews with various state e and select national org ganizations, tthose respon ndents While con expressing g a positive interest in Fairbanks F indiicated their o organization’ss approximate e need for ssquare footage according a to type t of facilitty space. Ass indicated byy the exhibitts presented below and o on the following pages, these e space requ uirements are e separated iinto the need d for total e exhibit space,, total meeting space s and total ballroom space. State and a select naational organizzation planne ers were first asked whether exhibit e space was required for their eve ent (i.e., contaaining a trade eshow functio on), summarizzed in Exhibit 13 3.

Exhibit E 13 Statte/National Convention C Ce enter Survey – Exhibit Spa ace Required d

No, 34%

Note: Of those respon ndents with a positive intere est in Fairbanks Source: CSL State & Niche National Organization Survey, 2009.

Yes, 66%

p resp ponded that th heir event req quires exhibitt space. Whille this As shown, 66 percent of surveyed planners uggests that any a new convention cente er in Fairbankks that lacks a traditional exhibit hall w would initially su miss out on o over half of o its potentia al market, it iss our experie nce that man ny groups cou uld use ballroo om or other multipurpose sp pace to fulfill their exhibittion space reequirements. Exhibit 14 presents me eeting al concrete floor exhibit sspace, or wh hether a multtipurpose balllroom planners’ requirement of traditiona uld suffice. space wou Exhibit E 14 State/N National Conv vention Centter Survey – T Total Exhibit Space Requirred

FEASIBILITY Y ANALYSIS OF A NEW CONVENT TION CENTER an nd PERFORMING ARTS CENTER IIN FAIRBANKS Market Dem mand Analysis Page 141

As shown in the exhibit on the previous page, only five percent of the respondents with a positive interest in Fairbanks (that require space for exhibitions/tradeshows), require traditional concrete floor exhibit space. The remaining (and vast majority) indicated a ballroom or other multipurpose space would be sufficient for their exhibition/tradeshow needs. Nevertheless, it is believed that this data highlights the importance of space appropriate for exhibit activities for a significant percentage of Fairbanks’ state and select national event market. Additionally, as will be discussed, nearly all groups also require some level of breakout meeting space and/or ballroom space concurrent to their exhibition space needs.

Exhibit 15 summarizes the average exhibit space level associated with the state and select national event market.

Exhibit 15 State/National Convention Center Survey – Total Exhibit Space Required

45,000

Gross Square Feet of Exhibit Space

40,000

Average = 5,100 sq ft.

Median = 3,000 sq ft.

35,000 30,000 25,000 20,000 15,000 10,000 5,000

95%

90%

85%

80%

75%

70%

65%

60%

55%

50%

45%

40%

35%

30%

25%

20%

15%

10%

5%

100%

Westmark

0

Percent of Market Capture Note: Of those respondents with a positive interest in Fairbanks.

Source: CSL State & Niche National Organization Survey, 2009.

As shown, of the 66 percent of Fairbanks’ potential state and select national organization event market that require exhibit space, the average amount of exhibit space required by Fairbanks’ state and select national organization market is approximately 5,100 square feet, with 90 percent of Fairbanks’ market requiring 12,000 square feet of exhibit space or less. Thirty-four percent of Fairbanks’ market potential does not require exhibit space as their events lack a tradeshow/exhibit component. Additionally, the Westmark Hotel and Conference Center, most used by current event planners, does not offer sufficient exhibit space for those surveyed. However, it does offer banquet halls that are sometimes used for exhibit functions, but its largest contiguous room is only 5,400 square feet, which would theoretically accommodate approximately 70 percent of the potential market. Additionally, in fall, winter and spring it offers the Tanana Tradeshow Area, with approximately 1,900 square feet of exhibit space, though the space is utilized as the baggage storage room during the summer months. In reality, the accommodated

FEASIBILITY ANALYSIS OF A NEW CONVENTION CENTER and PERFORMING ARTS CENTER IN FAIRBANKS Market Demand Analysis Page 142

capacity percentage by the Westmark (and other existing area properties) is likely considerably less, due to concurrent space needs by groups for food functions, assemblies and breakouts.

Breakout meeting space is a significant portion of a “complete” convention center. State and select national organization event planners were also asked to estimate the average breakout meeting space levels for their events. Because meeting room space can be used for many different purposes, actual square footage requirements can vary considerably. Responses are summarized below in Exhibit 16.

Exhibit 16 State/National Convention Center Survey – Total Meeting Space Required

35,000 Average = 6,300 sq ft.

Median = 4,400 sq ft.

Gross Square Feet of Meeting Space

30,000 25,000 20,000 15,000

Westmark

10,000 5,000

100%

95%

90%

85%

80%

75%

70%

65%

60%

55%

50%

45%

40%

35%

30%

25%

20%

15%

10%

5%

0

Percent of Market Capture Note: Of those respondents with a positive interest in Fairbanks.

Source: CSL State & Niche National Organization Survey, 2009.

As shown, in order to capture approximately 90 percent of Fairbanks’ market, more than 13,000 square feet of breakout meeting space is required. The Westmark Hotel and Conference Center, as indicated, has the ability to capture a fairly significant percentage of the potential event market, at 85 percent. It is important to note that other facility space, such as ballroom space (and even exhibit space in some cases) can often be used to accommodate meeting space requirements.

Event planners were also asked to estimate the average amount of ballroom space used for their events.

Located on the following page, Exhibit 17 illustrates that 90 percent of Fairbanks’ state and select national organization event market requires 6,000 square feet of dedicated ballroom space or less.

Additionally, 86 percent of respondents with an interest in Fairbanks require ballroom space to be available. It is important to note that ballroom space is the most versatile space offered in most convention centers. Ballrooms are regularly subdivided and concurrent events and/or activities are held in them.

FEASIBILITY ANALYSIS OF A NEW CONVENTION CENTER and PERFORMING ARTS CENTER IN FAIRBANKS Market Demand Analysis Page 143

Exhibit 17 State/National Convention Center Survey – Total Ballroom Space Required

14,000 Average = 2,800 sq ft.

Median = 2,250 sq ft.

Gross Square Feet of Ballroom Space

12,000 10,000 8,000 6,000

Westmark

4,000 2,000

95%

100%

90%

85%

80%

75%

70%

65%

60%

55%

50%

45%

40%

35%

30%

25%

20%

15%

10%

5%

0

Percent of Market Capture Note: Of those respondents with a positive interest in Fairbanks.

Source: CSL State & Niche National Organization Survey, 2009.

Many planned conferences, conventions or meetings have seated banquets as part of the event.

Currently, the Westmark offers 5,400 square feet of ballroom space, which can accommodate nearly 85 percent of Fairbanks’ potential market. Exhibit 18 displays event planners’ estimated seated ballroom attendance for their events.

Exhibit 18 State/National Convention Center Survey – Average Ballroom Function Attendance

900 Average = 220 Median = 200

800

Ballroom Attendance

700 600 500 400 300 200 100

Percent of Market Capture Note: Of those respondents with a positive interest in Fairbanks.

Source: CSL State & Niche National Organization Survey, 2009.

FEASIBILITY ANALYSIS OF A NEW CONVENTION CENTER and PERFORMING ARTS CENTER IN FAIRBANKS Market Demand Analysis Page 144

100%

95%

90%

85%

80%

75%

70%

65%

60%

55%

50%

45%

40%

35%

30%

25%

20%

15%

10%

5%

0

In order to capture 90 percent of its state and select national organization event market, a Fairbanks convention center would need food function space (ballroom) for nearly 450 attendees.

Exhibit 19 summarizes the total sellable space levels associated with the state/select national event market.

Exhibit 19 State/National Convention Center Survey –Total Sellable Space Required

80,000

Gross Square Feet of Sellable Space

70,000

Average = 14,100 sq ft.

Median = 12,300 sq ft.

60,000 50,000 40,000 30,000 20,000

Westmark

10,000

100%

95%

90%

85%

80%

75%

70%

65%

60%

55%

50%

45%

40%

35%

30%

25%

20%

15%

10%

5%

0

Percent of Market Capture Note: Of those respondents with a positive interest in Fairbanks.

Source: CSL State & Niche National Organization Survey, 2009.

As shown, state and select national groups surveyed require an average of 14,100 square feet and a median of 12,300 square feet of sellable space for their events. In order to capture 90 percent of the Fairbanks potential event market, 27,500 square feet of sellable event space would be required. With 17,000 square feet of total sellable event space (representing the largest “traditional” convention/conference facility in Fairbanks with associated lodging), the Westmark can theoretically currently accommodate 70 percent of Fairbanks’ potential event market; however, the actual percentage is likely less than this due to the delineation and square footage apportionment of the Westmark’s space, along with other marketing/operational/scheduling issues associated with its core cruise business.

FEASIBILITY ANALYSIS OF A NEW CONVENTION CENTER and PERFORMING ARTS CENTER IN FAIRBANKS Market Demand Analysis Page 145

Delegate Attendance Event planners were asked to estimate the average delegate attendance levels for their events. These figures exclude spouses and guests of the event’s delegates. Responses are summarized in Exhibit 20.

Exhibit 20 State/National Convention Center Survey – Average Attendance

Delegate

Exhibitor

4,500 4,000

Delegate Attendance

3,500 3,000 2,500 2,000 1,500 1,000 500 100%

95%

90%

85%

80%

75%

70%

65%

60%

55%

50%

45%

40%

35%

30%

25%

20%

15%

10%

5%

0

Percent of Market Capture Note: Of those respondents with a positive interest in Fairbanks.

Source: CSL State & Niche National Organization Survey, 2009.

This exhibit illustrates the percentage of the potential market represented by various levels of attendees to Fairbanks events. As shown, nearly 50 percent of the Fairbanks potential state and select national organization event market will have approximately 225 attendees or fewer, while 90 percent possess 1,000 or fewer.

FEASIBILITY ANALYSIS OF A NEW CONVENTION CENTER and PERFORMING ARTS CENTER IN FAIRBANKS Market Demand Analysis Page 146

To advance the understanding of the non-local involvement associated with these events, Exhibit 21 was created to compare events to the percentage of delegate attendance that is non-local.

Exhibit 21 State/National Convention Center Survey – Percentage of Non-Local Delegate Attendance

100

Percentage of Attendance Non-Local

90 80

Average = 60% Median = 75%

70 60 50 40 30 20 10 0 Events

Note: Of those respondents with a positive interest in Fairbanks.

Source: CSL State & Niche National Organization Survey, 2009.

The exhibit shows that on average 60 percent of the delegates are non-local, while the median is 75 percent. Events which draw strong non-local attendance can have a significant economic impact on the community hosting the event.

In addition to reviewing the percentage of non-local delegates associated with events, the percentage of non-local exhibitor attendance was also analyzed. Exhibit 22, on the following page, presents the findings. On average, 53 percent of exhibitor’s are non-local, while the median is 65 percent.

FEASIBILITY ANALYSIS OF A NEW CONVENTION CENTER and PERFORMING ARTS CENTER IN FAIRBANKS Market Demand Analysis Page 147

Exhibit 22 State/National Convention Center Survey – Percentage of Non-Local Exhibitor Attendance 100

Average = 53% Median = 65%

Percentage of Attendance Non-Local

90 80 70 60 50 40 30 20 10 0

Events

Note: Of those respondents with a positive interest in Fairbanks.

Source: CSL State & Niche National Organization Survey, 2009.

Overall Impressions Event planners were asked for their overall impressions of Fairbanks as a potential site for their organization’s events. Their responses are summarized in Exhibit 23.

Exhibit 23 State/National Convention Center Survey – Overall Impressions of Fairbanks Fine/Good Choice

28%

Friendly People/CVB

13%

Don't Know

10%

Weather Dependent

10%

Good Location/Accessible

10%

Current Facilities Too Small

10%

Other

9%

Scenic/Good Sight Seeing Too Far

0%

6% 4%

5%

10%

15%

20%

25%

Note: Of those respondents with a positive interest in Fairbanks.

Source: CSL State & Niche National Organization Survey, 2009.

FEASIBILITY ANALYSIS OF A NEW CONVENTION CENTER and PERFORMING ARTS CENTER IN FAIRBANKS Market Demand Analysis Page 148

30%

The majority of interested respondents indicated a general satisfaction with Fairbanks as a potential event destination, indicating it as a good choice, friendly and accommodating CVB representatives and community, accessible location and good sight-seeing. Concerns that were mentioned involved the dependence on weather, facilities being too small and Fairbanks being potentially too geographically remote of a destination.

International Convention Center Survey In addition to the state/select national surveys performed, a targeted sample of international organizations with a history of recurring conferences were emailed a survey concerning their interest in the Fairbanks destination and the likelihood that they might host a future event in Fairbanks if a sufficient convention facility and lodging package existed. Additionally, the survey collected some base information concerning the size of the groups’ events and facility/destination preferences and requirements.

Organizations specifically targeted included those involved with the following industries: cold weather research, arctic/sub-arctic issues, petroleum, climatology, geography, Native American studies, and other such issues/topics that are believed to match well with the characteristics and “brand” of the Fairbanks destination. Over 150 emails went out to meeting planners of the targeted organizations across the globe, resulting in a total of 21 completed surveys. Survey results included the following: 

22 percent of respondents indicated some level of interest in hosting an event in Fairbanks, assuming a convention/conference facility and hotel package existed that fully meet the needs of the individual groups.



Many interested groups indicated the need for local financial incentives or support to help outweigh the travel costs for international delegates.



Of the 78 percent of surveyed groups who indicated a lack of interest, frequently indicated reasons for a lack of interest included:



o

Cost and time of travel.

o

Preference for warmer and more centrally-located destinations.

o

Appeal of destination in terms of amenities, nightlife, entertainment and other items as compared to other international cities.

o

Preference for European destinations as opposed to North American cities.

o

Limited or no membership in Alaska.

Of those groups expressing interest, convention facility and hotel requirements included: o

Exhibit space requirements (for tradeshow/exhibitions) were typically small, with less than half of the organizations requiring exhibit space. A typical amount required is approximately 2,000 to 10,000 square feet of exhibit space.

o

Typical breakout meeting space requirements consist of five to 10 rooms offered at one time, with an average of 1,000 square feet needed in each room.

o

Typical ballroom space requirements included reception space for 150 to 1,000 people resulting in a space of 2,250 to 15,000 square feet required.

o

Appropriate supporting hotels are considered very important and critical to all groups.

Most groups mentioned the need for a convention-quality hotel offering between 100 and 300 rooms, three to four-star hotel (in terms of quality), spread across one or two hotel properties for room block requirements.

FEASIBILITY ANALYSIS OF A NEW CONVENTION CENTER and PERFORMING ARTS CENTER IN FAIRBANKS Market Demand Analysis Page 149

Local Arts Survey Representatives from local arts organizations that have been established to foster performing arts participation and development in the Fairbanks area were interviewed to better understand the usability and availability of existing local facilities, the potential demand for a new performing arts center (PAC) and the needs and preferences of the organizations. A variety of local and regional arts organizations were interviewed during in-person focus groups and individual meetings conducted by CSL. Such organizations included those that produce/sponsor orchestras, musicals, plays, concerts, recitals, guest speakers, ballet, dance, opera and other live performances. Organizations interviewed included: 

Dance Theatre Fairbanks



Fairbanks Arts Association



Fairbanks Concert Association



Fairbanks Flautists



Fairbanks Shakespeare Theatre



Fairbanks Symphony Orchestra and Youth Symphony



North Star Ballet / Dance Foundation



Northland Youth Choir



Opera Fairbanks



Fairbanks Light Opera Theater



Youth Symphony

Local Arts Groups Comments on Existing Local Facilities Each organization discussed a multitude of topics, including observations regarding existing local Fairbanks facilities and their ability to host existing and potential future events/performances/activities.

The local arts groups’ comments regarding these existing facilities are located below and on the following pages.

Hering Auditorium This venue offers the largest theater in Fairbanks (1,289 standard seats and 18 wheelchair seats) and is attached to the Lathrop High School. Additionally, most of Fairbanks Concert Association performances are held here.

General comments from local arts groups about the venue included: 

Scheduling difficulties – School District controls the calendar, with Concert Association having “first dibs” thereafter. Users meetings take place every April to schedule the facility for the following year.

FEASIBILITY ANALYSIS OF A NEW CONVENTION CENTER and PERFORMING ARTS CENTER IN FAIRBANKS Market Demand Analysis Page 150



Low costs - base facility rental is $1,200, although the facility receives many fee waiver requests.



Insufficient box office and lobby space.



Difficult access for elderly and handicapped patrons.



Small orchestra pit.



Inadequate dressing room, green room and backstage space.



Lack of restroom and food and beverage facilities.



Inability to accommodate some larger events.

Davis Concert Hall and Salisbury Theater The Davis Concert Hall and Salisbury Theater are located on the University of Alaska - Fairbanks campus and are very heavily utilized. The University’s use, including student groups, performances, recitals and competitions get priority in the booking calendar and primarily consume this space. Next in line for use is the Symphony.

General comments from local arts groups about the venue included: 

Not centrally-located within Fairbanks.



Scheduling difficulties – University controls the calendar.



Small orchestra pit(s).



Inadequate dressing room, green room and backstage space.



Lack of nearby parking.



Lack of stage depth and height.



Lack of practice space.



Great acoustics and overall look at Davis – size and availability are its biggest constraints.



Davis is a more “single-purpose” venue, much more suited for concerts, rather than any type of musical or theatrical production.



Salisbury in need of renovation/upgrades.

Local Arts Groups Summary of Demand The greater Fairbanks/North Star Borough area is served by numerous performing arts organizations and related groups. In general, the number of arts organizations active in the Fairbanks area is moderate to strong, relative to the area population. Local arts groups currently utilize a combination of existing theaters and auditoriums and other multipurpose event facilities to host their events. Interviews indicated strong participation in the arts and general support for the development of a new PAC. There are many opportunities for collaboration between groups that are currently limited by existing facilities.

In general, each of these groups has unique preferences for the characteristics of a potential new PAC. For instance, ballet groups emphasize the need for a large, deep stage (i.e., 50’ x 50’), theater groups focus on plentiful fly and wing space, while the symphony will strongly prefer an orchestra pit (i.e., 50’ x FEASIBILITY ANALYSIS OF A NEW CONVENTION CENTER and PERFORMING ARTS CENTER IN FAIRBANKS Market Demand Analysis Page 151

20’) and sufficient stage length. Seating capacity needs range from as low as 300 for smaller groups, to as many as 4,000 for a large event put on by the Fairbanks Concert Association. Several groups could shift many of their productions to a new PAC and possibly increase the number of events produced locally, while other groups would likely continue using smaller, existing venues for most of their productions. Beyond simply quality-of-life benefits, the arts can have other local benefits as well. For example, some Fairbanks area companies and hospitals are using the local performing arts community as a part of their recruiting efforts.

To help identify accommodations and amenities a new PAC should offer, local arts groups were asked what kind of features would benefit their organization and their productions/uses. Below are the recommendations and suggestions put forth by the organizations.

Opera Fairbanks Opera Fairbanks would like to see a larger facility that could be made more intimate, thus allowing the possibility of booking larger traveling shows which are otherwise unable to appear in Fairbanks.

Currently, Opera Fairbanks is limited by the lack of suitably-sized orchestra pits in existing local venues (none can accommodate more than 40 people), which limits the scope of plays and performances that can be accommodated. An ideal pit would be capable of accommodating 70 or more people. Additional features that could add to Opera Fairbanks’ overall presence include: dressing rooms sufficient for a large-sized cast, including potable water, restroom facilities, and large (chorus/orchestra) and small (leads) dressing rooms, a green room to host pre and post-event artist gatherings, fly space, traps with hydraulic lifts to pit and portions of the stage, adjustable/moveable walls and/or seating tiers, full-sized screen with front and rear projection capabilities, comfortable seating, wig/makeup facility and costume shop and full-sized rehearsal space.

The lack of space has also limited the potential for partnerships or collaboration with Anchorage and Juneau Operas, which are both interested, however, cannot occur without a proper facility in Fairbanks.

Additionally, the inability to book beyond outside of one year in local facilities inhibits Opera Fairbanks when planning, procuring partnerships/guest artists and marketing.

Furthermore, Opera Fairbanks would like to see a "children's" theater—a smaller, more intimate space (perhaps 150 seats), with a lower stage (perhaps 12 inches high), with some fly/wing and lighting capabilities, to be used primarily as a teaching space for elementary through high school children. In addition to children's classes and children's productions, the space could be used for poetry readings, recitals, presentations, workshops, small shows with chamber ensemble or piano, movie showings, etc.

With the development of a “children’s” theater Opera Fairbanks has an interest in potentially initiating an after-school theatre/opera program for elementary and middle school children that would teach all aspects of theatre and opera (i.e., sets, costumes, makeup, lighting, props, stage direction, vocalization, etc.). In addition, Opera Fairbanks has an interest in partnering or cross-marketing with the annual Summer Arts Festival. Finally, Opera Fairbanks does not feel there is a need for a black box theater as a component of a potential new PAC.

Fairbanks Concert Association Currently, the Fairbanks Concert Association typically organizes ten performances annually, and does not foresee the number of events changing in the future. Events include concerts, lectures, dance performances, comedy acts and other live performances. The association’s attendance levels have been strong, with several events even selling out. A majority of the events are held at Hering Auditorium, as the Fairbanks Concert Association has a good working relationship with the Fairbanks North Star Borough FEASIBILITY ANALYSIS OF A NEW CONVENTION CENTER and PERFORMING ARTS CENTER IN FAIRBANKS Market Demand Analysis Page 152

School District. Future goals for the organization include attracting better talent, growing the attendee base and increasing corporate sponsorships. In regard to facility-related desires, Fairbanks Concert Association would benefit from having office space, a box office and reception areas in the facilities it utilizes. While the group could foresee limited use of a new PAC, the cost to rent the facility, acoustics, seating capacity and date availability would all be critical issues to their consideration of future expansion of usage.

North Star Ballet / Dance Foundation The North Star Ballet/Dance Foundation has been in existence for 28 years and currently organizes more than ten performances annually, including the annual Nutcracker performance and a Spring Gala. A majority of their events are held at Hering Auditorium and Salisbury Theater, but they would be strongly interested in using a new PAC, as stage depth and wing space at Herring Auditorium does not adequately address their needs. Additionally, North Star Ballet/Dance Foundation also operates the North Star Ballet School, held at the Fairgrounds, which includes approximately 200 students. The North Star Ballet School would also be interested in relocating to a new PAC. In the future, this organization is interested in increasing the number of guest artists brought in to perform. In regard to facility-related desires, the organization is not interested in a “multi-purpose room” development but noted the lack of studio space in Fairbanks.

Fairbanks Symphony and Other The Fairbanks Symphony has been in existence for more than 60 years and currently presents seven annual concerts, as well as additional recitals. All events are held at Davis Concert Hall; however, recent growth in attendance has led to an increase in the number of sold-out performances. If a new venue would be developed, the Fairbanks Symphony feels the number of performances and recitals could grow, along with attendance.

In addition, to the above groups, other organizations had comments to contribute. While many of the local organizations would likely shift some or all of their productions to a new PAC, many fear that rental costs might be prohibitive. For example, the Northland Youth Choir organizes a week-long annual choral festival that could potentially be housed at a new PAC. Additionally, several smaller organizations expressed a general disinterest in using a new PAC in Fairbanks due to already having a place to utilize, such as the Dance Theatre Fairbanks, which hosts all events at their new facility (a renovated fire station). Finally, Fairbanks Drama Association hosts all events at their 154-seat Riverfront Theater facility. It is important to many of these smaller groups to have “a home they can call their own”.

Nevertheless, many representatives expressed the belief that a new PAC would be a significant asset in raising the perception of the arts in Fairbanks and to further grow local programs and interest.

Other Amenities / Concepts for Local Organizations Many of the above organizations contributed opinions; however, all ideas were not presented above.

Other suggestions put forth for a new PAC included: the incorporation of classrooms, coaching spaces, practice and rehearsal rooms, music library, visual arts space (including areas for permanent and rotating displays), concession stands, restaurant and in-house catering facilities, gift/retail shop(s), office space, arts incubator angle and apartments or condos to be used for guest/traveling artists when hotel rooms are unavailable or for on-site convenience.

FEASIBILITY ANALYSIS OF A NEW CONVENTION CENTER and PERFORMING ARTS CENTER IN FAIRBANKS Market Demand Analysis Page 153

Promoted Arts Survey As a component of the evaluation of the proposed performing arts center’s market potential, a number of event promoters were contacted and surveyed as well. Telephone interviews were completed with regional and national promoters of touring entertainment and performing arts shows/events representing over 500 shows of a wide variety of types, including: concerts and variety shows, Broadway/musicals, theatrical productions and dance/ballet.

The promoters were asked a number of questions relating to their experiences in Fairbanks and other Alaska communities, opinions with respect to the Fairbanks location, preferred/required physical and operational characteristics of a potential new performing arts center and their interest and anticipated future usage of a new venue. Information received from promoter interviews is presented below and on the following pages. Specifically, as part of this analysis, key representatives from the following event promotion companies were contacted:           

Alan Wasser Associates Barney McClure Beaver Productions Big League Theatricals Brad Simon Organization Cox Events Grutman and Murtha House of Blues Jack Utsick Presents Jade Presents Jam Productions

          

Jam Theatricals Live Nation Moscow Ballet Police Productions Premier Productions Rush Concerts The Acting Company The Booking Group Trudy Heffernan WestCoast Entertainment Whistling Swan Productions

Due to the variances in the number and types of events hosted at comparable performing arts centers, four general categories of events were developed and utilized for illustrative purposes. Below are descriptions of each general category, including examples of specific events/productions and event types. 

Concerts and Variety Shows include a variety of musical acts, including rock, pop, alternative, Christian, country, rap, adult contemporary and other music genres, as well as comedy acts, readings and other variety performance events.



Broadway / Musicals include major musical productions, such as “Wicked,” “Les Miserables” and “The Producers,” as well as other smaller productions.



Theatrical Productions include plays, dramas, operas and other such artistic performances.



Dance / Ballet includes touring dance groups performing classical ballet, jazz/funk, tap and other interpretive movement productions.

Summaries of the types of comments received through these telephone interviews, by general category, are provided on the following two pages. The focus of these summaries largely pertain to requirements and preferences for facility sizing, capabilities and amenities, as well as comments about geographic location and possible market niches.

FEASIBILITY ANALYSIS OF A NEW CONVENTION CENTER and PERFORMING ARTS CENTER IN FAIRBANKS Market Demand Analysis Page 154

Concerts and Variety Shows As previously mentioned, concerts and variety shows include a diversity of musical acts, including rock, pop, alternative, Christian, country, rap and other music genres, as well as comedy acts, readings and other variety performance events. Concerts have historically been one of the most profitable types of spectator events. Arenas, amphitheaters, and performing arts theatres are the primary venues utilized for concert events. Demand for these facilities by concert groups varies depending on the type of act, as a large concert could have an attendance of 25,000, whereas, a smaller concert may only have 500 in attendance. Additionally, stage requirements are generally vague, as these productions are often flexible in nature, with the ability to play on make-shift platform stages in arenas, or general proscenium stages in theaters. Size of the stage varies, with an average-sized stage consisting of a width of 60 feet, depth of 50 feet and a height of 50 feet.

Overall, four out of five promoters interviewed indicated an interest in using a new Fairbanks performing arts center, assuming it met the physical, cost and scheduling requirements of their events. Comments included the following: 

We love Fairbanks. We have had artists perform there previously and enjoyed our time while in the community.



Fairbanks and Anchorage are our two top places to stop while in Alaska; we do not go to one without stopping at the other, it is too costly.



Fairbanks could use a new or newly updated performing arts theater, the current facilities are somewhat aged. The current facility we use, we sell out very quickly. With a market their size, I think they could support a 1,500-seat new theater.



As long as we are able to schedule an event there and at Anchorage near each other, we’ll continue to come to Fairbanks.

Broadway / Musicals For the purpose of this analysis, Broadway/musicals include major musical productions such as “Wicked,” “Les Miserables,” “Rent” and “The Producers,” as well as other smaller productions. The run of these events depends on the production size and popularity of the show, market demand in local areas and venue capabilities. Many smaller shows run one night only per venue, mid-size productions can be split into two markets per week with two to four shows in each venue, and large sized productions, can run for weeks in large metropolitan areas. On average, the attendance at the touring Broadway shows runs from 1,500 to 2,000. However, based on conversations with tour promoters, some of these shows are willing to use smaller theaters in certain markets. Of the touring Broadway show promoters interviewed, a relatively low interest level was indicated in using a Fairbanks theater.

Additionally, stage requirements for Broadway-type shows include a proscenium stage and significant amount of stage area. The average technical specifications include a stage area of 40 feet by 35 feet deep, and a grid height of 30 feet. Other requirements, not as crucial as stage type and space, but for less adaptation by the touring show, an additional 15 to 20 feet on each side of the stage area for wing space, 20 fly lines, proper theatrical lighting, and eight to 12 fully-equipped dressing rooms are required

by Broadway-type touring shows. No additional rehearsal spaces, including Black Box theaters, were indicated as needed by promoters of these types of shows.

FEASIBILITY ANALYSIS OF A NEW CONVENTION CENTER and PERFORMING ARTS CENTER IN FAIRBANKS Market Demand Analysis Page 155

Theatricals Theatrical productions consisting of plays, dramas, operas and other such artistic performances also frequently utilize performing arts facilities. A main difference between theatricals and the Broadway events described above is they are generally smaller in terms of the size of production and space and seating required. Additionally, many touring theatricals are produced only one night per market, or stay for split weeks, with three to four performances in two markets per week. Theatrical productions also tend to rely more on the host venue to promote the show within the local region. Further, theatrical touring groups often schedule matinees for school groups, as well as host educational workshops in conjunction with local schools and performing arts groups.

In terms of space and theater requirements, theatrical productions also tend to be more flexible. Seats required ranges from 500 to 2,000 seats. Theatricals are also more willing to work around a venue’s technical capabilities, adjusting to a lower number of lighting units, rigging lines, and fly and wing space.

Assuming that a potential new Fairbanks Theater would meet their needs, nearly all theatrical promoters interviewed expressed interest in using a Fairbanks Theater. However, all promoters interviewed additionally expressed the need to be able to book events in another Alaska market near their time in Fairbanks, as well as the need for help from the local venue to schedule workshops, outings and other events to occupy the cast and staff’s time, to outweigh the costs to get the production to the market.

Dance / Ballet Touring dance groups consisting of performances of classical ballet, jazz/funk, tap and other interpretive movement productions also make use of performing arts facilities. Typical dance touring seasons run during the winter months, late-October to mid-March, with approximately 50 to 80 cities on the routed schedule. Within each city, a dance group will generally put on two to three evening productions, sometimes in conjunction with local dance groups’ performances, acting as “special guests” or “featured performances.” The typical attendance of dance productions, on average, is around 2,000, although some groups can accommodate to theaters with only 1,000 to 1,500 seats.

Although seating requirements are generally flexible, the type and size of the stage is crucial for promoters when booking theaters across the country. At minimum, a theater needs to offer a stage width of 30 feet, depth of 40 feet and a height of 60 feet (including rigging and fly space), for dancing space alone. Further, it was indicated through a few interviews that the incorporation of a “spring” floor into any theater development in Fairbanks will greatly increase the likelihood of events coming to the facility. Like theatrical productions, many educational programs are developed for touring dance groups.

The dance production team will come in one or two days early to host workshops and other educational and community outreach programs to benefit the local market, as well as develop advertising and promotion for the main stage productions. Of the dance promoters interviewed, interest was moderate for using a Fairbanks Theater with more than half indicating they might consider it if the facility fully met their needs, including affordability, local assistance and scheduling issues.

FEASIBILITY ANALYSIS OF A NEW CONVENTION CENTER and PERFORMING ARTS CENTER IN FAIRBANKS Market Demand Analysis Page 156

Likelihoodd of Utilizing a New Perform ming Arts Faciility in Fairbannks on to the ev vent informattion and facillity characterristics questio ons, promote ers were askked to In additio indicate the t likelihood of their org ganization using a Fairban nks PAC, asssuming it and d the area’s hotel inventory meets the needs n of theirr event(s). Responses R re lated to regio onal and national promote ers of touring en ntertainment and performing arts are prresented in Exxhibit 24.

Exhibit E 24 Promoted Arts Survey y – Likelihood d of Utilizing a New Perforrming Arts Ce enter

The overa all positive intterest by resp pondents, if sufficient s faciility space and hotel inven ntory existed, is 69 percent. Specifically, 29 percent in ndicated theirr group would d "definitely" hold an even nt in Fairbankks, 19 percent "likely," 21 perrcent "possibly," seven perrcent "not likeely," and 25 p percent "defin nitely not."

FEASIBILITY Y ANALYSIS OF A NEW CONVENT TION CENTER an nd PERFORMING ARTS CENTER IIN FAIRBANKS Market Dem mand Analysis Page 157

Market Demand Conclusions Overall, in reference to the market demand analysis for a new convention center facility in Fairbanks, the existing facilities in Fairbanks are limited in their ability to attract non-local conventions, conferences and tradeshows. Survey results indicated a strong demand from in-state groups, moderate demand from targeted national groups and a limited to moderate demand from targeted international groups. A significant portion of non-local demand is believed to be “unmet” by existing local facilities.

While demand is estimated to be negatively impacted by Fairbanks’ remote location and cost/logistics associated with travel, it is believed that this is partially mitigated by the uniqueness of the destination and the “fit” for many groups within specific industries.

As much of the event activity and attendance of a convention center and performing arts center is typically generated by local area residents, this will likely have implications concerning each of the potential facilities’ overall use and attendance levels. Therefore, demand by local groups is estimated to be lower than the average comparable facility (due to population levels within practical driving distance), but will be an important component of facility utilization.

Similarly, the number of arts organizations active in the Fairbanks area is moderate to strong, relative to the area population. There are a variety of existing performing arts venues in the Fairbanks area, each possessing some physical and date availability limitations in accommodating certain types of arts groups.

Additionally, the area lacks a suitable performing arts facility to effectively compete for many types of non-local touring productions and shows. The majority of the demand for a new Fairbanks PAC would be expected to be driven by local arts groups. However, affordability, scheduling availability and physical characteristics will be critical in their consideration of the venue. Therefore, the analysis suggests that sufficient market demand exists (particularly from local arts groups) to generate use levels consistent with the average comparable performing arts theater evaluated.

FEASIBILITY ANALYSIS OF A NEW CONVENTION CENTER and PERFORMING ARTS CENTER IN FAIRBANKS Market Demand Analysis Page 158

6.0. SUPPORTABLE FACILITY PROGRAM AND DEVELOPMENT OPTIONS Based on the results of the analysis of local market conditions, competitive/comparable facilities and host communities, industry conditions/trends and market demand, an evaluation of the supportable facility program components was performed for both a new convention center and performing arts center in Fairbanks.

For the convention center, the estimated market supportable facility program is tied closely to the unique characteristics of the Fairbanks market. The characteristics of the current/potential future hotel inventory and other visitor amenities in the area also influence program estimates. Adjustments to the convention center program are made to reflect event segments that require hotel room blocks beyond the expected capacity of the Fairbanks area. The resulting market-supportable convention center building program focuses on the levels of sellable space that would be necessary to accommodate potential convention, conference and meeting event demand for a new Fairbanks convention center.

For the performing arts center, the estimated market supportable facility program is also tied closely to the unique attributes of Fairbanks. The characteristics and growth potential of the local arts, as well as the transportation and visitor infrastructure in the area (to accommodate future non-local shows, artists, attendees and participants) have been considered in the evaluation. The resulting estimated performing arts center facility program focuses on sizing, capacity/seating levels, component apportionment and amenity attributes that would be necessary to accommodate potential local and certain non-local concerts, theatrical, dance and other live performance event demand for a new Fairbanks performing arts center.

Specific square footage and configuration of individual support areas for both facilities, such as lobby, circulation, storage, box office, administrative office and other front/back-of-house areas, are not specifically itemized within this analysis; however, based on state-of-the-industry facility development standards, total square footage of such support spaces have been estimated in a subsequent chapter for purposes of generating order-of-magnitude construction cost estimates. Architectural concept and design work will be necessary to further outline and refine estimates to this end.

Convention Center Supportable Program and Development Issues Based on the previous analyses undertaken, key aspects of a market supportable facility program for a potential Fairbanks convention center are presented below.

•

•

•

Multipurpose Hall: o

Approximately 25,000 square feet of subdividable, column-free, carpeted, upscale space

o

Approximate 30-foot ceiling heights

o

Utility floor grids, independent loading, public access, climate control, etc.

Breakout Meeting Space: o

Approximately 10,000 square feet of breakout meeting space

o

Subdividable, upscale

Sufficient pre-function, support and storage space.

FEASIBILITY ANALYSIS OF A NEW CONVENTION CENTER IN THE FAIRBANKS Supportable Facility Program and Development Options Page 159

•

Estimated facility footprint would approximate 70,000 square feet (less than 2.0 acres), with additional acreage required for parking, ingress/egress, green space, loading/marshaling, etc.

•

Parking is often the biggest “x-factor” in overall site acreage planning (i.e., surface versus structured parking, shared parking opportunities with hotel, etc.), that could add many acres to the site requirements.

•

At least 250 quality hotel rooms (preferably full-service) either attached or located adjacent to the facility.

It is important to note that these space figures represent the amount of convention facility space that would be required to accommodate a majority of Fairbanks’ event demand, particularly that which is currently estimated to be un-accommodated. Further, development models other than the typical “standalone” model may require size adjustments. For instance, a public-private partnership model (involving a private sector hotel partner) may result in a smaller facility for a hotel partner to consider absorbing the operating risk.

An important part of evaluating the feasibility of a new convention center in Fairbanks is understanding what portion of Fairbanks’ measured market demand might represent incremental non-local event activity in the community. One method of approaching this is to compare the facility requirements indicated by interested convention survey respondents with Fairbanks’ largest convention/conference facility—the Westmark-Fairbanks Hotel. This analysis is shown below in Exhibit 1.

Exhibit 1 Convention Center Supportable Program – Unmet Market Demand Issues Fairbanks State/Niche National Market Capture 40% 50% 60% 70% 80%

Westmark

20%

30%

0

0

0

200

3,000

4,000

6,000

Ballroom Space (exhibition)

5,400

0

0

200

3,000

4,000

Ballroom Space (food function)

5,400

700

1,125

1,500

2,250

Meeting Space

11,600

1,350

2,100

3,000

Total Event Space

17,000

3,850

6,000

400

10

30

Exhibit Space

Total HQ Hotel Rooms

90%

100%

9,000

12,000

40,000

6,000

9,000

12,000

40,000

3,000

3,000

4,000

6,375

12,000

4,350

6,000

7,500

10,800

13,050

32,250

8,100

12,150

13,600

16,750

19,650

27,500

75,250

40

50

70

100

125

200

650

Note: Of those respondents w ith a positive interest in Fairbanks.

Source: CSL State & National Organization Survery; Fairbanks CVB, Facility Management, 2009.

As shown, the Westmark-Fairbanks Hotel does not integrate traditional concrete floor exhibit space. As such, from a technical standpoint, it is not able to accommodate the 70 percent of the market that have exhibit space requirements. However, as was discussed in the previous chapter, many of the groups that have tradeshow components of their events are willing to use ballroom space (or other types of multipurpose spaces) for these needs. If we were to assume that all the groups with exhibits were

FEASIBILITY ANALYSIS OF A NEW CONVENTION CENTER IN THE FAIRBANKS Supportable Facility Program and Development Options Page 160

willing to use the Westmark’s ballroom for their tradeshow/exhibit activities, the Westmark would technically be able to accommodate 60 percent of the measured market. However, it is important to recognize that nearly all these groups have concurrent space needs and nearly all require a ballroom/banquet hall for food functions and/or general assemblies. This is where a major limitation with the existing Westmark is apparent (when it relates to accommodating the measured market that has an interest in Fairbanks), as the exhibit, food function and assembly needs of many mid-sized and larger groups are in excess of that which can be provided by the single, subdividable ballroom in the existing Westmark. In practical terms (without consideration of seasonality conflicts that exist during peak cruise season), it is believed that the Westmark likely can realistically accommodate 50 percent or less of Fairbanks potential non-local convention/conference event market.

As previously discussed, any new convention center will require the support of a quality headquarters hotel in order to attract non-local events. Ideally, the headquarters hotel would be physically attached to the convention center. An adjacent parcel (without a physical connection) would be next desirable, but it should not be located any further than practical walking distance, which for a community like Fairbanks is considered to be within two to three city blocks. Fairbanks has a handful of existing lodging properties that generally meet the size and quality characteristics required of a headquarters hotel. They include: (1) the 400-room Westmark Hotel, (2) the 326-room Princess Riverside Lodge, (3) the 275-room Wedgewood Resort, (4) the 208-room Pike’s Waterfront Lodge, and (5) the 147-room Springhill Suites.

However, from a practical standpoint, there does not appear to be any adjacent or very nearby parcel opportunities for the Springhill Suites to serve as a headquarters hotel.

It is further believed that enticing a new, appropriate hotel development (unrelated to the cruise industry) to Fairbanks to serve as a headquarters hotel would be extremely challenging without significant public sector incentive for the foreseeable future, particularly in the current difficult economic environment and associated ensuing credit market upheaval. As such, as will be discussed in the subsequent chapter, it is believed that if a new convention center project is pursued in Fairbanks, it should involve a location that is adjacent to one of the aforementioned four existing hotel properties.

A stand-alone convention center is normally a publicly-led and publicly-owned project (i.e., public sector contribution normally consists of 90 to 100 percent of the total development costs). A quality, appropriate-sized headquarters hotel attached or within close walking distance is critical. A stand-alone convention center does have high construction costs and normally requires an annual operating subsidy; however, it is generally best positioned to attract economic impact-generating events and protecting usage by local events.

A public/private partnership convention center model is normally developed in partnership with a new or existing hotel located in the community. In comparison to stand-alone convention centers, overall public sector funding contribution is typically lower for hotel/convention centers developed under public/private partnerships (however, many projects of this nature involve the necessity for the public sector to fully fund the construction of the convention/conference space component, but often relieves them from an annual ongoing operating funding obligation). While the operating risk usually rests with the hotel partner, in some cases it may be borne in part or in full by the public sector. The level of public sector control over booking, marketing and/or operating policies tends to be commensurate with the level of contribution to the overall project. Relative to other communities throughout the country, there may be a stronger opportunity in Fairbanks to partner with one or more Native corporations to assist in defraying some public sector costs.

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Performing Arts Center Supportable Program and Development Issues Based on the previous analyses undertaken, key aspects of a market supportable facility program for a potential Fairbanks performing arts center are presented below.

•

A flexible, proscenium stage performing arts theater, that needs to be a “practical” facility that “fits” the identity and brand of Fairbanks (i.e., open, welcoming, inclusive, not overly ornate, etc.).

•

Between 1,250 and 1,500 seats. Project leaders could work with architects to evaluate ways to physically/perceptually scale house via partitioning systems (to create the important perceptual sense of ticket scarcity and intimacy for smaller events).

•

Stage with a minimum of 60-foot width and 45-foot depth.

•

Consider the ability to “create” a thrust retractable/removable seating or stage pieces.

•

A minimum 50’ x 30’ proscenium opening.

•

Plentiful fly space and wing space with a minimum of 20 feet (left and right).

•

Inclusion of a full-sized orchestra pit (able to accommodate 70 or more musicians).

•

Inclusion of between five and 10 dressing rooms.

•

A “black box” theater (small, simple secondary space with limited seating) would assist in accommodating local arts groups usage and rehearsals, but is not considered to be a necessary component of a successful performing arts center in Fairbanks.

•

Gallery space – to accommodate visual arts and to serve local artists, and provide exhibition space for other galleries and museums.

•

Reception/banquet space – limited space to accommodate pre- and post-performance functions, member events, speaker forums, corporate, civic and other local organizational meetings and banquets.

•

Rehearsal space.

•

Studio/workout space.

•

Cultural/education classrooms.

•

Food and beverage outlets.

•

Circulation and storage space.

•

Restaurant and retail space.

•

Handicap-accessible per modern architectural standards.

•

Outdoor “green” space.

stage

via

portable

staging

and

As with the market supportable items outlined for the convention center, architectural assistance will be necessary to further refine and conceptualize the programmatic components for the performing arts center. Qualified national architects specializing in performing arts centers typically also extensively involve local arts group representation and community leaders throughout their concept and design process—from investigative/visioning stages through final design.

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As previously mentioned, with respect to any potential performing arts center in Fairbanks, involvement by local arts groups in the use of any developed facility will be critical, as measured demand from significant touring shows would be expected to be somewhat limited. In other words, the identity and focus of the performing arts center should “lean” towards a local arts orientation.

However, like in nearly all communities, local arts organizations often lack significant funding available to pay expensive facility rental charges. This normally means strong discounts on facility rental for local arts groups. Therefore, with a “local arts orientation”, it would be expected that operating revenue generation in the facility through user rent/fees will be constrained, resulting in a larger operating deficit for a new Fairbanks performing arts center (relative to other performing arts facilities that are able to attract a higher level of highly attended, touring shows and entertainment). These issues will be discussed further in the subsequent cost analysis chapter of this report.

From a programmatic perspective, methods that might be able to generate additional income for the performing arts facility could include integrating “equity return vehicles” into the physical product itself.

These include items such as leasable office space, residential or short-term housing (condos/apartments), or other facility areas that could be rented/leased by non-arts groups (such as permanent showroom/exhibit areas, sponsor areas/donor bricks/signage opportunities, etc.).

It is believed that the City or the Borough represent the only logical candidates for ownership of any new performing arts center in Fairbanks. From an operational standpoint, facilities of this nature employ a variety of models throughout the country. Some examples include management by: (1) the public sector owner via a municipal department; (2) a quasi-government Authority that has more independence than traditional municipal management; (3) a private third-party private management firm under a fixed-fee plus incentive fee contract; (4) a strong local arts organization who is a primary tenant of the facility; and (5) a non-profit organization, existing or newly-created.

Given the estimated attributes of a potential Fairbanks performing arts project (its type, focus, user base, and potential financial characteristics), along with the characteristics of the Fairbanks community itself (in terms of its population, corporate base, local arts, etc.), it is believed that the most appropriate management model would consist of a newly-created 501(c)(3) non-profit organization. The non-profit organization should have a board of directors with a diversity of representation, including municipal government, the business sector, local arts community and other local leadership.

Co-Location Issues and Facility Development Scenarios There are a number of important issues that are noteworthy pertaining to physical co-location of the convention center and performing arts center (i.e., physically attached and located on a shared site), if both facilities are developed.

Potential strengths of a concept involving the physical co-location of both facilities include: 

Shared operations—There is an opportunity for operational synergy in the sharing of certain overhead and staffing. These efficiencies typically lead to lower operating costs (relative to costs to operate two independent facilities).



Shared structure—There are often efficiencies that can be designed into the physical project, relative to two stand-alone buildings. For example, the dual-component facility could have a shared common area/lobby, shared central plant, shared storage and access, shared parking, etc.

FEASIBILITY ANALYSIS OF A NEW CONVENTION CENTER IN THE FAIRBANKS Supportable Facility Program and Development Options Page 163



Cross-over usage—There may be opportunities for some facility users to use both facility components under a joint facility. For example, certain convention events could use the theater for general assemblies and entertainment. Conversely, certain performing arts groups/shows could use some of the convention center space for food and beverage functions, workshops, pre/post show receptions/meet-and-greets, etc. (also reducing the necessity to design in some of these flat floor spaces in a stand-alone performing arts center).



Community support and funding—A single project can simplify the approach to funding/financing the two facilities, as the public and private sector fund-raising effort needs to be completed once rather than twice with two separate efforts. Further, this can sometimes expand local constituent support for a project, as its appeal is widened given its multiple components, uses and purposes.

Conversely, potential weaknesses of a concept involving the physical co-location of both facilities include: 

Booking/scheduling—Important booking/scheduling challenges can arise, due to required lead time in scheduling, needs of primary tenants for performances and rehearsals, etc. Many conventions book the host facilities several years in advance, while many arts groups may not have their upcoming season finalized until about a year in advance.



Incongruent uses—Inconsistencies can arise between users (i.e., rock concert occurring across the hall from a conference final banquet), including the possible co-mingling of patrons in facility common areas and/or entry and exit points.



Management challenges—There normally are distinct differences in the optimal management and service philosophy and delivery of services between typical convention centers and performing arts centers. It is often difficult to find a single manager and associated staff that understand how to best operate both types of facilities.



Cross-over usage not critical—While convention groups could use a theater for certain types of functions like general assemblies, the use of a fixed-seat auditorium/theater is normally not a requirement by these groups. Most of these groups are used to setting-up a ballroom with a portable stage and chairs the way that they want them, enhancing flexibility. Also, there is sometimes a perception by these groups that there are added costs to their event if they rent a theater space for one or more functions (relative to other flat-floor areas).



Cost burden—While it is likely that certain construction and operational cost efficiencies would materialize under a co-located project (making it less expensive to build and run than two independent facilities), the costs associated with the project will most certainly be higher than any single facility project. As such, if the costs for a joint project are ultimately deemed by local stakeholders and constituents to be too high, both facilities might be more easily discarded from consideration since they would have been linked together throughout the planning and community support stages.

Therefore, for the remaining analyses pertaining to site/location, construction costs, financial operations, economic impacts and funding, the following three facility development scenarios have been assumed: Scenario 1: Stand-alone convention center and stand-alone performing arts center.

Scenario 2: Co-located convention and performing arts center.

Scenario 3: Public/private partnership for a hotel and convention center, and a stand-alone performing arts center.

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7.0. SITE / LOCATION ANALYSIS As important as size and configuration, the location and site of an event facility, such as a convention center or performing arts center, can have a significant impact on the facility’s operational success. For the convention center, this includes its ability to generate new visitation and associated economic impact in a host community, as well as its ability to drive significant local attendance. For the performing arts center, this typically includes an attractive, pedestrian-friendly location that maximizes visibility, accessibility and local attendance. Secondary considerations of sites for both types of facilities typically include the potential to induce ancillary, spin-off development near the site due to increased traffic levels generated to the facilities.

As part of the overall evaluation of a potential new Fairbanks convention center and performing arts center, an assessment of several potential site locations within Fairbanks was conducted to determine what general areas might be best suited as a host location for the proposed facilities.

The intent of this type of analysis is to assist in focusing on the advantageous locations within the market for potential investment in convention center and performing arts development, so that specific site parcels can be identified for further, more focused consideration. With the assistance of the CVB and other parties, background and physical characteristic information for each of the subsequently identified parcels was assembled and reviewed and site tours were completed. However, it is suggested that additional analyses be conducted with regard to site acquisition/preparation costs and unique costs associated with architectural and engineering requirements, traffic, infrastructure and other related concerns prior to final site selection.

Site Evaluation In general, a large number of characteristics and factors are typically important when evaluating the attractiveness of site locations. These include, but are not limited to: 1. Proximity to quality full-service hotel inventory 2. Requirements / preferences of private partner (if applicable) 3. Size, cost and ownership complexity of site 4. Proximity to restaurants, retail, nightlife, entertainment 5. Pedestrian-friendly walking environment 6. Parking availability 7. Ingress / egress 8. Site visibility 9. Synergy with other public sector development initiatives / master plans 10. Compatibility with surroundings 11. Other considerations For a convention center project, proximity to quality, full-service hotel inventory is the single most important factor. Without a large, quality hotel property that is attached, adjacent or within very close walking distance (i.e., two to three city blocks maximum), a new convention center will be extremely limited in its ability to attract non-local conventions, conferences and tradeshows. Without this type of hotel support, the convention center will function more as a “local� venue, such as community center or civic center.

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n center proje ect under the public/privatte partnership p model with an existing o or new However, a convention enario 3), the e requirementts and prefere ences of the p private partne er will have significant influence hotel (Sce on the ulttimate location. In all likellihood, a prosspective new hotel develop per partner w will be looking g for a site/location that will be b able to ma aximize non-cconvention ceenter hotel ro oom demand, as the conve ention elf (even if atttached to the e hotel) will not n likely drivve the majoritty of room night demand in the center itse hotel (if the hotel is un naffiliated witth the cruise industry). Ass such, locatio ons near high hly-visible roa adway mand generattors will likely y be more atttractive from the hotel parrtner’s perspe ective. arteries and other dem s like this that wo ould involve an a existing Faairbanks hote el, the site w would obvioussly be Under a scenario limited to parcels adjaccent to the ho otel property. ypical perform ming arts center, c adjaccency/proximiity to an a appropriate h hotel is rela atively For a ty unimporta ant. The more m importa ant factors typically t inclu ude proximity ty to concen ntrations of retail, restaurantts, bars, cafe es, nightlife, and a other entertainment. Visibility, acccessibility an nd aesthetic ““fit” in the enviro ons are also important. The T importance of these ffactors is whyy many stand d-alone perfo orming arts cente ers are located d in or near the central business districtts of downtow wns.

General Site S Areas n Fairbanks were w identified d for evaluation as potenttial site areass for a A total off five general site areas in new conv vention centerr and perform ming arts centter. Exhibit 1 displays eacch of the evaluated genera al site locations.

Exhibit 1 – Ge eneral Sites / Locations

FEASIBILITY Y ANALYSIS OF A NEW CONVENT TION CENTER IN N THE FAIRBANK KS Site / Locatio on Analysis Page 166

These general site areas were identified in collaboration with the Fairbanks Convention and Visitors Bureau, the Fairbanks Arts Association and CSL. Several of these sites (near Princess/Pikes, near Westmark, and near Wedgewood) were obvious choices due to their proximity to the largest lodging properties in Fairbanks. The Springhill Suites is also a hotel that could serve as a headquarters hotel, but a site near it was not included due to the lack of sufficient available site parcels. Sites near the Carlson Center and in the Vision Fairbanks targeted redevelopment area were also included, due to their prior discussion in the community as possible site locations.

Site/Location Assessment and Conclusions As important as size and configuration, the site of a convention center and performing arts center can have a significant impact on their success. When comparing each of the identified general site locations in Fairbanks, each one possesses its own strengths and weaknesses. The attractiveness of the sites also differs depending on which facility development scenario is considered.

With respect to a potential new convention center, adjacency or very close proximity to a suitable headquarters hotel is the more important issue when considering the potential location for the facility. It is considered unlikely that a large, new full-service hotel development (i.e., 200 to 250 rooms) would be viable in Fairbanks in the foreseeable future, given (1) the existing supply of lodging in the marketplace, (2) historical market occupancy/rate/revPAR performance, (3) sharp seasonality patterns, (4) the assumed lack of a cruise affiliation, and (5) the state of the economy and credit markets. Most convention center headquarter hotels only derive between 15 and 30 percent of their overall room night demand from an associated convention center; therefore, the remainder of their room night business must be generated from a combination of latent and induced demand in the market place. In order to secure an appropriate new headquarters hotel development, it is likely that a large public sector incentive would be required at a minimum, with full public sector financing/funding of the hotel considered a more likely scenario. Therefore, for purposes of this analysis, we have assumed that an existing Fairbanks lodging property would be required to serve as the convention center’s headquarters hotel.

A riverfront location near Pikes and Princess Hotels offers the benefit of two large, proximate hotel properties and a location on the expressway and near the airport. A location at Wedgewood also provides a significant supply of hotel rooms. However, both of these locations lack proximity to Fairbanks’ downtown. While just outside the central business core, the Westmark provides the closest link to downtown amenities. Under these three site locations, it is assumed that the convention center would be physically connected to the associated lodging property (and may or may not be operated by the hotel under a public/private partnership).

The Vision Fairbanks site area also offers some interesting possibilities, given its location downtown.

However, without an adjacency to an appropriate hotel, this area loses attractiveness as a host location for a convention center. The only currently viable sites within the Vision Fairbanks area might be parcels located in the northeast portion of the designated plan (which could theoretically provide close proximity to the Westmark). However, given that the center would not be physically attached to the Westmark under this scenario, it is unlikely that the Westmark would have an interest in a public/private partnership to operate the space.

A Carlson Center location lacks any proximate hotel rooms and it does not have a tie-in to downtown.

While it possesses a large amount of concrete floor exhibition space, the facility primarily functions as a spectator/sports venue. As such, it would be difficult to add on to any of its existing space to create an upscale “convention/conference center” that would be best positioned to attract the incremental non-local convention, conference and meeting events identified in this analysis.

FEASIBILITY ANALYSIS OF A NEW CONVENTION CENTER IN THE FAIRBANKS Site / Location Analysis Page 167

Focusing on the performing arts center, as previously mentioned, adjacency/proximity to a supporting hotel property is typically relatively unimportant. The more important factors typically include proximity to concentrations of retail, restaurants, bars, cafes, nightlife, and other entertainment, as well as visibility and accessibility. Therefore, a downtown location for the performing arts center is considered to be the preferred location. A downtown location would also enhance the ability to market other components, such as office space, short-term or permanent housing, and cultural space.

In conclusion, under Scenario 1 (two separate stand-alone facilities), the preferred location for the convention center would be adjacent to the Westmark, with secondary preferences being adjacent to the Princess, Pike’s or Wedgewood. Being separated from the convention center, the preferred site for the performing arts center would be a location in downtown, possibly the Polaris Building or other site that has close proximity to the downtown’s core offerings of restaurants, bars, cafes and retail.

Under Scenario 2 (co-located facilities), the two most important site requirements of each facility will need to be met—appropriate existing hotel support and downtown location. Therefore, the only apparent location is one that is near the Westmark.

Under Scenario 3 (public/private partnership convention center and stand-alone performing arts center), the driving requirement will be to identify a willing hotel partner to participate in the project (and would ideally include the hotel assuming operating control, and operating risk/gain, of the convention center).

The Westmark would be the preferred choice (given its downtown location and large complementary supply of hotel rooms and banquet and breakout meeting space). A partnership with Wedgewood or Princess and/or Pike’s could also represent options to explore. Like under Scenario 1, the preferred site for the performing arts center would be a location in downtown, possibly the Polaris Building or other site within walking distance of downtown amenities.

FEASIBILITY ANALYSIS OF A NEW CONVENTION CENTER IN THE FAIRBANKS Site / Location Analysis Page 168

8.0. ANALYSIS OF ESTIMATED EVENT AND USE LEVELS The purpose of this chapter is to analyze estimated event and utilization levels associated with a potential new convention center and performing arts center in Fairbanks for a stabilized year of operation (assumed to occur by the fourth full year for both facilities). For purposes of this analysis, the three development scenarios, as outlined in a previous chapter, were evaluated.

Exhibit 1 presents a summary of the number of events (or performances, relating to a portion of the performing arts center’s activity) that have been estimated under all scenarios for a stabilized year of operation (assumed to occur by year four).

Exhibit 1 Estimated Annual Event/Performance Levels (in a stabilized year of operation)

Scenario 1

Scenario 2

Scenario 3

Stand-alone CC & PAC

Co-located Facilities

Stand-alone PAC & Hotel/CC

Convention Center Conventions/Tradeshows Public/Consumer Shows Meetings/Banquets/Receptions Other Events Total

23 8 150 10 191

23 8 140 12 183

35 6 200 15 256

Performing Arts Center Tenant Performances Non-tenant Performances Rehearsals Other Rentals Total

35 60 50 30 175

35 55 40 60 190

35 60 50 30 175

As shown above, it is estimated that event levels at a new Fairbanks convention center during a stabilized year of operation could reach 191 events per annum under Scenario 1, 183 events per annum under Scenario 2 and 256 events per annum under Scenario 3. While fairly small within the context of the total number of events, the top event category (conventions/tradeshows) represents the primary economic impact-generating events for the convention center and Fairbanks community. They tend to be larger events in terms of attendance and space used, with longer durations and a large majority of attendees that do not reside in the local area. A significant portion of these events assumed under all scenarios would represent events that are “new” to the community (i.e., not presently hosted at local Fairbanks facilities). Similar to other comparable convention center facilities located throughout the country, the large majority of events under all scenarios are estimated to comprise small local events.

Further, it is estimated that a new Fairbanks performing arts center would reach 175 events per annum under Scenarios 1 and 3 (as both scenarios represent a stand-alone facility), while Scenario 2 would reach 190 events per annum for the center. Like most performing arts venues, it has been assumed that several local Fairbanks arts organizations would serve as “tenants” of a new venue, regularly using the

FEASIBILITY ANALYSIS OF A NEW CONVENTION CENTER IN THE FAIRBANKS Analysis of Estimated Event and Use Levels Page 169

facility for ticketed performances and rehearsals. Non-tenant performances would be those ticketed shows/events by other local arts groups, as well as touring shows.

Differences between Scenarios 1 and 2 primarily relate to some adjustments in Scenario 2 that account for the shared nature of the overall facility, cross-over usage by certain convention center and performing arts events, along with date availability/scheduling considerations. Scenario 3 primarily differs on the convention center side, due to its assumed marketing/scheduling/operating control by the private hotel partner. On average, hotel-controlled conference facilities accommodate higher levels of utilization; however, the average size of the events tends to be somewhat smaller than in non-hotel managed spaces.

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9.0. ANALYSIS OF CONSTRUCTION AND OPERATING COSTS The purpose of this chapter is to provide an analysis of order-of-magnitude construction costs and the estimated financial operating characteristics associated with the potential new Fairbanks convention center and performing arts center. Overall, this information provides a preliminary indication of both the upfront and ongoing costs associated with each of the identified facility development scenarios.

Preliminary Construction Costs To provide an understanding of potential costs associated with the construction of a new convention center and performing arts center in Fairbanks, an analysis was conducted of order-of-magnitude hard construction costs pursuant to the supportable building program elements presented earlier in this report.

Construction costs tend to vary widely among comparable convention center and performing arts center projects. Many variables exist that influence actual realized construction costs, including type of facility, size, components, level of finish, integrated amenities, costs of goods and services in the local market, location and topography of the site, ingress/egress issues, costs savings related to developing a joint hotel/center project and other such aspects.

Exhibit 1 presents the estimated order-of-magnitude hard construction costs for each of the three facility development scenarios, adjusted for current economic conditions and local conditions in Fairbanks.

Importantly, architectural design and site/infrastructure analysis will be required to fully estimate ultimate development costs. In addition to the estimated order-of-magnitude hard costs, soft construction costs, costs associated with land purchase and improvement, other potential infrastructure improvement costs and potentially annual operating costs will also need to be considered in the ultimate planning scheme, if subsequent planning steps are taken.

Exhibit 1 Hypothetical Order-of-Magnitude Hard Construction Costs by Facility Scenario (in 2009$)

Total Gross Square Feet (GSF) Hard Costs/GSF - Low Hard Costs/GSF - High Hard Costs - Low Hard Costs - High

Stand-alone CC

Stand-alone PAC

Combined CC & PAC

70,000

75,000

125,000

$250 $350

$350 $450

$300 $425

$17,500,000 $24,500,000

$26,250,000 $33,750,000

$37,500,000 $53,125,000

As shown, order-of-magnitude hard construction costs could range between $17.5 million and $24.5 million for the convention center and between $26.3 million and $33.8 million for the performing arts center. When a co-located facility is considered, hard construction costs could range between $37.5 million and $53.1 million. It is important to note that these estimates take into account the higher than average construction costs in the Alaskan Interior, as well as the lower than average construction costs FEASIBILITY ANALYSIS OF A NEW CONVENTION CENTER IN THE FAIRBANKS Analysis of Construction and Operating Costs Page 171

nationwide due to the economic downturn. Soft costs (i.e., financing costs, legal, architectural, consulting, permitting, etc.) would be in addition to these estimates, and could add 25 to 30 percent to total construction costs. Site acquisition and preparation costs, as well as any necessary infrastructure costs would also be in addition to these figures.

Detailed architectural concept, design and costing studies would be required to specifically estimate construction costs for a potential Fairbanks convention center and performing arts center.

Financial Operations Analysis This financial operating analysis only considers revenues and expenses generated through the operation of the facility itself and does not consider other potential ancillary income that may be related to the Center (such as incremental tax revenue, parking income, admissions surcharges, interest income, etc.), nor does it consider other non-operating costs, such as construction costs (i.e., debt service) and capital repair/replacement funding.

This analysis is designed to assist project representatives in assessing the financial effects of the potential convention center and performing arts center and cannot be considered a presentation of expected future results. Accordingly, the analysis of potential financial operating results may not be useful for other purposes. The assumptions disclosed herein are not all inclusive, but are those deemed to be significant. Because events and circumstances frequently do not occur as expected, there usually will be differences between estimated and actual results and these differences may be material.

The analysis of estimated operating results is presented in three components: 

Operating revenues.



Operating expenses.



Summary of estimated future financial operations.

As with all new public assembly facilities, an initial startup period is assumed before event levels are anticipated to stabilize. Financial operating estimates prepared in this section reflect a stabilized year of operation (assumed to occur by the fourth full year of operation), shown in 2009 dollars. This analysis has been developed to reflect “net” operations. For instance, reimbursed event expenses and associated event revenues are not presented, rather, they are assumed to “pass through” the financial operating estimates developed in this section. Per capita revenue and expense assumptions were also developed using comparable facility data and industry experience with similar projects, along with consideration of the unique attributes of the Fairbanks marketplace and specific conditions envisioned for the proposed facility (or facilities).

As in all studies of this type, the estimated results are based on competent and efficient facility management and assume that no significant changes in the various event markets will occur beyond those set forth in this report.

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Operating Revenues The primary sources of operating revenue for a potential new Fairbanks convention center include building rent, food service, contract service and other revenue, while a potential new performing arts center’s primary sources of revenue also include ticket/box office fees and donations/memberships. For purposes of this financial operating analysis, no parking revenue has been assumed to be retained by the facilities. The assumptions regarding the individual revenue components are also based on a review of the operations of comparable facilities throughout the country and industry trend data.

Facility/Space Rent Building rental revenues include charges for the leasing of facility spaces for events and other activities.

Estimated rental revenues are based on estimates of the number of events within specific event categories, attendance levels, square footage used, assumed future growth rates, rental rates and receipts at comparable facilities, with an emphasis on regional facilities.

Ticket/Box Office Fee Ticket and box office revenue consists of the sale of tickets for performance events and the associated fees related with running the box office for ticketed events at a performing arts center.

Food Service Revenue Food service (FandB) revenue consists of the sale of various food and beverage items at a potential Fairbanks convention center and performing arts center. Revenue assumptions are based on estimated event and attendance levels and estimated per capita spending for various event types. Estimated food service revenue is presented in terms of net revenue retained by the facility.

Donations/Memberships Donation revenue consists of contributions made by supporters of a potential performing arts center, while membership revenue is obtained through the sale of membership-based passes for performances and events held at the facility.

Advertising/Sponsorships Advertising and sponsorship revenue consists of revenue obtained through the sale of advertising space throughout the facility.

Contract Service and Other Revenue Contract service and other revenue consists of charges to event/show management (and exhibitors for the convention center) for event/production-related services, such as providing electrical hook-ups and other utilities, leasing of equipment, providing security and cleaning services, advertising and other

FEASIBILITY ANALYSIS OF A NEW CONVENTION CENTER IN THE FAIRBANKS Analysis of Construction and Operating Costs Page 173

miscellaneous revenue items. Estimated service and equipment revenue is based on comparable facility financial operations and estimates of the number of events/performances, attendance, square footage used, assumed future growth rates and receipts at comparable facilities.

Operating Expenses The primary sources of operating expenses for a potential new Fairbanks convention center and performing arts center include employee salaries, wages and benefits, utilities, repair and maintenance, general and administrative, insurance, materials and supplies, professional fees, and other expenses. It is important to recognize that this financial operating analysis does not consider additional marketing expenditures that will likely be necessary (presumably by the Fairbanks Convention and Visitors Bureau) to market the convention center to non-local convention groups. Incremental marketing expenditures for the convention center will be particularly important during the construction period and during the initial years of operations (in order to “get the word out” to state, national and international event planners).

The estimated operating expenses for a potential new Fairbanks convention center and performing arts center are based on historical operating expenses of comparable facilities and industry standards.

Specifically, comparable facility operating expense data was analyzed on a per-square-foot basis (as well as per-seat basis for the performing arts center). Consideration was given to operating efficiencies that could be expected to occur at a potential facility—and in particular, those that could occur under a colocated facility scenario (Scenario 2)—as well as cost of goods/services adjustments specific to the Fairbanks area and the surrounding region.

In estimating operating expenses, and staffing costs in particular, it is important that high-quality service is provided at a potential facility. Otherwise, the facility will not be in a position to attract and retain its market potential of non-local event activity. The estimates provided in a previous chapter also assume that this quality standard is maintained.

It was not possible to estimate operating expenses for the new convention space assumed to be a part of a public/private partnership with a hotel (under Scenario 3), as the operations of the convention space will be significantly tied to the operations of the hotel itself (i.e., shared overhead, staffing, general and administrative expenses, etc.). In order to estimate these figures appropriately, a hotel feasibility study would have to be conducted.

Salaries, Wages and Benefits Estimated salaries, wages and benefits include compensation for full- and part-time employees.

Employee benefits include payments for employee hospitalization programs, unemployment compensation, workers’ compensation, and FICA. This analysis is based on the financial operations of comparable and competitive facilities, and the potential facilities’ size and event levels. It has been assumed that the facilities will be staffed with personnel levels similar to that of other similar, wellmanaged convention and performing arts centers. These estimates reflect the assumption that some fulltime operations, maintenance, and setup staff will be maintained at the facility (or facilities) similar to comparable venues.

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Utilities Utilities expense at a new convention center and performing arts center in Fairbanks includes costs for electricity, water, gas and telephone. The estimates are based on industry averages (adjusted for higher energy costs in Alaska’s Interior) and the assumption that the new facility (or facilities) will include all the current energy-saving components.

Repairs and Maintenance The analysis assumes that the maintenance costs for a potential convention center and performing arts center in the early years of operation are relatively low. It is likely that such costs will increase incrementally over time as the facility depreciates. It is likely that the repairs and maintenance costs could eventually exceed the base-year estimates presented in this analysis. The establishment of a separate repair and maintenance reserve is recommended to fund future major capital projects.

General and Administrative General and administrative expenses include various day-to-day costs such as subscriptions, staff training, dues, staff travel, staff tuition reimbursement, licenses and permits, bad debt charges and other such items. This category also includes costs related to administrative business-related expenses such as postage, administrative supplies, administrative furniture and fixtures, auto allowances, administrative travel, memberships and maintenance of the administrative space.

Materials and Supplies Costs for materials and supplies for the proposed facility (or facilities) include those materials, supplies and equipment used for facility operations and its administrative offices. The analysis of materials and supplies expense is based on comparable facility operations and the levels of facility space.

Professional Fees Professional fees are primarily comprised of costs for services including accounting and legal functions and other non-recurring consulting and advisory services. This also includes contractual services expenses, primarily consisting of costs for professional services including trash removal, cleaning, security and other such items.

Insurance and Other Expenses In addition to property and liability insurance, the remaining expenses that have been estimated include bad debt charges, vacation accrual and other miscellaneous operating expenses. Expenses related to advertising and promotion are also included in this category. For the convention center, it has been assumed that the advertising and promotion expenses incurred by the facility would largely relate to marketing to local events—most traditional convention marketing is assumed to be borne by the Fairbanks Convention and Visitors Bureau (a delineation of responsibility that is the industry norm).

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Summary of Estimated Future Financial Operations Exhibit 2 presents a summary of the estimated financial operating results for a stand-alone, publiclyowned and operated convention center, stand-alone publicly-owned and operated performing arts center, and a combined convention and performing arts center in a stabilized year of operation (assumed to occur by the fourth full year of operation) and presented in 2009 dollars. These figures only represent the annual operations of the facilities and do not include construction debt service payments, capital repair/replacement reserve funding obligations, additional CVB marketing budget needs or other nonoperating expenses.

Exhibit 2 Estimated Financial Operating Results for a New Convention Center and Performing Arts Center (stabilized year of operation, in 2009 dollars) Stand-Alone CC

Stand-Alone PAC

Combined CC & PAC

Operating Revenues Space Rental Ticket Fee Box Office Fee Food & Beverage (net) Contract Service Donations/Memberships Advertising/Sponsorships Other Total Operating Revenues

$194,000 0 0 213,000 90,000 0 15,000 10,000 $522,000

$90,000 31,000 10,000 85,000 7,000 15,000 18,000 7,000 $263,000

$270,000 31,000 10,000 313,000 102,000 15,000 26,000 18,000 $785,000

Operating Expenses Salaries, Wages & Benefits Utilities Repair & Maintenance General & Administrative Insurance Materials & Supplies Professional Fees Other Total Operating Expenses

$423,000 160,000 35,000 72,000 35,000 37,000 51,000 68,000 $881,000

$319,000 125,000 32,000 68,000 34,000 30,000 38,000 45,000 $691,000

$631,000 205,000 60,000 106,000 55,000 61,000 81,000 102,000 $1,301,000

($359,000)

($428,000)

Net Operating Deficit

($516,000)

As shown in the exhibit, upon stabilization, a new stand-alone convention center in Fairbanks (under Scenario 1) is estimated to generate an operating deficit of approximately $359,000 per annum (in 2009 dollars). A stand-alone performing arts center in Fairbanks (under Scenario 1 and 3) would be estimated to operate at a deficit of approximately $428,000 per annum (in 2009 dollars), and if the two facilities were combined/co-located (under Scenario 2), the joint facility would be estimated to operate at a $516,000 per annum deficit.

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On a square foot and seat basis, these types of operating losses are slightly higher than comparable convention centers and performing arts centers throughout the country; however, they are consistent with comparable facilities operating in Alaska. They also include consideration of higher energy costs in Alaska’s Interior. The following chapter of this report will outline the net new economic impacts estimated to be generated by the project(s)—benefits often cited by communities as a factor in a decision to invest in the construction and annual operating obligations for projects like this.

As expected, the analysis indicates that a combined/co-located facility would realize operating efficiencies and operate at a smaller operating deficit than the sum of the deficits for each of the two stand-alone facilities. However, under Scenario 3 (stand-alone performing arts center and a public/private partnership with a hotel), the operating risk or gain associated with the convention center would theoretically rest with the hotel partner. Therefore, the performing arts center would be the only deficit that would need to be annually considered via outside public and/or private sources. Hotels typically can operate attached conference space much more efficiently than a public sector operator or contracted third party, due to shared staffing, shared overhead, shared marketing efforts, etc. This coupled with the added hotel room nights (the hotel’s core business and primary income generator) provided by the convention center can often work to more than off-set the operating “burden” associated with the added convention space (assuming the public sector funds the construction of the convention center).

Additionally, there may be some other opportunities to reduce annual, ongoing public sector funding obligations of operating deficits. These may include: 

Establishment of an endowment for performing arts center – typically a critical mechanism during initial construction fundraising and covering a portion of operating shortfalls.



Integration of leasable office space – could be constructed into the facility (or facility complex) and could provide a contractually-obligated income stream through tenant leases.



Integration of condos/housing units – short-term or long-term housing (including that for guest performing arts center artists) under a downtown facility location could also provide additional income streams.



Naming rights and sponsorships – the sale of naming rights (to the entire building or sub-sets of the facility, such as individual meeting rooms or the lobby/atrium) and other sponsorships can often enhance revenue generation to a degree.



Facility use agreements – some facilities contract with corporations, non-profits, municipal government, academic institutions for the rights to use part or all of the facility on a regular basis. These agreements can be structured for multiple years, that work to stabilize the predictability of revenues year over year.



Permanent showroom / exhibit areas – certain local corporations may have an interest in entering into multi-month or multi-year agreements to utilize additional facility spaces as permanent showrooms or “beta test sites” to demonstrate and exhibit their products and services; however, this may not be appropriate for a performing arts-type facility.

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10.0. ECONOMIC IMPACT ANALYSIS The purpose of this chapter is to provide an analysis of the potential economic impacts that could be generated by a potential new convention center and performing arts center in Fairbanks, based on key assumptions described herein. As previously mentioned, the evaluation of the economic benefits generated by public assembly facilities and the ability to fund the development are two of the primary determinants regarding the decision to proceed with projects. This chapter addresses: 

Economic impact concepts.



Annual economic impacts.



Non-quantifiable impacts.

The annual operations of a public assembly facility can provide significant benefits to an area. Typically, and for purposes of this report, quantifiable effects are characterized in terms of economic impacts.

Economic impacts are conveyed through measures of direct spending, total output, personal earnings and employment. These specific terms are defined later in this chapter.

Economic Impact Concepts The impact of a public assembly facility is maximized when out-of-town attendees, exhibitors and/or attendee guests spend money in a community while attending a facility event. This spending by out-oftown attendees represents new money to the community hosting the event. This new money then creates multiplier effects as the initial spending is circulated throughout the local economy.

It is important to note that spending estimates associated with the potential new facilities only represent spending that is estimated to be new to the community (net new spending), directly attributable to the operation (and existence) of the facility. The analysis does not consider any assumed displaced spending within the community.

The characteristics of economic impact effects are generally discussed in terms of their direct, indirect and induced effects on the area economy: 

Direct effects consist principally of initial purchases made by attendees at an event who have arrived from out-of-town. This spending typically takes place in local hotels, restaurants, retail establishments and other such businesses. An example of direct spending is when an out-oftown event attendee pays a local hotel for overnight lodging accommodations.



Indirect effects consist of the re-spending of the initial or direct expenditures. An example of



Induced effects consist of the positive changes in employment and earnings collections generated by changes in population associated with the direct and indirect expenditures.

indirect spending is when a restaurant purchases additional food and dining supplies as a result of new dining expenditures through increased patronage. A certain portion of these incremental supply expenditures occurs within the local community (i.e., “indirect spending,” the type of which is quantified under this analysis), while another portion leaves the local economy (i.e., “leakage”).

The re-spending of dollars in an economy is estimated by using economic multipliers and applying them to the amount of direct, or initial spending. The multiplier effect is estimated in this analysis using a

FEASIBILITY ANALYSIS OF A NEW CONVENTION CENTER IN THE FAIRBANKS Economic Impact Analysis Page 178

regional economic forecasting model provided by the IMPLAN Group, Inc., a private economic modeling company. The IMPLAN system uses an input-output matrix with specific data for multipliers based on regional business patterns from across the country. Financial information for the matrix of multipliers is collected from various sources that include, but are not limited to, the U.S. Department of Labor, as well as state sales and tax reports. The system uses this data to determine the economic independence of specific geographic regions as well as the interdependence that exists between industries in those regions. The systems provide total industry output, personal earnings and employment data for approximately 520 industry groups.

For purposes of this analysis, results of the economic impact analyses are measured in terms of the following categories: 

Total output represents the total direct, indirect and induced spending effects generated by the



Personal earnings represents the wages and salaries earned by employees of businesses



project. This calculation measures the total dollar change in output that occurs in the local economy for each dollar of output delivered to final demand. associated with or impacted by the project. In other words, the multiplier measures the total dollar change in earnings of households employed by the affected industries for each additional dollar of output delivered to final demand.

Employment represents the number of full- and part-time jobs. The employment multiplier measures the total change in the number of jobs in the local economy for each additional $1.0 million of output delivered to final demand. Estimation of FTE (full-time equivalent) positions is not possible under the IMPLAN modeling data set.

The initial spending of new dollars into an economy begins a series in which the dollars are cycled through the economy. The re-spending of the dollars is estimated by using the economic multipliers discussed above and applying them to the amount of direct, or initial, spending. The multiplier illustrates that spending in a defined economy will lead to additional spending until that dollar has completed its cycle through leakage. Leakage represents the portion of a dollar spent in areas outside the designated economy.

Annual Economic Impacts As previously mentioned, this analysis only considers “net new” economic impact. This impact is derived solely by visitors attending or participating in facility events that do not reside in the Fairbanks area. For conservative purposes, our approach to economic impact estimation does not consider any spending by facility attendees/participants if they reside in the Fairbanks area. It has been assumed that any spending by these local individuals would represent “displaced” spending, that would have otherwise been spent locally on other products and services.

Given the nature of performing arts centers, the vast majority of performing arts event attendance is generated from the local market. There are some visiting artists that represent non-local visitors, but their impact is relatively small. Some visitors may be in attendance at an event/show at the performing arts center, but it is often difficult to demonstrate that the performing arts center and its event/show was the primary reason for their visit to the community (i.e., the show may be one of the several entertainment/leisure activities they take in as part of a multi-day vacation, etc.). Therefore, for purposes of this analysis, we have not attempted to quantify net new economic impact for the performing arts center facility. As will be discussed later in this chapter, the qualitative (or non-quantifiable) benefits of a performing arts center will be discussed—as they tend to be the most often pointed to benefits for this type of facility.

FEASIBILITY ANALYSIS OF A NEW CONVENTION CENTER IN THE FAIRBANKS Economic Impact Analysis Page 179

Convention centers, on the other hand, have an easily identifiable subset of events where the majority of their attendance is non-local (many times requiring overnight accommodations over multiple days). Much of a convention center’s attendance, however, is still local in nature (i.e., corporate and civic meetings, banquets, wedding receptions, holiday parties, service club functions, educational seminars, etc.), but it’s the relatively small subset of conventions, conferences and tradeshows that often generate the large majority of net new visitation and economic impact for communities. Therefore, for the remainder of this section pertaining to quantifiable economic impacts, the convention center project will be the focus of the analysis.

One of the primary sources of direct spending involves attracting event attendees from outside the local area to make purchases in area hotels, restaurants and retail establishments.

The analysis of direct spending related to convention center activity begins with estimating the number of event attendees that could be attracted to Fairbanks. These estimates are based on the event attendance and event-day information developed through the market and event analyses.

Estimates of per-day spending by out-of-town attendees and exhibitors are based on the results of an annual Convention Income Survey performed by Destination Marketing Association International (DMAI), formerly the International Association of Convention and Visitors Bureaus (IACVB). The survey collected data concerning event related expenditures by delegates, exhibitors, associations and convention service contractors. The results of this survey have been adjusted to 2009 dollars, cost of living levels and the unique characteristics of Fairbanks. The estimates of average daily spending on a per delegate basis were applied to estimates of potential future event activity at the potential new convention center, based on the results of the overall market analysis. Adjustments were applied to estimated attendance levels for potential future event activity at the convention center to segregate estimated levels of potential outof-town event attendance as a direct result of convention center operations.

Exhibit 1 presents the direct spending associated for a potential new convention center in Fairbanks.

Exhibit 1 Potential New Fairbanks Convention Center Estimated New Annual Direct Spending by Industry (Stabilized Year of Operations, in 2009 Dollars)

Restaurant, $2,179,000

Hotel, $2,986,000

Entertainment, $302,000 Other Industries, $231,000 Local Transit,

Retail, $913,000

$801,000

Total Annual Direct Spending – $7,412,000

FEASIBILITY ANALYSIS OF A NEW CONVENTION CENTER IN THE FAIRBANKS Economic Impact Analysis Page 180

As presented on the previous page, total annual direct spending associated with a new convention center in Fairbanks is estimated at approximately $7.4 million (in a stabilized year of operations [assumed year four] in 2009 dollars). It is estimated that approximately 70 percent of these amounts could be considered direct spending that is “new” to the Fairbanks area (i.e., visitor spending that does not exist today via the events hosted at other local event facilities and would be directly attributable to the existence and operation of the proposed convention center development).

This total amount would be considered new spending to Fairbanks as a direct result of the annual operations of the new convention center. Spending by local Fairbanks residents is not included in this figure and spending reductions have been made for a percentage of non-local attendees that would be expected to represent “day-trippers”, not requiring overnight accommodations.

As the direct spending flows throughout the local and state economies additional rounds of spending, employment and earnings are generated. The total impact generated is estimated by applying specific industry multipliers to the initial expenditure to account for the total economic impact of the re-spending activity. The application of the multipliers involves calculating the product of the estimated amount of direct spending and the multiplier.

The total estimated direct expenditures generate effects on the economy that extend beyond the initial expenditures. Exhibit 2 summarizes the overall estimated new annual economic impacts within Fairbanks associated with estimated levels of potential event activity at the convention center, based on the application of the IMPLAN multipliers.

Exhibit 2 Potential New Fairbanks Convention Center Estimates of Net New Economic Impacts (Stabilized Year of Operations, in 2009 Dollars)

Total Direct Spending $7,412,000

Total Output $11,859,000

Earnings $5,188,000

Employment 205

As presented in the exhibit, upon stabilization, the estimated total net new output for the convention center totals approximately $11.9 million per annum (in 2009 dollars). Additionally, this spending is estimated to annually support $5.2 million in net new personal income (or “earnings”) in the local

FEASIBILITY ANALYSIS OF A NEW CONVENTION CENTER IN THE FAIRBANKS Economic Impact Analysis Page 181

Fairbanks economy, along with 205 full and part-time jobs. (As previously mentioned in this chapter, estimation of FTE [full-time equivalent] positions is not possible with IMPLAN economic modeling data.)

Non-Quantifiable Impacts In addition to the quantifiable benefits of the operation of a potential new convention center in Fairbanks, there are a number of potential benefits that cannot be quantified. In fact, these qualitative benefits tend to be a critical factor in the consideration of public and private investment in performing arts centers. Some of these potential qualitative benefits for Fairbanks for both the performing arts center and convention center include: 

Quality of Life for Residents – The performing and visual arts are often essential components of the fabric of modern communities. Infrastructure that support the arts, culture, history and higher learning are often the very things that work to attract families (and even companies) to live in specific communities. A typical performing arts center not only provides quality entertainment for local residents, it fosters artistic and cultural education and often facilitates the growth of the local arts community over time.



Construction Period Impacts – While not specifically quantified herein, there is normally a substantial short-term economic impact (including many jobs created) during the construction phase of major public assembly facility projects of this nature.



New Visitation – New visitors will be attracted to the area because of an event in the new convention center. These attendees, in turn, may elect to return to the area later with their families, etc. for a vacation after visiting the area for the first time and/or extend their stay during their time in the destination beyond the length of the convention center event they are attending.



Spin-Off Development – New retail/business tend to invariably sprout up near convention centers

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Community Marketing – Non-local attendees of certain convention center events (particularly,



Anchor for Revitalization – New convention center and performing arts center developments can



Other Benefits – There are a number of other intangible benefits of having a new convention center and/or performing arts center in a community that have not been quantified, including their ability to enhance community reputation and image, provide a local gathering point for residents, new advertising opportunities for local businesses and offset the seasonality of summer tourism business.

and performing arts facilities spurred by the increased traffic to the nearby area, representing additions to the local tax base.

conventions/conferences/tradeshows) often represent decision-makers and executives from a broad cross-section of industries. This exposure can benefit the area from a long-term business development perspective.

oftentimes be the base of community-wide master development plans (i.e., Vision Fairbanks) to enhance and revitalize markets, serving as strong anchors that draw local and non-locals into a concentrated area.

FEASIBILITY ANALYSIS OF A NEW CONVENTION CENTER IN THE FAIRBANKS Economic Impact Analysis Page 182

11.0. ASSESSMENT OF FUNDING ALTERNATIVES The purpose of this chapter is to provide a summary of the sources of funding that have been used within the public assembly facility industries and to discuss their potential for use in the possible development of a new Fairbanks convention center and/or performing arts center. The intent of the analysis is not to produce a financing plan for facility development, but rather to discuss certain financing vehicles, as well as public and private revenue sources that could be utilized to fund the project(s).

Typical Public Sector Funding Sources While there are a variety of public sector funding vehicles and revenue sources that have been used in the financing of public assembly facility projects in communities throughout the country, a large percentage are owned by the public sector and had original or expansion construction funding provided through municipal capital project funding (i.e., transfers from a City’s General Fund or Capital Projects Fund, etc.) or through the issuance of General Obligation or Revenue bonds. Types of financing/funding vehicles that are commonly used in public assembly projects throughout the country include: 

General Obligation Bonds

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Revenue Bonds

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Tax Increment Financing (TIF)

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Pay-As-You-Go Financing

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Certificates of Participation



State/Federal Assistance

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Private/Public Equity and Grants

These common financing vehicles have been used for many convention centers and performing arts centers across the country, with the use of bonds and tax increment financing being the most prevalent.

Over the years, relative to similar projects in other U.S. states, Alaskan convention center and performing arts center projects have tended to have a greater level of State and Federal assistance with respect to initial development funding. Particularly, facilities including the Carlson Center, Alaska Center for the Performing Arts, Wrangell Center, Ted Ferry Civic Center and Egan Center have all used State and/or Federal grants or other contributions as part of their initial funding. Further, there are many State-wide foundations that have assisted in funding Alaska-based public assembly facilities, including the Denali Commission and Rasmuson Foundation.

Service on locally-bonded debt is often supported by tax revenue, which has included the following: 

Hotel/motel taxes

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Sales and use taxes

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Property taxes

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Restaurant/food and beverage taxes

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Auto rental/taxicab taxes/fees

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Sin taxes (alcohol, cigarette, etc.)

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Admissions/entertainment taxes

FEASIBILITY ANALYSIS OF A NEW CONVENTION CENTER IN THE FAIRBANKS Assessment of Funding Alternatives Page 183

As previously mentioned, hotel taxes are frequently used to fund public facility projects such as convention centers, as the tax is borne by visitors and convention centers are normally considered visitor industry investment projects. Sales taxes are also frequently utilized for the construction of public assembly facility projects. Currently, the Fairbanks North Star Borough has an eight percent bed tax in place, and no local sales tax. For a comparison, the following other communities in Alaska that have a public assembly facility currently have the following sales and bed taxes rates: 

City of Anchorage (0% sales, 12% bed)

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City of Juneau (5% sales, 7% bed)

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City of Ketchikan (3.5% sales, 7% bed)



City and Borough of Sitka (6% sales, 6% bed)

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City of Wrangell (7% sales, 6% bed)

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City of Valdez (0% sales, 6% bed)

By law in Alaska, there is no limit to the percentage of sales tax charged by the local municipality.

However, it should be noted that the City of Anchorage’s bed tax rate is four percent higher than Fairbanks’, and was increased from eight to 12 percent in 2006 to help construct and support the recently opened Dena’ina Convention Center.

While there has been some discussion in recent years about instituting a local option sales tax in Fairbanks, there is plentiful evidence that doing so for the purpose of funding a convention center and/or a performing arts center project, particularly in these challenging economic times, may be difficult.

Nevertheless, for most comparable convention center projects throughout Alaska and the country, close to 100 percent of initial development funding is typically borne by the public sector. For comparable performing arts center projects throughout Alaska and the country, it is typical that between 50 and 75 percent of initial development funding is contributed by the public sector.

Overall, from a public sector standpoint, it appears that at least partial State funding for one or both of these projects in Fairbanks will be critical.

Potential Private Sector Participation and Other Revenue Sources In recent years, a growing number of communities have explored ways in which the private sector can participate in reducing the overall funding burden borne by the public sector. This participation has taken the form of: 

Naming rights and sponsorships

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Upfront service provider fees and facility component build-outs

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Exclusive facility use agreements

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Private donations of capital and/or land

Each of these opportunities for private sector participation in funding the facility should be evaluated.

Given the potential costs for construction and the annual costs to operate, such private sector participation may be a necessary component of a successful project.

FEASIBILITY ANALYSIS OF A NEW CONVENTION CENTER IN THE FAIRBANKS Assessment of Funding Alternatives Page 184

Naming Rights and Sponsorships Naming rights and other unique sponsorships have been increasingly used in the public assembly industry in recent years. Naming rights agreements typically consist of a local corporation paying a fee upfront and/or over a series of consecutive years in exchange for the use of their company’s name for the entire facility or various components of it. Naming rights agreements are much more prevalent with professional sports facilities than with other event facilities such as convention centers. This is primarily attributable to typically much greater exposure potential at professional sports facilities (i.e., national broadcast coverage of events, exposure through other forms of media, millions of annual spectators, etc.).

However, a small number of convention centers and performing arts facilities in small to mid-sized markets have sold naming rights for the entire facility or components of it. These transactions tend to succeed to the extent target companies can identify long-term benefits. These benefits can include: a revenue return, visual exposure for the sponsor, access to the attendees at the facility, sponsorship opportunities with events at the facility and other tangible benefits.

Upfront Service Provider Fees and Facility Component Build-outs Much of the recent private sector participation in public assembly facility funding has taken the form of up-front capital in exchange for guaranteed exclusive operating rights. For instance, a food service operator may contribute a portion of the costs of constructing the kitchen facilities or providing kitchen equipment in exchange for the right to provide food service in the building (or facility complex).

These provider fees can also include other in-house services, such as: (1) electrical, (2) utilities/environmental control, (3) internet and communications, (4) virtual meetings/satellite, (5) audiovisual, (6) security systems, (7) entertainment; and other such items.

Public assembly facility projects in recent years have increasingly seen private participation in the form of build-outs of various building components. For instance, several communities have partnered with one or more telecommunications firms whereby, in exchange for various advertising and sponsorship opportunities with the project, the firms installed the telecommunications systems (i.e., fiber optic and copper-based wiring, wireless components, equipment, etc.) at their own expense. In addition, the partnering firms may also receive revenue rights as facility users use the technology. Other private sector firms have provided similar build-outs in exchange for other unique opportunities at the facility, such as an exclusive area within the event facility that is used as a test area or showcase for the firm’s products or services.

Exclusive Facility Use Agreements In certain communities, there may be major corporations or institutions that are heavy users of the event facility. It may be possible to identify these users prior to facility development and negotiate up front funding in exchange for guaranteed use of the facility during certain times of the year. Such corporations or institutions may also be involved in the actual design of the event facility to help ensure that their facility needs are addressed.

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Private Donations of Capital and/or Land Certain communities have succeeded in historical fundraising efforts for various public projects. In these instances, a few high-profile, community-oriented wealthy individuals have provided private donations of capital and/or land to help defray public sector development costs.

Private donations from philanthropic individuals and organizations are often critical in the fundraising efforts for performing arts centers. Local capital campaigns (many times via the establishment of a dedicated endowment fund) tend to be instrumental in establishing seed money and demonstrating local interest in a project. The relatively small population of residents and corporations in Fairbanks, as well as limitations in the number of very wealthy individuals/families that make it their home, will likely pose challenges for a capital campaign. Nevertheless, attempts should be made to identify seed money of this nature if a determination to pursue a performing arts center project is made.

FEASIBILITY ANALYSIS OF A NEW CONVENTION CENTER IN THE FAIRBANKS Assessment of Funding Alternatives Page 186

Appendix A: List of Survey Samples and Organizations Local Organizations Interviewed                               

                

Alaska House and Art Gallery Alpine Lodge Assets for Interior Alaska Youth Athabascans of Interior Alaska Aurora Express Bed and Breakfast Bettisworth North Architecture Carlson Center - General Manager City of Fairbanks - Chief of Staff City of Fairbanks - Economic Development City of Fairbanks - Mayor City of North Pole - Mayor Cook, Schuhmann and Groseclose, Inc. Dance Theater Fairbanks Denali Arts and Humanities Alliance Design Alaska/Incoming Chair Greater Fairbanks Chamber of Commerce Downtown Association of Fairbanks Extended Stay Deluxe Fairbanks Arts Association Fairbanks Concert Association Fairbanks Convention and Visitors Bureau Fairbanks Flautists Fairbanks Light Opera Theater Fairbanks North Star Borough - Mayor Fairbanks Princess Riverside Lodge Fairbanks Rollergirls Fairbanks Shakespeare Theater Fairbanks Summer Arts Festival Fairbanks Symphony Orchestra Fairbanks Youth Choir Band Fountainhead Hotels Greater Fairbanks Chamber of Commerce Transportation Committee

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Historic Pump House Restaurant and Pub Holiday Inn Express Independent Writers Marketing and Conference Services McCafferty's Coffee House Morris Thompson Cultural and Visitors Center North Star Ballet North Star Dance Foundation Northland Youth Choir Opera Fairbanks Pike's Waterfront Lodge Pioneer Park Quality Inn and Suites Regency Fairbanks Sophie Station Hotel Super 8 University of Alaska Fairbanks - Art Department University of Alaska - Chemistry and Biochemistry Department University of Alaska Fairbanks - Davis Concert Hall University of Alaska Fairbanks - Event Scheduling University of Alaska Fairbanks - Int'l. Arctic Research Center University of Alaska Fairbanks - Salisbury Theater University of Alaska Fairbanks - ViceChancellor for Research University of Alaska Fairbanks - Wood Center Westmark Hotel

State / Targeted National Convention Organizations          

Academy of Euro Medieval Martial Arts ACS State Healthcare, LLC Agri-Kinc Inc. - Sales Incentive Alaska Statewide Nurses Conference Alaska Air Carriers Association Alaska Airmen's Association Alaska Anthropological Association Alaska Association for Health, Physical Education, Recreation and Dance Alaska Association of Nonprofit Corporations Alaska Association of Private Career Educators

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Alaska Association of REALTORS Alaska Association of School Business Officials Alaska Auto Dealers Alaska Baby Fair Alaska Bar Association Alaska Broadcasters Association Alaska Business Travel Association Alaska Cabaret, Hotel, Restaurant and Retailers (Alaska CHARR) Alaska Chapter of Educational Facility Planners International

FEASIBILITY ANALYSIS OF A POTENTIAL CONVENTION CENTER IN THE FAIRBANKS Appendix A: List of Survey Samples and Organizations Page A-1

                                            

Alaska Chiropractic Society Alaska Coal Association Alaska Coastwise Pilots Association Alaska Communications Systems Alaska Community Action on Toxics Alaska Community College Federation of Teachers Alaska Community Transportation / DOT Conference Alaska Conservation Alliance Alaska Council of School Administrators Alaska Credit Union League Alaska Dental Society Alaska Department of Education and Early Development Alaska Department of Health and Social Services Alaska Department of Transportation and Public Facilities - State Transit Meeting Alaska Distributors Alaska Dog Musher’s Association, Inc. Alaska Federal Credit Union Alaska Federation of Natives Alaska Federation of Retired Federal Employees Alaska Forest Association Alaska Forum on the Environment Alaska Hotel and Lodging Association Alaska Housing Finance Corporation Alaska Independent Insurance Agents and Brokers Alaska Inter Tribal Council Alaska Kennel Club Alaska Library Association Alaska Manufactured Housing Association Alaska Marine Conservation Council - Alaska Marine Science Symposium Alaska Marine Pilots Association Alaska Mechanical Contractors Association Alaska Medical Group Management Association Alaska Miners Association Alaska Motorcycle Dealers Association Alaska Municipal League Alaska Native Health Research Conference Alaska Native Tribal Health Consortium Alaska Nurses Association Alaska Oil and Gas Association Alaska Optometric Association Alaska Outdoor Council Alaska Peace Officers Association Alaska Pharmacists Association Alaska Police Standards Council Alaska Power Association

                                             

Alaska Process Industry Careers Consortium Alaska Professional Hunters Association Alaska Public Employees Association/AFT Alaska Public Health Association Alaska Public Health Nursing Conference Alaska Recreation and Parks Association Alaska Rural Water Association Alaska School Nutrition Association Alaska Science Teachers Association Alaska Sea Grant College Program Alaska Siberia Research Center Alaska Sign Association Alaska Sisters in Crime Alaska Society of Certified Public Accountants Alaska Society of Independent Accountants Alaska Sportfishing Industry Association Alaska State AFL-CIO Alaska State Chamber of Commerce Alaska State Department of Fish and Game Alaska State Department of Labor Alaska State District Council of Laborers Alaska State Geography Bee Alaska State Home Building Association Alaska State Hospital and Nursing Home Association Alaska State Literacy Association Alaska State Medical Association Alaska State Veterinary Medical Association Alaska Statewide Special Education Conference Alaska Support Industry Alliance Alaska Survey and Mapping Conference Alaska Telephone Association Alaska Travel Industry Association Alaska Tribal Conference on Environmental Management Alaska Trucking Association Alaska Water Wastewater Management Association Alaska Wine and Spirits Wholesalers Association Alaska Workforce Investment Board Alaska/Yukon Trails Meeting Planners Alaskan Shellfish Growers Alaska's Educational Resource Center Alpha Delta Kappa American Academy of Family Physicians Alaska Chapter American Chemical Society American Institute of Aeronautics and Astronautics (AIAA) American Institute of Architects - Alaska Chapter American Legion

FEASIBILITY ANALYSIS OF A POTENTIAL CONVENTION CENTER IN THE FAIRBANKS Appendix A: List of Survey Samples and Organizations Page A-2

                                                

American Lung Association of Alaska Anchorage Media Group Anchors Aweigh Boat Show Arctic Slope Regional Corporation Army National Guard ASRC Energy Services Associated General Contractors - AK Association of Alaska School Boards Association of Consulting Foresters of America Association of Information Technology Professionals Association of National Park Rangers Association of Pacific Coast Geographers Association of Public Health Laboratories Aurora Productions Bilingual Multicultural Education BP Exploration Bristol Bay Native Corporation Burroughs Welcome Fund Center for Human Development Chugach Alaska Corporation Chugach Electric Association Annual Shareholders' Meeting Clinical Laboratory Scientists of Alaska Cold Climate Housing Research Center Comerica Bank Commonwealth North Conference of Arctic Parliamentarians ConocoPhillips Council of Alaska Producers Council of Supply Chain Management Professionals Daughters of the American Revolution Alaska Deltek Denali Commission Deseret Book Club Company Deshka Landing Outdoor Association Diocese of Fairbanks - Catholic Bishop of Northern Alaska Doyon Foundation Ducks Unlimited EcoTrust Everts Air Cargo Fairbanks Amateur Hockey Association Fairbanks Memorial Hospital Family Centered Services of Alaska Family Life Federal Subsistence Board Meeting First National Bank Alaska Food Services of America Friends of the NRA state banquet GCI Global Knowledge

                                           

Great Alaska Beer and Barleywine Festival Green Fair Harley Owners Group Helge Ingstad Memorial Symposium on Arctic Climate Change Holland Cruise Lines IEEE - Vehicular Technology Society, Convention Interior Distance Education of Alaska International Brotherhood of Electrical Workers - Alaska Intertribal Timber Council KO Productions KPMG Lockheed Martin Aeronautics Company Lutheran Women's Advent Mental Health Association in Alaska Minerals Management Service NACE International NANA Development Corp.

National Association of Bankruptcy Trustees National Association of Clean Water Agencies National Association of Counties - Western Interstate Region National Association of Social Workers National Congress of American Indians National Defense Transportation Association National Education Association - Alaska National Electrical Contractors Association Alaska Chapter National Indian Head Start Directors Association National Indian Health Board Consumer Conference National Oceanic and Atmospheric Administration National Rural Electric Cooperative Association National Rural Health Association Native American Art Studies Association Native American Fish and Wildlife Society New Impressions Gift Show North Pacific Research Board North Slope Science Initiative - Northern Oil and Gas Research Forum North Star Youth Court Northwest Environmental Education Council Northwest Public Power Association Northwest Regional Educational Laboratory Opticians of Alaska Princess Tours Providence Health and Services Public Safety Employees Association of Alaska Resource Development Council

FEASIBILITY ANALYSIS OF A POTENTIAL CONVENTION CENTER IN THE FAIRBANKS Appendix A: List of Survey Samples and Organizations Page A-3

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Seekins Ford Lincoln Mercury Society of Alaska Association Executives Society of American Military Engineers Soroptimist International State of Alaska / Department of Education State of Alaska, Department of Commerce, Community and Economic Development State of Alaska, Department of Education, Commissioner's Office State of Alaska, Department of Fish and Game State of Alaska, Department of Natural Resources State of Alaska, Division of Fire and Life Safety Substance Abuse Directors Association Tanana Chiefs Conference, Inc. Target The Aleut Corporation The Northern Forum Tubular Solutions Alaska UAF - Evolutionary Biology

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UAF Alumni Association UAF Hockey Alumni Association United Church of God United Fishermen of Alaska University of Alaska Fairbanks Arctic Energy Technology Development Laboratory US Arctic Research Commission US Army Corps of Engineers US Ombudsman - State of Alaska Utility Wind Integration Group VECO Corp.

Western Association of Student Financial Aid Administrators Western Sheet Metal and Controls Western Society of Weed Science Western States Communication Association Worldwide Army Rangers - All Ranger Roundup Young Life Alaska

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International Convention Organizations                      

Academy of Management Adventist-Laymens Services and Industries International Alliance for Marine Remote Sensing American Association of Petroleum Geologists American Coal Ash Association American Fisheries Society American Geophysical Union ANDRILL Science Management Office Arctic Athabaskan Council Arctic Institute of North America Arctic Monitoring and Assessment Program Arctic National Wildlife Refuge, U.S. Fish and Wildlife Service Arctic Ocean Sciences Board Arctic Portal Association for Children's Prosthetics and Orthotics Clinics, Association for Computing Machinery Association for Manufacturing Excellence Association for the Advancement of Cost Engineering International Association of Destination Management Executives Association of International Petroleum Negotiators Atlantic Salmon Trust Basic Income Earth Network

                      

Circumpolar Agricultural Association Circumpolar Universities Association Commission on Study of the Earth's Deep Interior Cruise Lines International Association Drilling Engineering Association Ecological Council of the Americas Engineering Committee on Oceanic Resources European Geosciences Union Forum of Arctic Research Operators Foundation for Environmental Education Foundation for Environmental Security and Sustainability Global Climate Observing System Global Summit on Climate Change Global Wind Energy Council Green Earth Foundation Green Hotels Association Greening of Industry Network Human Dimensions of the Arctic System IAMAS, IAPSO and IACS. IEEE Geoscience and Remote Sensing Society IGU Commission on Land Degradation and Desertification Institute of Materials, Minerals and Mining International Academy for the Study of Tourism

FEASIBILITY ANALYSIS OF A POTENTIAL CONVENTION CENTER IN THE FAIRBANKS Appendix A: List of Survey Samples and Organizations Page A-4

                              

International Aluminum Institute International Arctic Buoy Programme International Arctic Science Committee International Arctic Social Sciences Association International Association for Energy Economics International Association for Environmental Philosophy International Association for Natural Gas Vehicles International Association for Society and Natural Resources International Association for the Physical Sciences of the Oceans International Association for Transformation International Association of Cooperative Tourism International Association of Drilling Contractors International Association of Fish and Wildlife Agencies International Association of Oil and Gas Producers International Bureau of Mining Thermo physics International Cadmium Association International Center for the Solution of Environmental Problems International Centre for Conservation Education International Commission on Climate International Committee for Coal and Organic Petrology International Committee on Automation of Mines and Quarries International Continental Scientific Drilling Program International Ecosystems University - Forum International International Energy Credit Association International Environmetrics Society International Federation of Chemical, Energy, Mine and General Workers' Unions International Federation of Tour Operators International Fishmeal and Fish Oil Organization International Forum of Travel and Tourism Advocates International Institute for Peace through Tourism International Institute of Fisheries Economics and Trade

                                   

International Iron and Steel Institute International Life Sciences Institute International Marine Minerals Society International Mineralogical Association International Movement - Educators for Peace and Mutual Understanding International Network for Circumpolar Health Research International Permafrost Association International Petroleum Industry Environmental Conservation Association International Research Center for Energy and Economic Development International Research Institute for Climate and Society International Scientific Centre of Fertilizers International Society for Complex Environmental Studies International Society for Environmental Ethics International Society for Environmental Protection International Society for Mine Surveying International Society for Respiratory Protection International Society for Rock Mechanics International Society of Biometricians International Society of Indoor Air Quality and Climate International Society of Medical Hydrology and Climatology International Society of Offshore and Polar Engineers International Society of Travel and Tourism Educators International Society of Travel Medicine International Tanker Owners Pollution Federation International Union for Circumpolar Health International Union for Conservation of Nature and Natural Resources International Union of Geological Sciences International Whaling Commission International Association of Jewish Genealogical Societies Inuit Circumpolar Council ISRIC - World Soil Information Lifeforce Foundation Minerals, Metals and Materials Society Mines Ministries of the Americas National Science Foundation North Atlantic Salmon Conservation Organization

FEASIBILITY ANALYSIS OF A POTENTIAL CONVENTION CENTER IN THE FAIRBANKS Appendix A: List of Survey Samples and Organizations Page A-5

          

North Pacific Anadromous Fish Commission Ny-Ålesund Science Managers Committee Pacific Arctic Group Pacific Salmon Commission Polar Field Services, Inc. Port and Ocean Engineering Under Artic Conditions Programme for the Conservation of Arctic Flora and Fauna Scientific Committee on Antarctic Research / International Arctic Science Committee Sea Ice Outlook Society of Environmental Toxicology and Chemistry Soil and Water Conservation Society

            

Solution Mining Research Institute The National Co. for Science and the Environment Travel and Tourism Research Association University of the Arctic Winrock International World Association of Travel Agencies World Coal Institute World Fed. of Travel Journalists/Writers World Foundrymen Organization World Mining Congress World Petroleum Council World Renewable Energy Network World Travel and Tourism Council

          

Jam Theatricals Live Nation Moscow Ballet Police Productions Premier Productions Rush Concerts The Acting Company The Booking Group Trudy Heffernan WestCoast Entertainment Whistling Swan Productions

Touring Performing Arts Organizations           

Alan Wasser Associates Barney McClure Beaver Productions Big League Theatricals Brad Simon Organization Cox Events Grutman and Murtha House of Blues Jack Utsick Presents Jade Presents Jam Productions

FEASIBILITY ANALYSIS OF A POTENTIAL CONVENTION CENTER IN THE FAIRBANKS Appendix A: List of Survey Samples and Organizations Page A-6

APPENDIX B: TELEPHONE SURVEY OF STATE and TARGETED NATIONAL ORGANIZATIONS - VERBATIM RESPONSES TO OPEN-ENDED QUESTIONS Q5. Are there any particular reasons why your organization is not likely to use a potential Fairbanks convention center? (only those who responded negatively towards Fairbanks) 

Our conferences are not that big; we only have approximately a hundred people that attend.



We are a local group, and are not interested in moving the group around.



We are an Anchorage based organization.



We have many members in Anchorage that would not travel to Fairbanks.



Because of the motorcycles, there is a lot of noise, and we can camp at the fair grounds for the rally.



We are set in our ways; the folks are used to going to Anchorage.



People come from all over the United States, and Anchorage is centrally located.



Most of our members are headquartered in Anchorage.



Anchorage is where most of our members are.



The cost of the convention center is too high for our budget.



We would not use a convention space; we would use space in a university.



We are already going to Anchorage and have a rotating agenda, and the chances of going back to Alaska are not real good.



We work with the base in Anchorage, so there's no reason to go to Fairbanks.



Our offices and members are located in Anchorage; it makes it more convenient and easier for everyone involved to stay in Anchorage.



Our board of directors all live in southeast Alaska, and we also piggyback and have our annual meeting in Anchorage to save cost, and Fairbanks would be expensive to travel to for us.



All the members and the military post members are located in Anchorage. We are a small group of people, and would not want to travel that far away.



We have to bid on this to have this convention to come to any city, and Fairbanks just doesn't have the revenue for our organization.



Half of our members are here in Anchorage, and we have solicited our members before to have the convention in another location, and they have all said they're happy where it's at.



Too far away; we have to hold them within a certain perimeter of our area.



Mainly the convenience. Anchorage is more central for our members.



Mostly we have Anchorage attendees, who either live here in Anchorage or are in close driving distance, and Fairbanks is too far; it would be expensive with the airfare amounts.



They like them close to home, and Fairbanks is too far away; it's a 6 hour drive - a bit too far to drive for a conference.



Most people fly from around the state, and it is cheaper to fly into Anchorage than anywhere else.

FEASIBILITY ANALYSIS OF A POTENTIAL CONVENTION CENTER IN THE FAIRBANKS Appendix B: Telephone Survey Open-Ended Question Responses Page B-1



My show draws people from all over the state, and Anchorage seems most accessible, and most of the businesses that are in my show are located in Anchorage.



The reason is cost; the shipping costs three times more than to the lower 48 states. The equipment that needs to be shipped to conventions also takes a longer amount of time to ship.



We use the school district; it's free.



There are similar events that we do that are already being held in Fairbanks. We are in Anchorage. Our Fairbanks office holds similar events in Fairbanks, so we would not go to Fairbanks to hold similar events that are already being held there.



There is a small number of fishing permit holders in Fairbanks; we only go to cities that have a larger number of people who hold the permits.



We're the Anchorage Economics Committee for the Anchorage area which is funded partially by the state of Alaska and Anchorage, so we would be unable to travel to another city.



Economics in the industry is too hard to fly people to Fairbanks so we make them come to Anchorage.



Event has been held in Anchorage for the past 26 years.



Our members are mostly located here in Anchorage, so there would be no need to go to another city.



Because it would be too far for our attendees to go. It can be too much of an expense to travel that far.



Because most of our membership is in the Anchorage area, and the members could not afford to fly or drive for 5 hours. So it is much easier for us to stay here in Anchorage.



Our office is in Anchorage, and we would need to have the event close to our office, and Fairbanks is not very close. Also, the attendees live in Anchorage and it would be inconvenient for them to travel to Fairbanks.



We are going to Anchorage in 2010, and the next possible time we would maybe think of going back to Alaska would be 10 years out.



It would be too expensive for most of our folks to get to; there are some cities that we can just not afford.



Yes, because of the weather, and they are more likely to go to Anchorage; the central hub is closer to Anchorage. For them to get to Fairbanks, they would have to go through Anchorage anyways, so it's not beneficial travel-wise.



Yes, we went there in 1997. We only have a board meeting for 40 people, and our guests said there was not enough to do and it was too cold. We would prefer to go to Anchorage for the things to do there.



Because the meetings are based on the ATIA, Alaska Travel Industry Association. We need to follow the ATIA calendar, and no time in the near future will we be going to Fairbanks. Also we really don't require a lot of meeting space, so it would not require us to use Fairbanks.



I think it’s just because a lot of people just like coming to the hotel we use, so that is why we keep having it there.



We don't really have companies up there; that would be our reason.



The facilities are too small.



Because the convention center would be too big.

FEASIBILITY ANALYSIS OF A POTENTIAL CONVENTION CENTER IN THE FAIRBANKS Appendix B: Telephone Survey Open-Ended Question Responses Page B-2



Because the facility is too small to accommodate us. The convention center cannot hold our accommodations; if I were convinced there was a facility that could hold over 200 people, then maybe it could be a possibility.



Because the members would rather come to Anchorage; they like to shop there.



Because our client base is in Anchorage, and it would require that our clients would have to travel.

Q18. Can you explain what types of requirements and preferences you have concerning the convention center’s headquarters hotel, in terms of hotel brand, size and amenities? 

We don’t have really any requirements for the hotels.



It's nice to have the full service; it's nice to have a meeting planner to help us with flights.



Everything needs to be full service with acoustic sound and web cast.



Full service enough to handle 100 rooms. The hotel has to be a state chamber member.



We need the hotel on the cheaper side; it needs continental breakfast, and we need a later check out so people aren’t scrambling around.



Breakfast, indoor restaurants, and wireless internet.



We have a priority. I'm working with hotels that are local and organic, that have compost piles.

We look for a committee that is active salmon policy. It’s a conference on salmon, so it is on county monitored issues, like health and water issues. We get a lot of government officials, EPA and commercial fisheries people.



We would like full service.



It would have to have full service and to have a business center.



More service and amenities are better; exercise rooms and hot meals, snow removal.



We are upper middle class Marriot range. It needs to be full service and needs to be attached or walking distance to the center. There needs to be more than two air services.



Full service with room service, a hotel staff that's fully staffed with competent convention center staff, audio and visual.



Cost would determine whether we would need full service or limited.



Audiovisual for sure, and a catering facility.



Wireless internet, youth friendly stuff for adolescents to participate in, and continental breakfast.



Full service; the main thing needs to be attached. I'm not going to have my California guys walking down the street in Fairbanks when it's cold.



We would like to fit everybody in one hotel, and wireless is always a must.



Limited service is okay.



A lot of meeting space, a lot of breakout rooms, and big hallways.



Nothing.



Full service with everything - all amenities, like food, room service, Wi-Fi, and pick up service from the airport. Most of our people fly in.



We require a dog friendly area.

FEASIBILITY ANALYSIS OF A POTENTIAL CONVENTION CENTER IN THE FAIRBANKS Appendix B: Telephone Survey Open-Ended Question Responses Page B-3



Continental breakfast, state of the art equipment, and a media and visual recording system.



Full service, internet connection, bar and restaurant.



Full service, shuttle service, and a storage area for exhibitors.



Nothing.



Be able to house and have all the functions we need. Make sure there are enough rooms to have meetings available. If they had enough rooms at the hotel, then we would not need to use the convention center.



Full service, shuttle service, full restaurant and bar.



Full service, good internet access.



Banquet facilities and shuttle service.



Shuttle service for elders and the handicapped, and a small private banquet.



If it will accommodate us with meeting and sleeping rooms and a banquet facility to hold 200 people.



Communications rooms, audiovisual, copy machine, a coat room to put our coats in, and a pulldown video screen.



Full service.



Not really.



I don't know.



Smoking and non-smoking rooms; handicap accessible.



No.



Bar, audiovisual, full service storage for us to ship a week in advance.



No.



No.



We need a full service hotel, and we would not stay at a non-union hotel. The rooms seem to be full of tourists so we cannot get a room block.



No requirements.



Nice restaurants so members don’t have to leave the facility.



No. No preference.



We'd like full service, wireless internet, parking and workout areas.



The location; if it is downtown, it is better.



We need internet, and the standard amenities that a hotel offers. Room service or close proximity for restaurants.



We'd rather have a full service hotel. Full service with a bar, open for long periods of time.



Full service, a nice hotel that has maybe a workout facility and hot tub, maybe a bar, and internet access.



Price - as cheap as possible.



Bathroom facilities that can handle the disabled. I like paper towels rather the hand dryers.

FEASIBILITY ANALYSIS OF A POTENTIAL CONVENTION CENTER IN THE FAIRBANKS Appendix B: Telephone Survey Open-Ended Question Responses Page B-4



Restaurants in the hotel. King size beds in the hotels.

Q19. Do you have any specific requirements or preferences regarding the convention center itself, in terms of its space and amenity offerings and its location and proximity to amenities like hotels, restaurants and shopping? 

AV, tables, chairs, and moderately priced caterers.



It's nice to have the hotel nearby, and if we have a meeting room, it's nice to have an office room to make copies.



Needs to be within walking distance to the hotels and a full service staff.



Closer to the hotel, and it's better for the attendees have a full service kitchen. We prefer to have a convention center with full audiovisuals and internet access.



The convention center in Anchorage is right downtown, which is convenient to shopping and restaurants. The only problem is it's hard to find parking.



The main thing is the size, which would be for the breakout rooms that you had already asked about.



We are usually in a single hotel with space that is there already; we typically don’t use convention center.



Definitely close to shopping and hotel.



Nothing.



On site catering, wireless access, adequate parking, well trained staff.



I'd like a carpeted exhibit hall with 16 feet or more to the ceiling. It needs to be ground level so people can drive right up there.



The need for AV. I would like to have it connected or very close to the hotel with very easy access. Again, competent convention staff.



Non-smoking, of course, and we'd prefer windows in every room and wheel chair access for everyone.



Handicap accessibility, and a vegetarian menu.



Close to shopping, for the kids.



No.



No, nothing.



Hotels and shopping are important; we get more people to show.



Close to hotels so people don’t have to rent cars; it keeps down the cost.



Nothing.



Next door to a hotel and attached with a bridge. The convention center needs a recording and sound system, comprehensive AV equipment, like screens, and it helps if they have Wi-Fi, that it's clean, and they have a crew on site, because we are sloppy.



That we are allowed to have alcohol and a band at the convention center.



No, nothing.

FEASIBILITY ANALYSIS OF A POTENTIAL CONVENTION CENTER IN THE FAIRBANKS Appendix B: Telephone Survey Open-Ended Question Responses Page B-5



Catering service and internet access.



Good lighting. Brighter lights in the meeting rooms and/or banquet, so everyone is able to see.



Coffee, food service, and computer IT support.



Close to hotels - a comfortable walking distance.



Nothing.



No, not that I can think of.



Concierge service, information desk available, shuttle available, and audiovisual available.



Close to hotels - within a block and heated hallways within the hotel to get to the convention center or other meeting spaces.



We don't use convention centers; we use resort hotels and properties.



Pull down video screen, audiovisual room.



Wireless internet. AV equipment.



No not really, no.



I don't really care.



No, nothing.



No.



Full multi-convention center; it would need to have audiovisual, big screens in the meeting rooms.



Audiovisual, state of the art IT.



No.



No.



A storage area for setting up. Audio screens that are already attached to the wall, and projectors that are in the ceiling. Signage, meaning a place where we can identify what is going on in each room. A food and refreshment stand. The ability to move in large exhibits from the street.

Outside space that is outside the convention center but is attached. The ability to make a big room into a small room. Individual control for temperature in each room.



Easy access for the exhibitors. A separate entrance.



Audiovisual equipment quality and the ability to use TVs instead of projectors.



None.



We also need audiovisual equipment and a good catering service.



Restaurants are very nice to have, and internet capabilities and close to hotels, within walking distance, but that's not absolutely necessary. Breakout rooms are usually my key component for the facility. The flexibility of the catering service.



We would rather be downtown where all the action is for our guests.



It would need to be in close proximity to all the main attractions in the area for our guests and their spouses.



Restaurants being close to the meeting place.



I would like to have them closer to restaurants so we could walk to the restaurants.

FEASIBILITY ANALYSIS OF A POTENTIAL CONVENTION CENTER IN THE FAIRBANKS Appendix B: Telephone Survey Open-Ended Question Responses Page B-6



No, nothing.

Q20. What issues pertaining to transportation and logistics might you foresee with hosting an event in the Fairbanks area? 

We would not have a problem with transportation.



I can't think of any.



None. Nothing.



The fact that the facilities are two miles from the hotel; we need shuttle buses, and right now it's additional costs.



People have their own vehicles, but we could use a shuttle bus.



No, not really.



We need international connection; people come from Russia.



Close to the airport is always a plus. We would like to have it closer to the airport; again, that would be ideal; otherwise there are no issues.



Just getting people to the convention center is expensive to rent motor coaches.



Alaska Airlines getting people here on time.



Getting there conveniently and economically. Is there a direct flight that goes to Fairbanks?

Weather would be an issue.



No, not really; we don’t have any problems. Our needs are well taken care of.



We need transportation to and from the airport and group rates for air transportation.



A shuttle to and from the airport.



Nothing.



We don’t have any problems; we partner with Alaska Airlines, so no problems.



I don’t think there would be any.



Just getting transportation to get there; it's expensive to drive and fly.



Transportation is not an issue.



Nothing.



If you're building a hotel next to the convention center, then there are no issues. There is not a good bus system from the airport to the hotel.



Most people are mobile; they come with their dogs and trucks.



It's so cold there, they need to have more than one shuttle in case the just one breaks down; it's very important to have shuttle services.



Sufficient rental cars available; they don’t have enough cars available to rent.



We need shuttle service to and from hotels.



Not enough parking space.



Nothing.



The biggest thing is the lack of best routes available to us during certain times of the day.

FEASIBILITY ANALYSIS OF A POTENTIAL CONVENTION CENTER IN THE FAIRBANKS Appendix B: Telephone Survey Open-Ended Question Responses Page B-7



Getting the people to Fairbanks. Alaskan Airlines have cut back at least two flights a day; it makes travel more difficult.



When we have been there, it has not been an issue.



None.



The availability of flights going in and out of the airport.



We need heated sidewalks, shuttle services.



Airport shuttle. We need to have enough shuttles available to transfer members back and forth.



No.



None.



Shuttle service would be necessary.



Airfare is too expensive.



They need shuttles to transport.



We have a field trip in March; we need buses that can transport at least 40 people to the sites we take in, and we also need bus shuttles to and from the airport.



No.



I don’t see any issue.



I don’t see any.



It's more expensive to fly there than to Anchorage.



I don't know. I don’t understand the question.



Shuttles and taxis.



I don’t foresee anything.



We don't really have challenges with that, we have transportation set prior to the convention, so it's all set up already.



Taxi service is necessary.



Rental cars, taxi service to and from the hotel, possibly bus service, depending on what event we will hold.



I don't know, because the last time we rented cars.



Shuttle bus; we need one.



Making sure we have adequate transportation from the airport to the hotel.

Q21. What are your overall impressions of Fairbanks and the Fairbanks area as a potential host market and location for your events? 

I think it's nice. I don’t know how to say we had a hard time finding the venue, and we couldn’t find rooms to rent for the event.



It's a great place, because they are very service oriented, and they are easy to work with; they are really friendly and helpful.



I don’t have a comment for that one.

FEASIBILITY ANALYSIS OF A POTENTIAL CONVENTION CENTER IN THE FAIRBANKS Appendix B: Telephone Survey Open-Ended Question Responses Page B-8



It's excellent; everything went smoothly while we were there. The Chamber was good and people were friendly. The facility management team did an exceptional job.



I would host something in the summer, not the winter, because the roads are horrid at that time.



They're good; whoever the Visitor Center people are, they have always treated us good.



It would be really challenging at this point; the hotel and the convention center are too small.



It's been a good location. I don’t really have anything; I've been there once, so I don’t know how to answer.



It’s a good place for meetings; a quick flight. It's easier to get people to the meeting when it's in Fairbanks. Fairbanks is very accessible.



Looking forward to it because, I have very good local support.



Semi-isolated; it's 4,000 miles away from our population centers.



If they were to upgrade to a larger convention center, it would be very good. If it's like it was back in 2005, we could not come; they did not have the space to accommodate all of us. If they were to upgrade to a larger convention center, it would be very good.



Extremely cold.



It would be great; the weather is nice in the summer, and if it was planned around the same time as the state fair, that would also be nice; it's a very nice state fair.



The kids get excited when we go to Fairbanks; it's one of the two urban centers in Alaska.



Low, because most of the people are coming from Anchorage; that’s why we stay in Anchorage.



It's a very good area; people are nice and interested in attending functions, particularly in the winter.



Fairbanks is a great place; it is centrally located for the smaller communities around here, but there's just not enough space at the convention center, and it makes it a crazy convention.



Nothing.



We liked it, but we didn’t like Westmark; they were not all about having conventions; they were too busy going about the sightseeing.



We've had a good experience at Pioneer Park; they have been very good to us. Our members like the park; it's easy find.



It's a good, nice place to visit. It's close to Chena Hot Springs.



It's fine; they meet our needs based on what you have told me.



Good; the people at the Visitors' Bureau are very nice and helpful.



I like it because it's packed in; everything is close by one another, and the convention center and Visitors' Bureau are very supportive.



I haven’t been there, so I have no impression.



Excellent; the university is based out of Fairbanks, so we like it better.



I think the lodging is improving, but I still would not host an event in the summer months in Fairbanks due to lack of and high rates of the lodging facilities.



It definitely has worked for us. We have a business there, and that's why it is rotated to that city.

FEASIBILITY ANALYSIS OF A POTENTIAL CONVENTION CENTER IN THE FAIRBANKS Appendix B: Telephone Survey Open-Ended Question Responses Page B-9



Half of our members are from the Anchorage area, so I think we would lose some of the attendance. If we could get people to travel, I think we could enjoy ourselves in Fairbanks.



It is a potential; when I did research, I could not find hotels to accommodate us. There are not enough rooms available.

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The scenery is just beautiful; it's just gorgeous.

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It's fine. I have held many events there for this organization and others and never had a problem.

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Great location. Nothing really specific. I'm trying to think; it's just a great location.

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No comment. I just have no comment.

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I know nothing about Fairbanks, so I cannot answer.

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I don’t know. I have never been there.

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A very, very good spot. We are a little different in how we choose our spots to go to; our members bid on the sites, and we have a lot of members in the Fairbanks area. Also, the people are so great and friendly; we love it there.

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Fairbanks is the crown jewel of mining; basically, historically mining began here in Fairbanks, and I think that it would not be appropriate to hold this convention anywhere but Fairbanks.

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It's dark and cold, and I'm not real sure why anybody would want to live here or visit.

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It's good; we would like to go back there, if Fairbanks could accommodate us. I can't really recall enough to be specific.

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Excellent value; it costs me less to have a meeting there than other places.

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It’s a possibility, if they build something that’s larger than what they have now.

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You need to know what you are working with; you may not have your hotel and meeting in the same location. I'd have no problem with them if we could get better communications regarding the locations of the hotels and the meeting places.

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I think it's very feasible for our event to be held in the Fairbanks area..

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I think it’s great; the service and food have been good.

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It’s a great place as long as they have the facility to host the event. We have been there previously and we enjoyed our stay. There was plenty to do. Not a lot of tourists, so transportation was very fast from point A to point B.

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Right now I don’t have any opinions on the area.

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I think it would be a very good place. It's one of the larger cities in Alaska. The Chena River and Hot Springs are here and very pretty. Also, a large group of attendees live in Fairbanks, so it's nice for them to hold it close to them.

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It is very promising in the summer, because the weather is better. I think that’s good; there's nothing else.

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It has good venues for having conferences, like the hotels.

FEASIBILITY ANALYSIS OF A POTENTIAL CONVENTION CENTER IN THE FAIRBANKS Appendix B: Telephone Survey Open-Ended Question Responses Page B-10