January 2018 FCCFA director's report

MEMORANDUM TO:

FCCFA Board Members

FROM:

Don L. Brown, Executive Director

SUBJECT:

Executive Director’s Report

DATE:

January 26, 2018

The following reports the progress of projects and major activities undertaken

by CFA staff since your November board meeting.

ADMINISTRATION  Amendment of the 2012 Loan Agreement #548-01-01 with Ohio Development Services Agency (DSA) for Nationwide Arena Resolution 2015-6 authorizes the Executive Director to act in the best interests of the Authority between Board meetings by authorizing contracts and agreements if the resulting expenditure fits within the annual budget, has the approval of two Board officers, and a ratifying resolution is presented for Board action at the next following Board meeting. Resolution 2017-2 also authorized the Executive Director to seek additional loan relief through an amendment to the above-referenced agreement.

Following extensive negotiations with DSA officials, a loan amendment has been executed which will fully satisfy the CFA’s State loan obligation with the State for Nationwide Arena, subject to the Board’s ratification and approval. The loan amendment was negotiated with key assistance from Ice Miller’s John Oberle, who served as our executive agency lobbyist in this matter.

Five Million of the CFA’s loan obligation will be exchanged for the Advertising Package shown in Attachment A. DSA will offset the $5 million in loan principal along with all outstanding loan interest and service charges, in exchange for the Advertising Package.

The COLHOC Limited Partnership must continue to meet its 60 FTE jobs commitment and $45 million payroll requirement annually, and the CFA must file loan forgiveness certificates for the years 2018 through 2021, inclusive.

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Meeting the jobs and payroll requirements over the next four years will satisfy the remaining $2 Million of the DSA loan obligation.

The loan amendment for Nationwide Arena was reviewed and accepted by the CFA’s general counsel, bond counsel, finance director, staff attorney, and Board officers. Ratification by the full Board will be sought through adoption of Resolution 2018-01 at next week’s meeting.

While casino tax revenues have never been as strong as anticipated, Nationwide Arena continues to return value to the State of Ohio by creating and maintaining jobs, a key part of the 2012 loan agreement. The CFA also continues to meet the Arena’s operating budget, land lease, and property tax obligations, which are prioritized under the 2012 acquisition agreement.  Contract Authorizations The Executive Director authorized six contracts since the November board meeting, as follows: •

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A $35 Thousand contract with Hilliard Glass to replace the access doors, frames, hardware, sealants, glass, and glazing near the South Atrium garage entrance.

Another $35 Thousand contract with Hilliard Glass to replace the doors, frames, hardware, sealants, glass, and glazing for three Ohio Center Way entrances.

A $32 Thousand contract with Kone Co. to replace the up-escalator step system near the South Café and Marketplace. The steps were damaged recently by a steel screw which lodged in the aluminum treads, causing a potential safety hazard.

A $13 Thousand contract modification with George Igel Co. to replace the sidewalk, install decorative fencing and a parking lot gate, and add pavement markings on the surface parking lot west of the Goodale parking garage. Completion of these improvements is expected next month.

A $13 Thousand contract with Designer Sign Systems for 18 GCCC directional and overhead signs.

A $4,300 contract modification with Amano McGann to provide communication devices, connections, and software programming to digitally display the number of available spaces at East Lot, Vine Street, and South parking garages.

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Operations and Finance  Convention Center Management GCCC financial results finished ahead of 2017 budget projections by $566 Thousand. This positive variance was due primarily to steady 4th Quarter financial performance including: catering, cleaning, electrical, and internet service charges, and South Café rentals.

The GCCC ended the year with net income of $702 Thousand, which exceeded the 2017 budget by $566 Thousand and exceeded 2016 results by $1.0 Million. Annual operating expenses for 2017, including payroll and utility expenses, were under budget by $952 Thousand.

For 2017 the GCCC’s revenue (adjusted gross income) was $19.87 Million compared with the budget estimate of $20.1 Million. GCCC revenue for 2016 was $17.67 Million. Key revenue components for 2017 were: • •

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Total direct & ancillary event revenue was $14.69 Million.

Total non-event revenue was $5.2 Million, including non-event parking ($3.9 Million), retail shop rentals ($852 Thousand), advertising ($136 Thousand), commissions, fitness center charges, and refunds ($287 Thousand).

Total gross revenue for food & beverage services was $11.35 Million, net sales revenue was $5.94 Million, and net income was $3.2 Million. For the year, the Discovery Café generated $287 Thousand, and the Starbucks Café generated $282 Thousand of net income.

Total revenue for parking services was $6.3 Million and net income was $5.2 Million.

614 event-days were held by year-end 2017 -- 123 more event-days than were budgeted. Total event attendance in 2017 was 863 Thousand, which was 62 Thousand fewer attendees than budgeted. Lower attendance resulted from event cancellations and lower-than-expected sporting and trade show event attendance.

YTD Hotel/Motel bed tax collections through November were $23.05 Million. 2017 year-over-year bed tax collections have outperformed 2016 by 5.2%. Hotel/motel bed tax collections through November also exceeded our 2017 budget projections by $587 Thousand. The CFA’s estimate of 2017 Hotel/Motel tax collections is $23.9 Million; this revenue will be used to meet our 2017 debt service obligations of $17.66 Million.

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 Recent GCCC News Coverage The GCCC is prominently featured in this month’s issue of Smart Meetings magazine. A second article featuring the GCCC’s expansion and renovation is featured in the Fall/Winter 2017 issue of Facilities & Destinations magazine.

A third article entitled Head Games appeared in the January edition of Columbus Monthly magazine. The featured article highlights the GCCC’s As We Are sculpture. A fourth article entitled Making Meetings Work appeared in the January edition of ColumbusCEO magazine, and notes that the As We Are sculpture draws crowds, and that LED lighting adds flair to the GCCC’s ballrooms.

Copies of all four articles are enclosed as Attachment B to this report. Also enclosed is a summary report of the 2014-2017 Columbus Reputational Survey released this week by Experience Columbus.  Goodale Street Parking Garage At November month-end, 253 patrons held monthly passes to park in the Goodale garage. Valet service at the Goodale garage also generated monthly revenue equivalent to an additional 90 monthly parkers.

Average monthly revenue for short-term parking in the Goodale garage exceeded $120,000. The total number of monthly parking passes remains limited to 300 monthly patrons and is subject to reconsideration.  North High Street Improvement Projects The City has completed Phase I of its North High Street improvement project from Ohio Center Way to Goodale Street. Phase II of the streetscape reconstruction began this month, will extend through October. Right-of-way construction will impact North High Street from Poplar Street to Second Avenue. The GCCC’s surface parking lot behind the Black Point on Goodale Street will be opened to provide a short-term parking option for Short-North District patrons and other public parking needs.  Nationwide Arena & Columbus Arena Management Columbus Arena Management (CAM) financial results continue to track FY18 budget targets. Through December, revenues were $14.798 Million,

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expenses were $14.492 Million, and net operating income was $306 Thousand. CAM’s Arena operating reserves held a $2.27 Million balance at month-end. CAM’s December monthly report is included as Attachment C. CAPITAL IMPROVEMENTS AND FACILITY DEVELOPMENT PROJECTS 

2017 EXPY Award for GCCIRE Project Improvements

Experience Columbus has announced that it will honor the CFA with a 2017 EXPY Award, recognizing the transformation of the GCCC, into a state-of-the art convention facility, the opening of the Goodale Street garage, and the Central Ohio art collection on display in the GCCC. EXPY awards will be presented by Experience Columbus at its March 15th Annual Meeting. 

Ohio Center Garage Engineering, Design, and Construction Service RFQ’s

With the CFA’s Development Committee approval, a request for qualifications (RFQ) was issued for engineering and design services related to the new GCCC parking facility, tentatively named the Ohio Center garage. Six (6) submittals were filed by the December 14th deadline. Submittals have been ranked and interviews will be held in early February. An A&E contract recommendation will be presented for approval at the Board’s February 27th meeting.

A similar RFQ process is now underway to seek submittals for construction manager at-risk (CM-R) services to build the Ohio Center garage.

A CM-R contract recommendation will be presented for approval at the Board’s March 27th meeting.  Public Auctions of GCCC Surplus Property An on-line auction of GCCC surplus furniture and equipment was successfully held last October. Surplus items included folding chairs, stages with risers, mechanical equipment, televisions, computers, office furniture, and office equipment. By mid-January, the warehouse was cleared of these surplus items.

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A second on-line auction was launched in January to dispose of 1,500 feet of surplus mall wall panels, food service and kitchen equipment, and a trash bin mechanical lift. The bid deadline for Auction #2 was January 22nd and the warehouse is expected to be cleared by March 1st.

Going forward, the CFA will schedule auctions annually to maximize our available warehouse storage space. Thanks to Jordan Edmonds, Scott Reed, Randy Chrisman, and Rodney Faulk for conducting both public auctions and disposing of the GCCC’s surplus property.