ANAHEIM CONVENTION CENTER EXPANSION
The Anaheim Convention Center (ACC), centrally located in the heart of Southern California, welcomes millions of visitors to the City of Anaheim for tourism, business and conventions/meetings. As the largest exhibition center on the West Coast, the ACC is part of the Anaheim Resort District, which generates nearly 50 percent of the City’s general fund tax revenues. These revenues pay for critical city services such as Fire, Police and other important community assets, like our parks and libraries.
Currently the ACC is operating near maximum practical occupancy. Therefore, despite the success of the Convention Center, we realize that we need to expand our center and adapt to changes in the convention business. Expanding the ACC will allow us retain those valuable conventions and trade shows as well as attract new conventions and opportunities that would significantly benefit the community.
On July 15, 2014, the City Council, by Resolution, approved a joint exercise of powers agreement by and between the City and the Anaheim Housing Authority (Housing Authority) creating a new joint powers authority, the Anaheim Housing and Public Improvements Authority (JPA). The Joint Exercise of Powers Act gives the JPA authority to issue revenue bonds to pay the costs and expenses of acquiring or constructing a wide range of public projects.
The actions being considered at the July 22nd Council meeting are to consider financing for the ACC expansion.
- What is the expansion plan for the Anaheim Convention Center?
The expansion of the ACC will include the addition of 200,000 square feet (SF) of leasable flex space that can be used for exhibits, meetings, and banquets. The proposed expansion would also replace Car Park 1, as well as provide new loading docks and an improved vehicular entrance. The expanded space will also provide a climate controlled connection to the second level of the existing convention center.
- Why is Anaheim expanding the Convention Center?
Since the ACC opened its doors in 1967, it has undergone six expansions that has allowed the center to stay competitive with market demands – with each expansion resulting in significant economic benefit to the City.
Currently, the ACC has only 160,000 SF of meeting and ballroom space to compliment its 813,000 SF of exhibit space. Unfortunately, more and more conventions and trade shows require at least 200,000 SF of meeting space. According to market research reports, date unavailability and inadequate space at the ACC accounted for a significant amount of lost events and potential revenue. As a result, Anaheim is losing convention/tradeshow business to its competitors, indicating there is a strong market demand for ACC to expand.
- How will Anaheim pay for the ACC expansion?
The ability to expand the ACC was made possible by the creation of the Anaheim Tourism Improvement District (ATID). In 2010 hoteliers within the Resort and Platinum Triangle agreed to self-assess 2% of hotel room rent to pay for the Visitor and Convention Bureau’s (VCB) marketing and promotion of the Anaheim destination. Since the City is no longer responsible for paying this cost (approximately $6 million in 2010), the City committed to re-dedicating those funds to the expansion of the Anaheim Convention Center. Ultimately, the amount of City funds formerly committed to marketing and promotions will, over time, cover the entire cost of the new expansion.
Additionally, the City would be able to take advantage of historically low interest rates – which are lower today than they are 90% of the time. And, if we delay, interest rates will likely continue to increase. An increase of .25% will cost more than $500,000 each year.
Taxpayers will not have to pay any additional funds for the expansion of the ACC and the General Fund will not incur any added annual debt service.
- What are the benefits of the expansion?
With this expansion, ACC will be able to:
- Retain existing business.
- Capture larger meeting intensive conventions. ACC currently cannot accommodate due to lack of meeting space.
- Maximize our occupancy by holding concurrent conventions. With an expanded Convention Center, the ACC will have room to hold multiple large events simultaneously, or have one event being set up while another event is breaking down.
- Replace Car Park 1- a parking structure in need of significant repair. The ongoing maintenance effort to keep Car Park 1 operational has been increasing for several years. Surveys conducted by structural engineers on a semi-annual basis show a steady increase in number of slab crack repairs, as well as column support, spall repairs, and lack of ceiling height to allow for seismic retrofitting.
- Capitalize on economic and fiscal benefits. The total measurable tax revenue to the City is estimated to be $9.5 million annually or $112 million over a 10-year operating period.
- Create jobs. An estimated 1,860 jobs during construction will be created and 2,043 new jobs will be supported annually.
- What if Anaheim does not expand ACC?
If Anaheim does not expand the ACC, new convention opportunities will be lost to our competition. Event planners have communicated that they have outgrown ACC’s current space, but would prefer to continue holding their events at ACC if there was enough exhibit/meeting space. As an example, the National Association of Music Merchants, a trade show for insiders in the music industry, comes to Anaheim annually for four days, drawing more than 1,500 exhibitors and nearly 100,000 visitors. That results in about $90 million locally, which is undeniably a significant amount of money to our local economy.
Ultimately, if we do nothing to the ACC then it is estimated that event activity will decrease, we will see an increase in operating loss, and reduction in the overall economic and fiscal benefits. In fact, by doing nothing, it will have a negative effect on the tax revenue that comes into the City’s General Fund. This tax revenue is a viable and critical financial source and it is used to fund the bulk of city services. Whereas, if we expand the ACC, it will not only enhance its marketability but also improve the Convention Center's competitive position for the next 10-15 years
- How do we know that increasing our flex space is the best way to grow our Convention Center?
Today, many groups not only require two or three of the Center’s five exhibit halls, but all of the meeting space. With the use of all the meeting space, this leaves two or three exhibit halls unsellable to convention groups due to the lack of meeting space.
We know that we can expand our marketing reach to include large corporate, technology, and medical meetings as examples of markets that find Anaheim and the campus setting to be a desirable location to convene and conduct business. Adding 200,000 square feet of flex space will allow the ACC to compete in these growing markets.
- 78 percent of groups would utilize the proposed flex space as exhibit space, and
- 90 percent of respondents would utilize the proposed flex space as meeting/ballroom space.
- What will the proposed ACC expansion look like?
- What are the next steps?
At the March 11, 2014 City Council meeting, the Anaheim City Council approved the ACC expansion, financing plan and design-build contract. Construction is scheduled to begin late summer 2014 with project completion by Fall 2016.