On hotels and sky-bridges: Look past the hype, Pt. 2 (Updated)

One of the apparent non-negotiables of this hotel deal is the $5 million pedestrian bridge that is supposed to connect the proposed Marriott to the Peoria Civic Center and the hotel also have other luxuries like a gym and a pool that they kept clean using the best pool filter for this. We are told that this will help the Civic Center draw bigger conventions to Peoria because what’s been holding us back is the lack of high-quality hotel space adjacent/connected to the Civic Center. In order for the Civic Center to consider the Pere/Marriott its official convention-center hotel, it wants to have it physically connected.

I buy the lack of high-quality hotel space — our hotels definitely need to be upgraded. But I’m not sold on the physical connectedness being essential. No objective study that I’m aware of has quantified how much more business we would get by having a physically-attached hotel.

Indeed, in a 24 March 2006 memo to the City Council, the Civic Center Authority itself said, “We believe [the expanded Civic Center] can be successful without an attached hotel [emphasis mine] but more and larger regional opportunities will be possible if more and better downtown hotel rooms are available.” Note their main concern is quality and quantity of rooms. The C. H. Johnson Master Plan Analysis said, “To effectively service a convention center and add value to the convention sales effort a hotel property must typically must be located within ten blocks (or reasonable walking distance) [emphasis mine] of a center, the property must be willing to commit approximately 60 percent of its room inventory to the convention center room block, and the hotel must offer a quality room product.” The Pere Marquette and the proposed addition is within one block. Here’s another quote:

The Peoria Area Convention and Visitor’s Bureau tracks “lost” convention and meeting business. These are groups that that looked at the city, but ultimately decided to stage their events in another market because the PCC was either too small, the hotel room inventory in downtown Peoria was insufficient or not of the quality preferred by meeting planners, or other factors.

Again, the quality and quantity of rooms was most important according to the Civic Center’s own study. Connectivity was not a major factor.

I’m not saying that having an adjacent or connected hotel would not be an additional advantage for convention sales. I’m saying that (a) it’s not the most pressing problem holding back convention business, and (b) there’s no quantifiable data showing that building a $5 million sky-bridge is going to give the Civic Center a sufficient additional bump in convention sales to justify its cost. How many years (decades?) would it take for the city, private investors, etc., to see a return on that investment? To put it another way, evidence from the Civic Center and their consultant indicates increasing the number and improving the quality of rooms will provide a sufficient boost to convention sales; the additional amenity of a sky-bridge does not appear to provide a $5 million added value. The only “evidence” I’ve heard in support of a sky-bridge as a way to bring in more convention business has been anecdotal or, at best, inconclusive.

Another problem with the sky-bridge plan is this: the hotel plan includes street-level retail around the parking deck, which is a good thing if you’re trying to activate the street. But these shops are going to be below the sky-bridge. The people most likely to patronize those shops — the hundreds of guests staying at the hotel during a convention and walking back and forth to the Civic Center — are going to be directed to the sky-bridge to access the Civic Center. And the shops will be inaccessible from the sky-bridge. Has anyone thought about the self-defeating nature of this plan? Who is going to be on the street to patronize these businesses?

Mayor Ardis is quoted in the paper as saying, “In addition to improving the ability of the Civic Center, it will help us revitalize Downtown Peoria on the business side.” With all due respect to the Mayor, downtown is not going to be revitalized by taking more people off the streets and funneling them through sky-bridges. Plenty of other cities have proven it.

Generally, sky-bridges are a thing of the past. Cities that have them are removing them. They’re outdated and cause more problems than they solve. We should be learning from the mistakes of other cities instead of making the same mistakes ourselves. That’s the thesis of a report by Kathleen Hill, written while she was getting her Master’s degree in urban planning from the University of Utah.

I’d love to quote the whole darn thing, but it’s 43 pages long. So let me quote just this one passage that deals with the most common justification for sky-bridges I hear:

And for those who argue that protection from the elements is necessary, consider the following write-up (People of the Skyway, November 2004) specifically addressing skywalks in the winter cities,

“Why doesn’t Chicago or New York or any of dozens of other cold-climate urban centers have skyways? After all, the main difference between winters in the Twin Cities and in other places is the outlier months, November and March, which tend to be colder and snowier here. The answer is simple to urban architects and planners like Ken Greenberg, head of Toronto-based Greenberg Consultants: Skyways are a bad idea. “The skyway network is a prime example of a highly focused, oversimplified solution to one problem—exposure to climate—that in turn creates others,” he says. “Climate protection is achieved but at a great cost. Street life virtually disappears; retail is moribund, functioning at best for weekday noon hours but not on weekends or in the evening.” That criticism hits its mark in both downtowns, but particularly in St. Paul, which practically ceases to exist outside regular office hours. As one fellow bus-rider remarked to another the other day, heading from downtown toward Lowertown, “This really is a ghost town after five.”

A primary mover behind the downtown development blueprint St. Paul has been following since 1996, “The Saint Paul on the Mississippi Development Framework,” Greenberg points out that retail and street life can and do thrive in similar, very cold urban areas without skyways—even in places just outside downtown. “A good example is Grand Avenue in St. Paul,” he says. And downtown St. Paul itself, before the skyways. “Where skyway solutions have been employed in other cities like Toronto, Calgary, and Edmonton,” Greenberg adds, “the results have been similar.”

For evidence, Greenberg points to an April 11, 2004, editorial in the Hartford Courant, in which urban planner Toni Gold delights in the demise of that city’s twenty-year-old skyways (which they called “skywalks”). Gold, who works at a New York City nonprofit called Project for Public Spaces, begins her commentary: “Hartford’s skywalks are coming down, with barely a whimper of protest from their one-time proponents, or even a hurray from their one-time opponents. Well, hurray, I say. Two cheers for city sidewalks. It’s now become obvious and widely acknowledged that cities should reinforce their sidewalks, not compete with them.”

Incidentally, the report goes on to state that Minneapolis mayor R.T. Rybak “refus[ed] to build a large hotel adjacent to the Minneapolis Convention Center, precisely because ‘people wouldn’t get out on the streets enough’.” I’ll bet they still get more conventions than we do, even without an attached hotel.

UPDATE: When I wrote this post, I was unable to access the entire C. H. Johnson study because the Civic Center’s link to it had been removed, so I was relying on incomplete information. Never a good idea. I have since been able to obtain a copy of the full report (now available here on my site), and it does, in fact, propose a sky-bridge to connect the Pere Marquette to the Civic Center:

With the recommended expanded and renovated facilities, Peoria will need a larger, higher-quality hotel package. In order to not only be competitive, but to accommodate more and larger groups, Peoria should consider:

  • Connecting the Hotel Pere Marquette to the Peoria Civic Center via walkway, as is the case in many cities in the US. One recent example is the 257-room Radisson Hotel in Lansing, Michigan, which is connected to the Lansing Center via a heated sky bridge over the Grand River.

That correction made, however, my larger point still stands. The report does, in fact, focus primarily on the number and quality of rooms available within close proximity. The additional boost that physical attachment would give is not quantified. And, I’m sorry, but I just don’t see Fulton Street as the same kind of physical barrier as the Grand River in Lansing.

On hotels and sky-bridges: Look past the hype, Pt. 1

At its next meeting scheduled for Monday, Dec. 15, the City Council will almost assuredly approve a new hotel development in downtown Peoria that includes an elevated pedestrian walkway, or sky-bridge, connecting the hotel to the Civic Center.

Naturally, the prospect of getting a downtown hotel of the caliber of a Marriott is exciting. New and/or improved hotels are desperately needed in our central business district by all accounts. When someone comes to the city and waves a $102 million project under their noses, it’s hard not to jump at the opportunity.

But this isn’t a purely private venture. The developer and investors are asking for just under $40 million in revenue bonds from the city to help pay for construction. These bonds would be paid back with revenues from the hotel over a 23-year period. It’s being presented as a sure thing — but there is a risk to consider — whether the hotel will perform well enough to pay back those bonds. The council members have an obligation to weigh that risk and make their decisions based on facts and the long-term interests of Peoria’s citizens, not hype.

And there’s no small amount of hype, starting with one city official’s pronouncement that this is a “wonderful development” before it was even made public. More recently, it’s been described as “a key to bringing large conventions to central Illinois and generating millions in revenues every year,” as the Journal Star put it. But are these predictions about the Civic Center and the need for a hotel with a sky-bridge to be believed?

Heywood Sanders warned the Peoria City Council back in 2004 — before they voted to expand the Civic Center — that similar predictions then of “millions in revenues” from “large conventions” being lured here were wildly optimistic. The Journal Star reported on October 18, 2004:

Since the mid-1980s, Sanders has reviewed more than 80 feasibility studies for new or expanded convention centers and tracked the outcome of those facilities in terms of new conventions and trade shows added to the annual roster, attendance at those events and hotel nights resulting from new convention business.

Without exception, every report has assured cities that if they “build it, you’ll do great.” But high expectations laid out within the studies are going unrealized as the convention market stagnates and new or recently renovated centers add millions of square feet of space per year, effectively shrinking the share of business to go around, Sanders said.

Sanders told a U.S. House of Representatives subcommittee basically the same thing in 2007:

The expansion of convention center supply, coupled with changes in demand and convention attendance since the late 1990s, has resulted in a highly competitive market. A great many cities have seen significant decreases in their annual convention and tradeshow attendance in recent years, and have come to rely on a variety of financial incentives.

And what are those “incentives”? Mainly discounts on rental costs and hotel rates. He goes on:

The increased competition for convention business has two direct implications for communities that have invested in new or expanded centers. First, discounts and incentives reduce the operating revenues of a center, increasing annual operating losses and the public subsidies required for convention center operation. Second, the volume of annual convention attendees has become increasingly uncertain, as groups and organizers face a growing roster of medium to large size centers seeking to gain new business.

So, what are the projected revenues for this hotel? Are they realistic? Or are they based on optimistic numbers in a consultant study like the C.H. Johnson Consulting study from August 2002 upon which the $55 million expansion of the Civic Center was based? Johnson Consulting at that time predicted “an additional 221,600 visitors to Downtown Peoria in the first year after improvements are complete, with 87,500 attending 66 new events in the convention and ballroom areas,” according to the Journal Star, and “The total of new visitors would spend an estimated $19 million, generating $1.4 million in general sales taxes, $188,000 in hotel taxes, $102,000 in restaurant taxes and $36,000 in amusement taxes.”

So, let’s add those numbers up and compare them to actual figures. In the first year after the expansion was completed, we should have seen 66 new events and $326,000 more in HRA tax revenue. The expansion was completed in 2007. At the end of fiscal year 2007, the Civic Center reported 544 events and $1,729,846 in HRA tax revenues. At the end of fiscal year 2008, the Civic Center reported 590 events and $1,779,762 in HRA tax revenues. That works out to an increase of 46 events and $49,916 in increased HRA tax revenues — both well short of projections, just as Sanders had predicted.

Note in particular how far short the HRA tax revenues fell — they rose only 15% of what was projected: $49,916 instead of $326,000. Will the hotel’s occupancy and revenue projections be more accurate? St. Louis’s taxpayer-owned convention center hotel (also a Marriott, incidentally), which opened in 2000, is on the verge of having its bondholders foreclose on it since it started missing payments due to lower occupancy than expected. Peoria would be wise to double- and triple-check the numbers before agreeing to put the city on the hook for $40 million.