GRAND RAPIDS — Those studying whether Grand Rapids needs another convention hotel hope to gather enough data that the Grand Rapids-Kent County Convention/Arena Authority can make a decision by year’s end whether to move forward on the project.
K Corner Consulting LLC founder Chris Knape, during a CAA meeting Friday, said the next steps are assessing funding mechanisms and finalizing construction costs, which he believes will need to be covered at least in part by public entities.
“One of the things we’re finding is very few, if any, full-service convention hotels get built without public bonding or some sort of public participation,” Knape told MiBiz. “We’re looking at a variety of scenarios, and the most conservative approach at this point is to use a city/county bonding authority to help finance the project should (the CAA) decide to move forward with it.”
The CAA, a public body that owns Van Andel Arena, DeVos Place Convention Center and DeVos Performance Hall, hired Knape in April to drive the research process. The CAA has also assembled a task force to continue research on the project.
Thus far, the group estimates development costs could be between $140 and $180 million, with an annual economic impact of $82.3 million. The data comes from a 2018 study from Chicago-based HVS Convention, Sports & Entertainment Facilities Consulting, which also showed demand for a 400-room convention hotel in downtown Grand Rapids.
The study assumed the project to be a 400-room, full-service property with a restaurant, lounge, coffee shop, 40,000 square feet of meeting space and a 20,000-square-foot ballroom, among other amenities.
Knape said issuing bonds would not put taxpayer dollars at risk, and the bond would pay for itself with the revenues generated by the opening of the hotel.
While the task force researches, Grand Rapids-based Progressive AE Inc. is assessing the economic feasibility of building the convention center hotel atop DeVos Place. Knape said the task force will return to the CAA with more concrete construction cost estimates by the end of the year.
CAA members emphasized the need to sell the idea of building the hotel to the public based on the economic benefits it would provide.
“We get confronted oftentimes about how we spend our money,” said Kent County Administrator Wayman Britt. “You’re going to have to really educate the (Kent County) Board of Commissioners. Their constituent base is not just in the city of Grand Rapids, it’s out in the cities and townships in the county.”
The goal of the project, according to Knape’s presentation, is to create additional meeting and convention space that would attract more and larger events, thus bringing in more revenue from hotel room nights for existing and future hotels.
According to the HVS study, the project would result in 590 new jobs and 69,350 net room nights.
An amphitheater project is also being studied by the task force. The CAA received $5 million from the state last year for the estimated $40 million project.
This project is estimated to create $5.9 million in new spending annually, 410 full- and part-time jobs and $456,000 in new tax revenue.
Knape said the task force is studying where the amphitheater could be located.
Millenium Park was an identified site of interest, though Knape said the task force has found some infrastructure and geological issues that might make it infeasible and unsafe to build there.
He hopes to have more information on funding mechanisms and a location by the end of the year.