Albany Convention Center Authority Report to the ACCA Board · 11/24/2009 · Report to the ACCA Board Introduction The following serves to document the current status of the Albany

Ad & Promo7%

Retail11% Food &

Beverage20%

Hotels37%

Rentals, Events,

Recreation, Technology

Services25%

Ad & Promo7%

Retail11% Food &

Beverage20%

Hotels37%

Rentals, Events,


Services25%

Ad & Promo7%

Retail11% Food &

Beverage20%

Hotels37%

Rentals, Events,


Services25%

Ad & Promo7%

Retail11% Food &

Beverage20%

Hotels37%

Rentals, Events,


Services25%

Albany Convention Center AuthorityReport to the ACCA Board

November 20, 2009

Albany Convention Center Authority

Report to the ACCA Board

Albany Convention Center Authority Board Members:

Gavin Donohue, Chair

Michael Perrin Vice Chair Michele Vennard, Secretary

Hon. John McEneny, Assemblyman Brad Rosenstein

Lori Harris Kai Earle

Michael Yevoli

Contact:

Duncan Stewart Executive Director

Albany Convention Center Authority 386 Broadway

Albany, New York 12207 (518) 275-4920

[email protected]

November 20, 2009

________________________________________________________________________________________________________ Report to the ACCA Board

Albany Convention Center Authority Report to the ACCA Board

Table of Contents

Introduction ............................................................................................................... 1 Background................................................................................................................ 2 Market Feasibility ...................................................................................................... 3 Preliminary Design .................................................................................................... 5 Preliminary Probable Cost Model.............................................................................. 10 Anticipated Benefits................................................................................................... 10 Preliminary Operating Proforma................................................................................ 13 Financing and Revenue Plan...................................................................................... 14 Impact on Existing Structures.................................................................................... 16 Environmental............................................................................................................ 17 Historic Preservation Plan.......................................................................................... 18 Community Program.................................................................................................. 19

Attachments 1. Preliminary Probable Cost Model 2. Preliminary Proforma

Supporting Documents Available on Request

1. Strategic Advisory Group - Albany Convention Center Market Feasibility Study (2001) 2. Albany Local Development Corporation - Convention Center Task Force Study (2002) 3. Strategic Advisory Group - Albany Convention Center Market Feasibility Update (2004) 4. HVS International - Albany Convention Center Market Study (2007) 5. HVS International - Albany Convention Center Market Study Update (2009) 6. Basile Baumann Prost & Associates Albany Convention Center Supportable

Development Range (2007) 7. Hartgen Archeological Associates - Phase 1A Assessment (2007) 8. Hartgen Archeological Associates - Phase 1B Work Plan (2007) 9. Zimmerman/Volk Associates - Residential Market Study (2006) 10. Albany Convention Center Master Plan - Public Meeting and Workshop Minutes (2007

/2008)

Page 1

Albany Convention Center Authority

Report to the ACCA Board

Introduction The following serves to document the current status of the Albany Convention Center Authority’s (the Authority) efforts to construct a Convention Center. The Authority intends to construct the Convention Center on an approximately 6 acre site generally bounded by Hudson Avenue, South Pearl Street, Liberty Street and the South Mall Arterial.

Future site of the Convention Center


Page 2

Background As the capital of New York State, the City of Albany (City) is the appropriate location for the development of a Convention Center, which can benefit the entire State, while simultaneously promoting new investment and growth within the City and surrounding Capital Region. As such, the Albany Convention Center project is viewed as a major physical, economic and social initiative that will position the City as a major competitor for national conventions and as a community of choice for new investment, growth and development. This vision is illustrated by the Authority’s mission statement:

“To develop and operate a dynamic convention center facility that maximizes its economic potential through effective leadership, proactive marketing and programming, organizational integrity and transparency, community participation, fiscal responsibility, and the leveraging of economic development opportunities for others through community outreach and inclusion.”

For decades, the City has viewed the project site as a blank canvas waiting for a good project to help paint a new enhanced future for New York State’s capital. The project site is underutilized, and consists mostly of vacant space currently used for surface parking lots. Situated adjacent to the Hudson River Waterfront, the proposed site is highly visible from Interstate 787 (I-787), and serves as a major gateway into the City. The development of a Convention Center will redirect growth and development opportunities into the City and Capital Region, it will contribute significantly to Albany’s skyline, and it will promote economic prosperity into an area that has for decades been devastated by urban decay.

The City of Albany has a unique opportunity to bring life back into this ruined, underutilized section of Downtown Albany. For years, the City has been successful in developing projects that promote investment into other sections of Downtown, but has struggled to direct investment into this blighted area. During this time, the City and the Authority have worked to create a vision for this area, develop consensus about a shared vision, and determine the best approach for redevelopment. As a result, excitement and momentum has been built around the development of a nationally acclaimed Convention Center will also serve as a model for innovative green building design principles by setting a goal to work towards achieving Leadership in Energy and Environmental Design (LEED®) Silver Certification.

Up until 2008, it was the Authority’s intent to construct a 400 room hotel and a 1,100 space parking structure in conjunction with the Convention Center. The hotel would help serve the gap in hotel rooms that previous market studies had indentified.


Page 3

Recently however, in response to changing economic conditions and potential financing mechanisms for the project, the Authority has reconsidered its approach to both the hotel and parking garage. It now proposes to partner with a yet unidentified private developer to fund and construct the hotel and partner with other public agencies to develop the parking garage. The Authority would work closely with both entities to ensure that the hotel and parking structure dovetail with the Convention Center to assure the three projects are seamlessly connected in both design and operations.

Market Feasibility The vision of a Convention Center in Downtown Albany had its beginnings in the 1996 Capitalize Albany Economic Development Strategy (Capitalize Albany). From this vision, the Albany Plan was born, which identified the Convention Center as one of the key elements in realizing the City goal of “building for the future”. From its inception with Capitalize Albany, the Convention Center has been viewed as one of the important elements that would support new economic opportunities not only in Downtown Albany, but throughout the Capital District.

In 2001, the City of Albany Department of Development and Planning along with the Albany Local Development Corporation commissioned the Strategic Advisory Group (SAG) to undertake a market and economic analysis to assess the market for a Convention Center. The study concluded that the Capital District has a number of smaller venues but none have the sufficient capacity to accommodate large conventions, consumer shows or exhibits to meet current market demands. The demand for conference space in Albany is served by the limited facility space available at the Empire State Plaza and Times Union Center. While both facilities provide an important venue for the Capital District, neither facility meets the program criteria that are required to attract regional and statewide conventions.

The findings from the 2001 SAG report indicated that there was strong market support for a new Convention Center. The report provided preliminary development estimates and recommended that the project be developed in two phases. Phase 1 would include 214,000 square feet of Convention Center space and a 400 room Hotel. Phase 2 would include an additional 169,000 square feet for a project total of 383,000 square feet at full build-out of the project.

In 2004, the Albany County Convention and Visitors Bureau commissioned SAG to update their original findings of 2001 to reflect current market conditions. In their 2004 update, SAG found that while new challenges and new opportunities exist there was no new information that would cause SAG to revise their original findings of 2001. The updated report indicated that the Capital District could significantly increase its market share of meetings activity and that the recommended facility program was still appropriate.

In 2004, the Governor, the Mayor, the County Executive and legislative leaders supported legislation to establish the Albany Convention Center


Page 4

Authority as the vehicle to plan and develop the Convention Center. Chapter 468 of the Laws of 2004; effective September 21, 2004 created the Authority. The Authority commenced operations in February, 2006 following appointment of its Members.

In 2006, as it began to formalize plans for the Convention Center, the Authority was concerned that market conditions may have changed since the preparation of the 2004 SAG Update. It was therefore determined that the building program should be reevaluated to determine if market support had changed. In 2007, the Authority commissioned HVS International to prepare a third market study for the proposed Convention Center.

HVS concluded that there was market demand to support the development of a Convention Center in Downtown Albany. HVS also recommended that the project be developed in two phases. Phase 1 would include a gross Convention Center building area of 244,000 square feet, and 400 hotel rooms, which could be accommodated by one full service hotel with 250 rooms and one limited service hotel with 150 rooms. Phase 2 included expansion of the Convention Center’s gross building area by 155,000 square feet for a project total of approximately 400,000 gross square feet.

The HVS report serves to validate market feasibility of the Convention Center. With the first study in 2001, and update in 2004 and a second update in 2007, the market for the Convention Center has remained strong and consistent. Moreover, the recommended building program, in response to market conditions, has remained approximately the same over the course the three market studies.

Table 1 Comparison of HVS and SAG

Building Program Recommendations (in square feet) (source: HVS 2007)

Phase 1 Phase 2 Area

HVS SAG HVS SAG Exhibition 60,000 85,000 120,000 180,000

Multi-purpose 25,000 0 0 0

Ballroom 10,000 25,000 35,000 25,000

Meeting 12,350 15,000 20,000 40,000

Total Function Area 107,350 125,000 210,000 245,000

Hotel Rooms 250/150 400 250/150 4000

In response to the recent changes in the economy and program changes (i.e. hotel would be privately funded and constructed), the Authority had HVS International prepare an update to the 2007 Market Study. The Updated Study included a survey of convention planners, which was also completed as


Page 5

part of 2007 study. The survey concluded that, even with the current economic downturn, there is strong market demand for a Convention Center.

The recommended building program, which is presented in Table 2, remains consistent with the first market study in 2001. However, HVS has recommended an increase in the meeting space from 12,350 sq. ft. to 22,000 sq. ft.

Table 2 2009 HVS Building Program Recommendations

(source: HVS 2009)

Exhibition Space 60,000 sq. ft. Multi-Purpose Space 25,000 sq. ft. Junior Ballroom 10,000 sq. ft. Meeting Space 22,000 sq. ft.

Preliminary Design The Convention Center is designed to accommodate a wide variety of events including small meetings, conventions, trade shows, consumer shows and various civic functions. The overall character and quality of the venue is intended to be either comparable or better than the best ranked convention centers in the nation. The design vocabulary of the overall facility would include amenities that create a welcoming atmosphere and a stimulating environment for event attendees and exhibitors.

The building program for the Convention Center would include the following options:

Phase 1 Convention Center – 296,550 sq. ft • 60,000 square feet of exhibit space • 25,000 square feet of multi-purpose / flex space • 10,000 square foot junior ballroom • 22,000 square feet of various sized meeting rooms • Additional service, pre-function and loading space as required by the

design Leadership in Energy and Environmental Design (LEED®) “Silver”

Certification as a minimum goal, with potential for a Gold Certification Relocation of State employee parking from underneath the South Mall

Arterial Use the area underneath the South Mall Arterial for construction staging,

bus staging and storage, event staging and parking Enclosed pedestrian connection to Times Union Center


Page 6

1st Floor Convention Center

2nd Floor Convention Center


Page 7

Phase 1 Convention Center

Phase 1 & 2 Convention Center


Page 8

View of Convention Center

View of Convention Center with Conservation Enclosure over 48 Hudson Avenue



Page 9


View of Interior of Convention Center


Page 10

Preliminary Probable Cost Model

The Preliminary Probable Cost Model for the Base Alternative for the Convention Center is outlined below. A detailed breakdown of costs is provided in Attachment 1.

Base Alternative Probable Cost Model (source: Gilbane/BBL 2009)

Convention Center $189,402,252

Times Union Connector $6,367,944

Site Costs (Land acq., archeology, site prep., utilities) $22,132,949

District Public Improvements (off site streets and utilities) $1,821,465

Total Probable Cost of Base Alternative: $219,724,610 In addition to the Base Alternative, the Authority has included two supporting elements that may be funded by other entities. These are as follows:

Alt-1: Water Feature within Liberty Plaza $400,000Alt-2: Historic Conservation Enclosure for 48 Hudson Ave. $3,500,000

Total: $3,900,000

Anticipated Benefits Considered a regional project, the Convention Center is anticipated to be a significant catalyst that will provide economic development opportunities throughout the Capital District, through employment, entrepreneurial investment, tax revenues, tourism and patronage at existing shops and restaurants. Furthermore, the Authority is developing a Community Benefits Program that will include an Affirmative Action and Economic Inclusion Plan. Overall, the Community Benefits Program will provide increased opportunities for area residents, particularly minorities and women in employment and training, on-the-job training, small business development, and apprenticeship opportunities.

Furthermore, after five years of operation, it is estimated that the Convention Center would:

directly employ and induce 950 jobs result in net increase room nights at City hotels by 63,000 stimulate $51 million in annual spending in the local economy stimulate another $16 million into the New York State economy

The increased spending generated by the project translates into an estimated $3.7 million in additional state, county and local taxes revenues.


Page 11

Table 3 Summary of Tax Revenue

(source: HVS 2009) Tax Source State City/County Total

Hotel Occupancy Tax $175,000 $1,784,000 $1,959,000

Sales & Use Taxes $564,000 $790,000 $1,354,000

Personal Income Tax $303,000 $0 $303,000

Auto Rental $12,000 $0 $12,000

Gasoline $36,000 $46,000 $82,000Total $1,090,000 $2,620,000 $3,710,000

Jobs created by the Convention Center (both during the construction and operation periods) contributes directly to increased retail sales, expansion of retail businesses (either existing or new), increased housing sales/ leasing, and expanded opportunities for new residential development. The increased activity in the retail and residential marketplace also provides additional opportunities in property management, real estate employment, as well as providing direct sales tax and property tax revenues.

The multiplier effect creates additional retail and housing sales/ leasing activity, providing additional tax revenues. The table below outlines the anticipated spending and employment estimates relative to the construction of the Convention Center.

Table 4 Construction Impact Estimates

(source: CHA/Gilbane 2009) Spending

Direct $219,724,610 Indirect $64,560,000 Induced $110,320,000 Total $394,580,000 Employment Direct 2,000 Indirect 510 Induced 880

Total 3,390

The Convention Center surrounded by a lively, well-marketed retail/ entertainment district linked to attractions found in Downtown Albany and throughout the region (through a multi-modal transportation system) is anticipated to enhance the City’s overall market image, attractiveness, and


Page 12

market position. This increased market appeal could lead to additional convention event business, increased Downtown households, and an enhanced capture of regional visitation.

The Authority recognizes that the Convention Center will only be considered successful if it provides a significant stimulus to the local economy. Combining the development trends in Downtown Albany with the economic stimulus provided by the Convention Center, Downtown Albany could experience:

180,000 square feet of retail space 125,000 square feet of office space Several hundred residential units

The Optimized Growth Plan, which illustrates potential locations of the future development is illustrated below:


Page 13

Preliminary Operating Proforma

The table below summarizes the proforma for years 1 through 5 of Convention Center operations. Refer to Attachment 2 – for Preliminary Profroma Statement.

Year 1 through 5 Operation Proforma Summary

Note: Expenses include Indirect Expenses, Operating Fees and Insurance

-$3,000,000

-$2,000,000

-$1,000,000

$0

$1,000,000

$2,000,000

$3,000,000

$4,000,000

$5,000,000

Year 1 Year 2 Year 3 Year 4 Year 5

IncomeExpensesNet Operating Income

-$3,000,000

-$2,000,000

-$1,000,000

$0

$1,000,000

$2,000,000

$3,000,000

$4,000,000

$5,000,000


IncomeExpensesNet Operating Income


Page 14

Financing and Revenue Plan

The Authority proposes to finance the proposed Convention Center through the issuance of its tax-exempt bonds. The bonds would be issued by the commencement of construction for the full amount of the project.

The capital cost of developing the Convention Center is projected to be $219,724,610 as identified in the Base Alternative Probable Cost Model.

The capital costs of the project would be funded from the following sources:

• $63,000,000 capital contribution from the State (remaining balance of ESDC Grant)

• $156,725,000 in proceeds from the sale of the Authority’s bonds

The financing structure assumes an annual State subsidy, estimated to be approximately $9.1 million. A committed State subsidy will result in a favorable rating of the Authority’s bonds, related to the State’s rating, allowing access to the capital markets at cost effective interest rates.

The State would be obligated to make annual payments, subject to annual appropriation, at least equal to annual debt service on the bonds until the bonds are paid at maturity. The bond structure assumes approximately level debt service, and a 30 year maturity, with interest capitalized during the twenty-four month construction period. The assumed interest rate is 4%.

The Convention Center’s annual operating costs, including debt service; are estimated as follows:

Debt Service $ 9,063,425.00 Net operating loss 2,435,000.00 Replacement reserve 500,000.00 Marketing 100,000.00

Total $12,098,425.00

Operations of the Convention Center are expected to result in a net loss from operations, before debt service, of approximately $2.4 million for the first five years of operations. The net operating loss, above, is the highest estimated year of the first five years, year four, selected to produce a conservative estimate (refer to Attachment 2).


Page 15

In addition to revenues from Convention Center operations, the Authority will receive a portion of the Albany County Hotel/Motel Occupancy Tax (“HOT”), estimated to be approximately $3 million annually. Combined with the State subsidy of $9.1 million, the $3 million HOT will produce annual revenues sufficient to cover estimated annual debt service and net operating losses.

Table 5 Sources of Funds

(source: Harris Beach 2009) Par Amount of Bonds $156,725,000.00

ESDC Grant (balance) $63,000,000.00

Total Sources $219,725,000.00

Uses of Funds

Underwriter’s Discount (1.0%) $1,567,250.00Bond Counsel 125,000.00Underwriter’s Counsel 75,000.00Authority Counsel 50,000.00State Bond Issuance Charge 1,316,490.00Trustee, Ratings, Disclosure 50,000.00Capitalized Interest 5,955,550.00Deposit to Construction Fund: Bond Proceeds 147,585,710.00 ESDC Grant (balance) 63,000,000.00Total Uses 219,725,000.00

Annual Sources Hotel Tax $3,000,000.00 State support 9,098,425.00

Total Sources $12,098,425.00 Annual Uses Debt Service $ 9,063,425.00 Net operating loss 2,435,000.00 Replacement reserve 500,000.00 Marketing/CVB 100,000.00

Total Uses $12,098,425.00 Financing assumes 30 year term; 4% interest rate; interest only 24 months; approximately level debt.


Page 16

Impact on Existing Structures

Several structures that vary in age, use, and condition are located adjacent to the Convention Center. The following summarizes the potential impact on each:

Structure Location Estimated Age

Potential Impact

Greyhound Bus Station 34 Hamilton St. Circa 1960’s Building will not be impacted during Phase 1 of Convention Center; Building made be relocated as part of Phase 2 of Convention Center

McDonald’s Restaurant Corner of South Pearl St. & Madison Ave.

Circa 1980’s Not directly impacted by construction of convention center; site may be redeveloped to support induced growth from Convention Center

Key Bank Building 66 South Pearl St. 1991 Not directly impacted by construction; a portion of the parking garage may be used to construct an elevated walkway between the Convention Center and the Times Union Center

Former Albany Mission 50 Hudson Ave. Early 1800’s Building could be removed or incorporated into project.

Radliffe House 48 Hudson Ave. 1728; rear additions date to late 1800’s

1728 portion of building will not be directly impacted. Rear additions may be removed in part to accommodate the Convention Center. May be preserved in a conservation enclosure.

Plaza Row (multiple buildings)

West side of Broadway from Hudson Avenue to Pruyn St.

Varying ages; most date to mid to late 1800’s

No direct impact on historic buildings. Former Trailways Buildings (circa 1960’s) would likely be demolished; site used for redevelopment and project gateway.


Page 17

Environmental The Authority, as Lead Agency under SEQR, has prepared a Draft Generic Environmental Impact Statement (DGEIS), and held public hearings on March 18 and 20, 2008. The public comment period on the GEIS was open until April 18, 2008. All substantive comments were addressed in the Final GEIS, which was adopted at the end of May 2008. The Authority adopted a Statement of Findings, on June 28, 2009, which completed the SEQR process. The following is a brief summary of the potential environmental impacts associated with the Convention Center, Hotel, and Parking Structure. The environmental impacts have been assessed in greater detail within the full GEIS.

Traffic & Parking – Convention Center event traffic is not expected to significantly impact traffic circulation patterns, or capacity of the existing infrastructure in Downtown Albany. Currently the overall parking needs for the project are estimated at approximately 1820 spaces. This includes 700 for the Convention Center, 400 for the Hotel and approximately 720 surface parking spaces that will be displaced as a result of construction. Parking needs will met through the construction of a multi-story parking garage, which will be developed by as yet undetermined entity, the potential construction of surface parking area underneath I-787 near Church Street, and the leveraging of other existing parking structures and surface lots within Downtown Albany.

Cultural Resources – refer to the Historic Preservation Plan in the next section.

Community Services – Increase in demand on community services such as police, fire protection and emergency is not expected to significantly impact their ability to adequately deliver these services.

Utilities – It is anticipated that the project will result in the increase in storm water runoff wastewater, water, electric, and natural gas demands. The existing infrastructure with improvements has the capacity to meet these additional demands.

Aesthetics – Since the site of the Convention Center is currently open and dominated by surfaces parking lots, the infill of the types and scale of the structure(s) being proposed will likely have a significant influence on the city skyline. The architectural vocabulary of these structures as they relate to the downtown skyline, historic quality, and pedestrian scale would be designed for a positive impact on aesthetics and visual character of Downtown Albany.

Air Quality – Increases in traffic volumes and HVAC systems will likely cause a minor, localized increase in air pollutants; that would be found in highly developed urban environment.

Construction Impacts – Approximately two year construction period will result in a short term, localized disruption of traffic circulation patterns, displaced parking, increased noise, and minor impact on air quality from construction vehicles and construction activities.


Page 18

Historic Preservation Plan The Study Area is located in one of the oldest sections of the City of Albany. The stockade, which was first erected in 1650, crossed the Study Area from west to east near Hudson Avenue and Division Street, in it various forms. During the 19th century, the Study Area included homes and industry such as carriage shops, shoe and boot makers, gunsmiths and printers. Even though the 18th and 19th century houses and industries have been removed over the years, their cellars, privies, cisterns and subsurface features remain. Fort Orange and Fort Frederick, both from the colonial era, are located adjacent to the Study Area.

Several features of historical importance remain in or in close proximity to the Primary Master Plan Area. The Radliffe House, an 18th century, two story building at 48 Hudson Avenue, is reportedly the oldest building in the City of Albany. Immediately adjacent to it is Liberty Park, an early public open space beneath which may be buried the remains of 18th century buildings that once lined the south side of Hudson Avenue.

A Phase 1A Literature Review and Archeological Sensitivity Assessment was completed for the Study Area in April 2007. Considering the history of the Study Area a Phase 2 Archaeological investigation and possibly a Phase 3 Data Recovery Plan will be required.

In June 2008, the ground reconnaissance of the site began in Liberty Park. The excavations revealed that portions of the park appear to be remarkably well-preserved. Artifacts in the nineteenth and late eighteenth-century strata were quite abundant.

In all, over 8,000 artifacts from the twentieth century to the seventeenth century were recovered. The cultural material will help to date the various strata and reveal information concerning the inhabitants of this neighborhood from Dutch colonial times, to the American Revolutionary War, to the early Federal period, and up to the time of the Civil War.

All of the artifacts from the Liberty Park excavation and initial trenches have been washed, sorted, and cataloged. Most of the artifacts are being curated by the New York State Museum.

A small portion of the collection has been placed on temporary display at the Albany Convention Center Authority headquarters. The collection was also displayed at an open house at the Office of Parks, Recreation, and Historic Preservation’s in September 2009.

Additional archaeology work is on hold until land acquisition has been completed and project funding has been secured. All future work in this regard will be coordinated with the Office of Parks Recreation and Historic preservation.


Page 19

The Historic Preservation Plan will likely include several elements including the avoidance of construction activities in the vicinity of sensitive resources or removal of artifacts prior to construction. Further, the project will preserve and possibly expand Liberty Park as a public open space. The historic 48 Hudson Avenue may be preserved by conservation enclosure.

A “museum of streets” or an “archaeology under glass” exhibit will be considered to provide a vehicle for promoting the historic significance of the site and surrounding area. Displays of collected artifacts or interpretive exhibits could be established within the Convention Center or other locations within the City, including the New York State Museum. Partnering with local institutions, such as the Albany Institute of History and Art, New York State Museum, and the State University of New York may also be used to promote heritage tourism and the cultural importance of the Study Area.

Community Program The Authority has undertaken a comprehensive community outreach program that had several goals:

Educate the general public and the project stakeholders about the anticipated benefits

Address public concerns about the environmental impacts of the project Establish a baseline and network for future Community Benefits Program

A summary of the community outreach program, which was conducted over the course of the last several years, is as follows:

Event/Forum Date(s) Comments One Day Charette

April 26, 2007

More than 100 invited stakeholders attended a daylong planning event held at the Old Federal Building in Downtown Albany. The morning portion of the workshop included a presentation of the environmental site conditions, historic resources, building massing, and economic conditions associated with the Convention Center and Hotel. The presentation ended with an overview of the guiding principals which provided the stakeholders a roadmap moving forward during the workshop. During the afternoon portion of the workshop the participants worked in nine separate subgroups to review their ideas for the Convention Center and Hotel and the relationship to the guiding principals. The groups reported back to the entire workshop audience presenting their top five priorities they felt were needed for a successful project.


Page 20

Neighborhood Meetings

May 15, 2007 May 22, 2007 May 24, 2007

Meetings with three neighborhood association were conducted to present the project and obtain feedback form residents, and property owners on topics relating environmental, architectural and economic. Neighborhoods that may be directly impacted by the project were selected for the meetings and included the following associations: • Historic Pastures Neighborhood Association; • South End Quality of Life Neighborhood Association; • Mansion Neighborhood Association

Community Meetings

May 8, 2007 May 29, 2007 May 30, 2007 Feb. 26, 2008

The Authority held three separate community wide public meetings, which also served as formal Public Scoping Sessions, in accordance with SEQR. These meetings were scheduled to reach a broader segment of stakeholders in the City population. Formal notices were published in the Times Union and announcements were made on local radio channels encouraging attendance from the general public.

Similar in format to the neighborhood meetings, the project’s guiding principals, master plan diagrams, Draft Public Scoping Document were presented and discussed.

Downtown Roundtables

July 20, 2007 Aug. 24, 2007 Sept. 26, 2008 Nov. 14, 2008

A series of four meetings conducted with Downtown Albany business owners, landowners, developers and city government officials. The meetings included a review of major design elements of the projects and open discussion about there merits and potential impacts on the Downtown Albany business community and economy.

SEQR Public Hearings

Mar. 18, 2008 Mar. 20, 2008

Two public hearings conducted during the public comment period on the Draft Generic Environmental Impact Statement. Meeting includes a short presentation on the project, followed by public comment, which as recorded via stenographer record.

Study of the Authority Hearings

Mar. 18, 2008 Mar. 20, 2008

Required by the Authority’s enabling legislation, the two hearings were conducted concurrently with the SEQR hearings.

Stakeholder Meetings

Various – 30 meetings

Over the course of the last year, the Authority has attended over thirty meetings with various stakeholders to address project issues and concerns. A representative list of these stakeholders include: NYSDOT, NYS OGS, NYS OPRHP, CDTA, CDTC, Downtown Albany BID, Historic Albany, Albany Parking Authority, City of Albany, Events Planners, Transit Community, Minority Groups, Landowners, and Developers

Post Master Planning and EIS process

May 2008 through present

Since completion of Master Planning process in May 2008, the ACCA has continued its public outreach program by:

• Working with landowners to acquire land • Met with Times Union Editorial Board (12/08) • Public Open House (8-27-09) • Press releases announcing land purchase • Public Speaking engagements to local business and civic groups

Attachment 1

Preliminary Probable Cost Model

Albany Convention CenterAlbany NYNovember 20, 2009

Project Sitework Convention Off-Site Times Union New Construction Costs: Totals Infrastructure Center Improvements Connector

-Trade Costs $121,816,866 $13,404,425 $103,309,304 $1,103,138 $4,000,000 -Construction Contingency $11,981,687 $1,340,443 $10,330,930 $110,314 $200,000

Sub-Total $133,798,553 $14,744,868 $113,640,234 $1,213,452 $4,200,000

Design Contingency & Escalation:Sub-Total $24,363,373 $2,680,885 $20,661,861 $220,628 $800,000

$158,161,926 $17,425,753 $134,302,095 $1,434,079 $5,000,000

Soft Costs: 11% 85% 1% 3%

Const. Management and Insurance ExpensesSub-Total $15,461,986

Combinend Softcost Expenses Architectural/Engineering Expenses

Sub-Total $17,131,442

Owner Related ExpensesSub-Total $28,969,256

$61,562,684 $4,707,196 $55,100,157 $387,386 $1,367,944

Total Cost Model Value $219,724,610 $22,132,949 $189,402,252 $1,821,465 $6,367,944

Project ADD Alternates .Exterior Water Feature $400,000 $400,000 .Historic Conservation Enclosure @ #48 Hudson Ave $3,500,000 $3,500,000

Total Construction Costs

Preliminary Cost Model

Attachment 2 Preliminary Proforma

Albany Convention Center

PreliminaryProforma Income Statement

Submitted to the Albany Convention Center Authority

Revised: November 20, 2009

Page 1

General Assumptions:Exhibit Space 60,000 s.f.Ballroom Space 25,000 s.f.Junior Ballroom 10,000 s.f.Meeting Space 22,000 s.f.

SMG’s management fees shown in Schedule # 2 were submitted to the ACCA in the form of aproposal and are subject to change.

Revenue Assumptions:

1. The number of events, by event category, are the determining factor for most revenues.Any changes to the number of events will impact all event revenues in the model.

2. Rent is assumed to be $0.20/sq ft/day based on a 3-4 day show run with 2-3move-in/out days.

3. Service income is a function of rent for all event categories except for sporting eventswhich are assumed to generate no service income.

4. All Food & Beverage is assumed to be handled in-house, generating a 36% average profit margin in year 1; This remains year-over-year about 33-35% through year 5.

5. Parking is assumed to be owned and operated by a third party and no revenueis included.

6. Booth cleaning assumed to be $0.25/square foot and used by 10% of convention andtradeshow exhibitors and 6% usage by public/consumer show exhibitors.

7. Electrical assumed to be handled in-house with expense equal to 50% of revenue.Audio Visual income is driven primarily by corporate events, meetings and banquets.

8. Internet / Telecom assumed to be handled in-house with expense equal to 50% of revenue.

SMGAlbany Convention Center

Proforma Income StatementSchedule 1: Key Operating Assumptions

Page 2


Proforma Income StatementSchedule 1: Key Operating Assumptions

Expense Assumptions:

1. The staffing model was developed on the assumption that most services and operationalfunctions will be handled on an "in-house" basis, with very little staffing beingsub-contracted to outside vendors.

2. Insurance projection based on following coverages:Policy

Liability/Excess Coverage Year 1 Year 2 Year 3 Year 4 Year 5Auto $1M/$5M $24,393 $26,802 $29,145 $31,959 $33,782Other Policies 2 Vehicles $2,500 $2,500 $2,500 $2,500 $2,500

Crime, etc. $1,000 $1,025 $1,051 $1,077 $1,104$27,893 $30,327 $32,696 $35,536 $37,386

3. Liability insurance is estimated at $0.173/head, but is subject to change, depending on the levels of coverage required by the ACCA. Automobile insuranceassumes two vehicles. We also assume the facility will not be responsible for realproperty insurance. This expense is assumed to be covered directly by the ACCA.

4. Power & Gas and Domestic Water expenses are based upon SMGs experience insimilar facilities such as Shreveport, Knoxville, Memphis, Mobile, Baton Rouge,and Providence.Water for heating and cooling is assumed to be provided by the State of NY.

5. All other indirect expenses are reflective of SMG's experience operating like facilitiesin similar markets.

6. Base Management Fee is per SMG's proposal. Under IRS regulations, the maximumIncentive Fee earned in any year cannot exceed the Base Fee.

7. All other indirect expenses are reflective of SMG's experience operating like facilitiesin similar markets.

Page 3


DIRECT EVENT INCOMERental Income $536,800 $565,600 $726,250 $762,250 $954,500Gross Service Revenues 149,440 158,080 204,550 215,350 270,800Gross Service Expenses (171,856) (181,792) (235,233) (247,653) (311,420)

Total Direct Event Income $514,384 $541,888 $695,568 $729,948 $913,880

ANCILLARY INCOMEFood & Beverage 710,325 707,986 763,472 761,128 779,095Booth Cleaning 23,760 24,840 26,640 29,938 31,104Parking 0 0 0 0 0Telecommunications 42,000 45,063 48,801 52,178 55,713Electrical 100,000 107,120 118,821 126,756 139,563Audio/Visual 43,500 45,000 47,875 49,375 51,875Equipment Rental 12,090 12,669 13,797 14,440 15,414

Total Ancillary Income $931,675 $942,677 $1,019,406 $1,033,815 $1,072,763

TOTAL EVENT INCOME $1,446,059 $1,484,565 $1,714,974 $1,763,763 $1,986,643

OTHER OPERATING INCOMEAdvertising 50,000 52,000 54,080 56,243 58,493Interest Income 20,000 20,800 21,632 22,497 23,397

Total Other Operating Income 70,000 72,800 75,712 78,740 81,890

TOTAL OPERATING INCOME $1,516,059 $1,557,365 $1,790,686 $1,842,503 $2,068,533

INDIRECT EXPENSESStaffing Expenses 2,282,600 2,372,762 2,466,531 2,564,050 2,665,470General & Administrative 160,500 168,315 176,574 185,306 194,541Operations 32,500 33,475 34,479 35,514 36,579Supplies 75,000 80,250 85,868 91,878 98,310Repairs & Maintenance 50,000 75,000 100,000 125,000 137,500Utilities 520,000 546,000 573,300 601,965 632,063Insurance 27,893 30,327 32,696 35,536 37,386Other Overhead 81,500 47,945 46,173 44,124 41,772 TOTAL INDIRECT EXPENSES 3,229,993 3,354,074 3,515,621 3,683,372 3,843,621

NET OPERATING INCOME ($1,713,934) ($1,796,708) ($1,724,935) ($1,840,869) ($1,775,088)(before fees, property insurance & property taxes)

Base Management Fee 125,000 128,750 132,613 136,591 140,689Maximum Incentive Fee 125,000 128,750 132,613 136,591 140,689Food Service Fee 115,380 117,374 124,720 126,897 130,732

Total Fees $365,380 $374,874 $389,945 $400,079 $412,109

Estimated Property Insurance 216,000 222,000 229,000 236,000 243,000

NET OPERATING INCOME ($2,295,314) ($2,393,583) ($2,343,880) ($2,476,948) ($2,430,197)(before property taxes)


Proforma Income StatementSchedule 2: 5-Year Comparative Income Statement (Net)

Page 4


Annual Adjustment Factor 3.00% 3.00% 3.00% 3.00%

Salaries 1,610,000 1,674,400 1,741,376 1,811,031 1,883,472 Taxes & Benefits 528,850 548,862 569,674 591,319 613,830 PT Labor 143,750 149,500 155,480 161,699 168,167

Total Salaries & Benefits 2,282,600 2,372,762 2,466,531 2,564,050 2,665,470

Power & Gas $420,000 $441,000 $463,050 $486,203 $510,513Water (Heating & Cooling - supplied by State) 50,000 52,500 55,125 57,881 60,775 Water (Domestic - supplied by City of Albany) 50,000 52,500 55,125 57,881 60,775 Marketing & Advertising 100,000 70,000 72,100 74,263 76,491 Supplies - Operations 75,000 80,250 85,868 91,878 98,310 Repairs & Maintenance 50,000 75,000 100,000 125,000 137,500 Insurance 27,893 30,327 32,696 35,536 37,386 Contracted Services 25,000 25,750 26,523 27,318 28,138 Telephone/Long Distance 24,000 24,720 25,462 26,225 27,012 Professional Fees 20,000 20,600 21,218 21,855 22,510 Trash Removal 20,000 20,600 21,218 21,855 22,510 Meetings & Conventions 10,000 10,300 10,609 10,927 11,255 Exterminating 6,000 6,180 6,365 6,556 6,753 Interior/Exterior Landscaping 4,000 4,120 4,244 4,371 4,502 Bank Service Charges 7,500 7,725 7,957 8,195 8,441 Office Supplies 7,500 7,725 7,957 8,195 8,441 Printing & Stationary 7,500 7,725 7,957 8,195 8,441 Travel & Entertainment 7,500 7,725 7,957 8,195 8,441 Postage & Freight 4,000 4,120 4,244 4,371 4,502 Employee Training 5,000 5,150 5,305 5,464 5,628 Computer Software/Fees 18,000 18,540 19,096 19,669 20,259 Dues & Subscriptions 2,500 2,575 2,652 2,732 2,814 Equipment Rental 2,500 2,575 2,652 2,732 2,814 Licenses & Fees 2,500 2,575 2,652 2,732 2,814 Meals & Entertainment 1,000 1,030 1,061 1,093 1,126

Total Indirect Expenses 947,393 981,312 1,049,090 1,119,323 1,178,151

Total Operating Expenses 3,229,993 3,354,074 3,515,621 3,683,372 3,843,621 YTY Growth 104% 105% 105% 104%


Proforma Income StatementSchedule 3: Indirect Expenses

Page 5