The Dayton Convention Center is losing money, but it stands to lose business and events if it does not invest millions of dollars into facility upgrades to keep up with the competition, according to information presented to city commissioners Wednesday.
Consultants hired to evaluate the condition and operations of the facility recommended spending as much as $28.4 million on improvements to make the property more marketable and appealing to visitors and event organizers.
Compared to its competitors, the convention center has very limited ballroom, banquet and meeting space, and it is hurt by a short supply of hotel rooms nearby, said the consultants.
They advised the city to consider restructuring ownership or operations of the property to share the financial burden.
“Frankly, I think you are going to have to find some partners,” said Susan Sieger, president of Florida-based Crossroads Consulting Services.
The city’s elected leaders said finding money for renovations will be challenging since the center primarily generates sales taxes, which go to the state and Montgomery County.
“We don’t receive any of the benefit for this space,” said Dayton Mayor Nan Whaley.
On Wednesday, Sieger and David Greusel with Missouri-based Convergence Design told city commissioners about their analysis of the convention center.
The study looked at how the facility compares to some of its competitors, including convention and conference centers in Cleveland, Cincinnati, Columbus, Toledo, Akron, Sharonville, Sandusky, Northern Kentucky and Fort Wayne, Ind.
An investigation by this newspaper last year identified some worrisome financial trends facing the center.
The Dayton Convention Center has less ballroom and banquet space than all but the Seagate Convention Centre in Toledo, which has none, the consultants found.
The center also has the second smallest amount of meeting room space among the properties studied. The Dayton CVB has one of the lowest marketing budgets, and the center has a comparatively low operating budget, they said.
The adjoining Crowne Plaza Dayton, the headquarters hotel, offers relatively limited accommodations, especially considering there are few hotel options in walking distance, consultants said.
And the center has many capital needs.
The consultants recommended investing $20.9 million to $28.4 million on facility renovations and enhancements over the course of about seven years. Failing to do so, they warned, would mean the center cannot keep up with the competition, which has and continues to make improvements.
In the next two years, the consultants recommended improving and expanding the restrooms, replacing the skywalk carpet and ceiling and upgrading the elevators.
These short-term projects could cost about $1.2 million.
Within about five years, the center should consider replacing telescopic seating, renovating the skywalk to the parking garage, adding a passenger elevator, replacing some of the roof and re-purposing theater dressing rooms, the report states.
This could run about $12 million.
Within seven years, recommended improvements included a new main entry, a renovated or expanded ballroom, upgraded seating and theater finishes and a “yellow brick road” — signage, lighting, etc. — to improve connectivity between the center and the Oregon Historic District.
These improvements could require spending between $7.6 million and $15.5 million. The more expensive estimate includes an expanded ballroom, instead of just a renovated one.
Visitors identified some notable strengths of the Dayton Convention Center, including the perception that it is a good value and has appealing layout and functionality, said Sieger, the consultant.
“Customer feedback was really positive,” she said.
The facility has competitive amounts of functional space and exhibit space, they said.
“The Dayton Convention Center is actually a pretty good building. We had heard things about it that led us to believe it might be kind of a dog — but believe me, we’ve seen dogs, and this building is not a dog,” said Greusel, the consultant with Convergence Design.
The convention center is operating in the red.
The revenue shortfall was $1.1 million in 2014. The 2015 budget projected a deficit of $710,000.
The city should explore a new ownership structure — like an authority entity — that could include representation from the city and Montgomery county, because it would be helpful to spread the costs among multiple organizations, Sieger said.
The city may want to consider outsourcing management of the property to a third-party, such as the Dayton CVB, she said.
The city could consider creating a tax-increment financing district or special tourism district to help generate money for repairs and improvements, she said.
Funding is a problem, but the city does not have many options, said Mayor Whaley.
Dayton has a 3 percent lodgings tax, and so does Montgomery County. Lodging taxes typically are limited to 6 percent under state law.
City officials said the county does not help fund the convention center’s operations even though it benefits from the sales taxes it generates. Dayton does not receive sales taxes.
Whaley said she hopes to meet with county leadership after they are presented with the consultants’ findings.
“The big question is why in 1970-whatever did the city ever get into this business when the model never fit our funding structure,” Whaley said.
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