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2008-11-24_ Supplemental Agenda Packet--Dossier d'ordre du jourCity of Saint John Common Council Meeting Monday, November 24, 2008 Location: Common Council Chamber Supplemental to Agenda 8.1(b) Saint John Trade and Convention Centre Facility Assessment 8.1(c) Saint John Trade and Convention Centre Presentation 8.1(d) Saint John Trade and Convention Centre Conventional Wisdom Report 8.2(a) Saint John Waterfront Development 2008 and 2009 Budgets 8.2(b) Saint John Waterfront Development 2009 Budget Request City of Saint John Seance du conseil communal Le lundi 24 novembre 2008 Lieu : Salle du conseil communal Ordre du jour supplementaire 8.1b) Hilton Saint John Trade and Convention Centre — Evaluation 8.1c) Hilton Saint John Trade and Convention Centre —Presentation 8.1d) Hilton Saint John Trade and Convention Centre — Rapport d'etude 8.2a) Amenagement du secteur riverain de Saint John — Budgets de 2008 et de 2009 8.2b) Demande de financement budgetaire 2009 relative a 1'amenagement du secteur riverain de Saint John SAINT JOHN TRADE AND CONVENTION CENTRE Facility Assessment Draft Report JANUARY 2008 AM WE TABLE OF CONTENTS Saint John Trade and Convention Centre Facility Analysis January 2008 1. Introduction .................................................................... ..............................1 1.1 Background and Objective ................................................. ..............................1 1.2 Scope of the Analysis ........................................................ ..............................1 1.3 Types of Events Held in Public Assembly Facilities ................ ..............................2 2. Current Situation ............................................................ ............................... 4 2.1 Saint John Economy .......................................................... ..............................4 2.2 Saint John Trade & Convention Centre ................................ ..............................5 2.3 Facility Strengths and Weaknesses ..................................... ..............................5 2.4 Saint John Trade and Convention Centre Utilization .............. ..............................7 2.5 Hotel Occupancy .............................................................. .............................12 2.6 Saint John Tourism Marketing ........................................... .............................13 3. Atlantic Canada Public Assembly Facility Supply ............ .............................15 3.1 Saint John ....................................................................... .............................15 3.2 Atlantic Canada Supply ..................................................... .............................17 3.3 Additions to Atlantic Canada Public Assembly Facilities Supply ...........................17 3.4 New Public Assembly Facilities Conclusions and Implications .............................19 4. Atlantic Canada Public Assembly Facility Demand ......... .............................21 4.1 Conventions and Conferences ........................................... .............................21 4.2 Trade Shows .................................................................... .............................25 4.3 Summary ......................................................................... .............................26 5. Conclusions and Implications ....................................... ............................... 27 5.1 Summary of Analysis ........................................................ .............................27 5.2 Recommendation ........................................................... ............................... 28 AppendixA ........................................................................... .............................30 WE 1. Introduction Saint John Trade and Convention Centre Facility Analysis January 2008 The Saint John Trade and Convention Centre ("SJTCC'), built in 1983, is located on the harbour in downtown Saint John, New Brunswick. The SJTCC is one of several elements of "Market Square ", a mixed -use development also accommodating a variety of retail and commercial uses as well as the Saint John public library. The SJTCC is one of the largest purpose -built convention and trade show venues in Atlantic Canada offering some 20,000 square feet of rentable area. The SJTCC is owned by the City of Saint John and operated by the management team of the adjacent and connected (via underground walkway) Saint John Hilton hotel (the "Hilton'). Over the past few years the City and the Hilton have identified a need update and refurbish the STJCC. Consideration has also been given to an expansion, should demand warrant. On behalf of the City, the Hilton engaged Conventional Wisdom to assess options to refurbish the STJCC as well as give consideration to potential expansion. Conventional Wisdom, in turn, engaged HLT Advisory ("HLT ") to assess market demand and the potential need for additional convention and trade show space at the STJCC. 1.1 BACKGROUND AND OBJECTIVE Conventional Wisdom retained HLT to determine: • whether demand exists to justify expansion of the SJTCC; and, if not • the degree to which the SJTCC should be refurbished and /or renovated; and • the range of options for expansion, refurbishment and /or renovation of the SJTCC. Essentially, HLT is to analyze potential demand levels for the SJTCC to help determine whether the venue should be expanded. 1.2 SCOPE OF THE ANALYSIS In completing the analysis, HLT undertook the following tasks: • Reviewed and analyzed events held at the SJTCC in 2006 and 2007. • Interviewed sales professionals at the SJTCC (Hilton staff), Harbour Station and Saint John hotels to understand the demand for meeting and exhibition space as well as customer perceptions of the venue. • Interviewed representatives from Tourism Saint John. • Toured the SJTCC and other Saint John meeting and exhibition venues. DRAFT FOR DISCUSSION 1 WE Saint John Trade and Convention Centre Facility Analysis January 2008 • Inventoried the supply of meeting and exhibition space in Saint John and other Atlantic Canada centres. • Reviewed demand for Atlantic Canada meeting and exhibition facilities. • Reviewed hotel occupancy for the Hilton, Delta and other Saint John downtown hotels. • Interviewed various industry representatives to determine expansion and new -build opportunities for convention and trade show facilities elsewhere in Atlantic Canada. • Investigated current event loads at other Atlantic Canada convention and trade show venues. • Analyzed air lift to Saint John and other Atlantic Canada destinations. At the conclusion of this analysis, the following report was prepared. 1.3 TYPES OF EVENTS HELD IN PUBLIC ASSEMBLY FACILITIES An understanding of the different event types accommodated in buildings like the SJTCC is essential to an appreciation of market demand. In addition to "conventions ", conferences /congresses, trade shows and consumer shows round out the range of public assembly events. Convention, conference and congress owners require significant amounts of meeting space while trade show organizers look to the functionality of the exhibit area as the key site selection criterion. The primary objective of a trade show is to bring the sellers of goods or services, within a specific industry, together with buyers. While the general public is usually not invited to a trade show, consumer shows focus on selling product to the resident /area population. Consumer shows require large amounts of parking and, ideally, access to public transportation. Table 1 profiles the various event types held in convention centres. DRAFT FOR DISCUSSION 2 WE Saint John Trade and Convention Centre Facility Analysis January 2008 Table 1 Event Types and Definitions Characteristic Conventions Tradeshows Conferences and Meetings Consumer Shows Market Focus Information exchange between Forum to bring industry buyers and Smaller corporate or association Public shows where suppliers professional groups and associations sellers together meetings display /sell goods directly to public Can include a trade show component Sometimes sponsored by trade or More specific in purpose than a Typically charge admission technical associations convention Includes local business meetings, management and board meetings, technical meetings, sales meetings and training seminars Attendance Profile Most out -of -town attendance Some out -of -town attendees and Varies by event Local attendees exhibitors Visit often combined with vacation, spouse often comes along Visit seldom combined with vacation, spouse rarely accompanies delegate Facility Needs High quality meeting rooms with Exhibit/display space intensive High quality meeting rooms with Exhibit space intensive audio - visual capability audio- visual capability Suitable loading facilities Extensive parking requirements Banquet facilities Meeting rooms Some meeting rooms Meeting rooms Nearby hotel rooms Nearby hotel rooms Moderate but increasing exhibit space needs Adiacent hotel rooms Rotation Rotation determined by association Meet in major markets to maximize No rotation Locally produced charter number of buyers and sellers Prefer tourist destinations Little rotation Economic Im act Hi h economic im act Moderate economic im act Limited economic im act Limited economic im act The event focus of convention centres varies by the venue's mandate. Facilities with a mandate to maximize economic benefits to the community give priority to conventions and trade shows. In most cases in Canada, an annual operating subsidy is provided to such venues by one or more levels of government. Facilities with a mandate focused on profitability (e.g., a requirement to break -even annually) will focus on conferences and meetings and other events (e.g., social events such as banquets) that maximize profitability. It should be noted that in many Canadian jurisdictions, convention centres have restrictions, often express, against hosting such events as they may be easily accommodated in other local, privately -owned facilities. DRAFT FOR DISCUSSION 3 Saint John Trade and Convention Centre Facility Analysis January 2008 2. Current Situation In this section, the current situation at the SJTCC from a facility and demand perspective is analyzed. 2.1 SAINT JOHN ECONOMY Saint John, with a census metropolitan area population of 122,389 (2006) and a regional commuter base in excess of 175,000, is located along the Eastern seaboard of Atlantic Canada. Industrialist K. C. Irving and his family built industrial businesses in Saint John throughout the 20th century with interests in oil, forestry, shipbuilding, media and transportation. Today, the Irving companies remain dominant employers in the region with the most important businesses being eastern North America's first deepwater oil terminal, a pulp mill, a newsprint mill and a tissue paper plant. Traditionally, Saint John served as a major port city in Atlantic Canada and is home to Canada's largest shipyard — until recently, a major employer for the city. Current economic growth sectors in Saint John include energy and advanced manufacturing, information and communication technology, tourism, and health care. About half of New Brunswick's electrical generation capacity is located in the Saint John region. Saint John is also home to Atlantic Canada's only nuclear power plant. Within the past three years, major energy projects have begun construction in Saint John with a total development cost expected to exceed $2.5 billion. Projects include a liquefied natural gas (LNG) re- gasification plant, the Brunswick Pipeline, and refurbishment of the Point Lepreau nuclear power plant. Further proposed energy projects (a new oil refinery and a second Point Lepreau reactor) could add an additional $11 to $14 billion in development within the next ten years. These energy projects are largely targeted at the northeast United States demand for energy — New England alone is forecasting a major, 6,400- megawatt energy shortage between 2015 and 2018. Saint John has also experienced growth in the area of information and communication technology, now hosting over 50 different companies specializing in e- commerce, software development, remote network management, technical support, multi -media and state -of- the -art Voice Over Internet Protocol ( "VOIP') applications. In addition to Saint John's energy and IT sectors, tourism generates over $200 million in annual expenditures, and has been supported by revitalization initiatives in the City's Uptown district and across the region. Examples include: restoration of the Imperial Theatre, construction of Harbour Station, private- sector investment in historic King Street, a new cruise ship terminal and Harbour Passage. DRAFT FOR DISCUSSION 4 WE Saint John Trade and Convention Centre Facility Analysis January 2008 A strengthening economy can be expected to have a positive impact on the meeting and convention industry. The extent to which these meetings are held off -site will benefit public assembly facilities such as the SJTCC. While many of these meetings are local (i.e., limited economic impact), attendees could come from outside the local area. The business generated by the Irving companies is a case -in- point. In 2006, Irving companies hosted 57 events at the SJTCC representing 14.5% of total volume. The majority of these events were meetings suggesting further need for meeting spaces as the LNG and related business activity occurs over the next two years. 2.2 SAINT JOHN TRADE & CONVENTION CENTRE The SJTCC was constructed in 1983. The venue offers 20,354 square feet of rentable space comprised as follows: • a 15,136 square foot exhibit hall divisible into two (9,976 square feet and 5,160 square feet); and • seven meeting rooms ranging in size from 336 square feet to 1,100 square feet. • 480 indoor parking spaces The parkade is used by patrons of the SJTCC and Market Square. The SJTCC is owned by the City of Saint John and located adjacent to, and is managed by, the Hilton Saint John. The SJTCC is connected to the Delta Brunswick (the "Delta') and Harbour Station by an indoor walkway. 2.3 FACILITY STRENGTHS AND WEAKNESSES Strengths of the SJTCC include: • Location, specifically the proximity to and interrelationship with o the downtown commercial core; o Saint John's two largest and leading hotels: Delta and Hilton; and o Market Square offering a range of retail, restaurant and service businesses. • Accessible to loading docks and easy access to the exhibit floor. • A venue size well- suited for the regional (Atlantic Canada) market. • A reputation for above average customer service. DRAFT FOR DISCUSSION 5 WE Weaknesses of the SJTCC include: Saint John Trade and Convention Centre Facility Analysis January 2008 • Inadequate crush space —The Great Hall (15,136 square feet) can accommodate 1,300 people for banquets. However, the SJTCC foyer can only accommodate 300 people in a reception setting. • Limited storage space — Analysis of bookings at the SJTCC in 2006 and 2007 uncovered several occasions where meeting rooms were used as storage areas. A garage area near the loading dock was used as a storage area in the past can no longer be used as a storage area, even on a temporary basis, as this is the only access for fire trucks. • Poor sense of arrival The foyer outside The Great Hall is a public thoroughfare. As a result, the venue can not be closed off for events nor can the foyer be used for exhibits, etc. Further, the use of the foyer as a public thoroughfare exacerbates the inadequate crush space issue described above. • Access to the kitchen crosses a public hallway /service corridor —The SJTCC kitchen is separated from the Great Hall by public corridor used to service other parts of Market Square. As a result, food is transported back and forth across the corridor leading to operational inefficiencies. • Lack of high -tech amenities for facility users —The SJTCC does not have internet connectivity, either hard -wired or wireless. Technology is becoming an increasing important part of convention centre design. Tradeshow Week studies indicate that facility users desire faster, better, less- expensive internet as well as more (and better qualified) customer service staff and technicians. • Inadequate coat check area —The size of the coat check area is insufficient for the size of the SJTCC. For example, if the Great Hall is being utilized to its capacity by an event, the size of the coat check is inadequate to accommodate the demand for this service. In addition to these specific negatives, the SJTCC is in need of general refurbishment given its age and usage levels since opening. DRAFT FOR DISCUSSION 6 Saint John Trade and Convention Centre Facility Analysis January 2008 2.4 SAINT JOHN TRADE AND CONVENTION CENTRE UTILIZATION Two methods of measuring utilization at convention centres are the number of events held and the occupancy level (i.e., the number of days in any given period that the venue, or parts of the venue, are used). While these measures demonstrate activity —and an obvious extension to revenue and bottom -line profitability levels —occupancy does not necessarily demonstrate "success." For the purposes of this analysis, HLT assumed that 11success" at the SJTCC will be defined as the degree to which the SJTCC is able to host convention events (and any other events) that generate visitation to the City of Saint John by non - residents. As a result, the analysis of utilization is more a function of type of event (i.e., conventions versus local meetings) than quantum of events. Event Data An analysis of event data provided by the SJTCC indicates that 393 events were held in 2006, as shown in Table 2. Table 2 Saint John Trade and Convention Centre - 2006 Events by Type Convention Trade Consumer Food and Conference Show Show Meeting Beverage Other Total Events 33 3 13 265 67 12 393 Source Saint John Trade and Convention Centre Discussions with Hilton representatives indicate that 2006 was an exceptional year for the SJTCC in terms of conventions and conferences while 2007 represents "more typical" business levels. Table 3 compares the events by event type for the January through November period in 2006 and 2007. nce Saint John Trade and Convention Centre - Events by Type (January through November) Convention Trade Consumer Food and Conference Show Show Meeting Beverage Other Total 25 1 13 253 48 5 345 13 DRAFT FOR DISCUSSION 7 Saint John Trade and Convention Centre Facility Analysis January 2008 Table 3 shows that while the number of events held at the SJTCC between January and November in 2006 and 2007 was similar, significantly fewer conventions and conferences were held in 2007. Further, while the average number of delegates at conventions and conferences was relatively consistent between 2006 and 2007, the average number of occupied room nights was lower in 2007 suggesting fewer out -of -town delegates. Convention and conference events tend to use a much greater proportion of SJTCC (i.e., more exhibit and meeting space) and for multiple days. As a result, these events generate more significant economic impact in the community. Over the past few years, the SJTCC has hosted several national associations and organizations for large (by Saint John standards) convention and conference events including: • Canadian Country Music Awards (2006) • Canadian Life & Health Insurance Association — Claims Section Annual Conference (2005) • Canadian Nuclear Association Annual Conference (2007) • Canadian Physiotherapy Association National Congress (2006) • Canadian Society of Respiratory Therapists Convention (2006) • Canadian Water and Wastewater Association Conference (2006) • Federation of Law Societies of Canada National Criminal Law Program (2006) • International Brotherhood of Electrical Workers Convention (2006) • Kinsmen & Kinette Clubs of Canada Convention (2006) • National Healthcare Leadership Conference (2005) • North Atlantic Ports Association Convention (2006) • Union of Taxation Employees (2005) • United Pentecostal Youth Convention (2006, 2007) • Victorian Order of Nurses Canada Annual General Meeting (2005) These groups used a significant portion of the SJTCC for multiple days as well as generated significant occupied room nights at area hotels. In addition to convention and conference events, the SJTCC has a base of annual events. An example of which is Port Days, which uses the entire facility for several days in June each year. Tim Issac antiques produces about six consumer shows /auctions each year, often on holiday weekends when convention venues such as the SJTCC have limited demand. J.D. Irving and its various subsidiaries appear to be the most frequent customer DRAFT FOR DISCUSSION 8 Saint John Trade and Convention Centre Facility Analysis January 2008 of the SJTCC, holding several meetings and social events throughout the year. The annual event base at the SJTCC, however, is limited. Despite the size of the Great Hall, the SJTCC hosts relatively few trade shows. Most of the large trade shows in Saint John (about two or three per year) are held at Harbour Station. Venue Occupancy Tables 4 and 5 show occupancy rates for the SJTCC for 2006 and for the January through November period in 2006 and 2007 respectively. (square feet) 5,160 9,976 525 625 1,100 924 924 784 336 20,354 e Days* 156 144 129 137 160 199 182 155 139 The overall SJTCC occupancy, as well as the occupancy of each exhibition hall /meeting room was significantly lower January through November 2007 than for the same period during the previous year. This disparity occurred despite the venue holding a similar number of events (Table 3), reflecting the fewer convention /conference events that use multiple rooms over multiple days. The last two weeks of December are typically slow periods at most convention centres. The SJTCC 2007 occupancy could reasonably be expected to be lower than the 34.0% achieved by the end of November as a result. The theoretical maximum occupancy rates for exhibit halls (at the SJTCC the Loyalist and Marco Polo rooms) is thought to be around 70% as a result of the requirement of move -in and move -out days for trade shows and consumer shows. A more likely (and efficient) occupancy level is thought to be in the 50% to 60% range. Greater occupancy levels may be achieved in meeting rooms. An annual study by PriceWaterhouse Coopers ("PWC') focusing on North American venues (with an emphasis on convention centres) suggests average exhibit hall occupancies in the 50% to 60% range for those venues located in gateway cities (major United States and Canadian cities with excellent air access), and lower levels for regional venues. The 44.1% occupancy achieved by the SJTCC during 2006 (reportedly an "exceptional" year) and the 2007 occupancy likely to be below the 34.0% achieved year to date (November) are well below North American industry averages as reported by PWC. DRAFT FOR DISCUSSION 9 Saint John Trade and Convention Centre - Occupancy 2007 and 2006 (January through November) Saint John Trade and Convention Centre - 2006 Occupancy Great Hall Great Hall Great Hall Welcome Cntr Loyalist Marco Polo Spencer I Spencer II Spencer III Montagu I Montagu II Montagu III Boardroom Total (square feet) 5,160 9,976 525 625 1,100 924 924 784 336 20,354 e Days* 167 151 142 149 171 212 194 164 147 oancv 45.8% 41.4% 38.9% 40.8% 46.8% 58.1% 53.2% 44.9% 40.3% 44.10/, (square feet) 5,160 9,976 525 625 1,100 924 924 784 336 20,354 e Days* 156 144 129 137 160 199 182 155 139 The overall SJTCC occupancy, as well as the occupancy of each exhibition hall /meeting room was significantly lower January through November 2007 than for the same period during the previous year. This disparity occurred despite the venue holding a similar number of events (Table 3), reflecting the fewer convention /conference events that use multiple rooms over multiple days. The last two weeks of December are typically slow periods at most convention centres. The SJTCC 2007 occupancy could reasonably be expected to be lower than the 34.0% achieved by the end of November as a result. The theoretical maximum occupancy rates for exhibit halls (at the SJTCC the Loyalist and Marco Polo rooms) is thought to be around 70% as a result of the requirement of move -in and move -out days for trade shows and consumer shows. A more likely (and efficient) occupancy level is thought to be in the 50% to 60% range. Greater occupancy levels may be achieved in meeting rooms. An annual study by PriceWaterhouse Coopers ("PWC') focusing on North American venues (with an emphasis on convention centres) suggests average exhibit hall occupancies in the 50% to 60% range for those venues located in gateway cities (major United States and Canadian cities with excellent air access), and lower levels for regional venues. The 44.1% occupancy achieved by the SJTCC during 2006 (reportedly an "exceptional" year) and the 2007 occupancy likely to be below the 34.0% achieved year to date (November) are well below North American industry averages as reported by PWC. DRAFT FOR DISCUSSION 9 Saint John Trade and Convention Centre - Occupancy 2007 and 2006 (January through November) Great Hall Great Hall Welcome Cntr Loyalist Marco Polo Spencer I Spencer II Spencer III Montagu I Montagu II Montagu III Boardroom Total (square feet) 5,160 9,976 525 625 1,100 924 924 784 336 20,354 e Days* 115 107 91 88 107 157 157 139 94 pancy 34.4% 32.0% 27.2% 26.3% 32.0% 47.0% 47.0% 41.6% 28.1% 34.00/ (square feet) 5,160 9,976 525 625 1,100 924 924 784 336 20,354 e Days* 156 144 129 137 160 199 182 155 139 The overall SJTCC occupancy, as well as the occupancy of each exhibition hall /meeting room was significantly lower January through November 2007 than for the same period during the previous year. This disparity occurred despite the venue holding a similar number of events (Table 3), reflecting the fewer convention /conference events that use multiple rooms over multiple days. The last two weeks of December are typically slow periods at most convention centres. The SJTCC 2007 occupancy could reasonably be expected to be lower than the 34.0% achieved by the end of November as a result. The theoretical maximum occupancy rates for exhibit halls (at the SJTCC the Loyalist and Marco Polo rooms) is thought to be around 70% as a result of the requirement of move -in and move -out days for trade shows and consumer shows. A more likely (and efficient) occupancy level is thought to be in the 50% to 60% range. Greater occupancy levels may be achieved in meeting rooms. An annual study by PriceWaterhouse Coopers ("PWC') focusing on North American venues (with an emphasis on convention centres) suggests average exhibit hall occupancies in the 50% to 60% range for those venues located in gateway cities (major United States and Canadian cities with excellent air access), and lower levels for regional venues. The 44.1% occupancy achieved by the SJTCC during 2006 (reportedly an "exceptional" year) and the 2007 occupancy likely to be below the 34.0% achieved year to date (November) are well below North American industry averages as reported by PWC. DRAFT FOR DISCUSSION 9 Saint John Trade and Convention Centre Facility Analysis January 2008 During 2006, the SJTCC ran at 100% occupancy (i.e., one or more groups used all exhibition and meting space) on 59 days. In 2007, only 100% occupancy was achieved on 31 days (year -to -date November). Turn A way Anaiysis An analysis of the business "turned away" or declined at venues provides additional insight into utilization levels (i.e., business that was turned away as other event(s) were booked on the requested dates) as well as whether the venue is large enough and configured properly to accommodate potential demand (i.e., events turned away because the facility was too small or due to other issues with the facility). Turn away reports can be a valuable tool in evaluating whether a venue should be expanded or reconfigured. The value of such reports, however, depends on the accuracy and completeness of the information included in the reports. For example, a venue might not track inquiries for events too large to fit in the facility. The resulting analysis might erroneously conclude that demand for an expansion does not exist. Hilton representatives provided two different sources on turn away business— monthly Hotel Sales Activity Reports from September 2002 through September 2007 as well as reports from the Delphi Property Management System ("PMS') installed in January 2007. While the information from the Delphi PMS is specific to the SJTCC, the Hotel Sales Activity Reports may refer to function space at both the SJTCC and the Hilton. Turn away business from these two sources is shown in Tables 6 and 7. DRAFT FOR DISCUSSION 10 Wesleyan Women 10/1/2004 Saint John Trade and Convention Centre PSAC - Environment Component 10/1/2004 90 3 Facility Analysis .. 10/22/2004 200 2 January 2008 The Women's Alliance (luncheon) 10/7/2004 0 1 $ 7,500 Table 6 11/5/2004 40 2 unknown From Hotel Sales Activity Reports (September 2002 Through September 2007) 4/29/2004 Function Space Not Available /Inadequate Function Space 2 unknown New Brunswick Federal Council 5/31/2005 Room Length SJTCC Group Date Nights (Days) Revenue Department of Health & Wellness 11/22/2002 118 6 $ 2,500 Atlantic Herring Coop 2/20/2003 30 2 $ 2,150 Department of Education 3/12/2003 130 2 $ 2,000 National Energy Board 4/22/2003 unknown 7 unknown Canadian Administrative Housekeepers Association 5/1/2003 118 7 $ 2,500 Kent Sales Awards 1/18/2004 80 2 $ 8,200 International Trade & Security for Small Business 5/1/2004 306 3 $ 52,800 HRDC 5/17/2004 unknown 5 unknown Wesleyan Women 10/1/2004 160 2 unknown PSAC - Environment Component 10/1/2004 90 3 unknown New Brunswick Crime Stoppers 10/22/2004 200 2 $ 13,800 The Women's Alliance (luncheon) 10/7/2004 0 1 $ 7,500 District 45 Toastmasters 11/5/2004 40 2 unknown New Brunswick Federation of Home & Schools 4/29/2004 80 2 unknown New Brunswick Federal Council 5/31/2005 25 1 unknown Bell Canada 10/11/2005 30 1 unknown Ivey School of Business 10/16/2005 221 5 unknown Equine Canada 2/5/2006 422 7 comp. rental Kennebecasis Toastmasters 5/25/2006 225 1 unknown Women's Issues Branch Executive Council Office 6/6/2006 120 4 unknown Maritech 2006 10/25/2006 300 1 $ 5,300 Canadian Association of Speech & Lanauaae Therapists 3/28/2007 540 7 $ 39.000 Table 7 From Hilton Saint John Delphi System (February 2007 forward) Group Date Function Revenue Lost Reason Source Atlantic 4/17/2007 $ - Function Space Unavailable New Brunswick Special Care Home 4/25/2007 $ 380 Function Space Unavailable Pfizer 4/27/2007 $ 25,106 Function Space Unavailable Department of Transport 5/4/2007 $ 2,850 Function Space Unavailable J.D. Irving Limited 10/12/2007 $ 3,529 Function Space Unavailable Addison Travel Marketing 10/18/2007 $ 3,588 Function Space Unavailable The Conference Board of Canada 11/26/2007 $ 1,137 Function Space Unavailable Scotia Bank 9/21/2008 $ 7,580 Facility Limitations - See Activity Analysis of the Tables 6 and 7 shows: • Between four and nine events have been turned away per year (2003 through 2007). In 2006, according to Hilton representatives an "exceptional" year for the SJTCC, only four events were turned away. • Of the 30 events turned away, 25 events or more than 80% were to occur in the months of April through June or September through November. While the high season for convention venues differs by location and event type, these months DRAFT FOR DISCUSSION 11 WE Saint John Trade and Convention Centre Facility Analysis January 2008 represent the high season for most convention venues in Canada. Most Canadian venues experience some excess demand for conventions during these months. • Either no events were turned away because the SJTCC was not large enough to accommodate them or no such events were tracked. • For some events, expected function revenue was reported. In only three of 17 such events was the expected revenue higher than $25,000 suggesting some events turned away were relatively small. However, for many events function revenue was not reported, possibly because the inability to accommodate the group was determined early in the process. The turn away information provided by through the Hilton suggests limited excess demand for the SJTCC. 2.5 HOTEL OCCUPANCY A key consideration for any convention /conference planner, once the adequacy of the convention facility has been determined, is the availability of hotel rooms. Three hotels are located in downtown Saint John proximate to the SJTCC: • Hilton Saint John -197 rooms • Delta Brunswick -255 rooms • Hotel Courtenay Bay -122 rooms Figure 1 shows the monthly occupancy for these three hotels from January 2005 through October 2007. DRAFT FOR DISCUSSION 12 Saint John Trade and Convention Centre Facility Analysis January 2008 Figure 1 Saint John Downtown Hotel Occupancy (Hilton Saint John, Delta Brunswick, Hotel Courtenay Bay) 80% 75% unuum01 �IIIII 65% 60% �Nwm�w��unomm�mm vwwm„o„„w,u�oo 55% 50% 45% 40% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec —2005 2006 2007 The market occupancy is approaching, or exceeds, 70% in April through June and September through November (typically the high season for conventions at Canadian public assembly venues). These occupancy levels suggest that meeting planners assessing Saint John as a potential venue for an event targeting out -of -town delegates would likely have difficulty in securing a room "block" (rooms set aside by the hotel some years in advance for conference attendees) of any significance at the major Saint John hotels. Any expansion of the SJTCC could not reasonably be considered without assurance of additional hotel development in the downtown core proximate to the SJTCC. 2.6 SAINT JOHN TOURISM MARKETING Saint John is positioned as a leisure and convention /business destination by Tourism Saint John (and various other City- funded /controlled entities, such as Venue Saint John). These entities have historically been funded through allocations from the City budget. Recently the Saint John Hotel Association ("SJHA ") initiated a "destination marketing fee" (DMF) program similar to that in place in several other Canadian cities. A DMF levy of 2% will be applied to room revenue on every stay at participating hotels. This levy is expected to generate in excess of $400,000 annually and will be combined with funding from the City of $900,000 for a total of $1.3 million. The resulting total is expected to be allocated as follows: DRAFT FOR DISCUSSION 13 WE Saint John Trade and Convention Centre Facility Analysis January 2008 • Meeting and convention marketing -45% or about $585,000 • Sport tourism and special event marketing -35% or about$455,000 • General leisure marketing -20% or about $260,000 Success in attracting conventions is dependent on the development and funding of a long- term marketing strategy given that lead times are often 3+ years long. The increased funding is expected to generate an increase in meeting and convention events at the SJTCC as well as special events that may use the SJTCC and /or Harbour Station. DRAFT FOR DISCUSSION 14 WE Saint John Trade and Convention Centre Facility Analysis January 2008 3. Atlantic Canada Public Assembly Facility supply In this section, the supply of meeting and exhibition space in Atlantic Canada is reviewed. 3.1 SAINT JOHN In addition to the SJTCC, other downtown venues offer meeting and /or exhibition space. Harbour Station Harbour Station, a 6,200 -seat arena located in downtown Saint John, opened in 1983. The bleachers are retractable, allowing the arena floor to be converted into a 56,000 square -foot, column free exhibition area. The conversion from arena to trade show venue takes approximately eight hours. An additional 20,000 square feet of exhibit space is located on the arena's concourse. Harbour Station is connected to many downtown attractions and hotels by an indoor walkway and has parking facilities for 500 vehicles. The facility is located about 300 metres north of the SJTCC. Downtown Saint John Hotels In addition to the space in the SJTCC, the Hilton Saint John has six meeting rooms totaling 5,027 square feet. The largest room is 1,450 square feet. Four other hotels in downtown Saint John offer a range of meeting space of various sizes, specifically: • The Delta Brunswick (connected to the SJTCC by an indoor walkway) has nine meeting rooms with 15,792 square feet of rentable space. The largest room is 9,000 square feet. • The Fort Howe Hotel has nine meeting rooms with 13,650 square feet of rentable space. The largest room is 7,410 square feet. • Hotel Courtenay Bay has seven meeting rooms the largest of which is 2,666 square feet. The total meeting space available at the property is 5,250 square feet. • The Colonial Inn has three meeting rooms totaling 5,029 square feet with the largest room being 3,500 square feet. Table 8 summarizes Saint John convention, trade show and meeting venues. DRAFT FOR DISCUSSION 15 The major meeting and exhibition venues in downtown Saint John total 48 meeting rooms (at maximum breakout) and over 140,000 of rentable space. Figure 2 shows the location of the meeting and exhibition venues included in Table 8. Figure 2 Saint John Hotels and Convention Facilities ms ' rr r q,�e �w.mirix ,?, PdurcdunlvkuC .J aV ,; -'d, m „: .1 ui r' Saint John Trade and Convention Centre U Facility Analysis i','i�h'tuww'uN^sla �PowAil4ldfkixr� � January 2008 ry Table 8 Downtown Saint John Meeting and Exhibition Venues .tom *A M Meeting Rooms Venue Hotel Rooms Maximum Break Out Total Rentable Space Largest Room Harbour Station' n/a 2 76,000 56,000 Saint John Trade & Convention Centre n/a 9 20,354 15,136 Delta Brunswick 255 12 15,792 9,000 Fort Howe Hotel 137 9 13,650 7,410 Hotel Courtenay Bay 122 7 5,250 2,666 Colonial Inn 100 3 5,029 3,500 Hilton Saint John 197 6 5.027 1,450 Totals 811 48 141,102 The major meeting and exhibition venues in downtown Saint John total 48 meeting rooms (at maximum breakout) and over 140,000 of rentable space. Figure 2 shows the location of the meeting and exhibition venues included in Table 8. Figure 2 Saint John Hotels and Convention Facilities ms ' rr r q,�e �w.mirix ,?, PdurcdunlvkuC .J aV ,; -'d, m „: .1 ui r' t 1' r �� i','i�h'tuww'uN^sla �PowAil4ldfkixr� � if- Legend Convention Facilities A) Saint John Trade and Convention Centre B) Harbour Station Hotels 1) Holiday Inn Express 2) Fort Howe Hotel 3) Hilton Saint John 4) Hotel Courtenay Bay 5) Delta Brunswick Hotel 6) Colonial Inn The SJTCC and Harbour Station are close enough to support large events (i.e., a convention with a trade show component). However, based on information provided by Tourism Saint John, only one convention /trade show event has been jointly held at the two venues since 2005. DRAFT FOR DISCUSSION 16 t 1' r Legend Convention Facilities A) Saint John Trade and Convention Centre B) Harbour Station Hotels 1) Holiday Inn Express 2) Fort Howe Hotel 3) Hilton Saint John 4) Hotel Courtenay Bay 5) Delta Brunswick Hotel 6) Colonial Inn The SJTCC and Harbour Station are close enough to support large events (i.e., a convention with a trade show component). However, based on information provided by Tourism Saint John, only one convention /trade show event has been jointly held at the two venues since 2005. DRAFT FOR DISCUSSION 16 ry wn .tom *A M Legend Convention Facilities A) Saint John Trade and Convention Centre B) Harbour Station Hotels 1) Holiday Inn Express 2) Fort Howe Hotel 3) Hilton Saint John 4) Hotel Courtenay Bay 5) Delta Brunswick Hotel 6) Colonial Inn The SJTCC and Harbour Station are close enough to support large events (i.e., a convention with a trade show component). However, based on information provided by Tourism Saint John, only one convention /trade show event has been jointly held at the two venues since 2005. DRAFT FOR DISCUSSION 16 3.2 ATLANTIC CANADA SUPPLY Saint John Trade and Convention Centre Facility Analysis January 2008 Table 9 inventories those Atlantic Canadian hotels and stand -alone public assembly facilities offering at least 10,000 square feet of meeting /exhibit space. Moncton Coliseum Complex* Atlantic Canada Public Assembly Facilities (at least 10,000 square feet of rentable space) n/a 3 109,000 75,000 Delta Beausejour, Moncton Meeting Rooms 310 Venue Facility Type Hotel Rooms Maximum Break Out Total Rentable Space Largest Room rint John 18 20,000 6,200 Fairmont Algonquin Hotel Saint John Trade & Convention Centre Convention Centre n/a 9 20,354 15,136 Delta Brunswick Hotel 255 12 15,792 9,000 Fort Howe Hotel Hotel 137 9 13,650 7,410 Moncton Coliseum Complex* Mixed -Use n/a 3 109,000 75,000 Delta Beausejour, Moncton Hotel 310 16 22,454 8,540 Chateau Edmunston Hotel 102 18 20,000 6,200 Fairmont Algonquin Hotel 234 9 18,814 4,833 Capital Exhibit Centre, Fredericton Exhibition Centre n/a 1 18,000 18,000 Delta Fredericton Hotel 222 10 13,000 7,500 Ramada Fredericton Hotel 114 7 11,508 2,075 Crowne Plaza Fredericton Hotel 168 13 10,784 4,294 �wfoundland & Labrador Hotel 196 14 13,067 4,477 Pepsi Centre, Corner Brook* Arena n/a 10 27,085 18,525 Delta St. John's Hotel 403 21 20,265 11,760 St. John's Convention Centre Convention Centre n/a 3 18,200 16,000 Fairmont Newfoundland, St. John's Hotel 301 17 15,718 7,319 Holiday Inn St. John's Hotel 250 9 12,105 5,625 ince Edward Island Delta Prince Edward, Charlottetown Hotel 211 12 25,649 12,075 Charlottetown Civic Centre* Mixed -Use n/a 11 1.200 Exhibition Park, Halifax* Mixed -Use n/a 4 82,500 61,000 World Trade and Convention Centre Convention Centre n/a 21 58,877 20,000 Annapolis Basin Conference Centre, Digby Mixed -Use 95 62 51,483 5,581 Membertou Trade & Convention Centre Mixed -Use n/a 8 47,000 10,000 Keating Millennium Centre, Antigonish Mixed -Use n/a 8 46,095 23,100 Westin Nova Scotian, Halifax Hotel 296 14 19,294 8,400 Marriott Halifax Harbourview Hotel 352 15 17,000 7,620 Centre 200, Sydney* Arena n/a 7 14,562 6,612 Holiday Inn - Halifax Harbourview Hotel 196 14 13,067 4,477 Best Western Truro Trade & Convention Centre Hotel 92 13 12,010 8,000 Dartmouth Sportsplex* Arena n/a 9 11,688 7,200 Park Place Hotel & Conference Centre Hotel 178 14 10,950 2,920 White Point Beach Resort Hotel 159 9 10,034 3,240 The SJTCC is one of more than thirty public assembly facilities in Atlantic Canada offering in excess of 10,000 square feet of rentable space. 3.3 ADDITIONS TO ATLANTIC CANADA PUBLIC ASSEMBLY FACILITIES SUPPLY Several additions to the supply of public assembly space in Atlantic Canada are being contemplated, both new facilities and expansions. DRAFT FOR DISCUSSION 17 Saint John Trade and Convention Centre Facility Analysis January 2008 Moncton A convention centre has been contemplated for downtown Moncton as early as 2000. A market analysis was recently completed for the City of Moncton by PKF Consulting. The market analysis concluded: • Sufficient demand exists in Moncton to support a convention centre. • The recommended facility profile is 24,000 rentable square feet including a 16,000 square foot ballroom. Two downtown locations are being contemplated — adjacent to the Delta Beausejour and the "Beaver Lumber" site. The City of Moncton is determining whether to proceed with the construction of a convention centre. Financing for facility, expected to cost $25 to $30 million, is not yet in place. Fredericton Fredericton is also contemplating a convention centre in the downtown core. A $21 million facility with 20,000 to 27,000 square feet of rentable square feet is being considered for downtown Fredericton on Queen Street, across the street from the Crowne Plaza Hotel. The venue, as currently proposed, will include underground and surface parking as well as a 150,000 square foot office facility. According to Team Fredericton (Fredericton's economic development corporation), Fredericton Council has decided to proceed with this project despite not having a funding commitment from the Federal Government. A development contract has been signed and the project is expected to break ground in the spring of 2008. A timetable for the opening of the facility has not yet been set. Charlottetown A 20,000 to 25,000 square foot convention centre is being contemplated for Charlottetown. Two options are being considered: • a stand -alone facility on the waterfront; and • an expansion of the Delta Prince Edward hotel that would include a reconfiguration of some vacant retail and office space. A consultant has been engaged to conduct a market study. Funding for the construction of the facility is not in place. Additionally, an RFP has been issued for the expansion of the Charlottetown Civic Centre. [Following up with Stu Dunn at Char lottetown Civic Centre I DRAFT FOR DISCUSSION 18 WE Halifax Saint John Trade and Convention Centre Facility Analysis January 2008 An expansion of the World Trade Centre in Halifax has been discussed for several years. The current proposal would see the arena, the Halifax Metro Centre, relocated to another site and the vacated space (currently used on occasion for exhibition space) becoming part of the convention centre. This expansion is in the early planning stages and funding for the new arena and convention centre expansion is not yet in place. Other Canadian Centres Several public - assembly facility projects are currently under construction in other Canadian centres including: • Casino Windsor Conference and Entertainment Facility (Windsor, Ontario)— opening in 2008 • Toronto Congress Centre Phase I expansion— opening in 2008 • Toronto International Centre Conference Facility— opening in 2008 • Vancouver Island Conference Centre (Nanaimo, British Columbia)— opening in 2008. • Victoria Conference Centre Crystal Garden (expansion)— opening in 2008 • Vancouver Convention and Exhibition Centre (expansion)— opening in 2009. In addition, new or expanded public assembly facilities are being planned or discussed in many other cities across Canada including Barrie (Ontario), Calgary (expansion of the Calgary TELUS Convention Centre), Niagara Falls (a new facility with federal and provincial government support), Ottawa (and major rebuild of the Ottawa Congress Centre) and Edmonton (a possible expansion of the Shaw Convention Centre). 3.4 NEW PUBLIC ASSEMBLY FACILITIES CONCLUSIONS AND IMPLICATIONS The construction of new public assembly facilities, or the expansion of existing facilities is often a long process. None of the Atlantic Canada projects described above is under construction nor are they guaranteed to proceed. Further, the funding for the construction of the proposed facilities is not finalized. While the quantum of convention centre projects under consideration in Atlantic Canada is significant, likely all projects will not proceed even if funding can be secured. The "universe" of regional and national conventions that can occur in Atlantic Canada is somewhat finite. As construction begins on one or more of the proposed projects, other projects will likely be delayed or cancelled as projected demand levels are re- evaluated. DRAFT FOR DISCUSSION 19 WE Saint John Trade and Convention Centre Facility Analysis January 2008 The SJTCC is currently the only dedicated convention centre in New Brunswick, although several hotels offer comparable meeting and exhibition space. If the proposed convention centres in Moncton and Fredericton are realized, they will compete with the SJTCC for provincial events. In addition to the convention centre projects proposed in Atlantic Canada, several projects are under construction or proposed for other Canadian centres. As additional supply is added, it may impact the rotation of national events to Atlantic Canada. Further, the growth in the supply of convention space will likely exceed the growth in national events suggesting competition to host these events will increase. DRAFT FOR DISCUSSION 20 WE Saint John Trade and Convention Centre Facility Analysis January 2008 4. Atlantic Canada Public Assembly Facility Demand This section focuses on conventions /conferences and trade shows — the event types that typically generate the greatest economic impact on the local community. 4.1 CONVENTIONS AND CONFERENCES Venue Saint John recently conducted an exercise where 199 national associations were contacted and asked about the potential of holding an event in Saint John. This exercise provided some valuable insight into the attractiveness of Atlantic Canadian destinations to national association event organizers. Of the 199 associations contacted, 85 have held, or have booked events in Atlantic Canada. Table 10 shows a summary of this analysis that is presented in more detail in Appendix A. Sixteen of the 199 national associations contacted had previously held an event in Saint John. Saint John compares favourably to other Atlantic Canadian destinations, hosting more events than only Halifax. The Venue Saint John survey however, must be analyzed with caution as the results for Saint John included a longer time period than that considered for other Atlantic Canada destinations. Nevertheless, the strong showing by Saint John reflects past interest in the community as a convention destination. A more reliable comparison may be future event bookings in Atlantic Canada. Two of the national associations contacted have booked a future event in Saint John. For comparison purposes, 16 associations have events booked in St. John's, 11 in Halifax, seven in Charlottetown and four in Fredericton. Halifax and St. John's appear to be the most popular destination for Canadian associations. In addition to Canadian associations, regional (Atlantic Canada) and provincial (New Brunswick) associations could also potentially hold an event at the SJTCC. Table 11 summarizes New Brunswick local and provincial associations and head office locations, as well as regional, national and international associations with head offices in Atlantic Canada. DRAFT FOR DISCUSSION 21 Table 10 Canadian Associations Holding Events in Atlantic Canada Have Held Event Future Event Booked 0 0 c o U o 0 c o U) CO 0 U i x O Q 0 m U 0 0 C K O Q 0 0- cu cu H C C C Q L -0 C C C cu H Sixteen of the 199 national associations contacted had previously held an event in Saint John. Saint John compares favourably to other Atlantic Canadian destinations, hosting more events than only Halifax. The Venue Saint John survey however, must be analyzed with caution as the results for Saint John included a longer time period than that considered for other Atlantic Canada destinations. Nevertheless, the strong showing by Saint John reflects past interest in the community as a convention destination. A more reliable comparison may be future event bookings in Atlantic Canada. Two of the national associations contacted have booked a future event in Saint John. For comparison purposes, 16 associations have events booked in St. John's, 11 in Halifax, seven in Charlottetown and four in Fredericton. Halifax and St. John's appear to be the most popular destination for Canadian associations. In addition to Canadian associations, regional (Atlantic Canada) and provincial (New Brunswick) associations could also potentially hold an event at the SJTCC. Table 11 summarizes New Brunswick local and provincial associations and head office locations, as well as regional, national and international associations with head offices in Atlantic Canada. DRAFT FOR DISCUSSION 21 Saint John Trade and Convention Centre Facility Analysis January 2008 A total of 332 local, provincial, regional, national and international associations have head offices located in Atlantic Canada. Of note: • 22 or 11.7% of the 188 New Brunswick provincial associations are located in Saint John. Fredericton, the provincial capital, is the location of the vast majority of provincial associations. This may make Fredericton a more attractive destination for many New Brunswick provincial association events. Nova Scotia is the location of considerably more regional, national and international associations than New Brunswick. The majority of the associations with head offices in Nova Scotia are located in Halifax. Destination Selection Criteria Tradeshow Week Research has recently completed research on destination selection criteria for event planners. These criteria are summarized in Table 12. DRAFT FOR DISCUSSION 22 WE Saint John Trade and Convention Centre Facility Analysis January 2008 Destination Selection Criteria Hotel Room Price /Quality 63% Finding Open Dates 49% Labour Costs and Service Issues 46% Number of Hotel Rooms, Capacity 44% Hotel Block Attrition Clauses and Issues 41% Regional Professional Demographics 33% Quality of Area Near the Venue /Headquarter Hotel 33% CVB /City Government Marketing Efforts and Support 28% Airport Capacity 25% Parking Capacity 23% Restaurants - Quality, Reputation, etc. 22% Safety Issues /Low Crime, etc. 19% Road and Highway Access 19% Cultural Amenities, Nightlife 19% Technology Service Costs and Service Issues 14% Regional Consumer Demographics 13% Public Transportation Access 13% Total Population 12% Health of City /Regional Economy 10% Golf Courses and Other Sporting Opportunities 10% Family- Oriented Activities Nearby /In City 10% Gambling /Gaming Nearby 5% Space for Outdoor Exhibits and Tents 4% Amusement Parks Nearby 2% Professional Sports in City /Nearby 1% Other 11% Some of the above criteria are easily comparable among Atlantic Canada destinations. Number of Hotel Rooms Table 13 shows the number of hotels and hotel rooms for selected Atlantic Canada destinations. DRAFT FOR DISCUSSION 23 Table 13 Hotels and Rooms - Selected Atlantic Canada Destinations Average Size Hotels Rooms (rooms) Halifax /Dartmouth, NS 41 5,066 124 Halifax, NS 27 3,783 140 St. John's, NF 18 2,155 120 Moncton, NB 23 2,097 91 Fredericton, NB 15 1,488 99 Saint John, NB 13 1,389 107 Charlottetown, PE 14 1,290 92 DRAFT FOR DISCUSSION 23 Saint John Trade and Convention Centre Facility Analysis January 2008 Halifax, St. John's and Moncton each have considerably more hotel rooms than Saint John. As a result, these destinations are likely more attractive to association event planners — especially those planning events with a significant number of out -of -town delegates. Hotel Room Price /Qua /ity Table 14 shows average hotel rates for selected Canadian destinations. Table 14 Average Hotel Rates Selected Atlantic Canada Destinations 2006 St. John's $ 123.88 Prince Edward Island $ 114.37 Halifax /Dartmouth $ 124.34 Moncton $ 108.90 Other New Brunswick (including Saint John) $ 99.58 Hilton Saint John Competitive Set* $ 107.05 Atlantic Canada $ 111.94 Canada $ 123.52 While St. John's and Halifax /Dartmouth slightly exceeded the Canadian average in 2006, all Atlantic Canada destinations are well positioned from a hotel room price perspective. "Other New Brunswick ", which includes Saint John, had among the lowest average hotel rates in 2006. The Hilton Saint John tracks the occupancy and average daily rate of the five hotels located in their competitive set (all located in downtown Saint John). The average rate for the competitive set in 2006 was above the $99.58 average for "other New Brunswick" in the PKF data but below the Atlantic Canada average as well as the other Atlantic Canada urban centres. Further, the average rates for downtown hotels typically exceed those for all hotels in a market. Saint John appears to be well positioned from a hotel price perspective. However, the number of quality hotel rooms in Saint John may be considered limited by some meeting planners. The Hilton (197 rooms), Delta (255 rooms), Holiday Inn Express (100 rooms) the Hotel Courtenay Bay (122 rooms) as well as the 116 -room Hampton Inn (which opened in January 2008) are likely to be considered the "highest quality" hotel rooms in downtown Saint John. Only the Hilton and Delta are full - service hotels. DRAFT FOR DISCUSSION 24 Saint John Trade and Convention Centre Facility Analysis January 2008 Airport Capacity The number of destinations with scheduled flights, the frequency of service to those destinations and the capacity of the aircraft are important criteria for national association event planners considering Atlantic Canada. Table 15 shows the destinations served with scheduled flights from selected Atlantic Canada airports. Halifax, and to a lesser extent, St. John's enjoy scheduled air service to more destinations than other Atlantic Canada centres. Of the selected Atlantic Canada centres included in Table 15, Saint John has scheduled air service to the fewest destinations. Air fares to and within Atlantic Canada are relatively steep. This may result in price - conscious national association event planners selecting an "eastern" destination to consider Quebec destinations more attractive than Atlantic Canada destinations. Summary An analysis of hotel room prices, number /quality of hotel rooms and airlift suggests that Halifax and St. John's are the most attractive Atlantic Canada destinations for national association conventions and conferences. In 2007, 22% of the events held at Halifax's World Trade Centre were by national associations and groups. St. John's has become a popular destination for national association events since the St. John's Convention Centre opened in 2001. 4.2 TPLADe SHOWS An important selection criterion for those planning regional trade shows (i.e., those that generate economic impact) is the population in the market area. Table 16 shows the current and projected population within a 3.5 hour drive of various Atlantic Canada urban centres. We have limited our analysis to Canadian -based population as currency, excise and other constraints limit foreign participation at most trade shows. DRAFT FOR DISCUSSION 25 Saint John Trade and Convention Centre Facility Analysis January 2008 Total (Candadian) Population within a 3.5 -hour drive* Due to its central location within Atlantic Canada, Moncton has an advantage in attracting regional trade shows. Moncton is located within a 3.5 hour drive of a significant portion of Atlantic Canada's population. For comparison purposes, the population base within a 3.5 hour drive to Saint John is just over half that of Moncton. Not surprisingly given the data in Table 16, Moncton and Halifax (the Atlantic Canadian city with the second greatest population base) are home to the largest two exhibition venues in Atlantic Canada —the 109,000 square foot Moncton Coliseum Complex (excluding the arena) and the 82,500 square foot Halifax Exhibition Park. In addition to trade shows, the central locations of Moncton and Halifax make them attractive destinations for regional conventions and conferences. 4.3 SUMMARY For national convention events, Halifax and St. John's appear to have an advantage based on the selection criteria reviewed in this section. Saint John could be considered part of a second tier of Atlantic Canada destinations that includes Fredericton, Moncton and Charlottetown. For regional trade shows and conventions, Moncton and Halifax appear to have an advantage over Saint John and other Atlantic Canada destinations due to a central location. An expanded SJTCC would not likely significantly improve Saint John's position within these markets. DRAFT FOR DISCUSSION 26 2007 2010 2012 2017 Moncton 1,352,764 1,364,655 1,372,583 1,396,143 Halifax 955,398 968,594 977,385 1,000,971 Fredericton 729,651 733,371 735,844 744,848 Saint John 607,122 613,586 617,872 631,108 Charlottetown 550,610 556,309 560,103 570,732 St. John's 249.950 250.999 251.713 252.953 Due to its central location within Atlantic Canada, Moncton has an advantage in attracting regional trade shows. Moncton is located within a 3.5 hour drive of a significant portion of Atlantic Canada's population. For comparison purposes, the population base within a 3.5 hour drive to Saint John is just over half that of Moncton. Not surprisingly given the data in Table 16, Moncton and Halifax (the Atlantic Canadian city with the second greatest population base) are home to the largest two exhibition venues in Atlantic Canada —the 109,000 square foot Moncton Coliseum Complex (excluding the arena) and the 82,500 square foot Halifax Exhibition Park. In addition to trade shows, the central locations of Moncton and Halifax make them attractive destinations for regional conventions and conferences. 4.3 SUMMARY For national convention events, Halifax and St. John's appear to have an advantage based on the selection criteria reviewed in this section. Saint John could be considered part of a second tier of Atlantic Canada destinations that includes Fredericton, Moncton and Charlottetown. For regional trade shows and conventions, Moncton and Halifax appear to have an advantage over Saint John and other Atlantic Canada destinations due to a central location. An expanded SJTCC would not likely significantly improve Saint John's position within these markets. DRAFT FOR DISCUSSION 26 WE 5. Conclusions and Implications Saint John Trade and Convention Centre Facility Analysis January 2008 The SJTCC was constructed in 1983. The facility now requires capital investment to support the current level of operations. In parallel with necessary refurbishment and updating, the City and Hilton management are contemplating the need for expansion and /or reconfiguration. Essentially, three options are being considered: • refurbish the venue by addressing necessary cosmetic modifications but leave the space largely as is; • reconfigure the venue to provide more usable and efficient space; and • expand the venue. Discussions with Hilton management and representatives of Market Square management suggest additional area may be available within Market Square to accommodate a larger SJTCC footprint. 5.1 SUMMARY OF ANALYSIS The SJTCC has been successful in attracting a modest number of major national and regional events. Hilton management should be commended on overcoming some of the disadvantages Saint John faces as a convention destination in securing this business. Such disadvantages include: Limited air access when compared to other Atlantic Canada destinations. • Limited number and availability of quality hotels and hotel rooms proximate to the SJTCC. • Weather issues (real and perceived) that may not be considered attractive by event planners (and cause additional challenges when taken together with restricted air access). Analysis of the current utilization levels at the SJTCC and current market parameters suggests: SJTCC occupancy (44.1% in 2006, 34.0% year -to -date November 2007) below industry averages and below levels of most first and second tier convention centres across Canada. • A modest level of turnaway business (i.e., 30 potential events have been "turned away" since September 2002). • A limited number of "full use" days where the SJTCC operates at 100% capacity. DRAFT FOR DISCUSSION 27 Saint John Trade and Convention Centre Facility Analysis January 2008 Strong current competitors in Halifax and Saint John (and to a lesser extent, Charlottetown) each possessing superior air access, larger resident population bases, regional head office centres and profile. Within New Brunswick, Saint John is the least well located (from a regional access point -of- view). The presence of three major population centres within the province (Saint John, Fredericton and Moncton) tends to limit any one centre from being in a dominant position (e.g., St. John's, Halifax and Charlottetown are clearly the major destinations in each of the other four Atlantic provinces). The hotel supply and air access issues are not likely to improve in the short- to mid -term. As a result of these factors, we believe expansion (to any significant extent) of the SJTCC is not warranted. Recurring annual regional demand, as well as more infrequent national demand, for convention and conference space is likely to be ably accommodated within existing and proposed venues. The success of St. John's in hosting national and regional events should be noted, in particular the fact that no single St. John's venue offers more exhibition or meeting space than the SJTCC. While not all of the potential Atlantic Canadian venues discussed in this report are likely to occur, a reasonable expectation is that either the Moncton (a strong regional trade show venue) or Fredericton (the home of the majority of New Brunswick associations) proposal will proceed. 5.2 RECOMMENDATION The main exhibit hall of any convention centre is the primary factor in determining the building footprint and, ultimately, site size and parameters. Once the size of the primary exhibit hall is determined, the balance of the components (e.g., meeting space, crush space, service areas) may be incorporated into an overall building layout. In the case of the SJTCC, the primary exhibit hall (i.e., the Great Hall) is sufficiently large to accommodate current and anticipated market demand, suggesting the SJTCC footprint is adequate. However, while current demand levels do not support additional exhibition space, the venue is almost certainly not reaching existing potential as a result of: • inadequate crush space outside the Great Hall; • location, orientation and attributes of meeting rooms; • a poor sense of arrival; and • a lack of high -tech amenities and connectivity. Given the location of the SJTCC within Market Square as well as historical (and projected future) demand levels at the venue, consideration of a reconfiguration /refurbishment plan that: DRAFT FOR DISCUSSION 28 WE Saint John Trade and Convention Centre Facility Analysis January 2008 • Provides substantially more crush space adjacent to the Great Hall, likely necessitating the removal of the Montagu meeting rooms. Creates meeting space at least equal to the amount lost on the ground floor (i.e., the Montagu rooms) as well as additional meeting space (perhaps up to 4,000 sq. ft.) and improved flexibility (i.e., ability to create multiple break out rooms). A site visit to Market Square and preliminary review of building plans suggests additional meeting space may be accommodated on the floor directly above the Great Hall (and current Montagu meeting rooms). • Creates a better "sense of arrival" at the SJTCC main entrance. • Allows for greater separation between users of public areas (general public in Market Square), SJTCC customer areas, and service areas (e.g., SJTCC kitchen). • Addresses current requirements for communications connectivity throughout the facility. • Improves the connection between the SJTCC and the Hilton Saint John. • Undertakes facility -wide cosmetic improvements including the replacement of worn furniture, fixtures and equipment, updating design elements to current standards and ensuring maximum comfort to potential users. To an extent, the ability to add more meeting space within the current footprint (extending up to the second floor) as well as addressing the other recommendations noted above will be a function of space availability (within Market Square) and the associated cost. Once Convention Wisdom determines reconfiguration options within Market Square, these recommendations should be re- evaluated with a cost - benefit analysis. DRAFT FOR DISCUSSION 29 WE Appendix A Saint John Trade and Convention Centre Facility Analysis January 2008 Canadian Associations that have held, or have booked future events in Atlantic Canada Canadian Associations Holding Events in Atlantic Canada Have Held Event w — Tai Q ' LL Future Event Booked � w — Tai Q —• Appraisal Institute of Canada 1 1 Association of Canada Land Surveyors 1 Association of Canadian Archivists 1 1 Canadian Association of Chain Drug Stores 1 Canadian Association of Chemical Distributors 1 1 Canadian Association of Chiefs of Police 1 Canadian Association of Emergency Physicians 1 1 Canadian Association of Exposition Management 1 Canadian Association of Family Enterprise 1 Canadian Association of Independent Living Centres 1 Canadian Association of Independent Schools 1 Canadian Association of Insolvency and Restructuring Professionals 1 1 1 Canadian Association of Interns & Residents 1 1 Canadian Association of Members of Public Utility Tribunals 1 Canadian Association of Mutual Insurance Companies 1 Canadian Association of Occupational Therapists 1 1 Canadian Association of Optometrists 1 1 Canadian Association of Police Boards 1 1 Canadian Association of University Teachers 1 1 Canadian Association on Gerontology 1 Canadian Bureau for International Education 1 Canadian Call Management Association 1 1 Canadian Cooperative Association 1 Canadian Council on Professional Engineers 1 Canadian Counseling Association 1 1 Canadian Dental Assistants Association 1 Canadian Education Association 1 Canadian Egg Marketing Agency 1 Canadian Farm Business Council 1 Canadian Federation of Nurses Union 1 Canadian Funeral Services Association 1 Canadian Health Information Management Association 1 Canadian Independent Adjusters Association 1 ICanadian institute for Steel Construction 1 Canadian Institute of Actuaries 1 Canadian Institute of Food Science Technology 1 Canadian Institute of Forestry 1 Canadian Institute of Planners 1 1 Canadian Institute of Plumbing &Heating 1 1 Canadian Labour Congress- Pride Gathering 1 Canadian Labour Congress- Women's Retreat Committee 1 1 Canadian Life & Health Association 1 Canadian Lun g Association 1 Canadian Manufacturers & Exports Association 1 1 1 Canadian Newspaper Association 1 Canadian Organization of Campus Activities 1 1 Canadian Organization of Medical Physicists 1 Canadian Orthopaedic Society 1 Canadian Parent for French 1 Canadian Parking Association 1 Canadian Payments Association 1 Canadian Payroll Association 1 Canadian Printing Industries Association 1 Canadian Property Tax Association 1 1 Canadian Public Relations Society 1 1 Canadian Real Estate Association 1 1 1 Canadian Research Knowledge Centre 1 Canadian Roofing Contractors Association 1 Canadian Society for Exercise Physiology 1 1 Canadian Society for Training & Development 1 1 Canadian Society of Diagnostic Medicine 1 1 Canadian Trucking Human Resources Council 1 Canadian Veterinary Medical Association 1 Canadian Water Network 1 Canadian Window and Door Manufacturers Association 1 Coaching Association of Canada 1 Construction Specifications Canada 1 Dairy Farmers of Canada 1 1 Denturist Association of Canada 1 1 Dieticians of Canada 1 1 1 Federation of Law Societies/Criminal Law Program 1 1 Insurance Brokers Association of Canada 1 Key Clubs of Canada 1 National Golf Owners Association 1 North American Packaging Association 1 Packaging Association of Canada 1 Pentecostal Assemblies of Canada 1 Ringette Canada 1 Royal College of Physicians & Surgeons of Canada - General Surgeon's AGM 1 Royal College of Physicians & Surgeons of Canada - Pathologists 1 Skate Canada 1 Thermal Insulation Industry Association of Canada 1 Trans Canada Telephone Employees Curling Association 1 Treasury Management Association of Canada 1 United Ostomy Association of Canada 1 1 7 8 20 6 4 16 121 1 7 4 11 1 0 2 16 Totals DRAFT FOR DISCUSSION 30 m m m m m 2 m m El to tQ VAI 0 LO 1� a) c 0 c d) 0 0 9 0 m m N (14 I 17 0 ll� Jell, Ili �jo tarot gohn Trade and Convention Centre THE ASSIGNMENT On Wednesday 9 November 2005, Richard Schmidt of Orlando -based Conventional Wisdom Corp. ( "CWC ") toured the Saint John Trade and Convention Centre and met with Mr. Vijay Kawatra, General Manager of the Hilton Saint John; Mr. Ted Asbridge, Trade and Convention Centre Manager; and Mr. Greg Yeomans, Comptroller for the City of Saint John. This report documents the opinions, findings and rec- ommendations based on our site visit. Our notations regarding functional relationships and comparisons for size are made relative to current facility programming standards developed by Conventional Wisdom over the past 10 years and suc- cessfully in use at more than 20 operating convention centres in Canada, the United States and Southeast Asia. OVERVIEW The convention centre is an integral element of the Market Square, a multilevel mixed -use development which includes restaurants, retail and office space and underground parking. The 22- year -old facility is con- nected to and operated by the 200 -room Hilton Saint John. 1 ,,. tarot gohn Trade and Convention Centre Recent additions to the regional inventory of public assembly buildings including the Harbour Station arena in Saint John and a new convention centre in Moncton have changed the competitive position of the Centre. Originally used as a multipurpose building, its mix of space and configuration seem better- suited to mid -sized conventions and association meetings, whereas ticketed consumer events, concerts and tradeshows have relocated to Harbour Station. TOURISM- RELATED INFRASTRUCTURE The City's history is tied to its deep water port which currently supports passenger cruise ships and industri- al uses for wood and paper products, petroleum and liquid natural gas. Airport capacity is adequate to a community of this size which is connected by regional jet service to Toronto, Montreal and Halifax. The airfield and termi- nal facilities could accommodate mid -size jets (737, A320, MD -80, etc.) if demand increases over time. There appears to be a significant business opportuni- ty to enhance eco- tourism related to the Bay of Fundy, boating, fishing and other outdoor activities, which would extend or encourage repeat visitor stays and its related economic influx to the community. �!v N C5aint gohn Trade and Convention Centre For example, discussions were held in the 1990s regarding the co- location of an IMAX theater with the New Brunswick Museum. With a film featuring the region's natural beauty, adding this element would be beneficial to Saint John's competitive position for mar- keting to convention and association business. GENERAL FINDINGS Interior design work to replace some lobby furni- ture and update the colors and finishes of the pre - function / crush space and Great Hall is nearly complete. Light sconces will be added or replaced, while new wallcoverings, paint and drapes provide a more unified color palette. 2. The prefunction / crush space is inadequate rela- tive to the amount of function area it serves. Events often utilize either the adjacent Montagu or Spencer meeting rooms for bar setups, seating groups or related purposes that would normally occur in prefunction space. By comparison, newer designs often feature daylighting using glass facades and views which can enhance the experi- ence of the destination. 3 C5aint gohn Trade and Convention Centre �!v 3. Meeting room architectural features and finishes are less than optimal. Hard sur- faces reflect sound and negatively affect speech intelligibility, ceiling heights are low relative to modern audiovisual pro- jection requirements, operable wall pan- els have incurred significant deterioration at edges, joints and seals that reduce sound isolation between divisions. ' "3 tarot gohn Trade and Convention Centre 4. The Great Hall interior finishes are of lesser qual- ity than befits a modern banquet hall. Ongoing lighting changes include replacing fixtures and new Lutron dimming controls, a significant improvement over existing conditions using a mix of incandescent, metal halide and high pressure sodium lamps. 5. A series of catwalks is utilized for rigging light trusses and dropping electrical power to the Great Hall floor for event use. Services are limited and the workspace is highly constrained, but there are no ready alternatives to the catwalks available. 6. 6. Loading areas and back of house circulation paths are shared with other tenants of Market Square, easily accessible by retail and museum staff, delivery personnel and others. This poses a significant security risk to certain types of events such as jewelry merchandising shows, political ral- lies and private corporate events. Conflicting mes- sages are common such as the marked exit door propped open with a No Admittance sign. 5 C5aint gohn Trade and Convention Centre 7. Back of house service, support and storage areas are inadequate and have minimal security. 8. Much of the operating equipment has effectively reached the end of its useful life and needs to be replaced. These items include classroom tables, folding and stacking chairs, portable staging and their respective transport and storage carts. 9. The audio system in the meeting spaces is sub- stantially outdated and should be replaced. New specifications should include replacing speakers, amplifiers and adding a digital signal processor. 10. Internet connectivity has rapidly become a staple of conventions, association meetings and tradeshows. Given the age and construction mate- rials used in the facility, consideration should be given to providing a wireless infrastructure to both the public circulation and function spaces. An IP- based wireless network would further provide the capability to use Voice Over IP telephony (VoIP) in lieu of temporary UTP cabling 6 �!v tarot gohn Trade and Convention Centre IDEAS FOR FURTHER CONSIDERATION Based on our initial assessment of the hotel and con- vention facilities and the surrounding area, Conventional Wisdom proposes three different con- cepts for consideration by the City and other interest- ed parties. The options are listed in order by increas- ing cost, and while no estimates can be developed without further study, the differential between each concept is potentially an order of magnitude. Option #1 - Refurbishment and Repair • Develop a Capital Plan that would fund replace- ment of the majority of the operating equipment. Depending on the available funding mechanism, this work could be completed in a single year or span up to three years if a prioritized list were developed. • Evaluate options for changing the divisibility of the Great Hall by determining if another wall track was anticipated by the original structural design. This would allow installation of a second track (changing room proportions) or additional track and panels (more divisions and greater flexibility). • Add a lighter - colored partial ceiling in the Great Hall in lieu of black- painted open structure. An open - grid -type of ceiling composed of acoustical clouds could be installed, with lighting and rigging access provided between the panels. • Replace the gypsum board ceiling in the Montagu meeting room with an acoustical tile and grid -type of ceiling while maximizing clear height to improve room acoustics and audiovisual presen- tation quality. 7 �!v tarot gohn Trade and Convention Centre Option #2 — Renovation, Reconstruction and /or Expansion • Substantially reduce or demolish the Montagu I and 11 meeting rooms. Reconfigure the space to increase prefunction / crush space, storage and add restrooms to improve distribution and accom- modate multiple concurrent events. • Evaluate procurement of the offices above the Montagu meeting rooms. Changing this space to meeting rooms would replace the reconfigured Montagu rooms (see previous item) with space having updated audiovisual features and technol- ogy but entails significant cost for escalators and structural modifications. • Evaluate the possibility of adding another floor to the existing structure and reconfiguring the public circulation, office and retail spaces. A key element of this change will be to improve operational secu- rity by separating the service, support and storage functions of the Trade and Convention Center from the retail and office tenants. R tarot gohn Trade and Convention Centre Option #3 - Abandon and Replacement • Abandon the existing Trade and Convention Centre and replace it with new conference and banquet space on land adjacent to the Harbour Station. Land use and development approvals must anticipate the building of a new hotel and parking structures proximate to or contiguous with the arena and convention space. Modify or con- vert a portion of the old T &CC for use by the Hilton and convert the remainder to new retail and /or office space, IMAX or cultural facilities. • Alternately, develop new convention facilities in conjunction with the proposed redevelopment options for the Coast Guard parcel adjacent to the Hilton. This site could possibly tie into the existing T &CC and would leverage the existing hotel inventory better than the Harbour Station site. However, it would be prudent to plan for future expansion of the convention space and the addi- tion of a third hotel within this redevelopment effort. Operational Considerations There are a number of marketing and operational opportunities for improving financial performance and economic impact that were beyond the scope of this facility evaluation. The City may choose to con- sider having a management consultant advise it on the viability of these and other courses of action: • Developing and managing events for - profit dur- ing slow convention periods • Improving regional marketing efforts to identify and target specific potential convention groups and better develop an identity based on the sur- rounding natural features and local lifestyles. 9 \ � {\ \�� y §§ ®3j \� §$\ > y y � \ \ � | .� ¥¥ (D :) £ 0. 0 ¥: { �. .. . .�� .. .�� . . cn 0 0 . C .� � �: �. m\ ^ `° �. . CD \ . .. C \? 2 § CD : > m ?% w§ m k \ 2� .� \: \ , \ < \ \ r �' r► d�ii � � .; � \\, �� � y 2� � \ ��. ` ,� </� %� /� � � \ �� � «\ � � ? { .�. ^\ \dye \ \" Allm \ 9 f� � { 9 i ,��J� /rvnic2F' �rii 1 t /s ✓,r,,L„ i�ilSlrr. rr�r� fv�s palm v ris ���ivr2fi�r�ior� trurrfvf tyGl�t. ad lit 7 I u i r: jg -A I � u � :.. Q . . Q ANA 2O «\ Q CL . . . .� ¥ (D : ©¥ % D § w ®' .y _ \ cr : . \ ^� LM 4� 2¥ co E rr "e y. sm m Q « . CO ?». ® 0 © . ` 2< ¥ L. . ,. .. k CL ©n \� ■�� � \ \ � ~ � 0 11! sr' ■"1r L,, w M • Wmft • r w r s li it s �r s 1 • �.... D r i Cr t CD r 13 CD o n N � s s CL 0 r r 111..... co 1 � 111 cwn CD u And cn �rrr w rr cD Cr t a CD i co . i ti w CL w #' • CL ■"1r L,, x111 r s w i • r • w +fir �r r N i • w M i • w r s li it s x111 r s w i • r • w +fir �r r N i • w • r it s �r WX QA QA • 6 w =.d rr • • • .............. • Mj E CD a) • • rs • 00010 • • ON* 00019 0 T- 0 U) 60, T- • • U) • Co • cn • n E U- E co • • 1- 0) > >N • C) CY) a) > • (D a-.- • 6 w =.d rr • • • .............. • Mj E CD a) • • rs • .. ¥... � .� � � ) ° # � 1 m c� Ja 0 \ / ! � » . .�� � « \ OR ' f \ � : c� Ja 0 \ / ! � » Saint.khn for the City of Saint John Council NOVEMBER 24, 2008 Saint John Waterfront Development Contents Section 1. Operations Budget .................................................. ..............................1 1.1 Executive Summary & Stated Assumptions ......... ..............................1 1.2 The Saint John Development Corporation (Combined) ......................3 1.3 Waterfront Development ....................................... ..............................4 1.4 Market Square Parking Garage ............................ ..............................5 Section 2. Capital Budget 2.1 Waterfront Development & Coast Guard Site ....... ..............................6 Appendix A. Confidential 2009 BUDGET Saint John Waterfront Development Confidential 2009 BUDGET Saint John Waterfront Development 2009 BUDGET Section 1. Operations Budget 1.1 Executive Summary, Stated Assumptions & Notes 2008 has been a year of transition and reconfirmation for Saint John Waterfront Development, with the arrival of a new General Manager and the fall 2008 Inner Harbour Land Use Plan review. Looking forward into 2009 there are no immediate changes to the corporate mandate, however over the course of the year the role of Saint John Waterfront Development in relation to advancing the development of the waterfront area and increasing its vibrancy will be reviewed. To this end Saint John Waterfront Development recognizes its ability to assist its partner's, most notably the City, in the many endeavors being made to continue the revitalization in the waterfront area and uptown core. More specifically, a key component of the 2009 task list is to complete an audit of the financial arrangements that govern the operation of Market Square. This audit will be carried out to assist Waterfront Development and the City in understanding the current financial calculations and obligations related to the operation of Market Square, see assumption #2 below. The following assumptions and note's provide further contextual background for the 2009 Operational Budget: • Assumption #1 - No significant changes in 2009 to the mandate of the organization. However a new General Manager has joined the team and is currently working with the Board to review priorities and directions for the future. • Assumption #2 — Included in the 2009 budget are expenses related to carry out a financial audit for Market Square ($50,000). • Assumption #3 — Coast Guard Site Project expenses are not covered in this budget. In the past these have been budgeted for by the City of Saint John. A recommendation with this budget should be provided for. These costs would include any and all soft costs including but not limited to; outside professional services for real- estate, designs, site testing and evaluation. • Assumption #4 — As a result of on -going planning and capital improvements slated for the boardwalk in 2009, new demands for improvements to the park space in the residential area will result in design initiatives intended to improve this public area ($25,000). • Assumption #5 — As the role of Waterfront Development continues to grow and advance, with both the participation in City related projects and also facilitating projects with other groups, the operational costs associated with providing leadership, coordination and technical support as a service will continue to increase. In an effort to account for the cost of increased activity, Waterfront Development has provided for unforeseen requests for assistance with the creation of $20,000 miscellaneous line item, see note 4 below. This will be closely monitored by the Board. Confidential Saint John Waterfront Development 2009 BUDGET • Note 1. As noted in the 2008 submission, the integration of The Saint John Waterfront Development Partnership and the Saint John Development Corporation into one operational unit "Saint John Waterfront Development" has resulted in changes to the 2009 budget and format. Specifically administration expenses have been combined and allocated to Waterfront. This replaces the practice of creating separate purchase orders /contracts for expenses. • Note 2. A recommendation made in 2008 for changes to the purchasing /expense approval process to have all expenses approved by the General Manager is still being implemented. • Note 3. Salary for General Manager is split between SJDC and Waterfront Development. • Note 4. Staffing levels to remain unchanged in 2009, however a proposed review of staffing levels in 2009 is recommended. As the Market Square Audit will be complete and it is anticipated this will include a detailed review of responsibilities for SJDC and the City. Additionally, work being completed under the Municipal Operations Review (Vision 2015) may change the requirements for SJDC. Examples include responsibilities for Trade and Convention Center, other Municipal Developments (a role in the Police and Justice Complex process, extended Coast Guard Mandate, possibility of discontinued parking management agreement at market square and consolidation with SJ Parking Commission, etc.). • Note 5. Increased emphasis and awareness will be made on the service and assistance Waterfront Development provides. This will be done through increased engagement with partner's and the public. Tools for engagement include public presentations, direct meetings and the creation of high quality report's and marketing material that promote the Saint John waterfront and Waterfront Development's role. Confidential 2 Saint John Waterfront Development 1.2 The Saint John Development Corporation (Combined) SAINT JOHN DEVELOPMENT CORPORATION (COMBINED OPERATIONS) STATEMENT OF OPERATIONS AS AT SEPTEMBER 30, 2008 YEAR END FORECAST & 2009 BUDGET PROPOSAL 2009 BUDGET Total Y.T.D. Y.T.D. Y.T.D. 2008 2008 2008 Operating Income Actual Budget Variance Budget Forecast Variance Revenues: - Waterfront Development /Partnership 120,000 120,000 (4,685) 160,000 160,000 3,000 City Grant 147,020 147,020 (35) 196,029 196,029 (900) Rental Income 41,250 41,250 305 55,000 55,000 (200) Administration Fees 19,331 19,422 (91) 25,900 25,900 - Investment Income 28,390 15,100 13,290 20,000 35,000 15,000 PNB Funding 23,205 25,000 (1,795) 50,000 50,000 - Grants, ACOA Funding (50) - (50) - (50) (50) Total 379,146 367,792 11,354 506,929 521,879 14,950 Operating Expenses: - - - - - - Waterfront Development 245,068 241,314 3,754 288,975 343,818 (54,843) Salary& Benefits 71,947 74,512 (2,565) 98,092 98,092 32,300 Other Services/Training 1,161 2,250 (1,089) 3,000 7,000 (4,000) Total 318,176 318,076 100 390,067 448,910 58,843 Administration Expenses: to Waterfront Development which will be expensed from SJDC investments. Office Lease 19,898 15,480 4,418 20,644 28,000 (7,356) Audit Services 7,415 7,600 (185) 7,600 7,415 185 Office Electricity /Cleaning 453 1,763 (1,310) 2,350 500 1,850 Office Equip /computers 6,205 4,500 1,705 6,000 6,000 - Directors Expenses 1,912 2,160 (248) 2,880 2,880 Business Affairs/Travel 7,315 1,875 5,440 2,500 7,500 (5,000) Office Supplies /Misc 2,615 1,125 1,490 1,500 4,500 (3,000) Bank Fees 1,006 1,125 (119) 1,500 1,450 50 Telephone 2,765 3,750 (985) 5,000 3,600 1,400 Postage & Courier 973 450 523 600 700 (100) Waterfront Admin Allocation (26 749) (18 028) (8 721) (24 037) (35 000) 10 963 Total 23,808 21,800 2,008 26,537 27,545 (1,008) Operating Income 37,162 27,916 9,246 90,325 45,424 (44,901) Other Expenses: - Legal Services 2,815 7,500 (4,685) 10,000 7,000 3,000 Insurance 38,965 39,000 (35) 39,000 39,900 (900) Cathodic Protect. Electric 1,280 975 305 1,300 1,500 (200) Cathodic Protect. Inspection 2,064 9,750 (7,686) 13,000 15,000 (2,000) S.S.P. Wall Maintenance - - - 90,000 82,000 8,000 Residential Park 3,247 3,000 247 4,000 3,500 500 Boardwalk /Floating Wharf 8,210 27,750 (19,540) 37,000 13,500 23,500 Snow Removal 1,800 1,500 300 2,000 1,600 400 Market Square Public Leases Audit - - - - - - Special Projects - - - - - Total 58,381 89,475 (31,094) 196,300 164,000 32,300 Surplus (Deficit) (21,219) (61,559) 40,340 (105,975) (118,576) (12,601) Note 1: The 2008 Forecast is comprised of 9 months of actual results and 3 months of forecast results. Note 2: The 2009 Budget Deficit forecast of( $93,524) is comprised of a $25,000 SJDC contribution to Waterfront Development which will be expensed from SJDC investments. Also, $68,078 of unused Waterfront Funding forcasted to carry over. Confidential 3 Saint John Waterfront Development 2009 BUDGET 1.3 Waterfront Development SAINT JOHN WATERFRONT PARTNERSHIP STATEMENT OF OPERATIONS AS AT SEPTEMBER 30, 2008 YEAR END FORECAST & 2009 BUDGET PROPOSAL Y.T.D. Y.T.D. Y.T.D. Forecast 2008 Forecast Actual Budqet Variance Year End Budqet Variance REVENUE: WD Partner Contribution 120,000 120,000 0 160,000 160,000 0 SJDC Contribution 18,000 18,000 0 25,000 25,000 0 WD Carry Forward 58,500 40,500 18,000 53,975 53,975 0 WD ACOA FUNDING (249) 0 (249) (249) 0 249 WD PNB 23,205 25,000 (1,795) 50,000 50,000 0 City of Saint John - Deferred Revenue 123,170 123,170 0 123,170 123,170 0 TOTAL REVENUE 342.626 326.670 15.956 411.896 412.145 249 EXPENSES: WD Salaries 54,362 58,493 (4,131) 72,483 77,990 5,507 WD Benefits 8,706 7,938 768 11,608 10,584 (1,024) WD Admin (SJDC Allocation) 26,109 18,028 8,081 34,812 24,037 (10,775) WD Communications \Notices 1,974 6,750 (4,776) 2,632 9,000 6,368 Promotions & Marketing 4,987 20,250 (15,263) 6,649 27,000 20,351 Research /Analysis/ Studies 0 8,148 0 20,000 10,864 0 WD Web Site Maintenance 0 2,625 (2,625) 0 3,500 3,500 WD Business Dev Activity 130,182 7,500 122,682 133,182 10,000 (123,182) Computers & Software 591 0 591 788 0 (788) WD Site Visits \Conferences 0 4,875 (4,875) 5,000 6,500 1,500 WD Design \Plan Fees 11,494 22,500 (11,006) 50,000 30,000 (20,000) Strategid Land Use Planning 0 0 0 0 70,000 0 Coast Guard 2,939 0 2,939 2,939 0 (2,939) Harbour Passage Opening 3,725 7,125 (3,400) 3,725 9,500 5,775 TOTAL EXPENSES 245,069 164,231 88,986 343,818 288,975 (115,707) PROFIT (LOSS) Surplus (Deficit) 97,557 162,439 (73,030) 68,078 123,170 115,956 Note: City of Saint John provided funding for Harbour Passage resurfacing received in December 2007and expensed in July 2008. Confidential 4 Saint John Waterfront Development 1.4 Market Square Parking Garage 2009 BUDGET Confidential 5 The Market Square Parking Garage 2009 Operatiing Budget 2007 2008 2008 2008 2008 2009 Actual Budget YTD Actual Forcast Variance Budget Revenues: Hourly Parking 597,641 650,000 424,380 636,570 (13,430) 658,850 Monthly Parking 220,351 348,400 241,814 360,000 11,600 380,000 Hotel Parking 327,324 225,000 142,631 215,000 (10,000) 216,060 Event Parking 36,838 35,000 21,313 32,000 (3,000) 3,000' Hotel Sub Lease Rent 40,000 40,000 26,666 40,000 - 40,080 Advertising 1,326 - 1,326 2,000 2,000 � 0 1,223,480 1,298,400 858,130 1,285,570 (12,830) 1,331,856 Expenses SalariesMages 181,476 183,300 125,035 187,500 (4,200) 199,400 Administration Fees - SJDC 24,443 25,968 17,163 25,711 257 26,637 Management Fees 15,500 15,545 10,363 15,545 - 15,546 Audit Services 3,345 3,500 3,457 3,457 44 3;600 Insurance 6,420 6,500 4,333 6,500 - 6,700 Telephone /Radios 2,624 2,600 1,718 3,200 (600) 2,600 Accounting 1,800 1,800 1,200 1,800 - 1,800 Bank Charges 1,800 1,800 1,200 1,800 - 1,800 Data Processing 1,500 1,500 1,000 1,500 - 1;500 Shop Supplies 1,152 1,500 847 1,200 300 1,500 Office Supplies 475 1,000 127 900 100 1,060 Tickets 3,585 3,000 325 500 2,500 4,000 Postage & Courier 830 1,000 692 1,000 - 1,060 Cleaning 660 2,000 220 1,000 1,000 1,060' Miscellaneous /Advertising - 1,000 - - 1,000 1,000 Snow Removal 13 500 37 100 400 500 Uniforms 115 200 - - 200 1,©00 Damage Claims Deductible - 500 - - 500 506 Signage 21 1,000 55 510 490 1,000' HST 3,422 3,156 2,231 3,342 (186) 3,156 Total Variable Expenses 249,180 257,369 170,004 255,565 1,805 275,2$ Total Contribution Margin 974,299 1,041,031 688,127 1,030,006 (11,026) 1;056,612 Camera /Monitors - - - - - 1,000 Maintenance -CO System 3,080 3,500 - 3,200 300 3,500 Maintenance - Equipment 330 2,000 1,079 1,700 300 2,060 Maintenance -Doors 1,176 1,500 96 1,000 500 1;500' Maintenance - Electric 1,110 1,000 - - 1,000 1,000 Maintenance -Other 2,212 4,500 1,514 2,500 2,000 4,560 Maintenance - Sweeper 1,026 1,500 1,513 2,500 (1,000) 1,500' Lighting Improvements 1,870 2,000 - 1,500 500 2,660 Painting /Paving 2,440 2,500 - 2,600 (100) 2,600 13,245 18,500 4,203 15,000 3,500 19,600 Surplus(Deficit) 961,055 1,022,531 683,924 1,015,006 (7,526) 1,037,012, Note 1: The 2008 Forecast is comprised of 8 months of actual results and 4 months of forecast results. Confidential 5 Saint John Waterfront Development Section 2. Capital Budget* 2.1 Waterfront Development Improvements surrounding Market Square Boardwalk $ 600,000 Pugsley Park (A) & Broad St. Park $ 715,000 Reversing Falls Phase I & II $1,500,000 Marco Polo $ 150,000 Total $2,965,000 Coast Guard Site Consultants & Reports $ 400,000 Site acquisition $2,800,000 Sea Wall Repairs $3,400,000 Capital Budget Request Grand Total $9,565,000 2009 BUDGET Saint John Waterfront Development continues to seek out partnerships to help meet the capital goals related to the Inner Harbour Land Use Plan and to date has raised $4 million from the Federal & Provincial Government's and $1.4 million from the Private Sector. The spirit of partnership will ensure that the Saint John waterfront continues to grow. * see Appendix A for a 4 year Capital Budget forecast Confidential 6 Saint John Waterfront Development 2009 BUDGET Confidential Previously Forecasted Carry -over for 2009 TotalRequest from 2008* Budget for 2009 2010** 2011** 2012* Water Street Saint AndiEws Park Three Sisters Park Broad Street 361,435 361,435 Puaslev Park (A) 354,000 354,000', Pugslev Park (B) 1,156,279 1,156,279 $361,435 $1,510,279 -$7X5 !g5 1,156,279 Reversing Falls West Designs, Studies & Reports Phase I 750,000 750;000 Phase II - Lower Falls 750,000 750,000� Phase III - Lower Falls 2400,000 Falls View Park 1,800,000 River View Drive 900,000 900,000 $750,000 S750,00)1 $1,500,000 $4,200,000 5900,000 5900,000 Boardwalk - Hilton -York Point 600,000rG11t1 ti Coast Guard Site Consulting Fees 400,000 400,000 Land Acquisition 2,800,000 2,800,000, Seawall Repairs 3,400,000 3,4410,000 1,800,000 Harbour Passage 1,200,000 1,200,000 $3,200,000 S3,400,00)j $6,600,0001 1 $1,200,000 SI,200,000 SI,800,000 Lovalist Plaza 1,800,000 600,000 Small Craft South Market Slip 360,000 Marco PoloProiect 150,000 $150,000 Harbour Passage Lower Cove Loop 1,200,000 Partridge Island 2,400,000 �l\rt unil al,lt ursts $0,50 435 8 356,279 5,100,000 4,260,000 Projects in design phase; consulting phase "" These capital projects will involve partnership funding Confidential