T r a d e F a i r C e n t r e s

Transcription

1 APPENDIX 1.3 T r a d e F a i r C e n t r e s

2 Trade Fair Centres Overview 168 Highlights Average area of trade fair centres built in 2003: 50,000 m² Financial arrangements for construction: major participation by governments Managers: companies managing convention centres and tourism promotion agencies Healthy sector on the international scene General description of projects CUnlike stadiums or theatres, trade fair centres are immense spaces with modifiable configurations that can easily be adapted to the needs of different clients. This versatility requires a large building. The industry standards are as follows: average exhibition area: 50,000 m² site area: 230,000 m² overhead clearance: 12 metres number of doors and access ramps: 40, for a 50,000 m² centre minimum inter-column spacing: 18 metres divisible exhibition halls soundproof rooms with internal environment control highly sophisticated lighting, soundproofing and air conditioning sufficient high-quality meeting rooms to host banquets and audiovisual presentations sufficient high-quality food services efficient ticket counter service sufficient washrooms Source : Tourisme Montréal, Trade fair centres: types of events In North America, the most active sectors when it comes to trade fairs are: medicine and health care design and interior decoration computers recreational sports products clothing education giftware Trade fair centres host events much larger than those held in other large-capacity buildings. On average, a trade fair moves into the centre for about ten days, but half that time is used for setting up and taking down. By comparison, a mega-concert can easily move into a venue and produce a show in less than 24 hours. Even though certain trade fair centres offer reduced rates during the days spent assembling and dismantling exhibits, the general practice in the industry is to bill customers for the entire period that the space is occupied. By and large, trade fair centres are not in use 12 months a year. The most popular months are February, March, April, September, October and November. Summer and the holidays are slow periods for organizing trade fairs The trade fair industry takes different forms. Each one endeavours to design the most attractive formula possible, given the target market: consumer fair: aimed more at a local and regional clientele, with products and services displayed in the form of a huge exhibition; specialized fair: targets a clientele made up mostly of industry and professional businesspeople, both local and international; mixed fair: strives to draw as many visitors as possible with an industrial/ professional dimension and a "general public"-type approach. The disadvantage of this formula is that it is open to too many people, and complicates business relations and transactions; an exhibition combined with a convention or symposium: less attractive for trade fair centres since it is not a regular event, but simply piggybacks on the related convention or symposium. Innovative Urban Redevelopment Projects

3 Implementation Initiating the project Analysis shows that it is the creators and entrepreneurs in a given sector, i.e. the managers of convention centres, who are the main driving force behind the construction of trade fair centres. In some cases, entrepreneurs join forces to inject new energy into their sectors and attempt to gain international visibility, since they cannot obtain an international profile solely through local and regional exhibitions. Since the success of a trade fair centre is not based on a single event, other regional players also join in, including tourism promotion organizations and governments. In other cases, it is convention centres that suggest that a trade fair centre be built. They are close to exhibitors familiar with local trends, and can easily determine whether demand justifies such a facility. Ownership Whereas trade fair centres in Europe and Asia are privately owned, the tendency in North America is to combine them with convention centres. Developers, who are also the owners of existing convention centres, are trying to meet new demand by their clientele. Trade fair centres require substantial government assistance, given the high capital costs involved, and municipal governments have every interest in finding private investors, so that they can collect property taxes- considerable amounts, given the large size of such centres. Public property, after all, is not subject to property tax. More rarely, an association of companies will own the trade fair centre and use it mainly to promote their own products. This ownership formula, with revenues from leasing the centre for other kinds of exhibitions, makes it possible to better promote their own niche. Managing the trade fair centre Revenue from leasing space in the centre is $0.02/m² (20 cents/ft²) on average. Trade fair centres can also earn revenue from different concessions and other paid services offered to their clients (restaurants, bars, exhibitor services: electricity, assembly, handling). According to a 2003 study by Tourisme Montréal, based on the case of the Quebec City trade fair centre, the Olympic Stadium and Montréal's Palais des congrès convention centre, this kind of additional revenue amounts to nearly 80% of leasing revenue. Benefits: some indicators The table below gives a few indicators, which vary depending on the kind of event. 169 Financing The financing package depends on the type of property involved. The huge price tag of a trade fair centre means that governments have to play an active part in arranging financing. In the United States, almost the entire amount is raised through state or municipal bonds. Closer to home, Toronto's National Trade Centre was built with the help of the National Infrastructure Program (Tourisme Montréal 2003). When the developer is a convention centre, the amounts necessary are drawn from profits from previous events. Choosing a site Easily accessible (public transit and road network) Extensive parking available Accommodation nearby; ideally a hotel on the site Much thought has to go into the location of such a centre, given the huge surface area required. In urban settings, the establishment of a trade fair centre is often used as a redevelopment tool for industrial brownfields located on the edge of downtown. Source : Petersen (2001). Appendix 1

4 Trade Fair Centres Overview A major trade fair centre for Montréal- Recommendations by Tourisme Montréal A 2003 study by Tourisme Montréal analyzed Montréal's real needs and reached the following conclusions: short-term needs: minimum 37,000 m² medium-term needs (10 years): minimum 50,000 m² so as to be at the international average long-term needs: minimum 75,000 m² so as to be among the top North American trade fair destinations. Georgia World Congress Center United States Indoor exhibition area: m The location criteria and technical requirements for building a trade fair centre in Montréal are as follows: located near downtown attractive urban environment and landscaping site served by a large-capacity transit system sufficient hotel rooms available nearby (ideally on site) site that fits in with city tourist attractions capacity for over 3,000 parking spots on the site or nearby simple road and highway access Possibility of future expansion. Georgia World Congress Center/ References Patersen, David C. Developing Sports, Convention and Performing Arts Centers. Washington, USA: Urban Land Institute, rd edition. 268 pages. Tourisme Montréal. Étude sur l'état de la situation des centres de foires dans la région métropolitaine de Montréal: Rapport final. Montréal, pages. Available on the Web: Georgia World Congress Center/ Georgia World Congress Center/ Georgia World Congress Center/ Georgia World Congress Center/ Innovative Urban Redevelopment Projects

5 Leipziger Messe Germany Indoor exhibition area: m Leipziger Messe/ Leipziger Messe/ Leipziger Messe/ Tokyo Big Sight Japan Indoor exhibition area: m 2 Michael Greenhalgh/ Michael Greenhalgh/ Appendix 1

6 Trade Fair Centres Overview Poliforum León Convention and Exhibition Center Mexico Indoor exhibition area: m Poliforum León Convention and Exhibition Center Poliforum León Convention and Exhibition Center Poliforum León Convention and Exhibition Center Tokyo Big Sight Japan Indoor exhibition area: m 2 Hong Kong Convention and Exhibition Centre/ NWS Holdings Limited/ NWS Holdings Limited/ Hong Kong Convention and Exhibition Centre/ Innovative Urban Redevelopment Projects

7 Messe Frankfurt Germany Melbourne Exhibition and Convention Centre Australia Indoor exhibition area: m 2 Indoor exhibition area: m Messe Frankfurt GmbH/ Messe Frankfurt GmbH/ Melbourne Convention and Exhibition Trust 2000/ Denton Corker Marshall Group/ Messe Frankfurt GmbH/ Messe Frankfurt GmbH/ Messe Frankfurt GmbH/ Messe Frankfurt GmbH/ Melbourne Convention and Exhibition Trust 2000/ Melbourne Convention and Exhibition Trust 2000/ Appendix 1

8 Trade Fair Centres Case Study Boston Convention and Exhibition Center (BCEC) Boston Artist's impression of the BCEC. Area: 172,200 m², including 55,700 m² exhibition surface (on a 25-ha site) Completion: Estimated cost: Design: Development: US$800 million Rafael Viñoly (architects), HNTB (engineers) State of Massachusetts, City of Boston Context In the late 1970s, studies commissioned by the City of Boston indicated that if the city was to remain competitive on the national and international markets, it would have to quickly increase the conference and exhibition space it had to offer. At the time, the obvious solution was to expand the John B. Hynes Auditorium (today the John B. Hynes Veterans' Memorial Convention Center), a building located in the historic Back Bay neighbourhood, near prestigious hotels, restaurants and stores. In 1982, the State created the Massachusetts Convention Center Authority (MCCA) and assigned it ownership and management of the new convention centre as well as responsibility for planning its redevelopment (in collaboration with the Boston Redevelopment Agency, a municipal body). The renovation and expansion work on the Hynes Auditorium lasted two years ( ) and cost US$234 million. The 51,100-m² complex sits on a 2.2-ha site and offers 17,900 m² of exhibition space. The John B. Hynes Veteran's Memorial Convention Center had an excellent location, in terms of both services and transportation, which greatly contributed to its phenomenal success. On the other hand, the fact that it was inserted in a densely built-up area forced its designers to limit the size of exhibition spaces and arrange them on two levels, thereby reducing the building's potential. Since the early 1990s, studies have shown that the Hynes Convention Center is no longer able to keep Boston competitive on the North American market for large conventions and trade fairs, since such events call for over 8,600 m² of contiguous exhibition space. The BCEC is in the middle of the Seaport District, shown in this map. MCCA- Massachusetts Convention Center Authority To avoid losing market share to New York, Atlanta, Chicago, San Francisco and other cities, the Commonwealth of Massachusetts adopted legislation allowing Boston to proceed with the financing and construction of a new convention and exhibition centre, in This bill, known as Chapter 152, authorized the Massachusetts Convention Center Authority (MCCA) to create a 12.5-ha buffer zone around the future BCEC, gave the Boston Redevelopment Agency the right to expropriate the land required for public purposes and established financing provisions for the project (see the Implementation section). It was decided to locate the project on the South Boston Waterfront, an industrial and port brownfields area where a number of renewal projects are now in progress as part of the Central Artery/Tunnel project (the Big Dig). Project description The BCEC, with a total area of 172,200 m², is the largest convention centre in northeastern North America. It occupies two-thirds of a 25-ha site (the vacant third is reserved for future expansion of the complex) and offers 55,700 m² of contiguous exhibition space, 86 meeting rooms, a 3,800-m² ballroom, a 1,200-room hotel and 1,000 parking spots. The centre is located near the waterfront and Fort Point Channel, just ten minutes on foot from Boston's business district and six minutes by car from Logan Airport (through the all-new Ted Williams tunnel). It is served by a metro station (T System), and is also located near the express train line linking Washington, Philadelphia, New York and Boston. Finally, Boston is bucking the North American trend of combining the roles of a trade fair centre and convention centre, by dividing up the two markets. The BCEC specifically targets the large trade fair market, while the Hynes Convention Centre continues to host smaller-scale events, such as professional congresses and symposia. Innovative Urban Redevelopment Projects

9 Implementation The project, estimated at close to US$800 million, is being financed jointly by the City of Boston and the State of Massachusetts. The municipality's contribution, estimated at nearly US$200 million, corresponds to the cost of acquiring the land and of demolition, while the State is covering all construction costs, of about US$600 million. Since the economic spin-off from trade fair centres is essentially indirect, governments are usually the main, if not the only, financial backers for such projects. For the BCEC, Chapter 152 nevertheless authorizes the City and the State to reduce their investment by levying taxes on the main beneficiaries of the project, i.e. Boston hotels, restaurants, car rental agencies and store owners. Consequently, the financing sources for the BCEC include: 1 all revenues from taxes levied on meals and beverages in establishments located near the BCC, within the Convention Center Financial District (CCFD), a 2.75% surtax on hotel rooms in the region (Boston, Cambridge, Springfield and Worcester), a 5% surtax applicable to tourist sites, cruises and guided tours, Artist's impression of the new trade fair centre. Follow-up The economic spin-off from the BCEC, estimated at US$765 million/year, can be broken down into four main categories, as follows. Tourism spin-off Revenues attributable to the many visitors from outside the city (convention-goers and exhibitors) who will be renting cars, taking taxis and spending in local restaurants, hotels and stores; spin-off is estimated at US$271.4 million for Boston and US$436.2 million for the Commonwealth as a whole. Employment Direct jobs (BCEC construction, management and maintenance) and indirect jobs (hotels, restaurants, stores) created by the project. It is expected that the BCEC will require 162 regular and 585 subcontract employees (parking, maintenance, cafeteria, etc.). In addition, the new demand created by the project should contribute to creating 2,800 jobs in the hotel sector and 2,700 jobs in the food services sector. Urban redevelopment The project's contribution to the renewal of the South Boston Waterfront. Like other projects in progress (construction of a new metro line, underground highway between the South Boston Waterfront and Logan Airport, etc.), the BCEC will attract new hotels, offices, restaurants, stores and public spaces to the area. Tax benefits Additional tax revenues will be raised thanks to the greater number of hotel rooms, higher retail sales, more restaurant customers, new jobs created and all the projects as part of the renewal of the South Boston Waterfront. 175 an additional charge of $2/day on certain parking lots in the CCFD and an additional charge of $10 on car rentals in Boston. Artist's concept of the main exhibition hall. References Evans, M. Ian. The Boston Convention and Exhibition Center. The Convention Center as Catalyst for Investment and Development on the South Boston Waterfront. Study submitted to the John W. McCormack Institute of Public Affairs, University of Massachusetts at Boston, May Petersen, David C. Developing Sports, Convention and Performing Arts Centers. Urban Land Institute. 3rd edition, 2001, p site of the Massachusetts Convention Centre Authority Notes 1. Ian M. Evans. The Boston Convention and Exhibition Center, Op. cit. Appendix 1

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