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Last week's announcement that USA Niagara has assigned a consultant to the task of identifying possible replacements for the Niagara Falls Convention and Civic Center met with guarded optimism from a hotel industry reeling from falling occupancy rates and increasing tax assessments.
The move by USA Niagara -- the state agency charged with rebuilding the city's moribund downtown -- and the Niagara Falls Convention and Visitors Bureau to pay Hunter Interests $36,000 to seek alternate venues for incoming groups also spurred one common question.
What took so long?
The future of the 28-year-old facility has been in question since last June, when New York Gov. George Pataki announced a memorandum of understanding with the Seneca Nation to build a casino in Niagara Falls. The tentative plan called for siting a temporary casino in the Convention Center while a permanent structure was built next door, replacing the remains of the defunct Splash Park.
| "The sooner the better, whoever will do it. We need something, and I don't think there's a lot of discovering to do." -- Phil Villella, hotelier |
"They should have been thinking about this on Day One," said one source involved with the hospitality industry. "What were they doing for eight months? There isn't a bigger economic issue in this city, and it's only going to get worse for the industry before it gets better."
Meeting planners, already concerned about the future availability of the Convention Center, were further irritated by a lack of response from City Hall. The city leases the building, which is operated by Niagara Falls Redevelopment in partnership with Aramark Venue Management, from the state.
"Five months have now passed since the initial announcement by Governor Pataki and we still cannot seem to obtain a definite commitment as to space availability at the Convention Center," planner Melody Thompson of the Philadelphia Church of God wrote in a Nov. 29, 2001 letter to Mayor Irene Elia. "The (Convention and Visitors Bureau) and Convention Center staff say they would like to guarantee Convention Center availability to our group; however, they cannot do so at this time because the decision as to what happens ... is out of their control."
Stan Rydelek, president of the Convention and Visitors Bureau, blamed the delay on snags in negotiating a final compact with the Seneca Nation.
"I think that when the announcement was made, the intent was that things would go through a lot quicker than they did," Rydelek said. "We got to a point where, casino or no casino, we have to make some bold moves forward."
For local hoteliers, that point has been too long coming. The winter season always represents a relatively slow period for the lodging industry, but with travel generally down since the Sept. 11 terrorist attacks and the city's biggest offseason draw hanging in limbo, business during the winter of 2001-02 has been downright glacial.
Unable to secure definite answers on the Convention Center's availability, some major meeting planners, like those for the national Lions Club, took events elsewhere. Others, like the Philadelphia Church of God, had to slice their attendance in half to squeeze into available space at the soon-to-be Quality Inn on Niagara Falls Boulevard. In all, Convention Center management and the CVB estimate a loss of $8-9 million due to the uncertainty.
"The sooner the better, whoever will do it," said Phil Villella of Howard Johnson's on Niagara Falls Boulevard. "We need something, and I don't think there's a lot of discovering to do."
Villella said he and other hoteliers believe the obvious choice for increased convention and trade show space sits along Buffalo Avenue, in the shuttered Nabisco warehouse.
"Nabisco is the one we've all been looking at," Villella said of the vacant 175,000-square-foot facility. "It's right at the entrance to the city and it's close enough to downtown and everything else."
NFR executive vice president Roger Trevino confirmed that the corporation expects to close its purchase of the Nabisco property on July 1, pending equipment removal and final decommission of the factory.
"We purchased Nabisco because we feel it is the gateway into Niagara Falls," Trevino said. "Our original intent and discussions have been with other types of entertainment, retail and hospitality users. While we acknowledge the tourism industry's needs, we haven't made a decision as to usage."
Hoteliers and tourism officials agreed that more space with more modern technological infrastructure is needed to attract the most lucrative gatherings.
While USA Niagara officials urged patience in announcing the study, which they said would take up to three months, any further delays in creating the needed space intensify the long-term impact. Major conventions book a year or two in advance, which could mean even harder times for the tourism industry during coming winters.
"My take on the whole thing is that it just appears there are a lot of studies that have already taken place (regarding downtown Niagara Falls)," said Mark Lepine, area managing director for Lodgian, which owns the Holiday Inn Select and Sheraton Four Points in Niagara Falls, as well as the Holiday Inn Grand Island. "We've been kind of in limbo for an extended period of time. Big conventions book years out and right now, we don't have much negotiating power when it comes to competing with other cities."
The city's recent tax assessments tightened the screws on the already struggling lodging industry. Despite occupancy rates plummeting from their usual 40 percent to near single digits in some cases, City Hall (which loudly trumpeted a zero tax-rate increase last fall) informed most hoteliers that their properties had somehow appreciated in value.
"We get no service whatsoever," said Villella, who said his assessment shot up by one-third. "What do we get? We have our own dumpsters and for anything else we pay. My sidewalk looks like hell, and I've been complaining for years.
"This is a time where we need some help, like the hotels in New York City. Instead, we get more penalized by higher taxes."
"Our revenues are going down, yet our tax assessment went up," echoed Lepine. "That makes absolutely no sense."
The city could also help by securing performance bonds, which several groups have requested to protect their initial investment should the Convention Center become unavailable.
"I think the majority of vendors are looking to come into the Convention Center but are looking for some kind of performance bond," Lepine said. "We need some support in making those things happen."
Rydelek said the CVB, whose funding comes from bed taxes generated by area hotels and motels, is doing what it can to help until the Convention Center issue is resolved.
"We are working on trying to increase the number of smaller conventions to fill in (for the big ones)," Rydelek said. "And we're trying to get as speedy a resolution as possible on a timeline for getting into a building."
For their part, the Hotel and Motel Association underwent a restructuring last week and chose Lepine as the organization's new president.
"We need to be unified and we are unified," Lepine said.
Another vexing question for hoteliers, who have a combined stake of well over $100 million in the city (even before the increased assessments) -- can they survive the loss of business caused by a delay that could wind up being nearly a full year by the time a final decision is made?
"It will be tough for the small ones and the big ones as well," Villella said. "We have to book every convention we can. They have to decide what they're going to do and act on it."
| Niagara Falls Reporter | www.niagarafallsreporter.com | March 19 2002 |