IMC PROPOSAL FOR A PUBLIC/PRIVATE PARTNERSHIP FOR A DOWNTOWN LAS VEGAS EXPO CENTER International Market Center January 22, 2018
Our Goal is to create a Downtown Las Vegas Exposition Campus for all.
Contents .......................................
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1.0 Executive Summary
2.0 Project Overview
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3.0 Proposed Project
4.0 Project Finances
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5.0 Supplemental .......................................
Downtown Expostion Campus + World Market Center’s Permanent Showroom Facilities for the Home Furnishing Markets IMC CLV Contents
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EXECUTIVE SUMMARY 1.0
I N T E R N AT I O N A L MARKET CENTERS
Executive Summary
3
Overview of IMC Markets Overview of IMC
Markets
World’s largest owner/operator of premier, permanent World’s largest owner/operator of premier, showroom space for the• furniture, home décor and gift permanent showroom space for the furniture, permanent World’s largest owner/operator of premier, industries
Markets
home décor and giftfor industries. showroom space the furniture, home décor and gift
industries Owns and operates over 12.2 million square feet of world• Owns and operates over 12.2 million square feet class exhibition space in High Point, NC and Las Owns and operates overspace 12.2Vegas of world-class exhibition inmillion High square Point, feet of worldclass exhibition space in High Point, NC and Las Vegas serving the East and WestNC coast customers and Las Vegas serving East and West coast serving the East and West coast customers
− Each location hosts twocustomers. each year, − Markets Each location hosts two which Marketsare each year, which are • Each location hosts two Markets each year, which events Super Bowl-sized, must-attend industry events Super Bowl-sized, must-attend industry are Super Bowl-sized, must-attend industry − has Las Vegas Campus also has an center open-daily design center − Las Vegas Campus alsoevents. an open-daily design and hosts events throughout the year and hosts events throughout the year
• Las Vegas Campus also has an open-daily design center & hosts other events throughout the year.
IMC OVERVIEW
Las Vegas and High Point
Las Vegas and High Point Las Vegas Campus: 5.4mm SF (3 buildings)
High Point Transportation Hub
Las Vegas
Las Vegas Campus: 5.4mm SF (3 buildings)
Las Vegas
1.1
High Point Campus: 6.8mm SF (15 buildings)
High Point Campus: 6.8mm SF (15 buildings) High Point,
High Point, NC
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High Point Transportation Hub NC
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5
3
4
4
10 7
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10 8 79
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11 12
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1/5/2018
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I N T E R N AT I O N A L MARKET CENTERS
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The Heart of the High Point Market
1. International Home Furnishings Center 2. Showplace 3. Plaza Suites 4. Furniture Plaza 5. National Furniture Mart 6. Commerce & Design 7. Historic Market Square
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8. Market Square Suites 9. Market Square Tower 10. South Main 11. Hamilton Market 12. Hamilton 200 13. Hamilton 320 14. Hamilton 330
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The Heart of the High Point Market
1. International Home Furnishings Center 8. Market Square Suites 2. Showplace 9. Market Square Tower 3. Plaza Suites 10. South Main Executive Summary 4 4. Furniture Plaza 11. Hamilton Market 5. National Furniture Mart 12. Hamilton 200 6. Commerce & Design 13. Hamilton 320 7. Historic Market Square 14. Hamilton 330
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IMC Hosts Two Markets Per Year Our Markets and Properties at each of the High Point, North Carolina and Las Vegas Campuses
IMC hosts two Markets per year at each of the High Point, NC and Las Vegas Campuses
High Point, NC
Las Vegas
15 Buildings
3 Buildings / 3 Pavilions / Garage
Gross / Rentable Square Feet (mm)
6.7 / 5.4
5.4 / 4.8
# of Perm. Tenants
514
626
April & October
January & July/August
# of Attendees
75,000
45,000
# of Buyers
23,000
23,000
Public Funding
$6.5MM
$0
Industry Focus
Furniture & Home Décor
Furniture, Home Décor & Gifts
# of Buildings
OUR MARKETS & PROPERTIES 1.2
I N T E R N AT I O N A L MARKET CENTERS
Event Dates
Selected Properties
1/5/2018
Executive Summary
3
5
Temporary Exhibitors @ Market
OUR MARKETS & PROPERTIES 1.3
I N T E R N AT I O N A L MARKET CENTERS
• Today, IMC utilizes our Pavilions to host our temporary exhibitors. • These temporary exhibitors are considered the “what’s new” in the industry and are a major draw to the Market. • Temporaries include new companies (who one day will grow into large, established brands), companies selling one of a kind items (big draw for Market), and companies testing Market to see if it is a good fit for their business (often converting to permanent showrooms). • You simply cannot have a “Market” without a strong & robust temporary exhibitor destination.
Executive Summary
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PROJECT OVERVIEW 2.0
I N T E R N AT I O N A L MARKET CENTERS
Project Overview
7
IMC operates three Pavilions for Tradeshows & Special Events. These Tradeshows are profitable & CRITICAL to the success of IMC because they drive attendance & function as an incubator for future long term tenants. The permits to operate the Pavilions expire in 2019. IMC has applied for a 3 year extension and a waiver of all milestones. We propose to construct a 384,310 square foot Exposition Center for yearround use on our existing parcel of land contiguous with our campus that would benefit both IMC and the City of Las Vegas.
PROJECT OVERVIEW 2.1
The City would benefit from having a large modern exposition center in the downtown area driving revenue increases in lodging, gaming and entertainment. After the proposed EXPO Center is built, the Land where our existing Pavilions are located will be converted to parking or other alternative use compatible with the plans for Symphony Park. The design is consistent with the existing architecture on the IMC campus.
I N T E R N AT I O N A L MARKET CENTERS
Project Overview
8
Proposed Project Program Exposition Space Meeting Rooms Office Space
PROJECT SUMMARY 2.2
273,752 sf 24,315 sf 5,449 sf
Pre-Function, Registration, 80,794 sf Concessions, Restrooms Total Gross Area
384,310 sf
Meeting Room space is flexible and reconfigurable and can handle small or large venues. This includes 10,142 square feet on the 16th floor of B Building overlooking downtown Las Vegas. I N T E R N AT I O N A L MARKET CENTERS
Project Overview
9
Existing Downtown Conference Space
CURRENT STATISTICS 2.3
• Golden Nugget
31,000 sf
• Plaza Hotel & Casino
23,000 sf
• Stratosphere Casino and Hotel
17,000 sf
• The D Las Vegas
11,000 sf
• Fremont Hotel and Casino
7,330 sf
• California Hotel and Casino
4,935 sf
• Main Street Station Casino, Brewery & Hotel
4,500 sf
• El Cortez Hotel and Casino
3,200 sf
• Downtown Grand Las Vegas
2,490 sf
• Four Queens Hotel and Casino
2,264 sf
• Total Downtown Conference Area
106,719 sf
Sources: Las Vegas Convention & Visitors Authority; Applied Analysis.
I N T E R N AT I O N A L MARKET CENTERS
Project Overview
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PROPOSED PROJECT 3.0
I N T E R N AT I O N A L MARKET CENTERS
Proposed Project
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Overall Site Plan of the World Market Center Exposition Center
Existing World Market Center Buildings
C.
B.
SITE PLAN 3.1
I N T E R N AT I O N A L MARKET CENTERS
Proposed Exposition Center
A. The Exposition Center will be located in front of and on the ground floor of the existing garage
Current location of the existing Pavilions to be converted to surface parking after construction of the Exposition Center
Proposed Project
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Proposed Exposition Center A
B
C
A
D
B
EC
D
F
E
F
PHASE 1
G
G
LEGEND
A
EXISTING BUILDING A
B
EXISTING BUILDING B
C
EXISTING BUILDING C
D
PREFUNCTION / MEETING SPACE (ACCESS TO LEVEL 1 EXPO AND LEVEL 2 MEZZANINE)
E
REGISTRATION
F
BUS AND VALET DROP-OFF
G
EXISTING GARAGE (146,500 GSF OF LEVEL ONE TO BE CONVERTED TO EXPO AND SUPPORT SPACES)
ny
Pa
rk
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PROJECT IMAGES
CONCEPT IMAGE
Grand J A N UA R Y 0 8 , 2 0 1 8 PROJECT # 2017170
I N T E R N AT I O N A L MARKET CENTERS
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I NT E R NAT I O NAL M AR K E T C E NT E R S L AS V E G AS , NE V AD A
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Proposed Project
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Proposed Exposition Center w/future showroom expansion A
B
C
DA
B
EC
D
F
E
F
PHASE 1
G
G
LEGEND
A
EXISTING BUILDING A
B
EXISTING BUILDING B
C
EXISTING BUILDING C
D
PREFUNCTION / MEETING SPACE (ACCESS TO LEVEL 1 EXPO AND LEVEL 2 MEZZANINE)
E
REGISTRATION
F
BUS AND VALET DROP-OFF
G
EXISTING GARAGE (146,500 GSF OF LEVEL ONE TO BE CONVERTED TO EXPO AND SUPPORT SPACES)
ny
Pa
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PROJECT IMAGES
CONCEPT IMAGE
Grand J A N UA R Y 0 8 , 2 0 1 8 PROJECT # 2017170
I N T E R N AT I O N A L MARKET CENTERS
E X P O S I TI O N C E N TE R
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Proposed Project
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Proposed Exposition Center A
B
A
CB
D
C D
E
E
FF
PHASE 1
G
CONCEPT IMAGE LEGEND
A
EXISTING BUILDING A
B
EXISTING BUILDING B
C
EXISTING BUILDING C
D
PREFUNCTION / MEETING SPACE (ACCESS TO LEVEL 1 EXPO AND LEVEL 2 MEZZANINE)
E
REGISTRATION
F
BUS AND VALET DROP-OFF
G
EXISTING GARAGE (146,500 GSF OF LEVEL ONE TO BE CONVERTED TO EXPO AND SUPPORT SPACES)
PROJECT IMAGES 3.4 J A N UA R Y 0 8 , 2 0 1 8 PROJECT # 2017170
I N T E R N AT I O N A L MARKET CENTERS
E X P O S I TI O N C E N TE R
I NT E R NAT I O NAL M AR K E T C E NT E R S L AS V E G AS , NE V AD A
2
Proposed Project
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Proposed Exposition Center w/future showroom expansion A
B
A
CB
D
C D
E
E
FF
PHASE 1
G
CONCEPT IMAGE LEGEND
A
EXISTING BUILDING A
B
EXISTING BUILDING B
C
EXISTING BUILDING C
D
PREFUNCTION / MEETING SPACE (ACCESS TO LEVEL 1 EXPO AND LEVEL 2 MEZZANINE)
E
REGISTRATION
F
BUS AND VALET DROP-OFF
G
EXISTING GARAGE (146,500 GSF OF LEVEL ONE TO BE CONVERTED TO EXPO AND SUPPORT SPACES)
PROJECT IMAGES 3.5 J A N UA R Y 0 8 , 2 0 1 8 PROJECT # 2017170
I N T E R N AT I O N A L MARKET CENTERS
E X P O S I TI O N C E N TE R
I NT E R NAT I O NAL M AR K E T C E NT E R S L AS V E G AS , NE V AD A
2
Proposed Project
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Proposed Exposition Center w/future showroom expansion
I N T E R N AT I O N A L MARKET CENTERS
Proposed Project
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Proposed Exposition Center w/signage A
B
C D
E
F
PHASE 1
G
CONCEPT IMAGE LEGEND
A
EXISTING BUILDING A
B
EXISTING BUILDING B
C
EXISTING BUILDING C
D
PREFUNCTION / MEETING SPACE (ACCESS TO LEVEL 1 EXPO AND LEVEL 2 MEZZANINE)
E
REGISTRATION
F
BUS AND VALET DROP-OFF
G
EXISTING GARAGE (146,500 GSF OF LEVEL ONE TO BE CONVERTED TO EXPO AND SUPPORT SPACES)
ive
PROJECT IMAGES
JANUAR Y 08, 2018 I N T E R N AT I O N A L MARKET CENTERS
PROJECT # 2017170
EXPOSITION CENTER
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INTERNATIONAL MARKET CENTERS LAS VEGAS, NEVADA
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Proposed Project
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Proposed Exposition Center w/signage C
D
E
G
PHASE 1
F
CONCEPT IMAGE LEGEND
A
EXISTING BUILDING A
B
EXISTING BUILDING B
C
EXISTING BUILDING C
D
PREFUNCTION / MEETING SPACE (ACCESS TO LEVEL 1 EXPO AND LEVEL 2 MEZZANINE)
E
REGISTRATION
F
BUS AND VALET DROP-OFF
G
EXISTING GARAGE (146,500 GSF OF LEVEL ONE TO BE CONVERTED TO EXPO AND SUPPORT SPACES)
PROJECT IMAGES 3.7
rkway
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JANUAR Y 08, 2018 I N T E R N AT I O N A L MARKET CENTERS
PROJECT # 2017170
EXPOSITION CENTER
INTERNATIONAL MARKET CENTERS LAS VEGAS, NEVADA
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Proposed Project
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Level ONE
Existing World Market Center Building
Converted Grade Level of Garage
C
Proposed Exposition Center
FLOOR PLAN 3.8.1
Column Free Area
Registration
Courtyard Entrance
C I N T E R N AT I O N A L MARKET CENTERS
Proposed Project
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Level TWO
Existing World Market Center Building
C
FLOOR PLAN
Proposed Exposition Center
3.8.2
I N T E R N AT I O N A L MARKET CENTERS
Proposed Project
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Entitlements Prepare Drawings 30 Days $25K
CLV Planning & Approval 90 Days RFP & Selection of Contractors 4 weeks
Contract Documents
PROJECT TIMELINE 3.9
Construction
Architecture and Engineering Documentation 12 to 15 months
CLV Building Dept. Review | 90 Days
$2.2 MM (CD’s Only)
$850K
Preparation for Construction is expected to take 14-17 months at a cost of approximately $3.1 MM
On-Site & Off Site Improvements | Vertical Construction Approximately 18 months Total time projected to be 30 - 35 Months
I N T E R N AT I O N A L MARKET CENTERS
Proposed Project
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PROJECT FINANCES 4 .0
I N T E R N AT I O N A L MARKET CENTERS
Project Finances
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Estimated Costs SOFT COSTS
• Architectural & Engineering Fees • Agency Fees • Sub Total
$3,700,000 $2,100,000 $5,800,000
HARD COSTS
PROJECT COSTS
• • • • •
Pavilion Demolition On & Off Site Improvements Conversion of Garage to Expo Support New Expo Facility Construction Sub Total
146,536 SF 237,774 SF 384,310 SF
$775,000 $6,500,000 $9,200,000 $53,500,000 $69,975,000
LAND COSTS
4.1
• 8.7 Acres @ $2MM/Acre
• Grand Total
I N T E R N AT I O N A L MARKET CENTERS
$17,400,000
$242.45/SF
$93,175,000
Project Finances
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EXPO Revenue Projections & Comps
Revenue/SF/Day
$0.33
(a)
Projected Annual Revenue/SF
$18.00
(b)
PROJECT REVENUE (a) $0.33 is average revenue psf on show days among major venues nationally. (see appendix)
4.2
I N T E R N AT I O N A L MARKET CENTERS
(b) The Las Vegas Convention Center generated $21.52 psf and the Cashman Center generated $15.92 psf in calendar year 2016.
Project Finances
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SUMMARY Without Public Funds the return on this project is -7.3% due to the low profitability of Convention Center revenue.
SUMMARY CONCLUSION 4.2
I N T E R N AT I O N A L MARKET CENTERS
Our desired minimum IRR on a project like this is 15% and a cash yield of 10%. IMC will need Public Funds of $30 million to achieve a -1.4% IRR and a cash yield of less than 5%. Without Land, IMC will need Public Funds of $30 million to achieve a 3.9% IRR. Project Finances
26
Economics & Returns Economics and Returns Year 0
Year 1
Year 2
Year 3
Year 4
Year 5
Year 6
Year 7
10.00 95% 83,364 834
12.00 95% 83,364 1,000
12.48 95% 83,364 1,040
12.98 95% 83,364 1,082
13.50 95% 83,364 1,125
14.04 95% 83,364 1,170
14.60 95% 83,364 1,217
15.00 40% 109,501 1,643
16.50 55% 150,564 2,484
18.00 70% 191,626 3,449
18.18 85% 232,689 4,230
18.36 90% 246,377 4,524
18.55 90% 246,377 4,569
18.73 90% 246,377 4,615
9.62 1,053
9.86 1,485
10.11 1,937
10.36 2,411
10.62 2,616
10.88 2,682
11.16 2,749
2,476 1,053 1,423 57.5%
3,485 1,485 2,000 57.4%
4,490 1,937 2,553 56.9%
5,312 2,411 2,902 54.6%
5,649 2,616 3,033 53.7%
5,739 2,682 3,058 53.3%
5,832 2,749 3,083 52.9%
-
-
-
39,878
Tradeshow A Assumptions Revenue psf Occupancy Occupied sf Revenue Expo Assumptions Revenue psf Occupancy Occupied sf Revenue Cost Assumptions Cost psf Tradeshow
PROJECT REVENUE
Cost psf Convention Cost Total Earnings Revenue Cost EBITDA Margin Cash Flow Construction Cost
4.2
Public Funds
(93,175) 30,000
Sale (7.5% Cap Rate, Net of Tx Cost (3.0%)
Net Cash Flow
(63,175)
Yield on Cost Unlevered IRR
I N T E R N AT I O N A L MARKET CENTERS
1,423
2,000
2,553
2,902
3,033
3,058
42,961
2.3%
3.2%
4.0%
4.6%
4.8%
4.8%
4.9%
-1.4%
1/7/2018
1 Project Finances
27
IMC
SUPPLEMENTAL 5.0
I N T E R N AT I O N A L MARKET CENTERS
Supplemental
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Additional Amenities on the IMC Campus 90K SF Courtyard for Outdoor Events
IMC AMENITIES
Multiple Atriums
5.1 Atriums can be used for receptions & events
I N T E R N AT I O N A L MARKET CENTERS
Banquet Facilities
WORLDVIEW - 10,000 SF of Meeting Space overlooking Downtown
Outdoor Events
Additional outdoor event space on top of B Building
Supplemental
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Publicly‐Owned Product Positioning Publicly-Owned Product Positioning SUMMARY CONSIDERATIONS
Summary Considerations Overall, it appears that Las Vegasthat venues (the Overall, it appears Las Vegas basis from whichvenues revenue at the (theprojections basis from which subject propertyrevenue are derived) are generally in projections at the subject line with the broader convention market. The property are derived) are generally venues identifiedinatline thewith right basedconvention on theare broader surveyed resultsmarket. and reflect published (non- at The venues identified discounted) pricing on show days (as of June the right are based on surveyed 14, 2016), whichresults is different than published effective and reflect rental rates over(nondiscounted) the course of apricing year. Pricing on showis based on net square feetofrents. days (as June 14, 2016), which is different than effective rental Average Among Venues rates overMajor the course of a year. $0.33 PSF on Show Days Pricing is based on net square feet rents.
PRODUCT POSITIONING 5.2
Sources: Applied Analysis; Southern Nevada Tourism Infrastructure Committee; Las Vegas Convention & Visitors Authority. Notes: (a) For many convention centers, actual contracted rates may differ from the published, non-discounted rates listed above; (b) Many convention facilities, particularly those within privately‐run resorts with other available revenue centers, may offer discounted or free rental space depending on other revenues from lodging, catering, etc., that may be contracted with convention clients.
Average among Major Venues
$0.33 PSF on Show Days
1/5/2018
I N T E R N AT I O N A L MARKET CENTERS
CITY
FACILITY
REVENUE/SHOW DAY
City
Facility Name
Revenue/Show Day
New Orleans, LA Houston, TX
Ernest Morial Convention Center George R. Brown Convention Center
$0.55 $0.50
San Francisco, CA
Moscone Convention Center
$0.44
San Diego, CA
San Diego Convention Center
$0.42
Anaheim, CA
Anaheim Convention Center
$0.38
Indianapolis, IN
Indiana Convention Center
$0.37
Orlando, FL
Orange County Convention Center
$0.37
Las Vegas, NV
Sands Expo & Convention Center (private facility)
$0.36
Las Vegas, NV
Las Vegas Convention Center (increased rate as of 7/1/18)
$0.35
Las Vegas, NV
Mandalay Bay Convention Center (private facility)
$0.35
Las Vegas, NV
World Market Las Vegas Exposition Center
$0.33
Atlanta, GA
Georgia World Congress Center
$0.33
Las Vegas, NV
Las Vegas Convention Center (increased rate as of 7/1/16)
$0.33
Los Angeles, CA
Los Angeles Convention Center
$0.32
Las Vegas, NV
Las Vegas Convention Center (current thru 7/1/16)
$0.29
Louisville, KY Salt Lake City, UT
Kentucky Expo Center Salt Palace Convention Center
$0.29 $0.29
Philadelphia, PA
Pennsylvania Convention Center
$0.20
Denver, CO
Colorado Convention Center
$0.19
Chicago, IL
McCormick Place
$0.18
Dallas, TX
Dallas Convention Center (Kay Bailey Hutchinson Conv Ctr)
$0.17
Sources: Applied Analysis; Southern Nevada Tourism Infrastructure Committee; Las Vegas Convention & Visitors Authority. Notes: (a) For many convention centers, actual contracted rates may differ from the published, non-discounted rates listed above; (b) Many convention facilities, particularly those within privately‐run resorts with other available revenue centers, may offer discounted or free rental space depending on other revenues from lodging, catering, etc., that may be 21 contracted with convention clients.
Supplemental
30
Downtown Expostion Campus + World Downtown Expostion Campus + Worl Market Center’s Permanent Showroom Market Center’s Permanent Showroom Facilities for the Home Furnishing Markets Facilities for the Home Furnishing Market I N T E R N AT I O N A L MARKET CENTERS