Michele Skalicky talks with Mark Hecquet, president of Visit Springfield, about what the 3% hotel/motel license tax that will be on the ballot in Springfield on April 7 will be used for if it passes.
Mark Hecquet is here with me today. Give us an overview of what a new convention center in Springfield might look like.
Hecquet: Yeah, a new convention center is different to what probably people think a convention center is. You know, people think it's a stereotypical big, boring box that welcomes conventions for people to sit and be talked to. But today's convention centers aren't that. They are a multi-use community-first building that is built to be used 24/7, 365 days of the year. It's something that it will be a center point of the city. It will be something that will be an iconic building but built in a way that one day it can welcome 2,000 people for a convention, and the next day it could be hosting a local community event or a show of some sort or, you know, be a gathering point for many different groups in the city. So, you know, we're working with Populous on the sporting events side. It will host sporting events and things like that. So, really, built in a way that it is truly an asset for the community that everyone should be able to see themselves in it at some point.
Yeah. That's what — I've seen some comments about on social media in particular...people saying, you know, we need like a free skate park here. We need infrastructure — we need better infrastructure — and we need, you know, crime to be addressed and that kind of thing. What is in this for me, basically? So how will this be available for the community to use?
Hecquet: Well, first of all, back to the center, why it's really needed for Springfield is our community as a whole really lacks indoor products. You know, we do really well. We have the outdoors in the summertime. We can do that really well, but the indoor is a real challenge around here. In terms of the other things of skate parks and needs, obviously the real goal of the center is to be an economic driver for the city. You know, we welcome millions of visitors in our city every year, and we need to continue to keep them coming because obviously they spend a lot of money. That money in turn generates taxes that stay behind, are then used by our city to provide the basic core services and things like, as you mentioned, police and safety, transportation. And, you know, even this conversation about the convention center is even bringing up those positive conversations about, let's say, safety or transportation. There's been a lot of talk about connectivity and how the center will connect our communities together, provide better transportation routes to get people around our city. So, all those positive things are already taking place.
Does the city plan to incorporate the existing Expo Center into the new design?
Hecquet: 100%. The current space, the Expo Center, just historically was never built the way it was proposed. Right now, it is a 45,000 square foot space, just does not — has not been upgraded in the last 20 years. Doesn't have the basics. Doesn't have a kitchen. There's no escalators. Some real basics. It doesn't have any meeting rooms that are of any value. So, the goal is, yes, that will be incorporated. How is to be determined. But yes, that is the footprint, and the big grass space connected to that will be encompassed in this footprint.
And there would need to be a hotel, but that would be privately developed. How critical is that piece?
Hecquet: I would say it's the most critical piece at this point. You know, we have a sales team that goes around the U.S., and the world in some instances, looking for business to come to Springfield, on the conventions, the meeting side, and probably the biggest hurdle for us now is we do not have a connected hotel to our space, which is a, you know, I'm sure many people have traveled, that is something that many cities have crossed that bridge, so to speak. So, the private development of a hotel is paramount to this project. And the city is already, not putting the cart before the horse, I would say, but at least letting that hotel developer community know that if things go on April 7th in a positive way, that they're able to move at the speed of business to get that hotel piece online.
How confident are you that if a new convention center is built, that you'll be able to attract the groups to come here that would make it worthwhile?
Hecquet: Yeah, it's a really, really, actually probably the most important question, you know. I've been in Springfield now three years. I'm sure the listeners can probably tell I'm not from Springfield. And what has disappointed me the most is we lose more than we gain at this time, which is very saddening. You never want to see a customer be at your doorstep and then you don't have what's needed for them. We have a great city with great amenities. Accessibility is wonderful from our transportation, from the roads to the airport. We have downtown, we have the outdoors, we have restaurants, dining, entertainment. We just don't have the venues to accommodate the meetings side of it. So, we are losing every day to Kansas City, Saint Louis, Branson, Joplin. We're losing to all these other cities who have these spaces. So, it's with great confidence that our team is like we have suffered for the last 20 years without a quality space. And even on the local side, we see so much local businesses has moved. Let's just take a key — Assemblies of God — they have events all over the U.S., and they wish they could host them in Springfield. We just don't have the size or the quality of venue they need.
How could we compete with Branson, Saint Louis, Kansas City do you think?
Hecquet: Well, first and foremost, I'm not here to disparage other cities in our state. First of all, we're going to build a center that will be different. It will be built for the future. It will be built for the next 30 years with this sort of really community-first sort of environment, it will weave in the community, the culture of Springfield into it. So, everyone will be able to see themselves. So, it'll be very different. It'll be very different that I think, first of all, will position us in a different place. And perhaps I would say my role is what I believe in — will position Springfield as a leader in this space. And you know, every city is different. You know, Springfield has a lot of conveniences. It has airports close by. It's got a good array of hotels. It's got a good downtown vibe, but it's also got the outdoors. So, we just have a package that's very different, let's say from big cities and even from Branson, we're very different. So, I think it would really and the real goal is to position us not only a leader in Missouri, but in sort of a region, and in sort of take all the states around us, Oklahoma, Illinois and others that will position us as really a center point.
How much say would the community have in what this ultimately looks like?
Hecquet: Yeah. So, you know, we talked a little bit offline about this. The city hired Populous, one of the probably the top company in the world at building these centers. And so, they've done some pre-design work. And this Friday (3/13), they've involved a lot of input from the residents from a sort of just a sort of imagining what it could be. So, if everything goes well, April 7th, Populous will be back to build on those. And again, it's going to be a very community input setup. And there'll be more listening sessions and more, probably a little more granular getting into the more details of the look, the feel, the iconic nature, what resonates with residents and things like that. So, this is going to be a project that's not an isolated city's Just going to do this without — this is going to be every user groups will be involved, sporting teams, all those kind of pieces, everyone will be involved in the process.
You've talked a little bit about this, but what types of events could this new convention center host?
Hecquet: Yeah. So, you know, at Visit Springfield, let's take one sector. We have the Sports Commission that we manage. And you know, they are, again, another part of our industry that we are losing business because we don't have a large indoor space. So, they are already looking at potentially of national wrestling events, national gymnastics events. Any of those sports or the martial arts could be in there, basketball, volleyball, you know, large events bringing thousands of people on a weekend or during the week in the summertime, so that's one segment. We have conventions, you know, we're looking now — we can right now only really hold comfortably a multi night convention of about four to 500 people. So, we're thinking that we could go into the 1,000 to 2,000 people, so, we're now looking at state associations, state conventions, regional conventions, national conventions that are looking for homes. And we have a list of probably about 500 prospective pieces of business already just on the meetings and conventions side. Sports side, they have probably a list of probably 150 potential new events. And these events, what's really important with this project, we cannot host now, today. So this is not moving business. This is new business that could come into our city.
How many events would the city have to bring in over what period of time to make this project worthwhile, or has that been determined yet?
Hecquet: Well good question. Obviously, the city wants the building itself to be revenue neutral. That is the goal of it just to self-sustain itself. Obviously, with an eye of having the right maintenance and funds to keep the building being able to be renovated, which was actually not done in the previous building. Visit Springfield, we've done a lot of research on this project on what it could generate in terms of demand and things like that, you know, and predictions, which they are projections, it's very hard to see what it really does, but we do look at other cities as well, the number of events they bring in. We had a most recent study by Hunden Partners out of Chicago who estimated that a new center built to the right size that we need would generate about 164 new events, which would encapsulate about 250 days. So, with, you know, approximately 200,000 new people in our city generating millions upon millions for our community, that's the bar. That's what we're aiming for. So, you know, you take those two, we want to create — it will not be a drain on the community, and the city has been very fiscally prudent on that and looking at funding mechanisms that will put no strain on the general fund. In fact, zero strain, so that's one. And then, you know, as I said, that's our goal. That's what we. They did financial projections on those numbers, and it will get in in a five-year window to a revenue neutral position if we can bring all those events to town.
Do you know how often the Springfield Expo Center is currently being used?
Hecquet: Not enough. You know, we use it, from the groups we have, about 12 times a year, so, not very much. There are some local events in there as well, but not, it's not the economic driver that these centers are built to be where it brings in people to our hotels, into our dining, into our entertainment, into our airport. It's not driving that into our community right now. It is a very community based, so, it's really not doing what it was intended to do right now.
And let's talk about funding more, remind listeners the estimated cost of a convention center and how would this be paid for?
Hecquet: Yeah. So, the, the estimated cost is $175 million. So, the proposed way it's being paid for is through an increase in, as is termed, the tourism tax, which is a tax that is placed on someone using one of the Springfield hotels or short-term rentals. So, they're proposing to increase that tax, which is currently 5% to 8%, a 3% increase. That new 3% will be used to cover 145 million of that 175 million. And then the Spring Forward (SGF Sales Tax) commission has earmarked 30 million towards to create the 175 million of this project.
So, state funding is not a critical piece of this, or is it?
Hecquet: It is not. It is not. And that was a strategic move by the city that, as you probably heard, you know, there was a request made at the state for funding. Obviously, this has a economic impact to the state, and the state recognized that, and you probably heard that there was an appropriation of 30 million for this project, which was put in a withheld bucket under the pretense, since Springfield needs to get its funding in place, that the state wasn't going to give Springfield its money without proof. So that new money, if it comes, will be used for additional land acquisition if needed and probably lowering the debt that is needed for this project. So no, the 175 million is funded primarily by the proposed new tax by people staying in our hotels and short-term rentals with the 30 million from the Citizen Advisory Committee, which is the Spring Forward. Yeah.
So, the 3% lodging tax that voters are going to decide in April, tourists would be paying that?
Hecquet: 100%. I think there's been a little bit of confusion that this would be a tax on residents. It is not unless the resident was using a hotel or short-term rental. But no, this is primarily a visitor tax. And if you go to a, you know, a lot of other cities, this is a very common practice of how these centers are funded is through a visitor centric tax.
How can you assure residents that the city wouldn't have to come back at some point and ask voters for more money to pay for the project? I've heard that question brought up in these listening sessions.
Hecquet: Yeah, really good question. So, let me answer that. The additional 3% will go solely to build. But you know, you bring up a really good point. What happens about maintenance, renovations, all those kind of things? Where are those going to come from? What if something breaks? How's the city going to pay for it at the end of the day? Well, as I mentioned, there is an existing 5% tourism tax of which about just under half of that is currently being used to pay off the Jordan Valley ice Park, which equates to about almost $3-4 million a year. That bond is going to be paid off (in) 2028. The goal is to use those funds as a backstop for any overruns or renovations or maintenance as needed. And that, as is predicted, is ample to cover that, which will not require any need to go to the general fund. In fact, to be very honest with you, when, you know, Visit Springfield, this has been a project that's been on the top of our strategic plan for, we'll call it decades. You know, when we first started talking with administration — the city — about this, they were very clear to us. Any funding or any strategy has to have zero impact on general fund. In fact, it has to be a revenue plus for general fund. And that's what this project is. This is a project that, if you really think about it, it is about providing more for general fund. It's providing a generator that will allow the city to spend more on its core services, its police and fire, roads, all those kind of things that we need more of, right, at the end of the day. So, a very protected model, very paid by the visitors, zero committed from general fund or local taxpayers.
If voters approve a hotel motel tax increase, what will our tax look like compared to other cities?
Hecquet: So, today — it's a really good question — when someone spends a night in Springfield, the total tax is 13.1% approximately. There are some CID's, it just confuses it. But 13.1 is the sort of average in our city. So that will increase 3% to 16.1. Just to give you an example, right now we're in bottom third in the state in terms of where we are and what we charge for someone staying in our hotels. So, we'll go to sort of mid top third but still below some of the cities you mentioned earlier Saint Louis, Kansas City, Tulsa, Overland Park, other cities that will be competing will still be below, but I will re-bring the narrative on that, which we don't find people are asking that question of us when they come to book a group, they don't typically ask, how much is your hotel tax rate? So we feel that as long as we keep it at a competitive place, which is lower than the big cities are doing, we will still have a competitive advantage. And so, you know, we don't want to, you know, put us at the top of the pile. We wanted to create a number that would generate enough to build the size and quality of building this city deserves at the end of the day.
Does this increase in the hotel motel tax take into consideration current lodging rates or will this be — is it based on what a new convention center could generate?
Hecquet: Yeah, we're getting into the real, the real numbers game. So average daily rate in a hotel in Springfield is actually very low in our state. We trend very low, which is not a good thing. It's not a good — people say, oh, it's value. No, it's not. We should be higher for our city. Two things, yes, demand increases rates, 100%. So, you create a new demand generator, you will naturally create more demand for rooms that rates will increase, which is a positive at the end of the day. It also creates demand for new hotels. Obviously, we talked about earlier about the need for a new hotel. That new hotel will probably be of a full-service quality, which will increase rates higher as well, which will allow all others to raise up as well. So, yes. Will it cost more to stay in a hotel in Springfield? That is part of the goal to generate more revenue, (it) generates more tax revenue back again, back to that same cycle, back to the city core funding, etc., etc.. So yes, it's both to increase occupancy in our hotels as well as increase rate.
What about other hotels that already exist? Would that benefit them if you are building a hotel downtown, potentially others? What about existing hotels?
Hecquet: Yeah, really good question. And there's lots of research on this about what is the impact of a center once it's been built on the surrounding hotels? So, you have the primary ones, the downtown ones, they obviously see an immediate increase, but what is very interesting is so do the secondary ones that are a little bit further out, say more than five miles away from the convention center. They see, you know, over a 10-year window — there's lots of research on this — an increase in revenue or occupancy of about 6 to 9%. So yeah, there is, and that is a compression because what happens is there's the compression. So, all those people that were originally staying downtown, they're forced to look in the surrounding area. So, it's this, it's this massive ripple that is created across the entire city. So, you know, and hence, that's why the Hotel Lodging Association is in support of this because they see that A.) they want more demand at a time when they really need it, which is winter in the colder months. That's a massive need for the hotel community. And research shows that there is a compression effect. Even if you were in the outskirts of town, you're still going to benefit from this.
Is there adequate parking downtown for this?
Hecquet: As someone who's come from a big city and who has a welcome center in the garage that has almost a thousand spaces alone connected to it. You know, we asked Hunden when they came to town, that was a question that came up, what is the parking situation like? They were very confident we actually have a very good parking scenario. We obviously have the parking garage there with almost a thousand spots. Just down the road from that, there's another parking structure on the other side of the 505. And there's a lot of surface lots around there where the baseball stadium has their parking. So, there's a feeling that there is adequate parking, in fact, even ample parking to accommodate once you get the needs, you know. And another thing that comes up with that same question is traffic. What happens with traffic in that area? There's great confidence that that's not — that that area is not well traveled all the time and is used to bearing big events already with baseball, with, you know, University Plazas there, there's downtown, we've had festivals there, so, it's very used to influxes. So, I don't think — I personally and what Hunden said — that parking is in a good place.
We see comments online like no means no. We said no. Why do you think this vote could be different from November when the tax increase failed?
Hecquet: Yeah. So, the first time around, you know, transparently there was nothing done to educate or inform residents about what was even going on. And that was a mistake and lots of humility with that. And I'm partly to blame for that. There was not a good information. I wasn't talking to you today what I should have been, getting the word out about why, tell me why is this good for a resident? And so, you know, in the city, it acknowledged that they made some missteps as well on that and should have done more. So, you know, obviously a lot of, there was a lot of soul searching, lots of information, lots of gathering, the city reached out, surveys, informal polls, all those kind of things. Lots of listening sessions. The council members went out and listened. And I think the general sentiment overall was we just didn't know enough. We didn't know. You were asking us to vote on a project, a100 plus million-dollar project, the, probably the largest civic project this city has done will do ever, at least for the foreseeable future, with zero information. And I don't think that was fair to the residents. And I think the residents came out and, again, you talk about only a 7% turnout. I think that was more telling if you think about the turnout — 7%. It's about 8,000 voters on 106,000 voters in Springfield. I think many came out and said, oh, I didn't vote. Maybe, perhaps now I'm informed, I would like to vote type of thing. So, lots of reasons. And I think that council, as they voted unanimously, felt that they heard residents, but it did change, they did change. And I think about any good proposal, the first proposal probably wasn't good enough. And they've gone back looked at it; they've added a sunset clause. So, after 35 years this will be done. It'll be over with. And they provided information on the funding structure, location, so, it's a very different proposal. So, I would say, you know, to the people who said no, they said no to that proposal. This is a new proposal. It's different. It's different in the language and more information. This Friday (3/13) Populous will be unveiling a pre-designed concept, which was another number one thing that was asked for. Where is it going and what's it going to look like? So, you know, I think all those things came into play.
Yeah, I know that that was one thing people said that they just didn't know enough, that they wanted to know where this was going to be and what it was going to look like. And it does seem like you've worked to address that. So why does the City (of Springfield) — again, why does the city see this as so important that it needed to come back before voters?
Hecquet: Well, you know, the economics alone are one thing, you know, as Hunden Partners, you know, said, as I mentioned earlier, 164 events, 250 days, almost 200,000 new people, 80,000 room nights, a $1.3 billion impact over 30 years, almost 2.5 million in local taxes every year. That speaks for itself. It's a wonderful economic driver. You pair that with what we're losing in our current center. It's just deteriorating. It's just not doing anything. And we have a downtown that, in my short time here, is probably not the best place it could be right now. And the venue is a mechanism, an economic mechanism to lift up all at the end of the day, lift up our entire city, starting with downtown. You know, I come from the travel space. I'm a believer that a downtown is the heartbeat of a city. As a visitor, typically we all end up in in our downtowns and the downtown is a reflection of the rest of our community. And if the downtown is not beating as best it can be, it is a reflection of the rest of the city. It doesn't matter how good other parts of the city are, if the downtown is poor, it reflects for the rest of the city. So, you take that, you take the economic side, you take what it could do. Imagine on a Tuesday night, you've got 3,000 people here from all around the country. They're downtown, they're enjoying and spending money. They're out in our community. Well, we would never have that demand, you know. So, we're creating vitality in our city, which creates demand for new restaurants, new entertainment, new hotels. All these things come with it. More airport demand. People say, things like, oh, we need to have an east coast — yeah, personally, I'd love an East Coast flight, but demand is a massive, part of that equation. So, you know, that's, you know, that's the one side. It would just elevate us as a city at the end of the day, I think it would be something we are proud of. And I think as a city, we need to be investing in ourselves, investing in our own community and doing some really great things. You know, we've got Route 66 national spotlight coming up at the end of April, once in a hundred years opportunity for us. And you know, and this is a project of momentum, and I believe that it is time for this project. The city has not invested in itself in, I think over 10, 15 years. And unfortunately, we're seeing the impact of that.
So, if voters again, say no, what will happen with this project moving forward?
Hecquet: Excellent question. Again, I just want to be clear to the listeners, Visit Springfield is not a city government. We're our own private, 501C6 not for profit. You know, as we talked about, as in many cities, they use this sort of tourism tax, hotel tax to pay for these centers. It is paid by visitors. It's a very normal mechanism. It is, and, you know, from our perspective and certainly many of the city, the economic benefits of a convention center are very clear, and more so than that, the current state of what we have is very poor and a very poor reflection of our city. And, you know, in terms of a sense of pride is being lost at this. So, what happens if the voters say no to a visitor tax? I can't surmise what the city will do, but I have seen what others have done. They start looking at their own residents and they look at things like, well, a visitor uses a restaurant, so we'll look at restaurants. So, we look at other mechanisms that could impact a local taxpayer like myself, like yourself. And I'll just be clear, I'm not a fan of that. I would much prefer a visitor who uses this, majority would be paying into this and not a local taxpayer.
And then I know there are people who think convention centers just aren't being used anymore, that the business just isn't there. What do you say to that?
Hecquet: I would actually fundamentally disagree with that. In fact, what we're seeing is post COVID, yes, everyone's like, oh, we're meeting in this very virtual world, the Zoom world. Apathy has set in in a tremendous way in that where the demand to meet face to face is actually on the increase in people wanting to meet. The real salient question is how people want to meet. People don't want to be sat in a room with a thousand people being talked to. They want to meet in cool spaces, smaller groups, informal settings. They want to meet looking over a nice view. The desire to meet is probably as high as it's ever been. It's how people are wanting to meet is what's really cool. And that's what's really exciting about Springfield is we can create that because we have this sort of blank canvas of building something that is built to future meeting needs, not what pretty much every other city in America is dealing with is this sterile, archaic box. We can create a space that is for gathering and how people want to gather from, whether it's a bar in a convention center or in a space or just or a fireplace or an overlook that people want to meet in these places, not only conventioneers, local will want to meet. There's talk about playgrounds and things like that, outdoor green spaces, indoor outdoor settings, very, you know, and how people want to meet today. We don't want to meet in boring boxes, no windows. We don't want that. We want to be engaged with the outdoors, cool settings, and that's kind of how people meet. Today is very, very different.
