Friday, December 12-Council Supports $5M In Upgrades To Powell Center

OCEAN CITY – Although the Roland E. Powell Convention Center won’t be getting an exterior expansion any time soon, it’s going to get a few much needed upgrades inside.

Though the Mayor and City Council did not deem plans for the $60 million to $75 million expansion of the center feasible at Tuesday’s work session, they did support the first phase of upgrades to the existing building costing at least $5 million.

City Engineer Terry McGean and Tourism Director Mike Noah brought forward a recommendation and plans to upgrade the existing building, which had its last expansion 13 years ago when it was in “deplorable shape,” according to Noah.

“The building is starting to show her age,” said Noah. “We are not naïve enough to think that in these economic times that we can feasibly recommend a full-on expansion, but we feel that we can and should upgrade the existing building.”

Included in the short term plans that were approved by council Tuesday were the installation of a 1,700-raised-seat performing arts room/auditorium equipped with theatre seats, new sound system, stage curtains and lighting as well as closing in the west deck behind the auditorium for usage as a banquet room and exhibit area which will boast a stellar bay view. Technology upgrades and energy efficient improvements throughout the convention center round out the first phase of improvements, which will be paid for by a $5 million bond financed by the 1-percent food and beverage tax that was instituted when the last expansion of the building took place in 1996.

City Solicitor Guy Ayres called the $5 million bond the “dedicated source to refund the debt”, and added that Ocean City has almost paid off all of the original $15 million that it bought in bonds for the original expansion in 1996, seven years early than the 20 allowed in the bond agreement. The Maryland Stadium Authority, who is the town’s 50/50 partner in the convention center, will not pay off their part of the $15 million until 2015, which is when the agreement would legally end and the valuable food tax is proposed to sunset.

In addition, the extra $5 million that was optioned to be tacked on to the original $15 million bond “would be paid off within five years,” according to Finance Administrator Martha Lucey, which “would still be before the Stadium Authority is done paying theirs.”

Simply put, the money is there for the town to use for at least the first stage of upgrades to the building and the revenue created by the food tax keeps the town from having to use money from the general fund.

Mayor Rick Meehan was in favor of doing the plan in several phases based on the current economic conditions.

“We need to take interim steps. When I leave Ocean City, people always ask me what is new. People are looking for something new and upgraded, and we’ve done a good job up until now to not allow our city to get old. The two part expansion is the right move,” Meehan said.

According to McGean, the current building has seen created over $163 million in spending, created 2,150 jobs and generated $2.2 million in tax revenue while welcoming over 3.4 million people and over 1,100 events.

“The importance of maintaining these jobs and the economic impact is the driving factor in us making this recommendation to move forward with a short-term strategy,” he said.

Noah said that the building’s major dates are booked through 2013, but the short-term upgrades and the projected long-term expansion could have a major impact.

“We have no room in the inn right now, but we realize that it’s not proper to expand the whole thing right now. Even though our dates are booked, we are seeing about 5- to 7-percent less people coming to these events, which is about par for what the rest of the economy is feeling right now,” said Noah.

As far as the long-term expansion, the number gets pretty hefty in phase two with a proposed $20 million parking garage and a $2 million expansion of the lower hall, and it gets even heftier in phase 3 with a $48 million expansion of the building itself, including a brand new 63,000-square-foot exhibit hall, which would double the space available for events.

Susan Siegler, president of Florida-based Crossroads Consulting Solutions, provided an extensive study on the impact of an expansion to the building based on extensive interviews with users of the building and market research and found that both upgrades and eventual expansion are needed.

“If the Ocean City Convention Center does not expand or reconfigure its current space, the likely trend will be condensed toward state and local business only,” she said.

Siegler projected the economic benefits of a full-scale expansion at $230 million to $262 million in revenue annually, including $48 million to $70 million in direct spending per year, but warned that leaving the building as is could be costly.

“This is a drive-to destination, as there is no major airport. You have no state-of-the-art performing arts facility or up-to-date wireless capabilities. You don’t maximize your space and that is your real challenge. The way you have it set up, instead of giving people 63,000 square feet to rent, you offer them 42,000,” she said.

When it came down to it, McGean said it became a “can we vs. should we” question.