Four Penny Opera

The February 17, 2000 issue of the Independent was devoted to the additional penny being added to the bed tax – the tax added on condo rentals and hotel rates – and it was going to build a convention center and parking garage on Pensacola Beach.

It was to be completed by late 2003.

Here is the part of article that concerns Pensacola Beach:

The Pensacola Area Chamber of Commerce commissioned a $100,000 study that identified two possible locations for a convention center: Pensacola Beach and downtown Pensacola. However, some say one location had an obvious advantage: space.

“The beach is the only location with a critical mass of hotel rooms within one mile of the proposed center. Downtown does not have nearly the same real estate,”

In the fall of 1999 the Chamber received the study, which concluded the city needed 350 rooms to support the site and easy access to 1,000 total hotel rooms. The beach already has approximately 923 hotel rooms within a mile of the site, according to the 2000-2001 Pensacola Area Visitors Guide.

With the results of the study, county officials began to examine what beach property was available. The study proposed a 150,000 square foot facility, but because of the finite nature of the beach, planners decreased the size to 80,000 square feet.

In addition, an adjoining parking garage with a $7 million price tag is proposed.

“The parking garage would provide 500 additional spaces for beach visitors, which would increase the current capacity by 50 percent,’’ said Bill Griffith, Santa Rosa Island Authority member.

Although Clarion Suites Resort and Beachside Resort on Via de Luna already have convention center space of 5,000 and 7,000 square feet respectively, he said the hotels do not have sufficient room for large conventions of 3,000 people.

Griffith, as the past president of the Florida Chamber of Commerce, tried to bring the state convention to Pensacola, but was unsuccessful because of the limited space available at existing Pensacola and Pensacola Beach facilities.

This is a prime example of why a large convention center would be a windfall for the Pensacola Convention and Visitor Information Center, said Julian MacQueen, CEO of Innisfree Hotels. “Because they will finally have something to market,” he said.

Right now, most convention attendees fly into Pensacola and then depart for resorts in Sandestin, Orange Beach and Panama City. MacQueen said the Pensacola Convention and Visitor Information Center has never been able to submit proposals to groups because the city lacks the facilities.

The Board of Directors for the area chamber agreed in its position statement that “the Pensacola-Escambia metropolitan area is lacking in sufficient meeting and convention space and to have a balanced tourist development effort the convention element needs to be enhanced.”

Other tourist areas in northwest Florida, such as Destin and Panama City, acknowledge the benefits of a local convention facility.

Barry Hoehn, director of sales and marketing at Edgewater Beach Resort in Panama City said Pensacola has an advantage of more air, meaning airport facilities can accommodate a mass of visitors whereas Panama City is more limited. He said that Pensacola could draw national conventions like the tourism conference with its proposed 80,000 square feet center.

Sheilah Bowman, the former director of tourism for the Pensacola Area Chamber of Commerce, said, “We lose business because we do not have a convention center. That is why we did a feasibility study.”

The county effort, lead by Griffith, approached MacQueen last fall regarding his Surf and Sand sound-to-gulf property near the SRIA office. The hotelier said that getting involved with the county to build a resort across from a proposed convention center was “plan B.”

“I was well on my way to building a hotel on the beach side when the SRIA approached me about the convention center and resort last fall,” he said. “To forgo the $35 million dollars in development on the sound side, I needed an incentive to give up that property. The county is offering my company a preferred interest rate on bonds provided tax-free through the municipality.”

The nice part about the proposed site near the SRIA office is that the county has room to expand the convention center facility another two acres, said Griffith. The SRIA can then be housed in the center and use the rooms for its meetings.

MacQueen said that the county estimates that the 80,000 square feet can accommodate 3,000-4,000 people depending on the activity.

Some private industry representatives remain wary of the local government becoming tied into development projects with individual corporations.

Still, one commissioner defends the concept.

“In Florida and the rest of the country there are numerous examples of the government having partnerships with private enterprises. But I do understand the grievance about the unfair advantage that the hotel investor gets with better interest rates,” Commissioner Mike Bass said. He also suggested that critics overlook the fact that MacQueen has the land available.

Amid the controversy between the county and local hotel corporations, the county is accepting alternate proposals for a convention center and resort.

The Pensacola Area Chamber of Commerce is likewise not sold on the proposed beach facility.

In a faxed statement, the chamber said “The construction of a new convention center should be subject to an accredited feasibility study supporting the investment for the specific size and location proposed, and the funding for the construction, maintenance, operation, or debt service not encumber any bed tax dollars currently assigned for tourism marketing.”

Each entity – the convention center, the parking garage, and the resort – are three separate bond issues for the county. The total price tag, not including the price of attaining the soundside lease, amounts to approximately $51 million dollars.

The county commissioners would attain the tax-free government bonds and pay the debt service with a portion of the one cent bed tax increase.

To accelerate the repayment, the county will charge a yet undetermined fee for beach visitors to use the parking facility. That, along with a large percentage of the Bob Sikes bridge toll will pay off the garage construction bond, Griffith said. Innisfree would pay its bond through a lease arrangement over 30 years.

The bed tax would then simply service the debt on the convention center, although Griffith said the county may need more than one penny to service the debt. The county would operate the center from convention income and fund shortfalls in the budget with the commercial lease fees, five percent of total sales, that all hotels pay to the Island Authority.

“With the convention center, the county has to assume there will be at least a $430,000 shortfall in the budget. Commercial lease fees would be used to compensate for the shortfalls, but there is no plan to raise the fees in the future,” said Griffith.

If the convention center is approved by the county, Griffith said bids to construct the center will be called for immediately. The site would be projected for completion between 2003 and 2004 with aggressive marketing prior to opening.

The detriment to beach development always remains the occurrence of hurricanes. With the memories of Hurricanes Erin, Opal and Georges, the construction of a major county convention project on the barrier island gives fodder to any skeptic.

The planners, however, are not as concerned with the weather.

“After the major hurricanes, only three hotels were down: the Dunes and the Holiday Inn on the gulf and the Pensacola Grand Hotel in downtown. The Hampton Inn, near where the proposed convention center will reside, sustained the least amount of damage of any hotel on the beach. Even the SRIA building did not have any damage during the storms,” said Griffith.

He said that regardless of where the county puts the center, tornadoes associated with a large storm will always wreak havoc. The convention centers at Miami Beach, Kiawa Island, SC, and Amelia Island off Jacksonville are situated on barrier islands and they have never had any problems.

Sandy Johnston, the Pensacola Beach Chamber of Commerce executive director, sees other benefits of locating the center on the barrier island.

“When people come for a convention, they naturally want to stay on the beach,” she said. The beach has a dozen hotels, shops, and restaurants within walking distance of the proposed convention center and the beach trolley is also available for the visitors, she said.

“This convention center is an economic boom for the county. It will bring in people during the off-season and the bed tax will go to Escambia County. The convention guests will also visit the historic district, the zoo, and other attractions and pay sales tax,” Johnston said.

Beach locals familiar with the proposed site of the convention center, however, offered mixed reactions to the plan that would uproot them from their longtime location near the Surf and Sand Cottages.

“It would be a shame to lose the little stores that are so popular in the summer. Locals also want to keep the beach low-rise. It would lose its charm if the beach went high-rise,” said Bonnie Elbert, owner of Discount Beach Wear and Toucan’s T-Shirts.

Elbert’s businesses would have to consolidate into her Island Style store near Flounder’s if she loses her lease.

Resident and retiree Ted Wiggs came to Pensacola Beach because it was small and nice compared to Miami Beach. He said that Bobby D’s Beach Bar and the little shops and cottages on the Surf and Sand property give the beach character.

“There is not enough infrastructure to support it. The beach only has a finite space to build. On top of that, we are subsidizing the convention center. The Island Authority does not care about the residents, only money,” he said.