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KPMG BP ConventionCentreBusPlan Oct2000
KPMG BP ConventionCentreBusPlan Oct2000
VANCOUVER THE
CONVENTION AND EXHIBITION CENTRE
BUSINESS PLAN
Prepared by:
VANCOUVER CONVENTION CENTRE EXPANSION TASK FORCE
October 2000
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TABLE OF CONTENTS
APPENDICES
A. Members of Vancouver Convention Centre Task Force
Vision Statement, Mandate, Principles and Terms of Reference
Business Plan Outline
B. Expanding the Vancouver Convention & Exhibition Centre, Market Justification
and Economic Benefits, KPMG, February 2000
1.0 INTRODUCTION
This Business Plan is the culmination of a year’s work by the Vancouver Convention
Centre Expansion Task Force (“Task Force”) and encompasses:
• a summary of the results of the due diligence undertaken by the Task Force - due
diligence that involved extensive meetings and consultation with industry
representatives, with municipal, provincial and federal politicians and staff and
with professional advisors; and
• the recommendations of the Task Force for a controlled and business-like
construction and implementation of an expansion of the Vancouver Convention
and Exhibition Centre (“VCEC”).
Premier Miller said that the need for an expanded convention centre had never been in
question and that expansion was an important part of keeping Vancouver competitive
with other destinations which were already expanding across North America and around
the world. However, he said that the province was cancelling the project because:
1. the provincial government was not able to secure a financial contribution from the
federal government;
2. Concert was not able to secure a financial commitment for the hotel portion of the
development; and
3. the provincial government was not able to secure a project agreement with labour.
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Premier Miller said that the province would not consider the expansion further unless the
private sector came forward with a viable alternative.
The Task Force undertook to provide leadership, direction and focus leading to a
workable, industry-driven Business Plan for expansion of the Vancouver Convention and
Exhibition Centre (“VCEC”). The Plan would be prepared on the premise that funding
would be provided by the federal government, provincial government and industry.
Members of the Task Force agreed that the Business Plan would be based on the
following, underlying premises.
• The expansion would take place on the waterfront adjacent to the Vancouver
Convention and Exhibition Centre.
• The Business Plan would be limited to expansion of the convention centre and not
any other components, however worthwhile.
• Industry, the federal government and the provincial government all would be
required to contribute financially to the expansion.
• Gambling or gaming would not be considered as a component of expansion.
Convention centres are catalysts for generating net economic benefit from the spending
of overnight visitors. Through the collective efforts of the VCEC, Tourism Vancouver,
Vancouver hotels and the broader tourism industry, the VCEC has a proven track record
of meeting this objective since opening in 1987.
The services of KPMG and BC STATS were engaged to assist the Task Force. KPMG
reported that the current VCEC generates $245 million annually in delegate and visitor
spending and $73 million in revenue for local, provincial and federal governments. With
expansion, annual delegate and visitor spending would increase to $474 million (an
increase of $229 million) in 2009, the first year of normalized operations for the
expanded convention centre.
KPMG estimated that a typical city-wide convention of 1,750 delegates and 350
exhibitors generates $5 million in spending and $1.5 million in taxes for municipal,
provincial and federal treasuries.
Conventions attract foreign delegates. It is these people, mostly from outside British
Columbia and increasingly from outside Canada, who bring their money to spend here. It
is therefore foreign capital that fuels delegate spending, creates jobs and generates
resultant tax revenue for governments. These tax revenues can then be used by
governments for such things as health care, infrastructure, education and other
government programs at no cost to the taxpayer.
Cities throughout the world appreciate the importance of convention centres to their
economic well being and have invested heavily in the construction, upgrading and
expansion of convention centres. Currently in North America there are 87 new and
expanded facilities planned or under construction that will offer a total of 14.2 million
square feet of new exhibit space and 3.3. million square feet of meeting space.
In spite of the expansion activity, demand for space continues to outstrip supply in North
America. In 1999 the square footage of exhibit space that came on the market was .6%
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over 1998. For that same period the growth in demand for exhibit space at trade shows
was 5.8% – approximately 10 times the rate of supply.
While Vancouver competes with other Canadian facilities for some events, Vancouver
primarily competes with U.S. and international cities and this will become increasingly
so. KPMG estimated that 90% of the convention delegates to the expanded convention
centre will be attending North American and international conventions and, for this
reason, expansion is geared to the US and international markets.
EXHIBIT 1.1
CURRENT & PROPOSED EXPANSIONS
VCEC COMPETITIVE MARKETS
San Diego
San Francisco
Minneapolis
Seattle
Denver
Current
Portland
Preliminary Stages
Montreal
Under Construction
Toronto
VCEC Expansion
Calgary
Vancouver
The Task Force is well aware that a hotel is important for the success of the project.
However, the Task Force believes that market forces will determine the size, location and
timing of a hotel. The Task Force is aware that a hotel site adjacent to the convention
centre expansion property is proposed and expects that a convention-style hotel meeting
the needs of meeting planners, delegates and exhibitors will be announced to open in time
for the expanded convention centre.
The Task Force also agreed that gaming or gambling would not be considered as a
component of expansion. The issue of gaming is one that continues to polarize the
community. The Task Force agreed that the priority was to build the convention centre
expansion and that the benefits to the citizens of British Columbia were so significant that
gambling revenues were not needed to justify industry and government investment in the
convention centre expansion.
The prime beneficiaries of expansion are the federal government, the provincial
government and the tourism industry and it is an underlying premise of the expansion
plan that all three will contribute to the cost of convention centre expansion.
Because the tourism industry believes strongly that expansion will bring benefits to it and
to the community at large, the tourism industry has committed an investment of $90
million toward the total development cost of the project. Industry already contributes to
all levels of government in taxes ranging from property taxes, provincial sales taxes,
Good and Services taxes to payroll taxes. However, industry’s commitment is to provide
$90 million in funding for this project in addition to these taxes. (Industry made a similar
commitment to the Portside development.)
BC STATS estimates that expansion will generate $75.8 million annually in incremental
revenue for the federal, provincial and municipal governments (for the year 2009) and
will create 7,530 new, full-time jobs.
BC STATS estimates that construction will generate $88 million in incremental taxes to
governments and provide 6,702 person-years of employment.
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event business;
• generate economic benefits through jobs and tax revenues from out-of-province
visitors that will provide governments with the opportunity to reduce taxes for
British Columbians and Canadians;
Additional objectives that arose from the experiences of the previous expansion design
process were to:
• demonstrate industry initiative and support for an expansion proposal;
• contain costs and minimize public sector financial risk;
• provide an attractive return for the tourism industry, the federal government and
provincial governments to encourage their investment in expansion;
• minimize design compromises which could impact the functionality and
marketability of the expanded facility;
• minimize construction and operational impacts on existing facilities, including the
Vancouver cruise ship terminal, the SeaBus terminal and the existing Vancouver
Convention & Exhibition Centre; and
• eliminate the linkage with the design, construction and timing of the hotel
component.
The Task Force also agreed that it would communicate regularly with industry and the
three levels of government and share its results during the due diligence process so that
the resulting Business Plan would reflect the consensus of those who were the
beneficiaries of expansion.
There was not the time, resources or appetite by industry, public or governments to re-
create that process. However, the Task Force concluded that there were significant
benefits in utilizing what had been learned from the previous process that ended in
October 1999.
The due diligence steps the Task Force undertook were to:
• confirm that expansion was warranted;
• evaluate the best site and design for expansion, one worthy of Vancouver’s
waterfront, that enhances the Canada Place icon and is highly functional;
• evaluate the project and confirm the cost to build the project; and
• compile the results and present them in a business plan.
BUSINESS CASE
The Task Force was not prepared to consider such a large infrastructure project without
re-affirmation that expansion was warranted.
The business case was to be non site-specific. That is, the results of the study would be
relevant for waterfront sites on either side of the existing VCEC. This would allow the
Task Force to re-examine the case for expansion while reviewing site options.
The international consulting firm, KPMG, had previously conducted extensive analyses
on various aspects of expanding the VCEC in 1995 and 1996. The Task Force engaged
KPMG to update its previous work and analyse the benefits of convention centre
expansion. KPMG released its the study: Expanding the Vancouver Convention and
Exhibition Centre, Market Justification and Economic Benefits in February 2000. The
KPMG study concludes that there are compelling reasons to proceed with expansion.
(Results of the KPMG study are described extensively in Section 2 and throughout the
Business Plan.)
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• Canada Place has become one the world’s most recognized landmarks and has
great appeal to delegates and meeting planners.
• The existing VCEC continues to be an excellent venue for events and will
continue to be an integral part of the expansion plan.
• Meeting planners told Vancouver marketing personnel that a waterfront location
was a critical part of the decision to select Vancouver over its competitors and
accounted for increased business.
• A site adjacent to the existing VCEC provided efficiencies both for delegates and
exhibitors and for management of the VCEC.
Two sites qualified for consideration – the Portside project site to the east of the VCEC
and the Discovery Place proposal on the Burrard Landing site owned by Marathon
Developments Inc. (“Marathon”) to the west.
Shortly after the Province cancelled the Portside project, Marathon notified the Province
that its Burrard Landing site was available for convention centre expansion. Marathon
was offering the site as a vendor, not in its role as a developer as it did in 1997. The
Province referred Marathon’s interest to the Task Force.
The Task Force was fortunate that the Marathon site was still available and the plans for
the Discovery Place proposal on the Burrard Landing site were essentially complete. The
Marathon proposal had been withdrawn from the previous process only a short time
before the deadline for submissions in 1997.
Given that:
• the Province had just cancelled the Portside project;
• the Portside project had been thoroughly investigated and was very well known to
members of the Task Force;
• the Burrard Landing concept had been through the extensive public process as
part of the Stage I Evaluation of the Vancouver Convention & Exhibition Centre
Selection Process;
• the Burrard Landing site was on the waterfront adjacent to the VCEC; and
• the Burrard Landing concept was essentially complete
the Task Force agreed that it should first focus its attention on the Burrard Landing
concept.
Pacific Liaicon and Associates Inc. (“PLA”), recognized for their extensive work on
major projects including the Vancouver International Airport expansion, conducted an
assessment of the Burrard Landing site. The assessment was conducted in close liaison
with PAVCO, who are responsible for managing the VCEC.
LMN Architects (“LMN”) were engaged to update the original design they had prepared
for Marathon. LMN are experts in convention centre design having participated in over
40 convention centre designs throughout the world and having won numerous design
competitions.
George Loschky of LMN described the site as “the most dramatic and attractive
location we have ever worked with”. LMN worked with VCEC management and staff,
and City of Vancouver planning staff to arrive at a final design concept that is functional,
spectacular, worthy of Vancouver’s waterfront and enhances the Canada Place icon.
The result of the analysis was that the Task Force unanimously recommended the Burrard
Landing site and design concept as its preferred choice for the convention centre
expansion.
BUSINESS PLAN
After concluding that the expansion would be of significant benefit to the citizens of
Greater Vancouver, British Columbia and Canada, the next step was to prepare a business
plan that would:
• provide accurate and detailed information for the financial participants in the
project; and
• provide a blueprint for the controlled and business-like construction and
implementation of the expansion.
The Task Force first approved a Business Plan Outline, which was forwarded to senior
officials in the provincial and federal governments for comment. The Task Force
provided this to governments to ensure that any and all information required by the senior
levels of government would be included in the Business Plan. The Business Plan Outline
is included in Appendix A.
The Business Plan uses a number of terms to describe the financial results – normalized,
nominal and net present value.
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in normalized dollars for the year 2009. It is assumed that the first normalized year of
operations will be 2009.
“Net present value” is a method of discounting future cashflows to state them in current
year dollars. All present values are stated in Year 2000 dollars.
“Nominal” refers to spending and taxes that are recorded at their value in the year that
they occur.
The report makes extensive use of the term “convention centre expansion”. For clarity,
convention centre expansion comprises:
• constructing new facilities on the Burrard Landing site to the west of Canada Place;
• renovating the existing facilities at Canada Place; and
• linking the two sites to form an integrated convention and exhibition centre.
1.5 SUMMARY
♦ After cancellation of the Portside project, the Task Force was created and undertook
to provide leadership, direction and focus leading to a workable, industry-driven
Business Plan for expansion of the VCEC.
♦ The Business Plan compiles and presents the information and results obtained as a
result of the due diligence. The Plan addresses the fundamental issues including the
cost of the expansion, the amount of benefits to be generated (and the recipients
thereof), the recommended program of spaces and concept design, funding
alternatives and recommended governance during the construction and operating
phases.
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“The impact of losing tentative convention events and/or past users due to relocation of
events elsewhere is significant. The relocation of a single 4-day, city-wide convention
of 1,750 delegates could potentially result in the loss of more than $5 million in
spending and over $1.5 million in government revenue.”
KPMG, Expanding the Vancouver Convention and Exhibition Centre, Market Justification and Economic Benefits
2.1 INTRODUCTION
The first major step in the due diligence process for the Task Force was the re-affirmation
of the need for expansion. There had been no independent assessment of the need for
expansion or a review of the expansion parameters since April 1995 when KPMG
prepared its 1995 study, Assessment of the Market Potential for Expanded Convention
Facilities in Vancouver, for BC Pavilion Corporation (now PAVCO).
While members of the Task Force were confident that expansion was still warranted, they
were unwilling to recommend proceeding with such a large private/public infrastructure
investment without a current, independent assessment.
The Task Force engaged KPMG to update its previous study and provide a current,
independent report on whether expansion was warranted and what expansion parameters
would be appropriate. Specifically, the purposes of the new KPMG study were to:
• confirm the market potential for expanding the VCEC;
• recommend optimum expansion parameters; and
• quantify the economic benefits to business and government resulting from an
expansion of convention facilities and the corresponding increase in visitors.
The Task Force also engaged the services of BC STATS, the statistical agency of the BC
Ministry of Finance & Corporate Relations, to provide economic impact information that
was based on the spending estimates provided by KPMG in its report. BC STATS
employed its British Columbia Input Output Model (“BCIOM”) to produce the results.
This section describes the results of the KPMG and BC STATS reports. These entire
reports as presented to the Task Force are contained in Appendices B and C respectively.
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The objective of the VCEC is to generate net economic benefits at the local, provincial
and national level by attracting overnight visitors and to showcase British Columbia and
its role as a gateway to Canada.
Through the collective efforts of the VCEC, Tourism Vancouver, Vancouver hotels and
the broader tourism industry, the VCEC has a proven track record of meeting this
objective since opening in 1987.
However, more and more North American cities are recognizing the value of conventions
and trade shows as a means of generating out-of-town visitation and corresponding local
and regional economic benefits.
INTRODUCTION
The market analysis conducted by KPMG focused on reconfirming the demand for expanded
convention facilities in Vancouver. Specifically, the market analysis included a review of:
• North American convention demand trends;
• North American exposition/trade show demand trends;
• Greater Vancouver’s convention and leisure travel appeal;
• Historical convention activity in Greater Vancouver;
• VCEC performance to 1999 including industry focus and current event
characteristics;
• the impact of VCEC size on future performance; and
EXHIBIT 2.1
AVERAGE SQUARE FEET USED
NORTH AMERICAN CONVENTIONS
50% 1994
40% 1998
30%
20%
10%
0%
< 9,999 10,000-39,999 40,000-79,999 > 80,000
SQUARE FEET USED
Source: KPMG
The number of North American events requiring more than 80,000 square feet was
estimated to be in excess of 3,200 in 1998.
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EXHIBIT 2.2
AVERAGE NUMBER OF DELEGATES
PER CONVENTION
ALL NORTH AMERICAN CONVENTIONS
1994
40% 1998
30%
20%
10%
0%
< 100 100-300 300 - 499 500-999 1,000-1,999 > 2,000
NUMBER OF ATTENDEES
Source: KPMG
EXHIBIT 2.3
ANALYSIS OF SELECTED
NORTH AMERICAN EXPOSITIONS BY SIZE
50%
50% 43%
40%
27%29% 1994
30%
1998
20% 11%15%
7% 8% 5% 6%
10%
0%
22,000-99,999 100,000- 200,000- 300,000- 400,000-
199,999 299,999 399,999 500,000
SQUARE FEET
Source: KPMG
In its 2000 study (released in February), KPMG reviewed exposition and trade show
demand and, based on estimated demand for the year 2000, reported that, between 1995
and 2000:
• the demand for total square feet would increase by 22%;
• the average show would increase from 208,000 square feet to 248,000 square feet;
EXHIBIT 2.4
CHARACTERISTICS OF NORTH AMERICAN TRADE AND CONSUMER SHOWS
1995 1997 1999 2000
Actual Actual Actual Estimated
Source: KPMG.
EXHIBIT 2.5
NORTH AMERICAN EXHIBIT SPACE
NO. OF FACILITES % EXHIBIT SPACE %
(Sq. Ft. millions)
Successful convention and trade show facilities are continuing to expand in order to
capitalize on established markets and many of VCEC’s direct competitors have either
recently expanded or propose to do so in the near future.
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Toronto’s recent addition of 250,000 square feet (1997) and Montreal’s proposed
100,000 square feet expansion (2001) were justified based on anticipated demand from
U.S. groups for Canadian convention/exposition destinations.
KPMG reports that four of the VCEC’s direct competitors (San Diego, Seattle, Portland,
Denver) compared in the 1995 KPMG study have planned, are completing or have
completed expansion since the 1995 KPMG study.
EXHIBIT 2.6
CURRENT & PROPOSED EXPANSIONS
VCEC COMPETITIVE MARKETS
S an D iego
S an Francisco
M inneapolis
Toronto
C algary
Vancouver
As a result of this constant expansion activity, few major exhibit halls remain at the same
size for more than five years. The key reasons for this expansion trend are:
• Convention & Visitors’ Bureaux (CVB’s) and municipalities have placed an
emphasis on attracting “business tourists” to their cities;
• competition for conventions and expositions, especially the largest events, is
intense;
• trade shows are growing at a steady rate, but very few new events are launched on
an annual basis; and
• all sizes and types of events, from mega-trade shows to small meetings have a
wide array of venue options.
5,400
5,000
4,600 Actual
4,200 Projected
3,800
3,400
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002
Room nights sold in Greater Vancouver increased from 4.0 million in 1992 to 4.9 million
in 1999 and, by 2000, total room nights sold are projected to reach 5.0 million. Hotel
room demand is expected to continue to increase for the foreseeable future.
EXHIBIT 2.8
ROOM NIGHTS SOLD BY SEGMENT - 1999
GREATER VANCOUVER
Individual
Individual Leisure Corporate
21% 25%
Source: KPMG
As shown in Exhibit 2.8, the convention market (represented in the chart by Group
Corporate Meetings and Group Convention) is crucial to the success of the Vancouver
hotel community. In 1999, approximately 29% of total room nights were the result of
conventions and corporate meetings. Conventions at the VCEC accounted for
approximately 60% and corporate meetings at hotels accounted for approximately 40% of
these room nights.
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EXHIBIT 2.9
GREATER VANCOUVER CONVENTION & MEETING ACTIVITY
1983 TO 1999
NO. OF CONVENTIONS
NO. OF DELEGATES
450 295,000
360 245,000
270 195,000
180
90 145,000
- 95,000
83
85
87
89
91
93
95
97
99
19
19
19
19
19
19
19
19
19
No. of Conventions No. of Delegates
Since 1993 the trend has been that the number of delegates to Vancouver has continued
to increase. Because four of the 16 city-wide events in 1997 were exceptionally large
(e.g, APEC) the number of delegates in that year jumped from 176,000 in 1996 to
252,000 in 1997.
The current definition of a city-wide event is 1,000 or more hotel rooms consumed on the
peak night of the convention which are booked at a minimum of three hotels.
City-wide events are important because they make the tourism infrastructure operate
more efficiently and generate more hours of work for employees in the tourism industry
than do normal events. A recent study commissioned by Tourism Vancouver concluded
that occupancies increased by 11.1% at convention hotels and 7.9% at non-convention
hotels during city-wide events.
More than hotels benefit from city-wide events, where thousands of delegates spend an
average of $520 per day visiting local attractions, in restaurants, taxis and retail stores.
Taxis are busier with less waiting time between fares and hotels, restaurants and retail
stores call in more part-time staff to serve these consumption-hungry visitors.
The VCEC is the host facility for the majority of city-wide conventions held in
Vancouver. The VCEC’s (and Greater Vancouver’s) ability to successfully host very
large events (e.g., International Conference on AIDS) despite facility size constraints and
a limit on the number of hotel rooms, not only demonstrates the attractiveness of
Vancouver, but also suggests great potential to attract more of these events with
expanded facilities.
The current capacity for the number of city-wide events is limited to approximately 15 to
20 per year due to the space limitations of the existing VCEC. The ability to host city-
wide events will increase significantly with expansion with the resultant, associated
benefits.
EXHIBIT 2.10
VCEC EXHIBIT HALL & BANQUET ROOM UTILIZATION
1994 TO 1999
85%
Exhibit Space
75%
Ballroom Space
65%
55%
1994 1996 1997 1998 1999
Source: KPMG
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EXHIBIT 2.11
LEADING INDUSTRY FOCUS
OF NORTH AMERICAN EXPOSITIONS
20%
15%
10%
5%
0%
Sciences Technology Home Sports and Education Building
Furnishings Leisure
Source: KPMG
In 1999 (consistent with prior years), the industry focus of VCEC conventions was
primarily medical sciences, technology and business/finance events. The VCEC and
Tourism Vancouver marketing plans suggest a continued focus on these segments.
20%
10%
0%
Medical Technology Business and Management Agriculture Other
Sciences Finance
Source: KPMG
EXHIBIT 2.13
VCEC CONVENTIONS
BY PEAK ROOM REQUIREMENTS
1995 TO 1999
NO. OF CONVENTIONS
60
2,500+
45
1,000-2,499
30 600-999
< 600
15
0
1995 1996 1997 1998 1999
Source: KPMG
EXHIBIT 2.14
VCEC TRADE SHOWS
BY PEAK ROOM REQUIREMENTS
1995 TO 1999
NO. OF TRADE SHOWS
30
1,000-2,499
600-999
20
< 600
10
0
1995 1996 1997 1998 1999
Source: KPMG
The number of city-wide conventions hosted by the VCEC over the past 5 years
(requiring 1,000+ peak hotel rooms) ranged from a low of 9 in 1996 to a high of 16 in
1997. U.S. and internationally-based convention groups consistently account for more
than 75% of all city-wide conventions and trade shows.
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The convention and trade show events held at the VCEC generally do not overlap. Most
conventions (e.g., 26 of 35 in 1999) are held between April and October, with most city-
wide conventions (e.g., 10 of 14 in 1999) concentrated between May and September.
The majority of trade shows (e.g., 16 of 26 in 1999) are held between November and
April, except for December.
EXHIBIT 2.15
VCEC CITY-WIDE CONVENTIONS
1997 TO 2005
20
Tentative
15 Confirmed
10 Historical
0
1997 1999 2001 2003 2005
Source: KPMG
In order to estimate the impact of VCEC size on future performance, KPMG interviewed
representatives of events held at the VCEC from 1995 to 1999 and representatives of
selected tentative events in the future.
KPMG’s analysis of selected events occurring from 1995 to 1999 included a review of
space needs and interviews with event representatives. KPMG concluded that the annual
growth in attendance for these events ranged between 5% to 8% and the average number
of attendees at city-wide events (held at the VCEC) increased from 2,100 to 3,050.
EXHIBIT 2.16
AVERAGE ATTENDANCE OF VCEC USERS
REQUIRING 1,000 PEAK HOTEL ROOMS
Actual
4,000
3,000
2,000
1,000
0
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
Source: KPMG
Interviewees suggested that the size of the VCEC is limiting their ability to maximize the
potential attendance. As the space needs of VCEC users (and potential users) continue to
grow, the VCEC’s space constraints become more of an issue.
In late 1999, KPMG conducted interviews with a sample of potential VCEC users each
requiring between 100,000 to 300,000 square feet of exhibit space. The majority of
interviewees expressed an interest in incorporating Vancouver into their rotation pattern,
assuming an adequate mix of exhibit and meeting facilities and a sufficient number of
hotel rooms proximate to the convention centre.
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EXHIBIT 2.17
VCEC MARKET POTENTIAL
FACILITY REQUIREMENTS AND CHARACTERISTICS FOR FUTURE VCEC EVENTS
EXHIBIT ATTENDANCE HOTEL YEAR
SPACE BLOCK
Source: KPMG
EXHIBIT 2.18
NORTH AMERICAN CONVENTION ACTIVITY
BY MONTH
% OF CONVENTION ACTIVITY
20%
15%
10%
5%
0%
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Source: KPMG
The ability to host multiple events (and/or events with overlapping move-in/move-out
schedules) is currently not possible at the VCEC with the exception of very small events.
The majority of North American convention events are held in June, or between
September and November and utilization of VCEC exhibit and banquet rooms during
these months has been in excess of 70% for each year since 1995.
The event load projections shown in Exhibit 2.19 were derived after considering
historical performance, potential expansion of existing events and the ability to attract
new (i.e., larger and contiguous) events.
EXHIBIT 2.19
EXPANDED VCEC POTENTIAL EVENT LOAD &
SQUARE FOOT DAYS USED
1999 (ACTUAL), 2005, 2009, 2013
80 80,000
SQ. FT. DAYS USED
NO. OF EVENTS
60 60,000
Trade Shows
40 40,000 Conventions
Exhibit Space
20 20,000
- -
1999 2005 2009 2013
Source: KPMG
The cyclical nature of the convention business suggests that event load estimates will
vary from year to year based on external factors and the marketing direction of the VCEC
and Tourism Vancouver.
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Exhibit Space
Seattle Meeting/Ballroom Space
Portland
Minneapolis
Denver
San Diego
San Francisco
Vancouver
VCEC users (and potential users, based on telephone interviews) are somewhat more
meeting-focused. The ratio of current VCEC exhibit space to meeting/ballroom space is
approximately 2:1. This preference for greater meeting capacity reflects the convention
(as opposed to trade show) orientation of existing and projected VCEC clientele.
CONCLUSIONS
Based on the event load projections outlined in Section 2.3 and on additional interviews
to determine current user needs, KPMG reconfirmed the facility mix recommendations
made in its 1995 report (as set out in Exhibit 2.21).
EXHIBIT 2.21
1999 VCEC FACILITY EXPANSION RECOMMENDATIONS
(Square Feet except where noted)
CURRENT EXPANDED COMBINED
MEETING ROOMS
NUMBER 20 40 to 55 60 to 75
SQUARE FEET 43,000 83,000 to 88,000 126,000 to 131,000
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Benefits from operations are generated from the spending of out-of-town attendees and
delegates attending conventions and meetings at the VCEC. This spending converts into
profits to employers and tax revenues that would otherwise be paid by residents of British
Columbia.
The KPMG study quantified the benefits resulting from operations of an expanded VCEC
by addressing:
• incremental delegate/exhibitor spending;
• government revenues and employment impacts; and
• the impact of lost events.
The calculation of incremental revenue and associated economic impacts are based on the
event load projections for 2009.
Exhibitor spending includes hospitality suites, accommodation for booth staff and booth
set up expenses. Spending by delegates and exhibitors occurs at a variety of hospitality
and tourism industry businesses, not just “traditional” suppliers such as hotels and
restaurants.
EXHIBIT 2.22
ECONOMIC IMPACT
DELEGATE AND EXHIBITOR SPENDING YEAR 2009 DOLLARS ($ millions)
INDUSTRY SECTOR EXISTING INCREMENTAL EXPANDED
The BC STATS results were generated from the BC Input Output Model (“BCIOM”),
which is derived from the 1996 Interprovincial Input-Output tables developed by
Statistics Canada. The economic impact summary from BC STATS includes direct,
indirect and a range of induced impacts of spending
The Chief Economist of The Vancouver Board of Trade also recommended that the
BCIOM be used to calculate the output results because it uses data specific to British
Columbia.
Based on the BCIOM, the incremental delegate and exhibitor spending as a result of
VCEC-hosted events will generate $75.78 million (say $76 million) in incremental tax
revenues to the three levels of government.
1
For definitions of terms, see Appendix C, BC Input-Output Impact Analysis for Vancouver Convention
Centre
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EXHIBIT 2.23
ECONOMIC IMPACT
INCREMENTALTAX REVENUES TO GOVERNMENTS ($ millions)
Existing Incremental Expanded
Federal $ 35.80 $ 29.43 $ 65.23
Provincial 26.83 36.82 63.65
Municipal 10.81 9.53 20.34
TOTAL $ 73.44 $ 75.78 $ 149.22
EMPLOYMENT IMPACTS
The incremental spending also has a powerful impact on employment creation. Exhibit
2.24 summarizes the job creation impact due to delegate and exhibitor spending and due
to the need to expand the internal operations of the VCEC because of expansion.
This is an excellent illustration of the role of the VCEC as an economic generator. While
the facility will employ an additional 205 persons as a result of expansion, the
incremental delegates and exhibitors the VCEC attracts will create 7,325 new jobs in
Vancouver and around the province other than at the VCEC.
EXHIBIT 2.24
ECONOMIC IMPACT
NEW FULL-TIME JOBS
JOBS %
Source: BC STATS.
For illustrative purposes the economic impact of a city-wide event is profiled in Exhibit
2.25.
EXHIBIT 2.25
PROFILE OF A CITY-WIDE EVENT AND ASSOCIATED IMPACTS
Government Revenue
Municipal 223,000
Provincial 555,000
Federal 738,000
TOTAL Government Revenue $ 1,516,000
Given that more than 10 events held at the VCEC in 1999 were larger than the event
shown above, every event that the VCEC loses due to the absence of expansion will
result in a loss of substantial revenues to industry and governments.
Current revenues generated as a result of delegate and exhibitor spending associated with
events held at the VCEC are $245 million per year with over 90% of revenues dispersed
throughout the tourism and associated industries (e.g., accommodation, food and
beverage, retail and transportation providers).
The expansion of the VCEC will, as a result of increasing both the number and size of
convention events in Vancouver, generate still greater economic benefits to tourism and
service industry businesses and all three levels of government. Incremental spending by
delegates and exhibitors in 2009 will be approximately $229 million.
Governments will receive incremental annual revenues of $75.78 million ( $29.43 million
for the federal government, $36.82 million for the provincial government and $9.53
million for the municipal government).
The impact of losing tentative convention events and/or past users due to relocation of
events elsewhere is significant. The relocation of one typical, city-wide convention of
1,750 delegates could potentially result in the loss of more than $5 million in spending
and over $1.5 million in government revenue.
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2.6 SUMMARY
♦ The objective of the VCEC is to generate net economic benefits for the community
and governments.
♦ The financial and economic benefits of an expanded VCEC are significant and are
shared by a wide range of tourism industry businesses and the taxpayers through
taxes collected at all levels of government.
♦ Many of the VCEC’s conventions and trade shows are outgrowing the VCEC and are
being forced to look to venues in other cities that are able to accommodate them.
Vancouver’s direct competitors are planning, have planned or are expanding their
facilities to meet the increased space demands of Vancouver’s target markets.
♦ An expanded VCEC will not only permit targeting of new and larger events but, more
importantly, will permit the hosting of multiple events during peak convention
season.
♦ Most, if not all, of the attributes associated with a successful convention destination
(i.e., quality of service, easy access, tourist appeal, range of facilities and attractions)
are in place in Vancouver as demonstrated by the City’s past successes in hosting
conventions.
♦ “The status quo is not an option. Without expansion, the current benefits
realized by Greater Vancouver’s tourism industry will decline as the VCEC is
unable to effectively compete in an environment of increasing attendance and
demands for additional exhibit space.”
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3.1 INTRODUCTION
As with any large project of this type, it is important to ensure that the facility is used to
its potential. Therefore, a carefully thought-out and properly financed marketing plan is
necessary to attract the attention of the convention community and secure customers,
thereby delivering the significant benefits to industry and governments created by
expansion.
The foundation of the marketing plan is the business vision for expansion. The following
statement summarizes what drives all decisions in the market development plan.
VISION
The convention centre expansion will be a major economic generator derived from the
incremental spending of additional overnight visitors.
In Greater Vancouver alone, tourism revenues have grown by 75% over the past decade.
Tourism accounts for $3.6 billion in annual gross visitor spending. The meetings and
conventions market comprises approximately $419 million (12%) of the total market.
As can be seen on Exhibit 3.1, convention centre expansion is a catalyst that drives the
economic benefits in the meetings and conventions segment of the industry.
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EXHIBIT 3.1
CONVENTIONS’ SHARE OF OVERALL TOURISM
DESCRIPTION REVENUES %
Convention Centre (Current) $ 244.9 7%
Expanded Convention Centre (Incremental) 228.9 6%
Non-convention Centre Meetings 179.3 5%
Other Tourism 2,987.1 82%
TOTAL Tourism $ 3,640.2 100%
Source: Economic Impact and Spending Data, Tourism Vancouver, June 2000 and KPMG, modified for 2009.
It is naive to imagine that Vancouver’s customers (actual and potential) will get unduly
excited about expansion in Vancouver when more than sixty other cities in North
America are either in the preliminary stages of expansion or under construction.
Tourism Vancouver, the Vancouver Hotel Association (VHA) and the VCEC formed the
Marketing Group of the Task Force and collaborated to evaluate, deliberate and
recommend the best way to compete in the global marketplace. This marketing plan
reflects their collaborative effort.
Vision
Focus
Priorities
Programs
FOCUS
Expansion will be a catalyst to elevate Vancouver and BC’s position as a convention
destination by focusing the actions of the community on delivering exceptional
customer experiences.
The expansion of the convention centre is not just about constructing a facility that will
attract more and larger conventions. With expansion, Vancouver will attract different
kinds of conventions that will bring heightened expectations of our offering as a
destination, not just as a convention centre. Although Vancouver and British Columbia
are known for excellent customer service, the challenge will be to create a destination
mentality that embodies the broader impact of expansion. Premier customer service is a
strategic difference that will keep Vancouver and BC at the top of the list of international
destinations.
“The margin will be in the attributes that surround the product, not the physical
product itself. The real product value is in the surrounding components, the
atmospherics…service, delivery and responsiveness.”
Alf Nucifora, speaking to the International Association of Convention and Visitor Bureaus, October 1997.
“Tangible assets are no longer the primary driver of competitive advantage and
profitability. Instead, intangible assets such as high-quality customer service and
intellectual capital are increasingly the source of value in today’s most successful
businesses”.
Andersen Consulting, quoted in a marketing supplement in The Globe and Mail, May 2000.
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facilities and overall quality experiences for their clients (i.e., delegates and exhibitors).
Technology plays a fundamental role in the expectations of these customers. The
destination sellers that fully appreciate and deliver in this area will be well positioned for
success.
“There is a new power equation between buyers and sellers. In the traditional
relationship, sellers had most of the cards – and held them close to the vest. Now,
thanks to Internet connectivity, buyers have unprecedented access to information
about products, competitive pricing, and sourcing options. They can make their
voices heard to sellers”.
Andersen Consulting, quoted in a marketing supplement in The Globe and Mail, May 2000.
STRATEGIC PRIORITIES
The Marketing Group considered a wide array of factors in the development of strategic
priorities, including customer trends, industry assets, stakeholder needs, sound business
opportunities and environmental (external) challenges. The strategic priorities set out
below will drive the investment allocation for market development programs.
1. Delivering Results
Establish common short- and long-term business goals for the various customer
groups that will be targetted, with the overall objective of surpassing the annual
“delegate spend” by increasing the number of delegates that will be realized from
expansion.
COMPETITION
A coherent, integrated and aggressive marketing plan is predicated on assessing
Vancouver’s convention position in relation to the competition. Expansion will enable
Vancouver to strengthen its appeal amongst meeting planners in certain competitive sets.
With some competitors, expansion may not have much of an impact.
It is the opinion of the Marketing Group that the following competitors will be impacted
to some degree by Vancouver’s expansion. In addition to the information provided
below, the Marketing Group thinks it is extremely important that Vancouver’s
positioning in the marketplace is re-evaluated through customer research in the near
future.
Tourism Vancouver and the VCEC both obtain valuable and candid customer feedback
through customer advisory groups – a collection of meeting planners who are responsible
for organizing conventions for large organizations and who have a first-hand knowledge
of the needs of their clients. These customer advisory groups have cited that Vancouver
needs to work to overcome competitive disadvantages such as air accessibility, customs
clearance and the lack of a convention headquarter hotels (1,000 rooms).
EXHIBIT 3.2
KEY COMPETITORS FOR VANCOUVER
EXHIBIT SPACE # OF HOTEL ROOMS - METRO
(1999)
SOURCE: 9th Annual Competitive Analysis Report, Chicago Convention and Tourism Bureau, Inc. (1999).
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MARKET SEGMENTS
The market segments that are prime users of the VCEC are Conventions, International
Congresses, Meetings, Incentive Shows, Trade Shows, Industry Events, Consumer Shows
and Civic Activities. These market segments are defined further below.
CONVENTIONS
• 1000-5000 guestrooms on peak night of convention.
• 2-6 year booking period prior to actual convention year.
• Planners and delegates: 90% from U.S., 10% from Canada.
• Annual association meetings, usually in different cities each year.
• Privately held meetings for the benefit of association’s membership.
• Professional, trade, medical/research, scientific, government, fraternal, religious,
union, educational, social.
• Include several general sessions, concurrent seminars, simultaneous workshops.
• May or may not include exhibits.
• Key selling points: delegate draw, exhibitor draw, destination appeal, cost, access,
pre/post opportunities, safety.
INTERNATIONAL CONGRESS
• 1000-5000 guestrooms on peak night of convention.
• 3-10 year booking period prior to actual convention year.
• International headquarters for organizations usually in Europe, U.S. or Canada.
• Delegates from around the world.
• Many meetings are bi-annual.
• Host country/national body usually invites international organization to hold
event.
• Emphasis on medical and scientific research.
• May or may not include exhibits.
• Key selling points: local support/relevance, delegate draw, cost, pre/post
opportunities, destination appeal, safety.
MEETINGS
• Primarily classified as corporate.
• 1000-3000 guestrooms on peak night of meeting.
• Meetings shorter in duration than conventions and congresses.
• 0-3 year booking period prior to actual convention year.
• Primarily North American, 90% from U.S. and 10% from Canada.
• Product launches sales meetings, annual general meetings, shareholder meetings
or training sessions.
• Key selling points: availability, access, meeting and function space, cost,
TRADE SHOWS
• Similar to conventions, but with a main focus on exhibits.
• 1000-2000 guestrooms on peak night of event.
• 1.5-3 year booking period.
• 60% from U.S., 30% from Canada, 10% international.
• Exhibitors are both local and from out-of-town.
• Events are sometimes open to public interested in the field.
• Trade shows are owned and operated by professional trade show management
firms.
• Key selling points: delegate and exhibitor draw, local support, facility/space, cost,
access, safety.
OTHER SEGMENTS
• Industry events are part of conventions.
• Consumer shows are similar to trade shows, but focus on public attendance and
retail sales.
• Civic activities are public events, such as Canada Day.
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EXHIBIT 3.3
RANKING OF MARKET SEGMENTS
RANK SEGMENT SIZE OF MARKET ECONOMIC RETURN ABILITY TO
INFLUENCE
1 Conventions H H H
2 International Congresses M H M
3 Meetings H M M
4 Incentive Shows L H M
5 Trade Shows L M M
6 Industry Events L M H
7 Consumer Shows L L L
8 Civic Activities L L L
It is important to note that the “ability to influence” factor referred to in Exhibit 3.3 refers
to the ability to influence meeting planners who are the decision-makers, not the
delegates who attend the event. However, it is recognized that the role of the delegate is
not to be overlooked as the delegates’ opinions of a destination significantly influence the
meeting planner.
Vancouver’s appeal has and will continue to lie in the “atmospherics” of service, delivery
and responsiveness, not in the square footages and dimensions that seem to be the
foundation of convention marketing strategies in many other cities.
• Sell Vancouver as a destination first - The success of the expanded facility will
come from the overall appeal of Vancouver. A member of the Marketing Group
commented that “the convention centre might be the front door to the conventions
market, but it is what is behind the door (the essence of the city) that will sell it”.
• Diminish the business risk - An expanded, fully updated facility will remove the
concerns raised by the market in the past.
1. Pre-Selling/Qualification
(i.e., web sites, advertising, trade shows, direct mail, BestCities.net partnership, sales
missions, familiarization trips, special promotions/events, e-business)
3. Customer Servicing
(i.e., attendance building, customer support, on-site and welcoming activities)
The KPMG report estimates that an expanded convention facility will generate
approximately $474 million in gross revenues from delegates and exhibitors in a
normalized year (2009). Incremental spending represents $229 million of the total,
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indicating that expansion will double spending over pre-expansion levels. The study
states that the growth in business will be enhanced not only by the ability to host larger
events, but the opportunity to host simultaneous or overlapping events.
According to the KPMG study, hotel room nights will accelerate at a pace faster than
delegate days because of a delegate profile weighted toward U.S. and international
visitors.
Exhibit 3.4 summarizes the impact of expansion on events, delegate days and hotel room
nights before and after expansion.
EXHIBIT 3.4
ANNUAL EXPANSION GOALS
CURRENT INCREMENTAL EXPANSION % GROWTH
KPMG forecasts an event profile that is focused more on conventions than trade shows.
The expanded convention centre would potentially have a mix of 66% conventions and
34% trade shows. (The current mix is 57% conventions and 43% trade shows.)
EXHIBIT 3.5
TYPE OF ANNUAL BUSINESS FORECASTED
REGIONAL NORTH AMERICA INT’L TOTAL
Source: KPMG
With respect to the number of city-wide events, the Marketing Group determined that 36
city-wide events after expansion would be a reasonable target.
EXHIBIT 3.6
ANNUAL CITY-WIDE EVENT GOALS
TYPE OF EVENT PRE-EXPANSION POST-EXPANSION
Conventions 10 18
International Congresses 3 8
Meetings (Corporate) 1 6
Trade Shows 1 4
TOTAL 15 36
The return to the tourism industry from expansion will be driven by events that cater to
overnight visitation. In particular, conventions that include exhibits are significant
generators of revenue ($6.73 million/event). The least beneficial events are consumer
shows ($0.99 million/ event) which draw from the local market.
EXHIBIT 3.7
GROSS REVENUES BY TYPE OF EVENT
ROOM-NIGHTS SPENDING
PER EVENT PER EVENT ($millions)
Vancouver currently has sufficient hotel room inventory to accommodate the incremental
hotel room-night demand shown in Exhibit 3.4. At present there are 24,160 hotel rooms
in Greater Vancouver and 14,734 hotel rooms in the City of Vancouver, of which 12,975
are located in the downtown area demonstrating that Vancouver has adequate hotel room
inventory to host typical city-wide events. A number of new hotel properties were
developed in the past few years when the Portside project expansion was originally
announced.
Year-to-date hotel occupancies (to June 30) at Greater Vancouver hotels are 62.3 percent,
5.2 percent below the June year-to-date level for 1999. Based on year-to-date actuals to
June, the forecast for 2000 is 62.6 percent, 5.5 percent below 1999 actual occupancies of
68.1 percent.
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RESOURCE ALLOCATION
The business of building business with meeting planner customers is dominated by one-
to-one relationships. The market is somewhat finite – understanding the needs of the
customers and delivering exceptional experiences will differentiate one destination from
another. Members of the Marketing Group reported measurable benefits to investing in
developing one-to-one relationships. For example from 1998 to 1999 Tourism Vancouver
increased its conventions sales teams by one-third and, in the same period, reported that
the number of qualified prospects and converted business increased by 31% and 42%
respectively.
To grow the share of the meetings and events market, Vancouver will need to emphasize
outstanding customer service and continue to focus on building long-term relationships.
This approach should form the foundation of the way customers are serviced and become
even more of a focus as the market matures.
Technology will continue to play an increasing role in the ability to service customers.
The web is enabling the industry to offer more valuable, timely information and more
efficient, higher quality service.
At the appropriate time, key programs will need to be planned and developed by
members of the Marketing Group and the industry in general, by building on existing
initiatives and creating new marketing activities. The programs should be strategized with
the following in mind:
• Program description, business objectives and relevance to strategic priorities;
• Lead organization and other partners;
• Customer emphasis, in terms of type, life-cycle, origin and seasonality;
• Emphasis of various communications vehicles;
• Key measures of success;
• Key activities (tactics);
• Timing; and
• Anticipated staffing and investment resources, including leveraged amounts.
3.7 SUMMARY
♦ In order to reach its potential, a highly functional and beautiful facility must be
marketed, not as a stand alone, one-time event, but as a fully integrated and long-term
feature within the broader context of destination marketing.
♦ Over the course of the past 13 years, the existing convention centre has proven itself
to be an economic engine for Vancouver, British Columbia and Canada. An expanded
facility is the next step in protecting and growing the future. But the promise will only
be delivered with a long-term, strategic and highly accountable marketing plan that
focuses on delivering exceptional customer experiences.
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“The most dramatic and attractive location we have ever worked with.”
George Loschky of LMN Architects, designers of more than 30 major convention centres in North America.
4.1 OVERVIEW
The KPMG report concluded that the expansion should provide for:
• contiguous exhibit hall space of 250,000 to 300,000 square feet;
• ballroom space of 50,000 square feet;
• 40 to 55 meeting rooms occupying 83,000 to 88,000 square feet; and
• theatre with seating for 1,500.
The Task Force agreed to focus its investigation on those sites that had gone through the
extensive industry and public scrutiny of the previous Stage 1 – Expressions of Interest
and that were on the waterfront adjacent to the existing VCEC. There were a number of
solid business reasons for this decision.
• Canada Place has become one the world’s most recognized landmarks and has
great appeal to delegates and meeting planners.
• The existing VCEC continues to be an excellent venue for events and will
continue to be an integral part of the expansion plan.
• Meeting planners told Vancouver marketing personnel that a waterfront location
was a critical part of the decision to select Vancouver over its competitors and
accounted for increased business.
• A site adjacent to the existing VCEC provides efficiencies both for delegates and
exhibitors and for management of the VCEC.
Two sites qualified for consideration – the Portside project site to the east of the VCEC
and the Discovery Place proposal on the Burrard Landing site owned by Marathon
Developments Inc. (“Marathon”) to the west.
Shortly after the Province cancelled the Portside project, Marathon notified the Province
that its Burrard Landing site was available for convention centre expansion. Marathon
was offering the site as a vendor, not in its role as a developer as it did in 1997. The
Province referred Marathon’s interest to the Task Force.
The Task Force was fortunate that the Marathon site was still available and the plans for
its Discovery Place proposal on the Burrard Landing site were essentially complete. The
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Marathon proposal had been withdrawn from the previous process only a short time
before the deadline for submissions in 1997.
Given that:
• the Province had just cancelled the Portside project;
• the Portside project had been thoroughly investigated and was very well known to
members of the Task Force;
• the Burrard Landing concept had been through the extensive public process as
part of the Stage I Evaluation of the Vancouver Convention and Exhibition Centre
Selection Process;
• the Burrard Landing site was on the waterfront to the west of the VCEC; and
• the Burrard Landing concept was essentially complete
the Task Force agreed that it should first focus its attention on the Burrard Landing
concept.
Pacific Liaicon and Associates Inc. (“PLA”), recognized for their extensive work on
major projects including the Vancouver International Airport expansion, conducted an
assessment of the Burrard Landing site. The assessment was conducted in close liaison
with PAVCO, who are responsible for managing the VCEC.
LMN Architects (“LMN”) were engaged to update the original design they had prepared
for Marathon. LMN are experts in convention centre design having participated in over
40 convention centre designs throughout the world and having won numerous design
competitions.
George Loschky of LMN described the site as “the most dramatic and attractive
location we have ever worked with”. LMN worked with VCEC management and staff,
and City of Vancouver planning staff to arrive at a final design concept that is functional,
spectacular, worthy of Vancouver’s waterfront and enhances the Canada Place icon.
The expanded convention centre on the Burrard Landing site will be able to
accommodate the KPMG expansion parameters and will offer a program of spaces
slightly larger than recommended by KPMG.
• The size of the Burrard Landing site allows the construction of a true purpose-
built facility for conventions and exhibitions which is unfettered by site
constraints. The proximity of the site to the existing VCEC allows a full
integration with the existing building via multi-level linkages and service
corridors.
• The existing VCEC is able to operate at full capacity (and therefore generate full
benefits to governments and industry) during the entire construction period.
• The specific design of renovations to the existing VCEC can be deferred until the
Burrard Landing expansion is well underway, allowing time to assess any shifts in
market requirements.
• Being able to build a convention centre that offers spaces slightly larger than
recommended by KPMG addresses an originally stated requirement that
opportunities for future expansion be included.
• The form of expansion will provide space for larger groups and multiple smaller
events.
The property includes legal lots 23 through 28, Plan LMP29892. Lots 29 and 30 are
owned by Marathon and have been rezoned for possible development as hotel or office
towers to permit a minimum of 500,000 buildable square feet on each property.
The lands proposed for the expanded convention centre are a reconfiguration of Lots 23,
24, 25, 26, 27 and 28 and comprise a total area of approximately 18.37 acres (800,215
square feet). Under a proposed neighbourhood development plan, the shoreline would be
altered slightly so that the entirety of lot 23 would be a water lot (578,364 square feet)
and the remaining four lots (221,851 square feet) would be completely filled. Under the
proposed plan for the convention centre expansion, the size of the water lot would be
reduced because of less cutting away of the shoreline.
The property is currently zoned CD-1 which permits a variety of uses including cultural
and recreational, marina, institutional, marine terminal, office, retail and service. The
current zoning also requires that the developer include the following amenities:
• arts centre;
• day care facilities; and
• public amenity spaces.
The City has indicated that it would favourably consider re-zoning of the property
permitting the development of a convention centre. As part of the rezoning, Marathon has
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already made application to sub-divide the property – one parcel for the convention
centre expansion and two parcels for office and hotel development.
In coordination with the Task Force, PLA carried out the following steps:
• requested that Marathon develop an updated version of the original “Discovery
Place” proposal which would take into account new developments in convention
centre design since the project was originally conceived;
• directed technical and operating staff of the VCEC to work with project architects
and engineers to ensure all functionality requirements were met or exceeded;
• met extensively with regulatory authorities including City of Vancouver Planning,
Engineering and Cultural Affairs departments, Vancouver Deputy City Manager,
the Vancouver Parks Board and the Department of Fisheries and Oceans to
identify any issues having the potential to impact the proposal; and
• assisted in discussions with Marathon as to the cost and conditions associated
with purchase of the necessary property.
LOCATION
The site is in a premier position on the Vancouver harbour, consistent with the industry
position that an adjacent waterfront site is required to maintain the continuity of market
expectations and the highly successful image built by Vancouver since the opening of the
VCEC in 1987.
PROXIMITY TO VCEC
The site is immediately adjacent to the existing VCEC at Canada Place and can be readily
linked and functionally integrated with this facility through both existing and new
connectors via available rights-of-way.
VIEW ASPECT
The site is endowed with Vancouver’s signature harbour, mountain and park views,
unobstructed by either the existing VCEC facility or other adjacent development. It is
entirely removed from industrial port and rail activity, and opens to what will be an
extensive park area associated with the Coal Harbour development to the west.
LOW PROFILE
The site offers a natural drop in elevation from the level of the existing street grid to the
harbour front. This allows for the construction of the exhibition hall below city grade
where it will not impede city views. At the same time, it enables the development of a
significant street level public plaza, which provides direct access to the harbour edge
from the downtown core.
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The “icon” of the sails at Canada Place will remain the most dominant architectural
feature, with new views to the sails opened up from the expansion wing.
SIMPLIFYING RELATIONSHIPS
The site for expansion would be created by subdividing the required portion of the overall
Burrard Landing property to create an independent site, which would be owned by an
appropriate, designated entity agreed to by the funding participants. Two sites, potentially
for hotels, would be created immediately to the south on adjacent private property with
separate ownership.
This separation has the advantage of simplifying what were previously complex
relationships among the various components of the overall development.
• The convention centre expansion could proceed independently of other
components, minimizing any real or perceived cross-subsidies and conflicts
regarding their associated design, construction and infrastructure.
• The adjacent hotel(s), while functionally part of the overall development, would
proceed as independent private sector projects according to market conditions.
• There would be no need to link the start of expansion construction to a parallel
start of construction on a cruise ship terminal expansion as the expansion would
not require the shutdown of the VPA’s berths during the construction period.
With the Vancouver Port Authority’s January 2000 announcement that it is
proceeding with the third cruise ship terminal, the two projects are now
proceeding independently and will not interfere with each other in any significant
way.
The first phase is the construction of the Burrard Landing site. During construction there
will be no interruption in the operation of the VCEC. The ability to operate without
interruption is a major economic advantage to the tourism industry and the three levels of
government.
The second phase is the renovation of existing facilities at Canada Place. With the
Burrard Landing expansion now completed and open for business, there will be no
interruption in VCEC operations while renovations to the VCEC are being carried out.
At the conclusion of the second phase, the link between the two phases will be completed
creating a single functioning facility linked by multi-level access corridors. This will be
the final step in the completion of the convention centre expansion.
CONTAINING COSTS
The construction of a single purpose-built building on its own site reduces the complexity
and overall cost of the project.
In addition to the simpler design, there are a number of other factors that contribute to a
lower project cost. The design team was able to modify the original Discovery Place
design by moving the building footprint approximately 200 feet further on to the shore,
significantly reducing marine and site preparation costs.
The expansion will require renovations only, rather than retrofitting, to bring the existing
VCEC up to the standard of the entire expansion. Therefore, the renovated VCEC will
continue to generate revenues for a relatively modest investment only.
Collectively, these measures helped to reduce the overall cost of the project while still
delivering the full program of required components.
ARCHITECTURAL CONCEPT
LMN have designed more than 40 major convention centres throughout the world. A
corporate profile of LMN is contained in Appendix F. Project designer George Loschky
described the site as “the most dramatic and attractive location we have ever worked
with”.
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The architects’ approach is one that appreciates the setting, maintains full functionality
and respects both the views and the existing prominence of the sails at Canada Place as
an international signature statement.
ARCHITECT’S DESCRIPTION
Functionality was a high priority for the design of the expansion. In describing the
proposed program of spaces Mr. Loschky said,
“The design program proposed is a highly functional one that was developed in
full consultation with the managers and operators of the existing VCEC and
endorsed by them as meeting their most ambitious standards for operating
efficiency. The design concept also responds fully to the concerns expressed by
the industry users on reviewing the Portside project at the one day Industry
Advisory Forum held on February 22, 1999.
By meeting the entire space requirements in the first phase of expansion, there is
an opportunity to create a fully integrated facility and eliminate the design and
functionality compromises inherent in an adaptive refit of the existing facility.”
ORGANIZATIONAL CONCEPT
The vertical organization is very simple. Three floors accommodate the main public
space requirements of the program. Each level has a defined function – Level 11.5 for
Exhibition Halls, Level 52.5 for Meeting Rooms and Registration and Level 76.0 for the
Ballroom/Signature Room/Lecture Hall.
ARRIVAL
The topography of the site from the existing street grade to the waterfront below has
facilitated a multi-level arrival concept, which will provide efficient and convenient
traffic management for the project.
The focus for pedestrian traffic will be the Burrard Landing Plaza and the Thurlow
Gardens Plaza, where arriving delegates will encounter sweeping views of the waterfront
and mountains, free from bus lines and taxi queues. Access from both the east and west to
the registration lobby will provide a vehicular free environment for pedestrians.
Between Burrard and Thurlow on the north side of Canada Place Way will be a formal
ceremonial vehicular drop off that will lead directly into the registration area. A level
below the street will be a large taxi and limousine arrival area with entries to the 31.9-
foot mezzanine, which will link to the registration lobby above. Below the mezzanine at
exhibit level is located a convention shuttle bus terminal adjacent to an arrival lobby
linked to the levels above with escalators and elevators. The functionality and efficiency
of this arrangement will make a significant contribution to the arrival experience.
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Convenient, efficient and accessible visitor parking for 425 vehicles is provided on two
levels, both immediately adjacent to the mezzanine. Entry from Canada Place Way is by
way of a two-way ramp located to the east of Thurlow Street. 100 parking spaces for
harbour related activities are located on the exhibit level at the east end of the building
with access from Waterfront Road.
REGISTRATION
A 25,000 square feet dedicated registration lobby is provided at the Canada Place Way
street level. Access is provided to this area for pedestrians from the Burrard Landing
Plaza, the Thurlow Gardens Plaza, the vehicular street drop off zone and from the lobby
connections to the taxi and bus lobbies. The lobby is set back out of the circulation paths
to provide a controllable dedicated environment for registration. Conference/Meeting and
registration support rooms ring the registration area.
MEETING ROOMS
All meeting rooms are in one location, on one level, with full back-of-house support and
are surrounded by a wide pre-function concourse. All meeting rooms have 16-foot high
ceilings.
This provides a total of 83,000 square feet of meeting and conference rooms,
subdividable into 37 rooms, which can be used in various combinations to provide an
infinitely flexible combination of function space.
EXHIBITION HALL
The Exhibit Hall is a single contiguous hall of 250,000 square feet, with 30-foot clear
ceiling height that can be subdivided into three separate halls. Each hall can be
independently operated, offering a variety of combinations that will accommodate the
most demanding scheduling requirements.
A 90-foot x 106 – 120-foot column spacing, along with a 30 foot x 30 foot floor utility
grid, meets all of the industry standards. Unlimited future utility additions can be
accommodated by the under floor utility tunnel.
Each hall has direct escalator and elevator access from the mezzanine level, which acts as
a control point distributor for multi event conditions. The openness of the lobbies to the
exhibit space provides an interesting orienting overlook for delegates. The lobbies are
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also highly visible from the exhibit floor providing an easy reference for delegates
leaving the floor.
A ceremonial escalator, stair and elevator rotunda connects the street level lobby entries
to the mezzanine level. The openness of this feature area will bring natural light to the
mezzanine. At the street level lobby the escalators, stairs, and elevators will continue on
to the ballroom level.
The 50,000 square foot ballroom is sub-dividable into three separate rooms that can be
used in various combinations with separate back-of-house service or as a single room.
The ballroom has a 30-foot high ceiling.
At the north end of the ballroom is the 12,000 square foot Signature Room. This room is
designed with an operable wall separating it from the main ballroom, allowing for the
combined rooms to provide a single 62,000 square foot room. The Signature Room’s
east, north, and west walls have floor to ceiling glazing opening the room to the
extraordinary surrounding views. The room has direct access to outdoor terraces to the
east and west.
A 1,500 seat lecture theatre is located directly above the main entry lobby. It will have
back-of-house access to the stage and direct access to vehicle-size freight elevators that
connect to the truck dock.
A ceremonial escalator, stair and elevator rotunda connects the street level lobby entries
to a large pre-function area overlooking the plaza to the west. Secondary escalator, stair
and elevator access at the north end of the pre-function space connect to the meeting level
below.
The pre-function space opens to outdoor terraces on the north and west. From the west
terrace, a monumental stair sweeps down to the plaza physically and visually linking the
two.
FOOD SERVICE
The quality of food service is extremely important to those considering a meeting site.
Association planners have ranked it second only to the number, size and quality of
meeting rooms. Emphasis was placed on a concept that provides for efficient and
innovative food preparation to accommodate the tastes of the convention centre’s world-
wide clientele.
Provisions for portable bars and food vending carts are provided throughout lobby and
pre-function areas. Each section of the exhibit hall features a permanent concession stand.
They will be equipped with modular portable cooking equipment systems that will allow
the centre to offer a custom-developed concession stand menu to suit each event.
The concession stands will be designed to be convertible from walk-up quick service
units to kitchen/pantries capable of providing stir fried and other hot entrees as well as
hot and cold beverages, for large functions in the exhibit halls. The exhibit halls also have
provisions for portable bars, portable cafeteria modules and food vending carts.
The main banquet kitchen will be located adjacent to the ballroom. Satellite
pantry/kitchens will be located on the meeting room level with direct back-of-house
service to the meeting rooms.
All food service areas will be vertically connected by two large vehicle-size elevators and
two cart-size elevators.
SUPPORT AREAS
All support area requirements have been reviewed with the VCEC staff for location and
operation. The following is a brief summary of the essential support components:
• secure loading dock area with direct truck access to each hall subdivision and 22
truck docks with all necessary dock support;
• employee support areas located on the mezzanine below the Burrard Landing
Plaza (which allows easy access to all the various public transportation options for
the employees and is in a central location to all of the areas of the facility);
• administration offices located on the mezzanine level at the east end of the exhibit
hall in an area central to all areas of the facility, with offices looking out to the
east at Canada Place and having window overviews of the exhibit hall; and
• large FF&E storage areas throughout the facility (in back-of-house locations
adjacent to the ballroom and meeting rooms they support, insuring operational
efficiency).
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The design optimizes the balance between internal efficiency and external views by
arranging exhibit and sessional spaces in the interior of the building, but taking full
advantage of the surrounding views for social and breakout functions. The “icon” of the
sails at Canada Place will remain the most dominant architectural feature, with new views
to the sails opened up from the expansion wing.
The design provides the capability for multiple event business between the two wings as
well as the ability to combine the two major areas for the largest events.
There are two major public plazas, each incorporating a number of features designed to
attract and hold community interest.
The footprint of the Burrard Landing Plaza incorporates an entry to historic Burrard
Street and the formal or ceremonial arrival to the convention centre. The plaza has
unparalleled views to the Canada Place sails, cruise ships and north shore mountains. A
feature light beacon sits on the centre line axis of Burrard Street at the north edge of the
Burrard Plaza. The 20-foot high transparent structure recalls the notion of a maritime
navigation beacon. It marks the end of Burrard Street and acts as a visual focal point for
pedestrians and vehicles travelling down Burrard Street to the water’s edge.
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‘Coal Seam Gardens’, the brick kiln and the slabs of black granite that represent
the coal seam, are on an axis with the Marine Building and Brockton Point.
CIVIC GARDENS
The Civic Gardens provide a garden link between Canada Place Way and the Civic
Performance Park. The gardens provide the public and convention delegates with a place
to sit, rest and socialize in smaller groups in a landscape which displays Vancouver’s
floral attributes.
Marina Promenade
The Marina Promenade provides waterfront pedestrian access around the entire
downtown peninsula. The promenade is animated by retail frontage with seating
opportunities overlooking a marina and with Stanley Park as a backdrop. The
promenade continues along the water’s edge linking to Waterfront Road.
Pedestrian access to the Civic Plaza level is by stairs or elevator.
Amphitheatre
The Amphitheatre provides a venue for staged events with terraced seating and
unparalleled views of the Marina, Coal Harbour, Stanley Park and the north shore
mountains. The stage of the Amphitheatre depicts an historic map of the British
Columbia coastline. The Amphitheatre will offer unobstructed views of such
events as the Canada Day fireworks and the Christmas Carol ships.
Heritage Walk
The Heritage Walk takes pedestrians via a gently sloped walkway from the
water’s edge to the mid-level walkway and continues up to the main plaza. The
walkway provides historic storytelling and interpretive opportunities.
HOTELS
The site is immediately adjacent to the highest concentration of both existing and planned
hotel accommodation in the city. Marathon is also in the process of applying for rezoning
of the two adjacent parcels for hotel use. While this process is independent of the Task
Force activities, it is expected that one or two hotels would be announced coincident with
or shortly after the announcement of the convention centre expansion.
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The construction period for the Burrard Landing site will allow for an assessment of
industry trends to determine the program of modifications to the existing VCEC.
The separation of the existing VCEC and the Burrard Landing component of the
expansion will allow the VCEC to attract multiple events that will appeal to a number of
VCEC clients.
The close proximity of the two buildings will allow the VCEC to host much larger events
than could be contemplated at this time.
4.12 SUMMARY
♦ The Burrard Landing site and design offer great opportunities for Vancouver to
capitalize on the growing demand for quality space for the convention and meetings
market. With the completion of expansion Vancouver will be able to provide high-
quality space for conventions and meetings with great views, yet still with the
amenities provided by a downtown core location.
♦ The expanded convention centre will appeal to a broad range of convention and
meeting planners – for a city-wide convention that takes over the entire space or for a
smaller convention that wants to retain a sense of identity. With expansion, many
events can be operated simultaneously.
♦ The expansion will also complement the City, providing many community benefits
such as public open spaces, open plazas, gardens, an amphitheatre and harbour
access.
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“VCEC convention and trade show attendees currently generate significant economic
benefits to the Greater Vancouver, British Columbia and Canadian economies. The
expansion of the VCEC will …generate still greater economic benefits to tourism
industry businesses and all three levels of government.”
KPMG, Expanding the Vancouver Convention and Exhibition Centre, Market Justification and Economic Benefits
5.1 INTRODUCTION
The VCEC is a significant economic generator of the Vancouver, British Columbian and
Canadian economies due to spending by delegates and exhibitors to VCEC-hosted events.
At the present time, the VCEC generates $245 million per year in delegate and exhibitor
spending which, in turn, generates $73 million per year in taxes and supports 3,930 full-
time jobs.
Building on the proven success of the existing VCEC, the expanded convention centre
will provide even greater benefits to the community at large. In its first year of
normalized operations (2009), expansion will generate an incremental $229 million in
spending, $12.5 million in net profits to industry, $76 million in taxes to all levels of
government and 7,530 new, full-time jobs.
Construction will generate $88 million in taxes to governments and create 6,702 person-
years of employment. These are incremental net benefits produced solely as a result of
expansion.
One of the benefits not quantified in this report is that the form of expansion
recommended in this Business Plan will allow the VCEC to continue to operate at
capacity and generate its $73 million in benefits for governments and $245 million in
delegate spending during the construction period.
5.2 METHODOLOGY
The Task Force engaged the services of BC STATS to summarize the incremental
impacts of the construction and annual operations of convention centre expansion. The
Task Force provided BC STATS with:
• capital cost estimates (prepared for the Task Force by PLA);
• incremental spending estimates (prepared for the Task Force by KPMG); and
• VCEC proforma net profit statements (prepared by VCEC management).
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BC STATS used its British Columbia Input Output Model (“BCIOM”) to estimate tax
revenues and employment impacts. While the report noted that not all municipal tax
revenues will necessarily occur in Vancouver, the Business Plan assumes that all taxes
occur in Vancouver.
OVERVIEW
Tax Revenue and Industry Profit
As industry and governments are proposed investors in expansion, it is appropriate to
compare the returns they receive from their investment. It is also important that an
equitable measurement is used to compare their respective returns.
For industry, the Task Force assumed that delegate spending is equivalent to gross sales
and the appropriate comparison to government revenues should be net profit. For
government, collection mechanisms are already in place to collect these incremental taxes
and there is no appreciable incremental collection cost. Therefore, an equitable
comparison is tax revenues for government and net profits for industry.
CONSTRUCTION
BC STATS estimated the economic and employment impacts for construction based on
capital costs provided by PLA.
OPERATIONS
BC STATS estimated annual tax revenues and employment impacts for a normalized
year based on the delegate and exhibitor spending estimates prepared by KPMG (Section
2) and the operating proforma prepared by VCEC management.
The KPMG spending estimates and the BCIOM tax revenue estimates formed the basis
of a financial model that was prepared to estimate the benefits of expansion over the
thirty-year life of the project. The financial model made assumptions about growth,
inflation and a discount rate that are described below.
EXHIBIT 5.1
GROWTH IN DELEGATE AND EXHIBITOR DAYS
YEAR PERCENTAGE OF NORMALIZED YEAR
2005 65
2006 70
2007 80
2008 90
2009 100
2010 100
2011 onwards an additional 2% per year
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EXHIBIT 5.2
ECONOMIC IMPACT - OPERATIONS
INCREMENTAL REVENUES AND NET PROFITS TO INDUSTRY BY SECTOR ($millions)
2005-2034
GROSS REVENUES NET PROFIT NET PROFIT AS A
PERCENTAGE OF GROSS
REVENUES
The net present value of incremental net profits to industry is $208 million.
EXHIBIT 5.3
ECONOMIC IMPACT-OPERATIONS
INCREMENTAL REVENUES TO GOVERNMENTS ($millions)
Federal $ 1,956
Provincial 2,447
Local 633
TOTAL $ 5,036
The net present value of the profit to the construction industry is $8.3 million.
EXHIBIT 5.4
ECONOMIC IMPACT – CONSTRUCTION
INCREMENTAL REVENUES TO GOVERNMENTS ($ millions)
Federal $ 44.84
Provincial 36.21
Municipal 6.75
TOTAL $ 87.81
The net present value of incremental tax revenues to government is $73 million.
The industries that benefit from the construction phase differ from those who benefit
from the on-going operations once the expanded VCEC opens. The benefits to the
tourism industry have been identified separately from those of the construction industry.
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The net present values of the benefits to the tourism and construction industries are
$208.1 million and $8.3 million respectively (for a total of $216 million). These are
summarized by industry sector in Exhibit 5.5.
EXHIBIT 5.5
ECONOMIC IMPACT - OPERATIONS AND CONSTRUCTION
NET PROFIT BY SECTOR
NET PRESENT VALUE ($ millions)
INDUSTRY SECTOR $
The net present value of the incremental government revenues from expansion is $1.319
million as detailed in Exhibit 5.6.
EXHIBIT 5.6
ECONOMIC IMPACT – OPERATIONS AND CONSTRUCTION
REVENUES TO GOVERNMENTS
NET PRESENT VALUE ($millions rounded)
CONSTRUCTION OPERATIONS TOTAL %
EXHIBIT 5.7
ECONOMIC IMPACT - OPERATIONS AND CONSTRUCTION
INCREMENTAL EMPLOYMENT IMPACTS
CONSTRUCTION OPERATIONS
(PERSON-YEARS) (FULL-TIME JOBS)
Employment Impacts 6,702 7,530
5.8 SUMMARY
♦ From construction and from the first thirty years of expanded convention centre
operations, industry will enjoy incremental revenues of $15.8 billion and net profits
of $845 million. The net present value of these profits is $216 million.
♦ For the same period, governments will receive incremental revenues of $5.1 billion
with the federal government receiving 40%, the provincial government 48% and the
municipal government 12%. The net present value of these government revenues is
$1.319 billion.
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“Every year that the opening of the expansion is delayed, $229 million in delegate and
exhibitor spending, $75.8 million in tax revenues and 7,530 new, full-time jobs are
being lost”
Vancouver Convention Centre Expansion Task Force
The total capital cost for the convention centre expansion, including soft costs, land cost,
interest during construction, as well as a provisional sum for retrofitting and linking to
the existing VCEC, is $495 million.
This capital cost estimate provided by PLA is based on an updated construction cost
estimate developed by PCL Constructors for Marathon Developments in December 1999.
The estimate has been revised to reflect the latest approach to site preparation/foundation
costs, as well as land costs and interest during construction. These estimates are stated in
Year 2000 dollars. No provision is made for GST in the capital cost estimates. The
Business Plan assumes that the project will be GST neutral.
The development calls for approximately 1.2 million square feet of construction on three
main levels and four intermediate levels. The first main level is the 250,000 square foot
hall located completely under Canada Place Way. The other two main levels are
comprised of the main convention centre entrance, registration and meeting room level at
the same elevation as Canada Place Way (effectively 52.5 feet above sea level), with the
ballroom/lecture space located above the meeting room elevation at elevation 76 feet.
Approximately half of the exhibition hall area below the Canada Place Way elevation is
covered by the low profile two-storey building that houses the ballroom/lecture theatre,
meeting rooms and registration. The remaining half of the area that covers the exhibition
hall is a plaza of public open spaces animated by landscaping, dramatic views and
compatible retail areas. The four intermediate levels are comprised of the utility tunnel
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under the exhibition hall, mezzanine level overlooking the exhibition hall, two parking
levels and an elevated perimeter walkway.
Details of the project by square footage are set out in Exhibit 6.1.
EXHIBIT 6.1
GROSS FLOOR AREA SUMMARY
(SQUARE FEET)
COMPONENT SQUARE FEET
Detailed drawings are yet to be completed for the convention centre expansion. However,
relying on PLA’s experience with large projects, the Task Force is confident that the
preliminary capital cost estimate can be adopted as a not-to-exceed project budget. This
confidence is based on PCL Constructors’ work on the cost estimates for the above
ground structures and the estimates for site preparation/foundation costs provided by
Sandwell Engineering in consultation with the contractors who did the caisson drilling.
On PLA's recommendation, the Task Force decided that it would be prudent to identify
and firm up a site preparation and foundation installation approach that would provide the
same level of confidence in the cost and schedule of the site preparation and foundation
components as the building components. The Task Force funded a detailed examination
of this component of the project, in order to firm up the capital cost estimate and schedule
that is incorporated into this Business Plan.
The original Marathon Discovery Place proposal proposed that all the landfill material
and marine sediment under the development area be removed to the glacial till and
replaced with more seismically stable material that was less likely to be a problem during
an earthquake event. It was anticipated that approximately one million cubic metres of
material would require removal to an ocean dump site and be replaced with 1.5 million
cubic metres of structural fill material. Franki-type piles would then be driven into the
new fill material to a depth of 12 metres to support the structure.
Although the proposed convention centre lands have been remediated satisfactorily in
compliance with Ministry of Environment, Lands and Parks generic and matrix
commercial standards for (i) residential land use and (ii) commercial land use and a
Certificate of Compliance provided, PLA had concerns about the ability to obtain the
necessary permit to ocean dump. The area had been used as a landfill site during the early
development of the City, and even with the Certificate of Compliance, there remained the
prospect that contaminants that had escaped detection may lie beneath the surface. In the
event that contaminated soil was discovered during the removal, it is likely that any
ocean dumping permit, would be suspended. The alternative of moving this massive
amount of material to landfill would be prohibitively costly and would seriously disrupt
the project schedule.
During the tendering process for the equipment trials, it was determined that there had
been a recent technological advancement in North America in the installation of large
diameter caissons. The new caisson equipment used a drilling technique to install a
casing to and into the bedrock in contrast to the more traditional pile driving technique.
This technique was considered superior because there was concern that contractors might
not be able to force the piles through some of the debris. This new technique would allow
them to cut through the debris. A test caisson was arranged to confirm its adaptability to
the site soil conditions.
The site preparation cost evaluation project confirmed that the equipment was capable of
drilling through the site soil conditions and that the cost of the site and foundation works
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for the project was well within the cost estimated for ocean dumping the fill and marine
sediments and replacing with structural fill.
PLA’s work on this project was funded by contributions from Task Force members at a
cost of $550,000.
PLA estimates that the total capital project cost will not exceed $495 million, stated in
Year 2000 dollars. The total cost includes purchasing the land, planning, designing and
constructing the new expansion, renovating the existing VCEC and providing the
appropriate linkages.
The capital cost estimates of the convention centre expansion, include the linkage and
renovations to the existing VCEC, marine support, retail and loading/bus staging areas.
Capital cost items by cost area are summarized in Exhibit 6.2.
EXHIBIT 6.2
PRELIMINARY CAPITAL COST OF CONVENTION CENTRE EXPANSION BY COST AREA
(YEAR 2000 $)
COST AREA
Contingency 45,000,000
A greater level of detail for the capital cost areas has been prepared. However, the project
has not yet gone out to tender and for competitive bidding reasons, this greater level of
detail has not been provided in the Business Plan.
The VCEC currently generates a modest operating profit and, while there is demonstrated
demand for an expanded convention centre immediately, it will take several years for the
expanded convention centre to absorb the increased capacity and return to normalized
operations. Until then, the expanded VCEC will incur a modest operating loss and require
funding assistance.
Exhibit 6.3 summarizes the projected net income statement for the years 2005 to 2009.
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EXHIBIT 6.3
PROFORMA NET INCOME STATEMENTS ($000’s)
EXPANDED VCEC
Current 2005 2006 2007 2008 2009
$ % $ % $ % $ % $ % $ %
REVENUE
Rent 3,100 22 4,378 23 4,530 23 4,650 23 4,847 23 4,977 22
Food & Beverage 7,600 54 9,943 52 10,341 53 10,910 53 11,524 54 12,105 54
Event Services 3,000 21 4,375 23 4,525 23 4,618 23 4,806 22 4,912 22
Sponsorship & 300 2 245 1 255 1 255 1 260 1 265 1
Miscellaneous
Total Revenue 14,000 100 18,941 100 19,651 100 20,433 100 21,437 100 22,259 100
Based on the proforma income statements the expanded VCEC will post modest losses
through 2007 and return to profitability in 2009, the first year of normalized operations. It
is expected that the expanded VCEC will continue to enjoy a modest profit in the years
following 2009.
Descriptions of the revenue and expense items used in the projected net income
statements are outlined in Appendix G, Technical Information.
EXHIBIT 6.4
PROJECTED NET CASHFLOW ($000’S)
EXPANDED VCEC
CURRENT 2005 2006 2007 2008 2009
Source: VCEC.
Estimated funding assistance until the VCEC reaches normalized operations is $2.39
million. It is assumed that the Province through PAVCO will continue to be responsible
for any cash requirements of the expanded VCEC during this transition period as has
been the case since the VCEC first opened.
At present Tourism Vancouver, the VCEC and the local hotels invest in excess of $5
million per year in convention marketing. Expansion will create an additional 395,000
square feet of function and the incremental marketing investment required to market the
expanded facility is beyond the financial ability of those who currently fund the
marketing programs.
The Task Force reviewed two methods of estimating the incremental marketing
investment that would be required to secure the new business for the expanded VCEC.
The first method was to review historical spending and performance and use that as a
determinant of future requirements. The second was to compare the marketing budgets of
the VCEC’s main competitors.
The KPMG report estimates that expansion will attract 32 additional conventions by the
first year of normalized operations (2009). These conventions will generate $229 million
in incremental revenues in 2009. Assuming the direct ratio of $49 of spending for every
$1 of marketing, expansion would require an additional $4.7 million in marketing
funding to generate the additional $229 million in spending bringing the total marketing
investment to $9.7 million.
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It is expected that there will be economies of scale in accessing some markets that are
already being served through the existing marketing programs. Economies of scale are
assumed to result in efficiencies of 25 percent of program costs.
It is also reasonable to expect that there would be some administrative cost savings in the
application of these incremental marketing funds. Administrative savings are assumed to
result in efficiencies of 10 percent of program costs. Applying these cost efficiencies to
the incremental marketing investment calculated above will result in an incremental
funding requirement of approximately $3 million.
EXHIBIT 6.5
ESTIMATED ANNUAL MARKETING INVESTMENT REQUIRED ($000’s)
Existing Expanded Incremental
Marketing Budgets
Gross Budget $5,000,000 $9,650,000 $4,650,000
Less: Efficiencies on incremental
funding (1,650,000) (1,650,000) 35%
Net Budget (rounded) $5,000,000 $8,000,000 $3,000,000
The source information for the comparison is the 9th Annual Competitive Analysis Report
prepared by the Chicago Convention and Tourist Bureau, Inc., which annually undertakes
a survey of Convention and Visitors Bureaux (CVB’s) in Canada and the United States.
The survey queries the CVB’s in the areas of budgets, exhibit space, labour rates, meal
costs, hotel and room rates and overnight group meeting travel. 85 of 105 cities receiving
the survey, responded to it. While not all CVB’s have identical responsibilities, the study
provides a reasonable comparison of budgets and other categories for the industry in
North America.
The Task Force compared the Vancouver Convention and Visitors Bureau (Tourism
Vancouver) with the 49 CVB’s with budgets of US$5 million or greater. Vancouver’s
rankings are at the mid or lower end of the rankings according to overall budget, the
budget per number of hotel rooms and the budget per square foot of exhibit hall space.
These are detailed in Exhibit 6.6.
EXHIBIT 6.6
RANKING OF TOURISM VANCOUVER’S BUDGET
AS COMPARED WITH OTHER CONVENTION AND VISITORS BUREAUX
VANCOUVER’S RANKING
TH
CVB Budget 38 of 49
TH
CVB Budget / Number of Hotel Rooms (1999) 26
TH
CVB Budget / Exhibit Hall Space (Expansion) 24
Source: 9th Annual Competitive Analysis Report, Chicago Convention and Tourism Bureau, December 1999
The Task Force then compared Tourism Vancouver’s budget against the budgets of those
cities that KPMG listed as Vancouver’s main competitors in its March 2000 study
(Exhibit 6.7). The comparison is intended to set out the level of marketing investment
that Vancouver is making relative to its competitors.
EXHIBIT 6.7
RANKING OF VANCOUVER (POST-EXPANSION)
AS COMPARED WITH COMPETITIVE CONVENTION AND VISITORS BUREAUX
BUDGET SIZE OF HOTEL ROOMS BUDGET/ BUDGET/
EXHIBIT HALL METRO AREA SQUARE FOOT HOTEL ROOM
Denver 4 1 3 9 8
Minneapolis 9 5 5 6 9
Montreal 3 9 6 1 2
Portland 8 2 8 8 3
Salt Lake City 5 6 9 5 1
San Diego 1 7 2 2 5
San Francisco 2 3 1 4 7
Seattle 6 8 4 3 6
Vancouver 7 4 7 7 4
Source: 9th Annual Competitive Analysis Report, Chicago Convention and Tourism Bureau, December 1999.
With expansion, Vancouver’s exhibit hall will rank fourth largest of the nine cities, but its
overall budget will rank seventh. Vancouver also ranks seventh in budget per square foot
of exhibit space and fourth in budget per hotel room.
These rankings demonstrate that Vancouver’s marketing budget is at the lower end of the
range compared with its competition.
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The current sources for this funding are Tourism Vancouver, VCEC and the convention
hotels, with Tourism Vancouver providing approximately 70% of the funds through its
operating budget. In the longer term, Tourism Vancouver should be able to provide some
of the additional funding required through additional revenues created by the voluntary
two percent hotel tax that it receives for destination marketing. However, Tourism
Vancouver’s ability to provide these funds is constrained by the increase in hotel room
revenues (which generate the voluntary 2% hotel tax proceeds) as a result of the
convention centre expansion and growth in other visitor markets. Hotel room nights are
estimated to increase by 10 to 15 percent as a result of expansion. Consequently Tourism
Vancouver’s contribution toward the incremental marketing investment would represent
no more than 20 percent of the external investment required and would likely only be
available to contribute at this investment level when the VCEC reached the first year of
normalized operations (2009).
Given that the lead time for attracting larger conventions is often several years, the
marketing initiatives to book these additional conventions should begin as soon as
expansion is announced. Therefore, the investment in marketing should be funded as
soon as expansion is announced and continue beyond the first year of normalized
operations (2009).
EXHIBIT 6.8
INCREMENTAL MARKETING INVESTMENT REQUIRED (millions)
2001 2002 2003 2004 2005 2006 2007 2008 2009 TOTAL
Investment
Required $3.1 $3.2 $3.2 $3.3 $3.4 $3.4 $3.5 $3.6 $3.6 $30.3
The Task Force has not formally evaluated how to obtain the best return on these assets
and recommends that the funding partners undertake an assessment of these assets.
PARKING
The development plan provides for a total of 525 parking spaces – 425 underground for
the convention centre expansion and 100 for marina-related purposes. There will be
demand for parking by event attendees and neighbouring office tenants that should
provide a significant revenue stream.
The Task Force has not researched the business and financial benefits of each of the
above alternatives for parking. However, based on comparable facilities, net revenues of
$700,000 per year could be expected.
Preliminary discussions have taken place with Canada Place Corporation who is
responsible for the parking at Canada Place with a view to integrating the parking
operations at Canada Place with those created by the VCEC expansion.
MARINA
The Burrard Landing site includes a water lot and existing zoning allows for a
commercial marina to the north of the expanded convention centre. The marina would
replace and improve on the temporary facilities and short-term leases that are currently
on the Burrard Landing site. The convention centre expansion will occupy part of the
water lot, but it is expected that the remainder water lot would be re-developed as a
marina with commercial float plane access. As with the parking, there are a number of
options available to develop the marina.
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Preliminary estimates are that the marina could generate net revenues of approximately
$350,000 per year assuming the first option.
RETAIL
The development plan also proposes approximately 36,000 square feet of retail along the
north perimeter of the expansion. There is a concern about the amount of traffic it will
draw because of its location on the north side of the expanded convention centre and
further investigation will be required. Revenue estimates from retail have been estimated
at approximately $50,000 per year.
Total net revenues from these sources is estimated at $1.1 million dollars per year
expressed in Year 2000 dollars. It is assumed that the parking, marina and retail would
begin to produce income coinciding with the opening of the convention centre expansion
in 2005.
6.6 SUMMARY
CAPITAL FUNDING
♦ The capital funding requirements for the convention centre expansion are $495
million expressed in Year 2000 dollars.
OPERATING FUNDING
♦ Additional operating funds will be required both to fund operations from the time the
expanded convention centre opens until it achieves normalized operations and to fund
the additional marketing investment that will be required to secure the new business
and generate the profits, taxes and jobs.
♦ It is important that this funding be part of any overall funding program for the
convention centre expansion. It is assumed that this funding will be part of the
discussions among the funding partners who participate in the governance of the
expanded convention centre.
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There are a number of funding options that are available for the financing of the
convention centre expansion. Most U.S.-based models for financing are not relevant to
the VCEC expansion as funding vehicles such as tax-free municipal bonds are not
available in Canada.
Most models that have a private funding component have the convention centre as an
element of a larger development where the traffic that the convention centre generates
enhances the value of the other elements in the overall development. Most other models
consist mainly, if not entirely, of funding from federal and provincial governments for
reasons discussed in the next section.
The funding model contemplated for the convention centre expansion is a public/private
partnership with industry and governments providing funding and also having a decision-
making role in the structure and development of the expansion.
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and governments will receive substantial incremental economic benefits (i.e., in addition
to the benefits generated by the existing VCEC) as a result of the convention centre
expansion and financial participation by industry, the provincial government and the
federal government is considered necessary for the expansion to proceed.
This is not punitive or oppressive. There are compelling economic reasons for
governments and industry to want the convention centre expansion to proceed. Expansion
will bring significant incremental revenues to industry in revenues from the sale of goods
and services to the delegates and exhibitors and to governments in taxes resulting from
those sales and services.
Each of the three proposed funding partners has expressed interest in participating in the
funding of the convention centre expansion and each has criteria that must be met prior to
agreeing to invest.
Representatives of the federal government have said that it declined to invest in the
Portside project because the cost of important elements of the project were never clarified
and because a proper business plan was never prepared.
Following Portside, the provincial government indicated that it would require meaningful
financial participation by industry and the federal government as a condition of
participation in any future expansion plans.
The Task Force believes that there are positive reasons for the federal government,
provincial government and industry to participate in funding the convention centre
expansion. The convention centre expansion project is a well-defined project with very
specific costs and with economic benefits that have been quantified for all proposed
financial participants.
The project is straightforward in that it involves only the development of the convention
centre expansion. The costs are known and are well defined for all components of the
development – as are the benefits. Independent experts have quantified the benefits to
industry and to government.
The Task Force proposes that the tourism industry contributes $90 million and that the
federal and provincial governments contribute the remaining $405 million. The tourism
industry proposes that it lead discussions with the federal and provincial governments to
expedite a mutually satisfactory funding agreement.
The tourism industry is fully aware of the significant incremental financial benefit that
will flow as a result of the convention centre expansion and is prepared to invest in a
meaningful way to make expansion a reality.
Tourism Vancouver and the Vancouver Hotel Association (“VHA”) have shared the lead
role in structuring a tourism industry contribution that is designed to satisfy the needs of
the industry and governments.
Industry did not pursue discussion with the federal government in respect of up-front
funding by the federal government as none of the collection methods contemplated for
repayment of the loan is under the federal government’s jurisdiction.
The voluntary two percent hotel tax was initiated by the private sector as a fair and
effective collection mechanism to fund tourism marketing and initiatives. In 1988, the
tourism industry, together with the City of Vancouver, approached the provincial
government to implement a voluntary incremental 2% levy on the room tax for hotel and
motel accommodations in the City. The voluntary 2% hotel tax has been in place in
Vancouver since 1988 and has been implemented in a number of other municipalities
around British Columbia. In 1999, the voluntary 2% hotel tax proceeds provided for
destination marketing of Greater Vancouver were in excess of $8 million.
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The voluntary two percent hotel tax is an example of an income stream that provides the
Province with appropriate security and administrative simplicity. The Province collects
the tax under a provincial statute, remits it to the City, who in turn remits it to Tourism
Vancouver.
With respect to the investment of $33 million from Tourism Vancouver operating funds,
Tourism Vancouver’s Board of Directors has already committed these funds.
With respect to the $57 million to be raised by an increase in the voluntary hotel tax from
2% to 2.5%, the process to obtain this increase has been initiated. Provincial guidelines
now state that a majority of the hotels and a majority of the hotel rooms in the
municipality must agree to the implementation of the hotel tax before it will be
considered by the province. At the present time, the Vancouver Hotel Association is
working with the Vancouver accommodation sector to gain the support necessary. The
Vancouver Hotel Association is hopeful that the required majorities will be secured in the
near future. In addition, the City will be required to approve this arrangement and make
formal application to the Province to increase the rate.
It is proposed that the Province would advance funds against the security of the revenues
from voluntary hotel tax charged on hotel rooms in Vancouver and collected by the
province. The tax would continue to be directed to Tourism Vancouver, who would be
responsible for payments to the Province.
The thirty-year stream of incremental profits from delegate and exhibitor spending will
yield an average annual rate of return of 11.5% to the industry for its $90 million
investment. The net profits earned by the construction companies who will build the
expansion were not included in the calculations of the return on the tourism industry’s
investment.
EXHIBIT 7.1
MEASURES OF ECONOMIC BENEFITS TO INDUSTRY
30 YEAR TERM (2004 – 2033)
MEASUREMENT AMOUNT
BACKGROUND
Both the Federal Government of Canada and the Provincial Government of British
Columbia have a long history of successful involvement with the Vancouver Convention
and Exhibition Centre.
The international icon created by the VCEC’s sails on Vancouver’s waterfront first
housed the Canadian pavilion for EXPO 86, the 1986 World Exposition. The federal
government selected the site and design to provide a long-standing legacy for Canadians
in the form of a world-class convention and exhibition centre. That investment in
infrastructure can be looked upon with significant pride as it gave cause for community
pride and stimulated a surge in tourism business that has yielded a financial return to
Canadians many times over the original investment. Canada Place stands as an important
symbol of federal government involvement in British Columbia.
2000 marks the thirteenth year that the British Columbia government has had
responsibility for management of the VCEC. Managed by the Provincial Crown
Corporation, PAVCO, the VCEC has experienced growth and success that now demands
expansion. It was the provincial government that launched the process to arrive at the
best means of expanding the existing convention and exhibition facilities.
With the cancellation of the Portside project, BC’s former Premier charged industry with
responsibility for developing a viable alternative. The assumption remains that the
provincial government will make a significant financial contribution to the expansion, in
keeping with the sizeable revenue stream for government that expansion will provide.
While the federal government has at no time made a financial commitment to expansion
it is assumed the federal government will consider the project an expansion of the highly
successful Canadian icon they first established, Canada Place. It is also assumed that the
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demonstrable significance of the revenue stream to the federal government will deem
involvement an excellent investment in the expansion of infrastructure the government
previously established. Finally, the senior Minister for British Columbia, the Honourable
David Anderson, requested that a Business Plan be developed to provide the opportunity
to carefully review the investment opportunity. The Business Plan confirms the business
case for proceeding with this project.
The Task Force makes no assumptions as to the vehicles government will utilize to
contribute to the expansion. Further, in recognition of the ongoing nature of financial
relationships between federal and provincial levels of government the Task Force
assumes the two levels of government will negotiate the contribution each will make to
the project.
The federal and provincial governments will receive $88 million in taxes from the
construction of the convention centre expansion. In the first year of normalized
operations the federal government will receive $29.4 million, the provincial government
$36.8 million and the municipal government $9.5. Over the period from the start of
construction in 2001 until 2034, the governments will receive $ 5.1 billion in incremental
taxes from the convention centre. These amounts are all expressed in nominal dollars.
Rather than recommend that each government invest a specific amount, the Task Force
assumed that each government’s investment would fall in a range from one-third to two-
thirds of the $405 million investment required from governments for the project to
proceed. The Task Force then calculated a number of financial performance indicators for
the governments for each end and the mid-point of the suggested range. (Exhibit 7.2)
The Task Force is not attempting to prejudge the criteria for investment by either
government. These returns are shown for illustrative purposes to demonstrate the
financial viability of the convention centre expansion to the two senior levels of
government in their roles as investors in the expansion.
The City will receive annual revenues of $9.5 million and total revenues of $633 million
over the thirty years. The net present value of the benefits is $157 million.
The City of Vancouver is responsible for issuing all necessary development approvals.
The convention centre expansion is subject to the normal City zoning applications and
required public hearings. No estimates of the value of the City’s contribution has been
made at this time.
EXHIBIT 7.2
MEASURES OF ECONOMIC PERFORMANCE
BASED ON SELECTED FUNDING OPTIONS – INDUSTRY AND GOVERNMENTS
Low end Mid-point High end
FEDERAL GOVERNMENT
Investment (millions) $ 135.0 $ 202.5 $ 270.0
Annual Return 2009 ($millions) $ 29.43 $ 29.43 $ 29.43
Net Cashflow
Nominal Value (millions) $ 1,866 $ 1,798 $ 1,731
Net Present Value (millions) $ 386 $ 319 $ 251
Annual Return on Investment (%) 23.6% 16.9% 13.5%
Payback (years) 8.4 10.6 12.5
PROVINCIAL GOVERNMENT
Investment ($millions) $ 135.0 $ 202.5 $ 270.0
Annual Return 2009 (millions) $ 36.82 $ 36.82 $ 36.82
Net Cashflow
Nominal Value (millions) $ 2,348 $ 2,280 2,213
Net Present Value (millions) $ 501 $ 433 $ 366
Annual Return on Investment (%) 25.6% 18.7% 15.2%
Payback (years) 6.8 8.4 9.8
MUNICIPAL GOVERNMENTS
Annual Return 2009 ($millions) $ 9.53 $ 9.53 $ 9.53
Net Cashflow
Nominal Value (millions) $ 633 $ 633 $633
Net Present Value (millions) $157 $157 $157
TOURISM INDUSTRY
Investment $ 90.0 $ 90.0 $ 90.0
Annual return (normalized year) $ 12.51 $ 12.51 $ 12.51
Net Profits
Nominal Value (millions) $ 834.84 $ 834.84 $ 834.84
Net Present Value (millions) $ 208.10 $ 208.10 $ 208.10
Payback (years) 7.9 8.9 9.9
Annual return on investment (%) 11.5% 11.5% 11.5%
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7.5 SUMMARY
♦ The Task Force is proposing that industry provide $90 million and governments
provide $405 million to fund the convention centre expansion.
♦ Based on this funding proposal, industry will receive an acceptable 11.5% annual rate
of return on its investment and governments will receive impressive annual rates of
return ranging from 13.5% to 25.6% depending on the level of investment. Payback
to government will vary depending on the level of investment, but in most cases
governments will recoup their entire investment in ten years or less.
♦ The annual rate of return for the three partners based on their investment in three
funding options is summarized in Exhibit 7.2. Industry’s investment and return rate is
shown for comparative purposes.
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8.0 GOVERNANCE
8.1 INTRODUCTION
This section addresses ownership, management and operation of the convention centre
expansion.
Following formation of the Task Force, the Task Force requested that The Vancouver
Board of Trade prepare a report of its recommendations for governance of the convention
centre. The Vancouver Board of Trade’s recommendations were endorsed by the Task
Force and The Vancouver Board of Trade’s complete report is attached to the Business
Plan as Appendix E.
STRUCTURE
The Task Force recommends that a non-share capital corporation be established under the
Canada Corporations Act, Part II to own, manage and operate the expanded convention
centre. The new Authority should be designed through consultation with the Task Force,
other key stakeholders such as the two senior levels of government, the City of
Vancouver and selected business organizations. A proposed name for the Authority is the
Vancouver Convention and Exhibition Centre Authority .
Among its general powers, the Authority would have the power to conduct business,
enter into agreements, borrow funds and issue debentures.
The Authority model is similar to that set up for the Portside project and recommended
for the proposed Ottawa Convention Centre.
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The Task Force supports The Vancouver Board of Trade’s recommendation that the
Authority set up for the Portside project be wound up and not be used for this convention
centre expansion.
OWNERSHIP
The owners of the Authority would be the investing partners – Federal Government,
Provincial Government and tourism industry – who will provide the investment for the
expanded convention centre.
The Task Force also recommends that the Province assign the VCEC lease including
options to the Authority. This would allow for common control over the entire expanded
convention centre.
BOARD OF DIRECTORS
The board of the Authority would comprise nominating entities representing industry and
governments. If the City of Vancouver were to make a contribution to the infrastructure
required, the City might be given a seat on the board. The industry representatives would
need to be designated by industry, not selected by government. The nominating entity
model utilized to identify board members for the Vancouver International Airport
Authority board might be an appropriate mechanism for this selection process, provided
that sufficient provision for accountability is included.
REPORTING
The disclosure requirements for the Authority should be the same as for public bodies in
British Columbia.
MANAGEMENT
The Task Force recommends that the Authority have a supervisory role in the affairs of
the expanded convention centre rather than a “hands on” operating role. It recommends
that the board of the Authority contract for the management of the expanded convention
centre rather than take on these roles itself. Contracted functions would include
operations and marketing.
The Task Force recommends that the Authority enter in to an agreement with PAVCO for
the operations. The Vancouver Board of Trade in its report recommended that the
informal arrangement between Tourism Vancouver and PAVCO be formalized. The Task
Force also recommends that the Authority enter into an agreement with Tourism
Vancouver/PAVCO for marketing once a formal agreement has been entered in to (that is
acceptable to the Authority).
8.3 BACKGROUND
PAVCO is responsible for the operations of the VCEC. The marketing of the VCEC is a
collaborative effort between Tourism Vancouver and PAVCO. While no formal agreement
exists between the parties, Tourism Vancouver, in its role of marketing Greater
Vancouver as a destination, plays a major role in the marketing of the VCEC. The
Vancouver Hotel Association and its member hotels also assist in providing significant
hotel room blocks required by larger events.
In preparing its report The Vancouver Board of Trade representatives met with a number
of industry stakeholders to determine the level of effectiveness of the current governance
model. These stakeholders included representatives from the tourism industry, hotel
community, PAVCO, Tourism Vancouver and others. The consensus was that governance,
marketing and operation of the existing VCEC appear to be very good. The Vancouver
Board of Trade recommended that the existing arrangements should be used as the model
for the expanded convention centre and the roles of PAVCO and Tourism Vancouver
should be continued and expanded to encompass the expanded convention centre.
The governance model for the expanded convention centre is more complex because the
underlying ownership of the two properties on which the expanded convention centre will
be located will be different.
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In preparing its report The Vancouver Board of Trade of Trade set out a number of
criteria for ownership, management and operations of the expanded convention centre.
These included the requirement for:
• seamless operation of the expanded convention centre;
• formal agreements between parties for the marketing of the expanded convention
centre;
• broad industry-dominated governance of the operations; and
• full disclosure and transparency in reporting.
Each of these issues is dealt with in the context of ownership, management and operation.
8.4 OWNERSHIP
The Vancouver Board of Trade examined a number of ownership options in its report
prior to recommending ownership by an authority. These included ownership by the
Federal Government, Provincial Government, by industry and by an authority.
Single ownership by either the Federal or Provincial Governments or industry, when each
party was making a substantial contribution, was rejected because it seemed illogical that
one party would own the entire development, when three parties were making significant
contributions.
The assignment of overheads to the convention centre would need to be spelled out in
advance. The rights of the owners of the buildings to make improvements and then
charge them to the lessee(s) would need to be negotiated.
Participants in these agreements would be the two senior levels of government, industry,
potentially the City of Vancouver, PAVCO and Tourism Vancouver.
8.5 SUMMARY
♦ The Vancouver Board of Trade was asked by the Task Force to prepare a report on
governance. The consensus was that governance, marketing and operation of the
existing VCEC appear to be very good. In its report, The Vancouver Board of Trade
recommended that the informal arrangement between Tourism Vancouver and
PAVCO for marketing be formalized.
♦ The Task Force recommends a governance model using an Authority for the
ownership, management and operation of the convention centre expansion.
♦ The owners of the Authority would be the investing partners – federal government,
provincial government and tourism industry – who will provide the investment for the
expanded convention centre. The Task Force also recommends that the Province
assign the existing VCEC lease including options to the Authority. This would allow
for common control over the entire expanded convention centre.
♦ The board of the Authority would comprise nominating entities representing industry
and governments. There would be additional representation with expertise in
construction and development on the board of the Authority during the construction
period.
♦ The board of the Authority would contract for the management of the expanded
convention centre rather than take on these roles itself. Contracted functions would
include operations and marketing.
♦ The Authority would enter in to an agreement with PAVCO for the operations and
with Tourism Vancouver and PAVCO for marketing once they have formally entered
into an agreement.
♦ There will need to be a formal agreement among the owners and/or operators as to
how the initial and any ongoing operating deficits and any ongoing operating
surpluses are to be shared.
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“The expansion project could be complete and operational fifty months from the date
of project approval.”
Pacific Liaicon & Associates Inc., Project Evaluation and Cost Report, September, 2000
In respect of pre-conditions it is assumed that the Task Force and the boards of the
founding group members will have ratified the Business Plan prior to its release.
The purchase agreement will contain provisions to assign the property to an authority or
other ownership entity once the governance issues have been resolved.
INDUSTRY
Tourism Vancouver’s Board of Directors has already approved in principle the $33
million contribution from Tourism Vancouver. The process to increase the voluntary
hotel tax from 2% to 2.5% to generate the additional $57 million has been initiated as
outlined in Section 7. After this process is completed successfully, industry will then be
in a position to enter into a formal loan agreement with the Province for its $90 million
secured by the proceeds from the Vancouver voluntary hotel tax.
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As part of the commitment to acquire the Burrard Landing property, funds will be
required to complete the balance of the Project Definition Report (“PDR”) including
updated schedule and final apportioning of costs within the not-to-exceed capital cost.
The PDR will contain a more detailed description of the facilities, permitting, project
schedule and capital cost breakdown. The PDR will also contain a Policies and
Procedures Manual, which will dictate the process for the project. Once approved, the
PDR will set out the procedures and guidelines for proceeding with the project to its
conclusion. It is expected that the PDR will require approximately four months to
prepare.
The following planning and design issues will need to be resolved during the preparation
of the PDR (and prior to the start of construction):
• resolve the issue of the location of the civic arts centre which is currently a City of
Vancouver requirement on the Burrard Landing site;
• amend existing environmental approvals granted to the Burrard Landing site by
BERC;
• coordinate the planning and construction with adjacent construction sites;
• resolve use of building density currently attributed to the site;
• finalize parking, traffic, and loading requirements associated with the
development;
• address design and location issues of the civic arts complex currently located on
the Burrard Landing site;
• determine final elevation of the Thurlow Garden plaza relative to existing street
grades;
• resolve outstanding urban design issues, including open spaces, sidewalks, bicycle
paths, and public waterfront access;
• determine final road widths for Waterfront Road and Canada Place Way; and
• schedule public hearings for the rezoning and permitting process.
The following planning and design issues will be partially addressed during the PDR
stage:
• modify the approved zoning and City agreements currently in place on the
Burrard Landing site; and
• address City enactment conditions, sub-division and legal agreements including
services and amenity agreements (i.e., daycare, public art).
It is anticipated that approval-in-principle will be granted by the end of this stage and
final rezoning and final enactment will be reached four and ten months later, respectively.
Every effort is being made to include approval agencies early in the planning/design
process. Ongoing discussions with the City of Vancouver and BERC regulatory
authorities lead the Task Force to believe that these issues are manageable, and there is a
real desire to resolve them successfully in a timely manner.
Immediately following the final approval of the PDR by the stakeholders, the plan is to
tender, award and start construction of the site preparation and foundation work which
will be the first major construction contract of the VCEC Expansion Project.
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SUMMARY PROJECT SCHEDULE
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“Convention centre expansion is a low risk project that will create significant benefits.
It is strongly recommended that this project proceed without delay.”
Vancouver Convention Centre Expansion Task Force
Approximately one year later the Task Force is delivering on that vision. The Business
Plan provides overwhelming evidence that an investment in convention centre expansion
is a great business decision – for industry and for governments.
It is proposed that the project is funded by industry and by governments. Industry has
committed to provide $90 million and proposes that the federal and provincial
governments together contribute $405 million to the project.
For the thirty years from 2005 to 2034 the incremental benefits from operations include:
• incremental delegate and exhibitor spending:
• $229 million per year
• $15.3 billion over 30 years (net present value of $3.8 billion)
• incremental net profit to industry:
• $12.5 million per year
• $835 million over 30 years (net present value of $208 million)
• incremental government tax revenues:
• $76 million per year
• $5.036 billion over 30 years (net present value of $1.246 billion)
• 7,530 new, full-time jobs
What makes the investment particularly attractive is that the profits to industry and
revenues to governments are generated by delegates attending VCEC-hosted conventions
and trade shows who are predominantly from outside BC and increasingly from outside
Canada. In essence, these delegates are injecting foreign capital into our economy and
creating these significant revenues to industry and governments.
The funds generated will be available to governments for programs such as health care,
infrastructure and education.
An additional return is the opportunity of the entire tourism industry to capitalize on the
increased number of foreign visitors to British Columbia who will be exposed to tourism
opportunities throughout the province.
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obtaining a detailed technical plan and cost estimates which include appropriate
contingencies.
On a theoretical basis, there is a risk that the market for conventions and trade shows may
not increase in the future. However, all studies and indications strongly support the view
that the conventions and trade show market generally will continue to be very strong and
Vancouver will continue as a premier destination for that market.
The KPMG study reported that “… the size of the facility is causing:
• existing users to outgrow the building;
• potential users to bypass the VCEC in favour of larger facilities; and
• VCEC management to decline business that could be accommodated in parallel
with another group were the VCEC facilities suitable for hosting multiple events.”
Not proceeding puts at risk the current $245 million spent annually by delegate at VCEC-
hosted events. This spending accounts for $12.5 million in profits for the tourism industry
and $73 million for governments annually. They provide 3,930 full-time jobs.
The KPMG report was conclusive on this issue. “The status quo is not an option. … the
current benefits realized by Greater Vancouver’s tourism industry will decline as the
VCEC is unable to effectively compete in an environment of increasing attendance and
demands for additional exhibit space.”
Time is of the essence. There is a great risk that the Task Force will lose the property if
this project does not proceed expeditiously. The Task Force has tied up the Burrard
Landing site only for enough time to secure the project funding. If funding approval is
not obtained in the near future, the site will revert to Marathon and likely be sold as a
hotel or office tower. It will not be available for consideration as a convention centre.
The VCEC continues to be a well-run facility with a long history of success. Building on
that success, it is proposed that the current operators would continue to manage the
expanded facility.
In addition, the tourism industry, and its ability to market the City and provide the
tourism products and services has an outstanding international reputation and is often
looked to by other cities as a model of excellence.
The KPMG study concluded that “… additional convention facilities in Vancouver are
necessary to meet demand”.
10.7 CONCLUSION
Convention centre expansion is a low risk project that will create significant benefits.
The Task Force strongly recommends that this project proceed without delay.
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APPENDICES
APPENDICES
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BUSINESS PLAN
APPENDIX A
VISION STATEMENT
MANDATE
PRINCIPLES
TERMS OF REFERENCE
APPENDICES
VANCOUVER CONVENTION CENTRE EXPANSION TASK FORCE
BUSINESS PLAN OUTLINE
I. Executive Summary
II. Introduction
1) Brief Statement of how Task Force was created
2) Operating proforma
i) Pre opening
ii) Opening
iii) Normalized
iv) Sensitivity analysis (best, worst, expected cases)
IX. Governance
1) Capital phase
2) Operating phase
Appendices
APPENDIX B
APPENDICES
VANCOUVER CONVENTION & EXHIBITION CENTRE EXPANSION PROJECT
PROJECT EVALUATION AND COST REPORT
APPENDIX C
BC STATS
Ministry of Finance & Corporate
Relations
BC STATS 10/19/00
2
well as other commodity taxes like gas taxes, air tax, etc. Specifically excluded from
these estimates are corporation taxes and royalties on natural resources.
• Municipal Revenues have been estimated by using a provincial average of the
share of indirect taxes on production which is received at the local level. Because
the BCIOM is a provincial model, not all of these revenues will necessarily occur in
the municipality where the direct effects occur.
Summary of Results
(all results are in thousands of dollars unless otherwise specified)
Construction Phase
Project expenditure: $494.8 million
Economic Impact Direct Indirect Induced Total
Output 428,000 210,886 77,673 – 191,367 716,559 – 830,253
GDP 188,915 94,601 43,267 – 106,598 326,782 – 390,114
Employment (person years) 4,275 1,715 712 – 1,755 6,702 – 7,745
Provincial Revenues 22,786 6,960 6,464 – 15,925 36,210 – 45,671
Federal Revenues 16,298 7,768 5,759 – 14,190 29,826 – 38,256
Municipal Revenues 3,514 1,306 1,834 – 4,518 6,654 – 9,338
BC STATS 10/19/00
3
BC STATS 10/19/00
4
BC STATS 10/19/00
Appendix 5
BC STATS 10/19/00
Appendix 6
BC STATS 10/19/00
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APPENDIX D
The proposed site is located on property currently owned by Marathon Developments Inc.
(Marathon) and designated in the City of Vancouver Official Development Plan By-Laws as the
Burrard Landing precinct. Refer to Figure 1.1 attached at the end of this section. PAVCO has
secured the property with an agreement in principle to purchase the proposed convention centre
lands. The formal purchase and sale agreement is currently being finalized for respective Board
approvals and signatures.
Preliminary construction cost estimates were prepared based on the Burrard Landing Design
document and with the benefit of pricing developed for the 1997 Marathon Development Inc.’s
“Discovery Place” concept and the 1999 Concert Properties Ltd. “Portside” concept. The pricing
for both of these concepts had been estimated by PCL Constructors Canada Inc. The expansion
costs include provisions for an integrated link, on two levels, to a fully renovated existing VCEC
facility at Canada Place. Additional engineering and costing completed in the Site Preparation
and Foundation Report, dated September 2000 by Sandwell Engineering Inc. and Golder
Associates Ltd. resulted in the development of an alternative site preparation/foundation
methodology, which can be implemented with a lower risk impact to schedule and cost.
The capital cost estimate for the proposed VCEC Expansion Projects presented in this Project
Evaluation and Cost Report (Table 1.1) is $495 million, based on the following premises.
• The project will consist of the following components, as described in the Burrard Landing
Design Proposal Evaluation and modified by the Site Preparation and Foundation Report:
– New Convention Facility
– Parkade
– Plaza
– Infrastructure
– Site Preparation/Caisson Installation
– Renovations and Linkage to Existing VCEC at Canada Place
• The VCEC Expansion Project provides the opportunity to construct the full program of
meeting spaces within a purpose-built facility with a total facility area of approximately
1.2 million square feet.
The proper combination of meeting spaces in one building provides for a greater flexibility
and efficiency in accommodating the movement of delegates between the various meeting
spaces and the cost-effective back-of-house servicing of these spaces. Including the meeting
spaces within the existing facility at Canada Place and in response to the fact that the largest
proportion of the available business opportunity will continue to be for events in the range of
2,000 to 5,000 delegates, the design of the combined facilities has created opportunities for
discrete, separated modules that can accommodate multiple simultaneous events.
• The new convention facility will not require a new cruise ship berth, SeaBus terminal, retail
pavilion or hotel.
• As discussed later in this Executive Summary, an Arts Complex is required by the City of
Vancouver. The capital cost estimate not only does not include an amount for building the
Arts Complex adjacent to the new convention facility, it is in fact, predicated on satisfactorily
relocating it off-site.
• Once the project has received approval to proceed, a project management team will be
established and a formal Project Definition Report will be prepared. The Project Definition
Report will form the “road map” for managing the project, as scoped, through to on-time and
on-budget completion. The Soft Costs include provisions for a project management
consultant and the costs of preparing a Project Definition Report, as well as other design and
inspection costs.
• The major land acquisition costs have been negotiated and include provision for land costs,
shared Arts Complex commitment costs and shared site servicing costs as part of the overall
budget estimate.
• The project assumes commencement by early 2001 and will be operational in early 2005
based on a 50-month schedule. All estimates for hard construction, soft and land costs are in
end of year 2000 dollars and include provisions for escalation. During the completion of the
balance of the Project Definition Report, the detailed cost breakdown will be prepared and
the anticipated cost escalation over the construction period will be estimated.
• With a project duration of four years, the capital cost estimate provides for interest during
construction using a rate of 6.5%.
• Designs are conceptual at this stage; therefore, a 10% project contingency is included in the
capital cost estimate.
The major outstanding issue that must be dealt with by the City of Vancouver before the
rezoning process begins, is the location of the proposed Arts Complex. The Arts Complex site is
a City registered encumbrance within the Coal Harbour Project, Phase 2, Burrard Landing
precinct. The Arts Complex site sits on the western edge of the proposed convention centre
lands. To remain at this location, the Arts Complex will have major implications to project
design, schedule and costs. As a result, PLA recommended that a formal study be undertaken to
investigate the feasibility of converting the now vacant Ford Theatre into meeting the functional
and design requirements of the proposed Arts Complex. With study terms of reference and a
team of design specialists assembled by the City’s Office of Cultural Affairs, PAVCO and
Tourism Vancouver commissioned PLA to undertake the four-week study, which started on
September 21, 2000. Moving the City registered encumbrance to the Ford Theatre will permit
the design and construction of the expanded convention centre to proceed in the most effective
and efficient manner which will have a positive impact on both schedule and costs.
Two other minor property issues that will be resolved during the rezoning stage with the City of
Vancouver are as follows:
• A small portion of the southeast corner of the convention centre footprint including the
integrated link to the existing VCEC facility is on Vancouver Port Authority (VPA) property.
The building encroachment does not affect the docking of ships in the west berth of Canada
Place. As a counterpoint to this item, the cruise ships cross the corner of the water lot, that is
included within the convention centre lands, during their docking manoeuvres.
• A small portion of the perimeter waterfront walkway on the west end of the convention
centre expansion extends over and into the adjacent water lot north of the City’s Harbour
Green Park.
In conclusion, it is PLA’s professional opinion that if funding agreements are finalized and
project approval to proceed is granted by the end of 2000, the expanded convention centre could
be completed and operational in 2005 within a budget of $495 million, subject to the above
premises. This opinion is based on PLA’s project management experience on similar-sized
projects, PLA’s role as Provincial representative on the Portside Project and the cost estimates
developed for this report.
Table 1.1
VCEC Expansion Projects
Capital Cost Estimate Summary
(in end of year 2000 dollars)
1. Parkade structure cost includes the costs of providing support for the Canada Way extension.
2. No design work has been undertaken on the VCEC Canada Place Renovation Project at the time
of writing this report. It is envisioned that the design will take place during the construction of the
VCEC Expansion Project and will be renovated to market condition requirements after the
opening of the new expansion facility. A cash allowance of $15,000,000 has been set aside for the
renovation work in Canada Place and for the linkage to the new facility.
Note:
1. Line estimates and unit prices have been obtained from contractors, suppliers and wherever possible
from historical data from similar projects.
2. Estimates have been compiled using industry standard estimating techniques and procedures.
3. All estimates include PST, but exclude Goods and Services Tax (GST).
APPENDIX E
EST. 1887
ER BOARD
THE VANCOUV OF TRADE
The Vancouver Board of Trade
Terminology
This report has been prepared for the Convention Centre Expansion Task Force by
representatives of The Vancouver Board of Trade who are concerned with the
proposed expansion of the centre. Accordingly, it is assumed that those reading the
report will be familiar with the terminology employed and the different components of
the expanded convention facility. In particular, the “existing facility” is the existing
Vancouver Convention and Exhibition Centre. The “new structure” refers to the new
convention centre structure which it is proposed be built on the Burrard Landing site
immediately to the west of the existing facility. The “expanded convention centre” is the
combination of the existing facility and the new structure. Throughout this document the
term “industry” refers to the business community and specifically to that part of the
private sector involved with and concerned with the convention centre and with ancillary
enterprises such as hotels, attractions, and convention-related transportation.
1.0 GOVERNANCE
The governance, marketing and operation of the existing Vancouver Convention Centre
appears to be very good. We recommend that the existing arrangements be used as
the model for the expanded convention centre. The roles of PAVCO and Tourism
Vancouver should be continued and expanded to encompass the expanded facility. In
addition, there should be a formal involvement of the Vancouver Hotel Association to
help ensure the ongoing optimization of marketing and sales efforts for the expanded
facility.
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The effective and efficient operation of the expanded Vancouver Convention Centre will
require seamless management of the combination of the existing facility and the new
structure (i.e., common management, a common operating entity, and common
marketing). The expanded convention centre must seem to be and must operate as a
unified entity.
The underlying ownership of the existing facility and the new structure may be different.
The existing facility is owned by the Federal Government, and leased to the Province to
operate. The new structure may have underlying ownership reflecting various financial
contributions made towards its development. Thus the Federal and Provincial
Government, industry, and potentially the City of Vancouver could have an ownership
interest in the new structure based on their respective contributions.
The existing convention centre is leased to the Provincial Government by the Federal
Government. The lease was assigned to PAVCO by the Province. The first 20-year
term expires in 2007; there are options to extend the term for three further 20-year
terms at the option of the Province.
While it might be simpler to try to arrange Federal Government ownership of the new
structure to parallel the ownership of the existing facility, that might not be easily
achieved. As outlined above, the other major contributors to financing the expansion
might logically wish to hold an interest in the new structure, and to have a voice
together with the other owners.
Provincial Government ownership of the new structure is another option. In that case
for the duration of the existing lease and its extensions the operating control of the
existing facility and the new structure could be joined in a seamless manner. However,
as discussed later, this option was already rejected for the previously proposed
extension to the east of the existing facility.
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Note: This envisions the winding up of the existing convention centre authority which
was established to undertake development and operation of the expanded convention
centre which would have resulted from constructing an expansion to the east of the
existing structure. This pre-existing authority should be extinguished once its existing
financial obligations are discharged. The new Authority should be designed through
consultation of the Convention Centre Expansion Task Force with other key
stakeholders such as the two senior levels of government, the City of Vancouver, and
selected business organizations.
The board of the Authority in which would be vested the ownership of the new structure
should reflect the ownership of the new structure, and also reflect key community
interests. Assuming that both senior levels of government and industry make financial
contributions to the expanded centre, board members could be appointed by each of
the Federal Government, Provincial Government, and industry (relevant private sector
organizations). If the City of Vancouver were to make a contribution to the infrastructure
required, the City might be given a seat on the board. The industry representatives
would need to be designated by industry, not selected by government.
The “nominating entity” model utilized to identify board members for the Vancouver
International Airport Authority board might be an appropriate mechanism for this
selection process, provided that sufficient provision for accountability is included. The
members of the Authority should be the nominating entities. These entities would
appoint the directors, and the board of directors would be accountable to the
nominating entities. There is precedent for this at the provincial – federal government
level for joint initiatives, with indications that this arrangement works well.
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It is important that the business community lead the board of directors, with nominees
from all nominating entities individually and collectively having experience and
qualifications to help ensure sound management of the convention centre.
The arrangement proposed above would leave the Province through PAVCO with the
operating responsibility for the existing facility, and the need to extend that responsibility
to the new structure part of the expanded convention centre. That should be done by
the provincial government reassigning to the Authority the lease for the existing facility,
and the Authority then contracting with PAVCO for the operation of the whole
convention centre. This would ensure that PAVCO continued to play its existing role,
but for the expanded convention centre.
The marketing plan for the expanded convention centre is in the process of being
developed, and will be one of the core documents guiding progress towards the
expanded facility. The activities and responsibilities outlined below would be undertaken
in support of that plan.
It would be helpful to the situation to have a marketing accord that would spell out the
relative responsibilities and involvement of each of these three organizations. For
example, Tourism Vancouver could have primary responsibility for marketing the
expanded convention centre beyond an agreed time horizon, while PAVCO could have
primary responsibility for marketing the centre from the current date up to that horizon.
The Vancouver Hotel Association would need to participate on an ongoing basis to help
ensure coordination and cooperation with the convention-oriented hotels.
The three organizations would need to work together regardless of the time horizon,
and should be formally charged with responsibility to coordinate their activities and
cooperate in their efforts to market the facility.
A mechanism likely would be required to help achieve the synergy outlined above. The
three key organizations involved are separate entities, but need to work coherently and
in concert. A structured process should be established involving the executive and
senior management of each of the organizations. This group should meet at least
annually to review and update the marketing plan. Personnel involved in marketing and
sales for each organization should carry out preparatory work and draft the revised
marketing plan. The executive and management of each of the organizations should be
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Governance of the Expanded Vancouver Convention and Exhibition Centre
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programmed to meet annually to update the marketing plan. It may prove worthwhile to
hold regularly scheduled quarterly meetings of the three participants to maintain
continuity of dialogue and ongoing updates of the marketing plan. Ongoing operational
cooperation would need to continue in any event.
There should be equal accountability and performance measures for each of the
participating organizations. As required, an outside facilitator and other resource
personnel could be added to help ensure that the process achieves the desired results.
The disclosure requirements for the Authority in essence should be the same as for
public bodies in British Columbia. The Authority should be transparent and open in its
operations and governance.
The construction of the new structure would require some different board of directors
expertise from that outlined above for ongoing operations. During construction of the
new structure, the Authority should add directors whose background is appropriate to
governance of that type of project.
Governments recover their investment in convention centres through the increased tax
revenues which they receive as a result of the economic impact of the facilities.
As noted in the business plan for the previously proposed convention centre expansion
in Vancouver, a convention space developer could never recover through rent the cost
of constructing convention and exhibition space. Almost all major convention centres in
North America are financed through tax measures of one kind or another. A public
sector role in governance therefore follows.
1.14 Summary
• The effective and efficient operation of the expanded Convention Centre will require
seamless management of the combination of the old and new facilities, including
operations and marketing.
• The current roles of PAVCO, Tourism Vancouver and the Vancouver Hotel
Association should be continued and expanded to encompass the expanded
convention centre.
• The underlying ownership of the existing facility and new structure may be different.
• To accommodate that and the current lease arrangements for the existing facility, a
Convention Centre Authority should be utilized.
• This arrangement for the new structure could be reconciled with the current
arrangements for the existing facility by the provincial government re-assigning to
the new Authority the lease for the existing facility. The Authority then would contract
with PAVCO for the operation of the whole of the expanded convention centre.
• The disclosure requirements for the Authority should be the same as for public
bodies in British Columbia.
• There are numbers of situations where the marketing of the facility is undertaken
jointly by the facility operator and a tourism/visitors bureau.
• The convention centre expansion, which was proposed for the site immediately to
the east of the existing convention centre in Vancouver, was to have been governed
by a convention centre authority.
• That authority still exists, and carries with it the debt associated with the project that
was terminated.
• Accordingly it is important that the new authority be quite separate, and that the
previous authority be extinguished to ensure that there is a fresh start.
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APPENDIX
Options
The convention centre expansion proposed for the site immediately to the east of the
existing convention centre in Vancouver involved the development of an extensive
business plan document that included consideration of ownership options. The
documentation concerning that proposed development notes that the proposal
presented six ownership scenarios, which were simplified into two basic options as
follows.
1. A private sector developer finances, builds and owns and leases the facility back to
the Province.
2. The Province finances and owns the facility, using (the development company) as
builder/developer.
“The first option has been rejected for reasons of cost, lack of risk transfer from the
Province and uncertainty ---. (The) business plan accordingly (assumed that) the
project (would be) built and owned by the Vancouver Trade and Convention Centre
Authority (VTCCA) ---.”
The proposal for the convention centre expansion involving the existing facility and new
construction to the east of the existing facility “--- did not have a solution for the
logistical issues which arise when the two portions of the expanded and retrofitted
facility are owned by two different landlords under different lease terms. Neither the
retrofitted portion owned by Canada Place Corporation nor the expanded portion owned
by (another entity) would be able to operate independently ---.”
“To eliminate the legal and financial problems associated with the --- arrangement, a
non-share, not for profit corporation was incorporated, the Vancouver Trade and
Convention Centre Authority, (VTCCA) as a vehicle to own both leases, to represent
the interests of the federal, provincial and industry stakeholders and to maintain the
common areas of the project. The VTCCA is incorporated under the Canada
Corporations Act, Part II.”
The VTCCA structure, objectives, relationship to PAVCO and the financial benefits of
the proposed structure are outlined in the Appendix to the Vancouver Convention &
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Exhibition Centre Expansion Summary Business Plan. That Appendix previously was
distributed to members of the Convention Centre Expansion Task Force.
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APPENDIX F
CORPORATE PROFILES
PACIFIC LIAICON AND ASSOCIATES INC.
LMN ARCHITECTS
CORPORATE PROFILE
Managing projects on schedule and budget on a corporate level has been the primary
service provided by Pacific Liaicon and Associates Inc. (PLA) to private industry and
governments since it was established in 1970 by Henry Wakabayashi. As Owner’s
Representative and Project Managers on a variety of private industrial and public sector
developments, PLA specializes in handling the requirements of Project Owners through
all development phases, including:
– conceptual design
– feasibility and environmental assessment studies
– project definition (scope, schedule and cost)
– design and engineering
– regulatory approvals and permitting
– construction
– start-up and commissioning
Their combined project management experience is over 90 years. Although Ray Zibrik
joined the company in 1988 and Verne Janzen, in 1998, both Ray and Verne were
involved in PLA projects prior to joining the company.
PLA has a core group of 25 professional and technical staff, more than 6 support
personnel, and has ready access to other associate consultant resources for specific
project requirements.
APPENDIX G
TECHNICAL INFORMATION
TECHNICAL INFORMATION
Using the SICE classifications, net profit margins were recorded for those industries that
are sub-sectors of the six industry spending sectors set out in the KPMG report.
Specifically, the Net Profit Margin (as a percentage of sales) was collected for the top
quartile of Canadian small businesses in each industry sub-sector for 1996, 1997 and
1998 (the last years for which information is available). An average of net profit margins
was taken for the three years for each SICE industry. From these average net profit
margins for each SICE classification, a weighted average net profit margin for each of the
industry sectors was calculated based on the number of businesses in each sector. These
net profit margins were applied to the KPMG spending estimates to determine the net
profit by industry sector.
The derivation of the net profit margin is shown below for the Accommodation sector.
Accommodation Sector
SICE Industry No. of Firms 1996 1997 1998
9111 Hotels and Motor Hotels 2,168 5.70% 6.20% 6.90%
9112 Motels 1,812 8.20% 9.10% 10.70%
9114 Guest Houses 105 6.00% 6.20% 5.20%
9121 Lodging Houses 248 7.00% 8.20% 9.50%
Total 4,333
There is an argument that a marginal profit rate on the incremental sales to delegates and
exhibitors is higher than an overall net profit rate in the short term because only operating
costs are required to create the incremental profit. While acknowledging this argument’s
validity in the short term, over the longer term market pressures in the form of additional
competition will return profitability to historical levels. Because the Task Force is
measuring the impact due to VCEC-hosted events over a thirty-year period, it considered
that industry net profit percentages would be more reliable than marginal profit
percentages.
The Task Force appreciates that industry profit percentages used to estimate net profits in
the Business Plan may not represent the precise profits earned by companies affected by
the spending by these delegates and exhibitors. However, the profit estimates are
Direct expenses are the direct charges that relate to these expense categories.
Facility Expenses
Facility expenses include staffing, fees, general administration, business development,
operations, property taxes and lease costs.
APPENDIX H
RESTRICTIONS
The results of this Business Plan are based on estimates and assumptions that are
inherently subject to uncertainty and variation depending upon evolving events. We do
not represent them as results which will actually be achieved. Assumptions may not
materialize and unanticipated events may occur; therefore actual results achieved during
the estimate period will vary from our projections and these variations may be material.
We reserve the right (but are under no obligation) to review all calculations included or
referred to in this report and, if we consider it necessary, to revise our conclusions in light
of any information which becomes known to us after the date of this report.
The report and financial projections contained herein pertain only to the facilities and
locations described and conditions prevailing during the course of the research completed
on September 20, 2000.