'Soft market' for conference center
April 9, 2008
When looking at the 15 action items presented to be implemented in the tourism study and strategic plan developed by PLACES, you might note a glaring omission. The construction of a hotel/conference center in downtown Warren. PLACES director Gary Esolen discusses the proposed project in the first report of his three-part study, pointing out that a previous study found it not feasible to build a hotel/conference center in Warren. Horvath Horizon Hospitality Advisors, LLC. conducted the feasibility study into the project, which would utilize the former Loranger building on Clark St. 'Horvath thought it would be necessary to have 20,000 square feet of meeting space and 120 rooms, and they still came to the conclusion that the project was not feasible,' Esolen wrote. 'Basically, they saw occupancy starting at under 50 percent and rising to slightly over 60 percent with time, which would bring it to the edge of feasibility but they were not confident that the room rates could support the development.' Esolen said it was likely Horvath was under considerable pressure to produce a more favorable report, 'which they were unable to do.' Esolen said that the report goes into detail that is not common in a report of its kind, outlining reasons to hold back higher occupancy projections. 'Basically, the proposed hotel conference center in downtown Warren depends on existing hotel demand (which is a combination of leisure and business demand, neither of which are particularly strong in the area),' Esolen wrote, 'and the demand that would be generated specifically by marketing the conference center, that is, the demand for meetings and events of various kinds that could be held at the center and would generate room occupancy for the hotel.' Esolen called the conference center market 'soft' in his report. 'So this project faces a weak leisure market, a weak business market and a weak conference market. It is doubtful that with any amount of tinkering it is going to reach the threshold of success.' The city recently resurrected hopes of completing the project via a $12 million proposal by Impact Warren developer Bob Yoder and the Provident Group, based in Baton Rouge, Louisiana. In the proposal, the city would leverage $3.375 million in Section 108 Loan Guarantee funds to help pay for the project. The project includes a scaled down convention center and a 74-room hotel. A second study will be conducted to determine if the project is feasible..
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