Thousands of out-of-towners who were planning to rent hotel rooms, hold meetings and eat and drink in Lake County may have to be merry with their money somewhere else.
White Lodging announced Aug. 9 it will close and demolish the 343-room Radisson Hotel at Star Plaza and its theater, at U.S. 30 and Interstate 65 in Merrillville, in early 2017.
The decision to close the theater was reversed in early November. But the hotel will still come down and be replaced by a new national-brand hotel to come online in late 2018, but without the current 67,000 square feet of meeting space.
With the reduction in meeting space the smaller hotel will bring, there remains a risk that conventions might permanently relocate to another region.
Speros Batistatos, South Shore Convention and Visitors Association president and CEO, said Lake County needs to build a convention center to replace and grow $70 million in conference spending the Radisson generated over the last two decades.
Batistatos said the private sector isn’t building large halls, so it may have to be financed with a countywide 3 percent food and beverage tax to build what could be an $80 million facility, and $130 million of other tourist-related construction projects throughout Lake County.
A majority of the Lake County Council, who said they are allergic to a new tax, nevertheless endorsed a plan by Northwest Indiana Regional Development Authority CEO Bill Hanna to pay for a feasibility study.
Councilman Jamal Washington, D-Merrillville, who opposes a consumption tax, said, “I voted for the feasibility study, because I would like to get some concrete data to show if it can be supported.”
County Councilman David Hamm, D-Hammond, told convention center supporters, “I’m giving you no commitments on a food and beverage tax.”
RDA CEO Hanna said he wants to form a steering committee of county government officials and RDA board members to draw up the specifications for the feasibility study.
He said the study may not be completed for several months. There is no timeline on when a center would be built.
Convention center, arena, other venue?
Purdue University Northwest Chancellor Thomas L. Keon asked community leaders to think not just convention center, but also an arena for events like Northwest Indiana Symphony concerts, sports and the circus.
Batistatos agreed that in addition to conventions, the proposed center could host car, antique and boat shows and potentially 10 to 20 concerts annually if configuring it for that wouldn’t be prohibitively expensive, since the goal would be to fill it with events 365 days of the year.
The U.S. Travel Association reports Americans spent $121.9 billion in 2015 on meeting events and incentive travel. That spending generated 1 million jobs.
Batistatos has said the feasibility study should answer whether the market will accommodate a new center and, if so, how large should it be and where should it be located.
Heywood Sanders, of the University of Texas at San Antonio, who has studied the hospitality market and wrote, “Convention Center Follies,” said Northwest Indiana could be entering a convention market that is becoming overbuilt.
He said the magazine Tradeshow Week counted 325 convention and conference centers with more than 25,000 square feet of exhibit hall space in 2010 in the U.S.
What will market bear?
Floor space at the four top convention centers in the country — McCormick Place, Chicago; Orange County Convention Center, Orlando, Florida; Georgia World Congress Center, Atlanta; and Las Vegas Convention Center — has expanded by 61 percent from 1996 to 2015, and billion-dollar expansions are being planned in Las Vegas as well as Seattle and New York City, Sanders said.
He questions whether the demand for trade show space has kept up with this floor growth since it has been difficult to find public data on exposition show attendance in recent years.
Sanders said, “The dilemma is that if you can find a way to build it, that doesn’t mean you necessarily have success in luring visitors to your convention center.”
Batistatos has suggested a convention center of between 75,000 and 125,000 square feet, which would be comparable to convention centers in South Bend and Tinley Park, but smaller than facilities in Chicago, Indianapolis and Fort Wayne, because Northwest Indiana is considered a peripheral market that draws smaller conventions looking for convenience and affordability.
While not every community can reel in a convention center, Batistatos has suggested a new consumption tax also could fund improvements to Wolf Lake, Hammond’s Lost Marsh Golf Course, Whiting’s downtown and Gary’s Genesis Convention Center.
“This could result in another wave of investment at Wolf Lake or along the lakefront for a Gary marina or more sports facilities in Crown Point or cleaning Cedar Lake. There are plenty of reasons to support this, if and when we ever get there,” he said.