Cuyahoga County Council advancing plans to renovate… Leave a comment
CLEVELAND, Ohio – The total cost of proposed improvements to the Global Center for Health Innovation grew from $46 million to $54 million on Tuesday, but Cuyahoga County Council is limiting its contribution to $40.4 million, for now.
The county’s contribution includes $31 million in debt to cover the bulk of renovations meant to officially merge the Global Center with the attached convention center. It also includes $9.4 million in cash – the $5 million council previously pledged from stimulus funds, $3 million from the general fund to cover the cost of inflation since the project was first proposed, and $1.4 million accumulated through naming rights on the facility.
Another $9 million will come from the Cuyahoga County Convention Facilities Development Corporation’s reserves, though as one councilmember pointed out, the fund is entirely supported by the county through annual payments to the governing board.
Left out of funding was about $5 million to build a skywalk connecting the convention center to the Marriott hotel at Key Tower, which the majority of council members seemed to favor, but not entirely on the county’s dime. Members wanted to know how much the hotel might contribute and how Cleveland officials feel about the bridge before considering the added cost.
But even without the bridge, inflation has already driven the project’s cost up to $49.4 million, an increase over the $46 million initially quoted for the same amount of work.
“I’m sure it’s justified, but it’s still an increase that I didn’t expect, to see this number go higher,” Councilwoman Nan Baker said during Tuesday’s Committee of the Whole meeting.
Still, council voted to advance the proposal to second reading, with Council President Pernel Jones, Jr., giving it his full support and Councilwoman Sunny Simon stressing urgency in locking in the debt to avoid the risk of even higher interest rates.
The current plan anticipates a 5% interest rate on a 20-year bond, with an annual debt service of $2.5 million to be paid equally by the CCCFDC board and the county.
Councilwomen Yvonne Conwell and Cheryl Stephens voted against the spending.
The vote followed three hours of council’s questions after presentations by convention and tourism officials who stressed again their belief that the renovations are needed to make the convention center more attractive to host events and conventions. They want to double the junior ballroom to 22,000 square feet, create more meeting space on the upper floors of the Global Center and add escalators, stairs, bathrooms and back-of-house improvements to support the higher occupancy the tourism industry predicts will result from the changes.
David Gilbert, president and CEO of Destination Cleveland, said the renovations would bring Cuyahoga up to the “middle of the pack” in industry standard, compared with competitors, but not doing any of them will eventually cost the county business.
He characterized the renovations as “a cross between a need and a want,” but warned “every year we wait, the further we fall behind.”
Council seemed receptive to the concept, but strongly questioned whether the scope should include expanding the junior ballroom, which accounts for nearly half of the project cost.
Baker repeatedly pointed to several other ballrooms within close proximity to the Global Center that may also fill the need, especially if the county does decide later to build the skywalk connecting the convention space to the Marriot hotel, which also has a 10,000 square foot ballroom.
Numerous officials, including Ron King, general manager for the Global Center, countered that event planners are looking for convention space with flexible sized rooms without having to send people outside to get there. Most convention centers support two ballrooms – one grand ballroom and one junior – so that it can also host multiple events simultaneously, he said.
“Which is what exists now,” Baker said.
“Yes, it does,” King conceded, though he said the expanded space offers more opportunities for use.
A cleveland.com reader survey previously showed that most respondents do not support renovations, and the two candidates running to be the next county executive have also opposed the spending.
Council repeatedly acknowledged those concerns during the meeting, but indicated they hope to make the convention expansion succeed where past ventures have failed.
“I get a lot of people that tell me the Medical Mart was a disaster and we shouldn’t be throwing good money after bad…but I don’t think that’s the right question,” Councilman Dale Miller said. “I think the right question is from where we are right now, what is the best way we can take advantage of the opportunities that present themselves at this time?
“I think you’re on the right track,” Miller said.
