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Convention Plan Returns

Officials in Camarillo have been talking about building a hotel and conference center for years, hoping to capitalize on local demand for meeting space and overflow business traffic from the western San Fernando Valley and Ventura County. But the idea languished through the recession and looked all but dead after California’s redevelopment agencies were dissolved in 2012. The city had earmarked a redevelopment agency parcel at Las Posas Road and the 101 Freeway for the convention center. Old ideas die hard, though: The plan finally appears to be moving forward, with the land back in city hands and negotiations underway for development of a complex composed of a 700-seat conference center, a 200-room hotel and around 45,000-square-feet of retail shops and restaurants, possibly anchored by a Cheesecake Factory. Last month, the City Council unanimously chose Mian Cos., a Dallas real estate development firm whose founder T.M. Mian lives in Camarillo, to develop the project. Bruce Baltin, senior vice president in the L.A. office of hospitality consultancy PKF Consulting, said the timing appears good, with the hospitality market fully recovered from recession and the Ventura County region in healthy territory. “The city has wanted a conference center for some time, because the Camarillo market has always been heavy on business travel, with so many technology and biomedical companies headquartered along the 101 Freeway corridor,” he said. Camarillo Mayor Bill Little said that both local and regional business groups could use the conference center, including California State University, Channel Islands, which was established in 2002. “They have indicated that they could make good use of the space since they don’t have any facilities on campus yet to accommodate groups and conferences,” he said. “There’s really a need in the central part of Ventura County for a conference center and a hotel to accompany it.” But Little – Camarillo’s city manager in the late 1990s before he retired in 2000 and ran for City Council in 2012 – said he’s well aware that such projects can be risky. With meetings now taking place online and many companies and government agencies cutting back on their travel budgets, the conference and convention industry has been largely stagnant for years. And many well-documented examples have emerged around the country of taxpayer-funded convention centers that cost millions to build and operate, but deliver paltry returns on investment. Heywood Sanders, a University of Texas urban development expert, wrote a book last year called “Convention Center Follies” that takes a critical look at runaway convention center development in the U.S. The Las Vegas Convention Center, for instance, doubled its square footage in 2002 after consultants said the expansion would boost its convention attendance of 1.31 million and provide an economic boom to the city. But while the number of conventioneers climbed to 1.7 million in 2007, Sanders said, it had tapered back down to 1.32 million by last year. “If you look at the Los Angeles Convention Center, it has been sputtering for years, giving space away to the tune of millions of dollars a year to any group they can induce to come there. The city has been subsidizing new hotel rooms around that area for ages and now they argue that they need even more,” he said. Local stake The Camarillo mayor, however, thinks this project – which he estimated will cost $25 million to $30 million – has a good chance of success. “It’s always a risk to build something like a conference center. But we believe this is going to work, if it’s done right,” the mayor said. The hotel market in Camarillo had an average occupancy rate of about 73 percent at the end of last year with an average room rate of $104, according to PKF’s most recent survey. Adriana Huizar, executive director of the Camarillo Hotel and Tourism Association, added that she foresees the center and hotel being used by local and regional visitors who come to Camarillo to compete in regional tournaments for youth and adult baseball and soccer leagues. There also are visitors to the 160-store Camarillo Premium Outlets, immediately south of the development site, and a need for meeting spaces for local companies and non-profit organizations. “We have 11 hotels in the city, three of which offer meeting space, but right now it’s very limited,” she said. Baltin at PKF said the center would draw travelers and meetings related to Ventura County’s biotech corridor – where Amgen Inc. is headquartered – but also travel related to the U.S. Navy’s facilities in Port Hueneme. And giving Mian the nod as developer is a smart idea: “He owns properties up there, so he should know the market well,” Baltin added. Mian started out as a construction engineer before founding Mian Cos. in 1984. Though the company, which builds and manages multifamily, retail, hotel and office assets, is headquartered in Texas, Mian is a Camarillo resident, said Shawn Nichols, vice president of California operations for the firm, whose local office is in Oxnard. “(Mian) visited Camarillo about a dozen years ago, fell in love with it and bought a home in the Spanish Hills,” he said. Mian declined to comment for this story, but his personal connection to the area led him to develop a local real estate portfolio starting in 2002. That year, the firm built the Hilton Garden Inn in Calabasas, a 142-room hotel with 2,000 square feet of meeting space that boasts an 84 percent occupancy rate, according to a report submitted to the Camarillo City Council by City Manager Bruce Feng. The developer is currently in negotiations to add 60 rooms there, the report states. Three years later, Mian constructed the 170-room, eight-story Hilton Garden Inn in Oxnard that incorporates 5,000 square feet of meeting space and 3,500 square feet of office space and operates at 80 percent occupancy, according to the report. And since then, Mian has extended its investment in Oxnard, putting up the Homewood Suites by Hilton in 2010, with 129 suites and 1,000 square feet of meeting space, and the Adagio Bella Gardens, a 200-seat banquet hall and 3,680-square-foot meeting facility, in 2012. He’s clearly bullish on the area’s potential for further growth as a destination for business and leisure travelers: With his current properties enjoying occupancy rates over 80 percent, Mian also is in negotiations to develop a 160-room Hilton Boutique Hotel on 2.7 acres of oceanfront property in Ventura and a 78-room Hampton Inn in Santa Paula, Nichols said. The developer’s extensive experience in the market and Mian’s personal stake in the conference facility’s success as a local home owner played a role in the company’s selection from among four developers that submitted proposals for the project. “We chose Mian because they are in Camarillo, and in fact Mr. Mian lives in Camarillo and he knows how to market, operate and run these things,” Little said. Critical negotiation Mian submitted a proposal in a previous go-round to develop the conference center, but lost out to Marriott International Inc. of Bethesda, Md. That project faltered due to a construction management conflict and fizzled entirely during the recession, said John Fraser, a senior management analyst for the city. In his winning proposal, Mian outlined a plan for 15,000 square feet of meeting space, a 150-room Embassy Suites or Hilton Garden Inn with 50 additional rooms possible in a second development phase, and 43,700 square feet of leasable retail space that could accommodate three restaurants and three retailers. “He’s very excited to do this project and is hoping the city will help us fast-track it so we can break ground by the end of the year,” Nichols said. But Sanders warned that it is important for such negotiations to move slowly in order for cities to minimize taxpayer risk and maximize the chances for projects like conference centers to succeed. “Often private developers will say, ‘We need some public subsidy’ or ‘We need you to build the conference center and we’ll manage it.’ But in that case, who takes on the risk?” he asked. Sanders noted that though the hotel market has been booming nationally, business travel involving conferences and larger meetings has been lagging behind leisure and individual business travelers. An economic impact study conducted for the Ventura County Lodging Association by SMG Consulting showed that overnight visitors in Ventura, Oxnard and Camarillo have increased by 1.14 million between 2011 and 2014 and that overall travel spending had increased by nearly $200 million over the same period. It did not measure group business travel. Mian’s financial proposal calls for his development company to own and operate both the hotel and conference center, and pay $5 million for the land over a five-year payment term. But it would require the city to foot the bill for undergrounding an existing drainage channel on the property, and its proposal asks for a 50 percent rebate on the city’s hotel room tax requirement if the hotel occupancy rate falls below 65 percent. The next step will be negotiating those details and hammering out a final development agreement. There is no deadline specified for an agreement, and it’s likely that the city will take its time, given the project’s long history. Feng noted that building a conference center and hotel complex was first identified as a goal for the city in 2001. The land, which once housed the El Camino restaurant and now is the site of a car wash, was purchased from individuals in two parcels in 2004 and 2008. After the city’s redevelopment agency was dissolved in 2012, Feng and City Attorney Brian Pierik traveled to Sacramento half a dozen times, navigating a protracted process laid out by the California Department of Finance for the city to retain ownership of the conference center site and three other redevelopment parcels, valued at a total of more than $60 million. After all the hard work, the finish line may finally be in sight, Feng said. “Camarillo is such a well-planned community and we’re not quite yet built out. It is really important for us to control the remaining cornerstone pieces of the community.”

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