Tag Archive for steve moffett

The Omni Dallas Hotel Revenue Equals Savings for Taxpayers

The Omni Dallas Convention Center Hotel

The Omni Dallas Convention Center Hotel

What if your city could develop a hotel like the Omni Dallas Hotel at no cost to taxpayers and help transform your city into a place where investors, developers and new businesses come to create new jobs, new revenue and a variety of new and improved amenities that ultimately equate to financial security for the city and for those who live in it? It so happens that cities everywhere are doing this successfully with the construction of large developments such as Hotel and Conference Centers, Performing Arts Centers and other large mixed-use developments that attract tourists and visitors from other cities and promote growth and tourism.

As a very current example, the Omni Dallas Hotel, owned by the city of Dallas, reports that it is thriving to the degree that hotel officials project that it will bring in enough net revenue to meet its first-year debt obligations, not requiring Dallas taxpayers to contribute to the mortgage payment. Furthermore, financial projections also show that taxpayer support may continue to be unnecessary in years to come.

The Omni Dallas hotel was built with $477 million in city-backed bonds, and with the current performance, the Omni Dallas Hotel Manager Ed Netzhammer sates that he is confident that every penny of the city’s financing will be accounted for by the hotel’s revenue, indicating an excellent outlook for Dallas taxpayers.

According to the 2012 forecast displayed in The Dallas Morning News, the following was reported for the Omni Dallas Hotel.

The Omni Dallas Hotel 2012 Financial Forecast

  2011 2012
Occupancy Rate 58.5% 57%
Daily Room Rate $121.97 $169.34
Revenue Per Room $71.39 $96.52

The above numbers are steadily rising, and the Omni Dallas Hotel officials noted that in January, paid occupancy was a remarkable 65 percent, or 11 percentage points above projections. These 2012 numbers put the Omni Dallas Hotel on the same level as the Hilton Anatole. The combination of November – January numbers alone exceeded projections by 34%.

The most important information from the reports comes from the fact that in 2012, the Omni Dallas hotel expects to get 70 percent of sales from groups and conventions alone. “The inclusion of headquarters hotels is crucial for convention centers,” says Steve Moffett President of the Hospitality Division of Dallas-based development company Garfield Traub Development. “The numbers show that headquarters hotels enhance the performance of their convention centers, allowing them to meet and often exceed expectations.”

In the The Dallas Morning News article titled, “Omni’s 2012 sales expected to cover first-year debt payment,” the Omni Dallas Hotel manager Mr. Netzhammer expects his hotel to be the headquarters hotel or co-headquarters hotel in 16 citywide conventions. The 16 conventions are expected to fill up most downtown hotels, meaning not only great news for the Omni Dallas Hotel, but also for other hotels, restaurants, departments stores and other various businesses located in close proximity to the Dallas Convention Center.

Another great example of this type of success is not a hotel, but a Performing Arts Center. The Durham Performing Arts Center (DPAC) in downtown Durham, NC, had its skeptics before it was built, but now the development is very successful generating revenue to not only operate profitability, but enhance the numerous businesses surrounding it in downtown Durham. In addition, it now ranks among the top 10 in attendance of touring Broadway theaters nationally, and generated multiples of its originally-estimated net revenue. Since opening, the DPAC created new demand for restaurants, hotels and shops surrounding it.

To discuss how your city can achieve similar success like the Omni Dallas hotel and the Durham Performing Arts Center by building facilities which create new economic development for the community, contact Garfield Traub Development.

Public Private Partnership Makes W. TX Vision Reality

Overton Hotel and Conference Center

Overton Hotel and Conference Center, Lubbock, TX

As posted on HotelBusiness.com

LUBBOCK, TX—A decades-old vision to have an upscale, full-service hotel and conference center that would draw scores of guests and meetings attendees to this West Texas city and also support Texas Tech University in its own backyard has come to fruition here as a result of a public private partnership.

The Overton Hotel and Conference Center is the tangible yield of years of efforts by the partnership, which is composed of owner/operator 1859 Historic Hotels, Ltd., the City of Lubbock and developer Garfield Traub. “Lubbock is almost a text book case of how to bring private equity and conventional financing and tie it to public support in order to accomplish a very top priority for a community,” said Ray Garfield, principal of Garfield Traub Development, which led the project.

A great deal of the drive to get the project off the ground centered on the university and its desire to have a full-service hotel and conference center on or near its campus. “Around 1999 to 2000, we talked with [Texas Tech] and we talked with the city. The city itself, the entire community wanted a full-service, first-class hotel with ballroom and meeting space to support that entire region of Texas. When the efforts by Texas Tech fell short, the city took responsibility for it and we began our relationship with the city around 2003, 2004 and were formally selected to be the developer and led the effort to design and to build the facility,” Garfield said.

According to Steven Moffett, president of Garfield Traub’s hospitality division, the Overton deal is a $67-million project, of which $22.4 million was funded through the city and grants programs that Garfield Traub helped initiate with the city. The city issued bonds for $11.4 million. The balance—$44.6 million—was privately financed and includes a $35-million loan from Plains Capital Bank, Moffett said.

The City of Lubbock owns the conference center, the 11,250-square-foot ballroom, the kitchen and some back-of-house facilities, which it is leasing to 1859 Historic Hotels for the next 40 years with options beyond that. Garfield Traub and 1859 Historic Hotels owns the 15-story, 303-room hotel tower and the land underneath the hotel.

“It was a classic structure with great collaboration between the city and the private sector,” Moffett said.

The property is located within an urban renewal project known as the Overton Park District, which is considered the largest privately funded project of its kind based on acreage in the U.S. In creating this district, hundreds of properties in what was deemed a distressed neighborhood were acquired during the past decade by locally based McDougal Cos. “and essentially…eliminated one of the largest slum and crime areas in the city. [McDougal] has built, really, one of the truly great planned redevelopments in the country that any city has envisioned or tackled or accomplished,” Garfield said. The district encompasses student housing, retail, commercial, office, mid-rise and single-family residential space.

“The hotel and conference center that we developed with the city and the support of the university is sort of the crown jewel of this district,” Garfield added.

Garfield also noted that while the city could have issued tax increment financing (TIF) for the Overton project, the increase in assessed values of the redeveloped district “have been so tremendous over the past decade, and the tax revenues so greatly increased to the city, that the city issued its own debt at $11.4 million as its contribution.”

Hunter Carmichael, general manager of the Overton, agreed the community and university have been very supportive of the project. “Sometimes you get projects like this and everybody’s trying to find a way to hinder it. In this market it’s been the exact opposite of that,” Carmichael said.

The hotel overlooks Texas Tech and Jones AT&T Stadium, home to the university’s Red Raiders football team.

A key feature of the hotel is the second floor incorporation of a classroom for the school’s restaurant/hotel institutional management (RHIM) program, which helps students prepare for hospitality careers. “We are staffing our facility with many of the students going through the RHIM program,” Carmichael said, adding students outside the hospitality program also are on staff. “It’s been one of the advantages of being so close to the campus.”

The second floor also houses meeting rooms and executive boardrooms and the GM said his sales team will therefore be going after association and group business for the use of those facilities. “The state associations that rotate throughout all of Texas have really left the West Texas Panhandle off their radar due to having no facility that could accommodate them. So we’re going after all those groups that have been skipping the Panhandle and try to get them to come back out here. There hasn’t been a new full-service facility opened up here in over 20 years,” Carmichael said.

Carmichael added the initial feedback from some groups that have come to the hotel has been “overwhelmingly positive.”

The hotel and conference center, designed by architects DLR Group, includes a street-level restaurant, a business center, a fitness center and an outdoor pool. A bar and lounge area is situated between the conference center and the hotel lobby, which features 22-foot-high ceilings. Loewen Design Group did the interior design, incorporating West Texas themes.

The Overton is operated as an independent like many of the properties under Galveston, TX-based 1859 Historic Hotels’ umbrella, which includes a portfolio of some 2,500 guestrooms nationwide. Among its properties are the Brown Hotel in Louisville, KY; the Cliff House at Pikes Peak in Manitou Spring, CO; and the Menger Hotel proximate the Alamo in San Antonio.

Flagging the Overton with a major brand was considered, but according to Moffett, consulting firm PKF was brought in to help assess branding and it concluded the property would not get the additional rate and occupancy in the market that would be needed to justify a flag. However, Garfield suggested a community with the size and dynamic of Lubbock would, ultimately, attract the attention of flags such as Marriott, Hilton and Sheraton. “So we’ve designed the hotel, in every respect, to meet or exceed the requirements to accept a major flag. We’ll continue to keep our finger on the pulse of the marketplace there and when we believe it’s absolutely necessary to be branded then we’ll make that decision,” he said.

Currently, the hotel has a budgeted rate of $139 for this year. “And right now we’re exceeding that,” Carmichael said. “We’re in a market where, historically, average rate has run in the $70s.”

Carmichael noted that there are also two Holiday Inns, a Staybridge Suites, a Hawthorn Suites and an Embassy Suites in the market.

“Being a part of delivering a hotel of this quality to the City of Lubbock and to Texas Tech University has made this very special for us because Lubbock has needed this for a long time and they deserve a hotel like this,” Moffett said. “When you’re there in the lobby and people walk in you hear, ‘Wow. This hotel’s in Lubbock?’ It’s pretty amazing. It’s just a classic win/win situation for everyone.”

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