Jobs, economic growth, downtown development—reasons for a downtown convention center, hotel

C.H. Johnson Consulting President/CEO Charlie Johnson gave a presentation of a convention center/hotel analysis for the River District area Jan. 13 at the Burpee Museum of Natural History (See page A7 for story and commentary). Photo by Frank Schier

Study provides foundation for next steps in conversations with community

From press release

The Rockford Area Convention & Visitors Bureau (RACVB) on Jan. 13 was joined by public, private and labor leaders and organizations to announce the completion and findings of a feasibility analysis for a downtown Rockford convention center and hotel development. The presentation featured key findings from the study, including a convention center’s ability to spur job creation, leverage positive momentum in downtown and further establish the region as a visitor destination.

Three main points came out of the study:

υ Job creation and economic sustainability—According to the analysis, a convention center and hotel would add $36.6 million annually to the local economy from total visitor spending. The development of a convention center and hotel would provide immediate construction jobs as well as long-term hospitality industry jobs. The development would create new jobs, totaling 296 long-term, full-time jobs upon stabilization. The construction of the center and hotel would provide 450 jobs each year for two years.

υ Capitalize on positive momentum/development downtown—A convention center and hotel would be part of an overall plan to redevelop and reposition downtown Rockford. The analysis suggested that a convention center and hotel would support existing momentum in downtown, as demonstrated by the Burpee/Discovery Center Museum expansion, MetroCentre renovations, removal of the pedestrian mall, construction of a new federal courthouse, and opening of new restaurant and retail establishments.

υ Develop new visitor industry markets—Visitors generate more than $300 million in economic impact each year for the Rockford area, and according to the study, a convention center/hotel would increase that by more than 10 percent. Although known for its amateur sports facilities and the tournaments it hosts year round, Rockford is at a competitive disadvantage and  loses meetings and conventions to other communities because it lacks appropriately-sized facilities.
We are missing out on opportunities to bring a significant amount of visitors and revenue to Rockford, and as a result are forfeiting the jobs that would be supported by those visitors,

said Linda Heckert, RACBV Board vice chair.
The study found that a convention center would attract 120,000 additional visitors to Rockford every year. That would have a considerable economic impact on downtown and the entire region.

Recommendation: According to the study, a distinctive 58,500-square-foot convention center with a 200-room
focused brand

hotel should be developed. Construction costs would be approximately $30-35 million for the convention center and $22 million for the hotel. The convention center could be expanded at a later date in Phase 2.

According to John Groh, RACVB president/CEO, the analysis supplies the community and interested stakeholders with important information and provides a starting point to begin a discussion of whether or not a convention center should be pursued.
A key question is, in these difficult times, how do we move forward, how do we create jobs for our citizens? One way could be to work together and make projects like this happen,

said Groh. He referred to the opening of SportsCore One and Two, Road Ranger Stadium and other examples that attract visitors.

The study was conducted by C. H. Johnson Consulting, Inc., a hospitality and real estate consulting firm in Chicago. The purpose of the study was to assess the demand, operating revenue and expense projections for a convention center in downtown Rockford. The firm recommended that the Rockford area develop a high-quality convention center and comparable hotel in downtown Rockford for the following economic development reasons:

• It will significantly improve the economic health of our community. According to the study, a convention center/hotel will add $36.6 million annually to our local economy, increasing the impact of the region’s visitor industry by more than 10 percent.

• With 15.5 percent unemployment in the greater Rockford area, the highest in Illinois, such a development would, according to the study, provide 450 immediate high-paying construction jobs (for two years) as well as 296 long-term hospitality industry jobs, many of which would be full time with benefits.

• It would diversity the area’s hospitality market, increase the visibility of the Rockford area and maximize and complement downtown redevelopment efforts.

• With several downtown projects under way, this could add energy and assurance to the overall success of downtown redevelopment. Downtown Rockford is re-emerging as an economic center and resource for the entire community. A sustained investment like a convention center/hotel development would add to that momentum.

• Such a development would help further establish the Rockford area as a serious Midwestern destination for leisure and group travel, adding significantly to the $300-million-plus economic impact of visitors annually.


• According to the study, the convention center/hotel would have a $36.6 million economic impact annually to the local economy. It would pay $8.4 million in wages and salaries for the jobs created, and there would be added economic benefits as restaurants and other retail establishments, including those located downtown, benefit from the anticipated 120,000 additional visitors to the area.

• The presence of a convention center/hotel would generate $2.7 million in tax revenues. This is over and above the operating business of the convention center/hotel.


According to the study, total cost for a 58,500-square-foot convention center with a 200-room focused brand hotel would be approximately $55 million; $30-35 million for the convention center and $22 million for the hotel. The convention center could be expanded later.

• A convention center in this market is projected to host 231 events a year. In Year 5, it could generate $2.65 million in operating revenue a year and cost about $2.86 million to operate, requiring $210,000 in operating allowance. After Year 5, the operating allowance would be in the low $200,000s, which is customary and within industry standards.

• The hotel is projected to stabilize at 65 percent occupancy, with an average daily room rate of $97.30. In Year 5, it could generate about $8.1 million in revenue and cost about $5.8 million to operate, for $2.3 million in operating net income.

A complete copy of the report is available at

From the Jan. 20-26, 2010 issue

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