In the heart of downtown, the Lexington Convention Center (formerly known as Heritage Hall) and 23,000-seat Rupp Arena are ideally situated to host large events such as conventions, trade shows and other associated meetings and conferences. With an ongoing $50 million renovation of both the arena and the adjacent convention center entering into its fourth (and hopefully final) year of metamorphosis, this multi-use entertainment, convention, and shopping complex is being completely transformed to meet the demands and requirements of the most discerning presenters and exhibitors in the world.

Indeed, Lexington’s location – at the intersection of Interstates 64 and 75 – places Lexington Center within a day’s drive of 75 percent of the U.S. population. Blessed with such favorable geographic attributes and modern amenities, you would think marketing and booking the city’s convention facilities should be an easy sell and that area hotels and restaurants would be filled to capacity every day and night with all the out-of-towners attending various conventions and shows.

The unfortunate reality is that because of funding delays from state government and the uncertainty of when renovations to Lexington Center would be complete, the total number of meetings for Fiscal 2003 is off considerably from the high mark of 241 meetings in Fiscal 1999. In that year, nearly 139,000 people attended multi-day conventions at the Lexington Center. According to Lexington Convention Center figures, estimated attendance was less than 70,000 in Fiscal 2003, a loss of over 69,000 convention attendees.

The economic loss to Central Kentucky in Fiscal 2003 could have been as much as $46.3 million based on International Association of Convention and Visitors Bureau data and estimates prepared by Meredith Moody, vice-president of research and marketing for the Lexington Convention and Visitors Bureau. The estimate projects a loss of approximately 70,000 visitors, who spend an average of $400 per person. The losses include hotel room rents, transportation, dining, sundry expenses, and excursions to tourist attractions.

So, what’s the problem here? Certainly, the prolonged economic downturn and the immediate impact of the “9-11 Factor” upon the travel industry have had some bearing on the situation, but the main culprit in this case was the failure of Governor Patton’s administration and the General Assembly to allocate the final installment of state funds for the renovation.

In the 11th hour, a political poker game ensued in Frankfort that put many economic development projects across the Commonwealth in dire jeopardy and provided quite a bit of uncertainty over the future of Lexington’s Convention Center project. For an agonizing period during 2002, local officials, businesspeople, and potential convention and trade show clients wondered aloud, “when will the project be finished?” The final allocation of $15 million in state funds for the all-important and crucial final phase of development was not made in 2002.

To compound matters exponentially, this past spring’s politics added even further to construction delays due to the initial failure of the 2003 Kentucky General Assembly to pass a fully funded budget.

The General Assembly finally eked out a last minute deal that passed a greatly scaled-down state budget, which included the $15 million needed for the final phase of the renovation and expansion project. Area government and business leaders were extremely relieved to see the funds secured.

“The issue of the Convention Center and Rupp Arena will affect us the most – whether its remodeling will be completed and paid for or not. Right now, its stage of incompletion is costing us convention business,” Lexington Mayor Teresa Ann Isaac conceded during the budget impasse.

Despite the most valiant efforts of the Convention Center staff and construction crews, being under construction definitely contributed to the defection of more than a few conference planners who might have otherwise given Lexington a much closer look for their meeting needs in 2001-2003.

Bookings for Fiscal Year 2004 were also extremely light as a result of the funding delay, since reservations for conventions are made years in advance. Without a firm completion date for the Lexington Center’s renovation, many booking agents were reluctant to gamble on whether the funds would be available to complete the project.

“The expansion delay of the convention center has affected the city of Lexington convention booking pace for future years. It’s all about creating ‘compression’ and laying down good group room night base for future years as citywide conventions will be the key element to the center’s and area hotels‘ success,” says Matt Jones, director of marketing for Marriott’s Griffin Gate Resort in Lexington. “Unfortunately, because of the delays and lack of funding the Center’s sales effort has not had a good plan to capture new conventions to Lexington. To be successful in 2004, we should have been targeting new conventions for the new center back in 2002. As a result, 2004 is set to be another challenging year for conventions.”

“With any new changes in supply such as the additional convention center space, our hotel’s challenge will be to ensure we keep our existing customer base,” Jones continues. “With a new ballroom downtown, we have already lost some of our annual gala events that have been held at Griffin Gate Marriott Resort. My fear is that with the additional availability of new meeting space, we will continue to ‘cannibalize’ each other’s business. With that in mind, it will be very important for the convention bureau and convention center sales partnership to have a good plan to capture new citywide business to Lexington.”

“As the state’s second largest metropolitan area, with millions of convention dollars at stake, it was critical that the project be completed,” says Mayor Teresa Ann Isaac. “Fortunately, we were able to work with state legislators in a non-partisan effort to secure the remaining funding for the project. The completion of the project means more tourism dollars for Fayette County as well as all of the counties in the Bluegrass Area Development District.”

“We are overjoyed that the legislature has come through with the funds necessary to complete this project,” says Bill Owen, president and ceo of the Lexington Convention Center. “The tax revenues and economic impact generated from meeting and convention business that we can now go after with the expanded space will far surpass the investment the state government has made in this public facility.”

“The funding delay hurt our region and state in many ways and for many years to come,” offers Bob Quick, president and ceo of the Greater Lexington Chamber of Commerce. “It is hard to confidently sell a community resource when you are not sure if your product will be available and at what capacity. Luckily for us, the Lexington Convention and Visitors Bureau and Lexington Center staff did an excellent job of keeping a good face on the convention center project while the community was figuring out the funding issue.”

“It is difficult to quantify the amount of air travel business that may or may not have been lost due to delays in renovations to the Lexington Center,” said Michael Gobb, executive director of Blue Grass Airport. “Since 2000, Blue Grass Airport has added service to six new nonstop destinations, increased passenger activity by 25 percent and lowered average airfares by 22 percent. With the availability of more competitive air transportation in Lexington, we are eagerly working with the Lexington Convention Bureau and area attractions to lure an increasing number of both leisure and convention visitors to Central Kentucky.”

“We were very pleased that the state legislature and the Governor reached agreement on the state budget and subsequently completed the funding package for the Lexington Convention Center and Rupp Arena project,” said Larry Bell, general manager of Radisson Plaza Hotel in downtown Lexington. “Although the delay in meeting the original schedule definitely affected the level of convention activity for 2003 and 2004, the positive benefits of enlarging and improving our convention product will, in the end, far outweigh the impact of the delay.”

“Ultimately, we expect that this project will have a dynamic effect on the growth of tourism in the Bluegrass and in the continued economic development of downtown Lexington,” Bell continued.

The Lexington Center facilities were originally constructed in 1975 and included 23,000-seat Rupp Arena, Heritage Hall’s 78,000 square feet of meeting and exhibit space, and the Civic Center Shops. At the time of construction, Rupp Arena was one of the largest basketball arenas in the country and over the years has hosted several NCAA tournament events, including the 1985 Final Four. The renovation phase of Rupp – including a new entry pavilion with almost 11,000 square feet of lobby space, the installation of state-of-the-art large format video screens, upgraded lighting and sound systems, and the construction of additional fan services (which doubled concession capacity and more than tripled the restroom capacity) – played an undeniably large part in keeping the University of Kentucky’s men’s basketball program in the downtown arena as it’s official home court for the foreseeable future.

“This project will make the arena more attractive, more fan-friendly, and bring it technologically up to date,” Owen said. “Other arena improvements are planned as well. The University of Kentucky has committed to keep its men’s basketball program at Rupp as a result of this project.”

The final phase of the expansion will result in an entirely new look for the High Street entrance to Rupp Arena, mirroring the new exterior of the Vine Street façade recently renovated in the second phase of the project. In addition, a conference center adjacent to the new Bluegrass Ballroom will be created, providing the Convention Center with an additional 20,000 square feet of meeting and pre-function space. It is anticipated that the High Street expansion will be finished by Spring 2004 and the Rupp Arena phase finished by Summer 2004.

“The new conference center is perhaps the most exciting element of the entire project,” said LCC Director of Sales Joe Fields. “By next spring we’ll have the capacity to do 18 concurrent breakout sessions in beautiful state-of-the-art meeting rooms.”

The new Heritage Hall Ballroom and Elkhorn Meeting Rooms adjacent to the Heritage Hall exhibit spaces opened in March and have already hosted numerous events such as the annual Mary Kay Cosmetics Convention, The American Guild of English Handbell Ringers Convention and the Central Kentucky Home and Garden Show.

Bookings for 2005 are looking up now that construction is close to completion. Twelve events totaling 17,000 attendees are already booked for 2005. One important win of note for the Lexington Center has been the booking of the 2008 Rural Letter Carriers Convention. The Lexington Center won this business in a competition with nearly 30 cities in 11 states, winning out over cities such as Cincinnati, Des Moines and Milwaukee.

The LCVB estimates that this convention alone will bring 3,000 attendees and generate over $3.5 million in business for Lexington.

“The response from customers to our new space has been outstanding. The new renovation gives us a quality and flexibility that moves us to a much higher level of competitiveness in the meetings market,” said Fields. “We’re confident that we will be able to recover very quickly from the losses. In the convention business, things can change very quickly and we’re now in a good position to pick up business for Lexington.”


Rich Adkins is a staff writer for The Lane Report.
editorial@lanereport.com