July 10, 2003 -- A 300-room convention center hotel in downtown Columbia would be a success, according to an independent feasibility study conducted by an Atlanta firm. 

The PKF Consultants report was issued to advise bond underwriters on the viability of the project. It was released to City Council on Wednesday. 

The report shows the hotel would likely have occupancy rates of 65 percent to 68 percent, with rooms costing from $80 to $125 per night. 

The consultants estimated the city-owned Hilton would earn about $1 million a year. 

"There is very strong support for proceeding with the project as planned," consultant Adam Valente said. 

The estimates are slightly less than an October 2002 feasibility study conducted by the hotel's developers, a group headed by Edens & Avant Real Estate Services. 

That report, by Salomon Smith Barney, predicted occupancy rates of 70 percent to 74 percent, with rooms costing about $110 to $150 per night. 

The report also predicted the hotel would make about $1 million a year. 

In December, City Council hired the Edens & Avant group to build the hotel. 

The L-shaped Hilton will be located at the corner of Park and Senate streets, a half block from the Columbia Metropolitan Convention Center being built on Lincoln Street in the Vista. 

City Council based its decision to build the hotel on the 2002 feasibility study presented by Edens & Avant, Mayor Bob Coble said. 

The report released Wednesday is a third party, independent study required by investment bankers. But the city paid the $23,000 consulting fee. 

"This study was not to convince City Council that the hotel is needed," Coble said. "This is to convince the people who are going to issue the bonds." 

The city is guaranteeing $23 million of the $60 million cost with tax dollars. The hotel, expected to be complete by the end of 2005, will be owned by the city. 

The Edens & Avant group is earning a fee for developing the project. 

Hilton Hotel will manage. 

Controversy surrounded the decision because City Council turned down an offer from a private developer, John Q. Hammons, to build the hotel with his own money. 

Critics warn that the city risks spending tax dollars on the project if the hotel doesn't make enough money to make the bond payments. 

PKF vice president Peter Keim said the firm based its occupancy and revenue projections by comparing similar hotels in the downtown area. 

The consultants also interviewed meeting planners and estimated growth in the market because of the convention center and a planned USC research campus. 

The firm determined that about half of the rooms booked would be generated by the convention center. 

A spokesman for the Greater Columbia Hotel and Motel Association said the firm's projections are in line with the association's estimates. 

"We recognize the convention center needs a hotel," Bob Wislinski said after Wednesday's meeting. "We see it as a benevolent thing. 

It's intended to generate convention business, its own rooms." 

Wislinski wouldn't comment on city ownership of the hotel. "We recognize that it is controversial," he said. "We haven't taken a position on the financing mechanism." 

Wednesday's report indicated the Columbia market has been steady, even during tough economic timesbecause of business generated by state government and USC. 

Columbia avoided the market dip which plagued larger cities after 9/11, PKF's Valente said, because it's a "drive to" rather than a "fly to" destination. 

"This market has remained stable while other cities have gone off the cliff," he said. 

A survey of meeting planners indicated that Columbia would be a more popular location than Greenville or Florence for meetings or conventions; but the city rated behind Charleston, Hilton Head and Myrtle Beach. 

"Water and the beach will do that," Valente said. 

But, he added, the cost of rooms and other meeting expenses will likely be lower in Columbia than the coast, "and that's a big selling point." 

The consultants also noted that the strength of the market is illustrated by: 

-- The announcement that a 110-room Marriott Courtyard Hotel will be built on Lady Street 

-- The downtown Hampton Inn's occupancy rate, the highest in the chain 

-- USC's effort to build a hotel on campus. 

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(c) 2003, The State, Columbia, S.C. Distributed by Knight Ridder/Tribune Business News. C, HLT,