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Indianapolis Feeling Pain and Losing Market Share Until the
 2010 Completion of Convention Center Expansion

By Erika D. Smith, The Indianapolis StarMcClatchy-Tribune Business News

Sep. 16, 2006 - For cities in the business of hosting conventions, there's no gain without pain.

The pain part is particularly acute for Indianapolis this weekend as the massive Custom Electronic Design & Installation Association holds its convention outside of the city for the first time in four years. Thousands of attendees and exhibitors are spending $20 million in Denver, not cramped Indianapolis.

"They knew that this was coming," said Don Gilpin, executive director of Indianapolis-based CEDIA. "They knew there was an eventuality that we would simply outgrow the Convention Center."

The gain will come in late 2010, when the Indiana Convention Center nearly doubles its exhibit space to about 550,000 square feet. Indianapolis will rule the Midwestern convention market, attracting larger conventions, industry experts say.

Before then, though, the city and its tourism industry will have growing pains.

"We will lose some market share. How much, we don't know," said Bob Schultz, spokesman for the Indianapolis Convention & Visitors Association.

The city already has had to turn down trade groups looking to move here because the Convention Center is too small. Schultz declined to give details.

Then there are the groups that were here, but had to leave for the same reason. In addition to CEDIA, Performance Industry Racing and its 40,000 attendees are meeting elsewhere this year.

Schultz doesn't expect any more departures, though.

"We were able to convince our annuals that we are committed to growing with them," he said. Gen Con, for instance, signed up for another four years.

There have been other victories, too. Indianapolis landed FFA, with its 54,000 attendees, and Drum Corps International.

Schultz said the biggest concern right now is the future.

Most conventions are booked four or five years in advance. Often, organizers want to see the actual Convention Center or design plans before committing. But Schultz and the visitors association have nothing to show them. The plans aren't ready.

They won't be ready until early next year, said Bill Browne, president of RATIO Architects of Indianapolis. The company is the principal architect on the Convention Center project.

"We're going to be putting something out there in January," he said. "We'll have the more finished kind of renderings in the spring."

Schultz said some trade groups won't wait that long. They will go to other cities, such as Kansas City, Mo.; Minneapolis; St. Louis; Louisville, Ky.; Nashville, Tenn.; Columbus, Ohio; and Pittsburgh.

These are all "tier two" cities -- cities not quite happening enough or big enough or expensive enough to be a "tier one" New York or Los Angeles or Las Vegas.

These are Indianapolis' competitors. Many are expanding their convention centers, too.

Kansas City, for instance, is adding a 46,000-square-foot ballroom, which will give it slightly more exhibit space than Indianapolis' expanded center. And Louisville is adding 215,000 square feet of exhibit space, which will give it an almost 100,000-square-foot edge.

Actually, there's a space race going on nationwide, as the convention industry continues its upswing after crumbling in 2001 and 2002.

The demand for larger meeting rooms and exhibit halls is up. By some accounts, attendance is up, too.

Even the smallest of towns, such as Erie, Pa., and Branson, Mo., are building convention centers, so supply is high. However, most of the space in demand is in nice cities at nice times of the year.

"There's plenty of space. It's just that during the peak times, it's whether you can get it," said Danica Tormohlen, editor of Expo Magazine.

It takes the right mix of lively nightlife, accessible airport, overall location and downtown hotels to make a city a convention destination. Indianapolis has this now, industry experts say. The extra space will seal the deal.

"You have the package," said Bruce Harris, founder and chairman emeritus of Experient, the nation's top convention planner, with locations in Ohio, Georgia and Maryland.

In 2010, Indianapolis will have most of the tools necessary to rule the Midwestern convention market, industry experts say.

The only thing missing will be a Downtown headquarters hotel with 1,000 or so rooms.

In April, five parties submitted proposals for such a hotel, which could be built at Pan Am Plaza, above the expanded Convention Center or elsewhere.

City officials still are considering the proposals. But an announcement is coming in a couple of months about which plan the city favors and how it will encourage that hotel's development, said Justin Ohlemiller, a spokesman for Mayor Bart Peterson's office.

As for CEDIA's Gilpin, he's just waiting to see what happens.

The trade group, which represents high-end electronics companies and installers, wants to return to Indianapolis. But it needs to see more hotel rooms and more exhibit space before it makes any commitments.

Last year, CEDIA's 26,000 attendees filled up hotels as far out as Greenwood and Keystone at the Crossing. In the Indiana Convention Center, exhibitors filled every inch of available space, including the hallways.

And still, CEDIA had to turn away 80 exhibitors because there was no room. In Denver, there's more than enough.

"We want what's best for Indianapolis," Gilpin said, "but business is business."

CONVENTION TIPS: Trade groups have plenty of reasons why they favor certain cities over others.

TOP FIVE REASONS TO MOVE TO A CITY:

1. Size of exhibit halls (62 percent).

2. Location (54 percent).

3. Potential for attracting a lot of people from a city or region (28 percent).

4. Number of meeting rooms (24 percent).

5. Hotel prices (19 percent).

TOP FIVE REASONS TO LEAVE A CITY:

1. Not enough attendees from a city or region (46 percent).

2. Event outgrew exhibit halls' space (36 percent).

3. Labor issues or costs (29 percent).

4. Hotel prices too high (20 percent).

5. Complaints from attendees (20 percent).

Source: EXPO Magazine

TOP MEETINGS HERE: Top conventions and events in Indianapolis (by spending):

--National FFA Convention Attendance: 54,000. Visitor spending: $30 million.

--NCAA Division I Men's Basketball Final Four Attendance: 43,000. Visitor spending: $28.1 million to $45 million.

--Fire Department Instructors Conference Attendance: 25,000. Visitor spending: $24.7 million.

--Church of God 71st International General Assembly Attendance: 25,000. Visitor spending: $22.9 million.

--Gen Con Attendance: 25,000. Visitor spending: $21.8 million.

--Dealer Expo Attendance 21,000. Visitor spending: $15.5 million.

--Bands of America Attendance: 35,000. Visitor spending $13.2 million.

These conventions have left Indianapolis because of exhibit space constraints:

--Custom Electronic Design & Installation Association (CEDIA) Attendance: 25,000. Visitor spending: $20 million.

--Performance Racing Industry Attendance: 40,000. Visitor spending: $27 million.

Sources: Indiana Convention and Visitors Association

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To see more of The Indianapolis Star, or to subscribe to the newspaper, go to http://www.IndyStar.com.

Copyright (c) 2006, The Indianapolis Star

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