Convention center expansion launched tourism to new heights

When the Indiana Convention Center expansion emerged from the rubble of the RCA Dome five years ago, it was supposed to vault Indianapolis to national significance as a major event city.

Five years later?

“In terms of where Indy fits into the scheme of things, they’re not Vegas; they’re not Chicago; they’re not Orlando,” says Jeff Eastman, president and CEO of Strategic Data Resources, a leading research analyst in the industry. “But I would put them at the very top of second-tier cities. Probably in league with a Denver or San Antonio.”

Indeed, since the $275 million expansion opened in 2011, the new-look convention center has surpassed expectations, becoming a surprise favorite of meeting planners across the country.

The numbers speak for themselves. Indy's convention industry today brings in more visitors, who are staying longer and spending more than they ever have. According to Visit Indy's analysis, the economic impact of tourism hit a record $4.5 billion last year; that represents a milestone $1 billion increase from five years earlier.

But what should be a celebratory anniversary for Indy’s tourism industry has been overshadowed by the challenges ahead.

First, there's Indy's national reputation — or lack thereof, compared to popular millennial destinations such as Nashville, Portland, Denver and Austin. Despite recent accolades, a recent survey of prospective tourists shows that many still find Indianapolis wholly unremarkable — or worse, boring.

And, city tourism officials say they continue to be dogged by last year’s Religious Freedom Restoration Act firestorm, which drew a national spotlight to Indiana because of the belief among opponents that the law was a thinly veiled license to discriminate against lesbian, gay, bisexual and transgender people. Prolonging the problem, between the ongoing battles at the Statehouse and the upcoming gubernatorial election, the gay rights vs. religious freedom fight promises to stay in the headlines for some time to come.

Still, compared to five, 10, 20 years ago? The new-found pressure to stay competitive for the next Super Bowl, the next Final Four, the next national event is a good problem to have.

Visit Indy reports record year for Indianapolis tourism

'If you build it, they will stay'

It wasn’t that long ago that Indianapolis was in danger of losing its largest convention — but not because of a controversy.

In 2004, a feasibility study from PriceWaterhouse Cooper laid out two difficult options: Plunk down a quarter-billion dollars on an expansion and add hotel space, or do nothing and watch the city’s convention business atrophy.

One of the biggest gut checks came when GenCon, the country's largest tabletop gaming convention with more than 61,000 attendees last year, was considering leaving Indy when its contract ran out in 2010.

“GenCon is a perfect example of: If you build it, they will stay,” said Chris Gahl, Visit Indy’s vice president of marketing and communications. “We were in jeopardy of losing conventions, because they were literally outgrowing Indianapolis."

Visit Indy took their pitch to state lawmakers, and came home with a $275 million bond issue, financed by a 1 percent hike in hospitality sales taxes on things like lodging, food and rental cars.

The expansion was part of a $900 million deal that included the new 63,000-seat, retractable-roof Lucas Oil Stadium. And the Convention Center now boasts 1.2 million square feet of space, including 749,000 square feet of exhibition space combined between the Convention Center and Lucas Oil Stadium. The center also has 113,302 square feet of meeting rooms and 62,173 square feet of ballroom space.

The expansion nearly doubled the center’s exhibition space from 310,370 to 564,370 square feet, vaulting Indianapolis from 32nd to 16th on the list of the country’s largest convention centers at the time. Its size, coupled with its unique layout and connectivity to Indy’s rapidly redeveloping Downtown, made it a sudden favorite on the convention circuit, able to compete even in the blustery winter months.

With the 2011 opening of the J.W. Marriott, tunnels and skywalks now connect 4,720 hotel rooms to the Convention Center — the most of any city in the nation. The center’s also connected to Circle Centre mall and Lucas Oil Stadium, which serves as another exhibit hall for the largest events. Convention goers can stay inside for their whole trip if they wish.

“Meeting planners love it,” Eastman says.

And more and more, they’re booking Indy because of it. Convention attendance rose from 900,551 in 2010 to 1,064,352 last year.

Hotel occupancy is up, too, from 65.3 percent to 73.2 percent — and that’s with an extra 1,000 rooms of capacity. And there's more to come, with Visit Indy booking a record 904,717 hotel room nights, up almost 40 percent from five years earlier, when the group booked 650,020.

But for the first time since before 2011, there are signs the growth could come to a screeching halt.

Worst yet to come?

So far, the tangible fallout from RFRA hasn’t lived up to the ferocity of the rhetoric from opponents.

Visit Indy posted a record year in 2015, booking more future business than in any year in the group’s history, lending credence to conservatives who have long argued that the controversy was overstated by business leaders and the media.

But Gahl says the city hasn't escaped unscathed. A poll commissioned in October found lingering perception problems for the city, and last week Visit Indy confirmed that as many as 12 conventions that rejected Indy last year cited RFRA as a contributing factor.

Gahl expects the worst is still to come. Visit Indy's staff has fewer conventions in the pipeline today than in any of the past three years.

"The ripple effects from the RFRA crisis, we believe '16 will be the year to really truly tell how deep that cut is," Gahl said. “...This is a big year for Indianapolis tourism.”

Whether you think there is damage or not, eventually, it’s sure to fade. What won’t is Indy’s other perception problem. The legacy, if you will, of sleepy Naptown.

Official: RFRA cost Indy up to 12 conventions and $60M

Despite decades of investments in Downtown and sports, Indy’s still “not overly sexy,” Gahl acknowledges.

So while Indy may compete with San Antonio and Denver for conventions, it’s still a tough sell for out-of-state vacationers. A 2015 survey by Reach Market Planning & Walker Research found that among Chicago residents who hadn't visited Indy, some 70 percent said Indy was either boring, or that they had no opinion whatsoever.

Even those who have been here and like it leave with “relatively vanilla” impressions, Gahl said. In the same survey, some of the top terms national meeting planners used to describe Indy were “friendly, Midwest, clean, accessible and walkable.”

Not bad. But hardly glowing endorsements.

Leveraging the Downtown Canal

It’s partly this perception that has Visit Indy looking beyond its convention space. The group is in the midst of developing a tourism master plan that’s expected to include recommendations for many of the things you’d expect — future convention center expansions, new hotels — but also some things you might not — chiefly, the Canal Walk and the White River.

“From a tourism standpoint, we haven't fully leveraged the canal,” Gahl wrote in an email. “Research shows, nationwide, that visitors are attracted to water, whether that's an ocean, lake or even a canal.

“A good example of this is San Antonio's River Walk — similar set up to Indy, only more developed, with hotels, restaurants and cafes dotting the edge of the water.”

When the Canal Walk was taking shape in the 1990s, it was billed by many as Indy’s answer to the River Walk. But for a variety of reasons, says Aaron Renn, an urban planner, that vision has failed.

“The canal is primarily a recreational amenity for Downtown workers and residents,” said Renn, a senior fellow at the Manhattan Institute in New York, and author of the Urbanophile blog. “You go for a pleasure stroll there like you would go in the park. You go for a jog there. But it’s not necessarily a tourist attraction.”

Part of that’s the way the canal developed. In the 1990s, suburban sprawl was still preferred to urban density, so prime real estate is taken up by single-use residential developments like the Watermark gated community and the Gardens of Canal Court. There’s virtually no designated parking for visitors aside from White River State Park, making it difficult for newbies to access. And in stark contrast to the River Walk, much of the commercial real estate is taken up by office space.

Adam Thies, the former director of the Department of Metropolitan Development, says the comparisons to the River Walk are simply unrealistic.

Indy having banner convention year, but will it last post-RFRA?

“(The River Walk) is right in the middle of the central business district,” says Thies, who is now a facilities planner at Indiana University. “The equivalent would be that we would have a river or canal flowing down Penn, going down Washington and flowing down Illinois.”

Thies doesn’t see shopping ever taking hold. But, he adds, the dynamic on the canal is changing thanks to an influx of student housing. The canal recently got a new restaurant in Burgerhaus, plus a fitness center. And phase two of the 9 on Canal development promises additional residents and waterfront retail. The City-County Council is considering tax incentives for the project.

A few restaurants and bars, though, does not a tourist trap make.

The White River's potential

The bigger opportunity might lie with the White River. If nothing else, if offers a relatively blank canvas. Aside from White River State Park, there’s little there.

But activating the river has long vexed city planners. Its east bank is a floodplain. And the west bank is across the river from Downtown — a barrier that has long signaled the end of Downtown’s amenities.

And then there’s that other thing.

“For however many years, the river was a sewer, in no uncertain terms,” said Thies. “It wasn’t necessarily this super pleasant thing to be on.”

By federal mandate, the city’s working to clean it up. Work also is underway on the connectivity problems. Reconnecting to Our Waterways, a nonprofit group, has been raising money and developing plans to outfit the bridges with things such as new lighting and protected bike lanes to better connect Downtown to Indiana University-Purdue University Indianapolis and the Haughville neighborhood. The city also has converted New York Street to two-way traffic.

At last week's annual Visit Indy tourism address, President and CEO Leonard Hoops said Indy needed to dream big, pointing to Paris as a possible model. The French city creates artificial beaches each summer along the river Seine, drawing millions of visitors annually.

For now, though, the most talked-about site for redevelopment is the former General Motors stamping plant. And now that the criminal justice center is off the table, at least one lawmaker is suggesting the state buy the site for recreational purposes. State Sen. Luke Kenley, R-Noblesville, says he hopes to introduce a bill next year to do just that.

"Think about how valuable Central Park is to New York City,” Kenley said.

"This is 100 acres in the middle of the biggest city in the state of Indiana next to a state park ... over the coming years, it seems to me that it could be a pretty big asset for both the state and the city."

A separate bill this year, authored by state Sen. Jim Merritt, R-Indianapolis, would buy half of it for $15 million as part of a public-private deal to bring an amphitheater to the site.

But like the canal, it’s not clear the proposals would be major draws for tourism. Cities all over the country are trying to repurpose their rivers for recreation, Renn says, and Indy’s at a disadvantage because its river runs around, rather than through, its Downtown.

NRA convention is headed back to Indy � twice

“Not every place is Orlando, Florida,” Renn said. “And there’s no problem with that. Everyone’s got their own unique collection of things that they have.

“Sporting events have done very well for the city. I think the sports strategy is masterful, and a work of genius. What the city has done has worked very beautifully for it.”

The future of event tourism

In 2012, that sports-centric strategy — coupled with decades of investments in the city's Downtown — culminated in the city's first-ever Super Bowl.

It's easy, looking back, to forget the event's significance. Five years earlier, the Colts were playing in the NFL's smallest stadium, the RCA Dome. And even with Lucas Oil, Indianapolis had to be considered an underdog to get it. Indy was up against Houston and Phoenix, and the NFL at the time was notoriously reluctant to host the game in a cold climate. Even with the rise of retractable roofs, Indy was just the fourth cold-weather city to host one.

Without it there's no revamped Georgia Street, now a staple of Downtown. No Near Eastside legacy project, which transformed one of the city's most troubled areas into one of its most promising.

An economic impact study of the 2012 game in Indianapolis reported $152 million in increased local spending from visitors outside the Indianapolis area, but perhaps more importantly, the Super Bowl showed the country that Indy was an event city worthy of consideration. Indy's turn as host was so well received, the Circle City was a finalist once again for the 2018 game, but it came up short to Minneapolis.

So when’s the next big pitch?

Visit Indy’s not saying.

“Putting together a meaningful competitive bid takes time and resources, and while we continue to discuss it, there’s been no firm date or even full consensus that we need to host another Super Bowl again and if so, when,” Gahl said.

But another convention center expansion? That may be on the horizon. If not in the next five years, likely within the next 10.

When the last expansion was being discussed in 2006, today’s specs would have made Indy's convention center the 14th largest in the country. Today, it's 17th. And industry insiders like Eastman can rattle off half a dozen peer cities that are adding floor space and hotel rooms without skipping a beat.

San Antonio, Austin, Houston. Seattle, L.A., San Diego.

“If you sit still,” Eastman said, “people will pass you.”

IndyStar reporter Chris Sikich contributed to this report. Call IndyStar reporter Brian Eason at (317) 444-6129. Follow him on Twitter: @brianeason.

Then and now

Since the Indiana Convention Center expansion opened in January 2011, event tourism in Indianapolis has exploded. Here's a look at the industry's growth in a number of key measures

Visitors

• 2010: 23 million visitors

• 2015: 27 million visitors 

Tourism's total economic impact

• 2010: $3.45 billion

• 2015: $4.5 billion

Tourism jobs (full-time equivalent)

• 2010: 69,000

• 2015: 75,000

Downtown hotel occupancy, capacity

• 2010: 65.3%, 6,100 rooms

• 2015: 73.2%, 7,100 rooms

Convention hotel room-nights booked

• 2010: 650,020 future hotel room-nights

• 2015: 904,717 future hotel room-nights

Total conventions, attendance

• 2010: 401 conventions, 900,551 attendees

• 2015: 548 conventions, 1,064,352 attendees

Source: Visit Indy