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Center of the City
With an interior full of top-of-the-line technology and an exterior designed by committee, the Knoxville Convention Center is finally built. But does it work architecturally? And how does it connect to the rest of the city? It depends on whom you ask.

The new Knoxville Convention Center is one of the most expensive public projects in Tennessee history. As it prepares to open, questions linger about how much it will really be worth.

by Jack Neely

We've been arguing about it for more than five years now, but while we did, it somehow materialized: a huge and unusual building of marble, brick, and glass beneath the Sunsphere. It opens for business in July.

With more than half a million square feet of floor space, it's larger than anything of its kind in many other cities of the region. The new Knoxville Convention Center is the most expensive public building ever built in Knoxville. If all its site preparation, with related park and garage improvements, is included, it cost about $160 million, putting it in the running as one of the most expensive public building projects in the history of the state of Tennessee. Built jointly by Denark and Clark Construction, it's a big, solid piece of work. Those in charge of building it say they built it to last 100 to 200 years.

So far, though, it's guaranteed to be busy for only two of those years. Will the promised conventions come? After four years of bookings, some obvious triumphs, and outspoken confidence on the part of everyone involved in the project, answers remain uncertain. They depend in part on what's happening in a spare, windowless office one floor beneath the traffic of Henley Street, accessed from the old department-store tunnel. Down here are people at work booking time at the Knoxville Convention Center.

'New Businesses Take Time'

Bill Overfelt is the husky, gray-haired general manager of the convention center. A former assistant city manager of Key West, Fla., Overfelt has spent most of the last 20 years working for SMG. Overfelt is not a modest man. "My company is the largest private operator of convention centers in the world," he says. That company is the redoubtable SMG, which is in the early part of a five-year contract with the city to manage the convention center. Overfelt's work for SMG has included stints at convention centers in Atlantic City, Savannah, and Broward County, Fla. He's also the former assistant general manager of the Jackie Gleason Theater in Miami Beach. You get the impression that he and Gleason would have understood each other. Overfelt is a Type A guy, a driven salesman. A colleague describes him as "all business."

He answers questions quickly and directly. "The convention center is going into its start-up phase," he says. "We've booked 150,000 room-nights over the next two years. That's $80-100 million dollars into the local economy. That's outstanding for a convention center that's just opening." (PBA director Dale Smith's estimates the KCC's economic impact on the city in its first fiscal year will be in the neighborhood of $138 million, not counting about $30 million in previous events carried over from the previous convention center.)

Overfelt came to Knoxville early last year to head up a staff of about 20 in these subterranean quarters; ultimately, after they move to their offices in the convention center itself, SMG will employ 63 here. They're offering a basic rate of $7,500 a day for use of the big exhibit floor, a rate Overfelt calls "very competitive." But he adds, "in the early years, everything's negotiable."

He has a list of 43 new contracts for events at the KCC, from the first, the long-scheduled Junior Olympics in July, to the Tennessee Pharmacists' convention in 2006. Most of them were signed during Overfelt's tenure here; and they don't include previous commitments to the former convention center, many of which will move to the new one. He's especially proud that one of those is Destination Imagination, the national scholastic-challenge fair which, recruited by UT's Conference Center, has been one of Knoxville's liveliest conventions in recent years, drawing thousands of young people and their parents to Knoxville for D.I.'s annual May showdown. "They were in negotiations with Iowa State," Overfelt says. "They're staying here because of the new convention center."

He says occupancy rates, based on use-days, should exceed 50 percent for the first year. "In my experience, for the first two years in a brand-new box, we're doing very well." He's particularly pleased with "F&B"—food and beverage sales. "Every dime of that revenue belongs to the city of Knoxville," he says.

He admits that most convention centers don't make a living; they're considered worthwhile mainly for their spinoff development and their economic impact on the city as a whole. The KCC would have to do a lot to be profitable in itself. Its first-year operating loss, not counting the debt for its construction, is just over $3 million, to be accounted for by the city, plus almost $2 million in related expenses to maintain the park, the Locust Street Garage, and the former convention center, now to be known as the "exhibition center." PBA spokesman Mike Cohen says that start-up-year figure is likely a good deal higher than later years will be.

Overfelt says there are about 300 convention centers in the country, with about two dozen more under construction. It's a highly competitive market. What does Knoxville have to offer that other destination cities don't? The first thing Overfelt mentions is this big new building: "the convention center and its capabilities, and the flexibility it offers." He says the Knoxville Convention Center, being one of America's newest, is a state-of-the-art facility. "I'm not aware of any technology we don't have [access to] at the convention center." Overfelt says, in fact, that the Knoxville Convention Center's state-of-the-art wiring and other electronic amenities like video teleconferencing and high-speed Internet access make it the highest-tech of all 150 SMG-managed facilities.

He says Knoxville's convention center stands out in a couple of other respects. "This convention center's park-like setting—that's unusual," he says. The convention center's backyard is the World's Fair Park, being relandscaped to serve the convention center, to be finished next March. "A convention center with four finished sides—that's unusual." Most convention centers fit into city blocks, with one or more sides that aren't meant to be seen.

He adds Knoxville's convenience to interstate traffic, and the "closeness to the mountains" and "the family entertainment right up the road," by which he means the attractions at Pigeon Forge and Gatlinburg. "More and more groups are trying to combine family vacations with business."

In talking about the Knoxville Convention Center's charms, he doesn't happen to mention the city of Knoxville itself.

"This is a new business for Knoxville," he says. "New businesses take time."

Good Sports

Besides managing the center, SMG is charged with making short-term bookings: mostly local, they're booked to fit in the spaces around the long-term bookings, the big out-of-town conventions that should be the bread and butter of the convention center.

The group responsible for long-term bookings is the Convention and Visitors Bureau. "I'm amazed at the people here in Knox County, who say, 'You mean, it's really going to happen?'" says Mike Carrier, head of the CVB. "I assume they haven't been downtown lately."

It's safe to say the Convention Center has booked more meetings, shows, and conventions than most people know about. "Over 50 events are already booked in the convention center," says Carrier. "Most of the people who have negative things to say don't know that."

The big ones are unquestionably huge. The Junior Olympic Games open for a week and a half stay in late July, with an estimated draw of 15,000 people, most of them from outside of the area. A "World of Log Homes" public event this fall also estimates an attendance of 15,000.

The big kahuna is the American Bowling Congress. It will be here this time next year, wrapping up a six-month event that will bring 186,000. Though those bowlers from around the country won't all be here at the same time, they'll represent a population a little greater than that of the city of Knoxville.

Most of the ones on the list aren't nearly that big. The "Duncan-Brown Wedding" in February promises 135 people. (Overfelt mentions weddings as significant "F&B" contracts; you can give your daughter a convention-center wedding for as little as $20,000.)

Several of them are the sort of thing we're used to seeing in the old convention center, like bridal shows, Christmas parties, high-school reunions. Several of them appear to be entirely local, like Home Federal's corporate meeting (400) this December.

Some are a little more unusual. A Particle Accelerator Conference three years from now promises to bring 1,100 well-educated people downtown for four days. (By the time this first big high-tech conference gets here, the KCC's status as SMG's highest-tech facility in America may be a memory.) The Amputee Coalition two years from now will draw 650. A symposium on physical therapy in veterinary medicine in August will draw 600.

Compared to those first giant ones we heard about, most of the recent signees are modest in size. Three of the four biggest conventions scheduled for the Convention Center were booked more than two years ago. Both of the events anticipating a demand of more than 4,000 hotel rooms—the American Bowling Congress and the Junior Olympic Games—were booked more than three years ago.

"I was impressed that Gloria Ray and the city were able to book those events," Overfelt says of the resourceful director of the Sports Corp. "Those are what I call the home runs. The 500-600 room-night groups would be the base hits."

Overfelt has only extravagant praise for Ray and her Sports Corp., who landed those before he got here, but adds there's a reason for that fast-start phenomenon. The American Bowling Congress—which has local connections via ABC executive Jim Bevins, a Knoxvillian—tends to seek brand-new convention centers that have nothing scheduled to compete with their massive six-month itinerary. (And we gave them an especially good deal. Unlike almost all other conventions, the ABC's not even paying rent; their benefits will come mainly through hotel-room charges and F&B.) Regardless of the KCC's future success, the ABC extravaganza next year may well be remembered as the biggest convention in the convention center's history.

Ray's well-known successes have earned her more and more responsibility. She will be a continuing presence at the convention center as the likely director of a proposed Tourism and Sports Development Corp., which will oversee the Sports Corp. and the CVB and attempt to meld their duties. The details of that organization have yet to be decided, says Knox County Tourist Commission member Jeff Talman, who sees the larger organization as a way to prevent overlap and inefficiency among the sometimes rivalrous local-tourism promoters. The emergence of the KCC, and its enormous assets and liabilities, seems to be the impetus behind the reorganization. "We want to promote Knoxville in a smart way," says Talman. "There's a lot of dollars on the table."

Ray sounds modest talking about her early triumphs booking major events at the convention center. "Because ours [the Sports Corp.'s] are pretty large in number and long in duration, they get the most attention," she says. "We told them this community is on a roll. We were fortunate that they believed us."

"We have never lost a meeting where we brought the site-selection committee to town," she says. "They absolutely love the people, find them so friendly."

She talks up Knoxville's multi-faceted personality. "You want genealogy, we've got the historical society. For art lovers, we've got the museum. History, we've got Blount Mansion. Athletics—we're tough to compete with as a sporting venue. Entertainment, we've got shows at the Tennessee and the Bijou and the Coliseum. We're not just one type of city. We've got all sorts of things here."

PBA spokesman Mike Cohen confirms that the sports-minded Ray had a big influence on the interior specifications of the convention center, especially for the huge, sporting-event-sized exhibition hall.

Besides the modest size of some of these conventions, there's another caveat to the vaunted SMG booking list: not all of these new bookings represent new money. Almost half of the conventions on the list are apparently purely local, judging by the fact that they report a zero estimate of demand for hotel rooms. They're bodies in the convention center, of course, and they do buy food and beverages. But considering these are attracting locals who are buying food and drink in town anyway, small local events can't be expected to have much more impact on the local economy than a high-school basketball game.

Even a couple of the out-of-town conventions cater to folks who would have been in the neighborhood with or without a convention center. Consider that two 500-person events are "tailgate parties" on game-day weekends this fall tailored for football fans from the Universities of Florida and Miami. They're out-of-towners, to be sure, with out-of-town money—but many or most of these fans would likely have been here for the weekend of their football games anyway. In the absence of the convention center, they might have been spending their "F&B" money at Calhoun's or Barley's.

It's one of the several paradoxes of the convention-center biz that, though it was founded to help local business, it sometimes competes with it. Mike Edwards, the former PBA chief largely responsible for shepherding the convention center through its early stages, is now chief operating officer of the Knoxville Area Chamber Partnership. "In the best, most preferred world, there is a balance," he says. Ideally, he says, a convention center shouldn't compete with local business; but it also shouldn't become a burden to the taxpayer. "How to get those reconciled is more an art than a science," he says.

Overfelt makes no bones about the fact that all conventions aren't created equal, and he prefers the out-of-towners that produce room-night income for city businesses. "The more hotel-room nights they generate, the more I'm willing to negotiate," he says.

Carrier says it's not unusual for a convention center to take three to five years to build up a calendar of events sufficient to make it a stable operation. A lot of the conventions scheduled around the Southeast in 2003 or 2004 were initially planned years ago. "When these were being planned, we had nothing to sell. At that point, the convention center was still a feasibility study."

Edwards concurs. "Until meeting planners get to walk through it, kick the tires, they're not going to make a career-ending error" booking the wrong convention center, sight unseen.

Still, some express concern that the CVB hasn't been more successful. Of the 69 events on the current comprehensive list, the CVB has booked only eight events, plus a couple which share credit with SMG. Most of the scheduled events were booked by SMG. As Carrier says, convention-center booking is supposed to be a long-term prospect, but besides the renewal of the Destination Imagination contracts, there are only three events booked after 2004.

Others are said to be pending; Ray says she's close to closing a Sports Corp. deal on a big convention as late as 2014. "A lot of them are way, way out," she says.

A 'Third-Tier City'

On the drawing board, Knoxville might seem a propitious spot for a big convention center. For all its reputation for Appalachian isolation, Knoxville is one of the nation's more centrally located cities. Carrier parrots what World's Fair boosters were saying 20 years ago, that Knoxville is at the junction of a couple of major interstates and is within a day's drive of more than 50 percent of the population of the United States. All of that is apparently true, and perhaps the reason Knoxville got away with hosting one of the best-attended World's Fairs in American history. It's home of one of the larger universities in the east (that's a factor in several of the conventions on the list), not to mention the nation's largest utility company; and it's close to Oak Ridge National Laboratories. Carrier adds other civic virtues: "a good value for the price paid...a good and strong work ethic...a friendly attitude."

Carrier is surprised that many Knoxvillians don't know about the KCC; unfortunately, a lot of convention planners around the region don't know about it, either. Besides a short article in a January issue of the trade journal Successful Meetings ("A new convention center, coupled with Knoxville's small-town charm and vibrant entertainment options, is raising the bar for this up-and-coming meetings destination"), the KCC doesn't seem to have inspired much national buzz. Polled at random, some meeting planners within a day's drive of Knoxville say they've never heard of it.

Paul Henning works for Conference & Logistics Consultants, Inc., in Annapolis, MD. They plan conventions for a wide variety of professional associations across America. He says he has never heard of the Knoxville Convention Center. Worse, he doubts that his clients will be very interested.

"Destination cities are described as first tier, second tier, and third tier," he says. "Knoxville is definitely a third-tier city. With the exception of those clients with a corporate presence in Knoxville, very few of our clients would want to come to Knoxville for a convention. There's no interest there."

He's never been here. "It's a wonderful city, from what I've heard," he says. "But the general public awareness of Knoxville is limited. The city needs to market itself. Association attendees have to be convinced to attend."

He also says the lack of an air hub is a major drawback. "As I understand, it's a two- or three-airplane jump to get there." He says his clients' patience for connecting flights is even lower considering the delays necessary after September 11.

Most other cities with comparable convention centers do have better air connections to the rest of the country. Knoxville has direct air connections to about 15 cities; Charlotte has 104. Tourism promoter Talman looks on the bright side. "In the post-9-11 world, our proximity to most of the population of the U.S. is an asset," he says. "There's a lot of reluctance to fly." Maybe the KCC is indeed destined to attract the sort of conventioneers who drive.

The PBA is promoting the convention center with a handsome website that shows the KCC from several angles, inside and out. It shows busy fictional people in suits, some even in tuxedoes, moving through the building, coming and going to the assembly room, browsing high-tech corporate displays in the exhibition hall. To a one, they look like executives. They don't look much like bowlers or log-home fanciers or fishing-lure collectors or beauticians, or most of the other people actually scheduled to attend most of the conventions on SMG's list.

There's no call to be snooty, of course: the real conventioneers who will inaugurate our convention center may well be more interesting than most corporate executives. However, according to statements at the budget hearing last week, SMG is predicating its revenue projections on the idea that the average conventioneer will be spending $240 per day on hotel rooms, meals, and entertainment. Those elusive well-dressed conventioneers in the architectural drawings may well have expense accounts that would justify spending that much in a day, just to attend a convention. But the average bowler or hobbyist may find it easy to get by in Knoxville on a fraction of that amount.

No Headquarters?

"We have to be realistic in our expectations," cautions Carrier. There have, of course, been well-publicized disappointments. By the Convention Center Financing Act, the city gets its investment back mainly on new development in the Central Business Improvement District.

"We have not seen as much new development as people expected to see" in connection with the convention center, admits Carrier. Worsham Watkins International's "Renaissance Knoxville," the only convention-center-related development the city was considering a year or two ago, was a massive development that included a shopping mall, nightclubs, an office skyscraper, winter garden, hundreds of residences, and a new hotel. It seems to have evaporated without resulting in anything at all. Overfelt, who emphasizes the importance of a "vibrant downtown," missed most of the bombast and controversy of the WWI plan, but says he's confident that other plans are "moving forward." A couple of major redevelopment projects downtown, like the Sterchi and Phoenix buildings on Gay Street, are fully underway and promise to make downtown a little livelier with new businesses and many new residents within a year or so, as other initiatives, like the Kinsey-Probasco plan for Gay Street and Market Square, will make that vibrancy even more conspicuous. However, that popular plan depends on state funding which, given the mess on Capitol Hill, is a big question mark.

Another much-publicized problem is the lack of the elusive "headquarters hotel" often cited as critical to the success of the KCC. After attempts to close it, and promises to upgrade it, the future of the nearby 297-room Holiday Inn Select, a legacy of the Fair, has been murky for the last couple of years. But as of this week the current manager, Walter Wojnar, is confident that it will be upgraded to become a more-luxurious Crowne Plaza by next March. The top-to-bottom upgrade, estimated to be more than $4 million, will begin almost immediately.

One cautionary tale is that of the relatively new Charlotte Convention Center, which has been suffering from underbookings. According to a May 15 article in the Charlotte Observer, the current fiscal year has their convention center meeting only 42 percent of its goal. The lag has been blamed on the lack of an adjacent hotel, a deficiency cited for disappointments at several other convention centers around the country. To repair that perceived deficiency, Charlotte is pitching in more than 10 percent of the bill for a luxurious new 700-room Westin.

Will a similar fate will befall the KCC? That Holiday Inn, soon to be Crowne Plaza, is not adjacent to the KCC, but very close. The Hilton, with 317 rooms, is a long block away. The 197-room Radisson, about six blocks away, is also within a reasonable walking distance—at least, for those not carrying big charts or bowling balls.

To some, that's a strength. "I think that's going to be great," says Mark Schimmenti, UT architecture professor and urban-design expert. Formerly of the convention-center design team, for the last couple of years he's been working as director of the Nashville Civic Design Center. Since his move to Nashville, Schimmenti's new-urbanist skepticism of big-box convention centers has undergone a sea change. "I used to not believe in convention centers at all," he says. Nashville's downtown convention center is ugly (and smaller than Knoxville's); it's connected to a swanky hotel, but Schimmenti says most conventioneers don't stay there, preferring more reasonably priced ones elsewhere downtown. In the blocks between the Nashville convention center and downtown hotels, Schimmenti says, "the sidewalks are just full of people walking back and forth along the streets." He looks forward to seeing a similar phenomenon in downtown Knoxville. "People will have to stay at the Hilton, the St. Oliver, the Radisson, and they're going to be out on the sidewalks, walking through Market Square."

Chamber Partnership honcho Mike Edwards acknowledges that some convention planners are skeptical of centers without adjacent hotels, but says he "absolutely" subscribes to Schimmenti's theory that a little distance spreads the wealth. "We'll just have to sell it harder," Edwards says.

The KCC's fiberoptics networks and 27,000 square-foot ballroom and 104-inch Video Wall will only go so far. For all the convention center's expensive bells and whistles, perhaps its most critical asset is the city of Knoxville, specifically downtown Knoxville, and how inviting it seems to prospective meeting planners around the country. In the next year, Universe Knoxville, the Kinsey-Probasco plan, downtown renovation projects, travel safety, and the state budget will all be factors in that equation. No one can claim to know whether this huge and complicated experiment will work in the long run.

All we do know is that a half-decade of controversy about building the thing is now over. The convention center is undeniably there. In the next several months, we'll see thousands of people using it. We haven't done everything according to plan, but now we have to make it work anyway. As someone we spoke with said, not for the record, it will be "devastating" to the city if it doesn't.
 

May 30, 2002 * Vol. 12, No. 22
© 2002 Metro Pulse