The Conference Conundrum

The latest effort to renovate and expand Cobo Center offers the best hope yet to provide for the future growth of The North American International Auto Show. It will also help draw new conventions that would pump added revenue into local hotels and restaurants.
Long maligned Cobo Center could be renovated and expanded for a modest $288 million, a far cry from other plans that exceeded $1 billion. Photograph by L.C. Hamilton/Eye_Image Photography

Long fraught with delays, the proposed $288-million renovation and expansion of Detroit’s Cobo Center would help the region and state draw more conventions, conferences, and meetings; boost area hotel, restaurant, and hospitality services; and cut energy costs, add parking, and boost efficiency — especially as it relates to the delivery, setup, and breakdown of exhibit space.

The plan — which requires unanimous approval of a new five-member regional authority made up of appointees from the state, city, and Wayne, Oakland, and Macomb counties — would add 166,000 square feet of exhibition space to Cobo Center, remove fixed tiered seating inside Cobo Arena and replace it with retractable seating for around 3,000 people, better improve access and sightlines to the Detroit River, and expand Wayne Hall (located closest to the Detroit River). The Riverview Ballroom would also be renovated, while a new portico entrance at Jefferson and Washington would add 20,000 square feet of meeting space and provide a covered entrance into Cobo Center.

In addition, the Michigan Hall in the lower level would be extended to Atwater Street and the Detroit Riverwalk via a concourse that could serve as a pre-function space or added room for exhibits. The Michigan Hall would also flow into the lower level of the redesigned Cobo Arena, essentially providing large exhibit, banquet, or entertainment space to complement the Center’s main level, consisting of Wayne, Oakland, and Macomb halls. The expansion and renovation of the lower level would yield added exhibit room for the annual North American International Auto Show, the Center’s main user, as well as the annual SAE show and other large events. In addition, two or more large events could be held simultaneously on the main level of Cobo Center and in the redesigned Michigan Hall and Cobo Arena.

“We have met or exceeded all of the requirements needed to bring Cobo Center into the 21st century and effectively compete for new conventions and meetings on a very cost-competitive basis,” says George W. Jackson Jr., president and CEO of Detroit Economic Growth Corp., a quasi-public development agency in Detroit. “We’re going to add and modernize the heating and cooling equipment, so we’ll have significant cost saving there. Plus we’ll add truck bays at Cobo Center and Cobo Arena, and the plan will provide exhibitors with better access to electricity, communication wires, lighting, and sound.”

Currently, most electric power at Cobo is accessed via floor boxes, but power is limited, meaning contractors must often run special cabling to and across the ceiling. In the new plan, the addition of permanent transformers and so-called bus ducts would improve power access while cutting down on cabling costs. In turn, a new communication distribution spine would improve the setup and operation of computers, lights, speakers, and special effects like smoke machines.

Oakland County Executive L. Brooks Patterson, who five years ago balked when former Detroit Mayor Kwame Kilpatrick outlined a $1.3-billion plan to expand Cobo Center by 200,000 square feet, says he’s pleased with the new governing authority, although he believes deferred maintenance should be tackled before addressing any expansion efforts.

“We saved taxpayers $1 billion by insisting that Cobo be prudently improved,” Patterson says. “There was also talk that Oakland County would get one vote on a seven-member authority, which meant I would be out-voted for the rest of my life. But we held fast and insisted that we get one vote among a five-member authority, and that any expenditures and the like needed unanimous approval.”

Patterson says the recent downturn in the global automotive market makes him cautious of any expansion effort. “We need to improve the facility, no question, but we shouldn’t be adding space if the automakers aren’t going to produce as many vehicles down the road.” He believes the loading docks, heating and cooling equipment, communication and technology systems, and parking garage should be renovated first.

Joseph Serra, co-chairman of the 2009 auto show, which is hosted by the Detroit Auto Dealers Association in Troy, says more automakers, especially OEMs from China and India, would lease space during the January event if room were available. And longtime manufacturers say they could utilize any available extra space, he says. In the past, tight quarters caused many automakers to add second levels — a more expensive proposition.

“From the last seven years that I’ve been involved with running the show, we’ve heard a consistent demand from the OEMs for more space,” says Serra, president of Serra Automotive in Grand Blanc. “For years, the automakers were asking for a driving track so journalists and the public could experience all the new technology, and we finally added it this year (in the Michigan Hall). We need a venue that can accommodate all kinds of activities, and it would be a real shame if we, as the Motor City, couldn’t provide for an industry that will rebound and thrive.”

As part of Cobo Center’s renovation plan, the tiered seating inside Cobo Arena would be replaced with retractable seats.

While nationally, the convention industry has waned in recent years due to the sluggish economy and tighter travel and expense budgets, more convention centers have been offsetting the downturn by drawing regional conventions or improving upon national or international activities. “There’s been a whole shift in the convention industry toward regional events,” says Chuck Skelton, president of Hospitality Advisors Inc., a hotel-consulting firm in Ann Arbor. “It’s less expensive in terms of travel costs, plus the convention centers are eager to offer attractive pricing. At the same time, convention centers have been bending over backward to accommodate their larger shows.”

Given recent trends in the convention industry, Jackson says it was imperative that the Cobo Center project deliver a state-of-the-art facility at a conservative price.

New truck bays would be added to Cobo Arena, as well as a pedestrian plaza. Illustrations courtesy of the City of Detroit

What’s more, the new regional authority will be able to control operational costs more effectively, and there’s no requirement that Detroit contractors and businesses receive preferential treatment for contract bids.

Financing for the Cobo project would be generated from a variety of sources, including new state funds along with the extension of taxes on statewide liquor sales and metro Detroit hotel rooms, which were set to expire in 2015. Under new state legislation, those taxes – 1 percent on hotel rooms and 4 percent on liquor – will be extended to 2039.

While Jackson hopes to have most of the improvements completed in time for the 2012 auto show (meaning early November 2011, to allow time for exhibit setup), meeting such a deadline is predicated on unanimous approval of the regional authority as well as successful negotiations with Olympia Entertainment, a division of Ilitch Holdings Inc., the multifaceted sports, food, and entertainment empire owned by Mike and Marian Ilitch. Olympia Entertainment’s lease at Cobo Arena is set to expire this summer, and the company retains an option to renew the lease for another 30 years. The necessary architectural and engineering drawings would need to be completed in fairly short order, as well.

Area hotels, restaurants, and exhibit service companies are eager to see Cobo Center improved. A modernized convention facility would allow for additional conventions, whether it be large gatherings for auto or boat shows, or several smaller events offered simultaneously like conferences, family reunions, or meetings. The facility could also accommodate larger banquets. And with the retractable seats folded back, Cobo Arena could fit up to 5,000 people — meaning concerts and public gatherings could be offered.

“With the addition and renovation of several hundred hotel rooms downtown, we’ve all been looking for ways to generate new business as opposed to competing against one another,” says Scott Stinebaugh, director of sales and marketing at the Westin Book Cadillac Detroit, which reopened following a $188.9-million restoration last October. “I’m thrilled to hear that the Cobo Center expansion is finally moving forward. It will help the city and the region. We have the hotel package, and I’m glad all the parties stepped forward to support the convention center.”

Other Cobo Center improvements include new meeting rooms, renovation of the main lobby, upgraded bathrooms and elevators, improved finishes, and the addition of glass windows on the south side of the main concourse of Cobo Arena, which would provide guests with better sightlines of the Detroit River and Canada. A new truck bay on the east side of Cobo Arena would include an outdoor patio on the roof, which could be converted to meeting space in the future.

“With an improved convention facility able to compete with other regions in the country, you really have an asset that will help draw new business to the region,” says Tony Mira, general manager of the Ritz-Carlton in Dearborn, which recently celebrated its 20th anniversary. “At the end of the day, Cobo Center will only be as good as the service and hospitality we all provide, so it’s imperative that we make this work.”

Even private clubs are looking forward to an improved convention facility. “Our membership has been growing locally, nationally, and internationally, and we feel an improved Cobo will help draw members from around the world,” says John Rodriguez, general manager of the Renaissance Club in Detroit’s Renaissance Center (he also oversees the Skyline Club in Southfield). “We’re close to Cobo, we offer a tremendous amount of business resources, so it would be a big positive for us and the entire hospitality community.”