1. Convention Center Authority Republican Policy Group Presentation March 9 th 2015

2. Contents History of the Convention Center Authority History of the Convention Center Authority Discussion of the Lease Agreement Discussion of the Lease Agreement Relevance to the Pawsox Relevance to the Pawsox Constituent Contact Constituent Contact Future Agenda Future Agenda

3. Timeline Early Years Quiet Years Recent Years 1984 199420042015 Three distinct periods of time for the Convention Center Authority The Early Years The Quiet Years The Recent Years

4. The Early Years 1984 Providence Foundation Study 1986 Contractors Partner 1987 City State Task Force 1987 Cost $100 mm 1984: Providence Foundation Study “Convention Center would run a deficit $600k to $1.9 mm” “No major convention center pays its capital costs” 1986: Proposal for 45,000 ft 2 hall & 2,000 car garage 1987: City State Task Force Study Call to increase hall size to 50,000-95,000 ft 2 Potential cost of the Convention Center $100 mm

5. The Early Years 1987 G.A. Involvement 1988-89 Land Acquisitions 1989 Internal Concerns 1987: General Assembly Passes Legislation Title 42-99 creates Convention Center Authority 1988-89: Land Purchases by the CCA Buy 7.7 acres for $32 mm “$4 mm than CCA’s own real estate appraisers said the properties were worth” 1989: Internal knowledge of potential cost overruns “This will be the most expensive convention center on a ‘per- square-foot basis’ in the history of the country”

6. The Early Years 1989 Bigger Hall 1991 G.A.’s New Amendments Nov 1991 Lease Agreement 1989 New Projected Cost $147 mm 1989: Larger 100,000 ft 2 Hall Commissioned “This won’t cost the taxpayers one dime.” Richard Oster 1991: General Assembly passes new amendments for CCA CCA can build/operate a hotel 1991: State signs a lease agreement with the CCA Taxpayers to pay debt service and operational costs

7. The Early Years 1991 First Debt Issued 1991 Planned to Build Hotel 1991 New Projected Cost $214 mm 1991 New Projected Cost $356 mm 1991: First Bonds Issued by the Conv. Center Authority Issued $225 million in debt; no public vote needed. 1991: Hotel Plans Studies claim Providence did not have enough hotel beds for the bigger conventions Proposal for 363 room $47 mm with $10 mm dome June 1991 CC Const. Begins

8. The Early Years 1993 Westin Providence Built July 1993 More Debt Issued Dec 1993 Convention Center Finished Jan 1993 Consultant Report Jan 1993: Consultant Report By 1995, the project would require state subsidy of $18.6 mm Previously estimated subsidy was $8.6 mm Actual money provided in 1995, $17,214,610 1993: More Debt Issued CCA issued another $98 mm Again, the public never had a vote for this debt

9. The Quiet Years 2004 Total subsidy cost $183.5 mm 1994 Subsidies begin 1994: First state subsidy is made to the CCA $5.5 mm appropriated for debt service, roughly $9.1 mm in today’s money Subsidies have been appropriated each years since $454,500,000 has been appropriated from 1994-2015 Within 10 years, the state paid $183.5 mm Rhode Island has paid many ‘dimes.’

10. The Recent Years Mar 1993 CCA Sells Hotel Nov 2005 Lease Agreement Mar 2005: CCA Sells Westin Hotel to Procaccianti Group $95.5 mm price. Against Governor’s wishes based on moral reasons Proceeds from the sale used to pay down CCA debt Procaccianti Group defaulted on $14.7 mm in credit union crisis Nov 2005: Lease Agreement RI and the CCA sign another Lease agreement to include the Dunkin Donuts Center

11. The Recent Years Sept 2008 Dunkin Donuts Reopens Dec 2005 CCA buys Dunkin Donuts 2006 More Debt Issued Dec 2005: CCA Buys Dunkin Donuts Center Pays $28.5 mm to Providence for the Facility Renovations cost $64 mm over the next two years 2006: Issued More Debt, $92.5 mm Debt used to pay for the Dunkin Donuts acquisition

12. The Recent Years June 2016 VMA Agreement Expires July 2008 CCA Operates VMA 2014-15 VMA Renovations July 2008: CCA Acquires Operational Management over the Veterans Memorial Auditorium 2014-15: VMA Renovations Multi-year projects costs the state $15.5 mm June 30, 2016: CCA’s agreement with the state expires

13. Highlights Cost of the Convention Center Cost of the Convention Center –The final cost was more than triple the initially projected cost of the project –Debt service increased from $9.4 mm to $24.3 million Value for Money Spent Value for Money Spent –Paid more for land than appraised worth –Building cost more than other centers  $15 more per foot than AL Conv. Center  $35 more per foot than PA Conv. Center –RI is the “Rolls-Royce of Convention Centers”

14. Lease Agreement Bond Language Bond Language –State was not liable for bond repayment  “Obligations issued by the [Convention Center] Authority do not constitute a debt or liability or obligation of the state” –Security of Debt  “Bonds are secured solely from the pledged revenues or assets of the Authority”

15. Lease Agreement Pursuant to a “Lease & Agreement” Pursuant to a “Lease & Agreement” –signed 11/1/1991 & 11/30/2005 –CCA leased the Convention center facilities to the state  State is obligated to make lease payments “in an amount sufficient to pay the operating expenditures of the Authority and the debt service”  Subject to annual appropriations by the GA

16. Lease Agreement Importance Rhode Island Appropriations Rhode Island Appropriations –State has spent over $450 million  Was not an obligation of the state.  Was not expected to cost the state a dime. Voters Voters –Rhode Islanders never voted to issue debt Legality Legality –Completely legal and could happen again...

17. Pawsox Original Forecasts Original Forecasts –The Convention Center would “pay for itself”  Actual usage never hit estimated projections –Economic studies advocated for the project  Studies can be manipulated or misleading Be wary of Lease Agreements Be wary of Lease Agreements –Can cost Rhode Island millions –No voter approval is required

18. Constituent Contact Recommendations Recommendations –Need for better marketing of our convention  No mention of RI in tourist specific books –Readers Digest, Travel & Leisure  Yearly calendar of events? –Nashville Hotels issued materials in conjunction with Conv. Center  “I didn’t realize the amount of activities available”  “I’m going back there to do it all”

19. Constituent Contact Recommendations Recommendations –Need better venues that have a greater draw –Why are vendors foregoing the Conv. Center?  One event was held at the Conv. Center but now held at the Crowne Plaza –Why did the venue move? Cost prohibitive?  “Some local business advertise on TV how they are not at the Home Show.” –Why are they proud not buying a booth?

20. Next Agenda Continued Call for Greater Transparency Continued Call for Greater Transparency APRA Request Information APRA Request Information Additional Follow-up of Information Additional Follow-up of Information Next RPG Meeting 3/23/2015 Next RPG Meeting 3/23/2015