The lead development team for the proposed Capital City conference center project is telling Jefferson City to look at a West Texas city as an example of what is achievable.
Stephen Galbreath, Garfield Public/Private’s (GPP) chief development officer and head of design and construction, said his firm specializes in partnering with municipal entities to establish large facilities, like a conference or convention center.
Abilene, Texas
Galbreath said Jefferson City’s project is most similar to a hotel GPP built last summer in Abilene, Texas — the DoubleTree by Hilton Convention Center Hotel.
In Abilene, a city with a population of about 125,000, the downtown convention center and hotel is 170,600 gross square feet with 206 hotel rooms and is eight stories tall. The facility has a fitness center, pool, patio bar, a 12,000-square-foot ballroom, a three-course restaurant and 38,700 square feet of meeting space.
The very preliminary plans for the Jefferson City project is to build a 36,000-square-foot conference center, a hotel with at least 150 rooms and a parking garage with at least 700 parking spaces.
According to the city’s request for proposals, the hotel is likely to include a restaurant, rooftop bar, fitness center, courtyard and pool. The conference center and hotel will be connected and there will be retail, restaurant or office spaces at street level along Madison Street and East Capitol Avenue.
Rooms cost about $130 a night at the DoubleTree by Hilton Abilene Downtown Convention Center.
GPP’s financing plan puts the city of Abilene as the owner of the facilities; Abilene sold tax-exempt hotel revenue bonds and earned $14 million in grants from “anonymous community philanthropists,” according to documents from GPP.
Abilene has a qualified management agreement with Hilton, the hotel’s operator, and leases the conference center to the local government corporation, which Galbreath defined as a public, non-profit corporation to help and act on behalf of a local municipality.
In this instance, he said, the corporation holds ownership of the asset — the hotel — on behalf of Abilene while the public bonds are paid off. Once those bonds are paid, the corporation donates the hotel to the city.
The Abilene City Council approved GPP as lead developer in August 2021 with a groundbreaking ceremony held in October 2021.
The hotel opened June 2023 and cost about $84 million, according to Abilene City Manager Robert Hanna.
Hanna said $41 million came from “hotel revenue-supported debt,” $16 million from charitable contributions and $23 million from a combination of “cash on hand and hotel tax-supported debt.”
The city of Abilene spent an additional $3 million for change orders and on supplies that ended up costing more than expected.
“Given the supply chain realities and dynamic pricing that much of the construction industry was facing during this time, we were pleased with the final cost of the project,” Hanna said.
According to Hanna, the city of Abilene was also pleased with GPP’s work and the final product.
“We couldn’t be more pleased. We are currently working with Garfield Public/Private on remodeling our existing convention center to best complement our new DoubleTree by Hilton Hotel,” Hanna said.
The financing plan
As part of GPP’s proposed financial plan for the Jefferson City project, the document states “there is no ‘conventional’ financing structure for a full-service hotel and conference center that would result in less than at least 33 percent to 40 percent in public participation needed.”
Galbreath said GPP works with cities to structure a public-private partnership that is often exempt of real estate and sales taxes.
“We’re very creative in helping a city figure out that structure,” Galbreath said.
A city can also sell tax-exempt bonds on the open market, which Galbreath said is common in order for a municipality to pay.
“Typically, institutional buyers are buying bonds that are only against the NOI, which is the net operating income. So the money that the hotel brings in pays for these sets of bonds. (The bonds are) not on the city’s books, the city doesn’t have to stand up for them. The city then comes in with what’s called the gap, and they put in their piece of money,” Galbreath said.
The city can add their “piece of money” in various ways: Abilene added about $17 million from anonymous donations. Also, Texas has a hotel occupancy tax rebate that added about 10 years of the state’s hotel occupancy tax back to Abilene; in this case, about $10 million went toward the city of Abilene for the new hotel.
“The state’s not having to pay it, they’re just giving it back to the city to put into this important building for the city. And so, there’s city bonds, there’s publicly-sold bonds, there’s these kinds of rebates and things like that from the state,” he said.
Missouri does not have a rebate like Texas, though Jefferson City has a lodging tax, 4 percent of which is allocated to a conference center fund. This tax generates about $700,000 each year and the conference center fund has more than $8 million so far.
“They don’t do it like that in Missouri, but we’re looking at ways to kind of figure out a way that Jefferson City can maybe gain some of the impact or something like that,” Galbreath said.
Another option, Galbreath said, is for a large company — Coca Cola, for example — to donate enough money and to put that company’s name somewhere prominent on the front of the conference center.
The financing plan will take a while to solidify, he said.
“That right there is like a year of work,” Galbreath said.
Abilene also established the Abilene Convention Center Hotel Development Corporation to finance and operate the project, making it a public-private partnership.
Hanna said the Abilene Convention Center Hotel is in its first full year of operation and the city expects using net profits from the facility to pay off the debt. The Abilene City Council had to approve a debt issuance in order to pay for the project.
“Once this is done, the hotel and conference facility net profits could be used for capital improvements, or the City Council could decide to sell the facility to a private sector buyer,” Hanna said.
He said the goal for Abilene was not to make money off the facility but to “avoid taxpayer-supported operations.” He expects revenues will fully support the hotel’s operational, capital reserve and debt service requirements by the end of 2024.
“Provided that the market continues to perform, it is unlikely taxpayer support will be necessary in the second full year of operations and the years thereafter,” Hanna said.
Galbreath said GPP plans to meet with Jefferson City officials at least once a month in person and once a week over the phone while the studies take place.
“We’re really trying to figure out how do we fit all these pieces, there’s the parking structure, there’s the meeting space, there’s the hotel rooms, there’s the restaurant, and kind of fitting all that together,” Galbreath said.
The first step is to hire a third-party, a company “who has nothing to do with the deal,” Galbreath said, to determine potential rates and occupancies in the hotel.
The upcoming study — expected to be done by June — will take into consideration different seasons, especially the Missouri State Legislature that meets at the Missouri Capitol from January to May each year.
“Obviously in Jefferson City, those numbers are going to change. And we expect that the clientele will change. I think for the first five months of the year when your legislation is in session, it’s going to primarily be that group that is filling the hotel and filling the meeting space and filling the board rooms and things like that,” Galbreath said.
The hotel brand — typically a Mariott, Hyatt or a Hilton — will work with the Jefferson City Convention and Visitors Bureau (JCCVB) to ensure the facility is in use from June to December, too, he said.
“That brand helps the team on the ground there and helps (JCCVB) drive high-impact business to the hotel. And when I talk about high-impact business, we’re talking traveling, professional business could be associations could be corporate,” Galbreath said.
For example, Galbreath continued, when the Missouri City Clerks and Finance Officers Association host its annual conference with more than 400 people, the group will often go to a large city, like St. Louis, Kansas City or even Columbia.
Galbreath said that while Jefferson City’s new hotel would only have about 200 rooms, the other half of the association would “fill all the rest of the hotels around town.”
Having a large influx of people in the Capital City even just for a weekend would assist with economic development, he said.
“Being able to have the conference center with the headquarters hotel starts to be the tide, that raises all ships, and it really helps. It’s not going to compete with other hotels, it’s going to help bring in more business that was never there before that everybody can share,” he said.
Having a variety of hotels also encourages more people to visit Jefferson City, he said. Some may opt for a more expensive stay in a full-service hotel, which would provide a wide range of guest rooms, a significant amount of amenities, — such as concierge services, meeting rooms and three-course restaurants — while others may not want to stay in a select-service hotel, which typically has rooms with either one or two beds and a limited amount of amenities.
GPP plans to build a full-service hotel in Jefferson City.
“There’s the Capitol Plaza Hotel. It’s a good-sized hotel, but it’s an older hotel. And so I think it’d be great to have a different level of service than what’s available now in Jefferson City for the myriad of people who come in around the running of the state business,” Galbreath said.
GPP also wants to add restaurants, bars and retail spaces with exterior signage and exterior entrances on the bottom floor of the conference center and hotel for those visiting downtown.
“They’re not there to compete with other restaurants, they’re there to fill in a gap, a need that the city has. For instance, if there’s a barbecue place across the street that everybody loves, we’re not going to build a barbecue place, we’re going to do something else,” Galbreath said.
The next nine months will require GPP to identify the hotel brand and how much meeting space the hotel and conference center will include.
Galbreath was an architect with Arcadis for 22 years, where the bulk of his work for more than two decades was designing hotels.
“So I think we’re really good at helping steer hotel projects, make sure that they operationally work well make sure they’re a great experience for guests, trying to make things work from a design standpoint, and hopefully they’re there. They look good, and they’re successful,” Galbreath said.
GPP will work with Facet on architectural design for the new conference center, hotel and parking garage.
Alexa Pfeiffer/News Tribune photo: The corner of Capitol Avenue and Monroe Street is where a Jefferson City conference center would be built in the coming months. The News Tribune office building and parking garage will be demolished and a hotel, conference center and new parking garage will be built.
Courtesy/Garfield Public/Private: Garfield Public/Private built a convention center and hotel in Abilene, Texas, last year. The development is 170,600 gross square feet with 206 hotel rooms and eight stories. The facility has a fitness center, pool, patio bar, a 12,000-square-foot ballroom, a three-course restaurant and 38,700-square feet of meeting space.
Alexa Pfeiffer/News Tribune photo: The corner of Capitol Avenue and Monroe Street is where a Jefferson City conference center would be built in the coming months. The News Tribune office building and parking garage will be demolished and a hotel, conference center and new parking garage will be built.
Alexa Pfeiffer/News Tribune photo: The corner of Capitol Avenue and Monroe Street is where a Jefferson City conference center would be built in the coming months. The News Tribune office building and parking garage will be demolished and a hotel, conference center and new parking garage will be built.