The 200,000-square-foot expansion of Anaheim Convention Center that opens Sept. 26 is the result of three to five years of wrangling, funding and construction—and the biggest new effort of several the area will get stretching forward another three to five.
As such, it’s a pivot point for $3 billion worth of projects that include several four-diamond-level hotels and Disneyland Resort’s Star Wars: Galaxy’s Edge, as well as related efforts—parking structures and smaller hotels primping up—and trickle-down effects in other industries and nearby cities.
The new space, ACC North, brings exhibition square footage at the convention center to a tick above 1 million and total functional space—which includes outdoor plazas, meetings rooms, and a 7,500-seat arena—to 1.8 million.
Anaheim has the largest convention center campus on the West Coast, according to Visit Anaheim, which markets the city for travel and tourism.
ACC North’s effects start a stone’s throw away.
30
Anaheim Marriott “can attribute 30 groups and 80,000 room nights … through the next five years” to the growth, said Alex Shotwell, director of sales and marketing.
Groups include “large events where our hotel would be filled up.”
Marriott is one of three hotels—the others are Hilton Anaheim and Sheraton Park—at the convention center campus, which together offer about 400,000 square feet of indoor and outdoor meeting space, and 3,100 rooms.
Groups touring the campus “were drawn to Anaheim” by ACC North.
“They were specifically looking at the new space,” Shotwell said—and sometimes strictly so: ones that could’ve been booked in current halls sought “the design and look of a new building.”
50
Such interest began more than two years ago, said Tom Morton, the city-owned center’s executive director.
“As soon as we broke ground, we were selling that space,” he said.
It’s the seventh expansion of the 50-year-old center.
Anaheim approved the $180-million project in March 2014. News reports at the time estimated a 2014 groundbreaking would produce a fall 2016 completion date but opponents mobilized against the project, delaying a bond sale and the groundbreaking.
Expansion proponents overcame the opposition, and the project broke ground in April 2015.
Turner Construction Co. in Anaheim led the project and Populous, a Kansas City, Mo., architecture firm, designed it.
A $15 million parking structure built by San Jose-based Watry Design Inc. came first, followed by the new space.
75
Morton said the first new event is next month: Richfield, Minn.-based Best Buy Co. plans three days of “retail leadership” meetings for 3,000 people, an event booked in September 2015.
Visit Anaheim said 75 events have signed for ACC North, many of which also began the process several years ago.
“A lot of what we’re seeing is from groups that would not have considered us before,” said Jay Burress, president and chief executive of the destination marketer.
The new digs are as sexy as oncology conferences and microbiology events can be. Burress said attention is coming from medical and technology groups and that the flexibility of ACC North is a draw.
New space “can be a 200,000-square-foot ballroom, 200,000 square feet of exhibit space, or 45 breakout sessions.”
A trade show on one floor could put food, education and breakout sessions on the second.
Industries that “used to depend on tradeshows are more education-centric” and seek more space for smaller sessions. Others might take ACC North for product launches or testing areas for user groups at a tech shindig.
10,000
There’s also a 10,000-square-foot viewing deck facing Katella Avenue and Disneyland, which Visit Anaheim and others involved are promoting for watching Disneyland’s fireworks.
Shotwell said four kinds of groups are looking at ACC North: clients that might have left without it, those looking to expand a convention center event, groups returning to the city after a time away, and prospects seeking “the next, new thing.”
Burress said indoor and outdoor events also become more attractive; just as events by different groups can be held at the center simultaneously, so can those seeking outdoor spots—two outdoor areas: the 60,000-square-foot Arena Plaza at ACC North and the 40,000-square-foot Grand Plaza at the center’s main entrance, flanked by Anaheim Marriott and Hilton Anaheim.
“You can program those to different shows,” Burress said.
ACC North connects to the main convention center by a second-floor walkway, which helps make it a single venue for larger shows.
106,028
The convention center’s biggest show is NAMM each January.
The National Association of Music Merchants has said the 2017 iteration of its convention, a local mainstay over four decades, will include new areas. A map on its website shows ACC North devoted to professional audio and musical instrument technology exhibitors.
NAMM has grown 2% to 8% annually in exhibiting companies and registrants over the last three years—from 1,621 companies and 99,342 registrants in 2015 to 1,779 and 106,028 this year—with no new space available.
“It’s our only show where we’ve had to limit growth,” Burress said as NAMM’s 2017 show hit town—which would seem a non-issue going forward.
NAMM is booked through 2023, has set aside dates through 2025, and had issued requests for proposals to take it to 2030, Visit Anaheim said in January.
Burress said then that a goal of the expansion was to “secure these large annual events.”
$485,000,000
The Anaheim Public Financing Authority sold $260 million in bonds in November 2014, most of which went to pay for the convention center expansion; the bonds will cost about $485 million over 30 years.
Standard & Poor’s in New York rates the bonds AA-, and Fitch Ratings in San Francisco rated them the same in October 2014 and upgraded them to AA in June 2016.
The bonds are “solid investment grade (debt) that people are familiar with in the market,” said Terry Loughran, a director and senior portfolio manager for municipal bonds with City National Rochdale in Irvine.
He said the bonds trade about 10 to 20 basis points—“a very tight spread”—above the benchmark Municipal Market Data AAA scale.
“People are holding them,” he said. “It’s a well-received credit” in the market.
A study prior to the project’s approval said expansion will bring 325,000 more guest stays annually, the midpoint of its estimates, and the project has been projected to generate about $112 million for the city in the first full decade after opening, including hotel, sales and use taxes, and convention center income after operating costs of ACC North.
$3,000,000,000
The expansion is the first of several big projects to open that together total more than $3 billion in investments:
• Star Wars: Galaxy’s Edge is scheduled to open in 2019, and Walt Disney Co. has committed to investing $1 billion in Disneyland Resort.
• The four-diamond-level hotels include one from Disney, a J.W. Marriott near the GardenWalk restaurants, and two by Hong Kong-based Wincome Group—one of which is adjacent to the convention center and broke ground last week.
• $1 billion in Garden Grove hotels and resorts proposed in and around the Grove District down Harbor Boulevard from the convention center.
The Business Journal reported last month on projects—including a second water park in the city after Great Wolf Resort and a 35-story hotel tower—that would add 2,300 hotel rooms to the district’s current count of about 3,600.
The Anaheim hotel market is “a different world,” said Bob Olson, chief executive of R.D. Olson Development in Newport Beach. Olson got his start as a hotel developer in Anaheim about 20 years ago.
Disney is the city’s 800-pound animated gorilla driving development; Olson said the area can handle more projects because of the park’s growth and that of the rest of the city.
And The Rest
Other hotels and related industries also expect a boost from all this work.
“What’s nice about an expansion is you know when you need to staff up,” said Armen Karamardian, president of Zov’s Bistro Inc. in Tustin.
Zov’s has several locations in OC, including Anaheim. Karamardian said ACC North events will fill gaps in its week and that operationally, his interactions with Visit Anaheim make it easy to staff up or down relative to events being scheduled for the new space.
“We watch their calendar very closely,” he said.
Growth in food delivery to hotel guests is also a potential source of business.
An “increase in restaurant business commensurate with” additional convention center business can be expected, said Darren Tristano, a restaurant consultant and adviser to industry tracker Technomic Inc. in Chicago, with 10% as a benchmark boost following a venue’s debut.
The wider hotel market in the area is also seeing a business bump from big projects by Disney and cities.
“You really have to step up your game,” said Ed LaCivita, co-owner with Chris Hostert of ParkWest General Contractors in Anaheim.
ParkWest is overseeing a $4 million renovation at Ramada Plaza Anaheim, which will become a Wyndham Garden when the work completes in December.
ParkWest said $2 million is minimum for work on “mid-scale select service” properties like Ramada, with a common range of $4 million to $10 million per project.
“If you’re going to keep an older box, you have to put some money into it,” said Craig Sullivan, senior vice president.
Rising Tide
“A rising tide raises all boats,” ACC’s Morton said of the wider work in the area.
He said the upshot is that the area is “becoming more of an urban resort in look and feel,” adding amenities and “going vertical” with current and planned projects.
“Katella Avenue is growing up,” he said.
“If you haven’t been here in 10 years, it would look very different” now.
That’s something that can likely be said 10 years hence, as well.
