Minneapolis Convention Center & Downtown Assets 2018 Mayor - - PowerPoint PPT Presentation

SLIDE 1

CITY OF MINNEAPOLIS

Minneapolis Convention Center & Downtown Assets

2018 Mayor recommended budget October 27, 2017 Budget Book Pages E8 – E21

SLIDE 2

Downtown Assets Council Direction

• Goals
• Coordinated response to the large public assets

downtown

• 5 – year budget to prepare for operating and capital

needs of large public assets

• Committee
• City Coordinator lead
• Delegated operational responsibility to Executive Director of

the Convention Center

• CFO, Public Works Director & CPED Director

2

SLIDE 3

Downtown Assets – 5 year Plan

• Hospitality Sales Taxes used to more broadly

support these downtown assets

• 5-year plan addresses operating and capital

expenses

• Receives taxes and distributes resources
• General Fund distribution is guaranteed each year

allowing for predictability

• Four assets are supported
• Minneapolis Convention Center, Target Center, Commons and

Peavey Plaza

• Allows flexibility and management in funding as different

assets require variable amounts of resources

3

SLIDE 4

4

2018 2019 2020 2021 2022 Budget Forecast Forecast Forecast Forecast

Source of Funds: Local Taxes

87,583 87,096 89,092 66,955 69,303

Transfer in from Bond Arbitrage for Commons

420

• Downtown Assets Fund Interest Earnings

243 329 260 75 14

Total

88,246 87,425 89,352 67,030 69,317

Use of Funds: Transfer out to City General Fund

30,600 31,212 31,836 32,473 33,122

Transfer out to Arena Fund Debt Service

5,661 5,659 5,659 5,662 5,661

Transfer out to Convention Center

26,811 57,433 58,268 28,756 30,753

Commons Operating

750

• Peavy Plaza - Capital

4,000

• Peavy Plaza - Operating

400 412 424 437 450

Total

68,222 94,716 96,188 67,328 69,987

Change in Cash Position

20,024 (7,291) (6,836) (298) (670)

Downtown Assets Fund Cash Balance

20,024 12,733 5,897 5,599 4,930

Arena Special Revenue Fund Cash Balance

4,766 5,287 3,971 2,702 1,476

Convention Center Special Revenue Fund Cash Balance

26,809 27,814 26,628 21,097 19,897

Downtown Assets Umbrella Cash Reserve

51,599 45,834 36,496 29,399 26,303 City of Minneapolis 2018 Mayor's Recommended Budget -- Amended 10/10/17 Financial Plan (in thousands of dollars) Downtown Assets Fund (including Downtown East Commons Fund & Peavy Plaza Fund)

SLIDE 5

Budget Summary – Downtown Assets

Program name 2017 adopted 2018 Recommended funding Change Item (new dollars) FTEs Select type of funding

Non- general fund Non- general fund Non- general fund Current Add itio nal One time MCC - Facilities $21,416,857 $20,710,319 30.8 MCC - Tallmadge $90,000 $125,000 MCC - Events $24,635,570 $25,097,478 141.3 MCC – Meet Minneapolis Enhancement 750,000 650,000 650,000 X MCC – NCAA $100,000 $100,000 X Target Center $6,893,560 $6,636,893 1.2 Commons $750,000 $750,000 Peavey Plaza $4,400,000 $4,400,000 Total $53,785,987 $58,469,690 $5,900,000 173.3 5

SLIDE 6

6

Core Programs

SLIDE 7

Department Organizational Chart

Minneapolis Convention Center Organization Chart

September 8, 2017

20170908:geisejj0

Executive Director

Project Manager Director of Business Administration Director of Event Services Director of Sales & Marketing Meet Minneapolis Systems Integrator IV Human Resources Generalist Business Services Manager Accountant II Facilities Operations Manager Guest & Security Services Manager Event Operations Manager Event Services Manager Associate Director of Sales & Marketing Meet Minneapolis Program Assistant Event Services Supervisor Human Resources Associate Administrative Analyst II Accountant I Facilities Operations Supervisors Event Services Supervisors Event Operations Supervisors Senior Event Coordinators Sales Managers Program Assistant Office Support Specialist II Account Clerk OM Engineers Painters Carpenters GSS Event Coordinators CAS Operators Storekeepers Operations Maintenance Specialists Building Maintenance Workers Event Coordinators Booking Coordinator Technology Services Coordinators Grounds Crew Concierge Guest Services Ambassadors Production Technician II Part Time Stagehands Exhibitor Services Clerk II Exhibitor Services Clerk I Denotes Meet Minneapolis Personnel

SLIDE 8

8

% Chg 2015 2015 2016 2016 2017 2017 2018 From 2017 2019 2020 2021 2022 Budget Actual Budget Actual Budget Projected Budget Projected Forecast Forecast Forecast Forecast

Sour

• urce of

e of F Funds unds: Charges for Services

6,200 6,523 6,000 6,907 6,700 6,700 7,300 9.0% 7,300 6,100 6,300 6,400

Rents and Commissions

7,597 7,863 7,197 7,730 7,836 7,900 8,196 3.7% 8,150 7,400 7,600 7,600

Privileges

3,650 3,903 3,500 3,704 4,222 4,300 4,514 5.0% 4,500 3,600 3,800 3,900

Interest

396 370 184 624 595 600 612 2.0% 624 637 649 662

Other Misc Non Operating

164 318 114 173 76 76

• 100.0%
• Transfer from General Fund

50,340 50,340 50,050 50,050 49,786 49,786

• 100.0%

Transfer from Downtown Assets

• 26,811

53.9% 57,433 58,268 28,756 30,753

Transfer from Facility Reserve

• 5,400
• 0.0%
• Total

68,347 74,717 67,045 69,188 69,215 69,362 47,433

• 31.6%

78,007 76,005 47,105 49,315

Use of e of F Funds unds: Convention Center Operations

26,503 24,580 25,924 25,572 26,826 26,826 28,149 4.9% 28,460 29,313 30,193 31,099

Ongoing Equipment/Improvement

13,894 9,055 15,467 12,988 22,433 11,933 7,833

• 34.4%

11,437 10,453 11,808 8,579

Meet Minneapolis

10,071 10,031 9,905 9,905 10,613 10,489 10,701 2.0% 10,242 10,437 10,635 10,838

Transfer to DID

• 250

250

• 100.0%
• Transfer to Debt Service

24,502 24,321 24,612 24,431 24,669 24,669 24,811 0.6% 26,863 26,988

• Transfer to General Fund
• 3,860

3,860

• 100.0%
• Transfer to City Capital
• 6,000

6,000

• 100.0%
• Total

74,970 67,987 75,908 72,896 94,651 84,027 71,494

• 14.9%

77,002 77,191 52,636 50,516

Net et I Inc ncom

• me

(6,623) 6,730 (8,863) (3,708) (25,436) (14,665) (24,061) 64.1% 1,005 (1,186) (5,531) (1,201)

Begi eginni nning F ng Fund B und Bal alanc ance

• 60,454

67,186 67,186 63,478 63,478 48,813

• 23.1%

24,752 25,757 24,571 19,040

Endi nding F ng Fund B und Bal alanc ance

• 67,186

58,323 63,478 38,042 48,813 24,752

• 49.3%

25,757 24,571 19,040 17,840

Endi nding C ng Cas ash B h Bal alanc ance

• 66,210

57,347 65,535 40,099 50,870 26,809

• 47.3%

27,814 26,628 21,097 19,897 Cit City of Min Minneapolis lis 2018 2018 May ayor

• r's Rec

ecom

• mmended

ended Budget Budget - Am Amended ended 10/13/17 10/13/17 Financ nancial al Pl Plan an (in n thous thousands ands of

• f dol

dollar ars) Minneapol nneapolis s Conventi

• nvention
• n Center

enter Speci Special al Rev evenue enue Fund und

SLIDE 9

MCC - Facilities Program

9

Purpose and Context

The Convention Center Facility Program provides the physical building and

grounds of the Convention Center as well as the staff to maintain this City

• asset. The Events Program utilizes the facility to sell space and host events.

The Facilities Program includes repair and maintenance expenditures as well as Internal Service Charges.

• Funded from Hospitality Taxes
• A 17% increase ($497,000) in Internal Service charges
• $7.3 million in Procurement
• Living Wage Jobs

Services Provided

The facilities program provides repair and maintenance services for the facility including snow removal, grounds, utilities, and all Internal Service charges.

SLIDE 10

MCC Facilities Program

Goals

Living Well One Minneapolis A Hub of Innovation and Activity Great Places A City that Works X X X

Values

Equity Safety Health Vitality Connectedness Growth X X X

10

2017 adopted budget 2018 recommended funding FTEs Funding

General Fund Non-General Fund General Fund Non-General Fund Current One-Time (Yes/No) $21,416,857 $20,710,319 30.8 No

SLIDE 11

MCC Facilities Program Performance

11

10,296 11,948 10,414 8,632 4,293 2009 Benchmark, 13,990

• 2,000

4,000 6,000 8,000 10,000 12,000 14,000 16,000 2013 2014 2015 2016 2017 YTD* Thousands

Gallons of Water Used (in thousands)

*YTD through June 131,767 138,138 128,967 124,079 2009 Benchmark, 143,475 110,000 115,000 120,000 125,000 130,000 135,000 140,000 145,000 2013 2014 2015 2016

Total Energy* Use kBTU (in thousands)

*Total energy includes electricity, natural gas, cooling, and heating.

SLIDE 12

MCC Facilities Program Performance

12

48.8% 56% 59% 62% 60% 2009 Benchmark, 31.6% 0% 10% 20% 30% 40% 50% 60% 70% 2013 2014 2015 2016 2017 YTD* % of Waste Recycled

Recycling Percentage

*YTD though September / 60% represents 517 tons of recycled trash

SLIDE 13

MCC Facilities Program Performance - Certifications

APEX / ASTM Standard: In 2014, the Minneapolis Convention Center achieved Level One certification to the ASTM Standard pertaining to the Evaluation and Selection of Venues for Environmentally Sustainable Meetings, Events, Trade Shows and Conferences. This international sustainability venue standard is one of nine standards introduced by the meetings, conventions, exhibitions and events industry in 2012 to provide event planners and suppliers with specifications for producing events in a more sustainable manner. In 2014, MCC was one of six (6) facilities in the world to achieve Level One certification to the ASTM Standard. LEED: In 2017, The Minneapolis Convention Center obtained LEED Certification for Existing Buildings: Operation & Maintenance (EBOM). The LEED rating system, developed by the U.S. Green Building Council (USGBC), is the foremost program for buildings, homes and communities that are designed, constructed, maintained and operated for improved environmental and human health performance. 13

SLIDE 14

MCC Facilities Program Performance

14

$2.9 $2.9 $3.1 $3.0 $3.5 $- $1.0 $2.0 $3.0 $4.0 2014 2015 2016 2017 2018 In Milions

Internal Service Charges

SLIDE 15

MCC - Tallmadge Program

15

Purpose and Context

The Tallmadge Building is currently operated as an office building that is

leased to local businesses. Operating Revenues = $96,000 Significant improvements are needed to Tallmadge

Services Provided

SLIDE 16

MCC – Tallmadge Program

Goals

Living Well One Minneapolis A Hub of Innovation and Activity Great Places A City that Works

Values

Equity Safety Health Vitality Connectedness Growth

16

2017 adopted budget 2018 recommended funding FTEs Funding

General Fund Non-General Fund General Fund Non-General Fund Current One-Time (Yes/No) $90,000 $125,000 No

SLIDE 17

MCC - Events Program

17

Purpose and Context

A POWERFUL ECONOMIC ENGINE: Minneapolis Convention Center events drive economic activity to the

• City. These clients and visitors purchase goods and services from the convention center as well as

local restaurants, hotels, retail establishments, recreational, and arts & cultural businesses contributing to a vibrant downtown and providing living wage jobs. Events drive our revenues, thereby reducing our operating subsidy, events contribute economic impact to local businesses and contribute to City growth through

• Hospitality Jobs Sustained = 11,051*
• Hospitality Taxes Directly Attributable to MCC Activities Generated = $26,252,6027*
• Economic Impact = $676 million*

Services Provided

The Minneapolis Convention Center Events Program sells space, coordinates event services, delivers

audio visual, technology, utility, security and guest services for our clients.

• Includes the City's contract with Meet Minneapolis
• Operating Revenues Generated = $20,010,000*, representing an 7% increase over 2017

budget

• Subsidy Funded from Hospitality Tax Collections

*2018 Projected

SLIDE 18

MCC – Events Program

Goals

Living Well One Minneapolis A Hub of Innovation and Activity Great Places A City that Works X X X

Values

Equity Safety Health Vitality Connectedness Growth X X X X X X

18

2017 adopted budget 2018 recommended funding FTEs Funding

General Fund Non-General Fund General Fund Non-General Fund Current One-Time (Yes/No) $24,635,570 $25,097,479 140.3 No

SLIDE 19

MCC - Events Program Performance

19

Source: DK Shifflet & Associates 2012-2014 – Multipliers updated in 2011 & 2014

335 548 419 373 450 563 460 420 368 410 452 477 $228 $463 $299 $196 $319 $676 $- $100 $200 $300 $400 $500 $600 $700 $800 200 400 600 800 1000 1200 2013 2014 2015 2016 2017 Projected 2018 Projected Economic Impact (millions) Attendance (thousands)

Attendance and Economic Impact

Non-Local Attendance Local Attendance Economic impact

SLIDE 20

MCC – Events Program Performance

20

$16.27 $16.63 $18.40 $18.34 $19.58 $20.10 $0 $5 $10 $15 $20 $25 2013 2014 2015 2016 2017 Projection 2018 Budget

Total Operating Revenue (in millions)

Millions $23.86 $25.51 $24.58 $25.57 $26.83 $28.15 $0 $5 $10 $15 $20 $25 $30 2013 2014 2015 2016 2017 Projection 2018 Budget Millions

Operating Expenses (in millions)

SLIDE 21

MCC – Events Program Performance

21

$7.6 $8.9 $6.2 $7.2 $7.3 $8.1 $0 $1 $2 $3 $4 $5 $6 $7 $8 $9 $10 2013 2014 2015 2016 2017 Projected 2018 Budget

Operating Subsidy (in millions)

SLIDE 22

MCC - Events Program Performance

22

54% 60.5% 56.8% 58.1% 61.2% 66%

0% 10% 20% 30% 40% 50% 60% 70% 2013 2014 2015 2016 2017 Estimated 2018 Estimated

Total Occupancy

748 728 767 678 721 783 620 640 660 680 700 720 740 760 780 800 2013 2014 2015 2016 2017 Estimated 2018 Estimated

Event Days

SLIDE 23

MCC – FTEs & Retirements

23

45 3 7 2 3 5 2 5 10 15 20 25 30 35 40 45 50 2017 2018 2019 2020 2021 2022 2023

Retirement Eligible

194 177 177 177 173 174 173 160 165 170 175 180 185 190 195 200 2012 2013 2014 2015 2016 2017 2018

FTEs

SLIDE 24

MCC - Recruiting

24

SLIDE 25

MCC – NCAA Program

Goals

Living Well One Minneapolis A Hub of Innovation and Activity Great Places A City that Works X

Values

Equity Safety Health Vitality Connectedness Growth X X X

25

2017 adopted budget 2018 recommended funding FTEs Funding

General Fund Non-General Fund General Fund Non-General Fund Current One-Time (Yes/No) $100,000 Yes

SLIDE 26

MCC – NCAA Program

26

Purpose and Context

The NCAA program provides funding to support the use of City services and permits for the 2019 NCAA Final Four games.

Services Provided

• Anticipated to provide an estimated $54 million in economic impact to

the Minneapolis community.

SLIDE 27

MCC – NCAA Program

• NCAA: $100,000
• One-time funding
• Justification: Supporting the use of City services

and permits.

SLIDE 28

28

SLIDE 29

Target Center Program

29

Purpose and Context

The Target Center program provides an operating subsidy and capital funds for this City-owned facility through a contractual agreement with its operator, AEG Revenues generated = $2.7 million from taxes and rents

• First year of operations after renovation
• New terms of extended operating agreement

Services Provided

• Provides an estimated $100 million in economic impact as well as

cultural and arts activities to the Minneapolis community.

• The Target Center program provides living wage jobs through their event

activities as well as those of contractors.

SLIDE 30

30

SLIDE 31

Target Center Program

Goals

Living Well One Minneapolis A Hub of Innovation and Activity Great Places A City that Works X X

Values

Equity Safety Health Vitality Connectedness Growth X X X

31

2017 adopted budget 2018 recommended funding FTEs Funding

General Fund Non-General Fund General Fund Non-General Fund Current One-Time (Yes/No) $6,893,560 $6,636,893 1.2 No

SLIDE 32

Commons Program

32

Purpose and Context

The Commons program provides operating funds for this City-owned asset.

Services Provided

Part of the 5-year Downtown Assets Plan. Maintenance and upkeep of The Commons.

SLIDE 33

Commons Program

Goals

Living Well One Minneapolis A Hub of Innovation and Activity Great Places A City that Works X X X X

Values

Equity Safety Health Vitality Connectedness Growth X X

33

2017 adopted budget 2018 recommended funding FTEs Funding

General Fund Non-General Fund General Fund Non-General Fund Current One-Time (Yes/No) $750,000

SLIDE 34

Commons Program

• Change Item Amount: $750,000
• No new FTEs
• Provides funding for ongoing maintenance of this

City asset.

SLIDE 35

Peavey Plaza Program

35

Purpose and Context

The Peavey Plaza program provides an operating funding and capital funds for this City-owned asset. Anticipate funding matched with State and private fundraising.

Services Provided

Part of the 5-year Downtown Assets Plan. Supports renovations.

SLIDE 36

Peavey Plaza Program

Goals

Living Well One Minneapolis A Hub of Innovation and Activity Great Places A City that Works X X X X

Values

Equity Safety Health Vitality Connectedness Growth X X

36

2017 adopted budget 2018 recommended funding FTEs Funding

General Fund Non-General Fund General Fund Non-General Fund Current One-Time (Yes/No) $4,400,000

SLIDE 37

Peavey Plaza Program

• Change Item Amount: $4,400,000
• No new FTEs
• $4,000,000 is a one-time capital investment to

revitalize and preserve this historical asset.

• $400,000 is ongoing for maintenance and operating

costs

SLIDE 38

CITY OF MINNEAPOLIS

Meet Minneapolis

2018 Mayor Recommended Budget October 27, 2017

SLIDE 39

Meet Minneapolis Functional Org Chart

64.50 FTEs

MEET MINNEAPOLIS

Destination Sales

Sports Market Sales Destination Sales - West Central & Small Market Destination Sales - East Coast Minneapolis Convention Center Sales Global Tourism Sales

Destination Services

Destination Services Housing

Destination Branding & Strategy

Branding/ Marketing Partnership Marketing Public Relations/ Communications Minneapolis Visitor Information Center

Public Affairs

Public Affairs Sister Cities Program Market Research

Finance & Administration

Administration Finance & Accounting Information Technology Human Resources

SLIDE 40

Meet Minneapolis Budget Summary

($ in 000’s)

40 *Includes $750,000 in supplemental funding for 2017 **Includes $650,000 Mayor Recommended Supplemental funding for 2018

Program name 2017 adopted 2018 Recommended Funding Change Item FTEs Type of fund- ing

City Funding Other Funding Total City Funding Other Funding Total City Funding Current One time* Destination Branding and Strategy $944 $1,804 $2,748 $1,249 $1,939 $3,188 $400 21.0 X Destination Sales/Sports Minneapolis $4,099 $1,168 $5,267 $3,806 $1,327 $5,133 21.50 X Destination Services $864 $247 $1,111 $879 $289 $1,168 $150 9.00 X Public Affairs $688 $146 $834 $658 $6 $665 4.00 Administration and Support $3,893 $275 $4,168 $4,108 $52 $4,161 $250 9.00 Total *$10,486 $3,642 $14,128 **$10,701 $3,613 $14,314 $650 64.50

SLIDE 41

Meet Minneapolis

Core Programs

41

• Destination Branding and Strategy
• Destination Sales
• Destination Services
• Public Affairs
• Finance and Administration

SLIDE 42

Meet Minneapolis

2017 Supplemental Budget Update

42

• Destination Branding and Strategy - $200,000
• Website upgrade – infrastructure
• Media outreach
• Refreshed media assets
• Destination Sales - $350,000
• $250,000 available for City Services during X-Games
• $100,000 for high profile industry events
• Destination Services - $125,000
• Volunteer registration software near completion
• Beta testing of wayfinding app for skyway system
• Public Affairs - $75,000
• Foire de Tours executed
• Tourism Master Plan

SLIDE 43

43

SLIDE 44

CITY OF MINNEAPOLIS

Total attendance over the four day event. Minutes increased of X Games content YOY

• n YouTube.

Total number of Facebook followers; Facebook Live video views increased by 18% YOY during the week of X Games. Number of countries and territories X Games aired. Number of homes reached in addition to ESPN’s U.S.-based media platforms. Number of U.S. states plus 49 countries represented in the X Games Minneapolis ticket buyer fan base.

SLIDE 45

Meet Minneapolis 2018 Budget Change Request Background

45

CAPITALIZE ON BIG EVENT OPPORTUNITIES

• Tell our Story
• Brag
• Engage NEW Customers
• Get them here
• Better Service and Support Customers
• Keep them coming back

SLIDE 46

Meet Minneapolis 2018 Budget Change Request Background

46

• Destination Awareness
• Need for expanded awareness of Minneapolis as a destination

including and beyond big events

• Opportunity craft messaging about our appeal through our

improved website and revitalized media outreach

• Near-term opportunities
• Super Bowl
• Final Four
• Summer X Games
• NCAA Events
• Return on Investment and Business Success
• Additional hotel capacity
• Growth in local taxes, need to increase room demand

SLIDE 47

Destination Branding and Strategy

2018 Recommended Supplemental Funding

• Funding Amount: $200,000 (one-time)
• Expand role as a content creator and curator of website content, including a

wider range of contributors. Content areas include:

• Area neighborhoods
• MCC features and appeal of the city as meeting destination
• Diversity and inclusion profiles: communities, events, organizations, etc.
• Uniquely Minneapolis assets: beer scene, lakes, etc.
• Other topics as identified through the planning process
• Develop out-of-market digital advertising campaign to highlight re-launched

website and expanded content

• Public relations outreach and media pitching, increasing contacts with high

profile publications

SLIDE 48

Destination Sales

2018 Recommended Supplemental Funding

• Change Item Amount: $250,000 (one-time)
• City services and permits for X-Games 2018 per agreement
• Same amount as 2017 ($250,000)

SLIDE 49

Destination Services

2018 Recommended Supplemental Funding

• Change Item Amount: $150,000 (one-time)
• Expanded Welcome Program for 12 – 15 of the largest,

high profile groups including:

• Increased welcome signage, including banners and decals at

MSP, Nicollet Mall and Convention Center

• Customized skyway wayfinding/Skyway App
• Expanded hospitality training – quarterly events
• Expanded use and management of Rosterfy Volunteer

Management System

• Coordination, training and outreach

SLIDE 50

Meet Minneapolis

KPI Activity Levels (compared to goa

• als)

50

478,800 366,800 504,000 508,516 524,516 530,000

• 100,000

200,000 300,000 400,000 500,000 600,000 2012 2013 2014 2015 2016 2017 Proj

Future Room Nights

60,552 66,400 70,800 80,972 79,121 85,000

• 20,000

40,000 60,000 80,000 100,000 2012 2013 2014 2015 2016 2017

Future Leisure Room Nights

$14.9 $16.1 $16.5 $18.1 $18.1 $19.4 $.0 $5.0 $10.0 $15.0 $20.0 $25.0 2012 2013 2014 2015 2016 2017

MCC Revenue

($millions)

$1.0 $1.4 $1.5 $2.4 $2.2 $2.9 $.0 $.5 $1.0 $1.5 $2.0 $2.5 $3.0 $3.5 2012 2013 2014 2015 2016 2017

Private Revenue

($millions)

SLIDE 51

333 299 388 461 534 609 721 731 2010 2011 2012 2013 2014 2015 2016 2017 Forecast

Number er o

• f M

Meetings & Sporti ting E g Even ents Hosted ed b by M Meet M Minnea eapolis

1

Sources: iDSS (5/25/17) and TAP Ending 4/30/17 2017 Forecast = Three Year Average + 4/30/17 YTD Positive Variance Relative to 2017 Target

SLIDE 52

361,150 393,487 365,782 356,989 442,755 396,727 457,488 500,672 2010 2011 2012 2013 2014 2015 2016 2017 Forecast

Nu Number o r of H HOTEL R ROOM NI NIGHTS A Associ ciated w with

The M e Mee eeti tings & & Sporti ting E Events ts Ho Hosted b by M Mee eet M t Minneapolis

2

Sources: iDSS (5/25/17) and TAP Ending 4/30/17 2017 Forecast = Three Year Average + 4/30/17 YTD Positive Variance Relative to 2017 Target

SLIDE 53

53

Business Outlook

SLIDE 54

Meet Minneapolis

Business Outlook – OPPORTUNITIES

• Support Minneapolis Convention Center
• Nearing maximum capacity
• Use Big Events to Spotlight Minneapolis
• Amenities
• Neighborhoods
• Year-round activities
• Increase Hospitality Jobs
• Maximize Hospitality Tax Revenues

54

SLIDE 55

Meet Minneapolis Business Outlook – Support Local Economy

• Jobs (according to MN Dept. of Employment and

Economic Development)

• In 2016: 33,449 Annual Leisure and Hospitality Jobs
• In Q1 2017: 32,764 Leisure and Hospitality Jobs
• Local Tax Base
• Growth in Estimated Market Value of Hotels of 103%

from 2013 to 2017 (compared to overall City growth of 45%)*

55

*Source: City of Minneapolis Assessing Services, Hennepin County Property Tax Division

SLIDE 56

56

$0 $5,000,000 $10,000,000 $15,000,000 $20,000,000 $25,000,000 $30,000,000 $35,000,000 $40,000,000

City of Minneapolis Historical Sales and Hospitality Tax Revenue*

Sales Liquor Lodging Restaurant Entertainment Linear (Lodging) Linear (Entertainment) *Source: Minneapolis Finance and Property Services staff and MN Dept of Revenue (assumes reinstatement of exemption for transportation tax impact on Lodging Taxes)

SLIDE 57

Meet Minneapolis

Business Outlook – Hotel Room Inventory

57

Add'l 167K room nights* 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0%

• 500,000

1,000,000 1,500,000 2,000,000 2,500,000 3,000,000 3,500,000 4,000,000 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Hotel Room Supply and Demand

(1999 - Proj 2020)

Supply Demand Demand @ 68.4% Occupancy Avg Occ 68.4%

*In order to maintain average occupancy of 68.4%, an additional 167,000 annual room nights booked are required by 2019

• Additional supply equates to additional jobs and hospitality tax revenue potential

SLIDE 58

CITY OF MINNEAPOLIS

Questions?

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