SAG managed the renovation and expansion of the San Jose Convention Center, representing the facility manager, convention and visitors bureau, and hotel community. The existing center offers 142,00 square feet of exhibit space and 50,00 square feet of ballroom and meeting space. The convention center had not undergone any material renovation since its opening in the 1980s. Back of house services such as the central plant, roof and life safety were in dire need of replacement. Client areas were dated and space configurations limited the booking potential of the facility.
SAG began its role by researching the market and creating a customer-focused renovation and expansion program. Services continued with formulating a development strategy, analyzing master plan site issues, developing a conceptual design, estimating development costs, developing an organizational and management plan, and preparing a funding and financing plan. Following the creation of the strategies, SAG continued its management role, representing the client group in project design, development and financing.
Following a failed voter referendum (by 2%) to fund the project, SAG created an alternative financing strategy that combined a unique Mello-Roos District with downtown redevelopment area tax increment financing.
Mello-Roos financing structures have been used throughout California to finance infrastructure related to residential and commercial master planned developments, but a district had never been created with existing hotels to finance convention infrastructure. Under this approach, hotel members in the district vote to self impose a tax to fund the project. The tax is based on hotel revenues, much like a hotel tax. These funds are monetized in the public bond markets and the project is funded. To maximize the proceeds that could be generated by the special tax, additional credit enhancement was created through the use of a “blinker tax” that would blink-on an additional 1% to replenish a debt service revenue stabilization fund if utilized. These funds were augmented by tax increment financing proceeds generated by the City’s downtown redevelopment area to complete the project.
Project Components: Convention & Conference Center
Project Value: $300 million