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CITY OF SOUTH BEND I OFFICE OF THE CLERK Mr. Jarnecke replied,Occupancy,the struggle we're facing is accounting. It is a bit in a tough spot. We've seen an eight percent(8%)increase in hotel rooms within St. Joseph County overall,which means that we're closing in on 5,000 hotel rooms within St.Joseph County. Occupancy right now is around fifty-two percent (52%) within the county, so we're not at the performance level where the hoteliers certainly want to be. And whether that's early indication of recession, I don't know. We're anxious for that.The downtown hoteliers though were at about an eight percent(8%)to nine percent (9%) contribution margin of what we're adding to their existing inventory so if you think that if Century Center wasn't there those hotels would have to make up nine percent (9%) of their overall room nights. That would be a big gap for them. So, they are positive. We have great relationships with three(3) downtown hoteliers. They rely heavily on the footprint of the Century Center and the work between Visit South Bend Mishawaka and our sales staff as well. Councilmember Scott followed up, What was the impact to the Century Center from the Zoo and their moves that they made down state? Mr. Jarnecke answered, It's a challenging one (1) for us longer term. It's caused certainly the hotel/motel tax support along with Visit South Bend Mishawaka and some of the Century Center is a beneficiary and a name beneficiary of that six percent (6%). So, the near-term impact means that the Hotel/Motel Tax Board is funding, as of July 1, both Mishawaka and the Zoo out of reserves. Longer term that means that we won't have as much available to us,meaning the Century Center and Visit South Bend Mishawaka of that six percent (6%) in the future. So, we're nearing certainly within the next sixteen(16)months. Some are bigger decisions that are going to be made to that. I mentioned earlier, relative to the experience, we do think the timing is right to look at a strategic plan that may or may not include expansion, may or may not include requesting the increase of the tax rate within St. Joseph County from six percent (6%) to some percent north of that to help not only offset that but be a strategic approach for a long-term solution within. Councilmember Scott followed up, So it's a true flat six percent (6%) from us from Hotel/Motel, right? Mr.Jarnecke replied, Six percent(6%)is what the Hotel/Motel Tax is. Currently at Century Center in a given year it is receiving somewhere between$2.5 to $3 million dollars of that, so roughly it's a round number, there's a million dollars associated with each percentage. Committeemember Voorde asked, In terms of this re-imagining of Century Center there's been some discussion I know about the relocation of the Art Center. Is that active? Do you think we'd lose business at Century Center from a convention standpoint because we need more room? Mr. Jarnecke replied, I wouldn't say we're losing business because of having an Art Center,by any stretch. Do we lose business because we could use more space? Yes. That is as our shows are growing and want to grow, especially consumer facing shows, we run the risk of losing them to Ft. Wayne, Kalamazoo, Grand Rapids, or Indianapolis. Arguably, the Art Center space wouldn't necessarily be the right space they need to grow in anyway, so there is that component of it. It's just not the right layout, it's not the perfect spot within the building. But are we short on space at this point? We are, relative to how our shows and rentiers are wanting to grow. To your first(1St) question though, the Civic Center Board of Managers have renegotiated the lease agreement with the Museum of Art that was satisfactory to both the Art Museum and to the Century Center,which EXCELLENCE j ACCOUNTABILITY ! INNOVATION INCLUSION j EMPOWERMENT 455 County-City Building 227 W.Jefferson Bvld South Bend,Indiana 46601 p 574.235.9221 (574.235.9173 I T U 574.235.5567 www.southbendin.gov 9