THE COBO HALL RENOVATION AND EXPANSION PLAN

The plan calls for a total renovation of the current Cobo Hall Convention Center and a 120,000 square-foot expansion. The total cost of both the renovation and expansion based on figures presented by a partnership of Walbridge Aldinger and Barton Mallow, the two largest Michigan construction companies, is $323 million. This represents a reduction of 150,000 square feet of expansion from the December 2006 Ficano plan and also results in a reduction in the construction costs by over $100 million. This figure does continue to include the cost of constructing two covered moving walkways to directly connect the convention center to both the Renaissance Center and the Sheraton Ponchatrain Hotel. This need was uncovered by a KPMG report done for the Convention and Visitors Bureau several years ago in surveying potential conventioneers about the impediments to bringing a show to Detroit.

The Plan calls for the sale of Cobo Hall from the City of Detroit to a new regional convention authority made up of appointees of the Governor, the County Executives of Oakland and Wayne Counties, the Chair of the Macomb County Commission, and the Mayor of the City of Detroit. Each of the public appointees would be required to be a non-employee of the government so that there is private sector management working cooperatively with public sector ownership and oversight.

To prevent any further financial drains to the public entities who would now own and manage Cobo Hall, the plan calls for the establishment of a $142 million operating endowment to offset the deficit that is always expected in operating a large convention center. That operating endowment will generate at least $9 million annually to offset costs. Coupled with the ability to improve operational efficiencies and increase revenues, we anticipate that the annual $15 million current operating deficit will be eliminated.

Cost of the Modified Cobo Hall Plan