Detroit – — With a $279 million renovation wrapping up, Cobo Center is hitting its stride.
The convention center, which at one point was a $21 million drain annually on city finances, has fought back to near profitability and brought in some large conventions this summer. The center is poised for its best year since the Detroit Regional Convention Facility Authority took over operations of the struggling venue from the city at the end of 2009.
Now that Detroit has come out of bankruptcy and the city is retooling for the future, plenty of convention attendees are curious to see what Detroit has to offer.
“We like to refer to the ‘old’ Cobo and the ‘new’ Cobo. This is the new Cobo, just as this is the new Detroit,” said Cobo Center General Manager Thom Connors, who is also the regional vice president of SMG, the management company that now handles day-to-day operations at the center.
“The transformation at Cobo is simply an extension of what is happening in downtown Detroit.”
When the Detroit Regional Convention Facility Authority took over from the city in September 2009, Cobo was losing $21 million a year. Now, that deficit has been cut to $3.5 million, which means that with the $8 million subsidy granted to the center by the state in 2014, it was profitable.
Patrick Bero, CEO and chief financial officer of the authority, said Cobo Center should achieve profitability on its own well before the state subsidy is phased out in 2023.
“The state, the county and the city made a critical investment in this center and said really loudly to the marketplace that we want this center to be returned to a leader in the convention circuit so we can encourage economic investment,’” said Bero. “For the past two years, all revenue streams into the convention funds have hit records. It’s producing results.”
The city and Cobo are preparing for an event that many in the convention field consider the Super Bowl of the trade show industry.
The American Society of Association Executives will hold its annual convention in Detroit from Saturday through Aug. 11. While the event will bring in only about 7,000 people, about a third of those are the people at companies and organizations who make decisions on where to hold conventions of their own.
Translation: It’s like an audition for Cobo Center and Detroit.
“This is the game-changer for us,” said Bill Bohde, senior vice president of sales and marketing for the Detroit Metro Convention and Visitors Bureau. “And we are prepared.”
The stakes are high. When officials at the Detroit Regional Convention Facility Authority bid on the ASAE convention back in 2011, they knew about 20 percent of those who attend the convention will go on to book their own events at the same location in the following five years.
That’s why when they pitched their ideas, they did it not by selling Detroit in 2011, but what they foresaw Detroit would be like in 2015.
And according to Susan Robertson, executive vice president of ASAE, they have delivered well.
“It’s a really incredibly big project, and they’ve been thinking many years out for how this is going to go,” she said. “People are interested to see what Detroit has done, and we know it’s going to shine.”
Attendees are surveyed about the convention location when they sign up and, said Robertson, 87 percent have never hosted an event in Detroit.
“If 87 percent of our attendees don’t know anything about Detroit, that’s a huge opportunity to make an impression,” she said.
To put the impact in perspective, when ASAE held its convention in Nashville last year, it led to 101,000 room nights booked and another five meetings booked at the convention center there. It’s also resulted in an estimated future impact of $4.6 million.
The year before, the ASAE convention was in Atlanta, and it resulted in 28 convention bookings, 338,000 hotel nights booked and direct spending of $200 million.
‘I was thoroughly impressed’
People who work in the convention industry and conventioneers are taking note of the transformed Cobo Center.
Vern Lail of San Diego is an “install and dismantle” supervisor for Freeman, a major trade show general contractor. He was in town last week for the Automotive Service Association’s annual conference. Before that, he was last at Cobo for a show five years ago, before the major renovations began.
“It’s considerably better than it has been in the past. They’ve done a good job getting it to where the people wanted it to be,” said Lail. “To be honest, I was thoroughly impressed when we came in here. The last time, it was one of my two least favorite cities to work in.”
Gary Lane, who was attending the ASA convention last week from Mills Automotive Group in Baxter, Minnesota, said he was enjoying Detroit’s conference more than last year’s event in Las Vegas.
“I think it was nicer than what I expected. My expectations were that it wouldn’t be very clean and it would look rundown,” said Lane. “But overall I’m quite impressed.”
Cobo’s success has a ripple effect on nearby hotels and restaurants.
For the last 10 years, Richard Terry has been with Andiamo Detroit Riverfront in the Renaissance Center, a short walk from Cobo. The restaurant manager said he has seen a significant increase in business as Cobo has held more events.
“We anticipate it,” he said. “We always look at Cobo’s schedule to see what events are coming up.”
With ASAE coming up, he said Andiamo’s is ready to bring its A game.
“I hope this ASAE convention is a hit so they can appreciate what a gem Cobo ... and the RiverWalk is,” said Terry. “It wasn’t used very much when I started 10 years ago. It’s definitely bringing more traffic for us.”
Bill Aprill, director of sales and marketing for the DoubleTree Hotel by Hilton just a few minutes’ walk from Cobo, said occupancy in the last couple of years has been up by double digits, and the convention center is just one reason for that.
“The impact of Cobo has been great. It gives a stability to the market so that the hotels can go out and hunt for business,” he said. “Detroit is just on fire with business development and everything that’s going on. Cobo is just one piece of that.”
He says if ASAE is successful, the city could see as many as 15-20 major conventions a year, doubling or tripling the number of people seeking hotel accommodations. That would create more of a market for hotel investors.
“If there’s money to be made, hotels will come in and invest,” said Aprill.
Hospitality a priority
The $279 million Cobo renovation should be complete by the time ASAE attendees arrive. Nowhere is the effort more recognizable than the grand staircase, an expansive area leading to the main ballroom and that allows visitors to see right out to the Detroit River. But one of the biggest changes is behind the scenes with the new kitchen.
Jamie Miller is the executive chef for Centerplate, the group that manages food and hospitality services at Cobo Center.
He started working at Cobo in 2008, long before the infrastructure and kitchen improvements were made. For the largest events, it could take seven hours to prepare and plate the food on the day of the event. Now, they have a process with new high-tech ovens and freezers that allows them to do most of the prep work in the days leading up to a major event. On the day of an event, it takes two hours to prep a meal the size of the NAACP Fight for Freedom Fund Dinner, which can have 5,000 to 10,000 attendees.
“When I started here, at that time it was a lot of frozen foods,” he said. “In this building we sell two things: space and food. Now that we have an absolutely stunning space, we have to make sure the food is just as stunning.”
In addition to a new kitchen and food court, Cobo now boasts meeting rooms and ballrooms on the south side of the building facing the Detroit River. Beneath the surface, the center has been outfitted with updated networks for Wi-Fi and higher bandwidth, which has become a standard requirement for meetings and groups looking at convention centers to host events.
Outside, along Jefferson, an entirely new square with green space sits in front of a 4,800-square-foot video advertising board that will serve as the marquee for the center.
Cobo Center already has booked the Shell Eco Marathon for two more years, and the Society of Automotive Engineers recently signed a multiyear contract. In 2018, Cobo will host the U.S. First Robotics National Championship, a big get for the city. And, of course, the North American International Auto Show is signed on to stay through 2017.
As for the future, there are opportunities beyond convention bookings to explore that weren’t even on the table before the renovations.
Bero said down the line, Cobo could ramp up advertising on its new video boards and even explore naming rights.
“Not necessarily removing the name ‘Cobo,’ but getting a sponsor,” said Bero. “Nothing has been done yet and we don’t even know what the market for that is.”
Other challenges include working on a viable regional transit system to help visitors travel around Metro Detroit and encouraging people to build more hotels to allow for more capacity, said Bohde.
He said Detroit has the capacity for about 70 percent of all conventions but would need more than 5,000 rooms a night downtown to compete for the largest conventions.
“Detroit is a fabulous story. We’re the talk of the country,” said Bohde. “There’s a great sense of curiosity that has been created around the country of what Detroit is really about, and they walk away pretty impressed.”
Cobo annual attendance
North American International Auto Show Attendance:
Major upcoming conventions
- American Society of Association Executives, Aug. 8-11
- North American International Auto Show, booked through at least 2017
- Shell Eco Marathon, booked for two more years
- Society of Automotive Engineers, signed a multi-year contract.
- U.S. First Robotics National Championship, coming to Detroit in 2018
Cobo Center naming rights
With construction wrapping up on Cobo Center, Patrick Bero, CEO and CFO of the Detroit Regional Convention Facility Authority, says the center is exploring new ways of making money. One could be offering naming rights on the center. Bero says nothing has been done to explore selling a sponsorship to name the center, but the name “Cobo” would not be removed.
“Cobo means something entirely different now,” said Bero. “It is a very positive name in the convention center world.”
YearNumber of ConventionsRoom Nights Confirmed
2009 (7) 95,778
2010 (9) 82,057
2011 (4) 27,509
2012 (3) 52,310
2013 (5) 18,515
2014 (12) 78,217
2015 (14) 166,669