McCormick Centers On Small Groups

Faced with a stagnant megashow market, Chicago is converting the east building of its McCormick Place Convention Center into a venue designed for midsize meetings. This effort comes on the heels of the summer 1995 opening of Festival Hall, an exposition facility at Navy Pier also intended for the smaller-show market.

"There aren't really any new large trade shows being organized," said Alisa Gordon-Bay, a spokeswoman for the Chicago Convention and Tourism Bureau. "Because of the cost involved in putting together big shows, smaller ones are spinning off. That's where the growth potential is."

The revamped building, to be renamed Lakeside Center and scheduled for completion late this year, will allow show managers to customize four of the facility's 47 meeting rooms to provide space ranging from 4,500 to 15,000 square feet. One of the two exhibition areas, each of which will be about 300,000 square feet in size, will be divisible so it can better suit smaller function displays and seating arrangements. The current exhibit hall will be converted into a 45,000-square-foot grand ballroom, which can be split into two separate 22,000-square-foot rooms. A theater, business center, phone center and four restaurants will complete the list of coming attractions.

The project is part of an almost billion-dollar expansion, which includes a new building and glass-enclosed walkway unveiled last December. The 840,000-square-foot addition, which took more than three years and more than 5,000 workers to build, boosts the center's total area to 2.2 million square feet.

Chicago hopes that the building, together with Navy Pier, will serve as a one-two punch at the competition in the midsize meetings market, which has been somewhat overlooked by the city in the past.

"McCormick Place is so huge that the smaller shows felt overwhelmed," said Rich Carollo, manager of research and records for Chicago's convention bureau. "They generally required more meeting space, and that was sort of lacking compared to some other cities. Now, we are filling that need."

The abundance of services that will be offered at Lakeside will keep a midsize convention's delegates from having to even set foot in the center's other buildings, said John Devona, senior director of marketing for the Metropolitan Pier and Exposition Authority, the non-profit municipal corporation that owns both McCormick Place and Navy Pier.

"McCormick Place has been fortunate to have 60 to 70 repeat customers, but that also limits the number of new customers, so it's always been a catch-up game in terms of attracting new shows," said Devona.

And 95 percent of the shows are not the huge productions to which McCormick Place is accustomed, according to Carollo. Although the amount of square footage used by shows at McCormick Place has increased, the number of events there has fallen from 69 in 1993 to 53 last year. Currently, the convention bureau has a target list of close to 700 midsize shows it is seeking to draw, said Carollo.

Exhibition Hall space at Lakeside Center will be priced at $1 per square foot, similar to the rate of 95 cents per square foot at Navy Pier's Festival Hall, which features 170,000 square feet of exhibit area and 48,000 square feet of meeting space. Devona said that although both venues are geared toward the same general market, he believes demand is sufficient to fill both. Navy Pier is operating at almost full capacity right now, he added.

Devona pointed out that the new venues do not directly compete with hotels, which hosted the majority of the 38,000 trade shows, conventions and meetings held in Chicago last year, and will actually help increase their occupancy. "While hotel space is at a premium during large hardware shows, between those shows there is an abundance of rooms," he said. "The most exciting thing is that we will target Lakeside for time periods between large shows."

Arnold Karr, president of the Hotel-Motel Association of Illinois, endorsed this strategy. "There are lots of hotel rooms, and these other centers are really for shows that have graduated to the next level beyond hotel space," he said. Last year was a banner year for Chicago hotels, which had a roughly 75 percent occupancy rate, he said.

The new Hyatt Regency McCormick Place, which will be connected to McCormick Place Convention Center, completes the package of enticements Chicago is using to attract more shows. The $100 million hotel, which is being funded by a construction loan financed by Metropolitan Pier and Exposition Authority bonds that will be paid off by future hotel revenues, will contain 750 guest rooms and 50 hospitality suites. Designed for convention needs, it will offer a 1,200-square-foot ballroom, 2,700 square feet of boardrooms, a business center and Hyatt Business Plan rooms, which include fax machines and 24-hour access to copiers and printers. The hotel is scheduled to open in summer 1998.