Running on Ego

Running on Ego

COMMERCIAL REAL ESTATE by Mark Gordon | Managing Editor

Oscar Parsons openly admits that his ego is part of the fuel behind the Sarasota Bradenton International Convention Center. But he also fully believes he can make it work.

Oscar Parsons is nothing if not stubborn.

Over the last four years, he's pumped nearly $10 million into making the Sarasota Bradenton International Convention Center a profitable business that attracts shows and residents from throughout the Gulf Coast.

Yet this is a venture that by nearly every estimate, save for his own and a few other true believers in his inner circle, has little chance of succeeding. Consultants told him attempts at private ownership of a convention center fail 90% of the time. And more proof of the daunting task lies 35 miles north, where a company specializing in the field sold their interest in a similar venture in Pinellas County, citing a poor rate of return on the investment.

But the occasionally thickheaded Parsons is still going, experts be damned. "It looks like this can be one of the 10% that makes money," he says, without a hint of doubt.

Parsons will turn 84 in October. He's made millions of dollars through various businesses over the last half-century, from limestone quarries, car dealerships and banks in his native Kentucky to a lighting gallery in Sarasota. He's lost some millions, too, he admits, in a few failed ventures and recessions.

Parsons sees the convention center as the crowning achievement of his life, saying flat out that part of his drive is ego-fueled: "This would be my grand finale," he says, "my last hurrah."

The convention center is a former Sam's Club near the Sarasota-Bradenton International Airport. Parsons bought it from Wal-Mart for $3 million in 2002 and soon after went to work renovating it into a versatile convention center that could be a catch-all for greater Sarasota, hosting concerts, shows, conventions, weddings, meetings and, basically, any other event that needs a big space.

He's spent about $6 million on various upgrades and purchases, including acoustics, the roof, lighting, the parking lot and banquet materials. He's even had 30 doors capable of sustaining 130 mph winds installed.

Parsons faced hurdles, hoops and headaches from the beginning, and he still has problems four years later. For instance, while the center is near an airport, Sarasota-Bradenton provides little boost, as it's a regional facility that doesn't draw as many fliers as Tampa or Fort Myers.

Some other problems facing Parsons include:

• There is no major hotel connected to the facility, a black mark right from the beginning, many in the industry say. There are several hotels in the vicinity of the airport, but none even within a short walking distance to the center.

• Parsons gets no tax revenue from local governments, as other publicly-run convention centers do nationwide to help keep the business going. On the contrary, Parsons had a $60,000 tax bill for 2005, a 25% jump from the $48,000 he was assessed in 2004.

• The little revenues the center takes in only allow Parsons to employ a skeleton crew, which doesn't provide many opportunities to market the center on an on-going basis.

Atta-boy, Oscar

Parsons says several local governments officials praised him for taking the lead in bringing a convention center to the area. For example, Pat Baker, who helped organize the Manatee County Republican Party's annual Lincoln Day dinner last year at the facility, called it "the star of the county," in a convention center release.

And Parsons says that soon after he bought the building in 2002, he got similar pats on the back from building officials and others in Manatee County when they heard what he was planning to do with the facility, which has a Sarasota mailing address but is in Manatee County.

Still, looking back now, those atta-boys turned out to be ominous signs: Part of Parsons' struggles can be traced back to a county that's heavy on zoning and building regulations.

"I went to the building department and told them my plans. They said 'that's great, we love it. It's just what we need," says Parsons, pausing, before he drops the punch line. "Then they gave me a rule book [on building codes] that was 19 inches thick."

Building codes and other rules have proven to be prickly for Parsons over the past four years; he recently says he passed on a job to spend $500,000 to convert some of the center's space into conference rooms, both because he was not sure there was market demand, but also because of a potential code struggle.

It wasn't like that in Kentucky, Parsons says whimsically. He recalls that in 1939, when a local sheriff in his tiny hometown of Calvin asked the local home builder for permits vouching for the work he was doing, the builder said the permit was in the house. "It's got a silver pearl handle and shoots six times," Parsons says the builder told the sheriff.

'More trouble than it's worth'

Some of the other problems Parsons has encountered have a been-there-done-that feel to executives at Global Spectrum Inc., a Philadelphia-based company that manages arenas, stadiums and convention/expo centers worldwide. From 2001 to 2004, the company managed the Pinellas Expo Center on U.S. 19 in Pinellas Park.

The Pinellas Expo Center was also a converted Sam's Club that had 100,000-plus square feet of space. But Global Spectrum sold it after three years of paltry revenues. "It was beginning to be more trouble than it was worth," says Frank Russo, Global's senior vice president of business development. "We were spending too much money for too little return." He declined to release revenue figures for the facility.

In one sense, Global Spectrum's bottom line was different than Parsons'- the results of the Pinellas center were measured against the 18 other convention and expo centers the company manages, including one in China and the Harborview Center in Clearwater.

Barry Strafacci, who was in charge of the Pinellas Expo Center for Global Spectrum, said converted big-box facilities usually do much better in the Northeast because it's cold and wet in the winter there, so people look for indoor activities, unlike on the Gulf Coast. Strafacci maintains that his facility saw "a heck of a lot of business," it was just not enough in comparison to other venues the company manages.

Strafacci, who has never been to the Sarasota center but was aware of what Parsons is doing, says there are examples of well-run, privately owned facilities in Atlanta, Hartford, Conn. and the Washington D.C. area. Beyond weather, there are some staples of success when running a convention center in any market, the Global Spectrum executives say, starting with a good real estate deal.

Parsons, who bought the Sam's Club before the Southwest Florida real estate boom, has that. He's missing most of the other ingredients, though, such as being easily accessible from a major highway, heavy demand from local residents who would frequent events and low overhead.

Public relations push

Despite all the reasons he's bound to fail, there's the upbeat Parsons on a recent morning, driving his golf cart around the cavernous facility, showing a visitor around. He stops the cart by a small assembly room where a real estate training seminar is on a break and shows someone how to turn up the air conditioner.

Parsons still works just about every day. His second wife, Rose Malerba Parsons, whom he married last year, is responsible for marketing the center. Parsons recently launched a public relations blitz to generate interest in the building; upcoming scheduled shows include a boat expo in November and a Florida Huddle travel show in early 2006.

But it's not nearly enough. Parsons says he needs at least 52 events a year to make money, and he'd like to be at 100 a year, which he figures would be about $4 million a year in revenues. Right now, he's about 60% toward the first goal, as the center hosts about 35 events a year. It's enough to pay the bills, Parsons says, but not much else.

Parsons says he has a Plan B if things get really bad, but he's not there yet. He's been offered double the $3 million he paid for the building - offers made by people he referred to as cheapskates. "Whoever buys this thing is going to pay for it," he says. "I didn't do all this work just to wave it off."

Still, don't be surprised if Parsons does sell the building, even after all the money, time and effort he's invested into it. "As you know, I'm pretty impetuous," he says, hands locked behind his head, crossed feet planted on his desk. "If someone comes in with a good opportunity..."

Space, Please

LARGE FLORIDA FACILITIES

Facilities with more than 100,000 square feet of convention center space.

Orange County Convention Center, Orlando 1,103,538 square feet

Miami Beach Convention Center 502,848 square feet

Fort Lauderdale Broward Convention Center 375,000 square feet

Tampa Convention Center 299,000 square feet

Prime F. Osborn III Convention Center, Jacksonville 265,000 square feet

Coconut Grove Convention Center, Miami 150,000 square feet

Palm Beach Convention Center 150,000 square feet

Sarasota Bradenton International Convention Center 120,000 square feet

Lakeland Center 102,000 square feet

Source: Visit Florida, GCBR

Case Study

Should he

stay or should he go?

Oscar Parsons is four years into an attempt to make private ownership of a convention center a profitable business. He spent $3 million for the building and about $6 million on improvements. He has yet to make significant revenues on the venture.

The land itself was recently appraised for $3.9 million, he says, and he's had offers of roughly $6 million for the building.

The Review would like to hear readers' thoughts on what Parsons can or should do. Keep going? Sell it, even if it's at an overall loss? Change strategies with the center? Make different use of the facility?

Send your thoughts by e-mail to Mark Gordon at [email protected] or by regular mail to 1517 State Street, Suite 300, Sarasota, Fl 34236.

At A Glance

Sarasota Bradenton International

Convention Center

Here are a few examples of what Oscar Parsons has spent on improvements of the center over the four years he's owned it:

New ceiling - $50,000

Roof improvements-$200,000

Electric wiring - $20,000

Banquet tables, chairs, tablecloths and kiosks - $500,000

By the numbers:

120,000 square feet of air-conditioned space;

93,000 square feet of event floor space;

3,000 square-feet kitchen space, capable of serving 3,000 sit-down dinners;

1,400 square foot 'green room' for concert performers;

1,050 parking spots

Costs:

Full center: $8,200 per day (less than 9 cents per square foot)

Half center: $4,200 per day

Conference rooms: $200-$780 per day

Who is Oscar Parsons?

Oscar Parsons was born Oct. 22 1922 in Calvin, Ky., a town so small that rumor has it the population jumped 4% when he entered the world, he wrote in a Kentucky historical guide about his life.

Since that auspicious beginning, Parson's life has been segmented by busy intervals: In his late teens and early 20s, he graduated college with a degree in business, got married, had two children, served in World War II, in California with the U.S. Western Defense Command and opened his first business, a shopping center that later became an ice cream plant.

In his early 30s, Parsons began investing in auto dealerships in his home state. In his late 30s, he moved into banking, forming the American Fidelity Bank and Trust Co. in 1961. In his 40s, Parsons entered the mining field, opening Southeastern Stone Quarries, a facility he still owns today that makes crushed limestone.

A licensed pilot, Parsons moved to the Sarasota area in 1978 after years of thinking of the area as flyover land on trips to Naples and Tampa. He bought a condo on Longboat Key and founded a new business, Lighting Galleries of Sarasota, which he ran on his own until selling it in 2000.

Parsons has four grandchildren and three great grandchildren.

- Mark Gordon