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    Untapped business potential key to National Conference Center

    The National Conference Center in Leesburg is one of the area’s largest meeting facilities. File photo
    The National Conference Center was acquired last week for $36.9 million, and LaKota Hotels and Resorts has been contracted to take over the turnaround effort as the large conference center repositions itself to capture more business.

    "Our plan is to really refresh the place, with some new surfaces and dramatic work will be done in the food and beverage phase," said Sam Haigh, president and CEO of LaKota Hotels & Resorts.

    Haigh explains the acquisition as an economic opportunity.

    "The property was acquired at a good price," said Haigh. "The price makes sense when you look at the upside potential."

    By focusing on untapped social business, freshening the center's appearance and grabbing government meetings as they begin to bounce back from a down economy Haigh believes the property is ripe for turnaround.

    Haigh and LaKota believe large wedding parties, bar mitzvahs, award ceremonies and trade shows will help fill in the spaces when corporate and government clients aren't using the facility.

    In order to do this the company plans to invest heavily in sales and marketing efforts in order to expand local business opportunities.

    The biggest opportunity that was not fully realized in the past was the corporate training market, according to Haigh, further explaining that government business was so dominant that it wasn't as necessary as it is now to reach out to that sector.

    The other piece of the puzzle is the West Belmont National Ballroom, which is one of the largest in the country, and has an attached catering service.

    As explained on the LaKota Hotels & Resorts website, "Positioning and operating the properties first as high end hotels and resorts, allows for a much more robust business model, creating additional activity and excitement in the properties, building stronger service teams, and increasing the appeal to senior level conference groups."

    LaKota is taking over the property from longtime facility management company ARAMARK, which had managed the property for 40 years prior.

    Katie Doherty, the current general manager at the National Conference Center, explained that the team has worked on the transition since they learned of the sale in early March.

    "My role is to keep everybody excited about the future," said Doherty.

    Currently there are about 200 full-time employees at the National Conference Center. All except for a few executives, will keep their jobs.

    "Everyone there will continue to have a job," said Haigh. "New ownership should be seamless."

    Haigh said the company may hire new employees as it sees necessary, or as expansion dictates.

    The next major event at the center will be next week's 2014 United States Cybercrime Conference.

    Comments

    Oxford borrowed $60 million to buy the NCC in 2000 for $37.7 million and spent $23 million on renovations in 2001. In 2005 it borrowed $50 million to construct the ballroom. It sold in 2014 for $36.9, $800,000 less than the price paid 14 years earlier.
    $60 million loan in 2000
    $50 million loan in 2005
    = $110 million - $36.9 million 2014 sale price = $73 million invested over 14 years.


    PS: As pointed out over at Leesburg Today, the county undersold 76 acres (The Saudi Academy site) for $20 million to Raging Wire after cutting it out of the special tax district created to pay for the Silver Line to the Claude Moore property to be developed as “Moorefield Station” next to the Greenway in Ashburn.


    For review: The National Conference Center was built in 1974 as the Xerox Document University to train employees on copier technology—then the coming thing. Twenty years later, Xerox let outsiders use it and in 2000, sold it to Oxford Capital Partners because it was chronically under-booked. After a 2002 renovation, Aramark managed, but even the NCC’s best customer—the federal government with its per diem allowance for employees—didn’t need 917 dowdy, outdated rooms for any one night. In 2005, Oxford borrowed $50 million to build a 16,000 square foot ballroom just in time for the real estate bust, when even the feds could afford to book the NCC.  In 2010, Loudoun County came to Oxford’s rescue by announcing it would buy land from the NCC to build a high school.
    It eliciting an appraisal that added $6.5 million in “damages” to the market value of $12,650,000 for 41.5 acres—this to cover the cost of a 3-level parking deck adjacent to the new ballroom. Three months later, the Board of Equalization voted in secret to reduce the NCC’s assessment by—$6 million so Oxford would not be taxed on the “damages”  that paid for the parking deck.
    Loudoun Public Schools will pay for road improvements for the “boulevard” to the NCC, including a 2-lane roundabout at Riverpoint Drive and Upper Belmont Place to accommodate traffic to the NCC, a middle school, and a high school, all with access and exits blocked on the west, north, and east.
    Loudoun County never explained why Riverside High School is not being built on the NCC property. Instead, it abandoned a developer proffer and razed a sports park that operated under a Memo of Understanding with local youth sports leagues that raised hundreds of thousands of dollars for seeding, soil improvement, and underground sprinklers. Lansdowne Sports Park went away this year.
    After the infusion of $20 million in tax-paid dollars from Loudoun County with an overhaul of its road system still to come, the NCC fetched $37 million. Not enough to cover the $50 million loan from 2005, but maybe it fended off and embarrassing foreclosure.

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    Loudoun Business Journal - Summer 2014

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