GEORGE L. SMITH, II GEORGIA WORLD CONGRESS CENTER
ANNUAL REPORT
FISCAL YEAR 1981- 82

GEORGE L. SMITH, II GEORGIA WORLD CONGRESS CENTER
ANNUAL REPORT FISCAL YEAR 1981-1982

TABLE OF CONTENTS

Georgia World Congress Center Authority

Board of Governors/Legislative Overview Committee....................

1

Director's Report.......................................................

2

Expansion Update

-....................

3

Financial Overview......................................................

5

Rental Income.........................................................

7

Food Service - Rich's.................................................

8

Exhibit Utility Services...............................................

9

State of Georgia - Economic Benefits....................................

10

Event Attendance Summary

14

Staffing

15

LIST OF EXHIBITS

A. GWCCSales Graph..................................................

4

B. Statement of Income and Expenditures...............................

6

C. Estimated FY 82 Economic Impact of the

Georgia World Congress Center

11

D. Economic Impact Results - Five Year Summary......................

12

E. Georgia World Congress Center,

State of Georgia - Economic Benefits Summary

13

F. GWCCOrganization Functional Flow Chart

16

GEORGIA WORLD CONGRESS CENTER AUTHORITY BOARD OF GOVERNORS

OFFICERS

CHAIRMAN John E. Aderhold President Rayloc Atlanta, Georgia
SECRETARY Joseph W. Robinson President J. W. Robinson & Associates, Inc. Atlanta, Georgia

VICE-CHAIRMAN James S. Livingston Chief Executive Officer The Central Bank Swainsboro, Georgia
TREASURER Emily May Richards Vice President & Treasurer Tharpe & Brooks, Inc. Atlanta, Georgia

MEMBERS

Charles L. Davis Commissioner of Finance City of Atlanta Atlanta, Georgia

Jasper Dorsey Adjunct Professor of Mgmt. University of Georgia Atlanta, Georgia

Gene Dyson President Ga. Business & Industry Atlanta, Georgia

Assoc.

I. Owen Funderburg Citizen Trust Bank Atlanta, Georgia

John Riley State Senator, Retired
Sea Island, Georgia

GEORGIA WORLD CONGRESS CENTER AUTHORITY LEGISLATIVE OVERVIEW COMMITTEE

Senator Perry J. Hudson Senator Floyd Hudgins Senator Joe L. Thompson

Representative Representative Representative

Thomas Triplett Lauren McDonald, Jr. Franklin S. Horne

District 35 District 15 District 32
District 128 District 12 District 104

Hapeville, Georgia Columbus, Georgia Smyrna, Georgia
Savannah, Georgia Commerce, Georgia Macon, Georgia

1

DIRECTOR'S REPORT
Fiscal year 1981-82 was a tremendously significant year for the Georgia World Congress Center. In spite of a continued weak general economy, operational revenue increased by $643,626 over the previous year, an increase of 19.4%. Conversely, operational expenses increased by $380,649 over the previous year, an increase of only 11%. The Congress Center required no state appropriation for operations and completed the fiscal year with a NET PROFIT, or fund balance carried forward, of $296,263.
Of primary importance, the economic impact of the World Congress Center for the fiscal year was dramatic. Total attendance for all activities was over 794,000, with over 356,000 out of state visitors for the year. Out of state visitors spent an estimated $243 MILLION DOLLARS in direct expenditures, resulting in an economic impact of an estimated $400 MILLION DOLLARS. Based upon calculations by the Georgia Economic Forecasting Project, University of Georgia, the State of Georgia realized approximately $14 MILLION DOLLARS in new tax revenue, while the City of Atlanta realized approximately $3 MILLION DOLLARS in hotel/motel tax revenue as a direct result of Congress Center activities.
Unquestionably, expansion of the World Congress Center represents the single most significant development of the year, as well as the major challenge of the future. Construction bonds were sold in February, 1982 and construction of expansion was officially underway in March, 1982. Even though interest rates were quite high when bonds were sold, construction bids were generally very competitive and the expansion project received bids several million dollars below preliminary cost estimates.
The Congress Center continues to rank among the most heavily utilized facilities in North America. Various trade publications estimate the Congress Center and Atlanta rank second, third or fourth in the United States in major convention and trade show activities, depending upon which publication you read. In spite of tremendous expansion and new facility projects currently underway across the nation, we are confident we will continue to rank among the very busiest centers in the years ahead.
Fiscal year 1981-82 was indeed a most gratifying year for the Congress Center and we look forward to the challenge of the future. Complete facts and figures regarding the operation and activities of the World Congress Center are offered in this annual report.
2

EXPANSION UPDATE
With construction officially underway in March, 1982, expansion is rapidly becoming a reality. Expansion facilities will include an additional 300,000 square feet of exhibition space, bringing the total exhibit space up to 640,000 square feet for the entire Center. This will allow the Center to compete for all but a handful of the major conventions and tradeshows in the United States.
Expansion includes much more than raw exhibit space, however. Expansion facilities were designed not only to capture large exhibitions, but to also broaden our base and reach new markets. Expanded facilities will include 38 meeting rooms, including a carefully designed "conference center" for the rapidly growing highly specialized national and international meetings not necessarily requiring exhibition space. The conference center will have simultaneous translation facilities, will adapt to the most sophisticated audio-visual presentations and will be able to be utilized for teleconference activities.
Another significant element of the expansion is a 33,000 square foot ballroom capable of hosting banquets of 3,300 people or general session meetings of 4,500. Prior to expansion, large convention banquets were held in a portion of the exhibit hall or simply not held in Atlanta for lack of an appropriate setting. Our objective is not to compete with major hotels, but to serve a market demand existing hotels cannot serve. In addition to major food functions, the ability to handle general session meetings up to 4,500 people will increase the availability of exhibit hall space where many of these sessions have been held in the past.
Expansion construction, though in the very early stage, has progressed on schedule to date. New facilities are scheduled to open in phases. Current schedules call for two thirds qf the exhibit space to open in late fall, 1983. The balance of the project is scheduled for completion in summer, 1984.
Marketing of expanded facilities has been underway for well over a year and the response has been nothing less than tremendous. The current facilities have been booked to a practical maximum for several years. Upon confirmation of expansion, our initial tasks were to offer improved space and dates to our current customers who simply had no options in the existing facility, and to immediately schedule a substantial list of new customers who we could not offer dates prior to expansion.
As a result, the total expanded facility is booked through 1990 at virtually a 70% practical capacity as of this date. We anticipate the expanded building will reach near capacity bookings within a relatively short period following completion.
EXHIBIT A graphically illustrates facility bookings through 1990 in both the existing and expanded facilities.
3

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FINANCIAL OVERVIEW
Fiscal year 1982 resulted in significant increases in all major income categories in spite of lingering weak overall economic conditions nationwide. Rental income was up $194,112 or 11.3% over the previous year. Exhibit Utility Service, the providing of electrical, plumbing, etc. to individual exhibitors, increased by $231,540 or 28% over the previous year. Food service income was the most dramatic increase with $281,344 or 57.7% improvement over the previous year.
Total operating income increased by $643,626 or 19.4% over Fiscal Year 1981. Non-operating income included a federal EDA grant of $50,000, with State of Georgia matching funds of $50,000, for the specific purpose of developing promotional materials for expansion.
On the expense side, personal services increased by $273,906 or 11.9%. Increased personal service costs were entirely from General Assembly approved cost of living increases, merit increases of 3%, plus additional part time labor utilized throughout the year. No new positions were filled in 1982.
Regular operating expenses, which include utilities as well as material and supply accounts, increased by $63,218 or a mere 6.7% over the previous year.
Total operating expenses increased by $380,649 or 11% over the previous year. This compares to the total operating income increase of $643,626 or 19.4%. Consequently, the Center realized a NET OPERATING PROFIT of $296,263.
EXHIBIT B offers a complete statement of income and expenditures.
5

STATEMENT OF INCOME AND EXPENDITURES

INCOME:
Beginning Adjusted Balance
Rent
Food Service (Rich's)
Exhibit Utility Services
Georgia Hall
Miscellaneous
SUB-TOTAL State of Ga. thru OPB State of Ga. thru I & T Federal Grant Hotel-Motel Tax (ACVB)
TOTAL

FY 1980-81
$ 64,558 1,715,284 487,693 825,215 98,008 128,143
$3,318,901 300,000 667,198
$4,286,099

EXHIBIT B
FY 1981-82
$ 165,538 1,909,396 769,037 1,056,755 88,165 139,174
$3,962,527 7,000
50,000 50,000 723,298 $4,958,363

EXPENDITURES:
Personal Services
Regular Operating
Equipment
Contracts
Other
SUB-TOTAL
Special Project - Printing Special Project - Advertising &
Promotion / Expansion Hotel-Motel Tax (ACVB)
TOTAL

$2,285,506 941,396 22,025 70,522 131,704
$3,451,153
667,198 $4,118,351

$2,559,412 1,004,614 18,659 83,167 165,950
$3,831,802 7,000
100,000 723,298 $4,662,100

NET PROFIT (LOSS)

$ 167,748

$ 296,263

6

RENTAL INCOME

Exhibit Hall Rent Meeting Rms. & Auditorium Rent Miscellaneous Rent TOTAL RENT

FY 1980-81 $ 1,385,262
267,263 62,759
$ 1,715,284

FY 1981-82 $ 1,560,578
302,990 45,828
$ 1,909,396

Rental income increased by $194,112 or 11.3% in FY 1982 over the previous year. As the exhibition halls have been booked at virtual maximum capacity for the past few years, the increase in Exhibit Hall rent was not due to an increase in the number of major shows, but was predominantly an increase in the amount of exhibit space in a comparable number of shows. We believe this to be significant in terms of gauging the general condition of the economy. Major exhibit shows are definitely beginning to recover from the recession and most exhibitions are showing significant signs of renewed growth.
Conversely, the increase in meeting room and auditorium rent is almost entirely a function of increased bookings with new activities in these areas. We believe this too may be an indicator that hard economic times are showing signs of improvement. Particularly, we have seen a growth in corporate and business meetings which were a somewhat "soft" market the previous year.
Miscellaneous rent is predominantly generated through equipment rental and is not directly related to the amount of scheduled activity in the Center.

7

INCOME:
Food Sales Beverage Sales Miscellaneous
TOT AL INCOME

FOOD SERVICE - RICH'S
FY 1980-81 $1,987,098
375,570 35,067
$2,397,735

EXPENSES:
Cost of Sales (Product) Wages, Salaries & Related Other Operating Expense
TOT AL EXPENSE

$ 681,854 771 ,226 388,859
$1,841,939

NET INCOME

$ 555,796

FY 1981-82 $2,448,557
473,583 51,650
$2,973,790
$ 778,267 781,967 472,898
$2,033,132
$ 940,658

DIVISION OF NET INCOME:
Rich's (20%) Georgia World Congress Center (80%)

$ 111,159 444,637
$ 555,796

$ 188,132 752,526
$ 940,658

Rich's food service continued to maintain an excellent reputation for quality and service in the convention industry. Gross revenue increased dramatically by $576,055 or 24% over previous year's revenue. More importantly, net revenue to the World Congress Center increased by $307,889 or 69.2% over the previous year.
It should be noted the figures shown here are operational figures and do not reflect year end adjustments to reserve accounts, etc. as do the figures indicated in the Congress Center's statement of income and expense.
The dramatic increases in gross and net revenues are attributed to a most successful year in large convention banquets as well as a number of large local banquets which simply could not be served in hotel ballrooms and utilized our exhibition space.

8

EXHIBIT UTILITY SERVICES

GROSS INCOME
EXPENSE
Labor Materials & Supplies
TOT AL EXPENSE

FY 1980-81 $ 825,215
$ 156,528 64,866
$ 221,394

NET PROFIT (LOSS)

$ 603,821

FY 1981-82 $1,056,755
$ 163,973 55,287
$ 219,260
$ 837,495

The providing of electrical service, gas connections, compressed air,

water and drains, etc., to exhibitors continues to be one of our most

successful operations.

Exhibit utility services represents our most

effective income producing factor other than space rental. This operation

generated 26.6% of our total income for the year. It is particularly

significant to note NET INCOME of 79% of the gross revenue was realized

through this service.

In addition to generating income, the utility services operation continues to be extremely beneficial in maintaining a reputation nationally as a facility free from labor problems and exorbitant costs to exhibitors.

9

STATE OF GEORGIA-ECONOMICBENEFITS
The primary objective of the World Congress Center is to maximize utilization of the facility by major national and international conventions and tradeshows, thus attracting hundreds of thousands of out-of-state visitors who will spend their money in Georgia. In essence, we are in the business of "importing" dollars. The resulting private businesses and industries supported by this activity and the overall economic stimulus to the economy of Georgia in general are of top priority, as is accurate reporting of these activities and results.
However, we also believe it important and relevant to present a State of Georgia Economic Benefit Report as might be prepared for the state to review the very real net profit or loss from an "ownership viewpoint" of analyzing its investment without considering the indirect value and stimUlUS to the economy.
In recent years, economic benefits have been calculated for the World Congress Center by the Georgia Economic Forecasting Project, College of Business Administration, University of Georgia under the direction of Dr. John Legler. We offer our sincere appreciation to Dr. Legler and the University of Georgia for their assistance.
EXHIBIT C offers estimated economic impact figures for FY 1981-82. EXHIBIT D offers a summary of economic impact results for the past
five years. EXHIBIT E offers a graphic summary of economic benefits for each
year the Congress Center has been in operation, and includes NET PROFIT to the State of Georgia by virtue of state tax revenues.
10

EXHIBIT C

FY 1981-82 ESTIMATED ECONOMIC IMPACT OF THE GEORGIA WORLD CONGRESS CENTER

CATEGORY

CONGRESS CENTER & RELATED ACTIVITY

Personal Income

$ 44,895,043

Retail Sales (Including Hotels)

$198,119,200

Employment

2,962

Taxes:

Retail Sales

$ 7,924,768

Sales on Concessions

130,365

Hotel/Motel

2,938,052

Personal Income

884,432

Corporate Income

246,580

Total Taxes

$ 12,124,197

SECONDARY IMPACT
$103,343,489

TOTAL ECONOMIC - IMPACT
$148,238,523

$ 53,906,319

$252,025,519

4,808

7,770

$ 2,156,253
2,035,867 567,601
$ 4,759,721

$ 10,081,021 130,365
2,938,052 2,920,299
814,181 $ 16,883,918

Source: Georgia Economic Forecasting Project, College of Business Administration, University of Georgia, Athens.

11

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FIVE YEAR EVENT ATTENDANCE SUMMARY

1977-78 1978-79 1979-80 1980-81 1981-82

TOTAL ATTENDANCE
"OUT-OF-TOWN" ATTENDANCE

700,968 302,114

834,138 393,585

700,654 312,850

750,258 369,479

794,814 356,879

Total attendance for FY 1981-82 equaled 794,814 persons, an increase of 44,556 over the previous year. Of this total, 356,879 were "out-of-town" visitors, a slight decrease of 12,600 from the previous year.
The small decrease in out-of-town visitor attendance is attributed to a general softening of attendance at many major conventions. It is the impression of most convention managers that companies and firms are simply sending fewer representatives to their conventions and tradeshows for purely economic reasons.

14

STAFFING As of June 30, 1982, the Georgia World Congress Center had 120 authorized full-time positions. In addition, the Congress Center employed approximately 64,000 man hours of part-time labor during the year. This is equivalent in man hours to approximately 31 full-time personnel at forty (40) hours per week. The Center continues to place emphasis on professional development and we believe our staff has become one of the most effective organizations in the industry. Our continued success in re-booking well over 80%of all major events can be attributed primarily to the dedication and professionalism of the staff at all levels of the organization. EXHIBIT F is a current organizational chart depicting the functional
flow of the organization.
15

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