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Uniroyal Plant Has Future as Trade Center, Study Finds : Construction of 300-Room Hotel Nearby Called Key to $43-Million Commerce Project

January 09, 1986|LEE HARRIS | Times Staff Writer

COMMERCE — A recently completed feasibility study has concluded that the abandoned Uniroyal plant, which the city purchased from fireworks magnate W. Patrick Moriarty for $14 million in 1984, can be developed into a profitable center for mid-size trade shows and exhibitions.

Success, however, hinges on the city getting a developer for a proposed 300-room hotel needed to supply nearby lodging for the $43-million center's conventioneers.

The trade-center market study, completed in November by the Los Angeles accounting firm of Pannell Kerr Forster, concludes that " . . . there exists in the trade show (business) sufficient demand to support the operation of a mid-size trade show and exhibition facility in the city of Commerce."

The study included a nationwide survey of 1,349 trade show producers and managers. Of the 123 who responded to the survey, 42% said they would be interested in using the proposed center. Its market would be medium- and small-size conventions unable to secure dates at convention centers in Long Beach, Los Angeles and Anaheim.

$20,000 Study

The city Redevelopment Agency paid an estimated $20,000 for the study.

The proposed facility, tentatively dubbed the Com/Plex, would include a 140,000-square-foot exhibition hall, 20,000 square feet of meeting rooms, a food-service area for 5,000, parking for 2,000 vehicles and a 300-room hotel on the 35-acre site.

Construction costs for the hall and facilities excluding the hotel would be about $43 million, said Ira Gwin, director of the city Redevelopment Agency and community development.

To pay for construction and other expenses, the city will attempt to secure about $65 million in tax-exempt municipal bonds, Gwin said. If the city is unable to secure the needed bonds, alternatives would have to be looked at, such as "subdividing the land and selling it off for some industrial or commercial use," Gwin said.

The city is due to get a separate hotel study from the same firm next week. That study will cost between $10,000 and $15,000 and was commissioned once the trade center study indicated the need for a nearby hotel. The lodging study will provide detailed information on what type of hotel would best serve the city and the convention center.

In its market study, the firm concluded that the proposed convention center would be feasible, but to be competitive with other centers it would need more hotel rooms nearby. There are four hotels in the area with a total of 821 rooms. The closest is the Commerce Hyatt with 283 rooms. There is a 148-room Holiday Inn and 120-room Best Western Westland Inn, both in Montebello, and the 270-room Saddleback Inn in Norwalk.

"Both the center and the hotel are tied together. They don't stand alone," Gwin said.

The market study revealed that professional planners of trade shows and conventions would be interested in doing business at the Com/Plex but were concerned that there would not be sufficient overnight lodging in the area, Gwin said.

Once the city receives the results of the hotel study, Gwin said, officials will begin an immediate search for a hotel developer from whom they can "get a commitment" to build.

The city hopes to start construction on the trade show facility by the end of this year, he said, with construction to take about two years.

The primary function of the center would be for trade shows, conventions, consumer shows including auto, home and boat exhibits, seminars and major community events.

The city would contract with firms to arrange conventions for various groups, and get a percentage of the convention revenue.

Profit Expected in 7th Year

Gwin said the market study predicts that the center would show a profit by the seventh year of operation, when it would be operating at more than 40% of capacity and grossing $7 million.

The Uniroyal tire plant, which was built to resemble an Assyrian palace in 1929 by rubber magnate Adolph Schliecher, was closed in 1978, and has been a Santa Ana Freeway landmark.

Moriarty purchased the property in 1982 from the Doan Corp., a Canadian development company. The city paid Moriarty $14 million in October, 1983, for the property. Moriarty, a former fireworks manufacturer, is facing a maximum sentence of 35 years in prison after pleading guilty in March to seven counts of mail fraud in connection with banking transactions and bribery of public officials.

Four former Commerce officials received short federal prison terms in April, 1985, for their roles in a scheme to grant a poker parlor license in return for secret shares in the California Commerce Club. The officials cooperated as government witnesses against Moriarty.

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