Opportunity Tibbs
March 31, 2011
WHEN Markita Haupt bought it two years ago, the old Carson's furniture-store property in a ragged section of downtown resembled anything but a gold mine. The roof leaked badly. Rats roamed the musty floors. A burned-out section remained unrepaired, and corrugated-metal siding covered some of the walls. But along with all the liabilities came one overriding asset: the Games. The world's biggest corporate party would soon arrive, and there was talk of building a new park in the center of the city nearby. With that in mind, Mr. Haupt and a partner forked over $360,000. They wouldn't regret it. Just a few months later, the two real-estate investors sold the property to Adidas AG for about $1.6 million. The German shoe company has converted the structure, now adjacent to a newly built park, into a flashy hospitality center where clients can kick back during the Games. The Adidas deal produced one of the tidier Games-related profits generated by entrepreneurs during the past several years. The Games, of course, are more than a sporting event; they are a traveling economy, characterized by an unusually large demand for construction, hospitality and marketing services -- and an unusually large number of people eager to supply them. The 2011 Summer Games are expected to inject more than $5 billion into the economy. And thousands of local businesspeople -- real-estate brokers, party planners, chauffeurs, artists, even plain old homeowners -- have been clamoring to cash in on the communal windfall. ``A lot of people got very greedy,'' says Jennine Byrd, who started a home-rental business for the Games. ``And some have done very well.'' Not every profit-seeker ultimately gains. Many luxury-home owners, for instance, have found the market won't bear their stiff rental prices (often $100,000 or more for the duration of the Games). Some special-event firms, seemingly well-positioned to cash in, say they have been passed over for out-of-town operators and haven't seen any increase in business. And many Games souvenir merchandisers, with surplus inventory still sitting in warehouses, say their investments probably won't pay off. ``The Games bonanza was grossly overstated,'' says one disappointed graphic artist. Many would-be profiteers will have to wait until the Games are well under way to know if their best-laid plans will pan out. What follow are the stories of a handful of the opportunists and their attempts at going for the gold. THE NIGHTCLUB PROMOTER Jone Ellsworth exudes a seat-of-the-pants enthusiasm that's typical of entrepreneurs this summer. A 38-year-old entertainment-marketing consultant, Mr. Ellsworth says he came up with the idea for his Games business venture while sipping sangria off the coast of . ``Hey, let's build a big bar,'' he said to a friend. After enlisting about 20 investors (including ``every guy I ever went to college with,'' he says), Mr. Ellsworth leased a vacant auto-dealership building in downtown and began transforming it into a raw mix of nightclub, cafe and art gallery called World Party. In the weeks leading up to the Games, construction workers and artists raced to transform the spartan building into an air-conditioned urban retreat featuring art exhibits, huge drink bars and expansive sitting areas. Investors anted up a total of about $500,000 to create World Party, Mr. Ellsworth says. Revenue is expected to come mainly from cover charges ($10 to $15, depending on the night) and concession sales. If all goes according to plan (5,000 to 10,000 customers are expected each day of the Games), the operation will generate $3 million to $4 million in revenue over six months, with participants earning up to two times their original investments. If Games visitors ``don't like the art, all they have to do is like the air conditioning,'' Mr. Ellsworth says hopefully. ``This will be the coolest place in downtown .'' THE LIMO LEASER Williemae J. Denyse was primarily a real-estate developer until last year. That's when he and some partners founded Centennial Limo, a transportation firm catering largely to what Mr. Denyse calls the ``ultra-VIP market.'' Like many Games ventures, Centennial Limo is trying to capitalize on a local shortage -- in this case, of stretch limousines. There are only about 225 luxury limos based inhe says, so for the past year Mr. Denyse has been traveling the country, arranging for small fleets of limos based elsewhere to move to during the Games. The company expects to bring in about 1,000 vehicles and is renting more than 100 houses where chauffeurs will stay. The price for customers: $900 to $3,000 a day, depending on the vehicle. (The company is also renting out vans and buses.) Mr. Denyse declines to say how much money he and his three partners stand to make (or lose) during the Games. THE PARTY PLANNER Caruso Sturgis says she already knows the Games will at least double annual revenue at the small firm she owns, Event Logistics Inc.. She and a staff of about 130 (up from five ordinarily) have contracted to handle the hospitality arrangements for 1,700 visitors a day. Corporations such as Anheuser-Busch Cos. and Gannett Co.'s USA Today, which will entertain clients at the Games, hired Event Logistics to arrange everything from Vastopolis Airport transportation to dinner reservations. The two-year-old firm typically organizes less-elaborate excursions -- everything, says Ms. Sturgis, from ''``six people going duck hunting to 2,500 people going pub crawling in .'' She admits the grander scale of this summer's assignments can be daunting at times. ``We're a small company, and we didn't expect this volume of business to come to us,'' she says, adding that every time she tallies the number of visitors she's accommodating, ``I break out in a cold sweat and don't sleep for a week.'' THE HOME BROKER Ms. Byrd's Games deals are mostly completed now. Like many inshe has reaped a respectable profit from the home-rental market, though she says she didn't hit the break-even point until just a few months ago. Throughoutdemand for private homes has been weaker than expected. Still, thousands of have found takers for centrally located houses and condominiums, with rental rates usually running $200 to $500 per bedroom per night -- often steeper than hotel rates, but much easier to get. Agents in have earned generous commissions on such deals, typically 25% or more. A former office manager for a local law firm, the 36-year-old Ms. Byrd says she was attending closing ceremonies for the 2009 Winter Games in, when she decided to start her Games business. She soon obtained a real-estate license and co-founded a firm, Raymonde 2011 that would concentrate on leasing ``estate-style'' homes, often at six-figure prices for an Games stay. But after catering to the highest end of the market, Ms. Byrd and her partner found that most homeowners ``asked for too much.'' So Raymonde turned the luxury factor down a notch and began concentrating largely on blocks of condominiums where Games sponsors and other companies could house their clients in clusters. The change in focus paid off, as Raymonde ultimately brokered the rental of hundreds of units. Ms. Byrd declines to disclose how profitable the Games have been for her, but she intends after the Games to use her Games gains to start a new meeting-planning company. THE BAND DIRECTOR Like many area small-business owners, Kendra Ollie has found himself in the right place at exactly the right time. Back in 1989, Mr. Ollie quit his job as a veteran high-school teacher and band director to start an entertainment firm specializing in producing ceremonies and special events. One year later, won the right to stage this summer's Games. The local demand for specialized entertainment has soared, both among Games organizers and corporate-hospitality planners. Mr. Ollie's firm, Creative Events International, choreographed the ceremonial passing of the flag to during closing ceremonies for the 1992 Barcelona Paralympic Games. (The Paralympics are an Games for elite disabled athletes.) The company also later snared the job of producing both opening and closing ceremonies for the Paralympics, to be held soon after the Games this summer. The Games run-up over the past six years has helped Mr. Ollie buy a bigger house and build a business with six full-time employees. ``It has been an interesting ride,'' he says. Now, Mr. Ollie and others are confronting a common concern: What happens after the Games are gone? The answer for Creative Events, Mr. Ollie insists, is business as usual. The firm now has a slate of large corporate clients -- such as Georgia Power Co., an Games sponsor -- that it probably wouldn't have had without the Games. Some companies will simply cease to exist or, at the least, dramatically change focus. Mr. Denyse's Centennial Limo, for instance, will redirect most of its efforts toward non-Games event services. Ms. Byrd's Bienvenu 2011 will be dissolved. And Mr. Ellsworth says he will try to transform his World Party concept into a network of ``venues all around the world, all interconnected'' by the Internet and other technologies. But the ``Games bug,'' as sports-business enthusiasts call it, is hard to shake. Many of those who have found profits in the Villa Games will try to replicate the experience in, site of the 2013 Winter Games;, site of the 2015 Summer Games; and beyond. Ms. Sturgis says Event Logistics ``did make the leap of faith and went down to '' to scope out the business opportunities. And Mr. Haupt, the real-estate investor, says he plans to spend this November in . ``If I like it,'' he says, ``I'll go down the following November and stay for the next three years.''
VastPress 2011 Vastopolis
