Convention center projects across the U.S. are encountering a wide range of challenges in the brutal economy, from developers trying to remain solvent, to political wrangling and corruption, to scrutiny of such projects' consumption of precious public funds.
Not just in Cleveland—where the Cuyahoga County commissioners'decision to rebuild on the existing underground Mall B convention center site already has been criticized as a penny-pinching and fatal move—but scores of cities, like San Diego; Albany, NY; Wilmington, NC; Nashville; and Portland, are battling to push expansions, new builds, or convention hotels to fruition.
Dallas is trying to develop a publicly funded and owned convention hotel while a political action group wants to force the project to a public vote (Jan. 5 MN, p. 17), not unlike the decade-long ordeal Fort Worth underwent before it finally opened its privately developed 614-room anchor hotel last month. The situation in Portland is similarly contentious, as the city attempts to float bonds amid the credit crisis to fund a $200 million hotel for the Oregon Convention Center.
The debate surrounding convention centers is not new, but it is put under the microscope in tough times. Those that oppose them note a national overcapacity of money-losing facilities and a need to divert tax money to more pressing needs. Defenders say they revitalize areas around them, create jobs and businesses, and draw private development and visitor spending, leading to tax revenues. Also, they argue that these economic engines must be replenished or enlarged to attract or retain bigger or growing groups.
Those points were made in a late-January letter to Albany's Times Union paper by Michele Vennard, president and CEO of the Albany County Convention & Visitors Bureau, in response to critics of the proposed Albany Convention Center. She contended the convention and hotel complex will win new business that the present Empire State Plaza Convention Center couldn't land.
But the city's convention center authority has had to slash the project's tab to around $250 million and shift hotel and garage development into private-sector hands. And, at press time, it was waiting on a $10 million fund approval from the state while seeking federal stimulus aid for the project.
In Nashville, both CVB president Butch Spyridon and mayor Karl Dean applauded the respective 2013 and 2014 bookings by the Academy of General Dentistry and Association of School Administrators contingent on the proposed $595 million Music City Center. But money for the building's construction has yet to be sourced, and Dean is reportedly looking at tourism taxes. The city council must give approval, though it has green-lighted a taxable 1,800-acre downtown tourism zone.
In the west, San Diego is mulling a $1 billion plan to double the size of its convention center to 1 million sf and build a bayfront hotel, but mayor Jerry Sanders said no money from the city's general fund can go toward their development. Sanders has created a 17-member task force to determine whether there is demand for a bigger facility as well as financing options. The current center is said to be operating at capacity.
Back east, a 3-percent hotel tax is funding Wilmington's $60 million convention center, and a 157-room hotel is being privately developed. Construction began over a year ago, and while money already has been earmarked, there remains pressure to steer the funds elsewhere to aid the city's economy.
Development of a convention hotel for the Palm Beach County Convention Center has encountered setbacks. The credit freeze forced the project's developer to seek an additional $10 million subsidy from the county that was refused. Meanwhile, an FBI investigation revealed that county commissioners took bribes from the developer, which has led to one resignation and nixed for good a development deal struck in 2004.
The project is likely on hold until the dismal economic conditions improve, so a hotel now remains years away.
Originally published Feb. 16, 2009