Talk about wearing rose-colored glasses, complete with built-in blinders.
According to the big boosters at the Metropolitan Convention and Visitors Bureau, everything is just peachy-keen with Richmond’s expanded convention center.
A recent story in the Richmond Times-Dispatch (full version not available online, only this very brief overview) would have you believe that the $165 million expansion of the Convention Center — which razed parts of historic Jackson Ward in a quest to join every other neighboring urban community from D.C. to Norfolk in building a state-of-the-art downtown meeting place — is finally a raging success. A record-breaking success, in fact:
Conventions and meetings this year should bring nearly 138,000 people to the region, which will generate more than $72 million in local sales… The meetings also should generate about 104,748 room nights in local hotels.
Sounds great, right?
But as this 2005 report by Heywood T. Sanders of the University of Texas reminds us, these so-called precedent-setting numbers are nowhere near what Richmond boosters projected when they pushed — and I do mean PUSHED — the idea of expanding the center through increased taxes:
Three successive consultant studies, in 1990, 1995, and October 1999, made the case for tripling the size of the Richmond Convention Center, financing it through a metropolitan area wide hotel tax. The argument was that the benefits of the increased attendance at the larger center, in the form of a greatly increased volume of convention attendees and their hotel use, would flow to hotels in suburban counties as well as the city.
In a 1995 study, the consultant projected that two to three years after opening, an expanded center would attract 208,000 annual attendees who would use a total of 416,000 hotel room nights.
A subsequent projection by the consultant in late 1999 was that the expanded center (with a $165 million price tag) would bring 140,000 new hotel room nights of business to the metro area.
Seen from this vantage point, the convention center’s raging success doesn’t seem quite so impressive, does it? The figures are still considerably lower than what the original consultants projected would be happening two years ago — and the total number of hotel visits is even less than the number of additional nights that the paid prognosticators claimed would occur.
As we’ve learned on these pages, consultants studies are often wish lists — pay-to-play forecasts based on what their booster clients want to hear rather than anything resembling reality.
For an analogy, let’s try this one: It’s a little like a highly-paid pro baseball player who bats .150 and then calls his next .200 season a “record-breaking year.” While the city’s 2007 hotel occupancy rate of 65.2 percent was indeed near the national average, there is little direct evidence that this figure has anything to do with the performance of the convention center — and even less to suggest that 2008 will be a better year (in fact, as even the unquestioning RTD report admits, in its newsprint version only, a downturn in convention attendance is expected nationally). There is just as much evidence on hand that shows local hotels did a better — read: average — job of filling hotel rooms last year because of the residual effects of the 400th Anniversary of Jamestown, the increase in entertainment options downtown and other factors.
You would think that the Times-Dispatch would want to cite these early justifications in their report, if only to compare and contrast what taxpayers were promised and what they actually got. Instead, it simply regurgitates the spin generated by the Visitor’s Bureau (we know the newspaper remembers the 1990’s — the RTD must be the only daily in the nation still fixated on impeaching Bill Clinton in the era of George W. Bush).
The way convention center boosters use their attendance data to arrive at that impressive monetary figure of $72 million should also raise red flags to any journalist covering the story, especially when one considers that many of the largest events that get booked into Richmond’s convention center are regional trade shows, which traditionally attract one day visitors, most of them from the surrounding localities:
The estimate is based on average spending of $208 per person per day for 2 1/2 days, on lodging, food and beverage, sightseeing, transportation and other items.
Why $208 per person per day for 2 1/2 days? Why not $508 over three days? Or $1,008 over a week? And when you lump trade shows, one-day events and out-of-town conventions together, what in the hell becomes the standard?
Moreover, why not use this highly-suspect formula to determine a dollar amount for the economic stimulus that follows, say, Curated Culture’s First Fridays Artwalk — a grass-roots affair that required no $165 million dollar payout and brings people downtown on a regular basis, spending money — and dispense the Richmond city tax subsidies accordingly?
You know the answer to that one. It’s the same reason that Bill “Mr. Bosnia” Pantele is more concerned with the future of his developer pals in today’s paper than he is with the goals of the newly-proposed Downtown Plan, devised by a cross-section of citizens with an eye on protecting Richmond’s most coveted resources for decades to come (for more information on Tuesday’s public meeting on the Downtown Plan, click here). Them that has the Gold still make the rules in Richmond … and they also control the math.
But for an actual detailed, measured analysis of the convention center, and a summary of how the Big Boys have previously distorted attendance data, we turn not to the daily newspaper but to Style Weekly, and this excellent Feb. 2007 overview of projections and returns by Scott Bass [excerpts below]:
It’s 2007. So how about that vision of a vibrant East Broad Street bustling with pedestrians into the night? Perhaps you’re thinking of the popular First Fridays Artwalk, that one night a month when people pour into the streets to see the art galleries that are open late. Chances are those folks didn’t come piling out of the convention hall, skipping their last evening workshop for a little R&R. It’s difficult to link downtown life to the convention center, which fronts Broad Street with a giant concrete wall that stretches almost an entire city block.
The convention center is indeed adding events and drawing larger crowds every year. But those crowds have yet to translate into the economic prosperity that was supposed to accompany the new convention center. And when you consider that the city and surrounding localities send $11.5 million a year out of the region to pay off the center’s bondholders and that the city pays another $2 million to make up the center’s operating deficit, it’s possible — perhaps likely — that the convention center is actually a drain on the local economy.
“What could the city of Richmond buy for 14 million dollars a year? That becomes the central issue,” says Heywood T. Sanders, a public policy professor at the University of Texas at San Antonio who studies convention center economics. “What are you getting for what you are paying?”
The region benefits from getting [convention] events and people downtown, officials say, through admission taxes, sales taxes, meal taxes, parking revenue and the creation of additional jobs in the marketplace. Bottom line, they say: Visitors spend money here.
But how many people are actually visitors? Most of the attendees at the convention center’s events didn’t travel from outside the metro region, Sanders says, which translates to no significant new dollars being pumped into the regional tax base.
That’s one reason the industry breaks out conventions, trade shows and events when it reports attendance, singling out conventions and out-of-town trade shows as the true measure of new economic impact. Most people attending these events bring in money from outside the region.
When it comes to conventions, says John F. “Jack” Berry Jr., president and chief executive of the Richmond Metropolitan Convention & Visitors Bureau, the center had a record year in fiscal 2006, drawing 91,200 conventioneers. It was the first time in 12 years that the expanded convention hall beat traffic at the much smaller Richmond Centre, which reported 86,000 conventioneers in fiscal year 1994.
Berry, however, didn’t provide Style with statistics on trade shows.
Ah, but it seems our biggest wigs are finally learning their lesson about rosy, self-generated economic studies. They don’t even bother to commission them anymore, opting instead to just push — and I do mean PUSH — through their plans for expensive, citizen-funded boondoggles with the help of their political friends at City Hall without any projections or logical justifications whatsoever.
Case in point: The performing arts center, which is being planned by many of the same members of the Metro business community responsible for greenlighting the expanded convention center. The Virginia Performing Arts Foundation (oops, sorry, the “Centerstage Foundation”) have refused to produce the economic reports they once claimed existed; studies that would show Richmond taxpayers the longterm benefits of funding an expensive and exclusively-run arts center project that has little or no representation from local arts administrators.
The Foundation was unable to produce these studies during a “rushed” city council vote in September — does the “my dog ate my homework” excuse usually work with Mayor Wilder? Somehow it does with this project — and, according to my city councilman, they still haven’t brought them forward.
I guess you can see their point. Since it’s so easy to take care of these things in the smoky backroom, why bother leaving a detailed paper trail of promises you know you can’t keep, and that the daily newspaper won’t bother reminding taxpayers of anyway?
