Arizona Republic columnist Robert Robb has weighed in on Phoenix’s big investment for both a massive convention center expansion and a city-owned (that’s right, city-owned) hotel, following a Republic story that the 1,000-room Sheraton has lost $28 million since 2008. Noting that Phoenix city officials had assured that the city-owned hotel “would pay for its operations and servicing the debt to build it. No sweat,” Robb reports that the hotel’s ongoing losses, paid back from the city’s Sports Facilities Taxes, may now affect the city’s ability to refurbish or expand the Suns’ basketball arena.
The big Sheraton has been a fiscal disaster — last year’s occupancy rate came to an impressive 51.2% — because the convention center has genuinely flopped. Consultants from Ernst & Young and later HVS had forecast that the hotel would be humming along at 69% occupancy, based on the assumption that the bigger convention center would draw 375,000 convention delegates a year. Last year, the center actually saw 118,332. Oops.
This is Sacramento’s fate. Watch and learn, KJ.
This is listed under ‘Milwaukee Bucks’
It’s not a problem (other than the Fiscal Disaster part). Money will be poured into the Suns arena, after which a tax increase will be proposed to save all the desperately needed programs that will face the chopping block because – oops – we spent the money on the arena. Because hey it’s for the children, etc.
It’s not actually possible to be too cynical about subsidized sports venues in Phoenix, Glendale, Mesa, or anyplace in Arizona in general. Even if your cynicism goes to 11, it’s not enough.
Category corrected, sorry about that.
It’s probably hard wired in human brains, and needs to be studied by psychologists, but you can guarantee it that when people are elected to public office, they think they are magically transformed into competent businesspersons. They become instant experts in budgeting, insurance, finance, personnel, marketing, you name it, and have no compunction in their abilities to run stadiums, arenas, convention centers, hotels, and in my local case, a golf course. Just like this hotel in Phoenix, my community has lost its shirt for years on the golf course.
But thanks Neil for exposing all these boondoggles. They’re good for a laugh or two on government folly.
tim clark: It’s all fun and games until your city goes bankrupt.