Author: Heywood Sanders

If Georgia-funded parking deck isn’t for Falcons, don’t expect conventions to make it worthwhile

access_time personHeywood Sanders

The Atlanta Journal-Constitution reported recently on a $23 million proposal “tucked into Gov. Nathan Deal’s budget” for an expanded parking deck at the new Falcons stadium. “You wouldn’t build something like this parking deck for just eight games, Frank Poe, head of the Georgia World Congress Center Authority (owner of the World Congress Center, the Georgia Dome, and the new stadium) told the paper. “You build it because it’s sustainable for all the other businesses we have on our campus.” Maybe what Poe meant was “You build it and hope somebody actually turns up.”

Unfortunately for Atlanta, they haven’t been turning up much. For fiscal year 2014, the World Congress Center saw just 390,870 convention and trade show attendees. That’s down 17 percent from the previous year, and less than half the 807,000 attendees the center saw in 2007. It’s even far less convention business than the 601,000 attendees the center saw in 1989 — and that was two expansions ago. And if anyone thinks a big new parking garage is going to lure thousands to downtown Atlanta, the World Congress Center Authority has another trick to lure all that new business: a big new hotel.

The Authority just issued a Request for Proposals for a new 800- to 1,200-room hotel next door to the GWCC. According to the RFP, “The Authority envisions a new Hotel, if developed, to be an immediate enhancement to financial viability and dynamism of surrounding facilities, GWCC convention business, and to the City of Atlanta and the State of Georgia in general.” That would of course be the dynamism of a failing convention venue and a brand new $1.1 billion stadium, along with the booming convention business.

Add a P.S. on the work of the consultants: PriceWaterhouseCoopers produced a “market analysis” in October 1996 that forecast that after the latest center expansion, completed in 2002, the World Congress Center would see 1.4 to 1.5 million convention and tradeshow attendees a year. Didn’t quite work out that way.

 

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Phoenix’s convention center subsidies may limit ability to provide Suns arena subsidies

access_time personHeywood Sanders

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.

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Former NYC deputy mayor proposes $8b convention center in Queens, says it’s really free

access_time personHeywood Sanders

Grand schemes never seem to die. So former New York City deputy mayor Dan Doctoroff is back with a plan for scrapping Manhattan’s Jacob K Javits Convention Center and building an entirely new convention center in the middle of the Sunnyside Yards in Queens. Doctoroff’s op-ed pulled out the standard expansive booster rhetoric: “We are an undisputed leader in tourism, yet we lag badly in one important aspect: the huge convention and conference business.” And as for the Javits Center itself, well “It’s too small for many events and can’t compete with facilities in other cities.” And the price tag for a new center with double the space of the Javits, conveniently located in Queens? A mere $8 billion. Doctoroff offers the reassuring news that it would really be free: “But the beauty of this plan is that it can all be financed at no new net cost to taxpayers.” The fiscal magic would be performed by a sale of the existing Javits property, and all the new “incremental” tax revenues from the development boom around the Sunnyside Yards and the former Javits site.

The notion of a big new convention center in Queens isn’t new. Bob Yaro of the Regional Plan Association has been pushing the idea for years. And in his January 2012 “State of the State” address, Gov. Andrew Cuomo flogged a plan for the biggest convention center in the country to be by the Genting Organization gaming firm at Aqueduct Racetrack. For the politicos, NYC deserves something akin to the biggest.

Doctoroff (and Yaro and Cuomo before) neatly managed to avoid the realities of the convention business in New York and the rest of the country. The Javits has been hemorrhaging business for years, with convention and tradeshow attendance down from 1.25 million in 2000 to 817,100 in pre-recession 2007, and then just 595,300 last year. It’s been much the same at what is now the biggest center in the country, Chicago’s McCormick Place. There convention business has fallen from 1.44 million in 2000 to 863,773 last year. Even that has taken millions in public incentives and discounts to lure events, a necessity in an overbuilt buyer’s market.

The promise that a new center can be financed for free, with the tax revenues from adjacent development, has a familiar ring. When Mayor John Lindsay first promoted what would become the Javits in 1970, it was touted as the “first step in the redevelopment of the west midtown area,” part of a “transformation” of the West Side that would include a crosstown subway or “people mover” direct to the center, a “major new center” of high rise offices, and new hotels and restaurants, supported by the flood of new convention visitors. Didn’t quite work out that way.

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