When city-owned convention centers struggle, the politicians hire consultants.
When those consultants issue a report, they either say the convention center is too small or it doesn’t have enough hotel rooms nearby.
When the politicians read the report, they devote even more public money toward the proposed solution.
When it doesn’t work, they hire a consultant.
Tacoma’s very nice and relatively new convention center is struggling to bring in events, especially events that sell hotel rooms. As such, it doesn’t have enough revenue to cover the debt incurred to build it in 2004.
News Tribune reporter C.R. Roberts outlined on April 29 how the city diverted money from a parking fund that was supposed to be a backup source of money for convention center operations. He also reported that consultant CS&L International was hired to assess the facility’s operations and finances.
CS&L’s evaluation pointed to a lack of focus in marketing, a lack of money for the visitors bureau and the ill effect of staffing cuts. But it then returned to the choice between the center’s size and the lack of nearby hotels and selected the lack of nearby hotels.
“The City and other potential stakeholders should continue to consider ways to incentivize new hotel development within walking distance to the (convention center),” the consultant concluded.
“Incentivize” is consultant-speak for “subsidize” – that is, using some source of public money to cover much of the cost of a new hotel. That’s what Portland is considering. That’s what Boston is considering. That’s what Washington, D.C., is doing. That’s what dozens of cities big and small have done or are considering doing.
Seattle has seen attendance fall below where it was before its last expansion. Its solution? Expand again.
What is just as likely is that Tacoma’s problems began years ago. The initial feasibility study by C.H. Johnson persuaded a previous council to double the size of a proposed convention center and commit $85 million in public money.
Don’t blame the economy; the facility wasn’t meeting projections even before the Great Recession. Between 2006 and 2008, actual hotel nights attributed to the convention center were 42 percent, 47 percent and 38 percent of projections.
The center’s underperformance, then, isn’t the fault of the facility or the economy or the marketing or the hotels. The problem lies with a feasibility study that should have reported that the project as designed wasn’t feasible.
Tacoma isn’t alone. There is too much convention space in the nation and the region for a declining number of conventions.
“You are in an enormously competitive market when even the places you would think of as prime convention destinations are suffering,” said Heywood Sanders, a University of Texas-San Antonio professor and author of the upcoming book “Convention Center Follies.”
“The consultants have fed this with their predictions of perpetual growth and how you have to get bigger to compete,” Sanders said.
They always say yes because city officials who have big dreams don’t hire consultants with a reputation for saying, “You’ve got to be kidding.”
The CS&L study mentions the competition from other convention centers in the state – all subsidized like Tacoma’s by state and local taxpayers. But those were either open or being built when the initial feasibility study was done.
“Everyone is cannibalizing everyone else,” Sanders said.
His advice? Compete for the conventions and shows that tend to move among the cities in the region. Figure out a way to pay off the debt with what you have. Don’t fall for advice that you can build your way out of the problem.
“There is a market reality here, and you can’t change that,” he firstname.lastname@example.org