project plan neatly repeated the PWC “No Expansion” figure of 1,113,000 annual convention and tradeshow attendees at 73 events, despite the fact that the center hosted just 67 conventions and tradeshows in 2008, with an attendance of 708,200.69
There were no independent studies or reports in the New York City media of the remarkably parallel studies with similar estimates of economic impact completed by PriceWaterhouseCoopers for other cities at about the same time. Cleveland garnered a PWC report on a new center in 2001 with the promise of $181.7 million in annual direct spending, followed by another PWC analysis in April 2005 that forecast a larger center would boost annual convention attendance from 25,000 to 175,000, generating direct spending of $213,584,000 annually in Cleveland and Cuyahoga County.
Canton and the PriceWaterhouseCoopers consultants produced a market demand and economic analysis of a planned expansion of the Indiana Convention Center in early 2004, offering the assessment that the center’s “past success is largely explained by the strong destination package it offers (numerous proximate and connected hotels, dining, and attractions)” and promising that a bigger center would bring 18 to 23 additional conventions and tradeshows, attracting at least 108,000 new attendees and producing $108,810,000 in new visitor spending each year.70
PriceWaterhouseCoopers, like many of the other convention center consultants, appeared fully capable of finding that more space would generate more convention business for a wide array of cities. The absence of any real questioning or re-analysis of its forecasts was, in the case of New York’s Javits Center, a product of the local political environment. With a “deal” set by both Mayor Bloomberg and Governor Pataki, there was no organized or formal opposition. Local hotel owners had long pressed for a bigger Javits. With their commitment to a new hotel tax to pay a part of the cost (albeit less than the mayor had hoped), and a reliance on a broad array of seemingly “free” state and city funds, including $350 million from the Battery Park City Authority, the expansion (at least in its initial form and cost) did not appear to come at a particularly high price, or at the cost of another public investment project. And with the location of the Javits already fixed, there was no extended debate or conflict—as there had been at the Javits’s birth—over site and locational benefit.71
From Civic Improvement to Economic Boon
The arguments for public convention center investment and the case for development have changed dramatically over the past few decades. Where cities once promoted civic memorials or public amenities, convention facilities have come to be portrayed as economic boons, sources of new dollars from visitors and spurs to private investment and development. Those arguments—and the media coverage built around them—have come to be defined by the studies and analyses of ostensibly independent, “expert” consultants.
Armed with forecasts that a new or larger convention center will surely yield a predictable stream of new attendees and visitors, the public is told this investment will produce millions of dollars in “economic impact” and a substantial boost in new local jobs. Repeated by public officials and the local media, the promise of dollars and jobs appears to be absolutely assured. Only rarely are the foundations of those consultant conclusions fully investigated, the assumptions subjected to serious review and questioning. Nor are the consultants pressed to demonstrate the success or accuracy of their predictions, or held to account for their work.
The authority and expertise behind consultant conclusions has made convention center projects more appealing to local officials, and far easier to “sell” to the general public. But the political path to convention center development has also been reshaped from the years when Los Angeles or Cleveland voters would regularly say “no” to center investment. By the 1990s, it had simply become unnecessary to ask them.
Chapter 2
Paying for the Box
The grand public convention halls of the 1920s and 1930s—Cleveland’s Public Auditorium, Kansas City’s Municipal Auditorium, St. Louis’s Kiel Auditorium—were built by city governments and financed by city governments with general obligation debt. Those debts were backed by the “full faith and credit” of a city government, effectively the full stock of property and other tax revenues available to the city. And under state laws in these states and the vast majority of others, general obligation debt had to be approved by a majority of the local electorate.
Cleveland’s Public Auditorium was approved by the city’s voters in 1916 and finally completed in 1922. But when voters were presented with a scheme for financing and developing a new convention center in 1957 and 1958, they turned it down both times. Finally, in 1960, a smaller, restructured convention center scheme won voter approval. That center was supposed to vault Cleveland to the front rank of convention cities. As of 1981, it was still ninth largest in the United States.
When, after some twenty years of use, the center required improvements and refurbishing, in 1985 Mayor George Voinovich chose to invest some $28 million without asking the voters to decide. The city issued notes, largely financed by the Greater Cleveland Convention and Visitors Bureau through the bureau’s receipt of countywide hotel taxes, that avoided both a public vote and the limits of the city’s fiscal circumstances.
Cleveland’s business and political leaders repeatedly sought to develop an entirely new downtown convention center, beginning in the late 1990s. They ultimately chose a scheme in 2007 that neatly avoided the city government and its ongoing financial problems. Instead, the initiative for the convention center and a “Medical Mart” trade mart came from the overlying Cuyahoga County government. And in financing the $450 million project, the county’s three commissioners (by a vote of two to one) avoided the need for any public vote by committing the revenues from a special countywide quarter-cent sales tax.
Cleveland’s fiscal evolution neatly illustrates the changes over the twentieth century in convention finance. Where city governments once dominated development of public assembly facilities, the public role has increasingly shifted to other government entities, a diverse group ranging from county governments, as in Cleveland, to public authorities (such as the New Orleans Morial Convention Center Authority), regional entities (like the Greater Richmond Convention Center Authority), and state governments. And where the initiative to finance and build a convention facility once commonly required a majority vote of the local electorate, the new financing and organizational arrangements now regularly avoid the need for voter review and approval.
The restructuring of convention center finance away from direct voter approval was not happenstance. It reflected the increasing willingness of the national bond market to accept revenue bonds—debt issues backed solely by a limited tax or revenue source, such as a hotel or car rental—and the imagination of investment bankers seeking to serve local officials. But far more important, it was a choice, imitated and repeated across scores of cities, that served the political and development ends of both elected officials and local business leaders, as the changed social and political environment of major cities after 1970 made voter approval increasingly unlikely.
Kansas City’s business leaders had long viewed their community as a natural locale for major national conventions, as it is a major Midwest rail hub. The city’s Convention Bureau regularly boasted dozens of major meetings, including some 24 national conventions, 54 regional meetings, and 36 state conventions in fiscal year 1929. The city had erected a new convention hall in 1900, just in time to host the Democratic National Convention. But by the 1920s this was increasingly viewed as outdated and too small. The minutes of the convention committee of the Chamber of Commerce said, “We are gradually being eliminated from consideration through the lack of two important civic facilities now possessed by virtually all of the larger cities in the country…. One is dining and meeting space in hotels … and the other is of course the lack of a convention hall with which to care for the larger gatherings.” In language that would be repeated
