concluded, “Bartle Hall’s meeting rooms are substandard in decor and technologically outdated, and its undersized ballroom is costing Kansas City lost convention business and tax dollars.” “You have to spend some money,” he added, telling a council committee, “Kansas City ranked near the bottom of several comparison lists of the nation’s top 25 convention cities and risked falling even further without a Bartle Hall upgrade.”41
Kaatz’s analysis provided the justification for yet another call for investment in improving and expanding Bartle. And just as with the first expansion effort, the $74 million price tag of the new ballroom and additional upgrades would be on the ballot as an increase in city hotel and restaurant taxes, requiring only a majority vote for approval. And rather than a broad program of public improvements, the tax increases were paired on the ballot with a proposal for a $35 million revenue bond issue, much of it earmarked for downtown improvements. According to the city’s economic development director, “When we can, we want to invest our dollars to create a catalytic effect, to leverage private investments and create market opportunities.”42
The November 2002 ballot gave the Bartle upgrade tax increase a 52.8 percent “yes” vote, the lowest margin since the two-thirds majority garnered by the original bond proposal in 1973. But by changing the fiscal and political structure of convention center finance, Kansas City’s business and political leaders had literally “reformed” the capacity for convention center investment. By 2002, the business community could reassuringly assert that “business travelers” would pay the higher hotel taxes, and that the burden of the increased restaurant tax, “adding a nickel to every $20 restaurant tab,” was comparatively mild. The result, just as promised in every previous vote, was that Kansas City would remain a competitive convention destination, fully capable of competing with every other major city and luring tens of thousands of new convention attendees to the city each year.
The shift to revenue bonds and a vote solely on increases in the hotel and restaurant taxes did not remove the need to work out deals and compromises, both with the city’s hospitality interests and with important voter blocs. But it eased the political problem of securing electoral support, while being manageable in an environment of local fiscal limits. Convention center and downtown backers could regularly assert that these taxes could only properly be used for boosting tourism. And they could reassuringly portray the convention center investment as one that would both boost visitor spending and secure the fortunes of downtown.
San Antonio
The fiscal and political reformation managed by Kansas City business leaders and elected officials was not unique. Faced with growing voter resistance to both increased taxes and downtown development projects, a broad array of other cities succeeded in creating new fiscal schemes that assured public dollars for expanded centers without a vote on long-term debt.
San Antonio’s first post-World War II convention center efforts began with the plan for clearing and rebuilding much of the fringe of downtown as the site for a world’s fair, Hemisfair ’68. The fair plans included a new “Community and Convention Center,” to be financed with city general obligation bonds. That in turn required a referendum vote, and the center proposal with a $10.9 million price tag was packaged as part of a broader seven-item, $30 million bond program, including funds for parks, libraries, and street improvements, in January 1964.
Less than a decade after the new center opened in 1968, city officials called for an expansion. This time there was no attempt to put it on the ballot for voter approval. And there would be no further votes on center expansion or financing in future years. The expanded and renamed Henry B. Gonzalez Convention Center opened in 1977, financed by the revenues from the city-owned City Public Service gas and electric utility.
By early 1983, Mayor Henry Cisneros was promoting the idea of yet another expansion, arguing that it would allow for larger conventions and draw more visitors to the city. Even before it commissioned a feasibility study of the expansion, the city council committed to an increase in the hotel-motel tax. That hotel tax increase would pay for the “certificates of obligation” issued to pay for the expansion, neatly avoiding the need for a public vote on a bond issue proposal.43
The expansion of the HBG Convention Center was completed in late 1986, bringing it to 240,000 square feet of exhibit space. Yet once again, only a few years passed before downtown business interests and local hoteliers were pressing for another major expansion. Arguing that the center “is at absolute full capacity during months of high traffic,” consulting firm Gladstone Associates recommended in November 1990 adding up to 230,000 square feet of exhibit space, effectively doubling the center’s size. The consultants recommended that the expansion be paid for with an increase in the citywide hotel tax, then at 7 percent.44
City leaders secured approval for the 2 percent “Expansion Hotel Occupancy Tax” from the state legislature in 1993, and three years later sold the bonds to finance the $215 million expansion effort. By using the dedicated hotel tax, San Antonio could tap the revenues generated by some 23,000 city hotel rooms, regardless of whether they were occupied by convention attendees or by families visiting the Alamo and Riverwalk. And as the city and its stock of hotel rooms grew, the 2 percent tax provided a stream of funds committed to the expansion—and future expansions—almost exclusively.45
The HBG Center expansion was completed in early 2001. But even before the larger center had demonstrated its success (or failure) in luring convention business, the city government was planning yet another expansion. City finance officials told bond rating agencies in 2006 of their plans, well before actually receiving a consultant market or feasibility study in July 2008. With a committed stream of hotel tax revenues, the city had effectively created a permanent convention center expansion annuity, one that operated perpetually without voter review. Unfortunately, even that annuity was subject to the vagaries of local hotel occupancy and the national economy, reducing the city’s stream of hotel tax revenues. It was not until the summer of 2012 that the city was in a position to arrange financing for yet another center expansion and renovation effort, this time with a $325 million price tag, fully employing the 2 percent expansion tax with the added backing of a pledge of “any lawfully available resources of the City.”46
After the success of the initial voter-approved bond issue in 1964, San Antonio managed a fiscal regime that has supported successive center expansions and renovations, and all without recourse to the voters. And the city appears fully capable, fiscally and politically, of continuing major convention center investment for decades to come, without the risk or need for deal-making attendant to a public vote.
Cincinnati
A new auditorium or convention hall had long been a goal for Cincinnati business and political leaders through the first half of the twentieth century. Two successive bond proposals for a new auditorium were defeated by the voters, in 1939 and 1940. The city’s 1948 Metropolitan Master Plan included an “Exposition Hall-Arena,” along with a merchandise mart and new stadium, as part of a proposed civic center on the city’s redeveloped riverfront. But as city business leaders increasingly focused on the decline of the downtown core during the 1950s, the location and priority of a new convention center proved a point of some contention. City planners continued to envision the convention facility and auditorium as the anchors of a new civic center complex on the riverfront. Democratic city council member John Gilligan had his own proposal, for a new convention hall anchoring the west side of the downtown core area, a location embraced by the City Planning Commission in a December 1957 land use plan.47
For Gilligan, recalling the events after more than 30 years, a broad package of downtown investments, combined with federal urban renewal aid, offered the ultimate political solution—“It became evident that attempting to do one project at a time wasn’t going to get anywhere; projects and plans began to get inclusive…. [We] had to put together packages that all the downtown interests saw some benefit to their situation, were not being left
