Inner City Convention Centers: Worth the Public Subsidies?

Above: San Diego Mayor Jerry Sanders discusses the importance of the San Diego Convention Center to the community

Our home city of Boson is particularly vibrant this week with about 6,000 extra bodies moving in to attend the three-day National Urban League Annual Conference.  The conference, focused on economic empowerment and entitled Jobs Rebuild America, is being hosted at the Boston Convention and Exhibition Center.  While urban political and business leaders are discussing how to grow jobs in underserved communities, the $3.3 million conference is giving a boost to the Boston economy. 

Conferences are a strong economic driver for inner cities, drawing visitors to spend money on local hospitality, food, and shopping outlets.  Landing a national conference in your city can mean millions of dollars dropped into the local economic pot within a few days.  The Boston economy received a big boost earlier this year when Boston hosted the gaming convention PAX East.  Nearly 70,000 conventioneers (a PAX record) dressed up, played games, and pumped $18 million into the economy.     

San Diego, CA also recently gathered an eclectically dressed bunch at July’s Comic-Con.  The comic convention has been drawing around 130,000 attendees in recent years, close to the San Diego Convention Center’s capacity.

Boston and San Diego both see the importance of growing convention attendance in their cities and are currently investing in convention centers.  San Diego is in Phase III of its convention center expansion, growing its exhibit hall by 222,0000 SF, meeting space by 101,000 SF, and ballrooms by 80,000 SF.  The investment is justified because since opening in 1989, the San Diego Convention Center has contributed more than $18 billion in regional economic impact, generated $360 million in tax revenues and supports 12,500 jobs.

In a similar plan to grow convention attendance in Boston, a state panel voted last month to pump $2 billion in to the Boston Convention and Exhibition Center in order to double its size and add a headquarter hotel. Though nearly all 27 members on the panel were in favor of the expansion, the project has not gone without criticism.

Michael Widmer, President of the Massachusetts Taxypayers Foundation, stated that he is “yet to be persuaded that the benefits of this project merit the large public expenditures that would be required.” To his point, it has been predicted that the hotel alone might require upwards of $200 million in public subsidies. Adding to fears, Boston’s Hynes Convention Center realized a 26% lower attendance last year than in 2008.

This leaves economic developers asking: Do these projects really merit such public subsidies?

We find it undeniable that conventions are a driver of local economic activity. By some estimates, Boston's convention center expansion could result in an additional $222 million for the local economy, attract upwards of 25 new events per year, and create more than 7,000 new construction jobs in this inner city area.

Ultimately, the fate of Boston’s expanded convention center will depend on the will of state and local legislators. But in the mean time, to the 6,000 attendees in town this week, we say: Welcome!

BY Mary Duggan on July 28th, 2011

TAGS: