Enthusiastically, Baltimore’s mayor and Maryland’s governor thanked developer Willard Hackerman for his unusual offer Wednesday night at the Greater Baltimore Committee’s annual meeting: he says he’ll lead a private investor group that would foot the bill for a new $500 million, 18,500-seat downtown arena – so long as it comes as part of a publicly-funded $400 million convention center expansion.
But amid the warm response to the 92-year-old Hackerman’s apparent largesse – the GBC crowd applauded it heartily, as did Baltimore Sun editorial writers the next day – there’s something missing from the discussion.
Call it a reality check. Attendance at Baltimore’s current convention center has trended downward over the past six years. There were 12 percent fewer attendees in 2010 than in 2005 – and 19.7 percent fewer in 2009 than in 2006.
Amid a glut of convention center space across the U.S., questions have increasingly been raised in recent years, even from the industry itself, about how much extra business new centers generate.
Promoting convention centers as economic development, some public policy experts argue, is a tenuous strategy whose time has come and gone. They note that several cities, including Washington, D.C., and Philadelphia, have seen disappointing attendance and bookings, even after building big, new taxpayer-funded convention centers.
“It’s very clear that cities the size of Baltimore that expand their convention centers don’t get any significant new business as a result,” said Heywood Sanders, a professor of public administration at the University of Texas at San Antonio.
That’s the conclusion Sanders reached in a 2005 Brookings Institution study he wrote: “Space Available: the Realities of Convention Centers as Economic Development Strategy.”
“The situation has gotten worse, if anything, since then,” Sanders said, in a telephone interview with The Brew. “Cities are still promising these things as economic engines that just never are realized.”
Sanders, who is expanding his study into a book (“I would really like to call it ‘Convention Center Follies’”), clearly keeps up on the issue.
Baltimore officials, meanwhile, say the recession accounts for muchof the slow-down and that the low numbers actually support their case. They argue that more conventioneers would come here, if only Baltimore weren’t losing business to other cities that have enlarged or replaced their convention centers.
“An expansion will allow us to layer groups in the building to accommodate more groups at any given time and target larger groups that would not fit in our current building,” said Tom Noonan, president and CEO of Visit Baltimore, which runs the Baltimore Convention Center.
Since 2005, Noonan said, “we’ve lost 709,182 room nights due to lack of available dates and inadequate space at the Center.” (These were emailed remarks, transmitted by director of public relations, Sara Hisamoto. Noonan is out of town on vacation.)
That logic is “a desperate double-down bet for revitalization,” in the words of Baltimore City Paper’ writer Edward Ericson Jr., just about the only local writer to raise the issue recently.
Sanders’ study found that convention center attendance had peaked by the late 90s and a look at the data from Baltimore suggest it may have topped out here, too.
What If You Build It and They Don’t Come?
The Sage Policy Group publishes data on convention and trade show attendance as part of their “Tourism Barometer.” Here’s their breakdown for Baltimore over the last six years:
2005 – 335,097
2006 – 376,436
2007 – 335,131
2008 – 419,110
2009 – 302,494
2010 – 295,075
(Hisamoto confirmed the numbers, though she said Visit Baltimore generally publishes its data for fiscal years, rather than calendar years, and includes in their totals auto shows and other events more geared more to locals than out-of-town visitors. Thus, for fiscal 2010, for example, their number is 389,299.)
The story is similar elsewhere. Atlanta’s convention center, for example, had 697,000 visitors in 2008, 548,000 in 2009, and just 473,000 in 2010.
Convention Space Arms Race
If Baltimore were to sink hundreds of millions into a convention center, they would have to compete with an array of A-List cities that are thinking of doing the same thing, among them San Diego, San Francisco, Los Angeles, Boston, Miami and Seattle.
More than 17 million square feet of new exhibit space have been added nationwide in the last decade, according to The Philadelphia Inquirer, in an article about the sluggish debut this spring of Philadelphia’s new $786 million convention center.
“The total number of conventioneers now booked for the next five years is lower than the number of conventioneers drawn to the center in the last five,” according to the Inquirer, quoting from a recent study of the new Pennsylvania Convention Center. Philadelphia tourism officials predict that those numbers will improve as the economy recovers and as the center is able to market its advantages over other rival cities.
If it’s an arms race with Philly and everyone else, Baltimore officials argue, the city needs to be in it. Baltimore’s convention center “is the oldest and smallest among the city’s convention competitors on the East Coast,” Noonan told The Daily Record.
The current convention center has 313,000 square feet of exhibition and meeting space. “In 1996, when an expansion was added, it was listed as the 28th largest convention facility in the U.S., a figure that is now in the low 70s, GBC President and CEO Donald C. Fry told The Record.
The current proposal would more than double the space in the existing building, resulting in a convention center with 760,000 square feet of ballroom, meeting and exhibit space, according to preliminary plans prepared by architects Ayers Saint Gross.
It’s the kind of argument that prompted a Boston columnist to write a withering “I told you so” piece about the current proposal to double the size of the Boston Convention and Exhibition Center, following a decade in which the old center generated only half of its projected hotel room nights.
“I give it about a decade,” boston.com’s Jeff Jacoby remembered wrting in 1999, as a new convention center was rising on the South Boston Waterfront. “And then the droning will resume: If only we had a bigger convention center.”
The industry itself has acknowledged the challenges it faces in an era of shrinking government budgets and rollbacks of many city services.
A 2007 “best practices” report commissioned for the Destination Marketing Association International and the International Association of Assembly Managers notes that “many convention centers developed in the last three decades were viewed by municipal ownership as ‘loss’ leaders contributing essential economic activity that drove new tax revenues, economic benefit and employment.”
But now local governments expect convention centers to cover costs “in the face of shrinking ‘margins’ due to the current ‘buyers market’.”
Why, despite indications that the latest wave of convention centers are under-used and challenged as never before, do city leaders persist in building them? Those who think it’s spreading civic benefit are deceived and those who know better are duplicitous, Sanders argues: “It’s really all about development.”
With any convention center expansion to be paid for through state and city bonds, taxpayers will have a chance to debate the merits of the project, as the Maryland Stadium Authority conducts a study of the project, requested by Gov. Martin O’Malley and Mayor Stephanie Rawlings-Blake. That report is due at the end of the year.