A CASE AGAINST CONVENTION CENTER EXPANSION

by Michael Monks 
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As the state legislature considers many items for funding during a serious budget crunch, Northern Kentucky has two potential projects at the top of its wish list: expansion of the Northern Kentucky Convention Center and the development of Gateway College's Urban Campus, both within blocks of each other in Covington. The recent outpouring of support for keeping the city's House District 65 wholly intact or at least preventing part of it from becoming part of a Campbell County district was generally to keep a solid voice for Covington in Frankfort, and specifically to battle for funding for Gateway. In this lean economy, NKY's wish list will likely only be half fulfilled, if at all. 

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The conversation then turns to which wish is most important for the future vitality of Covington: an expanded convention center or a new urban campus of higher learning? A case could be made for each, but City Journal recently editorialized that cities are squandering money on expanded convention facilities citing examples from Boston to Baltimore to Dallas and more: 

Instead, many are spending hundreds of millions of dollars to expand convention centers and open yet more dazzling hotels, arguing that whatever convention business remains will flow to the places with the fanciest amenities. If this dubious rationale proves wrong and the facilities fail—it’s telling that the private sector won’t build them on its own—taxpayers will wind up on the hook, as usual.
The convention business has been waning for years. Back in 2007, before the current economic slowdown, a report from Destination Marketing Association International was already calling it a “buyer’s market.” It has only worsened since. In 2010, conventions and meetings drew just 86 million attendees, down from 126 million ten years earlier. Meantime, available convention space has steadily increased to 70 million square feet, up from 40 million 20 years ago.

While this right-leaning publication presents no data on Northern Kentucky, it has been said publicly that our convention center has had to turn away larger gatherings because of its small size. The NKY Convention Center may be unique in this regard, but City Journal has taken aim at convention center expansions as far back as 2004:

But today, after a generation of frenetic building and with much better data available, the inescapable conclusion is that few of these new projects are worth doing. Boston, for instance, spent nearly $230 million to renovate its existing convention center in the 1980s, and the result was barely a blip upward in its hotel occupancy, says political scientist Heywood Sanders of the University of Texas at San Antonio, the foremost expert on publicly built convention centers. Yet Boston officials brushed that experience aside and went ahead and built its brand-new—and already troubled—center anyway. Similarly, a vast expansion of Chicago’s McCormick Place, costing $1 billion in the mid-1990s, didn’t prevent a drop in that city’s share of major conventions. Meanwhile, Atlanta’s huge expansion of its convention space has done little for the city’s struggling downtown: a major retail project there, Atlanta Underground, has struggled to survive even as the city’s convention business has grown. “The payoff is not there,” says Sanders. 

But local politicians have typically argued that their projects will work better than those in other cities—on scant evidence for such conclusions. New York officials, for instance, justify expanding Javits on the grounds that the city is already a major trade-show destination and therefore won’t suffer like other cities from significant new competition. Yet Chicago was an even bigger force in the business when it expanded McCormick, but still saw its market share decline. And even if a bigger Javits were to attract some new business, it is highly unlikely to generate enough spin-off activity to justify its enormous public cost (including the eventual cost overruns likely with such a gigantic public project).

Gateway's proposed urban campus would also require a significant investment of public money, but as this debate continues, it is important to consider which project would present the larger civic return, which project would be the biggest boon to Downtown revitalization efforts, and which project benefits the most people.
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