Thursday, August 24, 2006
Convention Center White Elephant Struggles Again
In the battle of two regional assets over tax money, it looks like the Convention Center—a perpetual loser in covering its costs—has won over the Mellon Arena.
Since the great salvation of legalized gambling is going to fund both the operating deficit at the center and provide a revenue stream from whomever wins the casino license, all seemed to be fine and dandy with both facilities. But since the timeline for getting gambling up and running has been delayed and the Governor does not seem keen on giving the center money this coming year, the County Executive and the Deputy Mayor have instructed the Sports and Exhibition Authority, which owns both structures, to petition the RAD board for $2 million for the center instead of $1 million for the arena.
It is telling that the convention center, larger and more glitzy than the former center, still cannot attract sufficient business to cover its costs and close the operating deficit. As we have previously noted, the supply of convention space has increased while convention demand has plummeted.
The money from the County hotel tax should have been enough to cover the deficits, but a lot of that was committed to getting the center built. After a proposed car rental tax failed, the option of gaming was plugged in to fill the void. That the Executive insists the action is “temporary” to get the center “through 2007 and maybe 2008” shows that we should not expect an uptick in business at the center for it to cover costs.
Recurring deficits at the center and local officials scrounging around for money was not the rosy picture painted by boosters who wanted the center. But it has become reality.
Since the great salvation of legalized gambling is going to fund both the operating deficit at the center and provide a revenue stream from whomever wins the casino license, all seemed to be fine and dandy with both facilities. But since the timeline for getting gambling up and running has been delayed and the Governor does not seem keen on giving the center money this coming year, the County Executive and the Deputy Mayor have instructed the Sports and Exhibition Authority, which owns both structures, to petition the RAD board for $2 million for the center instead of $1 million for the arena.
It is telling that the convention center, larger and more glitzy than the former center, still cannot attract sufficient business to cover its costs and close the operating deficit. As we have previously noted, the supply of convention space has increased while convention demand has plummeted.
The money from the County hotel tax should have been enough to cover the deficits, but a lot of that was committed to getting the center built. After a proposed car rental tax failed, the option of gaming was plugged in to fill the void. That the Executive insists the action is “temporary” to get the center “through 2007 and maybe 2008” shows that we should not expect an uptick in business at the center for it to cover costs.
Recurring deficits at the center and local officials scrounging around for money was not the rosy picture painted by boosters who wanted the center. But it has become reality.
