As KDKA Radio’s Marty Griffin quipped the other day:
“They must be high.”
He was referring to news first reported by the Post-Gazette that there’s a new plan (this one called “massive”) to build a hotel attached to the David L. Lawrence Convention Center in downtown Pittsburgh.
Ah, yes, it’s déjà vu all over again.
As the P-G’s Mark Belko reports it:
“Loews Hotels & Company is pitching the idea of building a hotel featuring at least 500 rooms on the Downtown side of the convention center, according to sources.
“The project, estimated at more than $400 million, would utilize two parking lots at Penn Avenue and 10th Street that have long been reserved for such a development.
“New York City-based Loews, a subsidiary of Loews Corporation, has approached Pittsburgh-Allegheny County Sports & Exhibition Authority and city officials about the idea in hopes of drumming up support for it.”
Uh-oh! Sounds like Loews is looking for public subsidies. And as Belko further reports:
“It would not be surprising if Loews also sought public aid for its plan, particularly given the current economic climate where a combination of high interest rates and high construction costs have stymied many projects.”
But public subsidies in past iterations of this hotel convention center push (in one case, a requested $50 million in 2010) were a non-starter. And they should be again.
After all, hundreds of hotel rooms have been added over the years – privately. Why in the world should taxpayers subsidize a new and wholly unneeded hotel (there’s already a 660-room Westin on the site and it’s connected to the David L. with a short skywalk) that will directly compete with all those hundreds of privately added rooms?
By the way, KDKA’s Griffin notes that Downtown’s current hotel occupancy rate is about 40 percent. And more hotel rooms are required? Don’t think so.
More than a decade ago, in 2011 (in Policy Brief Vol. 11, No. 43), the Allegheny Institute’s Frank Gamrat and Jake Haulk panned the convention center hotel plan du jour:
“Before the talk of subsidy goes any further, it is incumbent on the advocates to share the data on current room night usage attributable to convention goers and on the annual pattern of room night demand.
“Building a hotel to accommodate a couple of large conventions that creates a glut of rooms for the rest of the year is a non-starter. And the claim that a lot more conventions generating room demand would come has to be more than just a claim.
“It is not enough to say build it and they will come. Promises and claims are easy. Taxpayers are jaded and skeptical about the promised payoffs from the use of their money on politicians’ favorite schemes,” the think tank scholars wrote at the time.
And that’s even more important in a climate in which post-pandemic Pittsburgh is, for lack of a better phrase, sucking for air in so many key metrics.
Hotels don’t create demand. Demand creates the need for new hotels. And if that demand truly exists, there’s profit to be turned by private investors.
Colin McNickle is communications and marketing director at the Allegheny Institute for Public Policy (cmcnickle@alleghenyinstitute.org).
