The talk about trying to get a convention center hotel built has resurfaced–again. Presumably developers are interested, and, as a bonus, we are told, the subsidy requests are for less than had been previously.
“Everybody’s looking for a subsidy” according to the chairman of the Authority that owns the facility. We cannot imagine why–almost every major development in Pittsburgh in the last two decades at least has been the recipient of some combination of Federal, state, or local money as part of the package.
Four years ago we wrote that “If costs are expected to exceed the benefits and are thus keeping private developers away, why should the taxpayers be asked to absorb that loss?”
Here are three options, in order of preference, that should be presented by local officials:
1. The hotel does not get built with any public subsidy (Federal, state, or local) as the point of the public building the convention center was to spur private development including hotels. If holding out this long has lessened the amount of the ask then waiting longer might eliminate it altogether.
2. The money from gaming that was originally set aside for the convention center hotel and then shifted to the County for purposes of economic development (the GEDF) gets shifted back to the hotel project for whatever is remaining and the GEDF is effectively shuttered. This would require action by the General Assembly.
3. The County and the City sit with state officials and examine all streams of money coming from legalized slots gaming and identify which stream they would like to redirect to the hotel project. This would also require General Assembly action.
Options 2 and 3 present officials with the concept of an opportunity cost, as they will have to decide the value of subsidizing the hotel by seeing what the best alternative use would be. They can choose to take money from the airport, the hockey arena, paying off old debts, or directly out of operating budgets if they like.
