Super-sized Convention Centers: The Boondoggles that Refuse to Die

Today, Boston Globe reporter Casey Ross has an article about a proposed expansion of the Boston Convention and Exhibition Center. I’m quoted bashing the rosy predictions that hired-gun real estate analysts frequently use to convince local politicians to pour millions and millions of taxpayer dollars into these projects:

“These consultants always say there is this untapped potential out there,’’ said Marc Scribner, an analyst with the Competitive Enterprise Institute. “But they are consistently wrong.’’

Ross mentions the new Walter E. Washington Convention Center, which has been underperforming for years. With D.C. media now focused on the development of the old Washington Convention Center site and, to a lesser degree, the new hotel for the current convention center, it is important to note a few inconvenient truths surrounding the Walter E. Washington Convention Center:

  1. D.C. spent $834 million to open the new convention center in 2003. From 1990-97, the old convention center generated attendance that resulted in attendees using 337,640 hotel room nights on average per year.
  2. The old convention center was 380,000 square feet. The new convention center is 725,000 square feet.
  3. When the new convention center opened, it generated conference attendance that resulted in attendees using 315,307 hotel room nights.
  4. According to the Washington Convention Center Authority’s latest annual report available on its website, the Walter E. Washington Convention Center’s attendees in FY 2009 used just 280,478 hotel room nights.

So, since the Walter E. Washington Convention Center opened eight years ago, convention center space increased by nearly 90 percent yet hotel room nights used by attendees is only about 82 percent of the 1990-97 annual use averaged by the old Washington Convention Center. There is little doubt that the $834 million could have been far better spent. But this is hardly an exception to the rule; this is essentially the rule! The downtown convention business, thanks to more competition from airport convention facilities and innovation in telecommunications services, is hardly the business it once was. The problem is overbuilt existing facilities and ever-declining demand, not too-small convention centers in urban cores in need of more publicly financed expansion.

Read Ross’s full article here, and you’ll come away with a far better picture of reality than the one possessed by most city officials.