Your Opinion: City must seek safeguards on building project
Sunday, November 10, 2013
The mayor and City Council seem to want to build a conference center.
Before committing taxpayer money to this project they should read an article from the Wall Street Journal, “Have We Got a Convention Center to Sell You!” (Dec. 31, 2011). You can find the article by googling “convention center wall street journal.”
The article says there is a nationwide glut of “empty meeting facilities, struggling convention halls and vacant hotel rooms.”
In 2010 the convention business had 86 million attendees. That was down from 126 million in 2000. In the same period, available convention space expanded from 40 million square feet to 70 million square feet.
This is a crowded market and the City Council should not be betting taxpayer money that they can succeed in it. They would be bucking the odds.
Tax-subsidized convention centers are often authorized by politicians who have been lobbied hard by developers, lawyers and financiers. These people will make money, but taxpayers will get the bill.
If the City Council authorizes the building of a conference center they will not only be risking any tax revenues that are pledged up front but may incur future liabilities if the conference center business is not as successful as the developers hope.
If the council goes ahead they should at least obtain from the developer a contractual obligation to indemnify and hold the city harmless from any future claims beyond the initially pledged tax revenues. And the developer should post a substantial bond to guarantee performance on this obligation.