the process currently underway to determine how—not whether—to expand the Boston Convention and Exhibition Center (BCEC) offers yet another example of the need for real public sector accountability.
Last year, the Massachusetts Convention Center Authority (MCCA) assembled the Convention Partnership to consider expanding what is already New England’s biggest building. Heavy with tourism industry officials and other potential beneficiaries, the group will soon recommend expansion and publicly owned or heavily subsidized hotel development that would cost more than $1 billion.
Quite a conclusion for a facility that has had less than half the impact projected in the 1997 feasibility study that persuaded lawmakers to build it.
A convention center’s economic impact is measured by the hotel business that events generate. The feasibility study projected the BCEC would generate 794,000 hotel room nights annually. In 2008 and 2009, it averaged 333,000.
In a wildly over-built convention market, even that is a testament to the job done by the convention center’s executive director, James Rooney, and his team. But it’s hardly an air-tight case for expansion.
At a Convention Partnership panel last summer, I was among those warning against a publicly owned convention hotel. St. Louis’s publicly owned hotel is in foreclosure. Bond ratings for similar hotels in Austin and Phoenix have been downgraded and Baltimore’s convention hotel rating has been revised downward.
The warnings did little to change the Convention Partnership’s inevitable conclusions, but it sure affected the messaging. Consultants subsequently described the Austin, Phoenix, and Baltimore hotels as “paying [their] debt service,” a classic example of putting lipstick on a pig.
The consultants are even defending the 1997 feasibility study. During my 2003-2004 tenure on the MCCA board of directors, eyes rolled at the mere mention of the report, which was conducted under an earlier regime.
But in a presentation to the Convention Partnership, the same consultants that prettied up the hotel pig noted that the BCEC projections were based on the assumption that 3,800 new hotel rooms would be developed nearby —failing to mention that the feasibility study said the facility’s very presence would generate development of those rooms.
The absence of hotel room nights from the consultants’ list of measures by which the BCEC has outperformed the feasibility study lays bare a dirty little secret: Many more convention attendees than the industry cares to admit are local and therefore don’t inject new money into the area economy.
Attempting to sidestep the room-night issue, Rooney said in September the BCEC’s economic impact can’t just be measured by “heads on beds.” He talked about the importance of “place-making,” a nebulous concept whose greatest value to expansionistas is that it isn’t measurable.
Rooney stepped up the “intangible benefits” campaign at the Partnership’s November meeting. An academic from England extolled business-focused events and cautioned against “grossly” underestimating their true economic value by measuring them based on what he called “tourism impacts.”
Without objective benchmarks, defining success is left to the convention consultants who never recommend against building or expanding and, in every case, dramatically overestimate performance.
The BCEC’s consultants also work for some of Boston’s biggest competitors. In 2003, they projected that expanding Philadelphia’s convention center would generate nearly 60 percent more hotel room nights. Post-expansion, room nights are down 40 percent.
Convention consultants also conduct the studies that prop up their earlier projections, like one that pegs the BCEC’s economic impact at an inflated $2.4 billion.
Despite the facts, expansion is likely this time around. But any plan should be accompanied by objective performance goals and the date by which they are to be achieved. That means a specific number of hotel room nights for the BCEC as well as occupancy rates and revenues for publicly owned or subsidized hotels.
Without objective accountability, it won’t be long before another stacked commission recommends expansion, citing a consultant-backed case that boils down to little more than “trust us.”
Charles Chieppo is the principal of Chieppo Strategies LLC, a public policy writing and advocacy firm.