I will point out that the Greens, partially in conjuction with Alice Green's Mayoral campaign, put out a very detailed position paper two years ago that documented how every convention center built in recent years has lost money, with only two even being able to cover debt payments.
It is disappointing that groups that know that the Convention Center is a bad deal - ARISE, WFP and Citizen Action - focus on negotiating a "Community benefit agreement" to get some jobs for Albany residents rather than just trying to stop the project.
In any case, here is the Green's analysis from two years ago. The numbers of course have only gotten worse since then.
Green Party Analysis of the Albany Convention Center Plan
I. Introduction
Over the last decade 50 cities across America have engaged in the expansion or construction of new convention centers, and at least 42 are planning on doing the same thing over the coming decade.[1] Albany and the State of New York plan to be in the group of 42; Mayor Jennings, Speaker Silver, Majority Leader Bruno, Governor Pataki, Senator Breslin, Assemblyman Jack McEneny - often political enemies - have united on the cause of building a new convention center here in the capital of the Empire State. A bipartisan effort indeed, and it will supposedly create 1,740 new jobs and generate more than $3.2 billion in total spending in the regional economy over the next thirty years.[2]
The plan is, of course, too good to be true. Not only will it cost $185 million dollars of tax money (to be paid for with a $231 million bond issuance), including a publicly subsidized hotel[3], but also it is a poor use of space in a downtown area already crowded with buildings that are only used during the 9-5 workday. Convention center proponents also rely on a supposedly vibrant convention center market to make their case for potential revenues, but "the overall convention marketplace is declining in a manner that suggests that a recovery or turnaround is unlikely to yield much increased business for any given community... currently, overall attendance at the 200 largest tradeshow events languishes at 1993 levels."[4]
Essentially, the market for conventions has declined to the point where it is no better than it was twelve years ago. In addition, the Task Force selected to examine the viability of a convention center included no representatives from community groups or labor unions who might be affected by said proposal; the membership was limited to members of local development groups, law firms, the entertainment industry.[5]
II. Convention Center Market Decline
The first part of understanding why the convention center proposal is wrong for Albany is examining the economic problems other cities have had with new or expanded convention centers, and the decline in the market for convention center space itself.
The national market for convention centers has been in decline for over a decade, a fact that has been lost on city officials looking for quick-fix large public works projects to revitalize downtown areas. Although use of exhibit space peaked in 2000 before declining, the height of actual convention attendance (5.1 million nationally) was reached in 1996 and has dropped steadily until today, when convention attendance levels match those of 1993 (4 million).[6] Rosy figures painted by convention center proponents across the country mostly stem from faulty methodology by only examining what Tradeshow Week, the magazine chronicling the 200 largest trade shows, offers. Further examination of the 200 largest events in 2002 and 2003 saw a drop in space usage of 4.2%[7] and an attendance drop of 3.2%[8] (Tradeshow Week had only reported a modest 0.7% drop in space usage, and a 3.4% increase in attendees).
Examining regional convention centers, as opposed to the largest ones in Las Vegas, Chicago, and New York, does not lead us to any brighter conclusions. A city like Baltimore, which recently (1997) expanded its convention center to 300,000 sq. ft. - very close to the proposed size of Albany's, has never reached its target peak yearly attendance of 330,000. It is, in fact, finding it "so hard to lure business that city officials are now searching for ways to make the facility more attractive, including spending millions in public money to build a subsidized hotel next door."[9]
Indianapolis expanded its stock of downtown hotel rooms by 3000[10] from the mid-80s until today, but has still seen convention attendance plummet by 33% from 1999-2003. Dallas and Denver did not fair any better; Dallas lost 41.2% of its convention room nights from 1999-2004 and Denver saw a 39% attendance decline in the same period. Clearly this is not a heartening sign for those who believe a convention center in downtown Albany will promote job grown and return the initial public investment at a profit.
All of this is occurring as industries find a decreasing use for conventions and a glut of convention center space has come on the market. Industry consolidation in prime convention areas - tools, hardware, technology - and better communication technologies has decreased the need for large expositions in various sectors. As fewer industries need large conventions, cities have added an additional 20.8 million square feet of space from 1990-2005.[11]
Larger convention centers have expanded to host simultaneous small and medium-sized shows, leaving the regional markets to fight for what is left. According to a Brookings Institute study, the "end result is a kind of `churning' where meeting planners try out new venues and locations, responding to incentives and opportunities and the possibilities offered by a far larger number of centers with potential space. And if a new city or venue fails to support the level of attendance sought, there are always other alternatives."[12]
III. Money Issues
The executive summary of the Albany Convention Center plan calls for a $231 million bond issuance to cover the cost of building the convention center. This assumes that the business generated by the convention center will enable the city to pay not only its operating costs but also pay off the bonds. Yet there are dire warnings for Albany in the problems other cities have faced with convention center revenue. The outlook for the Boston facility is so "dire... that it will need a $12-15 million annual public subsidy in its first few years of operation and may not reach its full booking potential for a decade"[13] and this is directly from Boston officials.
What is even more shocking is that "almost every convention center in the country operates at a loss, not even counting construction costs or debt... in 2001 only two or three convention centers in major markets consistently generate enough operating income to pay operating expenses."[14] Of course, Albany officials have declined to publicize that fact very widely. The convention center that is supposed to generate $3.2 billion in regional revenues over 30 years will only see that happen if the predictions for usage are correct, and given the statistics presented, the convention center may instead turn out to be an enormous drain on city resources that would be better spent elsewhere.
IV. Proposal Advocates and Impact
An examination of the individuals selected by Mayor Jennings to sit on the Task Force for the convention center proposal shows members of local development groups, law firms, the entertainment industry and a distinct lack of and community members or labor unions who should have a say in city development, and a distinct lack of any referendum from city residents on such a large expenditure of money and use of prime real estate. Task Force members are composed of exactly those local elite who would have an interest in developing the land and using public monies to do so. Therefore it is no surprise that the Task Force recommended building a convention center, like so many other task forces around the country.
Local governments are "land-based growth coalitions. They seek to intensify land use... a local power structure is at its core an aggregate of land-based interests that profit from increasingly intensive use of land."[15] The building of the convention center would be profitable to development interests who would gain plum contracts to build the center and hotel, and financial interests that would back the $231 million bond issuance. Residents of the city, especially working class ones, would find little to no benefit from the use of downtown land as a convention center, and would be shouldered with the burden of paying back the bonds if the center likely does not perform up to its assumed potential, leaving little revenue for smaller but necessary projects revitalizing the rest of the city, including decaying areas like Arbor Hill, the South End, or Central Avenue.
As proponents of smart-growth, the Green Party also flatly denounces the convention center plan. Large convention centers create enormous and wasteful building facades that do little to encourage usage of the city areas they inhabit, instead existing as a negative space that is not in use for most of the day or year. A far better plan for downtown and the city would see the $231 million invested in affordable housing, shops, clean, light industries in the areas proposed for the convention center, and the same throughout Albany. Better public transportation on a regional level would encourage smaller, but steadier increases in the economic health of the region as people find it more convenient to visit Albany (Schenectady, or Troy) and its downtown area.
V. Conclusions
The Albany Green Party summarily rejects the Albany Convention Center plan based on the given arguments and evidence. Convention center usage reached its peak a decade ago in attendance and six years ago in space usage. The glut on the market of regional and large convention center space has led to cutthroat competition between cities and the absolute negation of any profits the center may have generated. Task Force proposals are overly optimistic and miss the potential for disaster if the city cannot pay back its bond issuance via expected revenues from the convention center.
In addition, the plan directly benefits a few elite businesspeople at the expense of the rest of the city. Residents who live in a city that lacks a living minimum wage, has areas of intense poverty and areas lacking quality, affordable housing, poor regional transportation, and a downtown area that is mostly dead after the workday will only be hurt more by the construction of the convention center. The project is not even directed via a democratically elected board, but one appointed by the mayor, the state, and the county. It is therefore apparent that a defeat for the convention center plan would mean a victory for grassroots democratic action.
--------------------------------------------------------------------------------
[1] P. 19, 20; http://www.brookings.edu/metro/pubs/20050117_conventioncenters.pdf
[2] P. 1; http://www.albanyny.org/pdfs/final_report_executive_summary.pdf
[3] A bond issuance means that the city of Albany will take out money guaranteed to be paid back by the city over the course of several years or decades. A publicly subsidized hotel means that the city will pay for the running of the hotel.
[4] P. 1; http://www.brookings.edu/metro/pubs/20050117_conventioncenters.pdf
[5] P. 1; http://www.albanyny.org/pdfs/final_report_executive_summary.pdf
[6] P.4-5; http://www.brookings.edu/metro/pubs/20050117_conventioncenters.pdf
[7] 64.65 million sq. ft. to 61.9 million sq. ft., ibid, p.6
[8] 4.2 million to 4.1 million, ibid., p.6
[9] p.1; http://www.manhattan-institute.org/cfml/printable.cfm?=1335
[10] 2064 in 1986 to 5130 in 2003; p. 13 http://www.brookings.edu/metro/pubs/20050117_conventioncenters.pdf
[11] p. 18; http://www.brookings.edu/metro/pubs/20050117_conventioncenters.pdf
[12] p. 21; http://www.brookings.edu/metro/pubs/20050117_conventioncenters.pdf
[13] p. 1 http://www.manhattan-institute.org/cfml/printable.cfm?=1335
[14] P. 23; http://www.brookings.edu/metro/pubs/20050117_conventioncenters.pdf
[15] William Domhoff, Who Rules America? http://sociology.ucsc.edu/whorulesamerica/power/local.html
