The two conflicting Atlanta plans pointed up the political problem of siting and building a new “convention auditorium.” Built as part of a slum clearance and urban renewal project east of the downtown core, it might remove a “menace.” As part of the “air rights” over the gulch on the opposite side of the core, it promised to act as “magnet” for new investment and private development. But Atlanta could not necessarily afford one convention center, let alone two.
The solution for Atlanta, as it would be for any number of other cities, was a combination of multiple public projects in a single deal that could serve the distinct parts of the downtown core. Many of the east side “slums” described in the 1952 plan were in fact wiped out through the federal urban renewal program, providing a site for that “convention auditorium,” the Atlanta Civic Center. The railroad gulch would receive its own public project a few years later, in the form of a new coliseum/arena, promoted by one of the city’s major developers as the kind of magnet that could support his planned private development.
Atlanta’s voters first turned down the Civic Center bond proposal in 1962. A smaller scheme was approved the following year. But when local business leaders sought to construct an Intercontinental Congress Center in the late 1960s, they avoided city government and its voters. They turned instead to the Georgia state legislature. When the new Atlanta Coliseum was planned and developed in the late 1960s, it too was financed in a fashion that avoided any public vote.
With the fundamental deals for convention center building structured first within the local business community, only emerging into public view when set, and financing arrangements arranged to avoid or limit any direct public vote, the politics of center development has been effectively reshaped since the 1960s and 1970s. The final element in sustaining the convention center boom has been the set of promises—of visitor activity, spending, job creation, and economic impact—that have singularly privileged center development as a public investment.
Economic Impact
The fiscal reconstruction of convention center finance and politics has been accompanied by a parallel shift in the rhetoric of purpose and promise. The convention halls and civic centers of the first half of the twentieth century were commonly justified as amenities for the broad urban community, capable of hosting large community events as well as conventions, and accommodating large local gatherings as well as the occasional national political convention or major event. In 1923, St. Louis voters approved a $5 million bond issue for a “Municipal Auditorium and Community Center.” Cleveland voters overwhelmingly approved the bonds for a “Public Auditorium” in 1916. Los Angeles civic and business leaders promoted a new “War Memorial Auditorium” in 1920 as a “living monument” to the city’s servicemen and “large enough for any indoor spectacle.”40
Beginning in the years after World War II, cities began to promote the idea of luring major national convention and tradeshow events, often accompanied by the imperative to lure national political conventions. By the 1980s and 1990s, the rhetoric had come to center on the notion of “economic impact.” The flow of new out-of-town visitors to the conventions, accommodated by a new or larger venue, would yield a growing stream of spending, visitor dollars that would be multiplied throughout the local economy. Spending by hotel guests would be re-spent by hotel employees; wages of restaurant workers and retail employees supported by new visitors would be spent on other local goods and services, magnifying the economic impact.
The increased volume of visitor spending, over a three- or four-day average stay, would in turn boost local tax revenues. Hotel and restaurant spending would produce new hotel occupancy and sales tax revenue, and increased visitor business would ultimately support new development around the convention center, development that would produce new property tax revenues. By the early 1980s, arguments that a new or expanded center would produce economic benefits were a staple of consultant studies, with forecast amounts stated with striking specificity.
Convention centers have thus come to be justified as “loss leaders.” Local convention and visitors bureaus (CVBs) and center promoters acknowledge that almost every convention center in the U.S. operates at a loss, not even counting the annual cost in debt service. Centers simply do not take in revenues equal to the cost of operation. In fiscal 2011, the operating loss of Philadelphia’s Pennsylvania Convention Center was $18.1 million. Washington’s Walter Washington Convention Center lost $20.7 million from operations, in addition to $34.9 million annual debt service and $14.2 million for marketing. Orlando’s Orange County Convention Center saw an operating loss of $14 million.
But the regular argument of convention center backers is that these persistent operating losses, in addition to the cost of building a center, are more than counterbalanced by the “essential economic activity that [drives] new tax revenues, economic benefit and employment from other services and establishments like hotels, restaurants and retail stores.”41
The argument for convention centers as economic drivers has come to be structured around the analyses and predictions of consultants. Where once a local government research bureau or chamber of commerce might provide an estimate of future convention center business, by the 1980s and 1990s the public rhetoric of center investment revolved around formal forecasts of visitor volume, convention delegate spending, and multiplied economic impact.
These consultant forecasts, whether by hotel consulting firms such as PKF or major national accounting firms like PriceWaterhouse (and its predecessor Laventhol & Horwath), Coopers & Lybrand, and KPMG, were presented as both more expert and far more precise than their predecessors. Laventhol’s promotional materials circa 1989 boasted of its computer-based “predictive attendance model” and told local officials that its “estimates of economic impact…. can be used to gain community support and interest.” The language of public officials and newspaper headlines changed as well, describing the benefits of convention center development in terms of an exact number of annual new spending dollars and a seemingly guaranteed flow of new local tax revenues. Thus the discourse surrounding convention center investment was altered, from choosing one public investment against another in a broad package of bond proposals to a focus on the evident and certain rewards a new or bigger center would bring.42
For Philadelphians, the front page of the Philadelphia Inquirer in January 1983 brought the headline that “Big Civic Center Is a Must, Study Says.” The article reported on the conclusion of the PKF study that a new downtown convention center would bring some $700 million a year in convention delegate spending, yielding the city $1 billion in new tax revenues over thirty years. A second major Inquirer story two weeks later added the forecast that a new center would create as many as 5,000 new jobs. And with the boom in visitor spending and jobs would come a larger if less measurable benefit. A large new convention facility would reshape the city’s image from a “drab” location to a “progressive” and “forward thinking” community.43
The PKF analysis did include some alternatives, including a smaller center or renovation of the existing Civic Center. But the firm emphasized a large new convention center in the Center City area as its “first recommendation.”
Armed with the conclusions from the PKF consultant report described by its reporters, the Inquirer’s editorial writers chimed in, repeating the consultant claims of delegate spending, economic impact, job creation, and tax revenues and calling on the city to “move ahead with design and construction of a new and modern convention complex in Center City…. It should do so with enthusiasm and resolve.” Deeming the project of the “highest priority,” the stirring editorial concluded, “The need now is to get on with it—with vigor and dispatch.”44
For the Inquirer’s editorialists, there was little