Thursday, August 4, 2016

Does Baltimore Need a bigger Convention Center?

Rarely does the Baltimore Area Conventions and Visitors Association book a convention as large as the meeting of the Urban League with its reportedly 10,000 participants that are in Baltimore right now. A good time to speak about social and racial justice in our cities. For some this is a good time to talk about a convention center expansion again. (See BBJ article).

Talking about the need of the convention center to be bigger and better is a perennial favorite of politicians, no matter whether they are Democrats or Republicans. And they can be sure that the Greater Baltimore Committee and the Downtown Partnership will support a fancier center.
Space-frame architecture on steroids: Baltimore Convention Center

Most of the time, though, the behemoth, that according the promo on the website, is "nestled into downtown" sits empty or underutilized and underperforms against all previous projections.
The deficit doubled between 2001 and 2004, peaking at $5.5 million, according to state budget documents. This year, it is expected to be $5 million and to rise to $5.4 million next year. (Abell Report 2005)

The BCC is a convention and exhibition hall owned and operated by the City of Baltimore. It consists of two parts: the original Center which opened in 1979 and an expansion, which was completed in 1997. Together both parts offer about 300,000 SF of exhibit space, a 36,700 SF ballroom and 85,000 SF of meeting space in 50 breakout rooms. Both the BCC’s debt service and ongoing operating deficit are jointly funded by the City and the MSA.
Exhibit halls: accessible by tractor trailer

When the Convention Center continued to perform badly after the expansion in '97 it was blamed on the lack of a "convention hotel". Mayor Schmoke then famously declared the Wyndham (now Marriott) in Harbor East to be the convention center hotel hotel and lavished tax breaks on it that still haven't expired, the fact that the hotel was almost a mile down Pratt Street notwithstanding.

The center continued to underperform and the hotel issue continued to be batted around until the city, even more famously, engaged in hotel development itself and built the Hilton which now also under-performs and creates annual losses. The 757-room, City-owned Hilton Baltimore hotel opened in 2008. It is connected to the BCC by an enclosed skywalk bridge which somehow didn't help either.
Cavernous interiors: Mostly empty but always heated or cooled

For two decades, American cities have used public dollars to build convention center space—far more than demand warranted. The result has been a gigantic nationwide surplus of empty meeting facilities, struggling convention centers, and vacant hotel rooms (see “The Convention Center Shell Game,” Spring 2004). Given the glut, you’d think that cities would stop. Instead, many are spending hundreds of millions of dollars to expand convention centers and open yet more dazzling hotels, arguing that whatever convention business remains will flow to the places with the fanciest amenities. If this dubious rationale proves wrong and the facilities fail—it’s telling that the private sector won’t build them on its own—taxpayers will wind up on the hook, as usual.(City Journal, Winter 2012)
What would be  more logical, then, than seeing how one can add another money losing feature? The late Whiting Turner CEO Willard Hackermann suggested to make a new arena and hotel an integral part of the center and enlarge it that way. Governor O'Malley liked that idea and a study was completed showing such plans in 2012.
More Space than Attendance (Brookings Study)

The current arena has long been a thorn in the side of those who think that Baltimore doesn't have enough facilities that lose money. The arena, while old and called obsolete by some, actually makes money.

In fact, it is proof, that Baltimore can compete well with a facility that is paid off and doesn't even try to compete with the major league cities such as Philadelphia and Washington, both cities have first class arenas and convention centers and a national pull that Baltimore can't match even in its wildest dreams being less than half the size of Philly, not having the Liberty Bell and also no White House. Besides, the nation is totally overbuilt with convention centers. Many studies show that even well booked convention centers are questionable as municipal investments.
Baltimore's very own Hilton hotel: Money loser

One never knows what goes on in SRB's mind, but there she goes and authorizes a million dollar study with $313,000 coming from City funds to invetsigate once again expansion of the Baltimore Convention Center (BBJ). The same Mayor that was just scraping dollar from important budgest in order to keep the rec centers open.

All those who think that the City shouldn't offer the requested TIF for Port Covington need to take a look at the City's obsession of throwing good money at the futile attempt of making Baltimore a class A convention city.

If this were the only choice, I'd much rather bet on Kevin Plank to succeed than on a bigger convention center to be good economic development.

Klaus Philipsen, FAIA

"Space available", Brookings Study on Convention Centers, 2005




Klaus Philipsen, FAIA