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Expansions Proceed Under Tough Scrutiny

Sandi Cain
, News Editor
October 1, 2014



Gone are the days when most convention center proposals were swiftly swept from concept to reality. In today’s post-recession world, critics come from every corner of the woodwork and potential financial backers squirm at the phrase “city referendum.”

Nevertheless, many succeed while others postpone and some retreat to the drawing board. It often depends on the mood of the voters, local economic health and the attitude of local officials. Financing may be the most common hurdle to overcome today, with even willing investors sometimes fearful of a local backlash or smaller ROI than anticipated.

Financing issues impacted many of the proposed venues originally listed in the March edition of Trade Show Executive’s Pardon Our Dust report. A proposal to expand the Baltimore Convention Center was shelved due to budget concerns. Sacramento, CA and Buffalo, NY both seem divided in debates over expected return on investment, and a proposed expansion of the Fargodome in North Dakota faced a funding challenge that sent it back to a committee for study last year. No update was available at press time.

Other projects that have dropped off the Pardon Our Dust charts include the Albany Capital Center, which reduced the amount of prime exhibit space below the report’s threshold of 50,000 square feet (sf), American Royal Center/Kemper Arena in Kansas City, MO, and Myrtle Beach Stadium, which have changed their plans to focus on sporting events. Other cities including Lansing, MI; Memphis, TN; Nashville, TN; and Savannah, GA also have abandoned plans for expansion.

Closest to Shovel-Ready?

These centers on our newest update appear to be the best positioned to start construction:

Miami Beach Convention Center, which went back to the drawing board last year after voters ousted city council members who favored a since-cancelled plan. Bids for the new version were due in September; construction is expected to start in 2015 and end in 2018.

Boise Centre, whose Greater Boise Auditorium District said it would proceed with the first phase that will add 30,000 sf, regardless of whether or not a district judge decides to allow a bond measure to proceed. 

Executive Director Pat Rice said Idaho has two ways to get bonds approved:  by judicial validation or from a vote of the people. The district is still deciding which to pursue if the district judge does not allow the bond, but Rice isn’t confident a vote would help. “The general citizenry doesn’t understand our industry, and that’s our fault, I think,” he said.

Rice said the district has enough cash to complete the first phase without a bond. “We’ll build the ballroom and lease the meeting room from the builder until the rest (of the cash) is raised,” he said. Renovation of existing facilities, however, might be delayed until 2020 without a bond.

Greenville Convention Center in North Carolina, which was gifted a land parcel, in May, got the green light to award a design/build contract and issue special obligation revenue bonds for the expansion and renovation.

Kentucky International Convention Center, Louisville, in April, cobbled together a package that would raise $56 million from the sale of bonds backed by the Louisville Convention and Visitors Bureau, the city, and the Kentucky State Fair Board. In May, the governor signed a bill to allow the use of transient occupancy taxes to pay off the bonds.

Warriors San Francisco Sports & Entertainment Center signed a deal in April to buy private land in the Mission Bay district. Though the new arena/convention facilities are not expected to open before 2018, the team’s land deal puts them a step ahead of other projects.

Making Progress but Not Quite There

Fort Worth Convention Center will temporarily take a back seat to a new arena set for a vote in November. If that gets approved, it will be built before any convention center expansion, according to Kirk Slaughter, director of public facilities and events. He said Fort Worth officials recently approved a creative “financing zone” of transient occupancy taxes (TOT) from hotels to fund the arena. Using a 2013 tax baseline, the state will deposit the district’s portion of special assessments, TOT and possibly alcohol taxes in a special account to fund the convention center expansion.

“Getting a new arena opened first makes sense,” Slaughter said. “At the end of the day, what’s important . . . is that taxes generated by big events save every household about $800 (in taxes) each year,” he added.

Las Vegas Convention Center’s expansion that would create a Global Business District connecting the convention center with central transportation and the World Trade Center took a step forward behind the scenes this year. A Memorandum of Understanding between the Las Vegas Convention and Visitors Authority and Consumer Electronics Association with the World Trade Center Las Vegas and World Trade Center Mexico City helped solidify the city’s international business status — a key to the expanded district.

Washington State Convention Center in Seattle purchased some of the land it needs for the expansion and expects to start construction by 2017. 

Maybe Next Decade?

MDM Group/Miami World Center, a mixed-use development in downtown Miami, will not add convention facilities until Phase 2 of the massive project. But developers now face a federal lawsuit alleging that the current owner ousted a previous partner by fraudulent means. If the project proceeds, a privately financed Marriott Marquis World Convention Center Hotel is scheduled for five acres of the property.

Wisconsin Center, Milwaukee, in May received results of a nine-month study that recommended a mixed use complex and convention district with a convention center expansion for about $200 million. It was set for an early Summer vote. No update was available at press time.

Sacramento Convention Center faces divided opinions about if, how and where the center should be expanded. Some think it’s a drain on local tax coffers; others say more space would equal more revenue. Officials have said they are not in a rush to expand.

Financial Hiccups

Even when some cities think a financing mechanism is in place, hiccups occur. Several recent setbacks happened in California.

Anaheim’s plans for expansion were delayed a few months by a legal challenge to the bond financing approved by city council early this year. In July, city council approved a new financing plan that would keep the capital improvement investment from the general fund at present levels by refinancing some current bonds.

San Diego chose not to appeal a 9th District Court ruling that said its hotel-funded financing plan was not legal without a public vote. New plans for expansion have not been announced.

In Los Angeles, the agreement between the city and AEG to include a football stadium with convention center renovation plans will expire in October with no football team in sight. In May, the Economic Development Commission approved $600,000 in bonds to pursue proposals for a remodel of the convention center minus the expansion. If the new bonds go forward, ground-breaking still might not occur before 2018.

Reach Kirk Slaughter at (817) 392-2501 or; Pat Rice at (208) 489-3650 or