Convention Center Follies. Heywood T. Sanders
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and the city’s high hotel rates…. because New York is a highly attractive international city in a region with a shortage of exhibition space.”64
The 2004 PWC report provided the formal, seemingly expert, economic justification for New York’s political leaders to endorse and press for the Javits expansion. In a joint press release on March 25, 2004, Mayor Michael Bloomberg and Governor George Pataki announced “a historic plan to transform and modernize New York City’s convention industry,” including a major expansion of the Javits, a new adjacent 1,500-room hotel, and a 75,000-seat stadium. Their vision and rhetoric were grandiose: “This is a smart City-State investment in New York’s future and one that leverages private investment to grow our convention industry and help realize New York’s Olympic dreams.” Their claims that “the expansion will have a profound impact on New York’s economy, increasing the existing $97 million annual tax revenue generated by Javits by an additional $53 million and 415,000 hotel nights a year…. [and] will create 10,830 additional jobs” were drawn directly and exactly from the 2004 PriceWaterhouseCoopers report. The seemingly expert consultant study provided ample political cover and economic rationale.
While the analysis by PriceWaterhouseCoopers provided a public justification for the expansion, the report itself had some serious deficiencies. Rob Canton of PWC argued for the success of the expanded center, despite being “mindful of the fact that overall national demand for exhibit and meeting space and overall attendance at trade shows and conventions had declined since 2001,” because “the Center did not suffer substantial declines in business or attendance during this period and that it continues to turn away business because of lack of available dates.”65
The issue of the convention and tradeshow attendance at the Javits—historic, current, and likely future—was crucial to PWC’s forecasts of spending, public revenue, and job creation. It was also the vital link in understanding the reasonableness of the consultant’s forecasts. But in 182 pages of the January 2004 PWC report, analysis of attendance occupied less than a single page, largely devoted to a bar chart of attendance from 1993 to 2002. The report noted that “convention/trade show attendance is estimated to have ranged from 1.0 million to 1.4 million from 1993 to 2002 and to have averaged 1.2 million annually.”66
In the accompanying chart (Table 8), the attendance figures for 1999, 2000, 2001, and 2002 are all shown as “estimated.” The PWC consultants offered no explanation for their use of “estimated” values for three or four years earlier. The actual figures, distributed by NYC & Company, the city’s visitor bureau, in its monthly “Barometer,” would suggest significant change in the Javits’s performance. The Javits saw 1,277,800 convention and tradeshow attendees in 1999, and 1,253,400 in 2000. Yet attendance fell to 977,600 in 2001, followed by 931,850 in 2002, and 955,150 in 2003.67
Canton would surely have had the exact attendance numbers for 2001 and 2002 available for his analysis in late 2003. Indeed, he should have had at least partial year-to-date numbers through September or October. Those numbers would have shown a substantial and persistent drop in convention attendance. Yet that drop does not really appear in the report. Instead, it estimates a “No Expansion” scenario of 1,113,000 annual convention and tradeshow attendees, and a projected “Expansion” total of 1,532,000.
The proposed Javits expansion would first grow in size, as new Governor Eliot Spitzer and Senator Charles Schumer embraced a plan for a more ambitious expansion with a total cost on the order of $3 to $4 billion. Then, by 2008, it would shrink back to a renovation accompanied by a quite modest expansion—all that could be financed with the $700 million in hotel fee revenue bonds sold in November 2005. And as the expansion shrank, so did the Javits’s actual convention and tradeshow attendance, to 817,200 in 2007, 708,200 in 2008, and then 533,700 in 2012.68
From the first announcement of the Javits expansion plan in March 2004 to the adoption of the final “General Project Plan” in March 2009, the PWC forecasts were repeated over and over by public officials and in public documents. They were treated as “real” in the project’s environmental impact statement. Indeed, the final 2009 project plan neatly repeated the PWC “No Expansion” figure of 1,113,000 annual convention and tradeshow attendees at 73 events, despite the fact that the center hosted just 67 conventions and tradeshows in 2008, with an attendance of 708,200.69
There were no independent studies or reports in the New York City media of the remarkably parallel studies with similar estimates of economic impact completed by PriceWaterhouseCoopers for other cities at about the same time. Cleveland garnered a PWC report on a new center in 2001 with the promise of $181.7 million in annual direct spending, followed by another PWC analysis in April 2005 that forecast a larger center would boost annual convention attendance from 25,000 to 175,000, generating direct spending of $213,584,000 annually in Cleveland and Cuyahoga County.
Canton and the PriceWaterhouseCoopers consultants produced a market demand and economic analysis of a planned expansion of the Indiana Convention Center in early 2004, offering the assessment that the center’s “past success is largely explained by the strong destination package it offers (numerous proximate and connected hotels, dining, and attractions)” and promising that a bigger center would bring 18 to 23 additional conventions and tradeshows, attracting at least 108,000 new attendees and producing $108,810,000 in new visitor spending each year.70
PriceWaterhouseCoopers, like many of the other convention center consultants, appeared fully capable of finding that more space would generate more convention business for a wide array of cities. The absence of any real questioning or re-analysis of its forecasts was, in the case of New York’s Javits Center, a product of the local political environment. With a “deal” set by both Mayor Bloomberg and Governor Pataki, there was no organized or formal opposition. Local hotel owners had long pressed for a bigger Javits. With their commitment to a new hotel tax to pay a part of the cost (albeit less than the mayor had hoped), and a reliance on a broad array of seemingly “free” state and city funds, including $350 million from the Battery Park City Authority, the expansion (at least in its initial form and cost) did not appear to come at a particularly high price, or at the cost of another public investment project. And with the location of the Javits already fixed, there was no extended debate or conflict—as there had been at the Javits’s birth—over site and locational benefit.71
From Civic Improvement to Economic Boon
The arguments for public convention center investment and the case for development have changed dramatically over the past few decades. Where cities once promoted civic memorials or public amenities, convention facilities have come to be portrayed as economic boons, sources of new dollars from visitors and spurs to private investment and development. Those arguments—and the media coverage built around them—have come to be defined by the studies and analyses of ostensibly independent, “expert” consultants.
Armed with forecasts that a new or larger convention center will surely yield a predictable stream of new attendees and visitors, the public is told this investment will produce millions of dollars in “economic impact” and a substantial boost in new local jobs. Repeated by public officials and the local media, the promise of dollars and jobs appears to be absolutely assured. Only rarely are the foundations of those consultant conclusions fully investigated, the assumptions subjected to serious review and questioning. Nor are the consultants pressed to demonstrate the success or accuracy of their predictions, or held to account for their work.
The authority and expertise behind consultant conclusions has made convention center projects more appealing to local officials, and far easier to “sell” to the general public. But the political path to convention center development has also been reshaped from the years when Los Angeles or Cleveland voters would regularly say “no” to center investment. By the 1990s, it had simply become unnecessary to ask them.
Chapter 2
Paying for the Box
The grand public convention halls of the 1920s and 1930s—Cleveland’s Public Auditorium, Kansas City’s Municipal Auditorium, St. Louis’s Kiel Auditorium—were built by city governments