Convention Center Follies. Heywood T. Sanders
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twenty five years earlier in 1983. And where McCormick Place had once captured the majority of the 15 largest events, by 2008 it managed only two, ceding its leading position to Las Vegas.
The declining attendance at McCormick Place has come in part because of the growing competition from other cities. Both Orlando and Las Vegas are now not far behind McCormick in convention center exhibit space, and a host of other cities have competed by adding more space. But Chicago also faces a dramatically different convention and tradeshow industry. Following a split between the hardware manufacturers association and show management firm Reed Exhibitions, the National Hardware Show left Chicago for Las Vegas. Another McCormick mainstay, the summer Consumer Electronics Show that brought 72,000 attendees to Chicago in 1983, folded after 1994.
Other large McCormick Place-based tradeshows have also seen substantial changes in performance. Take the case of one Chicago perennial event, the National Restaurant Association Show. That event was the second largest in attendance for McCormick Place in 1983, with 87,000 attendees. It reached a peak attendance of just under 104,000 in 1997. Since then, the Restaurant Show’s attendee count has fallen to 73,664 in 2007, 71,367 in 2008, 53,319 in 2009, 57,892 in 2010, and 57,782 in 2011. Despite some recovery from the trough of the recession, attendance has remained well below the totals in 2007 and 2008.
The major tradeshow for the food machinery and packaging industry, Pack Expo, has long been among the top four or five events at McCormick in terms of exhibit space. The biennial Pack Expo (alternate years are held in Las Vegas) drew attendance of 78,321 and used 1.15 million square feet of space in 1998, its peak year during the 1990s. The show’s exhibit space use has been rather flat, just 1.12 million square feet in 2012. But its attendance fell to 67,964 in 2008, a significant drop from the peak a decade earlier, and to 67,641 in 2012.
Major conventions and tradeshows like the Restaurant Show and Pack Expo have commonly grown in size as McCormick Place has added more exhibit space. But more space has not translated into more attendees, and thus greater economic impact. Their history since the late 1990s suggests a gradual but dramatic change in the “draw” and perceived value of these events, a change that has directly affected the attendance at McCormick and its economic results.
Over and over, Chicago and Illinois public officials and a roster of consultants promised that a bigger McCormick Place would yield hundreds of thousands of new convention attendees and billions in new spending and public revenues. Those repeated promises have proved to be false, the consultant projections unmet. McCormick Place and Chicago officials have tried desperate measures to respond to the brutal competition in the convention market. In August 2009, the state announced creation of a $10 million incentive fund to provide rebates to conventions and tradeshows using McCormick. But by the end of the year a number of major shows, including the International Plastics Expo, announced plans to leave Chicago for other cities, including Las Vegas and Orlando.
Faced with the loss of these major events and pressure from other event organizers, the state legislature restructured the board of the Metropolitan Pier and Exposition Authority and began hearings into McCormick’s operations and finances. The result in early 2010 was a revamping of labor relations intended to reduce the cost of union labor in setting up and servicing exhibits and a massive $1.12 billion restructuring of the authority’s debt, together with plans to expand the publicly financed Hyatt hotel with an added 450 rooms.10
The performance of the nation’s largest convention center is by no means unique. The rhetoric of convention center boosters in city after city has not been matched by actual performance, and center managers and local tourism officials have ratcheted up incentive packages, free rent deals, and plans for even more space or adjacent hotel rooms.
For Atlanta and Phoenix, Boston and Philadelphia, just as for Chicago, the quest for a new or larger convention center follows a seemingly standard pattern. A local group, perhaps the city’s convention and visitors bureau or the local chamber of commerce, would proclaim that the community was falling behind its competitors, the size of its convention center slipping as other cities built and expanded. There would be news stories about “lost business” and descriptions of the groups and events that could no longer come because they had outgrown the center. And, predictably, there would be a study commissioned from an experienced, “independent” consultant.
The consultant study, filled with data and charts, would describe how other cities were building new centers, presumably demonstrating the need to compete with something bigger and more up-to-date. There would be summary figures of “lost business,” results from surveys of meeting planners demonstrating the attractiveness and appeal of the city, and a detailed presentation of national data indicating the consistent growth in convention and tradeshow demand and the reassuring forecast that growth would continue apace.
Armed with the consultant’s estimate of future convention business and the forecast that the “economic impact” of new spending by convention attendees would grow by 50 percent, 100 percent, or more, local officials would describe the public investment in a larger convention center as the catalyst for an economic boom. More convention delegates would lead to the development of new hotels, new restaurants and retail stores, likely revitalization of part or all of the downtown core, and a new image for the city itself.
In January 2011, New York governor Andrew Cuomo proposed a development to include “the largest convention center in the nation,” saying, “This will bring to New York the largest events, driving demand for hotel rooms and restaurant meals and creating tax revenues and jobs, jobs, jobs.” A few months earlier, Tim Leiweke of the AEG entertainment and development firm proposed a new privately built enclosed stadium as part of the Los Angeles Convention Center, contending that “L.A. would be the greatest destination for events in the world,” and that the city “could become the second or third” most sought-after convention city in the country.11
The promises and rhetoric have been remarkably consistent. At the same time New York, Los Angeles, San Diego, and Boston were contemplating major new centers or expansions, Cleveland and Cuyahoga County were building a $465 million Medical Mart and Convention Center, with the promise that it would attract 60 annual medical conventions bringing “300,000 visitors and $330 million in spending” after its 2013 opening. Nashville was building a $585 million convention center, slated to open in April 2013. The HVS consulting firm had forecast in early 2010 that the new Nashville venue would more than double the annual convention center hotel room nights produced in Nashville. And both Indianapolis and Philadelphia had opened major convention center expansions in 2011, each armed with consultant forecasts that they would see a sizable boost in convention attendance and resulting hotel demand.12
It would appear highly unlikely—indeed implausible—that each of these cities would see its convention attendance effectively double. With overall national convention and tradeshow attendance still depressed as a result of the “Great Recession” and economic restructuring, New York, Boston, Los Angeles, San Diego, Cleveland—and others like Miami Beach, Dallas, and San Francisco—would be able to increase attendance only by attracting events and people away from their competitors. And those competing cities would be unlikely to stand still and simply accept losing convention business. Communities such as Las Vegas and Orlando, Anaheim and Washington, supported by regular streams of public revenues fueled by visitors, would themselves respond by investing in more convention space and hotel rooms.
After the public promises of new spending, economic impact, job creation, and development often comes a reality that is rather different. City after city builds a big new center, only to realize little or no new convention activity and see no real job creation. The big new hotel that was supposed to be a direct product of the public investment in a convention center simply doesn’t appear. The promised economic impact is often missing or minimal. Yet that apparent failure—the center that sees half or a third of the attendance projected by a consultant, the convention venue that is obliged to give away its space, the tradeshow mecca that largely attracts local or drive-in attendees—invariably yields a call for more space, an adjacent hotel, or a new “entertainment district” that will propel the city into the front rank of convention destinations.
The “arms race” that has propelled this massive expansion in convention