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Ed Morrison · Where is the business plan for Cleveland’s convention center?
September 7th, 2008
The Pittsburgh Convention Center has “chronic” operating deficits of about $3.8 million per year.
Revenues: $6.2 million Expenses: $10 million Deficit: $3.8 million
Convention Center seeks RAD funds to offset operating losses
Is this really a smart investment for a County facing structural deficits?
(This analysis by Carnegie Mellon raised significant questions about the costs and benefits of a convention center in Pittsburgh. Public officials ignored the warnings, and now they are wearing cement shoes.)
According to this overview of the market from New Orleans, the market for convention space is not generating revenues because of steep discounting.
The move toward discounting follows a national trend. An industrywide oversupply of meeting space, brought on by a wave of convention center expansions, has forced many facilities to offer financial incentives to potential customers.
The risks of this type of investment are considerable. Cleveland could end up with a white elephant, and that future is not pretty as this commentary from Los Angeles makes clear.
Last 5 posts by Ed Morrison
- Signing off - February 3rd, 2012
- "The current global development model is unsustainable" - February 1st, 2012
- Market opportunities for developing Chicago's green economy - January 29th, 2012
- Plain Dealer flubs its explanation for firing Tony Grossi - January 27th, 2012
- Linking and leveraging university assets to strengthen regional economies - January 27th, 2012
September 7th, 2008 at 2:21 pm
Ed: The claim made by the County and Fred Nance is that all overruns on the construction of the convention center will be borne by MMPI – and that MMPI will operate the convention, pay expenses and for capital improvements.
So we are protected!
If you believe all that I’ve got a few bridges to sell you. While the county has a memorandum of understanding with MMPI there is no contact and until we know what that contract says those clams are to me absolutely meaningless.
And even then if history is any judge, there will be other ways to get around putting MMPI and not the county on the mark for overruns and deficits.
September 7th, 2008 at 2:24 pm
I cannot believe that MMPI is that stupid.
September 8th, 2008 at 12:34 am
County Commissioners lie.
Civic Boosters lie.
It’s not that complicated.