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.

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    Category: Economic Development
    3 Comments »

    3 Responses to “Where is the business plan for Cleveland’s convention center?”

    1. roldo bartimole Says:
      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.

    2. Ed Morrison Says:
      September 7th, 2008 at 2:24 pm

      I cannot believe that MMPI is that stupid.

    3. Mark W. "Some Guy on Bridge" Schumann Says:
      September 8th, 2008 at 12:34 am

      County Commissioners lie.

      Civic Boosters lie.

      It’s not that complicated.