Private consultants have determined that Springfield, Missouri is on the cusp of attracting a great deal of new convention business.
According to the Springfield Convention and Visitors Bureau, a study conducted by Hunden Strategic Partners “included a comprehensive market analysis that determined a convention center could support its operations and attract successful meetings and conventions if executed properly.” A press release about the study added the following good news:
The Springfield travel and tourism industry has experienced steady growth with more than five years of record overnight visitors, topping out at more than 1.38 million in 2018. However, the city’s convention market has been flat in recent years due to growing competition from cities offering newer convention facilities that are more appealing than what Springfield has available.
“We are not seeing growth in the convention business because we simply do not have competitive facilities,” said Tracy Kimberlin, president of the Springfield Convention and Visitors Bureau.
The Hunden study claims that over 20 years the convention center would generate $1.11 billion in revenue (page 129) and create 800 new full-time jobs over 10 years (page 131). What a great opportunity for private investors!
Except that somehow, it isn’t. The project apparently cannot happen without significant taxpayer investment—which is to say, free money from the government. Pages 122, 123 and 134 detail the need to increase and redirect existing taxes and levy new taxes through a CID (Community Improvement District) and maybe even through tax-increment financing or Chapter 100 bonds (page 122). As an aside, the Hunden report offers, “It will be very difficult to declare an area ‘Blighted’ that recently received a $300 million investment.” Alas, if only that were true.
This potential return on investment for a convention center in Springfield is either a good investment opportunity or not. We find out which when private developers put together a prospectus and share it with private investors who will decide for themselves whether to invest their own money. If developers cannot raise enough private capital, then the project is probably a bad idea.
Asking taxpayers to subsidize the project—exactly because developers cannot raise enough private capital—is admitting that they want public funds to support a bad idea. The proposal ought to be rejected on its face.
If you are interested in learning more about the dubious marketing claims of the convention hotel industry, you can watch this 2015 presentation by University of Texas at San Antonio professor Heywood Sanders, who wrote the book on convention centers in the United States.