Convention Center white elephants

Have We Got a Convention Center to Sell You! From Boston to Austin, politicians spend money on fancy white elephants.

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For two decades, America's convention center business has been declining, resulting in a nationwide surplus of empty meeting facilities, struggling convention halls and vacant hotel rooms. How have governments responded to this glut? By building more convention centers, of course, financed by debt backed by new taxes and fees on already struggling taxpayers.

Back in 2007, before the recession began, a report from Destination Marketing Association International described America's convention industry as a "buyer's market" suffering excess capacity. It's only gotten worse, attracting just 86 million attendees in 2010, compared to 126 million in 2000. Meanwhile, the amount of convention space angling for business has increased to 70 million square feet, up from 53 million in 2000 and 40 million two decades ago.

That's largely because governments refuse to stop making convention centers bigger and hotels even more dazzling, arguing that whatever business remains will flow to the places with the fanciest amenities. To finance these risky projects—which the private sector won't build by itself—cities float debt backed by new taxes and fees on already struggling taxpayers. As Charles Chieppo, a former board member of Massachusetts Convention Center Authority, lamented last year, "Logic rarely has a place in the convention business."

Rybak: Eliminating city convention taxes would 'wreck everything'

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The mayor also disputed reports that a city agreement to help pay for a nearly $1 billion Vikings stadium was complete. Mondale, said the mayor, “doesn’t speak for the city of Minneapolis.”

David’s proposal, which was debated but not voted on Thursday, would eliminate the citywide half-cent sales tax in Minneapolis, a 2.625 percent lodging tax in the city, a 3 percent downtown liquor and beer tax and a 3 percent food and beverage tax in downtown Minneapolis.

“This would wreck everything,” Rybak said of the convention center’s reliance on the taxes.

But some legislators, especially Republicans, argued that Minneapolis was funding its convention center with a series of taxes that convention centers in outstate Minnesota did not impose. “I’m just curious why you should get that extra, special attention,” said Rep. Sarah Anderson, R-Plymouth.

“You know who pays for this? The citizens in my district, my constituents that decide to go to Minneapolis – maybe go out to a restaurant for the night,” she said. “They don’t get to see the benefit on a day-to-day” basis.

Added Davids: “Why should Minneapolis be treated differently than other convention centers around the state?”

But Minneapolis officials said that the convention business that comes to Minneapolis produces millions in tax dollars for the state, and that eliminating the special taxes would force city residents to pay for the convention center through property taxes.

“There’s not a [major] convention center like this across the country that is self supporting, that I know of,” said Rybak.

Comment: MSP Convention Center