Convention Hysteria

In 1998, the Phoenix Civic Plaza lost $20 million. City officials don't mind. They made up the loss with your tax money, just as they do every year.

Allow me a digression to validate my skepticism. Remember the consultant the city hired to determine the necessity of the so-called Garage Mahal, the $45 million abomination built for the ostensible purpose of servicing the Science Center -- but not Bank One Ballpark? In 1989, voters concerned about such profligate spending enacted a law requiring voter approval before the city may spend more than $3 million on a sports- or convention-related project. So, legally, the "Civic Plaza East Garage" could not be built for baseball fans or the Civic Plaza. When the garage consultant repeatedly determined that no such colossal parking structure was needed to support the Science Center, city managers repeatedly altered the study parameters and sent it back. Finally, the consultant relented and came up with the findings the city wanted. And finally, he got paid.

Like the Civic Plaza it was built not to serve -- the 2,700-space Garage Mahal is losing money in bales, averaging only a few hundred parkers a day. In May, a huge month for the auto-box, it generated $152,000 in revenue. The debt service alone on the garage exceeds $300,000 a month, not to mention operational expenses. The deficit is covered by the Civic Plaza Fund fed by Phoenicians' excise taxes.

The garage is a monument to the corruptive influence of the city's downtown redevelopment zeal.

This "massing model" of the Civic Plaza expansion is intended to illustrate use of available space, not architectural style.
This "massing model" of the Civic Plaza expansion is intended to illustrate use of available space, not architectural style.

And, I might add, it consumed the only plot of land suitable for a more rational expansion of the Civic Plaza. The price that Phoenicians will pay for this subterfuge can scarcely be overstated.

"That garage was not built for the future of the city, it was built because the city was catering to special-interest groups," says Sal DiCiccio, a former city councilman who resigned to run for Congress in District 1. "Because the city catered to those special-interest groups, this (Civic Plaza expansion) is going to wind up costing the taxpayers more money."

Sordid episodes such as the garage fiasco cause me to blanch when the Civic Plaza consultant talks about jobs, claiming that the new convention center and the addition of 1,050 hotel rooms would boost the number of convention-related jobs in Phoenix from 8,000 to 15,100. Such a workforce would make for exceedingly well-staffed exhibit halls and hotels, because the Civic Plaza currently employs only 194 people, and "convention quality" hotels (as opposed to resorts) employ about one employee for every two rooms. That would translate into only 525 new hotel jobs. Moreover, 80 percent of these jobs are menial -- housekeeping, bellhops, busboys, kitchen staff, taxi drivers and the like. I hate to sound elitist, but these are not the kinds of jobs I want to fork over $30 a year to create.

Civic Plaza officials crow that the average convention delegate spends $959 per event. But in one draft of a market study, the city's consultant says delegates spend $557 per event.

Whom to believe?

Before Bank One Ballpark was approved, a consultant predicted the new stadium and team would spur an annual economic impact of $230 million. Yet midway through the team's second year in BOB, downtown had experienced a net gain of only four new business licenses.

In Tempe, where the price tag for Town Lake could reach $200 million, consultants enthused about economic impact. The banks were more taciturn. Despite copious City of Tempe incentives, the hotelier lined up to build a five-star inn hasn't been able to get financing.

Consultant hyperbole notwithstanding, I am not so naive as to believe that visitors to downtown Phoenix contribute nothing. There is a sizeable economic impact from conventions.

But how much should Phoenicians be expected to pay? Who's profiting, and to what degree? The two big "convention quality" hotels, the Hyatt Regency and the Crowne Plaza, are not locally owned. Neither are the prospective new hoteliers, Marriott and Embassy Suites. Most of the wealth we are taxed to incubate flows out of the community.

When did the fortunes of the hospitality industry become the city's responsibility? Or its obsession?

According to city records, the new convention center would be more than twice as big as the existing Plaza, which occupies the equivalent of eight city blocks. Most of the convention space would be constructed below ground. Aesthetically, this would be a welcome relief, removing the huge, bland barrier that the Civic Plaza now creates.

The city is rightly demanding that the state, which reaps far greater sales tax benefits than the city from conventions, help fund the new center. Most other states do help underwrite big municipal convention facilities.

With the new center, space dedicated to exhibit halls, ballrooms and meeting rooms would jump from 302,000 square feet to 700,000 square feet.

The city's official figure for the cost of the new facility is $450 million to $510 million. But the most recent consultant's study on the project puts the cost at a range of $526 million to $581 million.

The cost of the Off-Site Exhibition Hall was for many months projected at $20 million to $30 million for a 125,000-square-foot convention space. (This building would be dedicated to "community" events once the new convention center opened.) But as government projects are wont to do, this stopgap facility is mushrooming in size and cost. The flow of convention dollars into downtown tills must not be interrupted during construction. City staff's latest cost range for the PUHS facility is $51 million to $75 million.

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