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.

The city paid $17.5 million to acquire the land for the Off-Site Exhibition Hall at PUHS, plus $2 million to demolish old school buildings on the site. (City officials could not -- or would not -- tell me the cost of acquiring nine parcels adjacent to the old campus.)

Then there's the cost of an asset lost. In 1999, the city valued the Civic Plaza at a very conservative $156 million. (Incidentally, in 1994, the Plaza and adjacent Symphony Hall Terrace underwent $32 million in renovations. The Plaza was expanded in the mid-'80s, at a cost of $67 million.)

Even when low estimates are applied -- $526 million for the new convention center, $51 million for the off-site building, $156 million lost in the existing Civic Plaza, $20 million for land acquisition and demolition at PUHS -- the tab comes to $752 million.

The Phoenix Civic Plaza has lost more than $90 million on operations since 1993-94
Paolo Vescia
The Phoenix Civic Plaza has lost more than $90 million on operations since 1993-94
The old Phoenix Union High School campus would house an "Off-Site Exhibition Hall" that could be as big as the existing Civic Plaza
The old Phoenix Union High School campus would house an "Off-Site Exhibition Hall" that could be as big as the existing Civic Plaza

If we adopt the loftier estimates, the price tag billows to $831 million -- and that's without factoring in the inevitable cost overruns.

Now that's what I call economic impact.

In preparing this piece, I reviewed about 1,000 pages of city documents. The stack of sterile papers tells the story of the furtive campaign being waged at City Hall. But the narrative bears an unambiguous subtext. The documents don't merely suggest that taxpayers must spring for costly new hotels and a mega convention center. They shriek it.

Assistant City Manager Sheryl Sculley and Mayor Skip Rimsza are leading the chorus.

Rimsza, who did not respond to repeated interview requests, has said he prefers an expanded Civic Plaza for Phoenix over a new stadium for the Arizona Cardinals.

Sculley did return a call, informing me that the city is still negotiating to attract new hotels downtown.

You may recall Sculley's role last year in the city's misbegotten attempt to ram a 700-room Marriott hotel and a 350-room Embassy Suites into downtown. (Not coincidentally, that adds up to 1,050 rooms, the exact sum of new hotel rooms cited in the consultants' projections.)

City Hall proffered ludicrous incentives -- $18 million in outright investment and $118 million in guaranteed loans. Marriott would have received a $100 million hotel for a $5 million investment.

That dubious exercise in corporate socialism dissolved when owners of the Crowne Plaza threatened to refer the measure to the ballot, then sued the city. The courts ruled the scheme an unconstitutional partnership between private enterprise and government.

As the Marriott deal began to go south, Sculley apparently got desperate. She huddled with the developer of the Collier Center, where the Marriott was to go up.

That developer, Tom Roberts, subsequently offered Steve Cohn, an owner of the Crowne Plaza, a $10 million city subsidy if he would agree to sell his hotel and drop his opposition to the Marriott scheme.

Cohn recorded the conversation. On the tape, Cohn says he doubts that the city would provide such a subsidy, and asks if Sheryl Sculley had approved it.

Roberts replies: "Well, not only Sheryl. I think we have the council's unanimous support. If we can resolve this thing . . . that'd be the easiest goddamned decision they ever made in their life. I guarantee it. . . . I'd bet you any amount, no limit, I can deliver 10 million bucks."

Sculley and other city officials quickly (and predictably) distanced themselves from Roberts' offer, which Cohn characterized as a "bribe."

Sculley bristles at the suggestion that the Civic Plaza expansion is being choreographed by apparatchiks.

"This isn't a staff-driven project. This is a community-driven priority," Sculley says. "This is a priority of the Civic Plaza Task Force."

The Task Force has been quietly convening for nearly two years to lay the groundwork for the expansion. The body is composed of city staffers, downtown business types and activists.

Minutes of the September 22, 1999, Task Force meeting report that a consultant told the group, "The future is bleak if we settle for status quo.

"Ms. Sculley concurred, noting that old practices are no longer acceptable."

She sounds fairly driven to me.

And Councilman Gordon uses that very term, unbidden.

Asked if he's received much data on the expansion scheme, Gordon replies: "Not a lot. It's been so tightly controlled. Sheryl and the mayor have the keys. They're driving this thing to build."

Joe Davis, Civic Plaza director, tells me that the Task Force was "set up by Frank Fairbanks," city manager. Davis came to Phoenix in November 1998 to oversee the nascent expansion effort. Until then, he directed the convention center in San Diego, which is currently undergoing an expansion.

"What this is all about is economic impact," says Davis. "This is a serious growth industry. If you want to be in this game, you need to have the product."

He says the expansion project will allow Phoenix to attract conventions that are too big for the existing Civic Plaza, propelling us into the "major leagues" among convention destinations.

I resist the urge to note that Phoenix recently joined the major leagues of baseball, and the team is losing money.

Philip Porter, the professor of economics at the University of South Florida, is not so bullish on the convention industry. He believes the outlook does indeed "look pretty bleak." He is convinced that the digital age combined with transportation costs will retard the growth of the industry.

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