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Denver's convention center has 300,000 square feet of exhibit space, 100,000 square feet of meeting space and a 35,000-square-foot ballroom. Dilbeck says several large groups that met recently in Denver, including Ace Hardware and the Christian Booksellers Association, have told him they won't come back unless the city can provide a minimum of 400,000 square feet of exhibit space.
Last week the convention and visitor's bureau hired the consulting firm of Coopers & Lybrand to do a $110,000 study analyzing Denver's need for convention space. The bureau has asked the firm to determine how large a center Denver would need in order to become one of the twelve top convention destinations in the country, as well as how many hotel rooms would be required to serve huge gatherings.
Any expansion of the convention center would require a voter-approved bond issue, and the question could make the ballot as soon as November 1997. The bonds issued to build the current convention center are being paid off with a 3 percent tax on hotel rooms, a 2 percent tax on rental cars, and a half-cent levy on prepared-food and beverage purchases. Since those taxes brought in $16.7 million last year and payment on the bonds was just $8.2 million, it may be possible to expand the center without a tax increase. Voters, however, would have something to lose: the $8.5 million surplus that now flows into the city's general fund. If that money were instead devoted to paying off a new series of bonds, the general fund would have to be replenished some other way. And there's no guarantee that tax revenues, now booming thanks to the city's vibrant economy, will remain at current levels.
Dilbeck says the bureau is waiting for the study to be completed this fall before deciding how much money will be required to build the convention center of its dreams.
Under the most likely scenario, Currigan Exhibition Hall, built in 1964 for $11.4 million, would be demolished and replaced with a mirror-image of the convention center that now sits on the other side of Stout Street. In fact, the potential for expanding onto the Currigan site was one of the big selling points for the new center a decade ago. The loss of Currigan would come with an ironic twist: that facility was built after Mayor Thomas Currigan and other civic shamans sold voters on the notion that Denver needed a new convention center to keep up with San Diego and other cities--who, even then, were expanding theirs.
But Dilbeck, who wants 500,000 square feet of exhibition space, isn't swayed by skeptics such as Sanders who say the constant drive to expand can become a vicious cycle. "If you don't expand your center, you become a non-entity in terms of competing for business," he warns. "Our market is changing and it forces us to change the configuration of the kinds of hotel and meeting space we need. If we expand the center, we can reach 95 percent of the trade show, exhibition and convention business in the U.S."
The list of American cities that have expanded their convention centers or are planning to reads like the itinerary for a cross-country Chamber of Commerce junket: Baltimore, Providence, Philadelphia, Columbus, Chicago, Kansas City, Dallas, San Diego and Los Angeles. Cities coast to coast are betting that convention centers can revive depressed urban areas and pump up the local tax base, and the civic building boom has generated an astonishing increase in available meeting space. "In 1969 we had 6.5 million net square feet of convention exhibit space," Sanders notes. "Last year we had 23 million square feet. We're now seeing indications there's an oversupply of space."
In fact, several cities have run into trouble with their new convention centers. Philadelphia's 1.3 million-square-foot convention complex, which opened in 1994, has been a major disappointment. Backers claimed the $522 million center would create 10,000 new jobs and generate profits of $23 million by the year 2000. Instead, only 1,100 full-time jobs have been created and the city is stuck with an annual debt service of $24 million for the next quarter-century. In the meantime, Philadelphia has suffered through one of the worst municipal budget crunches in its history; everything from recreation programs to police protection has been radically slashed.
New convention centers in Providence, Kansas City and Tampa also have performed below expectations. Tampa is so desperate to revive its center that the city is planning to sell $141 million in bonds to fund construction of a huge convention hotel. Los Angeles opened a $500 million expansion of its downtown center in 1993, and has had difficulty filling the 805,000 square feet of meeting and exhibition space. Only fourteen national conventions were booked in Los Angeles this year, while convention superstars like Las Vegas and Chicago boasted more than forty each. One California tourism official called LA's empty goliath "the worst prebooked convention center in the country." Whether or not the facility is actually used, Los Angeles still has to pay $32 million per year in debt service.
But none of this seems to have daunted other cities. The building boom proceeds apace, as cities scramble to stay ahead of their rivals. "This is the urban equivalent of the nuclear arms race," says Marc Levine, a professor at the Center for Economic Development at the University of Wisconsin at Milwaukee. "If Baltimore expands and Milwaukee expands and Chicago expands, what's going to happen is that the cities that are authentic tourist attractions will win the race. The cities that aren't tourist attractions will be stuck with white elephants."