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Dripped Dry

As metro cities buy up high country water rights, Park County's ranching heritage is evaporating.

They were soon disappointed. The new center failed to meet projections almost from the moment it opened, and downtown hotels continued to suffer the same low occupancy rates they had hoped would be a thing of the past. In 1991 the center's gleaming environs were occupied less than half the time.

The responsibility for booking national conventions into the center falls with the convention and visitor's bureau, an independent agency whose annual budget is largely funded by a 1.75 percent chunk of the lodger's tax assessed on Denver hotel rooms. And the anger of downtown hoteliers over the convention center's weak performance soon found a target: Roger Smith, the president of the bureau.

Members of the bureau's board of directors, which includes the general managers of most of the major downtown hotels, were convinced Smith was doing a poor job of marketing Denver. They began plotting to remove him. When Smith refused to go quietly, a nasty internal dispute soon found its way onto the front pages of Denver newspapers.

After a public bloodletting that dragged on for months, Smith stepped down in 1993. Meanwhile, Colorado was earning reams of bad publicity after the passage of Amendment 2, and a national boycott of the "hate state" cut further into convention business.

Dilbeck took over as head of the bureau in 1994, and quickly placated the hotel managers on the board. He replaced much of the bureau's sales staff, and is credited with helping to reverse the fortunes of the center. National convention bookings have increased from 30 in 1994 to 41 this year, and the number of convention delegates has gone from 154,350 in 1994 to an estimated 189,074 this year. The center's operating loss has also dropped, from $3 million in 1993 to $1.6 million last year. (Convention centers almost never make money, and Denver's annual subsidy, covered by a payment from the general fund, is small compared to those of other cities.)

The hotel industry is also sitting pretty compared with the grim situation of just a few years ago. Downtown hotels enjoyed an occupancy rate of more than 70 percent last year, and finding a room downtown during the summer can be next to impossible. Room rates are over $100 a night at many Denver hotels. When the expanded Adam's Mark Hotel opens late next year, Denver will also have its first 1,000-room-plus convention headquarters hotel, a longtime goal of city boosters.

Not all that expansion is market-driven, though. The Adam's Mark project, for instance, is being funded with $23 million in subsidies from the Denver Urban Renewal Authority. An earlier proposal to build a 1,000-room hotel near the convention center with $20 million in public funds was shot down in 1990 when downtown hotel managers complained bitterly about subsidies going to a competitor. However, the convention and visitor's bureau succeeded in getting most of the downtown hotels to support funding for the expansion of Adam's Mark, arguing that while having a headquarters hotel would help all the downtown hotels by bringing more convention business to Denver, the Adam's Mark project would only add about 375 new rooms to the market.

Selling the city on an expanded convention center may not be so easy. After a decade of massive public works projects that have changed the face of Denver, many voters are tired of supporting huge new endeavors. The memories of the extravagant promises made in the 1980s are still fresh, and given the explosive growth the metro area has seen in recent years, some voters aren't so sure they even want Denver to be one of America's top convention destinations. That could complicate things for city council, which will have to decide whether to put an expansion proposal on the ballot.

"I think being in the top twelve [destinations] would be great for our hotels and restaurants, but I'm not sure it's the best thing for the general public that would have to pay for the expanded convention center," says Denver city councilman Ted Hackworth. "I hear a lot of excuses and not a lot of good reasons why we should expand."

When convention center proponents estimate the financial impacts of a center, they often use figures based on the notion that each dollar spent by a convention delegate has a multiplier of four. Basically, the multiplier concept goes like this: When a bellboy gets a $1 tip he'll stop by a bar after work and spend the money on a beer, helping the tavern owner to hire a bartender who in turn rents an apartment, circulating the money through the city. But critics say these formulas exaggerate the impact of conventiongoers' spending. "I think city council could be pushed to do this by the multipliers they use," says Hackworth. "It's time to challenge them on those numbers."

Sanders has been following the city's debate over a convention center for years; he's even included Denver in scholarly papers he's written on the convention center phenomenon. "When I first started doing research on this, I started doing case studies on a number of cities," he says. "One of the case studies I looked at was Denver." The fight over where to locate the center, Sanders notes, "was marvelously lengthy, elaborate and nasty."

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