Dripped Dry

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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."

Dilbeck believes Denver has advantages that will allow its convention center expansion to succeed where others have failed. Unlike Los Angeles and Kansas City, Denver has an attractive and thriving downtown. And Denver doesn't have a reputation as a depressed industrial town, like Philadelphia. "When people see lower downtown and the 16th Street Mall, it works to our favor," Dilbeck says.

Levine agrees that a city like Denver will have advantages over competing venues because of its mountain setting and revived downtown. But he questions whether the much-vaunted jobs created by conventions are worth large municipal subsidies. "Denver would have a reasonable chance of succeeding," he says. "The key question is, even if it succeeds, is that the best allocation of resources? There's no evidence these developments create the kind of economic boom their proponents claim. It doesn't create quality jobs for local residents."

Restaurant and hotel jobs are notoriously low-paying, and Levine believes it's a mistake for cities to lavish funds on an industry that doesn't provide decent employment. He points to New Orleans, one of the most successful tourist cities in America, as an example of the drawbacks of an economy based on travel. "New Orleans is a classic success story of tourist-based development," says Levine, "but 30 percent of the residents live in poverty."

Dilbeck, however, bristles at the charge that hospitality-industry jobs aren't worthwhile. "The average salary in the tourism industry matches up to average salaries in other industries," he insists. "You're talking to idealists when you talk to people who only want high-paying jobs. They're all wet behind the ears. The tourist industry is a wonderful one for entry-level employees. It's providing jobs for people without the skills to become computer programmers or engineers."

In the late 1980s, building a new convention center was touted as a way to recharge the depressed Denver economy, which was still suffering from the mid-decade collapse of the oil industry. Many office towers and hotels were half-empty, and civic leaders and downtown boosters were looking for a replacement industry to put some life back into Denver's core. Tourism seemed to fit the bill. Conventiongoers spend freely, pay local taxes, pack their bags and leave. For politicians they're like a dream: tax-paying party animals who never ask for more police patrols or a new elementary school.

But while Denver voters have been generous in funding everything from the performing arts to libraries--not to mention approving the construction of a $3.2 billion airport--they've been considerably more skeptical about the merits of convention facilities. The idealistic Pena charged into office in 1983 with the charismatic slogan "Imagine a great city," but soon discovered that a new convention center was a hot-button topic that could frustrate even the most resolute builder of cities.

Creating a new convention center became a major priority for Pena. But the young and inexperienced mayor found himself in the midst of a political free-for-all, as vying real estate interests came up with competing proposals. Denverites spent years arguing over where the new center should be. One group backed by developers Mickey Miller and Marvin Davis pushed a site behind Union Station, while another advocated the Golden Triangle just south of Civic Center Plaza. A smaller, less organized group wanted the convention center to be next to Currigan Hall on 14th Street, in a section of downtown that was looking more blighted by the day.

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Stuart Steers
Contact: Stuart Steers