in Houston, Texas
City of McAllen can’t give away free space at convention center, operating at a loss
Thursday, Sep 06, 2012, 09:58AM CST
By Curt Olson
discount

McAllen can’t even give away its city convention center space, illustrated by the recent revelation of a $1.6 million operating loss.

Three groups rejected McAllen as a venue in the past 18 months, with convention center officials giving away the meeting space, the McAllen Monitor reports. The ensuing operating shortfall compelled McAllen Chamber of Commerce President and CEO Steve Ahlenius to recommend his group taking over the convention center. Ahlenius believes the biggest drawback for McAllen is not having an attached or nearby hotel for conventions.

McAllen’s hotel occupancy tax has absorbed the red ink flowing from the convention center. But long-term, Mayor Richard Cortez said the solution requires officials to “put our heads together.”

He may want to consider some evidence.

Convention attendance at Chicago’s McCormick Place dropped 9.6 percent from 2010 to 2011, despite an increase in number of trade shows, the Chicago Tribune reported.

If Chicago’s McCormick Place has experienced this, what do McAllen officials expect in a city of 130,000 people in the Rio Grande Valley with 11 daily flights into the local airport?

Researchers at the D.C.-based Brookings Institution warned in 2005 of just such a decline, asserting that convention centers evolve into large expenses and empty promises. The study found:

  • Public capital spending on convention centers had doubled in a decade’s time to $2.4 billion annually, and convention center space had grown by 50 percent since 1990.
  • The overall convention marketplace declined to a point where recovery or turnaround is unlikely to yield much increased business. This decline began prior to the disruptions of the terrorist attacks on Sept. 11, 2001, and is exacerbated by advances in communications technology.

“This analysis should give local leaders pause as they consider calls for ever more public investment into the convention business, while weighing simultaneously where else scarce public funds could be spent to boost the urban economy,” the Brookings Institution concluded.

***
Contact Curt Olson at curt@texaswatchdog.org or 512-557-3800. Follow him on Twitter @olson_curt.

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