Report shows convention center construction undeterred by stagnant usage rates

Spending on convention center construction has doubled since the early ’90s despite a downturn of nearly 50 percent in convention attendance, according to a report published this month by the Brookings Institution.

Heywood Sanders, a professor of public administration at the University of Texas at San Antonio, authored the report that found public spending for convention centers nationwide has swelled from $1.2 billion in 1993 to an average of $2.4 billion a year from 2001 to 2003. Usage rates for these facilities have remained at 1993 levels, according to the report.

The report doesn’t seem to have deterred construction companies involved in convention center projects. The construction industry is one of many benefiting from the push for such facilities. More than 44 new or expanded convention centers are being planned nationwide, according to the report.

The report also notes that 53 cities have built or expanded their convention centers since 2000.

Dave Simpson, a spokesman from the building division of the Associated General Contractors of America Carolina chapter, said he thinks a planned convention center in Raleigh, N.C., is essential to both that city and the state’s economic stability. He said the current convention center for Raleigh doesn’t allow it to compete with other cities in the region such as Atlanta, Charleston, S.C., and Washington.

“From a common-sense standpoint, look at what we have now, look at what we’re going to get,” Simpson said. “It’s a no-brainer.”

Simpson says area contractors will benefit from the facility in ways beyond the initial construction. This is because he and others hope the convention center will draw more business into the city, which could prompt further construction projects.

“They aren’t going to come if you don’t build it,” Simpson said.

Raleigh’s plans for the convention center allocate more than $200 million for its construction, which includes a Marriott Hotel and underground parking area. In February 2004, the city named Skanska USA Building to serve as construction manager for the project, which began in July.

Raleigh’s new convention center is scheduled to open in early 2008.

“Construction companies are going to benefit because there is work,” said Louise Pulizzi, spokeswoman for Clark Construction, whose portfolio includes several convention center projects, including the 2-year-old facility in Washington.

Pulizzi said a sudden downturn in the construction of convention centers wouldn’t significantly affect Clark or other construction companies’ profit margins because they have a diversified list of services. However, she said there would be some impact should cities take the Brookings Institution report into consideration simply because of convention center projects’ large price tags.

“This analysis should give local leaders pause as they consider calls for ever more public investment into the convention business,” Sanders said in the report. He suggests city leaders invest often-scarce public funds elsewhere in order to better boost urban economies.

Patrick Beeson can be contacted at pbeeson@randallpub.com.