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Corporate Welfare / Subsidies

Another Fine Convention Hotel Mess

By Patrick Tuohey on Apr 29, 2020
Hotel lobby

Koksharov Dmitry/Shutterstock

The New York Times recently published a story on the impact of the COVID-19 virus and the economic downturn on a number of publicly financed convention hotels around the country. The piece included this:

The timing is especially vexing for new publicly funded convention hotels that were built to draw business travelers. The $367 million Loews Kansas City convention hotel in Missouri was supposed to open on April 2 and had already hired 340 of the roughly 450 employees it needed. But in mid-March, Loews announced that it would delay opening the 800-room property indefinitely. Kansas City provided financing incentives valued at about $166 million.

The Times piece is worth reading in it entirety, and it includes comments from Heywood Sanders, who spoke on this exact issue at the Kansas City library on July 22, 2016. The Show-Me Institute previously published a brief history of Kansas City’s convention-related failed promises since 1969. In short, despite decades of hype and public funding, Kansas City has never seen a significant increase in convention business despite considerable public investment.

A reasonable person might conclude that city leaders shouldn’t be held responsible for unforeseeable circumstances such as COVID-19. That is fair, but it also demonstrates that city leaders shouldn’t be involved in such speculative investments in the first place. As I’ve argued for years, the job of city government should be to provide basic services efficiently.

Private investors are much better at assessing risk because they are investing their own money. Cities are responsible for providing the basic services that we all depend on, and should be more interested in protecting the public dollars that we may depend on in a time of crisis.

 

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About the author

Patrick Tuohey

Senior Fellow

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