Conventional Fears

Let’s be honest. We all like new stuff.

So I can understand why Jefferson City officials are planning a fancy new conference center. But as we have said in the past, the government is not the best suited to plan development. There are two proposals for the project; both companies have told Jeff City officials that the government’s request for a facility with 30,000 square feet of exhibit space and an accompanying 200-room hotel is not realistic in this market.

The city has promised $9 million in lodging tax revenue to support construction, and is discussing the details of an operating subsidy.

The News Tribune editorial board has fears, writing, “Worst-case scenarios revolve around a money-losing conference center that must be vacated or infused with a perpetual subsidy of city tax dollars.” This is a real fear.

A Brookings Institution study found that the convention marketplace in the U.S. has been declining for quite some time. Yet, localities have continued to compete with each other for convention business by investing in new construction and expanding existing facilities. The study notes that many conference centers, including those in Saint Louis and Washington, D.C., have operated at a loss.

Why are Jefferson City officials so eager to invest in something for which they have not demonstrated a need? If developers who stand to gain from subsidies are telling the government that their plans will not be profitable  — the government should listen.