Monday, June 7, 2010

LOCAL NEWS: What a bigger convention center could mean to Boston

James Rooney wants to make Boston one of the nation’s premiere convention destinations. As executive director of the Massachusetts Convention Center Authority, he is proposing to accomplish that through a dramatic expansion of the six-year-old Boston Convention and Exhibition Center. He sat down recently with reporter Casey Ross to discuss the project and how to persuade a skeptical public to pay for it.

That speaks to the question of whether we should be satisfied with not just the convention operation, but Boston’s role as a globally significant destination. In my view, Boston has a great deal of potential to be a meeting city in a new world economy, and part of that means hosting the most significant thought leaders, assemblies, conventions, and meetings in our core industries, be that life sciences, academic, or (information) technology.

Those are the underpinnings of our economy. We should be a leader in hosting groups that want to talk about those things. We don’t have the capacity to do that on the scale that we could.

Why isn’t the existing facility big enough?

It is the largest building in New England; it’s a total of 2.1 million square feet of built space and over a half-million square feet of exhibit space; it is longer on its side than the Empire State building is tall. It is huge. But that being said, it’s only the 23d-largest convention center in North America. Chicago, for example, has a facility that is five times as large as the BCEC. They are able to host multiple conventions at once, which we can’t do.

Is there enough space around the convention center for the expansion you envision? (Rooney has previously outlined a new 400,000-square-foot hall, a 5,000-seat auditorium, a 75,000-square-foot ballroom, and a 1,000-room hotel.)

When we acquired the land to build the BCEC, we assembled 62 acres, and we’ve used about 40. So we have a little over 20 acres. The hotel becomes a little trickier because two of the sites are above highway structures, so they would come at a premium to build. There are other sites on solid ground that don’t have that premium, and we’ll have to see whether there is a trade-off in the cost of construction versus site optimization.

Why should people support this?

It starts with jobs. This is one of the biggest and boldest development plans under discussion right now. There are a lot of people in the building trades out of work who would get jobs building this development. There are thousands of permanent jobs in the hospitality industry associated with conventions, and there are broader economic impacts generated by what conventions bring — hotel room nights, spending at restaurants, spending on entertainment. But there’s a more macroeconomic picture here, which is maintaining Boston’s leadership role in hosting meetings of key industries, and you can only accomplish that if you have the infrastructure.

What else is needed to support the BCEC’s growth?

The most critical component is additional hotel rooms. There are 1,700 hotel rooms within walking distance of the BCEC. For a big convention, we may be able to acquire for them 1,000 or 1,200 rooms. Competitor cities have an average of 8,000 rooms within walking distance of their conventions centers. So that means we’re busing people all over the city. That creates a competitive disadvantage because of the added expense in Boston that doesn’t exist elsewhere. And it’s an inconvenience for attendees. We need today 4,000 rooms; if we expand, we’ll need 6,000 rooms.

Would the expansion require increases in existing tourist-focused taxes and fees?

There’s no clear answer on that yet. The funding mechanisms set up in 1997 to build the BCEC were brilliant. They were all hospitality and tourism taxes and fees, which thankfully for the local population are mostly supplied by visitors who stay in hotels and take trolley tours. That’s not to say local people don’t do that, but most of that money comes from visitors. The financing of the BCEC expansion would not be in competition with other public needs, such as education or public safety, if we keep it within the tourism economy.

You previously said you might seek public financing for the hotel component. How would that work?

In the hotel case, public financing is really a mechanism: It is the public issuing debt, but the funds used to pay that debt would be generated by the operations of the hotel. It’s not the case that we would need to take from existing taxes the public pays. The use of public financing is a huge policy question. It’s relatively new ground for cities and states across the country. There are a number of success stories, the best one being Chicago, which built a publicly financed hotel that profits $16 million a year for the taxpayers.

But if Boston’s hotel doesn’t do well, then the public is going to be on the hook for the debt. How can you be sure this is going to payoff for taxpayers?

I’d be foolish to give anyone a 100 percent guarantee. There is a certain amount of risk in any business venture. The question is, is it prudent risk? We’ll take a hard look at that. As we look at the business the convention center would generate for the hotel, there’s a solid foundation of demand we can virtually guarantee. Instructive is the performance of the Westin Hotel (next to the BCEC), which was built by private developers with public subsidies and tax breaks. That hotel is one of the highest-performing hotels in Boston.

How long will the review process take and when do you intend to file plans?

Our goal is to be in a position to file whatever legislation we need in the first quarter of 2011. State and city approvals would be needed, a lot of environmental review, a lot of public process. If I was to hang out a goal for when I’d like to open the doors on some of these elements, it would be in the 2015 to 2017 time frame.

Casey Ross Boston Globe May 30, 2010

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