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Chapter 2

Paying for the Box

The grand public convention halls of the 1920s and 1930s—Cleveland’s Public Auditorium, Kansas City’s Municipal Auditorium, St. Louis’s Kiel Auditorium—were built by city governments and financed by city governments with general obligation debt. Those debts were backed by the “full faith and credit” of a city government, effectively the full stock of property and other tax revenues available to the city. And under state laws in these states and the vast majority of others, general obligation debt had to be approved by a majority of the local electorate.

Cleveland’s Public Auditorium was approved by the city’s voters in 1916 and finally completed in 1922. But when voters were presented with a scheme for financing and developing a new convention center in 1957 and 1958, they turned it down both times. Finally, in 1960, a smaller, restructured convention center scheme won voter approval. That center was supposed to vault Cleveland to the front rank of convention cities. As of 1981, it was still ninth largest in the United States.

When, after some twenty years of use, the center required improvements and refurbishing, in 1985 Mayor George Voinovich chose to invest some $28 million without asking the voters to decide. The city issued notes, largely financed by the Greater Cleveland Convention and Visitors Bureau through the bureau’s receipt of countywide hotel taxes, that avoided both a public vote and the limits of the city’s fiscal circumstances.

Cleveland’s business and political leaders repeatedly sought to develop an entirely new downtown convention center, beginning in the late 1990s. They ultimately chose a scheme in 2007 that neatly avoided the city government and its ongoing financial problems. Instead, the initiative for the convention center and a “Medical Mart” trade mart came from the overlying Cuyahoga County government. And in financing the $450 million project, the county’s three commissioners (by a vote of two to one) avoided the need for any public vote by committing the revenues from a special countywide quarter-cent sales tax.

Cleveland’s fiscal evolution neatly illustrates the changes over the twentieth century in convention finance. Where city governments once dominated development of public assembly facilities, the public role has increasingly shifted to other government entities, a diverse group ranging from county governments, as in Cleveland, to public authorities (such as the New Orleans Morial Convention Center Authority), regional entities (like the Greater Richmond Convention Center Authority), and state governments. And where the initiative to finance and build a convention facility once commonly required a majority vote of the local electorate, the new financing and organizational arrangements now regularly avoid the need for voter review and approval.

The restructuring of convention center finance away from direct voter approval was not happenstance. It reflected the increasing willingness of the national bond market to accept revenue bonds—debt issues backed solely by a limited tax or revenue source, such as a hotel or car rental—and the imagination of investment bankers seeking to serve local officials. But far more important, it was a choice, imitated and repeated across scores of cities, that served the political and development ends of both elected officials and local business leaders, as the changed social and political environment of major cities after 1970 made voter approval increasingly unlikely.

Kansas City’s business leaders had long viewed their community as a natural locale for major national conventions, as it is a major Midwest rail hub. The city’s Convention Bureau regularly boasted dozens of major meetings, including some 24 national conventions, 54 regional meetings, and 36 state conventions in fiscal year 1929. The city had erected a new convention hall in 1900, just in time to host the Democratic National Convention. But by the 1920s this was increasingly viewed as outdated and too small. The minutes of the convention committee of the Chamber of Commerce said, “We are gradually being eliminated from consideration through the lack of two important civic facilities now possessed by virtually all of the larger cities in the country…. One is dining and meeting space in hotels … and the other is of course the lack of a convention hall with which to care for the larger gatherings.” In language that would be repeated decade after decade in Kansas City and beyond, the group argued, “Until they are realized, Kansas City must accept the fact that it is no longer a convention competitor with the larger cities of the country.”¹

Yet if the convention committee and the larger Chamber of Commerce earnestly desired a bigger convention hall, financing required voter approval of a city bond issue by a two-thirds majority. An initial modest bond proposal for $800,000 to acquire land for a new “Municipal Auditorium” had failed to receive the needed majority in November 1925. A second attempt, to secure $3.5 million to construct a new assembly hall in 1928, also went down to defeat.

The succession of bond issue defeats during the 1920s, including eight separate proposals in 1928, led the chamber leadership to propose a very different political strategy that would encompass not only the proposed Municipal Auditorium but a host of other needed public investments. In his November 1929 address to the Chamber of Commerce annual meeting, chamber head Conrad Mann argued, “We are going after this [bond issue] thing piecemeal…. It is just a makeshift program and the very nature of this program creates hostility among our citizens.” Mann called on his colleagues to back a “non-partisan ‘Kansas City Spirit’ movement that will put this thing over.”²

Mann’s view of a comprehensive bond program was remarkable in fiscal terms. The failed 1928 bond program had involved some $18.5 million. Now Mann said the business leadership should “center your efforts upon a major program and submit to the citizens of Kansas City a bond issue of not less than 75 million dollars.” He concluded,

We must give visible evidence of our confidence in Kansas City to people, regardless of where they may reside, that as Kansas Citians, we have faith in our own city; that we are willing to carry the burden in order to make our city a place of happy homes as well as an abiding place for industry and business in general. There is no way in which we can do these things in a more substantial, a more convincing way than by voting a bond issue and by so doing make funds available to meet the expenditures for improvements which are so much needed for our town.

In early 1930, city manager H. F. McElroy proposed that the chamber’s Conrad Mann chair a Committee of 100, charged with crafting a ten-year “plan of improvements” that would be the basis of a comprehensive package of bond proposals. While Mann and city officials sought a broad base of citizen involvement, they were not about to leave a proposal as critical to the city’s economic future as the proposed auditorium to chance. The subcommittee charged with reviewing the plans for the auditorium was headed by the president of the firm operating the Muehlebach, the city’s leading hotel; the secretary was the manager of the convention bureau.³

Citing an annual loss of millions of dollars of “convention business … directly attributed to the lack of an adequate public auditorium,” the subcommittee recommended a $5 million bond proposal for the new convention facility. Business interests united behind a site adjacent to the existing convention hall, preserving the advantage for nearby hotels such as the Muehlebach. And despite the fact that most such recommendations were seriously trimmed to fit city financial resources, the final recommendation of the overall committee was for a $4.5 million auditorium bond—the second largest of 16 proposed city bond issues.

Mann’s political calculus proved quite correct. With solid business backing and support of the Pendergast political machine, all 16 bond issues on the March 1931 ballot were approved, with the Municipal Auditorium winning a 79.2 percent “yes” vote. The Auditorium was able to take advantage of a $1.29 million federal public works grant, and some $750,000 from the sale of the existing convention hall, and opened in October 1935.⁴

Kansas City’s successful 1931 bond program neatly illustrated both the potential and the constraints of voter-approved general obligation bonds for major public building projects. With Missouri’s requirement for a two-thirds majority for each bond proposal, minorities of the electorate had a substantial impact on individual projects. A broad package, calculated to win the support of a broad popular coalition, could deliver what a single scheme for a new auditorium or civic center could not. That pattern of broad electoral coalition-building through a collection of public investment projects—projects that could be distributed across the community—was also exemplified by Missouri’s other major urban center, St. Louis.

St. Louis in the 1920s faced a political and fiscal situation parallel to Kansas City’s. While the business leadership had embraced a series of major development schemes for a new complex of public buildings and parkways, the required bond issues had often failed to pass. The city’s first attempt at a grand, comprehensive package came in 1920 with a bond program including 18 individual items, with a total cost of $24 million. For the downtown interests, the 1920 package included $1.25 million for the central parkways and $900,000 for a new Municipal Auditorium.

The May 1920 effort saw six of the proposed 18 bond projects receive the required majority. The proposed auditorium garnered a 62 percent “yes” vote, and thus failed to pass. Its failure was part of a larger pattern described by historian James Primm: “For decades, small and middle-class property owners, especially in the heavily German wards, not trusting the big-business leadership and feeling that increased taxes would fall most heavily on themselves, had maintained a conservative stance that amounted to civic neglect.”⁵ But the failure of the auditorium and other proposals did not deter the commitment by some to a broad program of public investment. Less than two weeks after the vote, the city’s chief planner, Harland Bartholomew, argued, “That plan, though it has not yet been approved by the necessary majority of voters, is practicable and necessary, and it is only a matter of time when people will recognize its necessity and it will be adopted.”⁶

The St. Louis Post-Dispatch joined the call for a new bond effort, noting in December 1921 that the city needed $25 million to put local sewers in safe condition. The Chamber of Commerce also added its weight behind a broad program of improvements, including the failed public auditorium plan. As the notion of a broad package of public investments gained support, it also began to grow in size and scope. In early 1922 a General Council on Civic Needs, comprising more than 200 members, met to assess the full scope of required public spending. Their recommendation to the city government came to more than $75 million. The city’s official fiscal watchdog, the Board of Estimate, reviewed and altered the plans, adding a $4 million proposal for a new courthouse. The final package came to $78.1 million. At each step in the development of the capital program, new groups and interests successfully pressed to include their own “needs” and spending priorities. And in order to win African American votes, Mayor Henry Kiel and Council President Louis Aloe agreed to finance a new city-owned hospital serving the black community.

The grand product was a February 1923 bond program including 21 separate issues, with a total cost of about $88 million. The broad, comprehensive program proved a political success, with 20 of the proposals winning the required two-thirds majority, including the new auditorium with a $5 million price tag. St. Louis’s new Kiel Auditorium opened in 1934, combining an auditorium seating 3,600 and a massive exhibition hall, enabling the city to host major national events.⁷

For St. Louis, Kansas City, and a host of other cities in the first half of the twentieth century, the route to building a new convention hall was politically and fiscally difficult. The need to win majority or super-majority voter approval in most states limited the scale of public investment and often resulted in outright defeat. The electorate often proved less convinced than the city’s business and political leaders of the virtues in hosting conventions. The common political response was an effort to create a broad, indeed all-embracing, political coalition through a comprehensive package of public improvements. Kansas City and St. Louis succeeded by tying the public buildings and parkways sought by downtown interests to neighborhood-level improvements and basic facilities such as sewers and local parks, carefully distributed across the city and to specific voter groups.

The political pressures to marry proposed new convention halls and auditoriums to a host of other public improvements, however, did not necessarily assure electoral success. Both Kansas City and St. Louis were obliged to repeatedly put their auditorium plans to the electorate. And other cities, such as Chicago, saw local voters regularly defeat convention hall proposals. The history of public auditorium and convention hall votes was one of electoral fragility and uncertainty rather than public enthusiasm.

Public Improvement and Downtown Revitalization

The Depression and World War II severely limited the ability of city governments to finance major public buildings and improvements. By 1945, the end of the war and the prospect of boosting new private development led a number of cities to propose major public investment initiatives. Those initiatives often reflected plans that had been developed during the Depression, and commonly were focused on efforts led by the local business community to support the downtown core and remedy slum housing problems in adjacent neighborhoods.

Dallas, pressed by both the Chamber of Commerce and the “powerful Dallas Citizens’ Council,” had commissioned planning consultant Harland Bartholomew to develop a new master plan in 1943. While the plan covered a range of subjects across the metropolitan area, it included a specific effort to encourage the “development of a compact and stable central business district, wherein high property values can be maintained over a long period of time.” Bartholomew’s vision for supporting the downtown core focused on building a new complex of public buildings, sited where it could deal with the blight of nearby slums. And he specifically added, “One of the early needs is that of a Convention Hall,” located in “proximity to the downtown district.”⁸

Dallas’s plan for a new civic center, including a new city hall and public auditorium/convention hall, were joined with local street, sewer, and park improvements as part of a $40 million bond package in late 1945. The idea of a comprehensive package of public investments was very much parallel to the models of St. Louis and Kansas City, as was the premise that these improvements would enable Dallas to keep up with other cities of the Southwest. The civic center scheme that joined the city hall, library, and auditorium in one downtown location was the product of city planning consultant Harland Bartholomew, who viewed the proposed civic complex as a means of “exerting a stabilizing influence on the downtown district.”⁹ The new Municipal Auditorium, in particular, was described as a means of bringing new visitors to the downtown and supporting area hotels and retail stores.

Dallas’s entire $40 million bond package was approved by the voters in December 1945. But that electoral success did reveal a continuing problem in gaining public support. Of the seventeen individual bond proposals, the auditorium came in almost at the bottom of “yes” votes, just slightly better than the proposed city hall and a livestock arena. The Dallas electorate that could readily support sewers, fire stations, and street paving was much less enthusiastic about the benefits of a new municipal auditorium.¹⁰

Dallas was not the only city that viewed a new public convention facility, perhaps as one part of a new civic center complex, as a means of refashioning the landscape of downtown development. Seattle business leaders too saw a new civic center as a means of both enhancing the city’s visibility and boosting the development potential of the downtown core. The planned “Seattle Center” development would both provide a site for a planned 1962 World’s Fair (“Century 21”) and “bolster the central business district, to enable it to hold its own against the rapid growth of suburban areas.”¹¹

But in order to build the facilities for the civic center and fair, Seattle was obliged to turn to the local electorate for approval of general obligation bonds. The $7.5 million bond issue for acquisition of the site north of downtown, a new concert and convention hall, and a multipurpose auditorium was passed in November 1956. That success provided the impetus for a matching $7.5 million appropriation from the state that secured the development of Seattle Center and the World’s Fair complex.

The focus of Seattle and Dallas on efforts to boost private investment and development in the downtown area was common to many large cities in the 1950s and 1960s. The availability of federal urban renewal funds for clearing and rebuilding slums, from the Housing Acts of 1949 and 1954, and the prospect for redeveloping deteriorated zones in and around the core, served as an impetus to a host of convention center development proposals in the decades after World War II. But where these cities succeeded in gaining sufficient voter approval for new meeting facilities, the outcome in other cities was far more problematic. Other cities tried, and often failed, to pass the necessary bond issues.

In mid-1957, Cleveland Mayor Anthony Celebrezze joined the city’s business leaders in promoting a scheme by New York developer William Zeckendorf for a downtown complex of hotel, office buildings, and apartment buildings on the city’s lakefront. But the cornerstone of Zeckendorf’s plan was the construction of a new convention hall, one long sought by downtown business and hospitality interests. And the financing of a new convention center necessarily meant gaining voter approval for general obligation bonds. With great fanfare, the $15 million convention center bond proposal appeared on the city ballot in November 1957. The bonds managed a 52 percent “yes” vote, but fell short of the required 55 percent majority. Mayor Celebrezze and developer Zeckendorf tried again with the same scheme the following year. The “yes” vote slipped slightly, and once again the plan failed.¹²

With two successive defeats, Zeckendorf gave up on Cleveland and moved on to other cities. But Celebrezze, and more importantly the business leaders of the Greater Cleveland Chamber of Commerce and Cleveland Development Foundation, were unwilling to give up on the promise of a big new convention center and the prospect of anchoring downtown revival with it and the new hotel it would surely draw. The result was a political compromise with the leadership of the city council that involved a less costly convention facility at a different site. With that compromise, a new $10 million convention center plan was put on the ballot in November 1960, and finally succeeded in winning voter approval.¹³

The route to electoral success was no less rough for 1960s Atlanta. Newly elected mayor Ivan Allen, Jr., and the Chamber of Commerce he had just led as president proposed a new auditorium/convention hall in early 1962. A $10 million civic center bond issue was packaged with other spending proposals for street and sewer improvements and a major new cultural and arts center in Piedmont Park. Despite the unanimity of the city’s white civic leadership and the promise of a broad set of community improvements, the entire bond package of $80 million failed to win voter approval.¹⁴

Mayor Allen and the chamber leadership were not willing to give up on the planned auditorium/convention hall, despite the fact that a post-election survey showed only 58 percent of voters willing to support it, compared to 84 percent backing for schools and 79 percent for street or sewer improvements. Allen chose to try again with a convention hall reduced in scale and cost, dropping the bond issue amount from $10 million to $9 million. Submitted to the voters again in May 1963, the convention hall issue passed. But Atlanta was left with an undersized convention facility, with business leaders complaining of its inadequacy shortly after it opened.

The cases of Cleveland and Atlanta suggested that voter support for convention center bonds was not necessarily certain, even with broad backing from business and political leaders including a seemingly popular mayor, the promise of new jobs and development, and the packaging as part of a larger bond program. That fact was certainly evident in 1960s St. Louis. A modest bond proposal for renovating city buildings, including the Kiel Auditorium, on the ballot in January 1962, was defeated. A second attempt later that year met defeat as well. And a 1966 bond issue for expanding the Kiel and adding more exhibit space was also defeated, managing the lowest “yes” vote (54 percent) of the 18 issues on the ballot.

St. Louis faced the unusual problem of having to secure a two-thirds majority under Missouri state law. But it also faced a new set of political and electoral realities during the 1960s, as the coalition of upper-income whites and African American votes that had historically provided the votes to pass major bond issues began to collapse. That change, in turn, reflected a new level of political involvement by the African American community, linked to the civil rights movement, and the increasing white outmigration from the central city. The new electoral politics of bond issues were fully evident when St. Louis business and political leaders succeeded in putting a proposal for building an entirely new convention center on the ballot in March 1971. The result was an abject defeat, termed by the St. Louis Post-Dispatch “the worst defeat of a local capital improvement plan here in many years,” with the bonds managing just 36 percent of the vote. Even the predominantly African American wards, long the source of 75 and 80 percent margins for previous bond proposals, delivered just a 45 percent “yes” vote—far below the needed two-thirds.¹⁵

Plans for a new convention center in downtown Kansas City followed a very similar trajectory to those in St. Louis, with much the same outcome. By the 1960s, the Municipal Auditorium that was the great political triumph of the 1930s was showing its age, and as in Cleveland and Atlanta, local boosters were looking to compete with newer, bigger centers in other major cities. At a meeting of the board of directors in March 1964, the Kansas City Chamber of Commerce took up the question of the need for more exhibit space at the auditorium, noting “The increased competition for convention business.”¹⁶ That May, the chamber leaders moved that “a complete study be made of the possibility of new and expanded auditorium facilities in Kansas City … [with] suggestions for methods of financing the project.”¹⁷

The new convention center had to wait for passage of a county government priority, a new stadium, in mid-1967. But with passage of the stadium bond proposal, the chamber leaders again took up the question of more convention space. At the chamber board’s July 1967 meeting, president Robert Ingram said “that it would be necessary for revitalization of effort for the establishment of an Exhibition Hall,” noting that “Mayor [Ilus] Davis advised him that the cost today would be approximately twelve million dollars” and that “hotel interests are quite concerned with building new hotel facilities until they are assured that we can have more conventions.”¹⁸ Two months later, Ingram reported to the board that he had been in touch with the city council and “that they were attempting to work it into a capital program.”¹⁹ After the city manager and staff crafted a broad capital improvement effort, Mayor Davis reported to the chamber in January 1969 that a planned bond program would join the new convention center with bonds for street lighting, swimming pools, airport improvements, and remodeling of City Hall. The Mayor concluded by saying, “We will call on you when the time arises that we need your support on these various projects.”²⁰

What the mayor and city council finally crafted was a package of 17 individual bond issues, for a total of more than $143 million, in keeping with the city’s historical pattern of comprehensive packages of bond proposals. The largest single item on the list was proposition number 3—$23.5 million for a new exhibition hall. The campaign for the December 16, 1969, bond election was bankrolled by the chamber, promoted as a “Program for Progress,” and sold vigorously by local media. The Kansas City Star ran a front page editorial on December 15, arguing that “The prime consideration at the polls tomorrow is whether Kansas City is to grow or retrench in the 1970s.”²¹ The campaign mirrored a host of past efforts. This time it did not work.

Each of the 17 bond issues was defeated, failing to win a two-thirds majority. Two, for police and fire, actually managed to top the 50 percent mark. But most did far worse, including the $23.5 million exhibition hall proposal. It managed just a 32.6 percent “yes” vote, placing it next to last in public appeal. The defeat was a stunning failure for both the city administration and the business leadership. Meeting with the chamber two weeks after the vote, Mayor Davis “explained that the Program was caught in the upgraft [sic] of feelings against taxes nation wide.”²² It was also clear that the mayor had little interest in returning to the voters quickly, as the city had in the past. The mayor said he had “no magic words or direction,” and that “all issues have to be passed and it is only a matter of when,” posing the question, “How do we do it?”²³

By about 1970, the business and political leaders of both Kansas City and St. Louis faced the larger demographic and political realities that had confronted their counterparts in Cleveland, Atlanta, and a number of other cities. The bond programs that had so consistently garnered public support in the past were now far more problematic. And no single project demonstrated the public’s indifference or disdain more than the investment in a new convention center or exhibition hall. However appealing these major investments might be to hotel owners, downtown firms, and local business leaders, their appeal to an electorate concerned about things like property taxes, (often dwindling) basic city services, and neighborhood change was remarkably limited.

The answer to the question posed by Kansas City mayor Ilus Davis of “How do we do it” clearly had to be differently—with some fiscal or political change that held the promise of reversing (or avoiding) the public’s disinterest.

A Fiscal and Political Reformation

Kansas City

The plaint of Kansas City’s mayor was largely irrelevant to the city’s Chamber of Commerce leadership. The chamber had planned and bargained for a new convention facility for over half of the previous decade, and the group was unwilling to accept the December 1969 vote as the final verdict. Just four months after the defeat, in April 1970, Lester Siegel of the chamber’s Convention and Tourism Department reported on a series of meetings to consider financing alternatives. Siegel “advised they were going to approach the people who would reap direct benefits from a new facility to participate in at least partial financing of a large facility to supplement the present space.”²⁴ Beyond the possibility of private backing, they were also “checking with other cities on how they were able to finance their facilities.”²⁵ Behind the scenes, business leaders were pressing the city council to move ahead on some arrangement for a new convention center. But it was not until late June 1971 that council member Sal Capra was able to publicly announce a city study of financial alternatives.²⁶

The decade of the 1960s had not been kind to the Kansas City central business district. New office construction in the suburbs had matched downtown development, and in the early 1970s would substantially exceed it. In terms of constant dollars, downtown retail sales had slipped from $157 million in 1963 to $137 million in 1967 and then $95 million in 1972. And the situation was getting worse, with one 1976 study reporting, “The Kansas City CBD experienced significant declines in all indices of economic vitality in the 1970–1975 period despite regional growth over the same time frame.” The city’s business leaders were desperate to boost downtown’s fortunes.²⁷

Whatever the fiscal preferences of the city council, the chamber was insistent on a convention center soon. The group voted on June 28, 1971, to reaffirm its commitment to a new hall “at the earliest possible date,” calling for the expansion to “be in the close proximity or adjacent to the present facilities as far as possible and that it be in a downtown location.”²⁸ Although the chamber clearly wanted a new convention hall, the financing alternatives of a business tax or a lease-purchase deal were less enticing. The group also “urged that the need for Convention and Exhibition Hall expansion be brought before the voters at the earliest possible date.”²⁹

Mayor Charles Wheeler embraced the chamber position and called for a November vote on the convention center proposition alone. But council members wanted to either defer a vote, or provide for repaying the bonds with taxes on hotels, restaurants, and ultimately visitors, as a means of making the project more appealing to the voters. After one member proposed building the new center adjacent to the city’s old airport rather than downtown, the council leadership and the chamber met in September 1971 to reach a politically acceptable solution.

That solution was made public on September 22. The council agreed to finance the new facility with revenue bonds issued by a nonprofit corporation, in a variation on the lease-purchase scheme.³⁰ They could thus avoid a public vote on the center proposal. Leaders from the hotel and restaurant business in turn agreed to a set of new taxes, and the chamber Board of Directors approved both the financing arrangement and the commitment to a downtown site. Indeed, the chamber went on to craft a plan under which it would obtain $1.25 million in private loans to finance architectural work on the center, and then promised that “if a reasonable amount of money is needed to complete the convention center, it will further undertake to obtain these funds through contributions from the business community of the Kansas City metropolitan area.”³¹

The deal to finance and build the new convention center was a political masterpiece. It enabled the chamber and the hospitality industry to achieve their goal of a quick start on the structure, while avoiding the potential for defeat and public embarrassment that might well have accompanied another vote. The council members were able to argue that business and visitors would pay, rather than local property owners. And they were thus able to free up part of the city’s property tax to support additional debt planned for a vote in 1972.

The political success of the convention center deal was nonetheless subject to a legal question, and in June 1972 a suit was filed that raised that question. The legal vulnerability of the planned center was mirrored by its fiscal problems. In July 1973, the Kansas City Star headlined “Convention Center Price Tag Rises Sharply.”³² The $19 million convention center was now estimated to cost $35 million, about the outer limits of the revenues from the hotel and restaurant taxes. But the legal problems won out—the Missouri Supreme Court in September decided against the city’s financing scheme, concluding that any commitment of city tax revenues required a public vote.³³

If the 1971 deal for the new convention center was voided by the court decision, the timing was nonetheless fortuitous. Quite independently, the city had been developing a broad gauge capital improvement program scheduled to go before the voters on December 18, 1973. The city council quickly moved to add the convention center as the fourteenth separate bond proposal, with a total cost of $30 million. Thirteen of the bond proposals, including $22 million for street improvements and $10 million for urban renewal, were to be paid for by the city’s general revenues. But the new convention center was different—it could be sold as paid for by visitors, through the new hotel and restaurant taxes.

The chamber leadership did not simply trust to the public’s civic spirit in winning approval for the center bonds. In late March, the leaders behind the bond program had reported on a meeting “with principals of the KANSAS CITY STAR and they have pledged full support.”³⁴ The Star provided substantial backing, both on its editorial pages and in news coverage. An extensive article on the Sunday before the vote announced, “Convention Center Dividends Paid in Business, Jobs” and described the competition the city faced for convention business, noting the successful results of new centers in Dallas, Atlanta, and Denver.³⁵

The Chamber of Commerce, together with the city’s hospitality community, provided the bulk of campaign funds. And the campaign effort extended beyond traditional advertising and public relations. Mayor aide and political consultant Jerry Jette noted the need to bring ward political organizations into the bond campaign:

The existing effective political organizations in certain sections of the City must be pulled into the campaign in favor of the Bond Package …. The areas to which I refer are wards 1, 2, 11, 12, 13, 14, 15, 16, 17 and 18. These are among the least affluent in the City and if we are to expect positive support at the precinct and on election day, certain monies must be made available…. Each precinct within each ward will be assigned a quota of 150 “yes” votes.³⁶

The fiscal commitment of the Chamber of Commerce to an effective campaign, perhaps including “certain monies” as well as appeals to community improvement, proved vital.

Ten of the 14 bond issues on the December 1973 ballot failed to receive the required two-thirds majority. The proposals for police and fire protection passed, but urban renewal, street improvement, and parks bonds all failed. The $30 million convention center bond literally squeaked through, with a margin of 22 “yes” votes out of more than 46,000 cast.

The successful 1973 convention center vote gave Kansas City a brand-new convention center, which opened for business in 1976. It also marked the beginning of a new era in convention center financing. The commitment of new hotel and restaurant taxes to pay off the general obligation bonds sold for the center fundamentally changed the fiscal and political environment for convention center investment. The new H. Roe Bartle Exhibition Hall was built across the street from the Municipal Auditorium, where it would support the existing concentration of hotels and anchor the southwestern core of the central business district. The new center would be expanded and improved at substantial cost in subsequent years. But Kansas City voters would never again face a convention center bond issue proposal that required two-thirds majority support.

In 1988, when St. Louis business and political leaders turned to the Missouri state government for help in financing a new domed stadium for a potential National Football League team, Kansas City chamber leaders successfully lobbied to pair a state commitment for Bartle Hall expansion with the St. Louis proposal. In July 1989, Governor John Ashcroft signed legislation that both created a regional sports complex authority for St. Louis and offered Kansas City $2 million a year to help pay for expansion of the Bartle Hall facility.³⁷

The commitment of state financing helped move the expansion effort ahead. Yet the state dollars could not pay the full cost of a major expansion, estimated at over $100 million. For that, Kansas City needed more local money. City leaders had imposed a set of hotel and restaurant taxes to pay for the bonds used to build Bartle in the 1970s. By raising those tax rates, it could provide a steady stream of revenue to retire new bonds for the expansion. At the same time, the tax increases would require voter approval, but only a simple majority.

By shifting to financing with a tax increase rather than a bond issue, Kansas City political leaders neatly reduced the size and scale of the electoral coalition needed to approve the expansion project. There was no need to propose a broad, all-inclusive package of public improvements for the entire city. But there was still a need to ensure the support of critical groups of voters. The result was a series of “side deals” to win council and community backing for the Bartle expansion. For the African American community, there was a commitment to neighborhood tourism projects that could include funding for a jazz hall of fame. Union leaders won a new contract for city employees.³⁸

The hotel and restaurant tax increase was backed by the “Kansas City Jobs Committee” with a $337,000 campaign effort and the strong editorial backing of the city’s two daily newspapers. The result was a 61 percent “yes” vote, securing some $6 million in annual revenues that could both pay for the expansion, now pegged at $120 million, and support a “tourism development fund” for projects like the Jazz Museum. The city neatly avoided the state requirement for voter approval of bond issues by crafting a lease arrangement, with the debt actually issued by the “Kansas City Municipal Assistance Corporation,” a nonprofit entity created in 1984 to get around state debt restrictions, and overseen by a board that included the city manager, the city attorney, and the city’s director of finance.³⁹

The expanded Bartle Convention Center formally opened in late September 1994, adding some 200,000 square feet of exhibit hall space to the earlier facility, at a cost of $144 million. Kansas City mayor Emanuel Cleaver termed the larger edifice a “majestic convention center that will set the standard for convention centers around the world.” The mayor added, “It makes a statement nationally that Kansas City is a big-league player when it comes to conventions.” The city’s convention and visitors’ bureau promised that 40 new conventions had already been booked for the expanded center through 2002. And there were promises of a boom in private hotel and restaurant development in the surrounding area.⁴⁰

Yet, much as with its original completion in 1976, the expanded Bartle almost immediately faced growing competition from other cities. And in 2000, the consultant hired by the city council and the convention and visitors bureau, John Kaatz of CSL, delivered a withering assessment of what the city had bought for its $144 million. He concluded, “Bartle Hall’s meeting rooms are substandard in decor and technologically outdated, and its undersized ballroom is costing Kansas City lost convention business and tax dollars.” “You have to spend some money,” he added, telling a council committee, “Kansas City ranked near the bottom of several comparison lists of the nation’s top 25 convention cities and risked falling even further without a Bartle Hall upgrade.”⁴¹

Kaatz’s analysis provided the justification for yet another call for investment in improving and expanding Bartle. And just as with the first expansion effort, the $74 million price tag of the new ballroom and additional upgrades would be on the ballot as an increase in city hotel and restaurant taxes, requiring only a majority vote for approval. And rather than a broad program of public improvements, the tax increases were paired on the ballot with a proposal for a $35 million revenue bond issue, much of it earmarked for downtown improvements. According to the city’s economic development director, “When we can, we want to invest our dollars to create a catalytic effect, to leverage private investments and create market opportunities.”⁴²

The November 2002 ballot gave the Bartle upgrade tax increase a 52.8 percent “yes” vote, the lowest margin since the two-thirds majority garnered by the original bond proposal in 1973. But by changing the fiscal and political structure of convention center finance, Kansas City’s business and political leaders had literally “reformed” the capacity for convention center investment. By 2002, the business community could reassuringly assert that “business travelers” would pay the higher hotel taxes, and that the burden of the increased restaurant tax, “adding a nickel to every $20 restaurant tab,” was comparatively mild. The result, just as promised in every previous vote, was that Kansas City would remain a competitive convention destination, fully capable of competing with every other major city and luring tens of thousands of new convention attendees to the city each year.

The shift to revenue bonds and a vote solely on increases in the hotel and restaurant taxes did not remove the need to work out deals and compromises, both with the city’s hospitality interests and with important voter blocs. But it eased the political problem of securing electoral support, while being manageable in an environment of local fiscal limits. Convention center and downtown backers could regularly assert that these taxes could only properly be used for boosting tourism. And they could reassuringly portray the convention center investment as one that would both boost visitor spending and secure the fortunes of downtown.

San Antonio

The fiscal and political reformation managed by Kansas City business leaders and elected officials was not unique. Faced with growing voter resistance to both increased taxes and downtown development projects, a broad array of other cities succeeded in creating new fiscal schemes that assured public dollars for expanded centers without a vote on long-term debt.

San Antonio’s first post-World War II convention center efforts began with the plan for clearing and rebuilding much of the fringe of downtown as the site for a world’s fair, Hemisfair ’68. The fair plans included a new “Community and Convention Center,” to be financed with city general obligation bonds. That in turn required a referendum vote, and the center proposal with a $10.9 million price tag was packaged as part of a broader seven-item, $30 million bond program, including funds for parks, libraries, and street improvements, in January 1964.

Less than a decade after the new center opened in 1968, city officials called for an expansion. This time there was no attempt to put it on the ballot for voter approval. And there would be no further votes on center expansion or financing in future years. The expanded and renamed Henry B. Gonzalez Convention Center opened in 1977, financed by the revenues from the city-owned City Public Service gas and electric utility.

By early 1983, Mayor Henry Cisneros was promoting the idea of yet another expansion, arguing that it would allow for larger conventions and draw more visitors to the city. Even before it commissioned a feasibility study of the expansion, the city council committed to an increase in the hotel-motel tax. That hotel tax increase would pay for the “certificates of obligation” issued to pay for the expansion, neatly avoiding the need for a public vote on a bond issue proposal.⁴³

The expansion of the HBG Convention Center was completed in late 1986, bringing it to 240,000 square feet of exhibit space. Yet once again, only a few years passed before downtown business interests and local hoteliers were pressing for another major expansion. Arguing that the center “is at absolute full capacity during months of high traffic,” consulting firm Gladstone Associates recommended in November 1990 adding up to 230,000 square feet of exhibit space, effectively doubling the center’s size. The consultants recommended that the expansion be paid for with an increase in the citywide hotel tax, then at 7 percent.⁴⁴

City leaders secured approval for the 2 percent “Expansion Hotel Occupancy Tax” from the state legislature in 1993, and three years later sold the bonds to finance the $215 million expansion effort. By using the dedicated hotel tax, San Antonio could tap the revenues generated by some 23,000 city hotel rooms, regardless of whether they were occupied by convention attendees or by families visiting the Alamo and Riverwalk. And as the city and its stock of hotel rooms grew, the 2 percent tax provided a stream of funds committed to the expansion—and future expansions—almost exclusively.⁴⁵

The HBG Center expansion was completed in early 2001. But even before the larger center had demonstrated its success (or failure) in luring convention business, the city government was planning yet another expansion. City finance officials told bond rating agencies in 2006 of their plans, well before actually receiving a consultant market or feasibility study in July 2008. With a committed stream of hotel tax revenues, the city had effectively created a permanent convention center expansion annuity, one that operated perpetually without voter review. Unfortunately, even that annuity was subject to the vagaries of local hotel occupancy and the national economy, reducing the city’s stream of hotel tax revenues. It was not until the summer of 2012 that the city was in a position to arrange financing for yet another center expansion and renovation effort, this time with a $325 million price tag, fully employing the 2 percent expansion tax with the added backing of a pledge of “any lawfully available resources of the City.”⁴⁶

After the success of the initial voter-approved bond issue in 1964, San Antonio managed a fiscal regime that has supported successive center expansions and renovations, and all without recourse to the voters. And the city appears fully capable, fiscally and politically, of continuing major convention center investment for decades to come, without the risk or need for deal-making attendant to a public vote.

Cincinnati

A new auditorium or convention hall had long been a goal for Cincinnati business and political leaders through the first half of the twentieth century. Two successive bond proposals for a new auditorium were defeated by the voters, in 1939 and 1940. The city’s 1948 Metropolitan Master Plan included an “Exposition Hall-Arena,” along with a merchandise mart and new stadium, as part of a proposed civic center on the city’s redeveloped riverfront. But as city business leaders increasingly focused on the decline of the downtown core during the 1950s, the location and priority of a new convention center proved a point of some contention. City planners continued to envision the convention facility and auditorium as the anchors of a new civic center complex on the riverfront. Democratic city council member John Gilligan had his own proposal, for a new convention hall anchoring the west side of the downtown core area, a location embraced by the City Planning Commission in a December 1957 land use plan.⁴⁷

For Gilligan, recalling the events after more than 30 years, a broad package of downtown investments, combined with federal urban renewal aid, offered the ultimate political solution—“It became evident that attempting to do one project at a time wasn’t going to get anywhere; projects and plans began to get inclusive…. [We] had to put together packages that all the downtown interests saw some benefit to their situation, were not being left out.”⁴⁸

The conclusion was little different for the council’s Republicans. Eugene Ruehlmann recalled, “the restaurant and hotel people were interested in the convention center, the big supporters of riverfront were the Cincinnatus Association [a local civic organization]; by putting them together we could get diverse groups together on both projects.”⁴⁹

For the city’s business leaders, the central goal was revitalization of the downtown core, not the riverfront or even a new convention center. Those leaders, organized as the Citizens Development Committee, were thoroughly unwilling to see their central focus—the core area urban renewal effort—run the risk of possible defeat by the voters. Discussing the politics of the package in March 1962, the business group’s conclusion was direct: “It was unanimously agreed that CDC favors the issuance of councilmanic [nonvoted] bonds for financing the City’s share of the Core Area project due to the prospect that a referendum would be unsuccessful. Such a failure would naturally inhibit Council from issuing councilmanic bonds following an opposing expression from the voters.”⁵⁰

The CDC was willing to embrace the riverfront and convention hall proposals, as long as the city’s focus was kept on the central business district. And while the business group was willing to back and finance an expansive bond campaign, it did so with the dual provisos that the downtown renewal be the first priority and that downtown funding not be subject to a public vote.

The decision to put the convention hall and the riverfront renewal together as a single $16.6 million proposal was almost unheard of. It reflected a clear political calculus that the convention center would be a tough “sell” to the public. According to John Gilligan, the center “in most people’s eyes was not that great a thing, just of benefit to a few downtown interests.”⁵¹ Packaging it together with the riverfront, for former planning director Herbert Stevens, recognized that “you have to link them together … the convention center had interest with the business community, the riverfront was pizzazz.”⁵²

The political wisdom of packaging the riverfront renewal and convention hall plans together on the November 1962 ballot was validated by the vote results. The convention center bonds won a 56.58 percent “yes” vote—just slightly over the required 55 percent majority. And much of the voting support had come not from the city’s better-off neighborhoods, but rather from lower-income, largely African American areas.

Perhaps the most salient result of the thin electoral margin for the convention center bonds was the fragility of public support for large-scale downtown public investment. The city would systematically avoid placing these kinds of proposals on the ballot in subsequent years and decades.

The new Cincinnati Convention Center officially opened in August 1967, with 95,000 square feet of exhibit space. Even by the standards of the time, it was a relatively small facility. But any potential expansion effort would have to await a suitable political and fiscal environment. Finally in early 1981, the city commissioned the Laventhol & Horwath consulting firm to examine the feasibility of an expansion and the means to pay for it. The Laventhol report argued that the center was in need of both refurbishment and expansion, at a cost of between $40 and $50 million. And the Laventhol consultants recommended a combination of a variety of financing mechanisms, including a new city bond issue, “excess” income tax revenues, and $10 million in “philanthropic contributions.” The Laventhol analysis did not suggest asking the city’s voters.⁵³

With growing local discord over the issue of downtown versus neighborhood public investment, the city council sought to avoid a public vote: “Because there was a chance voters wouldn’t approve it,” according to city council member Guy Guckenberger. The council member went on, “We felt the city couldn’t afford to take that chance.” City director of development Nell Surber echoed Guckenberger: “But you never know what the public will do and we just plain had our backs to the wall.”⁵⁴

The final financing scheme for the expansion had the city paying $27 million, the Hamilton County government adding $16 million, $5 million from the Greater Cincinnati Convention and Visitors Bureau, and additional funds from the state and federal governments. The expanded center, renamed in honor of Cincinnatian Dr. Albert Sabin, was dedicated in June 1986 and fully opened in 1987. The expansion boosted the Sabin Center to a total of 162,000 square feet of exhibit space. A host of cost overruns brought the final to $61.9 million, with serious conflict between the city and county governments over bearing the increased cost. But by joining with Hamilton County and adding state and federal dollars, the city succeeded in getting a larger center without recourse to the voters.

It had taken more than a dozen years from the original opening of Cincinnati’s convention center before there was serious consideration of an expansion. The pace proved more rapid in the wake of the 1986 unveiling of the Sabin Center. As the committee charged with reviewing the city’s downtown development plans finalized its report in late 1990, a headline in the Cincinnati Enquirer on November 15 brought the news that “Bigger Convention Hall Urged But City Skeptical of Adding More Debt.” Yet financing a major expansion, particularly while avoiding a public vote, was not a simple or easy process.⁵⁵

When the city’s chosen consultants, PriceWaterhouse, delivered their report in June 1995, it predictably called on the city to expand the center, arguing that Cincinnati would see “continuing decline in center city retail and restaurant sales if it does not expand its convention center.” Their recommendation was to double the center exhibit hall space, to some 600,000 square feet, at a cost of $290 million. But the city did not have the resources to support some $300 million in new debt itself.⁵⁶

By late 1998, with no real progress on the expansion effort, city officials brought the PriceWaterhouseCoopers consultants, led by David Petersen, back. Their February 1999 report again endorsed more space, albeit not as much as the earlier analysis. But the proposed expansion now carried a price tag estimated at $315 million. Despite an effort by city manager John Shirey to craft a package of new revenue streams from an increased city hotel tax, a boost in the county hotel tax, a restaurant tax, and a new sales tax increment scheme, it was simply impossible to finance an expansion of that scale and price. Finally, in late 2001, a special mayoral task force embraced a far smaller expansion, one that could be realized at a cost estimated at $171 million.⁵⁷

Even a dramatically reduced expansion plan would cost far more than the city itself could afford, and that demanded an exercise in imaginative intergovernmental finance. Cincinnati Mayor Charlie Luken and Hamilton County commissioner Todd Portune were able to craft a financing deal “breakthrough” in January 2002 that joined together city and county hotel tax revenues, a $10 million contribution from the Greater Cincinnati Convention and Visitors Bureau, a annual contribution from the city, and some $15 million in naming rights, for an expansion that carried a $198 million cost. The deal continued to evolve through the year, with a significant change in May that boosted the revenue from naming rights and promised a portion of the county hotel tax revenue to suburban communities, while putting the financing of the expansion in the hands of a new public authority, the Hamilton County Convention Facilities Authority.⁵⁸

The final deal for Cincinnati’s $160 million renamed Duke Energy Convention Center neatly combined funds from the city and county hotel tax revenues with contributions from the local convention bureau, the business community’s Equity Fund, and Duke Energy’s naming rights. With the expanded center’s grand opening in June 2006, the Cincinnati Enquirer touted “Convention Center Upgrade Breeds Confidence,” with the observation that “Business and tourism officials hope an improved and expanded convention center will boost the local economy downtown and beyond.”⁵⁹

The story of the expansion of Cincinnati’s convention center has all of the elements of a “Perils of Pauline” saga that extended over more than 15 years. The effort would regularly appear to be stalled or dead, with financing impossible to secure, only to rise again, perhaps in a different form, with yet another increasingly intricate financial arrangement. The one political and fiscal constant was that local voters were never given the choice of investing in a larger center. If Cincinnati’s business leaders ended up with a far smaller expansion than they had sought, they nonetheless finally got an expansion without a public vote.

Reformation and Result

The 1970s marked a turning point in the fiscal politics of convention center investment. Faced with growing voter disenchantment or outright revolt, symbolized by the passage of California’s Proposition 13 in 1978, city after city reshaped the historic pattern of building broad voter coalitions for comprehensive packages of bond projects. For some cities, like Kansas City, the initial shift reflected the defeat of a convention center bond proposal. In Cincinnati, the unwillingness of the city’s business leaders and elected officials to put a proposal before the voters reflected a clear calculation that it would likely fail. For San Antonio, the shift to hotel taxes and revenue debt took somewhat longer but ultimately reflected precisely the same political calculus—the need to insulate convention center investment from direct voter review.

Other cities were no less imaginative. After decades of plans and proposals, San Jose, California, finally opened a new downtown convention center in 1989, financing it with “certificates of obligation” that did not require a public vote, and would ostensibly be repaid by tax revenues from local redevelopment projects. When the city sought to expand and renovate its McEnery Convention Center in the late 1990s, it ultimately chose to use the revenue stream from an increase in the local hotel tax (Transient Occupancy Tax). But under California law, even that tax increase required voter approval. And the voters did not approve, providing the tax increase with a 65 percent “yes” vote that fell just short of the required two-thirds. The verdict of the electorate did not end the quest for a bigger convention center for San Jose. It simply shifted the focus of local business and political leaders to a fiscal scheme that could avoid voter review. The solution proved to be a “convention center facilities district,” created by the city council in August 2008, that could impose an additional hotel tax to finance the expansion. But the great virtue of the district was that its taxation only had to be approved by a vote of the city’s hotel owners, based on the size of their hotels. With “yes” votes representing 78 percent of local hotel rooms, San Jose could move ahead on a $120 million expansion project, with a guaranteed steady stream of future revenues dedicated to the convention center. And with the San Jose special district model approved by a state court, San Diego and San Francisco began to move ahead to finance their own center expansions with tourism district schemes that required only a (weighted) vote of local hotel owners.⁶⁰

The fiscal reformation of these cities and a host of others was achieved in a piecemeal fashion. Yet it evidenced a remarkable level of imagination and innovation. Cities committed to center development or expansion were willing to find revenue streams in a great many places. And, as the Cincinnati case so well demonstrates, they were often willing to “bet” on uncertain revenues or commitments in the hope of securing a politically viable deal. City boundaries were not necessarily a limitation either. Kansas City managed to piggyback on St. Louis’s quest for state dollars for a domed stadium, gaining it own share of state government dollars. And Cincinnati’s politicians proved amenable to sharing the responsibility for convention center expansion with the county government when the city lacked both the fiscal resources and the political capacity.

Formal legal limits were no hurdle either. State laws could be amended or changed to allow new taxes, or in the case of San Antonio, a higher tax dedicated solely to convention center expansion. State legislatures could also be persuaded to allow the creation of new governmental entities, such as the convention center districts in San Jose and San Diego, that exist solely to finance more convention center development without a public vote. The state government also represented an attractive political ally for convention center proponents, one with substantial fiscal resources where the promise of new distant visitors yielding increased tax revenues might well produce political success.

Bringing the State In

For convention center proponents, the search for financing—and a political opening—need not stop at a city or county boundary. Much as Willie Sutton observed about banks, state governments and state-created public authorities offer attractive vehicles for convention center building, often without the political or fiscal constraints and the requirement for voter approval faced by city or county governments. Consulting firms such as PriceWaterhouse have regularly argued that state governments reap a fiscal windfall, through the state sales tax, from the out-of-state attendees attracted to major centers. Yet, aside from potential fiscal benefits, business and hospitality groups already organized to lobby for their interests at the state capital find the appeal to a different level of government an easy shift to manage. State governments have come to play an increasingly important role in convention center development, one merely suggested by convention center names—the Connecticut Convention Center in Hartford, the Pennsylvania Convention Center in Philadelphia, the Georgia World Congress Center in Atlanta, the Washington State Convention and Trade Center in Seattle. That role, not entirely new, represents yet another form of the fiscal and political adaptation that has supported the enormous growth in convention center space across the U.S. over the last five decades.

New York City

New York’s business leaders regularly bemoaned the lack of a major convention hall through the 1920s, 1930s, and 1940s, particularly as other cities developed new venues. A New York Times editorial in December 1947, headlined “A Convention Hall Needed,” outlined that history from 1923, described the new auditoriums in Cleveland, Kansas City, St. Louis, and Atlantic City, and then noted the city’s loss of millions of dollars in convention business.⁶¹

The New York Merchants Association and its convention bureau had pressed the idea of a new auditorium/convention hall for Manhattan in conjunction with the planned 1939 World’s Fair, an idea endorsed by Mayor Fiorello LaGuardia. But with no prospect of federal funds, the city was not in a position to deliver a major new building. The city’s convention and visitors bureau, and its longtime chair merchant Bernard Gimbel, regularly pressed for a new public convention venue, albeit with no success. The first real plan for a convention center emerged in November 1946 with the announcement by the Madison Square Garden Corporation of a scheme for a “New Madison Square Garden,” combining a sports arena and a convention hall, to be built at Columbus Circle. The private corporation also announced the involvement of a public entity, the Triborough Bridge and Tunnel Authority, in financing and developing the new “Garden” and an associated garage.⁶²

The role of the Triborough Authority in the proposal was particularly significant. Triborough was the seat of the empire of Robert Moses, who had crafted a reputation as a stellar public official and “master builder” through the Depression years. New York Mayor William O’Dwyer had appointed Moses New York City Construction Coordinator in January 1946, charged with expediting and building a host of public projects outlined in a postwar public works program. An alliance with Moses could make the long-planned convention hall a reality, while avoiding the problems—fiscal and political—posed by direct city involvement in a private project.

The initial plans for the “New Madison Square Garden” had the Triborough Authority providing the financing for what would be a privately operated facility. That financing role in turn required securing approval of the state legislature for an increase in the authority’s debt limit and its new role. The first response in Albany was a firm “no,” with proposed legislation killed in the Assembly’s Ways and Means Committee. New York business leaders and Moses pressed the issue again the following year, and with the backing of Governor Thomas Dewey, won approval for the debt increase. The governor said it would make Mayor O’Dwyer “happy” and predicted “it would make New York again the pre-eminent convention city of the world,” and the city Convention and Visitors Bureau pegged its yield in new visitor spending at $25 million a year.⁶³

The involvement of the Triborough Bridge and Tunnel Authority in financing a new arena and convention center complex was at first glance odd. The authority had no particular mandate for such a facility—its purview was transportation. But Moses had gotten a host of public projects built, and had a strong relationship with city business leaders such as Bernard F. Gimbel of Gimbel’s Department Store and Saks Fifth Avenue, as well as bankers and financiers. Indeed, Moses would later recall in his autobiography that “The business community approached the Triborough Bridge and Tunnel Authority to meet this need [for a convention hall] as a matter of public service.” A new complex at Columbus Circle offered the prospect of meeting the city’s convention needs and of spurring the redevelopment of the West Side.⁶⁴

The Madison Square Garden Corporation eventually pulled out of the project, and the sports arena portion was eliminated. An effort announced by Moses in 1951 to bring both the Metropolitan Opera and the Philharmonic to a new music hall on the site also failed. Moses and Triborough were faced with two problems in developing the convention facility at the site backed by the business leaders. The built-up Columbus Circle location would be expensive to acquire and clear. And the convention hall itself was a money-losing investment. Moses needed some other activity to generate a revenue stream.⁶⁵

Moses, as head of the city’s Title I slum clearance program, chose to use the new federal urban redevelopment program to acquire the site and “write down” the cost for a new use. But federal restrictions ruled out building a home for the Opera and Philharmonic. The Triborough Authority moved ahead with the “Coliseum” as a new auditorium and convention hall on the Columbus Circle site, pairing it with a 26-story office building that would help subsidize the convention facility. The New York Coliseum opened in April 1956, giving the city some 273,000 square feet of exhibit space and filling the need for a modern convention facility that business leaders had long sought.

By turning to Moses and Triborough, the city managed to secure a new convention center and achieve a major redevelopment goal that neatly avoided any serious conflict over public investment priorities or the kinds of fiscal limits that had stymied earlier initiatives. There was no formal rationale for involving a bridge and tunnel authority in the business of building a coliseum/convention hall. But the authority route offered the opportunity to gain financing outside the city’s debt limit or tax demands, while capitalizing on Robert Moses’s public reputation. It made the new Coliseum appear both “free” and outside the realm of local politics. It also neatly served the interests of a businessman like department store magnate Bernard Gimbel, who served nine terms as head of the city’s Convention and Visitors Bureau, while garnering political support for Moses himself.

The role of the Triborough Bridge and Tunnel Authority in getting New York a convention hall also set a strong precedent. When, in March 1970, Mayor John Lindsay announced a plan for the “nation’s largest exhibition center” to be built on Manhattan’s West Side with more than twice the space of the Coliseum, he made it clear that a state public authority would be responsible for financing the $100 million cost. The project’s chief planner noted, “The city itself can’t swallow that cost with its present debt limit.”⁶⁶

What would ultimately emerge in 1986 as the Jacob K. Javits Convention Center, after a series of conflicts over location, design, and financing, would indeed by developed by a new public authority, the New York Convention Center Development Authority, with its bonds issued by the Triborough Bridge and Tunnel Authority and backed by the promise of annual state appropriations. The new Javits Convention Center ended up costing far more—$486 million in total—than the $100 million estimated by Mayor Lindsay in 1970. And the promise that the new convention center would set off a “transformation” of the West Side area has still been unrealized.⁶⁷

Chicago

When Chicago’s new McCormick Place convention center opened in November 1960, it marked both a major step forward in the city’s competitive position and a striking innovation in terms of governance and finance. The big new convention center was financed by a state tax on horseracing, rather than a local tax or as a general obligation. And the center was owned by a new public entity, the Metropolitan Fair and Exposition Authority. The new authority was created by state legislation and overseen by a 14-member board of directors jointly appointed by the Illinois governor and the mayor of Chicago, with both the mayor and the governor as ex officio members.

The financing and structure of McCormick Place were not happenstance. They represented a means of getting Chicago a new convention hall after decades of political failure, effectively crafted by the leadership of the Chicago Tribune to generate funding outside the political and fiscal limits on Chicago and Cook County, while effectively insulating (at least in theory) the project from the depths of Chicago politics.

Edward Banfield provided a history of the origins of McCormick Place in his 1961 study, Political Influence. He describes the initiative of Tribune publisher Col. Robert McCormick to provide for a permanent lakefront fair, replacing the temporary Railroad Fairs that had taken place in 1948 and 1949: “The Colonel, however, was determined. He told W. Don Maxwell, his managing editor, to work the problem out one way or another.” Maxwell’s choice of a tax that involved state government is seamless in Banfield’s telling: “Maxwell had no doubt about where the needed subsidy should come from … [a tax] on parimutuel betting at horse races.”⁶⁸

Maxwell and the Tribune might well have sought some alternative revenue source, perhaps from city or county governments, for their fair plans. But the Tribune had, in George Tagge, its state house reporter at the capital in Springfield, someone with a broad set of connections in the legislature and a political environment where the newspaper had significant clout. Tagge recalled in a 1984 oral history interview how the horse track taxes had come to serve Col. McCormick’s goal of a lakefront fair, and the eventual larger purpose of a permanent convention and trade hall, from a conversation he had in May 1951:

So one day the place wasn’t in session and I stopped at the desk of Paul Powell, then the Democratic majority leader and a fairly good news source…. So I said, “Well, you know, Cook County doesn’t get a damn thing out of that [racing tax revenue]…. And he, partly because he was so happy at the time, I think—I said, “Well, we’ve got this problem up in Chicago. We had this lakefront fair and Maxwell has been out with his hat in his hand … collecting money…. Why couldn’t something—couldn’t there be a bill that would put on—I don’t want to touch your dole or the county fairs, but the parallel of that for Cook County which would be used for lakefront fair building?” And Paul, a man of action, said, “Well, what the hell. That sounds square to me.”⁶⁹

George Tagge’s connection of the racing taxes that supported downstate county fairs with the potential to support a permanent fair in Chicago was in large part serendipity. But it also reflected a clear political calculation. Chicago and Cook County received none of the benefits of a tax that aided county fairs, and could make a plausible case for a share. At the same time, Tagge’s idea of relying on an existing state tax had a far larger appeal for a Republican-oriented newspaper in Chicago.

Tagge went on in his 1984 interview,

Well, my next step was to get on the phone to Maxwell and of course he was gung ho for it. “Wonderful, Wonderful…. And he said, “Well, who’s going to run the thing?” I said, “My notion is that it cannot be the damn Chicago City Council and it can’t be the damn Cook County Board because there are just too many burglars with their hands out all the time, if not for cash then for other things. And the nearest thing we can come to a power that has a pretty good sense of decency is the Chicago Park Board.” And he agreed with that.

Tagge, and likely Don Maxwell as well, had little regard for the politicians of Chicago or Cook County. The Railroad Fairs had been run by Major Lenox Lohr, a retired Army officer with an impeccable reputation, and the Tribune sought to keep a more permanent fair efficiently run outside local politics. When additional legislation was introduced in the 1953 legislative session to broaden the revenues to provide for a convention hall rather than a fair, the formal ownership of the convention facility was put in the hands of a new Fair and Exposition Authority.

The new authority was to have its members appointed in equal numbers by the mayor and governor. But Don Maxwell and the Tribune were unwilling to see the new entity come under the direction of some who lacked “civic virtue.” As Tagge recalled,

Maxwell decided to begin by choosing every member of the exposition authority and he didn’t talk to the mayor, the governor. He had me do it. He wouldn’t like to be turned down or argued with so I went to these people and told them what we wanted and quite properly they went along with it because we were completely and entirely responsible for getting the money.

The intent of Maxwell and Tagge, both in securing the state revenues for what would become McCormick Place, and putting it under the control of a public authority run by an appointed board, was to insulate the project from the petty politics of the city and county, while assuring a grand civic benefit run in an appropriately businesslike way. The subsequent history of McCormick Place and the Metropolitan Pier and Exposition Authority suggests that they did not fully achieve their aim. Building and then regularly expanding a major convention center was (and is) an inherently political activity in a variety of ways, with deals to be made and contracts and benefits to dole out.

The $252 million expansion, authorized by the state legislature in 1984 and financed with statewide sales and hotel tax revenues, provided an opportunity for what the Chicago Tribune termed “cronyism in contracts,” with the foundation subcontractor owned by the Democratic state representative who sponsored the expansion legislation. The security firm awarded a no-bid contract was owned by the brother of the chair of the Cook County Democratic Party.⁷⁰

The 1991 expansion, with its price estimated at $987 million and with backing from new taxes on car rentals, downtown Chicago restaurant meals, and airport buses, provided the opportunity for a last-minute budget deal in the state legislature, tying votes for the McCormick Place expansion to support for the continuing use of high-sulfur southern Illinois coal by Chicago utility companies. The final deal provided “‘McPlace,’ the $1 billion expansion of Chicago’s McCormick Place convention center, for Chicago Democrats … property tax caps for suburban Republicans … a balanced budget and caps for [Governor] Edgar … [and] coal for downstate.”⁷¹

Politics and deal-making has thus pervaded the business of McCormick Place. But it is a kind of politics that is fully removed from the direct influence and oversight of the mass of Chicago area citizens and voters. And when the questions of financing and implementing successive expansions with price tags on the order of one billion dollars arose, they were questions that were entirely the purview of the state legislature and the governor.

Philadelphia

Philadelphia, too, had an existing convention center in the 1970s and 1980s. The city-owned Philadelphia Civic Center boasted some 382,000 square feet of exhibit space, and had hosted a number of national political party conventions in the decades past. Its last major addition had come in 1978. But the center was old, and in the wrong place, in West Philadelphia some distance from downtown and its concentration of hotel rooms. For newly elected Mayor Bill Green and his aides, taking office in January 1980, the focus was on downtown and the need to boost both the city’s tourism industry and the larger downtown area. The city’s formal business organizations, the Greater Philadelphia First Corporation and the Chamber of Commerce, were both enthusiastic promoters of a new convention center in Center City.⁷²

The prospects of a new convention center were given a serious boost by the creation of a convention center steering committee in May 1982 that in turn commissioned a feasibility analysis from Houston-based Pannell Kerr Forster (PKF). The PKF findings, made public in January 1983, said the city needed a new facility with 300,000 square feet of exhibit space “to remain competitive in the conventions and meetings business.” PKF considered an upgrade for the existing Civic Center, but deemed a new center on the eastern side of the center city area as the most viable, at an estimated construction cost of $114 million.⁷³

City officials pressed for a center with some 400,000 square feet of space in order to beat the scale of the existing Civic Center. And construction and land acquisition costs began to soar, first to $275 million in the summer of 1983, then to some $400 million at the end of the year. With the cost regularly escalating, Mayor Green and local business and development officials chose to turn to the state government for financial assistance.

The city’s quest for convention center funds from the state began in August 1983 with an effort to change state rules to enable the financing, and an initial request for $43.9 million, even as the mayor was still negotiating with the Philadelphia city council for its approval of the convention center project. The agreement with the council was finally reached in March 1984. In April, the city hired S. R. Wojdak and Associates, and Joseph McLauglin, a former deputy mayor, as lobbyists for the city in Harrisburg, and they set about seeking to expand the state’s commitment well beyond $44 million.⁷⁴

The city’s convention center effort won the support of Republican Governor Richard Thornburgh. But Republican legislators had a set of specific demands, intended to limit what Philadelphia’s largely Democratic politicians could do with a state-funded convention center project. First, they insisted that the new center be owned and managed by a public authority, with a board equally divided between gubernatorial appointees and appointees from Philadelphia (in turn divided between mayoral appointees and city council appointees). Second, they capped the state’s fiscal commitment at $185 million. And finally, they insisted on a strict ethical code for the board and authority employees, as well as limits on contracts and employment.

State legislators and business interests outside Philadelphia also perceived the proposed state financing as an opportunity for serving their own local concerns and engaging in classic horsetrading. In the words of Democratic Senator Barry Stout of southwestern Pennsylvania,

I kind of liken this … to making whole hog sausage. I do not want to see all the loin go to Philadelphia and all the hams go to Allegheny County [Pittsburgh] and those surrounding counties like Washington, Beaver, Fayette, Greene, Westmoreland and a lot of the counties that are contiguous to metropolitan areas end up with the sow belly. I want to know … if in the next three weeks … we will fatten up the hog a little bit and have a little sausage for the rest … of Pennsylvania?⁷⁵

Governor Thornburgh responded to Pittsburgh legislators and business interests by promising state funding for the new midfield terminal at Pittsburgh’s airport for a total of $100 to $150 million. By the time he signed the act creating the Pennsylvania Convention Center Authority and committing $185 million in state funding, the legislative deal had broadened beyond the aid for Pittsburgh’s airport to include funds for small towns in upstate Pennsylvania, and the release of flood control funding for the northeastern area of the state. The final cost of the center, estimated at $114 million by PKF in 1983, came to $523.4 million when it opened in June 1993.⁷⁶

State Deals, Local Goodies

The deal that sealed millions in state funding for Philadelphia’s new convention center proved both a model and a harbinger. When Pittsburgh and Allegheny County officials began the search for financing an expanded center to replace what one consultant termed “worn and dated,” they turned—as had Philadelphia—to the state. Governor Tom Ridge came through with a commitment of $150 million in April 1998 for what would be a final cost of more than $370 million. When Philadelphia leaders concluded that the existing Pennsylvania Convention Center needed to be expanded, to keep up with the competition from other cities and accommodate “lost business,” they won a state commitment to finance the expansion debt service over 30 years, using the proceeds from newly authorized slot gambling at racetracks and casinos. The same new slots revenue source also provided funding for Pittsburgh as part of the deal, with funds to pay off the debt of the city’s convention center and build a new arena for the Pittsburgh Penguins. And Pennsylvania governors have been equally accommodating and distributive with smaller communities, providing state funds for new convention centers in both Lancaster and Erie in recent years.

State governments have come to be central players in convention center development and expansion in recent decades. The state of Maryland provided the bulk of financing for the Baltimore Convention Center, opened in 1979. When the center was expanded in the late 1990s, the state provided $101 million of the $151 million total cost. And the state also helped finance both a new convention center in Ocean City and a conference center in Montgomery County. Hartford’s new Connecticut Convention Center, opened in mid-2005 at a cost of $271 million, was entirely financed by the state government. The Arizona state government picked up $300 million of the roughly $600 million cost of a major expansion of the Phoenix Convention Center. Nebraska supports the Qwest Center convention center and arena complex in Omaha through an arrangement in which state sales tax revenues generated from the facility are “turned back” to the city of Omaha. Washington state enacted legislation in 1999 providing for the creation of “public facility districts” which can capture a portion of the sales tax revenue that would otherwise flow to the state, all without a vote at the local level. The public facility district scheme has supported new convention centers in Tacoma, Kennewick, Vancouver, Lynwood, Spokane, and Yakima. And in 2009, the state of Michigan passed legislation providing for the transfer of Detroit’s Cobo Convention Center to a new regional authority (with a board made up of representatives of the state and Wayne, Oakland, and Macomb counties as well as Detroit) and a $279 million expansion financed by a state liquor tax and hotel tax.

The “deals” that create and sustain these state initiatives vary. In some cases, like Pennsylvania’s, the state legislature’s “price” for funding a major project in one city or region is a companion project—or multiple projects—in other places. In other cases, like Detroit’s Cobo or again Philadelphia’s Pennsylvania Convention Center, the price of broad political and legislative support is a shift in control from the central city to a broader regional or state authority. And what appears to be a single instance of state involvement can easily become a “model” for a far larger set of facilities and investments. Washington state’s multiplying convention centers, built through public facility districts, employ the same financing vehicle the state provided a few years earlier to build Seattle’s Safeco Field baseball stadium.

The state-level politics of creating logrolling legislative coalitions and providing governors with “goodies” to distribute around their states thus tends to shape convention center building rather more than the realistic prospects of economic return or market feasibility. It leads to the proliferation of new convention centers in untested visitor destinations like Erie, Pennsylvania, or Vancouver, Washington. But it does offer local business leaders seeking a way to revitalize a downtown core, or local elected officials promoting a major new public project, a means of getting those things done—and claiming the credit—without relying entirely on local revenues or selling the community electorate on a bond issue. Perhaps most important, “taking it to the state” neatly avoids any serious debate over local, city priorities, ensuring that those interests that want a new or larger convention center succeed.

Riding a Visitor Wave

For most cities, financing and building a new or expanded convention center requires a substantial—albeit manageable—stock of political initiative and fiscal ingenuity. Local governments often need to overcome a combination of legal and fiscal constraints, as well as the possible opposition of the local electorate. For some communities, however, convention center financing and building is a far easier task. Those places are able to capitalize on effectively dedicated streams of public revenue that are legally linked to center finance and tend to grow over time.

Las Vegas

The Las Vegas Convention Center today boasts 1.94 million square feet of exhibit space, a far cry from the 40,000 square foot hall at its opening in 1959. Much like those in Orange County, Florida, the expansions of the Las Vegas Convention Center have been powered by the stream of revenues generated by a tax on Clark County hotel rooms. As the city and county have prospered as a gambling center and visitor mecca, the river of annual visitors has provided an enormous fiscal boon to the Las Vegas Convention and Visitors Authority.

The contemporary Las Vegas Convention Center began with an effort by a small group of local businessmen to build up the volume of visitors in off-peak periods. Led by electrical contracting firm owner and county commissioner George “Bud” Albright, the city and county jointly named a convention hall subcommittee in January 1955. The subcommittee of Horseshoe Club executive Joe Brown, Last Frontier owner William Moore, and Edmund Converse recommended building a new convention facility on an undeveloped site (the former Las Vegas Racetrack), owned by Brown, adjacent to the “Strip” of Las Vegas Boulevard.⁷⁷

The choice of the Strip, rather than downtown, as the center site was an enormously important one. It provided an abundant stock of relatively inexpensive land on which to expand, and it reinforced (and in turn was supported by) the explosion in development of casino hotels on the Strip, outside the limits of the city of Las Vegas.

Albright and the county commissioners faced another central question in choosing how to finance the planned $4.5 million convention center. Fearing opposition from local voters to a tax hike, Albright came up with the idea of financing with a dedicated five percent room tax on resort hotels and a more modest three percent tax on motels. That differential tax rate neatly accommodated the small motel owners, while providing a steady revenue stream. Albright’s son recalled seeing his father at an adding machine, trying to calculate the yield from varying tax rates, and “The numbers he produced were enormous.” Indeed, Kenny Albright remembered, “He thought he had put the decimal in the wrong place.”⁷⁸

Albright and the county commissioners had secured approval from the state legislature to develop the convention center through a new entity, the Clark County Fair and Recreation Board. The county commission approved the project in November 1955, and it was enthusiastically endorsed by both the Las Vegas Sun and the Review-Journal. The one final piece in securing the funds for the proposed center was approval by the voters of a county general obligation bond issue. With the argument that hotel taxes rather than their property taxes would pay, the county’s voters approved the bonds at a special election in March 1956. The grand opening of the new Las Vegas Convention Center came in 1959.⁷⁹

The argument that hotel taxes, not property taxes, would repay the bonds for convention center construction was a powerful one. As both Las Vegas and the casino hotels along the “Strip” grew, the hotel tax would provide an expanding stream of public revenues to finance the convention center and its expansions. But both the county commission and county voters had to approve the Fair Board’s expansion plans and the needed county general obligation bonds. They were not necessarily always supportive, and there were other political interests involved as well.

By 1964, the Fair and Recreation Board was planning for a major expansion of the center. The first step was to secure enough adjacent land to accommodate future growth, a total of 411 acres. The board’s plans also included a host of new civic facilities, including a concert hall and a stadium. But in order to win the support of the casino hotels, the board promised not to lease any of the land for a new casino for the next ten years. The promise once again was that the ever-growing stream of hotel tax revenues would pay off the bonds, with no impact on local property taxpayers. However, the Review-Journal mounted a spirited attack on the bond proposal, including an editorial that argued that the land deal amounted to “giving a group of politicians control over some of the most valuable property in the county, opening the door for all kinds of transactions, handing them a blank check to do anything they want with it.” County voters overwhelmingly opposed the $18 million bond proposal.⁸⁰

Four years later, the renamed Convention Authority returned to the county’s voters with a proposal for a $22 million bond issue to fund center expansion, a stadium near downtown Las Vegas, and a museum for Henderson. This time the Review-Journal backed the bond issue, terming center expansion “an inevitable step in our effort to remain competitive in the convention market.” Yet once again, the county’s voters proved unwilling to endorse funds for convention center expansion.⁸¹

Convention Authority board members blamed the 1968 defeat on a “lack of understanding” by the voters, with some concern expressed over the decision to include facilities beyond just the convention center. Still, both local business leaders and authority board members were unwilling to give up on the prospect of a bigger convention center. Promoting a new albeit far more modest $7.5 million bond issue in August 1970, businessmen created a $50,000 fund to back the claim that “The Convention Center has been open and operated for 11 years and not one cent of its cost has ever been assessed against property taxes.” The Review-Journal described the Greater Las Vegas Chamber of Commerce as “going all out to get their message across” and pass the bond issue. The September 1970 vote proved—finally—successful, with a three to one margin in favor of the bonds.⁸²

The Convention and Visitors Authority followed the modest success in 1970 with a larger, $12 million bond proposal in late 1974. Again promising, “Not one penny out of your pocket,” the November 1974 bond proposal was passed by county voters. That electoral success was followed by a $20 million bond proposal in May 1980. This included funding for convention center expansion ($12 million), new parking ($5.5 million), and convention and recreation facilities for the cities of North Las Vegas, Henderson, and Boulder City. The county’s voters approved the general obligation bonds on May 27.⁸³

The succession of electoral defeats and successes made evident the reality that Clark County voters were not consistently supportive of investment in an expanded convention center, despite the repeated arguments that the bonds would be repaid solely with hotel tax revenues. As a result, the Convention and Visitors Authority had been forced to scale back its expansion plans to bond issue amounts that could win voter approval. That had the effect of slowing up the convention center’s growth, even as the total number of hotel rooms in the county grew, from 25,430 in 1970 to 45,815 in 1980 and 73,730 in 1990.

The Convention and Visitors Authority also faced another political problem. Its stream of hotel tax revenues was a tempting target for city officials, who had long seen the downtown area and its casinos suffer as the “Strip” casino hotels near the convention center expanded. The downtown business interests, represented by the Downtown Progress Association, sought their own convention complex. The resulting deal, completed in 1977, led to the Convention and Visitors Authority financing the development of a “mini-convention center” and sports complex, the Cashman Center, adjacent to the downtown core. In subsequent years there would be other interests, notably at the state level, that also sought their own pieces of the authority’s stream of tax revenues.

Faced with the history of bond issue defeats at the polls and the need to craft convention center plans to gain voter support, the Las Vegas Convention Authority board sought some fiscal alternatives that avoided voter review. The first such effort came in 1983, with a deal the authority struck with local tradeshow owner Sheldon Adelson. Adelson, who put on the annual Comdex show for the computer industry, sought to gain more space by paying for an expansion of the center in return for guaranteed rent of just $1 per day. The Adelson deal enabled the authority to expand the center once again, but without having to sell local voters. By the middle of the 1980s, the organization and casino hotel owners sought a more permanent means of avoiding voter review. The result was a change in state law that allowed the county commissioners to authorize bonds backed by pledged revenue—in this case, the dedicated hotel tax—by a two-thirds vote, bypassing the need for public vote on a bond issue.⁸⁴

The exact timing and substance of the change in bond procedures is not documented, but when the Convention and Visitors Authority began to consider a $35 million expansion and renovation effort in early 1988, the bonds did not go before the county’s voters. The 1988 bond issue was followed by a regular—and regularly growing—stream of new bond issues to pay for even more expansion and improvement of the Las Vegas center. The Convention and Visitors Authority sold a $50 million bond issue in August 1993, followed by a $78 million issue in 1996, and a $5 million issue (for athletic facilities for the University of Nevada at Las Vegas) in 1998.

The Convention and Visitors Authority opened a major new expansion with 279,000 more square feet of exhibit space, funded by those bond issues, in November 1998. But even before that latest expansion was open and operating, the authority was making plans for yet another, far grander, expansion. The LVCVA commissioned a consultant study of expansion possibilities in June 1998. And, perhaps recognizing the growing claims by other units of government on its stream of hotel tax revenues—the county public schools would succeed in getting a piece of the tax for school construction in early 1999—the Convention Authority unveiled an innovative approach to financing more convention space.⁸⁵

The LVCVA heard from three major tradeshow organizers, including the Consumer Electronics Show and Reed Exhibitions, that they and other show managers were prepared to put up $40 million towards the expansion cost, then estimated at $79 million. Tim McGinnis of Reed Exhibitions termed Las Vegas, along with Orlando, as “the two hottest markets for conventions,” and said, “A lot of shows want to come to Las Vegas but can’t get dates. Without additional space, it puts a strain on generating additional revenue for a company.”⁸⁶

By relieving the hotel tax, and the Clark County government, from a large part of the burden of financing a major expansion, the Convention and Visitors Authority was attempting to both “sell” an expansion and compete head-to-head with Orlando, then planning its own major expansion. But both the expansion and the financing arrangement generated an immediate and sustained outcry from Sheldon Adelson. Adelson had gone on to build his own major private convention center as part of the Sands Hotel, with one million square feet of exhibit space. He opposed the financing arrangement, arguing that it would take business from his facility and imperil the authority’s future income stream, threatening to sue if the authority moved ahead.⁸⁷

Sheldon Adelson’s opposition had the effect of slowing expansion plans, delaying action from April until June 1999. Yet even as he argued that the LVCVA should bring its expansion and bond plans directly to the voters, the authority was planning on an even more effective end-run around the public review of new debt plans. The authority had sought state legislation that would enable it to issue revenue bonds itself, without the approval of Clark County commissioners. That revenue bond authority would ease the financing of this, and future, expansion efforts while stymieing any attempt by Adelson, or the convention center’s neighbors, to appeal to the county commission. Nevada Governor Kenny Guinn signed the revenue bond authority for both the Las Vegas and Reno convention authorities at the end of May.⁸⁸

The LVCVA’s new revenue bond legislation also enabled the Convention Authority to tackle a far larger and more expensive project. By the end of June, the expansion’s cost had grown to $150 million, and the board chose to move ahead despite Adelson’s objections. Predictably, Sheldon Adelson and his Venetian Hotel filed suit against the authority the next month, alleging that the LVCVA had violated state law by seeking to issue revenue bonds backed by hotel tax revenues.⁸⁹

The court decision in October 1999 fully upheld the Convention and Visitors Authority and its use of revenue bonds for the expansion. District Judge James Mahan wrote, “It appears that The Venetian’s quarrel is with the Legislature, which authorized the issuance of revenue bonds … and not with the LVCVA.” With the lawsuit moot, the authority moved ahead with a $150 million bond issue in November. The new South Hall of the Las Vegas Convention Center opened at the beginning of January 2002, just in time to accommodate the annual Consumer Electronics Show and its 110,000 attendees, and bringing the Las Vegas Convention Center to a total of 1.94 million square feet of exhibit space.⁹⁰

From its beginnings as the Fair and Recreation Board, through a series of bond defeats and political machinations in the 1960s and 1970s, the Las Vegas Convention and Visitors Authority has emerged as a massive fiscal engine, effectively free of direct control by Clark County voters or even the county commission. Convention center boosters had succeeded in reconstructing the political and fiscal constraints on the LVCVA, first managing to avoid direct public votes on expansion bonds, then legislating revenue bond authority that enabled the authority to avoid the potential hurdle of the Clark County commission. The state legislature did shift some hotel taxes to the local schools, and it would also take a portion of the hotel tax revenues to pay for transportation projects. But by 2007, the 132,947 hotel and motel rooms in Clark County were pumping out almost $220 million a year for the LVCVA, dedicated almost entirely to marketing, promoting, and financing the convention center. The authority’s room tax revenues were hit hard by the recession—the total for 2010 came to just $163.8 million. A planned expansion that would add more meeting room space and renovate older areas was put off. Yet the LVCVA still sits atop a stock of hotel rooms that can, as occupancies and room rates gradually improve, produce a stream of tax revenues that can and likely will support even more expansions.

In November 2011, LVCVA head Rossi Ralenkotter told the Review-Journal editorial board that it was time to revive the $890 million expansion project that had been put on hold during the recession. The authority’s room tax revenues for 2011 had grown to $194.3 million, and the authority’s vice president of sales argued, “If you look at what our competitors around the country have leading up to their convention centers, ours doesn’t match up.”⁹¹

Beyond City Limits

Beginning in the 1980s, it became increasingly common for academic analysts of urban politics and city policy to describe the constraints and limits on city governments. Paul Peterson’s 1981 City Limits focused on the notion that “local politics is most limited,” and posited the central necessity for cities to pursue “policies which contribute to the economic prosperity of the local community.” Economists Helen Ladd and John Yinger documented the fiscal straits of big city governments in their 1991 volume, America’s Ailing Cities. The fiscal problems of older cities like Detroit, Baltimore, Cleveland, and St. Louis that have seen continuing population loss since 1990 have not gotten better since they wrote.⁹²

For other urban observers and commentators, the fiscal and economic plight of the nation’s large older cities called for a restructuring of local government, focusing on the creation of metropolitan and regional solutions to governance and local finance. Former Albuquerque Mayor David Rusk, in Cities Without Suburbs and Baltimore Unbound, called for urban solutions such as the creation of a “Metropolitan Municipality of Greater Baltimore” with the capacity to raise and spend region-wide revenues that could resolve metropolitan scale housing, economic, and social issues.⁹³

Journalist Neal Peirce has similarly embraced metropolitan and regional government initiatives—“citistates”—as a means of moving beyond narrow local government boundaries to deal with broad regional needs. Peirce and his colleagues have stressed the importance of marshaling regional economic and fiscal resources to deal with the full range of contemporary metropolitan needs.⁹⁴

For all the seemingly broad agreement among urban analysts about the constraints on big city governments and the myriad limitations faced by cities and their leaders, those limits have represented no impediment to the proponents of convention center development. The massive public investment that a city like Baltimore, Philadelphia, or Hartford can no longer manage either fiscally or politically can instead be—and has been—readily managed by an independent public authority or a state government. What a fiscally strapped and racially divided community like St. Louis, Richmond, or Cleveland cannot achieve on its own (or with the approval of the city’s electorate) can in turn be politicked, financed, and realized by a county government or through a new regional entity. Thus, the convention center in downtown St. Louis is owned by the regional Convention and Visitors Commission, the Richmond facility by the Greater Richmond Convention Center Authority, Hartford’s Connecticut Convention Center by the Capital City Economic Development Authority (now Capital Region Development Authority), and the new Cleveland “Med Mart” by Cuyahoga County.

The structure of American local government, with an array of different agencies and multiple levels, provides ample opportunity to secure support for a convention center project from a variety of officials with varying outlooks and orientations. There was no necessity or compelling functional logic for involving New York’s Triborough Bridge and Tunnel Authority in building the Coliseum and later the Javits Center. Nor was the Chicago Tribune’s successful use of horseracing tax revenues to construct McCormick particularly logical. But these cases, and a host of others, worked.

Even where the responsibility for convention center development has remained with a general purpose local government such as a city or a county, as in the cases of Kansas City, San Antonio, and Cincinnati, it has proven possible to restructure the politics and finances to effectively insulate proposed centers from public review and debate. These cities, and others, have long since devised means of financing convention facilities without a direct public vote. They have made use of dedicated revenues from taxes on local hotel rooms and car rentals. These funds, often combined with the commitment of private dollars for naming rights or project aid, make a convention center seem a “bargain” or affordable even where government revenues are tight. And it is possible to structure such revenue sources to contend, as center backers often do, that these dollars are the rightful purview of local hotel owners, and somehow cannot be used for any other public purpose.

The product of a local governmental system of multiple responsibilities, revenues, and political openings is an unusual kind of “political privilege” that attaches to convention center development efforts. No longer packaged as one part of a broad effort to address investment and infrastructure needs with voter-approved bonds, convention centers are promoted as unique vehicles that will assuredly generate ever more “economic impact,” jobs, and new public revenues. And in those cases where a mayor, manager, or county official is less than fully enthusiastic about center building or expansion, proponents have been able to “wait out” resistant officials until the next election.

In Nashville, the city commission vote in January 2010 that officially began work on a $650 million new “Music City Convention Center” was the product of politics, deals, and consultant studies—from CSL, KPMG, Tradeshow Week, C. H. Johnson, and HVS—that extended back to April 1999, through the eight years of Bill Purcell’s mayoralty, to newly elected Mayor Karl Dean. Where Purcell’s finance director, David Manning, had issued a memo warning of “a serious over-supply of convention center space in recent years … [such that] the [Music City Center] could become a serious drain on Metro’s financial resources,” his successor found a way to make a more costly if no less uncertain project a reality. Nashville’s financing scheme for the Music City Center ultimately combined a hotel tax, a hotel tax surcharge, an airport departure tax, a vehicle rental tax, a redirection of state and city sales taxes at the center and adjacent hotel, and the creation of a Tourism Development Zone and tax. The combination of strong local business backing and mayoral support succeeded in gaining new state legislation that allowed the Metro Nashville government to tap a whole range of new revenue streams, dedicated to a convention center and nothing else.⁹⁵

Freed from the need to build the kind of electoral consensus required to “sell” bond issues to local voters, able to literally pick and choose the unit of government that is most fiscally flush and politically amenable, capable of outwaiting an unhelpful or unsupportive elected official, and ultimately positioned to garner the tax revenues generated by visitors and tourists rather than local taxpayers, convention center backers have managed to reconstruct local fiscal resources and politics to build even more centers. But if that political reconstruction has assured that convention center space in Orlando or San Jose, Baltimore or Omaha can grow, and will likely continue to grow, it does not assure that it works—that anyone will in fact come.

The fiscal reformation of American cities has made it possible for new and expanded centers to be developed across a wide array of places, even those like St. Louis, Cleveland, and Philadelphia that face serious economic problems and fiscal constraints. Yet just as those cities (or their county and state governments) have built and expanded their centers, so too have tourist meccas like Las Vegas and Orlando, major urban centers like Chicago, and even suburban jurisdictions such as Rosemont and Schaumburg, Illinois. Each has managed to craft its own unique fiscal and political solution. And each effort was justified by one or more consultant studies that described growing demand for convention center space and market “feasibility” for every new center. Those consultant analyses, and ultimately their inadequacies, errors, and failings, are the focus of the next two chapters.