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Preface

City governments are usually viewed as providers of basic services: police and fire protection, public works, parks and recreation, and libraries. Yet cities and a broad array of other local governments are also providers of public capital. They have long built major public buildings such as city halls, courthouses, and libraries, and in some places public auditoriums and theaters. In the 1950s and 1960s, a number of communities began the development of new convention halls—New York City’s Coliseum, Cleveland’s Convention Center, Atlanta’s Civic Center, Baltimore’s Civic Center—as part of schemes for urban renewal or downtown revitalization.

Those early convention venues were succeeded and replaced by newer, larger, and presumably more competitive centers within a decade or two. New York City’s Coliseum was replaced by the new Jacob K. Javits Convention Center in 1986; Atlanta’s Civic Center, opened in 1967, was superseded by the new Georgia World Congress Center in 1976. The new Baltimore Convention Center was opened in summer 1979.

During the 1980s and 1990s, the public investment in new and expanded convention centers boomed, as other cities sought to compete with New York, Chicago, and Atlanta. And that boom continues, with state and local governments spending over $13 billion on center building between 2002 and 2011. The building boom has been driven in large part by a revolution in center finance, and by a new kind of public role and promise. Expansive new convention centers increasingly became the product of state governments or special purpose public authorities, neatly avoiding the political and fiscal limits on city governments.

At the same time, a massive convention facility was no longer simply a means of accommodating an occasional national political gathering or a symbol of local pride. It was touted as a key element in local “economic development,” one premised on the assumption, regularly validated by “expert” consultants, that a new or larger convention center would yield a wave of new out-of-town visitors. Those visitors, bringing “new money” to the city, would in turn spur new private development, and ultimately thousands—often tens of thousands—of new jobs. With that money, development, and jobs would come a proportional wave of new public tax revenues, revenues sufficient to provide a substantial “return” on the public investment in convention center development.

In many ways, the contemporary convention center development story is one of the unbridled successes of local government: success in overcoming political obstacles and often public opposition, success in mobilizing public revenues and dollars, success in building expansive new facilities, success in ultimately securing the ability to compete against other cities for lucrative convention business. But while communities have proven remarkably capable of building new and larger centers, they have proven remarkably unsuccessful in filling them. From Atlanta to Seattle, Boston to Las Vegas, the promises of local officials and the forecasts of consultants have come up short. State and local governments have built modern new centers, only to see half or less of the convention attendees promised by the consultants. Other cities have expanded their existing centers, yet failed to see any consistent increase in business. Indeed, there is substantial evidence that the supply of convention center space substantially exceeds demand (a “buyer’s market”), with cities desperately competing by offering their center space rent free.

Why have cities and other state and local governments invested billions in convention center building when the actual results, in terms of new convention attendees, visitors, and economic impact, are quite limited or nonexistent? Why do local officials from Anaheim to Washington make convention centers, and tourism generally, such a signal public priority even as they cut back on public services and essential public facilities?

For some observers, such as economist Edward Glaeser, these investments amount to a misplaced set of public priorities on the part of elected officials, an “edifice error” exemplified by Detroit’s spending on an arena and a downtown People Mover. Glaeser argues, “Too many officials in troubled cities wrongly imagine that they can lead their city back to its former glories with some massive construction project—a new stadium or light rail system, a convention center or a housing project.” Correct as Glaeser’s observation is, it emphasizes the question of why convention centers and stadiums, a Rock and Roll Hall of Fame, or a new aquarium routinely rise to preeminence as local policy priorities. Some observers have stressed the local interests that directly benefit from public building—architects, consulting engineers, contractors, and construction labor unions—as well as the gain for politicians who “get to cut ribbons.” Others have pointed to the combination of local hospitality and tourism interests—hotels and restaurants, the convention and visitors bureau—with local policy entrepreneurs and larger national tourism interests and promoters.

The analysis that follows seeks to answer the why question, first by reviewing the metropolitan “arms race” that has propelled the massive expansion in convention center space around the country over the last two decades, and second by examining the genesis of this contemporary arms race through the historical experience of convention center development in three key locations: Chicago, Atlanta, and St. Louis. Unlike academic research that has focused on the visible, public side of large-scale public investment—the mayoral announcements, the newspaper headlines, the formal consultant reports—this work is focused on the interests and intent of local business and civic leaders. Those business leaders—the heads of major local banks and financial institutions, utilities, department stores, and local developers—have long played crucial roles in setting local capital investment and development priorities and in promoting convention center development. For them, the import of convention center development—and often public stadium and sports facility building—lies in the ability of public investment to shape land use and development opportunities.

These business leaders have been motivated not by promised “economic impact” but instead by concern with downtown property values, “protection from erosion,” and the place of “anchors.” Facing a combination of exploding suburban development and stagnant downtown cores in the 1950s, they sought—in the words of Chicago Title and Trust’s Holman Pettibone—dramatic public projects that would serve the “obvious need to bolster the downtown business district.” Moreover, the planners who worked for these business leaders recommended convention center development on sites that would remove “blighted conditions… detrimental to commercial development possibilities” in the downtown core, serve the necessity to “anchor the Loop securely,” and provide a “healthy fringe to Downtown.” The larger imperative for convention center development was thus one of land use and property value, fully focused on the downtown center.

The land use and property value focus of business leaders was not limited to just a convention center, or to one particular zone of downtown. A stadium or arena, a university campus or research center might well serve much the same goal of “anchoring” or “protecting.” Indeed, the imperative to serve different downtown business and property interests, interests often divided into “factions” or “sections,” divisions that demonstrated an “unhealthy rivalry,” necessarily demanded multiple public development projects. Those projects, spread across “factions” and “sections,” also served a broader collective purpose.

Yet even as local business leaders sought to “bolster” and “anchor” all of downtown with public projects, they faced increasingly uncooperative local electorates. Atlanta voters expressed strong reluctance to a convention center scheme in 1962, although they did approve a less costly project the following year. But by the end of the 1960s, business leaders across the country faced angry voters, as well as the related problem of “white flight.” St. Louis saw a 31.7 percent decrease in its white population from 1960 to 1970. For Atlanta, it was a 20 percent drop. That population loss both reduced the market for downtown retail, and also marked the departure of the middle-income population that had long supported major public investment bond issues.

The imperative to boost downtown development and create a sense of “momentum” did not evaporate for big-city business leaders during the 1960s and 1970s. Rather, it led them to focus on new fiscal schemes that could build grand convention centers, stadiums, and arenas independent of city fiscal resources or the preferences of city voters. In this period, Atlanta, Baltimore, St. Louis, Kansas City, Philadelphia, Boston, and Seattle all turned to their state governments as a source of public investment and finance. Even as downtown department stores like Atlanta’s Rich’s, St. Louis’s Scruggs Vandervoort and Barney, and Baltimore’s Hochschild Kohn closed their doors, the business leaders in these cities pressed for new public development projects that could serve as “anchors” and “sparks” for new private investment.

In 1954, Holman Pettibone could tell Chicago’s mayor and his business colleagues of the imperative for a major public project—the “obvious need to bolster the downtown business district.” Almost 50 years later, his counterpart in St. Louis, Bank of America’s David Darnell, would tell his colleagues that in order to “make the St. Louis region world class,” it “requires that the downtown area thrives.” That common quest to bolster the downtown business district, to assure that downtown thrives even as the larger city has declined or suffered, has been the central driver of convention center development in big American cities. And so even as centers fail to produce, as promised jobs, economic development, and private investment fail to appear, the calls from mayors and governors, from bankers and corporate CEOs for more public spending—and a new set of plans and consultant studies—come once again.