A September 7 story in the Lake News Online reported that the developers of a proposed hotel and convention center have come back to the County Commission to ask for additional tax subsidies, including a possible sales tax increase.

A September 7 story in the Lake News Online reported that the developers of a proposed hotel and convention center have come back to the County Commission to ask for additional tax subsidies, including a possible sales tax increase.
The experiences of other cities such as St. Louis should be instructive. Convention and hotel projects rarely if ever live up to the promises made by developers. In fact, they often leave local jurisdictions holding vast amounts of debt. St. Louis subsidized a 1,000-room Renaissance Grand Hotel and Suites, but convention business was so bad (worse than before the hotel opened) that bondholders foreclosed in 2009. The hotel was sold for a large loss in 2014.
In his book, Convention Center Follies, University of Texas at San Antonio professor Heywood Sanders examined similar projects around the country. He found that according to the convention industry’s own data, convention capacity far exceeds demand. Yet hotel and convention center consultants, who make money by building convention centers and hotels, continue to urge municipalities to build with promises of increased tourism that rarely if ever pan out.
Sanders recently gave a talk on his book in Kansas City, and a video presentation of it is available here: https://youtu.be/XtN2-mn_3tQ. Camden County taxpayers would do well to spend a few minutes watching Sanders’ talk, which is as entertaining as it is substantive.
Hotel and convention center consultants don’t always enjoy having to defend their records. In Kansas City, the main hotel developer and the visitors’ bureau chief refused to debate Sanders on their proposal. In the closing of the Lake News Online story, the local developer said, “The hardest part of this project is to keep moving. These kinds of things die in conversations, they die in anecdotes.” But sometimes this is exactly as it should be: no public policy—especially one that requires taxpayer dollars—should be spared public examination and conversation.
Camden County 2nd District Commissioner Cliff Luber was quoted as saying, “If there is a demand for this project, private investors will build it.” He is exactly right. Public officials should focus on providing government services effectively and efficiently, not using tax dollars to invest in risky projects that private companies are not willing to take on themselves.