Convention Center Follies. Heywood T. Sanders

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СКАЧАТЬ provided a longer historical view, the study might have yielded a more accurate, if more disturbing, portrait.

      While the Javits was shown as hosting 60 conventions and tradeshows with total attendance of 1.1 million in fiscal year 1995, that total was substantially less than the (not reported) 1.42 million attendees of 1991 or the 1.92 million in 1990. And perhaps most problematically, where Coopers & Lybrand calculated average convention attendee spending on the basis of estimates by the International Association of Convention and Visitors Bureaus, that each spent three days or more in the convention city, Javits attendees didn’t come close to that estimate. The Coopers study of the Javits expansion noted that the 1.1 million convention and tradeshow attendees in fiscal 1995 generated just 201,600 hotel room nights. The reality was that the tradeshows at the Javits were primarily attended by New York metropolitan area residents, who visited the Javits for the day, rather than by out-of-town visitors. In order to realize the jobs or economic impact promised by the Coopers consultants, the Javits would have to successfully compete for an entirely new market of rotating conventions.

      The Javits expansion proposal stalled despite the economic boom promised by Coopers & Lybrand, as the result of a fight between Mayor Giuliani and New York Governor George Pataki over Giuliani’s plan for a new stadium adjacent to the center. With no real progress, the Javits Center Operating Corporation commissioned another study to move the project forward, this time from Robert Canton of PriceWaterhouseCoopers.

      The March 2000 PriceWaterhouseCoopers analysis concluded (in print both italicized and bold) the “JKJCC will lose existing business if it does not expand,” “JKJCC will attract new events if it is expanded,” and “An expanded JKJCC will generate economic and fiscal benefits to New York City and the State of New York.” The PWC report offered an even more precise picture of the results of an expansion, noting that the center’s exhibit halls “are currently at practical maximum occupancy,” and predicting that an expansion of some 500,000 square feet would bring the Javits 504,000 more convention and tradeshow attendees each year, for a total of 1.62 million.⁶¹

      Canton’s 2000 report concluded that those half million more convention attendees would produce precisely 417,000 new hotel room nights a year and generate an added $355 million in spending and 7,000 additional jobs to the city. But at the end of the year an entirely new dimension was added, with the initially quiet floating of a proposal for a new football stadium for the New York Jets adjacent to the Javits. The Jets stadium was linked to the city’s efforts to win the 2012 Olympic Games. But a stadium with a retractable roof could also be sold as offering added exhibit hall space—“the stadium could be converted within 24 hours to exhibition space and connected to the Javits Center by a footbridge”—and a solution to the presumed deficiencies of the Javits. The convention center itself was termed by the Times article as “widely derided as an out-of-date, second-class building unworthy of the city.”⁶²

      Neither the Jets stadium nor the Javits Center expansion proved easily realized in the cauldron of New York City politics. So in late 2003 the Javits Center Corporation sought yet another consultant study of the market for an expanded center, turning once again to Robert Canton of PriceWaterhouseCoopers. In the years since the 2000 analysis, convention business and travel generally had been hard hit by a recession and the aftermath of 9-11. Convention and tradeshow attendance at the Javits had fallen from 1.3 million in 1998 to just 955,000 in 2003. Canton attributed the drop to “an industry wide trend of decreased event attendance.” Yet the forecast of new convention and tradeshow attendee spending in his 2004 report proved even greater than in 2000.⁶³

      The New York Times article reporting on the PriceWaterhouseCooper findings noted that “doubling the center’s size… would attract half a million more visitors, 18 to 20 new trade shows and conventions, and nearly $700 million in additional business a year.” The article also noted the reassurance provided by PriceWaterhouseCoopers that “The center does well despite its size, high labor costs and the city’s high hotel rates…. because New York is a highly attractive international city in a region with a shortage of exhibition space.”⁶⁴

      The 2004 PWC report provided the formal, seemingly expert, economic justification for New York’s political leaders to endorse and press for the Javits expansion. In a joint press release on March 25, 2004, Mayor Michael Bloomberg and Governor George Pataki announced “a historic plan to transform and modernize New York City’s convention industry,” including a major expansion of the Javits, a new adjacent 1,500-room hotel, and a 75,000-seat stadium. Their vision and rhetoric were grandiose: “This is a smart City-State investment in New York’s future and one that leverages private investment to grow our convention industry and help realize New York’s Olympic dreams.” Their claims that “the expansion will have a profound impact on New York’s economy, increasing the existing $97 million annual tax revenue generated by Javits by an additional $53 million and 415,000 hotel nights a year…. [and] will create 10,830 additional jobs” were drawn directly and exactly from the 2004 PriceWaterhouseCoopers report. The seemingly expert consultant study provided ample political cover and economic rationale.

      While the analysis by PriceWaterhouseCoopers provided a public justification for the expansion, the report itself had some serious deficiencies. Rob Canton of PWC argued for the success of the expanded center, despite being “mindful of the fact that overall national demand for exhibit and meeting space and overall attendance at trade shows and conventions had declined since 2001,” because “the Center did not suffer substantial declines in business or attendance during this period and that it continues to turn away business because of lack of available dates.”⁶⁵

      The issue of the convention and tradeshow attendance at the Javits—historic, current, and likely future—was crucial to PWC’s forecasts of spending, public revenue, and job creation. It was also the vital link in understanding the reasonableness of the consultant’s forecasts. But in 182 pages of the January 2004 PWC report, analysis of attendance occupied less than a single page, largely devoted to a bar chart of attendance from 1993 to 2002. The report noted that “convention/trade show attendance is estimated to have ranged from 1.0 million to 1.4 million from 1993 to 2002 and to have averaged 1.2 million annually.”⁶⁶

      In the accompanying chart (Table 8), the attendance figures for 1999, 2000, 2001, and 2002 are all shown as “estimated.” The PWC consultants offered no explanation for their use of “estimated” values for three or four years earlier. The actual figures, distributed by NYC & Company, the city’s visitor bureau, in its monthly “Barometer,” would suggest significant change in the Javits’s performance. The Javits saw 1,277,800 convention and tradeshow attendees in 1999, and 1,253,400 in 2000. Yet attendance fell to 977,600 in 2001, followed by 931,850 in 2002, and 955,150 in 2003.⁶⁷

      Canton would surely have had the exact attendance numbers for 2001 and 2002 available for his analysis in late 2003. Indeed, he should have had at least partial year-to-date numbers through September or October. Those numbers would have shown a substantial and persistent drop in convention attendance. Yet that drop does not really appear in the report. Instead, it estimates a “No Expansion” scenario of 1,113,000 annual convention and tradeshow attendees, and a projected “Expansion” total of 1,532,000.

      The proposed Javits expansion would first grow in size, as new Governor Eliot Spitzer and Senator Charles Schumer embraced a plan for a more ambitious expansion with a total cost on the order of $3 to $4 billion. Then, by 2008, it would shrink back to a renovation accompanied by a quite modest expansion—all that could be financed with the $700 million in hotel fee revenue bonds sold in November 2005. And as the expansion shrank, so did the Javits’s actual convention and tradeshow attendance, to 817,200 in 2007, 708,200 in 2008, and then 533,700 in 2012.⁶⁸

      From the first announcement of the Javits expansion plan in March 2004 to the adoption of the final “General Project Plan” in March 2009, the PWC forecasts were repeated over and over by public officials and in public documents. They СКАЧАТЬ