The Convention Center Hotel Hustle

October 25, 2005 0

Steve BucksteinQuickPoint!

The Portland Development Commission is close to spending millions of public dollars to subsidize a new Convention Center hotel. Cities around the country have been paying private developers to build such hotels on the theory that they will bring more visitors, thus turning losing convention centers into profitable businesses.

Studies have documented the fallacy that convention centers are worthy of public investment, but governments seem slow to learn. Recently, a leading critic came to Portland to explain why we should not dump good money after bad into our convention center complex.

Professor Haywood Sanders has studied convention centers and their headquarters hotels, and has come to the conclusion such hotels almost never deliver the visitors expected, and end up hurting existing hotels in their communities.

That may be why a local business group, including some Portland hoteliers, helped bring Professor Sanders to Portland State University last week. They correctly wonder why their tax dollars should be used to subsidize a major new competitor.

The PDC is concerned that such opposition could interfere with its negotiations to build the new hotel. But, if its plans won’t really pan out, shouldn’t Portlanders know that now rather than later?

It’s not often that an academic talk at PSU ruffles economic development officials’ feathers. Perhaps it should happen more often, and continue happening until the failure of such government economic development plans is understood enough to finally end them.

Steve Buckstein is senior policy analyst at Cascade Policy Institute, a Portland, Oregon based think tank.

© 2006, Cascade Policy Institute. All rights reserved. Permission to reprint in whole or in part is hereby granted, provided the author and Cascade Policy Institute are cited. Contact Cascade at (503) 242-0900 to arrange print or broadcast interviews on this topic. For more topics visit the QuickPoint! archive.

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