Tuesday, September 17, 2002

Smaller convention expansion unveiled

Less space, more of a load on taxpayers

By Dan Klepal dklepal@enquirer.com
and Gregory Korte gkorte@enquirer.com

The Cincinnati Enquirer

        A new $160 million “middle-of-the-road” plan to expand and renovate the Albert B. Sabin Cincinnati Convention Center wouldn't be as big as once proposed and would shift more expense to taxpayers.

        Compared to the previous expansion proposal, this plan calls for 94,000 square feet less space. It is still 184,000 square feet more than the existing convention center.

        The financing would include $10 million in corporate contributions instead of $16 million and $1 million a year from the city for 30 years instead of 20 years; and assumes the city and county would split a guarantee of $44 million in debt.

        Two of the key pieces of the plan remain unchanged: Hamilton County would have to raise its hotel room tax from 3 percent to 6.5 percent and the city would have to bump its hotel tax from 3 percent to 4 percent.

        Added to a 6 percent countywide sales tax, the increases would mean a 16.5 percent bed tax for downtown hotels, third-highest in the nation. Most hotels outside the city limits would be at 15.5 percent.

        Mayor Charlie Luken said the $198 million expansion was “mothballed” after Delta Air Lines announced in August that it would not buy an estimated $15 million in naming rights to the facility.

        Since then, city officials and their consultants have scrambled to put together a new, more affordable plan. It needs quick legislative approval: County commissioners and City Council have until Sept. 30 to raise the hotel tax rates or lose the authority to do so.

        “This is not a major expansion, it's sort of a middle-of-the-road,” Tim Riordan, assistant city administrator, said Monday. “If we're going to be a player at all, we need to have a state-of-the-art facility. (The current facility) is as far behind the times as you can get.”

        Conventions, Sports & Leisure (CSL), the city's consultants, say the smaller expansion does not mean a smaller benefit.

        CSL says it would still allow the city to compete for 75 percent of all conventions held in the United States every year; create 1,850 new jobs; and generate an additional $4 million annually for the state, $1.3 million for the county and $700,000 for the city.

        County Commissioner John Dowlin and City Councilman Chris Monzel are skeptical.

        “What baffles me is, have we gotten into this groupthink, whether we need an expanded convention center in the first place?” said Mr. Monzel, the lone vote against the city raising its hotel tax from 1.5 percent to 3 percent in February.

        “If we can't fill the facility we have now, how are we going to fill an expanded center? Maybe building a bigger box isn't the answer. Maybe we need a smarter box.”

        County Commissioners Todd Portune and Tom Neyer, generally supportive of an expansion, say they have many questions that need to be answered in the coming weeks. They got their first look at the plan Monday.

        The expansion would provide 194,000 square feet of exhibit space, 57,500 square feet of meeting space and 40,000 square feet of ballroom space. Construction would begin in 2004 and be completed in 2006.Other financing elements: Corporations would offer a $10 million loan; the state would contribute $20 million; and the Cincinnati Convention and Visitors Bureau would contribute $10 million over 10 years. The plan also presumes someone will pay $10 million for naming rights.

        The new plan abandons the idea of spanning Central Avenue and reduces the amount of contingency cash available to pay for unexpected expenses during construction.

        Mr. Luken said the city doesn't have the funding for contingencies in hand. But he said the city does have the benefit of low interest rates to borrow money and a favorable construction climate.

        “That "mothballed' comment is the most widely quoted word I've ever spoken,” Mr. Luken said. “No one remembers what I said after that, which was we would continue to work on it. While this plan might not have all the things we would have liked, this is what we can do.”

        Several downtown hoteliers expressed some relief after the mayor said expansion would be mothballed, saying the higher hotel tax rate would make it difficult to keep their customers from flocking to Northern Kentucky.

        Rob Gauthier, general manager at Millennium Hotel, said the higher rate will cost all downtown hotels about 15 percent of their leisure lodging business.

        Wayne Bodington, general manager of the Westin, said Monday he's concerned about the possibility of a half-penny sales tax for light rail passing in November, making the effective bed tax even higher for all county hotels.

        “When we thought the plan was dead, on one hand we were sorry but also somewhat relieved,” Mr. Bodington said. “While we don't like a 16 1/2 percent tax in any way, if there is an opportunity to salvage the project and retain its most important elements, the hotel community would reluctantly go along with it.”

        The city also announced Monday it has struck an $11.9 million deal with Scripps Howard Broadcasting Co., the owner of WCPO-TV, to buy Channel 9's studios at Fifth Street and Central Avenue, a key piece of real estate if the expansion is to happen.

        Under the agreement, WCPO has until June 1, 2004 to vacate the building. It also will get tax abatements at its new studios worth $1 million over 10 years. WCPO has an option to buy the former Natural History Museum site at Gilbert Ave. and Elsinore Street for $1.2 million.


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