By Paige Richardson
Tourism boosters in Baltimore had a can’t-miss idea. If taxpayers only poured huge subsidies — including hundreds of millions in bonds backed by hotel revenues — into building a convention center hotel, Baltimore would experience a boom in convention business that would generate jobs, revenue and economic prosperity for city residents.
But as the Baltimore Business Journal recently pointed out, “Baltimore built it, but they didn’t come.” Now their hotel is having trouble paying off its bonds and has lost $65.1 million since it opened in the summer of 2008.
In St. Louis, boosters had the same idea, spending millions in public money on the construction of a convention center hotel, which opened to much fanfare in 2003. Despite rosy projections by experts, it is now in foreclosure because hotel revenues were insufficient to pay its debt service. Again, it’s local taxpayers who are the big losers.
In Charlotte, N.C., taxpayers ponied up millions for the construction of a convention hotel there, but convention bookings quickly “receded to levels before the hotel opened,” according to an article in the Charlotte Observer. The list of midsize cities with failed and struggling convention center hotels — paid for with massive infusions of taxpayer dollars — goes on and on.
Now, starry-eyed tourism boosters in Portland want to repeat the same mistakes made by these other cities. And they want to spend your money to do it.
Metro is in the process of cutting a sweetheart deal to offer millions in public subsidies to get an international hotel chain to build a hotel next to our convention center.
Despite the fact that Metro is only now beginning, after months of stonewalling, to release any details about the terms of the agreement, our Legislature has gone ahead and diverted $10 million in lottery proceeds to back this cozy arrangement for a profitable out-of-state hotel chain and private developers.
Metro plans to issue $60 million or more in public bonds to pay for hotel construction, which with interest will add up to more than $100 million by the time they’re repaid. That’s outrageous enough, but the subsidies don’t stop there. Another $4 million in taxpayer funds is being given to the developers by Metro, as well as a $4 million loan from the city.
Don’t worry, says Metro. The bonds will be paid off with increased tax revenue from the new hotel. But newly released details about the deal between Metro and Hyatt still don’t provide clarity about who pays if the hotel comes up short — a very real possibility given the spotty track record of these sorts of ventures here and in comparable cities. So far, it seems public dollars will be on the hook. At a time when we are struggling to pay for basic public services, that’s a risk we can’t afford.
If the hotel makes money, the owners get to reap the profit; if it loses money, taxpayers foot the bill. Heads they win, tails we lose. Does that sound like a good deal to you?
Local officials currently considering this flawed hotel proposal need to think twice about whose interests they were elected to serve. Our legislators should have known better than to ignore basic principles of transparency and good governance by appropriating millions in public money before Metro made any effort to gather public input about the deal it has cooked up behind closed doors.
Now it’s the turn of local officials. They should put this bad idea to rest before local taxpayers are left holding the bag for the latest “trust us, this can’t miss” boondoggle.
Source: Coalition for Fair Budget Priorities
OH my God, what an article. I hope our city council members will read this right away.
This Evansville downtown hotel is now looks really scary after read this article.
Please pass this article on to your friends right away.
Thanks CCO for doing outstanding research on this subject. Looks like the Courier and Press failed us again.
Check out the Convention Hotel Business in Fort Wayne and Louisville just to name two.— Very Successful. Example: Fort Wayne is scheduled to have 50 Conventions this year.
This is a good idea and the Evansville public opinion favor the new hotel nbbt a margin of 10 to 1. Attend one of the public meetings and see for yourself.
Any city council person voting against the new hotel will not get elected next time. Labor alone will see to that.
Said the Mayor’s puppet. Wayne is beginning to remind me of that old puppet named Walter that Jeff Dunham has except Winnecke is Dunham and Wayne is Walter.
http://www.google.com/imgres?imgurl=http://i.chzbgr.com/completestore/2009/8/13/128946984446875214.jpg&imgrefurl=http://www.ar15.com/forums/t_1_5/1377011_White_House_defends_Bidenandapos_s_debate_demeanor__ie__blames_Ryan_for_Bidenandapos_s_smiling_.html&h=271&w=401&sz=18&tbnid=QoiQzciO7Pj3MM:&tbnh=81&tbnw=120&zoom=1&usg=__BnH8biGyPr2dztTvT5kZTXNScGA=&docid=guycjSa9hfy8IM&sa=X&ei=mOUTUvwEhNmKAofGgJgP&ved=0CDkQ9QEwAQ&dur=125
Wayne:
Riverboat gambling is not considered a family day-out destination. That is something that Ft. Wayne seems to understand, as the only gaming I found advertized there was a charity gaming facility at the Eagles Post 3512.
Pawn shops on every other block are not the sort of thing that makes a good impression on visitors to our city.
The Fort Wayne Children’s Zoo was founded by Earl B. Wells. Since opening in 1965, the 1,500 animal zoo has been located on 38 acres in Fort Wayne’s Franke Park. The zoo continuously ranks among the top zoos in the nation, recently ranked as the ninth best zoo in America by Child magazine in 2004 and fifth best zoo in the nation by Parents magazine in 2009.
Back when H.O. (Hank) Roberts 1952-1955 was running Evansville we had a zoo that was was truly something to be proud of. What we have now is a money pit of growing subsidies and dwindling exhibits.
These so called managers nowadays are letting Mesker Amphitheater go to hell because they do not want anything competing with their downtown investments. What a rich history Mesker Amphitheater has and what a loss for Evansville that it is in its current condition.
For some reason, and I am damned if I know why, the city managers over the years have not taken care of the things the people love the most!
___
Taken down because message was off message and too personal.
Why do you not use your real name when you post. What are you hiding?
Why don’t you John Boy?
So, Wayne, tell us about what “Labor” will see to do?
Your boy and his mismanagement are showing Evansville the RAW UNDERBELLY of the party of CRONIES and PLUTOCRATS you have helped to gain power…
What do you have to lose at this point?
This is totally embarrassing!
Wayne,
Is this the same threat you gave the Council so they would vote for Johnson Controls ? What if they voted for Johnson Controls but oppose the Hotel. Does “LABOR” withdraw their vote ? Does this mean that the City Council must always feed “LABOR”, lest they risk not getting re-elected ? What if the City Council said “screw you labor, I’ll vote in the public interest” ?
You are completely wrong. The Mayor and City Council did make the deal with Johnson Control better than what Weinzapel was willing to do. I did not encourage anybody to vote for the Jonson Control Project.
No wise person says screw you Labor. Labor is fully behind this hotel project. They show up at the polls. This is a good project and should be built and labor needs thew work.
There are only several hundred members of the labor temple and they are for the most part mindless idiots that vote for the Democrat no matter who it is. If a handful of union goons are running Evansville there is no hope. My god Wayne who stole your mind?
I can put thousands of people to work mining minerals from the ocean, but the cost of evaporating the water will always exceed the revenue generated by the minerals left behind.
“The American Republic will endure until the day Congress discovers that it can bribe the public with the public’s money.â€
― Alexis de Tocqueville
Wow vote yes because the Mayor says so, is getting 15 votes thus far. Baaaaaaaaaa. SMH.
Due to positions staked out by Winnecke, Able, and Parke,
the epitaph of the Local Republican Party could appropriately be chiseled on the cornerstone of the HWC’s Hotel.
that’s HCW’s Hotel,– sorry for the typo.
Actually that would be good—that means the convention hotel was built. The public is in favor of the hotel 10 to 1. Attend some of the public meetings and you will see.
The City Council will do the right thing and approve the project.
There are more Republicans holding the various office throughout our great City/County today than there ever has been.
I remember what happened to Russ Lloyd Jr’s quest for a 2nd Term, after pushing a Baseball Stadium downtown, the people didn’t want, –HE LOST! I remember that Jonathan Weinzapfel declined to run again, due to the disapproval of the Downtown Arena forced on the Citizens, derailed his aspirations for reelection/higher office, His/Local Democrat Central Committee candidate then LOST the primary! I remember Brad Ellsworth’s quest for a 2nd term, and due to lining up to give Pelosi a hickey, rather than noting the views of his constituents,–HE LOST. Winnecke is already a lame duck due to his flawed decisions,–from tearing down Roberts, to giving away $37+ million dollars of Community resources, –Hold on to your Hat Mr. Parke, as the Voters will kick butt once again, and all the Republican Central Committee’s kissing up to the ERBC puts the aforementioned, Winnecke, Able, and Yourself, into–the LOSER column.
Rumor has it that Connie Robinson’s vote is already paid for, her son was seen working at the Civic Center for the building authority. The yes count is now 4 for sure Weaver, Robinson, Mosby and McGinn, The question is which one of the 5 left will vote yes also? Earthcare 2 only bigger.
O’Daniel and Lindsey are No votes. Adams is most likely a NO. Stephanie is a likely No. That leaves the erratic John Friend who is backed into a corner on this issue. Will he vote for what the numbers tell him(NO) or will he vote with labor?
September 9th will very interesting indeed.
No shit, it will be interesting to see if the resident captain of the pirate ship will sing yo ho ho and a bottle of rum before voting. I hope he thinks about what supporting this undisclosed piece of crap will do for his accounting business if he votes yes without having the information he demanded.
Connie Robinson is a good person. I wish you would argue your points and not degrade people.
If hotel no is correct and she sold a vote on a $37.5 Million welfare check so a relative could get a job she is not a good person. Lets give her some credit for now but if the truth shows a relative (even a nephew) on the city payroll followed by a yes vote it is time to kick her pandhandling butt to the curb. Prove Wayne wrong Connie. Say it ain’t so.
Excuse me Wayne but If this is true it’s called influence peddling. Also does the word “political patronage” mean anything to you?
Rest of message was taken down because it was off message and personal.
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