Sacramento tourism officials are pushing ahead with plans to greatly expand the city’s convention center despite the lack of a financing plan.
The Sacramento Convention and Visitors Bureau recently released drawings of an expanded facility that were completed this month by the design firm Populous. Convention officials said they plan to release a cost estimate for the work in the coming weeks and hope to present options on how to finance it to the City Council by the end of the year.
The Populous renderings show a larger convention center with more direct access to downtown and midtown via a redesigned pedestrian walkway along K Street. The drawings also show a modern 50,000-square-foot ballroom atop the adjacent Community Center Theater that would provide patrons with sweeping views of Capitol Park.
With no solid financing plan in place, the project is likely years from taking off. Advocates of the plan argue that the convention center must expand to compete with newer and larger facilities in other cities on the West Coast, especially those in San Jose and Long Beach.
“We continue to compete, but there’s no question in my mind that if we don’t do something, if we stay at the status quo, at some point the newer, bigger and better are going to win out,” said Steve Hammond, president and CEO of the Sacramento Convention and Visitors Bureau.
Critics of the plan argue that the funding for the work should instead be spent on core city services and that city officials have overestimated the economic impact of the current convention center.
City officials – including City Manager John Shirey – have said they are generally supportive of the concept to expand the convention center but are eager to hear how the project would be funded.
A 1996 expansion of the center that cost $80 million was financed with bonds backed by special taxes placed on hotel rooms in the city. That financing model would likely be the foundation of another expansion.
However, the bonds used to fund the 1996 expansion still have eight years of payments left to go – meaning those hotel tax funds would not be available until 2021. Hotel taxes have also been designated to act as reserve financing for a new downtown sports arena.
Convention officials acknowledge that their plan to expand the center by between 80,000 and 90,000 square feet is a long-term effort.
“There are a lot of hands out there for the same pots of money,” said Brian Larson, a former chair of the Convention and Visitors Bureau board who is helping to lead the effort. “We are just trying to craft an overall plan. We’re trying to be proactive.”
Local watchdog group Eye on Sacramento has argued that hotel-tax revenues – which have more than doubled since 1993 to $19.8 million last fiscal year – should be used to support the city’s general fund budget, not an expanded convention center. Some hotel taxes are funneled into the general fund – which pays for most core city services – but most of the revenue is used to pay off Convention Center debt and operate the facility.
Craig Powell, president of Eye on Sacramento, said the city dedicates less of its hotel-tax revenue to general services than most other cities.
“This is one of those things that has been allowed to go on autopilot for a long time,” he said.
Powell also questioned claims by city tourism officials that the convention center has an economic impact on the city of more than $100 million a year. Using estimates for hotel-room bookings and money spent on hotels and meals by conventioneers, Eye on Sacramento calculated the economic impact at closer to $60 million.
“This is a highly subsidized industry,” Powell said. “Can the city afford to subsidize every industry? The answer, of course, is no.”
Call The Bee’s Ryan Lillis, (916) 321-1085. Read his City Beat blog at www.sacbee.com/citybeat