Foon Rhee

Why Mayor Steinberg now owns Convention Center decision, for good or bad

Mayor Darrell Steinberg, right, talks to Downtown Sacramento Partnership executive director Michael Ault before a Jan. 26 stakeholders meeting on a proposed Sacramento Convention Center expansion.
Mayor Darrell Steinberg, right, talks to Downtown Sacramento Partnership executive director Michael Ault before a Jan. 26 stakeholders meeting on a proposed Sacramento Convention Center expansion.

When business leaders gathered to celebrate downtown Sacramento’s progress, it was fitting that the event kicked off with a dance performance on stage at Memorial Auditorium. It is set to get a $16.2 million sprucing up starting in the fall so it can host the city’s major arts groups during a long overdue $83.4 million overhaul of the Community Center Theater, two projects that will boost the central city as a place to live, work and play.

But the marker laid down at last week’s event by new Mayor Darrell Steinberg could prove far more crucial for Sacramento’s future, not to mention the city’s finances. While he backed expanding the Sacramento Convention Center, he also called for considering other attractions – say an aquarium or an observation deck – to draw more visitors.

The next day, Steinberg led a much wonkier session, the first of five stakeholder meetings to figure out what to do. Clearly in his element in a crowded City Hall conference room, he asked some key questions. How much of the project is to fix design flaws from the last expansion 20 years ago? How is the convention industry changing, and what are competing cities doing? And if the goal is to fill hotels with visitors who will spend money and pay taxes, does a bigger convention hall give the biggest bang for the buck?

Steinberg said he is not “prejudging the outcome,” and he emphasized that the decision will be “data-driven, fact-driven.”

What a concept – and a welcome change from what’s happening at the White House, where President Donald Trump’s executive actions are gushing out, apparently based on anecdotes, feelings, “alternative facts” and keeping campaign promises at all costs.

While it’s easy to get caught up in the daily maelstrom that is the Trump presidency, we have to take care of business closer to home. And for Steinberg and Sacramento, the Convention Center is a big deal.

Officials are hoping for a key City Council vote in April, partly because bond rates are rising since Trump’s election, meaning there could be less money available for construction.

Steinberg could have easily avoided this politically risky call. The council was set to vote in October on a $170 million plan to nearly double exhibit space at the existing downtown site, mostly by borrowing against the city hotel tax.

But he asked for a delay, joining some business leaders urging a second look at a bigger center, perhaps at another location. Then last week, he threw a new curveball by suggesting it might be better to have a smaller center expansion and to invest some money in other amenities.

“If we’re smart, we can indeed have it all,” he declared at the 19th annual State of Downtown breakfast.

Maybe, maybe not, but one thing is for sure: By second-guessing city officials, Steinberg now owns the Convention Center decision, whether it turns out to be visionary or disastrous.

Count me among those who, like Steinberg, need more convincing that the demand actually exists for a major expansion, that Sacramento can really compete against more tourist-friendly cities and that the city can afford it. The last thing we need is an empty, expensive white elephant in the middle of the city.

While the attractions Steinberg mentioned all sound great, I also need to see proof they make sense for Sacramento. American cities are littered with great ideas that boosters believed would be big draws but weren’t.

And just improving the convention building can’t be the end of the debate. Officials must also look closely at operations at the Convention Center, as well as the Community Center Theater and Memorial Auditorium, all of which the city runs.

In 2015-16, the three buildings lost a combined $282,000 – the amount that staff, supplies and other operating expenses exceeded revenues from rental fees and ticket sales, according to city figures.

While such facilities are not intended to turn a big profit but rather to boost the citywide economy, it’s the third year in the last nine the complex ran an operating deficit, covered by profits from previous years. (Those figures don’t include repairs or debt repayments, which come out of the hotel tax.)

Perhaps it’s time to consider private management, used at some public convention centers, including those in Fresno, Long Beach and San Francisco.

At Memorial Auditorium, the city already plans to give a private company the rights to book artists, market shows and sell tickets. Supporters say the private “presenter” model gives the incentive to go out aggressively to fill seats; it’s used at Golden 1 Center and many other entertainment venues.

It’s possible that companies interested in being the presenter for the auditorium will want the chance at the theater as well, or that the management issue will be brought up by sponsors the city hopes will pony up $20 million for naming rights.

Fran Halbakken, the interim assistant city manager in charge of the projects, says the city is open to management changes. So are Steinberg and his team, though they are focused for now on construction.

However, Richard Lewis, president and CEO of California Musical Theatre, a primary theater tenant, is wary. He told me he’d be fine if a private presenter has a “good attitude” working with nonprofits, doesn’t increase lease payments and is as flexible on scheduling as the city.

But he’s worried that a for-profit company would not. “If it ain’t broke, don’t fix it,” he says. “We don’t need any more uncertainty.”

Some uncertainty, however, is unavoidable on big decisions such as the Convention Center.

Steinberg is right to broaden the debate, but once the available data are in and the deliberation is done, he and the council shouldn’t be shy about taking a leap of faith.

Foon Rhee: 916-321-1913, @foonrhee