Convention center expansion urged despite slowdown

December 11, 1990|By Liz Atwood | Liz Atwood,Evening Sun Staff

Would-be tourists might opt to stay home and sip lemonade on their back porches. Businesses might cut travel budgets.

But economic hard times are not expected to discourage the convention and trade show business.

So a panel appointed by the governor earlier this year has recommended that the state proceed with plans to double the size of Baltimore's 11-year-old convention center.

In many industries, businesses rely on trade shows and conventions to make contacts and peddle their wares, said Robert Hillman, who headed the Baltimore Convention Center Authority. "The convention and trade show business is fairly recession proof,"

The Baltimore Convention Center Authority yesterday presented a report to the governor and the General Assembly urging the state to appropriate $2 million next year to begin architectural studies for the expansion.

The expansion and upgrades to the existing facility are expected to cost about $104 million, said Robert Hillman, chairman of the authority. But the state would not have to pay any substantial amount on the project until after it is completed, according to the funding scheme advised by the authority.

The center would be completed in late 1994 under the schedule the authority recommends.

The current center contains 115,000 square feet of exhibit halls and 40,000 square feet of meeting rooms. Since the facility opened in 1979, it has generated $58.5 million in state tax revenues and already has repaid the initial investment and its interest of about $52 million, according to the report.

Already, the center has generated a $6 million profit and is expected to bring an additional $55 million profit by 1995.

Hillman said the authority believes an expanded convention center would be profitable, paying for itself with the increased tax revenues the added conventioners would mean to the state.

Hillman said the authority believes the state can pay the debt service on the revenue bonds without increasing taxes, but suggested that, if the General Assembly wants to be sure revenues are sufficient to pay for the expansion, it could levy an additional $1 or $2 tax on hotel rooms and a $1 tax on car rentals.

Alan Villaverde, general manager of the Stouffer Harbor Place Hotel and president of the Hotel and Motel Association of Greater Baltimore, said the hotel industry in the area would accept the additional room taxes if they were designated for the convention center.

"We support the convention center expansion as much as we can," he said.

These are tough times for hotel chains across the country and Baltimore is no exception, Villaverde said. "The hotel community as a whole is not anticipating a good year in 1991."

Baltimore hotels depend on a thriving meeting and convention business in order to keep themselves afloat, he said.

Although it would be several years before the proposed expansion could be completed, Villaverde said, the project is needed to strengthen the area's hotel industry over the long term.

"We're concerned about the hotel business," said Wayne C. Chappell, executive director of the Baltimore Area Convention and Visitors Association. "Something needs to be done to give a shot in the arm to the area."

The state already is grappling with revenue shortfalls, but Chappell said the state needs to look to the future. "This economic downturn isn't going to last forever."

Last year, Chappell asked the General Assembly to appropriate money to start the architectural studies, but the legislature took the more cautious approach and instead created an authority to review the plan.

The authority endorsed the idea of expanding the center, and hired consultants to update financial feasibility studies for the project.

The authority concluded that Baltimore is at risk at losing convention business unless it enlarges the space. A number of large organizations have said the current facility will no longer accommodate their conventions.

The authority said that if the building is expanded, it will be sufficient to capture 85 percent of the conventions now held in convention centers.

The authority recommended that the city retain ownership of the building and land, but lease the facility to a convention center authority that would operate the facility.

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