Bigger Convention Center

December 22, 1990

If Maryland is wise, it will use today's uncertain times to position itself for maximum advantage in the next economic upturn. A key step would be the proposed $150-million expansion of the Baltimore Convention Center.

Expansion was debated in the General Assembly last year. In the end, legislators played it safe. They created an authority to find out whether urgent expansion of the downtown facility indeed is needed. That authority, under the chairmanship of Robert Hillman, has now reported back. Not only does it find expansion overdue but it proposes ways to pay for it. "We have already started to lose repeat business and will lose more," Mr. Hillman says of the existing convention center.

When it opened 11 years ago, the Convention Center was appropriate for 85 percent of gatherings; today, it is suitable for only 60 percent of conventions. Among the center's key weaknesses is its inability to accommodate more than one big event at a time. Similarly, the center lacks a room large enough to seat 5,000 people.

To rectify these deficiencies, the authority proposes upgrading the existing main building and extending the convention center to the site of Festival Hall, an interim structure that is easily relocatable. Those moves would mean a doubling of the exhibit areas and meeting room space.

How would this be financed at a time when the state is bracing for a $423-million budget deficit?

One alternative is to finance the project by selling revenue bonds backed by the added revenue that the expanded center would bring in for the state. Another option is to raise the money to pay for the project thorough an additional hotel-room tax of $1 or $2 a night and a $1 surcharge on car-rental transactions in Maryland.

These are workable ideas. The current convention center was financed through revenue bonds. By the end of 1995, when the original bonds expire, the center will have run up $51.9 million in principal and interest costs but will have generated almost $70 million in tax revenues. Clearly this is a performance record that must be sustained.

Conventions are booked years in advance, meaning that if an expansion were completed in 1995, its full benefits would not be felt until the turn of the century. Because of this lead time, legislators have to give their approval soon on expanding the center. Otherwise, Baltimore -- and Central Maryland -- increasingly will lose business to other cities, where facilities are better and more flexible. A delay in upgrading the Convention Center could prove tragically short-sighted.

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