Md. alters method of gauging convention center's impact

State now providing a range of estimates

March 06, 2003|By June Arney and Bill Atkinson | June Arney and Bill Atkinson,SUN STAFF

Acknowledging that its method of calculating the economic impact of the Baltimore Convention Center overstated that impact, the state has adjusted its formula to provide a range of estimates.

Now, instead of offering a single estimate, the Maryland Department of Budget and Management is reporting that the convention center's economic impact was between $227 million and $565 million in the 2002 fiscal year.

For years, the state has boasted of huge economic benefits generated by the convention center. In 1998 - the first full year after the $151 million convention center expansion - officials said the center had achieved an economic impact of $1.07 billion.

For 1999 through 2001, the state has claimed the economic impact directly from the convention complex was: $575 million, $642 million and $569 million, respectively.

"Given the state of the available information, I cannot reduce the admittedly wide range between the estimates or provide a reliable point estimate within that range," Jay Ladin, the state economist responsible for the report, wrote in a memorandum.

Experts said the wide range makes it difficult to gauge the convention center's success.

"It is not an adequate guide for making public policy," said Heywood T. Sanders, chairman of the department of public administration at the University of Texas in San Antonio and a convention industry expert. "At base, it really doesn't tell us how well that convention center is performing and what it is doing."

Ladin said he revised the format after The Sun published articles in June calling the convention center's economic impact numbers untrustworthy.

"I knew the estimate was high, but I didn't know to what extent," said Ladin. "I am just saying I have more information now, and I think what I did this year was better."

Step in right direction

Sanders said the state's new approach to estimating economic impact is a step in the right direction.

"At least they're willing to say in public there's some uncertainty about it."

The state historically has calculated the convention center's economic impact by taking the number of people who attend conventions, trade shows and meetings and multiplying that by a per-delegate spending formula provided by the International Association of Convention and Visitor Bureaus.

The Sun pointed out that using that formula is unrealistic because some people double up in rooms, commute from their homes, stay with family and friends or stay only one night.

The state has also not made distinctions between international, regional and national conventions, although there are sharp spending differences among those attending them.

Precision is elusive

Ladin said in the report that the maximum estimate is still "too high" and that the minimum estimate "probably understates the economic effects of convention center events."

"More precision, if at all possible, requires better data than is currently available," Ladin said in the report.

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