City can't afford new convention center-arena

January 03, 2011|By Marta H. Mossburg

Baltimore needs a new publicly funded convention center and arena like my dogs need a therapist.

How wonderful that the design on the estimated $930 million redevelopment "is very solid and fits into the urban fabric of the city, and would provide some vitality and vibrancy to a building that right now is kind of drab and quiet," according to one backer.

Have we not learned?

The same reasoning stoked legislators to make it easier for people who could not qualify for a mortgage to get ridiculously large ones. When bankers exponentially amplified those bad decisions, the economy crashed.

Similar logic also pushed Baltimore legislators to build a $300 million hotel that loses millions and can't fill its rooms.

The philosophy behind the new plan must be that spending hundreds of millions of taxpayer dollars to build a bigger, flashier convention-entertainment complex will fill the hotel so it won't lose money anymore.

If it is such a great idea, why can't a private developer build it? When San Francisco voters rejected paying for a new ballpark for the Giants, the team privately financed the stadium.

Governments across the country have been using federal community block grants to build convention centers and hotels that private developers won't, creating an excess supply. As Steven Malanga writes in his 2010 book, "Shakedown," "the [convention center] building boom has sparked little, if any, economic development."

One example close to home stands out: "The Washington, D.C., convention center, built with $834 million of public money, is attracting no more business than the city's previous, smaller center," says Mr. Malanga. St. Louis' experience should also scare those with grandiose plans to fill Baltimore's Hilton hotel beds. That city's new Renaissance convention hotel, "built with block-grant and other public money and touted as the final piece of a downtown renewal project, has been running at an occupancy rate below 50 percent, and rating agencies have put its government-backed bonds on credit watch."

What makes Baltimore City economic developers so sure this time their plans will generate tax dollars instead of siphon them?

Targeted economic development has failed miserably in Baltimore, except for the lucky few recipients of tax relief and those who enjoy the power of doling it out. Despite hundreds of millions in tax credits and other types of financial incentives during the past decade, the city is still losing jobs and people. The population is down by 100,000 since 1990 and the number of people employed in the city is almost 10,000 less than five years ago.

Unless the Greater Baltimore Committee (which supports the planned convention center redevelopment) and the Baltimore Development Corp. (which is responsible for selecting publicly funded projects) count a mayoral corruption scandal involving favors for a developer and another involving a City Council member as success stories, it's hard to see how their plans have helped the city to thrive. When power is concentrated in a few hands, it inevitably leads to scandals. The only surprising thing is that there have not been more of them — at least publicly revealed.

What Baltimore really needs is broad-based economic reform that encourages many types of businesses and their employees to choose the city. Stephen Walters and Louis Miserendino outline the steps to make that happen in "How to Make Baltimore a Superstar City," a new report from the Maryland Public Policy Institute, where I work.

Using Boston and San Francisco as examples, they show how property tax relief boosted tax receipts and population within a few years. They also show how Baltimore could make this happen even in tough budget times. Part of their plan includes amending the city charter to secure tax relief in three years to encourage people to buy property before the new rate arrives. They also recommend putting tax receipt increases exceeding inflation in "a lock box" as a reserve to make up for any potential losses in revenue when the cut occurs, and asset sales to prepare for the change.

It makes no sense to increase convention space in the city when a glut exists across the country and at a time when taxpayers can barely afford existing pension and health care bills for city employees. The city does not need another shiny new metaphor of its failure. It needs leaders with the courage to enact the one tool assured to lift Baltimore from subsidized decay to independent success.

Marta H. Mossburg is a senior fellow at the Maryland Public Policy Institute and a fellow at the Franklin Center for Government and Public Integrity. Her column appears regularly in The Baltimore Sun. Her e-mail is martamossburg@gmail.com.

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