Lessons from Phoenix for SA's Gonzalez Convention Center?

Consultant studies and plans play an incredibly important role in city policymaking. Carrying the weight of outside "expert" analysis and conclusions, they can define the local discussion of alternatives, and make fundamentally political choices appear simply a matter of gaining the appropriate technical judgment from the experts. They make what may be risky or uncertain public projects and policies appear certain and predictable. As San Antonio approaches yet another expansion of the Henry B. Gonzalez Convention Center, it's worth noting that experts aren't necessarily really "expert," the forecasts not always realized. Let's start with Phoenix.

The December 2002 presentation by Phoenix Assistant City Manager Sheryl Sculley was dramatic and compelling. Making the case for the state funding half the cost of expanding the Phoenix convention center, Civic Plaza, Sculley's PowerPoint asked "State Funding – Why?" The answer seemed clear: "There is No Status Quo!"

Sculley's presentation simply stated the conclusions of a set of consultant studies dating back to 1999. An expanded convention center would produce $32 million in new state tax revenues and create 12,000 jobs. Sculley's message to the state's business and political leaders was that state financing for a bigger center would literally pay for itself. The presentation set out the argument that the expansion "would be paid for with NEW tax revenues that we will not get unless we expand."

The studies by PriceWaterhouseCoopers and Phoenix consultant Elliott Pollack had promised that more convention center space would inevitably boost the annual stream of convention attendees to downtown Phoenix. The existing Civic Plaza center had drawn 166,000 convention attendees in 1996 and 193,000 in 1997. The studies both forecast a larger center would bring Phoenix between 325,000 and 350,000 convention attendees each year.

Those conclusions were seemingly validated by a third consultant study by Ernst & Young, completed in March 2003. E&Y concluded "if Phoenix does not make any changes to its current facility and downtown amenities remain at the same level, Phoenix is expected to stabilize around 125,000 (rounded) delegates annually." But the larger convention facility would produce a serious boost in business: "the stabilized attendance for the expanded Phoenix facility is estimated at 376,861… on par with Dallas, San Diego and San Antonio."

The consultants' work made for a persuasive economic case. And when Phoenix chose to develop and finance its own 1,000-room convention center hotel, that too was justified by more consultant studies. City staff told the council those studies concluded the city-owned hotel was "solidly financially feasible." And as part of the city bond issue, an analysis from the HVS consulting firm in April 2005 concluded the city-owned hotel was poised to take advantage of the boost in convention business from the expanded convention center, using a forecast of 375,000 total convention attendees. That would enable the planned new Phoenix Sheraton to reach 66 percent occupancy by 2011, at an average daily room rate of $175.23 — average revenue per room of about $115.65.

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