Convention center exhibit hall space increased 36 percent nationally from 2000 to 2011 while attendance at convention center events fell 1.7 percent during the same time period, according to Heywood Sanders, a professor of public administration at the University of Texas at San Antonio and the nation’s leading expert on convention centers and city planning.
OKC’s plans include a $252 million convention center funded with money from MAPS 3, an initiative voters approved in December 2009. However, financing for the hotel is undecided but likely would include a multi-million-dollar public subsidy, if not outright ownership.
The total cost of a hotel would depend on size and amenities but could be as high as $200 million, city council members have been told.
As part of the ongoing MAPS 3 debate, Sanders (pictured) will provide an independent presentation about OKC’s proposed convention center and hotel at 6:30 p.m. Jan. 23 at the Bricktown Hotel and Convention Center, 2001 E. Reno Avenue. The public is invited.
Ward 2 city councilman and mayoral candidate Ed Shadid invited Sanders to make the presentation because of his concern voters were not adequately informed about the convention center hotel before the MAPS 3 vote. Shadid said he’s also worried OKC residents don’t understand the risk a large hotel subsidy poses for taxpayers if it’s not successful.
But Cathy O’Connor, executive director of the nonprofit Alliance for Economic Development of Oklahoma City, said no public subsidy amount has been determined and city officials “can’t quantify the risk” at this time.
A 2009 feasibility analysis by Convention, Sports & Leisure International found that a public subsidy for a headquarters hotel would be almost certain.
“There are no examples nationwide of a fully privately developed convention center headquarter hotel in at least the last five years,” the report stated.
Sanders claims most cities are facing the same dilemma in 2014.
More information needed
Sanders described OKC’s situation as “highly unusual, if not unique, in the lack of transparency and the absence of public information on the proposed convention center and convention center hotel.”
Yet, officials with the city and the Greater Oklahoma City Chamber of Commerce claim the projects were thoroughly vetted prior to the 2009 vote.
At this point, however, the issue is less about local politics and more about the reality of attracting new convention center business to the city, Sanders said.
“Right now, there are more questions than answers. How is it (the convention center) likely to perform? Will it perform at a level to support a 700-room-plus hotel?” he asked.
A 2013 market study conducted for the Alliance by Dallas-based Stone Hospitality and Real Estate suggests OKC’s convention center business can support a headquarters hotel with 735 rooms and 68,000 square feet of meeting space. The largest existing hotel in downtown OKC is the Sheraton Oklahoma City Hotel with 396 rooms and 28,000 square feet of meeting space.
Sanders has reservations about the Stone study.
“We want to know where the forecasts came from. How certain are their assumptions?” he asked. “If we can’t independently validate the assumptions, then it’s just a guess.”
Jeremy Stone, owner of Stone Hospitality and Real Estate, did not return requests for comment.
Sanders said OKC taxpayers should understand their city is not the only one in the nation with new, expanded or planned convention centers and connected headquarters hotels.
“There is no doubt the supply nationally is continuing to increase,” he said. “You are not in a situation where it’s only about Oklahoma City. You’re competing against cities that can do the exact same thing and more.”
Time for a break
Sanders believes OKC leaders should reconsider their position to build the convention center and hotel.
“I think the prudent thing to do, I would argue, is to call a time-out and ask how much sense both of these things make for the long-term. Then ask what could we do as a community beyond a convention center or convention center hotel that might reap the same or better results,” he said.
A group led by Councilman Shadid already is trying to prevent MAPS 3 money from being used to build a convention center. The group is seeking 6,000 signatures for a petition that would allow voters to decide if they still want MAPS 3 money spent on the facility. Voters in 2009 approved a one-cent sales tax increase but did not vote on specific projects.
“The market realities Oklahoma City found in 2009 are not the same they face today, and it is necessary and appropriate to go back to the voters and ask if they support a convention center,” Sanders said.