Thursday, January 05, 2012 – 02:06 PM
By Ilya Marritz / Andrew Parsons
Governor Andrew Cuomo grabbed headlines during his State of
the State address Wednesday when he proposed a massive convention center at the
Aqueduct Racetrack in Queens. The planned exhibition center, hotel and expanded
casino could replace the Jacob K. Javits Convention Center on Manhattan’s West
WNYC spoke with Haywood Sanders, a professor of public
administration at the University of Texas at San Antonio, who studies the
economics of convention centers.
What do you make of the proposal?
It’s crazy, crazy,
crazy. It’s a great piece of political theatre and gives the governor a chance
to grab headlines with a grand announcement. But as a piece of public policy
and as a mechanism for economic development it’s effectively unworkable.
The problem is that
in proposing the biggest convention center in the country, the governor is
seeking to compete with a host of other major convention venues in cities like
Chicago and Las Vegas and Orlando where, in the last few years, there has been
an enormous decline in convention and tradeshow activity attendance. The
phenomenon we now face is a convention center market that is oversupplied and
How much of that downturn in convention business is
attributable to the really bad recession that we’re crawling out of?
Let me give you an example, in the case of Las Vegas, in the
wake of the 2000 recession and 9/11, attendance at the Las Vegas convention
center barely budged. It dropped, from 2000 to 2003, by a total of 6 percent.
In 2009, it dropped by 30 percent and in 2010 it came back very slightly by 3
We’ve never seen an
impact of this sort in major convention centers across the country. And that is
a result, not just of the recession but of what everybody in the business
recognizes is an over-supplied market. That’s precisely the market in which the
governor proposes to compete by adding yet more space.
You seem to be saying that there are bigger trends at work.
What are they?
A whole lot of larger phenomena. As firms and public and
private organizations of all sorts operate in an uncertain economy, travel to
conventions in particular is something that is relatively easy to cut back on.
What we’ve seen is a pretty dramatic and long-term decline in attendance.
Now, you add to that
some longer-term trends. It’s much easier to get information and communication
electronically, through the internet, by social media than it ever used to be.
So on one side of the scale, a great deal of ease in information access and
communication in virtual forms [and on the other side] a much greater cost and
in some cases discomfort in actual physical travel to a convention destination.
What are the unique challenges of running a convention
center in New York?
There are a number of
phenomena and we ought to put them into two broad categories. The first is a
category that has to do specifically with the site and location that Governor
Cuomo has proposed. It is not a site in Manhattan. It is not a site surrounded
by the kinds of visitor amenities and activities that one would think make for
an attractive, desirable convention location. Many of those amenities are in
New York, in Manhattan. They’re not at Aqueduct.
Beyond that, there
are some peculiarities to the New York City market. Some of those involve the
cost of hotel rooms in New York City. Some of those involve the cost of
development in New York City. If Genting [operator of the Aquaduct Racetrack
that has signed a non-binding letter of intent with the state to possible
develop the Convention Center] is in fact going to build its own 3,000 room
hotel as a part of this development, it’s going to have to put a lot of money
up front. It’s going to have to pay New York City wages to its labor force. And
it’s going to be faced with competing against a host of other destinations.
Is it typical for the state or for a municipality to be
running convention centers rather than a private company?
Yes. Almost all such centers with a handful of exceptions
are publically owned. Some public center owners farm out the actual management
and operation of the center to a private firm, but the ownership and the
financial responsibility for managing to pay the debt service on the building
as well as the operating losses, that’s public function.
If record of these centers is so mixed, why do you think
they are attractive to governors and mayors?
For the same reasons we’re seeing this proposal come now.
Politically, it makes sense to promise big things. But it also is a vehicle to
changing the development prospects of a particular piece of urban turf. The promise of a big convention center makes
Genting’s Aqueduct project sound a whole lot more viable as a major private
investment. Cities and states often propose these things less with an aim to
getting a real business or economic impact, but as a device for changing the
shape of urban land and urban development.
richard cohen from
Haywood Sanders statements are slightly misguided.
#1, New York is not adding to the glut of convention
centers; they are replacing a poorly designed space.
#2, The problem with the Javits Center is the basic design.
There are no rooms for small classroom settings. Most conventions educate their
attendees and only visit the main space to get free stuff from the vendors
advertising the services related to the convention. These people travel to the
convention, stay in hotels, eat out, see local entertainment and add a real $
value to the economy.
#3, The Javits Center has a great deal of space for boat
shows and auto shows but the attendees live in the area and don’t add to the
#4, The big shows, such as the Consumer Electronics Show are
to big to fit in the Javits Center and have to pass on NY. If we had a show
like that, we would sell out hotel rooms, fill restaurants and theaters. Not to
mention retail purchases.
#5, Why Genting, would invest such a large sum of money only
reinforces the draw of a full blown casino in the city. This is New York,
conventional rules do not apply here.
New York is a prime destination because of the Broadway
theater. We would pull business away from other cities simply because we have
so much more to offer. Because the convention business is currently in a slump
is no reason to throw the baby out with the bathwater.