Welcome to Scribd, the world's digital library. Read, publish, and share books and documents. See more ➡
Download
Standard view
Full view
of .
Add note
Save to My Library
Sync to mobile
Look up keyword
Like this
2Activity
×
0 of .
Results for:
No results containing your search query
P. 1
Regional Brief 84 Raleigh Convention Center: Throwing good money after bad

Regional Brief 84 Raleigh Convention Center: Throwing good money after bad

Ratings: (0)|Views: 1,692|Likes:
This report examines 52 contracts signed by the Raleigh Convention Center for the period of July–December 2011 and is a follow-up to the September 2008 John Locke Foundation report “The New Raleigh Convention Center: A taxpayer-funded money pit.”
Key facts:
• Raleigh Convention Center (RCC) staff continues to provide favored organizations deep discounts for the use of meeting rooms and convention space.
• For the period of July through December 2011, RCC staff awarded discounts to 40 of 52 organizations, discounts totaling almost $569,000 with the average being 54 percent off the list price of RCC rooms.
• These discounts are similar to those given by RCC staff for the first ten months of operation (September 2008 to June 2009), which totaled $555,000 with the average being 58 percent discount off the list price.
• During the last half of 2011, twelve unlucky organizations were not given discounts but paid the full list price.
• Taxpayers need to be aware that RCC staff have broad discretionary power to award discounts, including granting free use of RCC space.
• Organizations receiving deep discounts are not the only beneficiaries. The taxes that subsidize these discounts unfairly subsidize a very small group of downtown businesses and property owners.
• In addition to the table contained in this report, the JLF created a searchable website (johnlocke.org/site-docs/research/RCC) that lists the contract and discount amounts for past RCC organizational users. Interested citizens can see for themselves the organizations that received discounts and those that did not.
This report examines 52 contracts signed by the Raleigh Convention Center for the period of July–December 2011 and is a follow-up to the September 2008 John Locke Foundation report “The New Raleigh Convention Center: A taxpayer-funded money pit.”
Key facts:
• Raleigh Convention Center (RCC) staff continues to provide favored organizations deep discounts for the use of meeting rooms and convention space.
• For the period of July through December 2011, RCC staff awarded discounts to 40 of 52 organizations, discounts totaling almost $569,000 with the average being 54 percent off the list price of RCC rooms.
• These discounts are similar to those given by RCC staff for the first ten months of operation (September 2008 to June 2009), which totaled $555,000 with the average being 58 percent discount off the list price.
• During the last half of 2011, twelve unlucky organizations were not given discounts but paid the full list price.
• Taxpayers need to be aware that RCC staff have broad discretionary power to award discounts, including granting free use of RCC space.
• Organizations receiving deep discounts are not the only beneficiaries. The taxes that subsidize these discounts unfairly subsidize a very small group of downtown businesses and property owners.
• In addition to the table contained in this report, the JLF created a searchable website (johnlocke.org/site-docs/research/RCC) that lists the contract and discount amounts for past RCC organizational users. Interested citizens can see for themselves the organizations that received discounts and those that did not.

More info:

Published by: John Locke Foundation on Feb 13, 2012
Copyright:Attribution Non-commercial

Availability:

Read on Scribd mobile: iPhone, iPad and Android.
download as PDF, TXT or read online from Scribd
See More
See less

02/13/2012

pdf

text

original

 
 for Truth 
The John Locke Foundation
is a501(c)(3) nonproft, nonpartisan researchinstitute dedicated to improving public policy debate in North Carolina. Viewpoints expressed by authors do not necessarilyreect those o the sta or board o the Locke Foundation.
200 W. Morgan, #200Raleigh, NC 27601
phone:
919-828-3876
fax:
919-821-5117www.johnlocke.org
regional
brief 
Raleigh Convention Center
Throwing good money after bad 
D
r
. M
ichael
S
 anera 
 
 anD
evin
M
unger
F
ebruary
2012
No. 84
This report examines 52 contracts signed by the Raleigh Conven-tion Center for the period of July–December 2011 and is a follow-upto the September 2008 John Locke Foundation report “The NewRaleigh Convention Center: A taxpayer-funded money pit.”
ey
F
 actS
•
Raleigh Convention Center (RCC) staff continues to providefavored organizations deep discounts for the use of meeting roomsand convention space.
•
For the period of July through December 2011, RCC staff awardeddiscounts to 40 of 52 organizations, discounts totaling almost$569,000 with the average being 54 percent off the list price of RCC rooms.
•
These discounts are similar to those given by RCC staff for the rstten months of operation (September 2008 to June 2009), whichtotaled $555,000 with the average being 58 percent discount off the list price.
•
During the last half of 2011, twelve
unlucky
organizations were notgiven discounts but paid the full list price.
•
Taxpayers need to be aware that RCC staff have broad discretion-ary power to award discounts, including granting free use of RCCspace.
•
Organizations receiving deep discounts are not the only bene-ciaries. The taxes that subsidize these discounts unfairly subsidizea very small group of downtown businesses and property owners.
•
In addition to the table contained in this report, the JLF created asearchable website ( 
 johnlocke.org/site-docs/research/RCC 
 ) that lists thecontract and discount amounts for past RCC organizational users.Interested citizens can see for themselves the organizations thatreceived discounts and those that did not.
 
2
John locke foundationRaleigh convention centeR: thRowing good money afteR bad
the convention center’s doors opened in Sep-tember 2008. That report found that RCCstaff awarded $2.3 million in discounts — anaverage of 60 percent off for convention andmeeting room space in the RCC.
2
 
S
 aMe
 
olD
 
Story
: rcc
giveS
 
 away
$569,000
in
 
Six 
 
MonthS
During the second half of 2011, the con- vention center staff gave away nearly $569,000in discounts to 40 out of the 52 organizationsusing the RCC — an average of 54 percentoff the list price of the RCC rooms.
3
The dis-counts were not spread out evenly, however;far from it.In fact, most of that $569,000 were for very large discounts given to a select few con- ventions. Eighteen of the 52 organizationsreceived discounts ranging from 60 to 100percent off list prices. These 18 organiza-tions received $432,000 of the $569,000 indiscounts, accounting for 76 percent of totalawarded discounts.
4
The RCC has offeredarguments in defense of this practice, but itis obviously vulnerable to political favoritism.The trend of providing rooms for nocharge or token charges of $1 continues. Of the 52 contracts awarded, 8 were no charge or
B
 acKgrounD
Nationwide, cities have rushed to “save”their downtowns by forcing taxpayers to payfor expensive, decit-producing conventioncenters and subsidize private hotels. Theresulting glut of convention-center space hasforced each city to make a choice: provide evenmore taxpayer-funded discounts and subsidiesto organizations to use its convention centeror face having an empty one. Giving discountsand subsidies has a lower political cost for citypoliticians who made bad decisions to build aconvention center than does having the publicsee it go empty and unused.This subterfuge is abetted by some localmedia outlets, who serve as convention centerboosters instead of taxpayer watchdogs. As aresult, taxpayers have little awareness of thetrue costs of convention center boondoggles,who pays, and who benets.To help rectify this problem, the JohnLocke Foundation has published reports onconvention centers in Asheville, Charlotte,and Raleigh.
1
 In addition, a JLF Regional Brief on“The New Raleigh Convention Center: A taxpayer-funded money pit” documented thethe discounts awarded by RCC staff before
Conference Dates(2011)OrganizationPaid Full  List Price
 July 1115NC Commission on Volunteerism and Community Service$900 July 16Annual All White Attire Fundraiser$6,150 July 22Creo Dollar 2011 CHANGE Experience$5,250 August 1820Women of Power Conferences Presents Warring Women Win!$750September 23Southeastern Guitar and Amp Show$10,750September 27Flood and Ethics Seminar$200October 8Evans Wedding Ceremony and Reception$1,200October 8SGM 11 Bike Choice Awards Show$750October 29PUSH Womens Conference$500November 78PCB Carolina 2011$8,500November 25Alpha Kappa Alpha$6,150November 272011 PlantStruxure$29,750
Table 1. Organizations charged full price for Raleigh Convention Center space
5
 
3
Raleigh convention centeR: thRowing good money afteR badRegional bRief
for token charges for convention and meeting space valued at $96,800.
6
 Other RCC users were not so lucky. Twelveusers paid full list price for RCC rooms (seeTable 1 for a list of those unfortunate enoughto pay full price for convention center space).The reasons for these practices are notcomplicated. The lost revenue from RCCusers that were given large discounts must besubsidized with taxpayer money. Perhaps evenmore troubling, the discretion given to RCCofcials when assigning discounts providesunnecessary temptation for favoritism andpossible corruption.
 w 
eaK 
 
 juStiFicationS
 
For
 
 arBitrary
 
DiScountS
 
 anD
 
Secrecy
RCC ofcials defend the legitimacy of granting deep discounts, but their argumentsfall short. The most obvious claim is that thediscounts are legitimate because they areaccompanied by requirements for food andbeverage sales. The policy is provided in anemail from Michael Williams, Raleigh’s Assis-tant Director of Public Affairs, in which hestates, “the room fee may be waived if thegross food and beverage revenue to the RCCis at least six times the room rental fee.”
7
 There are two problems with this claim.First, the revenue from food and beveragesgoes not to the RCC, but to Centerplate, theprivate company that holds a monopoly on allfood and beverage served at the RCC. Thecity receives only a small fraction of theserevenues, and as stated in the previous 2008report, “the contracts with Centerplate cater-ing … are not public documents, and Center-plate has refused to make them available.”
8
 Second, the policy is not administeredevenhandedly. Of the 14 organizations thatbought food, only three received free roomsbecause they bought the required amount of food, nine got discounts (with two getting freerooms) but did not buy the required amountof food, and two bought food but got no dis-count at all.The real policy is revealed later in Mr. Wil-liams’ email. He stated that these are negoti-ated deals, and the organization that “has the
best negotiating skills
gets the best deal.”
9
Complete government transparencyshould be the norm; secrecy can be justiedonly under serious concerns about safety orprivacy. Such concerns are absent here, so theRCC’s opacity in this area is not acceptable.(For this reason, JLF is posting RCC contractsonline at
 johnlocke.org/site-docs/research/RCC 
, sothat all citizens and groups will have access toRCC contracts.) Another RCC defense of the discounts isthat their goal is not to make money or even tobreak even, but rather to bring people down-town and put “heads in beds.” In this line of thought, they see the RCC not as an enter-prise that pays for itself like city water andsewer enterprise funds, but rather as a wayfor taxpayers to subsidize hotels and restau-rants in downtown Raleigh, discriminating against hotels and restaurants in other areasof Raleigh that collect the taxes subsidizing the RCC.Putting that in the context of the previousRCC argument makes it seem ridiculous. If the RCC wants to bring people to downtownrestaurants, why does it have a private con-tract with Centerplate? Doesn’t that contractexplicitly discourage people from eating outand beneting downtown restaurants? Additionally, for this argument to make theRCC a good idea for taxpayers, who nancedits $215 million construction, conventionswould have to come from out of the area.Conventions of local residents merely redi-rect hotel and restaurant sales from Raleigh’speriphery to downtown Raleigh — a prac-tice that is nancially neutral for Raleigh asa whole and that also does not justify RCCdiscounts.Unfortunately, the RCC does not track data of this kind. The economic benet of the local conventions is close to zero, andthe benets of state- and regional-level con- ventions are considerably small, too, becausemany attendees come from the Triangle areaand choose not to stay in hotels. RCC boost-ers fail to take these factors into account in

You're Reading a Free Preview

Download
/*********** DO NOT ALTER ANYTHING BELOW THIS LINE ! ************/ var s_code=s.t();if(s_code)document.write(s_code)//-->