Raleigh convention centeR: thRowing good money afteR badRegional bRief
for token charges for convention and meeting space valued at $96,800.
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 RCCofcials when assigning discounts providesunnecessary temptation for favoritism andpossible corruption.
RCC ofcials 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.”
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.”
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.”
Complete government transparencyshould be the norm; secrecy can be justiedonly 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
, 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 beneting 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 benet of the local conventions is close to zero, andthe benets 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