Elizabeth Salaam 11 a.m., Sept. 17
Professor Tells How Convention Center Stats Grossly Mislead
Heywood Sanders, professor at the University of Texas at San Antonio, and the ranking national authority on convention centers, has read the draft report by the mayor's task force purportedly studying convention center expansion, and concludes is it full of dubious statements based on distorted statistics. He says that the heralded growth of convention center business is based almost entirely on the growth of Comic-Con. In fact, the Rock and Roll Marathon and Comic-Con account for one-fourth of attendance, he says. San Diego may dump money into a convention center expansion just to keep Comic-Con. But the decision on where Comic-Con will go is up to Comic-Con, not San Diego, Sanders points out.
Here's how San Diego cooks its books: it takes a primary event such as Comic-Con or the Rock and Roll Marathon "and simply asserts that all of [attendees] are from out of town," and are spending, say, $1462 and staying in a hotel for at least four days. But any member of the task force could ask San Diego relatives, friends, neighbors if they attended Comic-Con or the Rock and Roll Marathon, and learn that many, many attendees are local residents who spend no extra money and do not spend any nights in local hotels. The convention center claims that it has had an economic impact of $17 billion since 1989, but because the center's own numbers are so slanted, there is no way to know. The draft report asserts that if an expansion is built, "there will be a specific volume of business," says Sanders. "These conclusions do not seem warranted in San Diego's case." Says Sanders, "A consultant study they rely on suggests that a 40% increase in exhibit space will yield a 40% increase in attendance." But Sanders has studied many convention centers. The answer is that the space increase will likely not result in a symmetrical increase in business. San Diego claims it is one of the few cities that is competitive: "The most competitive cities that have doubled the size of convention centers in recent years haven't gotten anything approaching what San Diego's consultants say they are going to get," says Sanders.
In the report, San Diego claims that it is "unique." Sanders has studied hundreds of cities, and they all say they are unique, he says. Convention centers are grossly overbuilt nationally, and as a result, centers have to slash prices. San Diego's "financial reports show that in 2007 the City gave $3.8 million in rental discounts and in 2008 gave $2.5 million in discounts. Is San Diego the unique place that doesn't have to give discounts? The answer is no," says Sanders.
The proposed center expansion (now smaller than originally suggested) would cost more than $50 million a year in debt service. If San Diego builds it and people come, there is still a question: would the money have been better spent elsewhere? And if it's built and the people don't come, "then that money has been essentially thrown away," says Sanders.
The draft document simply misquotes Sanders in places. It says in one place that Sanders says that San Diego is the exception to the rule: that it can thrive despite the glut. "I certainly don't believe San Diego is the exception," he says. In another place, the report attributes a number of statements to Sanders, such as that the center loses business most frequently because of a lack of available dates or space. But Sanders did NOT say these things. He believes that statements made by another person were wrongly attributed to him.
Sanders points out that San Diego has gotten national attention for cooking the pension books, juggling the numbers so a ballpark could be built -- "the shenanigans in San Diego reached a point of overt fraud. You don't often see that among local officials." Still, the task force gathers misleading and distorted arguments and says to the local populace, "Trust us."
Don't be surprised if they do.