Tacoma Convention Center: Experts say bigger is better

The city should stick with the current Greater Tacoma Convention Center plan that features a 50,000-square-foot exhibition hall, compared to one with 42,000 square feet.

That was the consensus of project consultants during yesterday’s City Council study session regarding the biggest building project in the city since the construction of the Union Station Courthouse.

Construction on the $89.7 million project – in the heart of downtown, from Market Street to Pacific Avenue between South 15th and 17th streets – is set to begin this fall.

The city is demolishing buildings at the site in preparation for construction.

Project experts told the City Council Tacoma could save about $1.2 million in the short term construction costs if the city went with the downsized exhibition hall, but that the city would lose many more millions in the long run with a smaller building.

“With convention centers, bigger generally is better,” Charles Johnson, president of C.H. Johnson Consulting, said, citing the fact that construction costs tend to go up over time.

The larger exhibition hall would also allow less expensive expansion in the future.

“Finance planning must include expansion,” Johnson said. “I just caution you not to build something too small.”

Demand for the convention center could increase with all of the new buildings being constructed in downtown Tacoma, Johnson said, not to mention a possible military build-up at McChord Air Force Base and Ft. Lewis.

In spite of the effects of the Sept. 11 terrorist attacks and a recession that has had a negative effect on regional tourism, building with an eye toward future expansion is warranted, because the economy is expected to recover before the convention center opens, according to Gregory Easton of Property Counselors, a Seattle-based real estate firm.

As planned, the convention center will eventually generate $75.6 million in annual spending, while a smaller building would generate $59.7 million, Easton predicted.

Redesigning the exhibition hall would also delay the convention center’s opening by six months, Easton cautioned, and reduce the city’s long- term annual visitor spending because a smaller exhibition hall would limit the city’s ability to recruit conventions.

Going with the current 50,000-square-foot exhibition hall plan, the Greater Tacoma Convention Center is tentatively scheduled to open in July 2004.

“Overall, the industry (convention, meeting and hotel) is healthy and growing,” Johnson said, despite the slowdown in corporate travel last year.

A total of 309 events, from conventions to trade shows to banquets, were projected to come to downtown Tacoma in 2008, based on 500 hotel rooms within walking distance.

“It’s sort of recession proof,” said David O’Neal of the Florida-based Conventional Wisdom Corp., which has worked on more than 100 construction projects around the world.

During bad economic times, groups and organizations need a place to meet in order to figure out how to get out of a recession, he explained, while during good economic times, they need a place to display their products or services.

“There’s a built-in demand for this type of building,” he said.

While city officials overall seemed pleased with the project so far, they did have some concerns.

Regarding the controversial 400-foot tower on the site, Mayor Bill Baarsma said that would be an easier sell if the tower itself was functional.

“It’s important that we take that into consideration,” he told the consultants.

They indicated the tower would be functional, providing visitors with a spectacular view of the waterfront and Mt. Rainier.

Councilmember Doug Miller was troubled with some of the financial aspects of the convention center, particularly on its projected $2.2 million operating deficit in 2008.

“The bottom line is we need to show the public we’re making good decisions for the city,” he said.

“All convention centers – except maybe two – operate at a deficit,” O’Neal stated. “They are not a for-profit business.”

The $2.2 million operating budget figure was described as conservative, Johnson said, explaining that didn’t include some funding sources such as parking revenue, which would generate an estimated $600,000.

Other funding sources include the hotel motel tax, a sales tax credit and a convention center admission tax.

Current projected revenues cover all debt services and operations, Johnson said, adding that management could probably stabilize the deficit at $1.5 million.

Councilmember Kevin Phelps described the convention center as a way to “capture” people – as opposed to having them visit Tacoma and then leave, returning to where they came from to spend money, instead of spending it in Tacoma.

“If we don’t get it (the convention center) here, I think we’ve missed a tremendous opportunity,” he said.