Tuesday, June 15, 2010

The Pitch's coverage of convention hotel informs tall citizen's thinking

Posted By on Tue, Jun 15, 2010 at 6:00 AM

click to enlarge Conventioneers are a hoot.
  • Conventioneers are a hoot.

Kansas City Mayor Mark Funkhouser took a side in the conversation about the 1,000-room convention hotel. He thinks it's a dumb idea.

Last Thursday, Funkhouser voted against exercising a $250,000 option on a downtown parcel targeted for the convention hotel. In his weekly newsletter, the mayor elaborated on his decision, which found him in the smallest of minorities (the ordinance passed 12-1).

Judging by Funk's takes, he reads The Pitch. The evidence we've seen suggests that a 1,000-room hotel will leave taxpayers sobbing into a pillow that a conventioneer from Duluth pressed between his glistening, overfed thighs.

Here's an annotated version of the relevant portion of Funk's newsletter.

The Mayor voted against a City Council resolution that called for the city to spend $250,000 to secure a site for a proposed 1,000-room, $315 million convention hotel.

When the Mayor heard this was on the agenda to be voted upon, his first thought was one that continues to stick with him today, "You have got to be kidding me."

The city has spent nearly $500,000 over the last decade on studies that give conflicting projections for the success of a new hotel. The Mayor stated that if history serves us, the most recent consultant projections are overenthusiastic.
The consultants in question work in the Hospitality Industrial Complex. It's a group of people who tell City A they need to build bigger and grander attractions to compete with the attractions they just suggested that City B build. For more on this sick feedback loop, check out Martin columns here and here.
Convention hotel plans often don't play out as consultants project, the Mayor said. In St. Louis the $277 million, 918-room Renaissance Grand Hotel & Suites went into foreclosure last year. Closer to home, taxpayers in Overland Park were called on to pay $2.4 million when the Sheraton Overland Park didn't meet projections.
I mentioned the problems in St. Louis in this 2008 column, when downtown interests and tourism boosters began to gear up the campaign for a convention hotel.
The Mayor points out that hotels have failed, are failing, across the country: Waikiki, Los Angeles, Las Vegas, Scottsdale, Orlando, Boston. He stated that there is no scenario that he can imagine that says now is the right time to do this.

The Mayor believes that the way to fix Downtown is to fix the neighborhoods around it and that the way to grow our city is to take care of our citizens and our neighborhoods. This is the way to true economic development. This is the way to new jobs. He stated that it's time to reform our government and go back to tried and true ways: a focus on our neighborhoods, and on our small businesses.

The Mayor noted that a $315 million hotel likely will require a commitment of tens, if not hundred of millions, of dollars from city taxpayers. This makes absolutely no sense to the Mayor.

Beyond the financial commitment, the Mayor Funkhouser called it "foolhardy" to pay for development rights for a "phantom" developer. He said that this property isn't going anywhere.
click to enlarge The proposed hotel site needs a little cleanup.
  • The proposed hotel site needs a little cleanup.
The property is the block on which the Power & Light Building stands. Portion of the property are considered brownfields. The land was used for a power plant and to store fuel. Get out the Hazmat gear!
When the idea of a convention hotel initially bubbled to the surface, the Mayor stated that he would keep an open mind about it. He asked a series of questions about the proposed hotel project last August, but none of the questions he asked have been answered, and the hardest question has been ignored entirely: How will we pay for it?

The Mayor said that one thing is sure: the hotel will cost our residents dearly. And it will cost our current hotel owners dearly if it comes to pass.
Public subsidies prop up downtown's existing inventory of hotels. The Pitch described these conditions in features stories in 2002 and 2004.
Lastly, the Mayor said that the need for an ongoing public subsidy for the hotel project is likely, and the city's consultant backed him up by saying that the project will not be profitable enough to make its debt payment.

Because of the above, the Mayor was the lone vote against the convention hotel project.
Price of genius, babe.

Conventioneer image via BabyGirl172's Flickr.

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