Hold onto your wallets. St. Louis. The convention consultants are back in town.
Their latest pitch is that we need to invest between $300 million and $500 million to upgrade and expand America’s Center. Chicago-based Johnson Consulting tells the Convention and Visitors Commission that it needs a bigger ballroom and a 50 percent increase in total meeting space. Renovations may even involve demolishing all or part of the domed stadium where the St. Louis Rams used to play.
The consultants say a major upgrade could buy us a 37 percent increase in convention business. If we do nothing, we’re doomed to a 14 percent decline.
If this sounds familiar, it’s because a different consultant made a similar argument back in 2000. If only we had a large headquarters hotel on Washington Avenue, a report said, St. Louis could expect an 85 percent increase in convention bookings within five years.
The surge in business didn’t materialize, and in fact the convention center generates fewer room-nights for area hotels now (an average of 351,660 between 2011 and 2014) than it did in 1999 (434,486). The heavily subsidized headquarters hotel, now the Marriott Grand, went into foreclosure in 2009 and saddled bondholders with a big loss.
Are the new projections any more credible than the old ones? Heywood Sanders, a professor of public administration at the University of Texas San Antonio, has his doubts.
Sanders has a copy of a study done in the late 1980s, when St. Louis was contemplating adding the stadium that became the Edward Jones Dome. Like the 2000 study, it contemplated a big increase in convention attendance that never happened.
The problem was that other cities didn’t stand still.
“This business is overbuilt,” says Sanders, who wrote a 2014 book called “Convention Center Follies” about the meeting-space race. “You are competing in a national market in which every one of your competitors can do and is doing the same thing.”
As the latest study points out, competing cities have continued to leapfrog St. Louis’ convention facilities. Nashville, Tenn., built a convention center in 2013. Denver expanded in 2004, Columbus, Ohio, in 2010, Indianapolis in 2011.
The Dome, built in 1995, is the newest part of America’s Center. Johnson Consulting says the complex is “aging and in need of substantial capital improvements.” New meeting halls elsewhere, it says, are snaring conventions that have outgrown St. Louis.
That part of the study rings true for Gary Andreas, a hotel analyst at H&H Financial in Chesterfield.
“If St. Louis doesn’t do something, they are going to sink down the food chain,” he said. “The pie out there isn’t growing by leaps and bounds.”
The convention business shrank during the recession and has begun growing modestly, but not fast enough to justify the building boom.
Sanders calculates that convention space nationwide has grown by 37 percent in the last 15 years. Even Las Vegas, he said, has had flat attendance despite doubling its convention hall in 2002.
So what’s St. Louis to do? For starters, Sanders advises, be skeptical of the consultants’ projections. “The story never changes,” he says. “Just build some more and you’ll get an increase in business. Why should we take it at face value in the face of this history of poor forecasting?”
The aging America’s Center may indeed be due for some upgrades. A decision to spend $500 million, though, should be based on more than an optimistic consultant’s report.