Convention center
By William R. Lech
is a boondoggleGIVE me a break, Mona. With Mona Wood's Aug. 15 View Point column, we see the "connected" public relations spin doctors continuing to distort the truth about the Hawaii Convention Center.
This time it is Wood, president of Ikaika Communications, who profited from the center's grand opening in June. Her work, like the work performed by everyone else associated with the center, was, is and will be paid for by the general public.
Recent letters to the editor criticizing the center's lackluster performance and closed-door policy to the local public apparently disturb Wood. She thinks we should stand by patiently while the center keeps its doors closed to the people who paid for it, while waiting for the Hawaii Visitors and Convention Bureau to fill it up with the "lucrative convention market."
The "lucrative convention market" that Wood writes of simply does not exist.
The economic impact study that was done to "sell" the center to the public (estimates were provided by the HVCB and the Convention Center Authority) had to show that the center was going to have a positive economic impact on the state. If otherwise, there would have been no public purpose to the development, and the Legislature could not have legitimately appropriated the funds.
The study claimed that there would be 200 conventions booked in the first five years. There are now 49 events currently scheduled for all future years.
But this does not give us the full picture. The targeted convention market was aimed at events with an attendee population range from 6,200 (low) to 7,500 (high). Currently, of the 60 events that have been booked, only 14 have met or exceeded the study's "attendee" population target.
The study estimated that the center's bookings would eventually reach 60 events per annum. To sustain this by the tenth year of operation, the HVCB must consistently book at least five events per month, a far cry from its current monthly booking rate of around two.
To fill the void already existing for the first five years, the HVCB would have to immediately book 140 additional events, all but impossible in today's marketplace.
Like much of the hoopla that has been generated about the center's economic activity by the tourist industry and its PR allies, Wood ignores the hard, cold existence of the negative fiscal impacts (debt service and operating costs).
This past legislative session appropriated about $42 million in taxpayer money to pay for the center's debt and operating costs in fiscal year 1999. That's approximately $115,000 a day to keep its facilities running, empty or full.
By the way, the debt service steadily increases over the next five years. The center's projected revenues do not likewise do so. Guess who's paying for it?
During FY '99, approximately 56,000 attendees are scheduled to use the center. The resulting unit cost to the taxpayer is roughly $743 per attendee. Each attendee would have to spend at least $9,600 in the local economy to generate enough tax revenues for the state to recover that loss. That will simply not happen.
IN reality, many of the center's smaller events could have been booked at existing private-sector commercial facilities, at no cost to the public. In each of those instances, where an existing facility could have been used, the center's positive economic impact is completely offset by the negative economic impact on these commercial facilities.
Regarding local use, in those void times during which the center is standing idle, I see no reason why the people who paid for it should not be able to use the center. If it is not to service the public economically (which it is not), then what other public purpose does it have?
Barring any substantial change to the marketplace, in the case of the Hawaii Convention Center, its negative economic impacts offset any positive gain. That, for the record, is the truth.
William R. Lech is chairman of the
Ala Moana Residents Advisory Council.