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Monday, September 1, 2014 |  Madison, WI: 71.0° F  Mostly Cloudy
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Convention center researcher Heywood Sanders warns against building new Monona Terrace hotel
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Sanders: "I can ride into town and present information, but what happens next is up to you."
Credit:Joe Tarr

Heywood Sanders admits that, "most people don't listen to me."

The professor of public administration at the University of Texas at San Antonio has been documenting how cities around the country have been investing in convention centers and convention center hotels, with little to show for it. He gave a series of talks on the trend as Madison prepares to invest up to $80 million in its own convention center hotel to support Monona Terrace as part of the Judge Doyle Square project.

Very few people showed up to hear him speak in sessions to the media (two reporters), Common Council (three council members) and the public (about 10 people). Those who did heard a much more pessimistic take on the convention industry than has been portrayed by consultants hired by the city, who have recommended the city subsidize a hotel in order to lure more conventions to Madison.

Sanders' presentation covered trends showing how the convention business has been largely stagnant since 2000, in both large and small markets. But at the same time, cities around the country have been building, renovating, and expanding their convention center space, creating an "arms race" that makes it extremely difficult for any particular city to get much new business. The competition has grown so fierce that some cities "routinely offer cash incentives of $25,000 to $30,000" to lure conventions or give away hotel rooms for free.

The two cities that do the most convention business -- Las Vegas and Orlando -- have also seen a stagnant industry. In 2000, Vegas hosted 1.2 million conventioneers. It doubled its convention space in 2002. The number of conventioneers climbed to 1.7 million in 2007 but tapered off to 1.2 million last year. "Having doubled their size, they're back to where they were in 2000. It's the same story all over. I see this pattern of dramatically declining attendance."

While Sanders agrees that there will always be a desire for industry groups to meet in person, he says it's clear that the heyday of conventions is over. More meetings are being held online, and more companies, state governments and universities are cutting back on travel expenditures. "If it hasn't started on an upward trajectory by now, I don't see it happening. I'm skeptical of simple explanations to complex phenomena, but I know [the industry] is changing."

Still, cities keep building more space to accommodate conventioneers. "What's proposed here is exactly what's being done in Des Moines, Spokane, Washington, D.C., Denver, Phoenix, Omaha, Myrtle Beach and a host of other places."

Sanders was particularly critical of a study done for Madison by C.H. Johnson Consulting in 2012, which predicts Madison will see a boom in convention business if it builds a hotel next door to Monona Terrace.

Johnson's study uses three cities -- Overland Park, Kansas (a suburb of Kansas City), Fort Worth, Texas, and Baltimore -- as examples of how a city added a hotel to increase convention business. But he pointed out that in each case, Johnson's own data does not support those claims. And projections that were made before those cities built their hotels (projections often made by C.H. Johnson Consulting) have never materialized.

In three sessions Sanders gave, he was asked similar questions: Has there ever been a consultant who recommended not building a hotel or convention center? Not that he has found. If the strategy clearly isn't working, why do cities keep doing it? Sanders is not sure -- he calls it "the great conundrum." What is the motivating force for cities? He suspects it varies, but believes in most places it has to do with the business communities' interest in increasing land values.

During the public session, one person asked what citizens can do to stop the project. Sanders said when left up to a governing body to decide, like a city council, it is almost always approved. When put to a referendum these proposals are usually defeated (although, he added, even then the governing body often ends finding another way to do the project).

"You need to talk about this," he said. "I'd like to believe this is a community of thinking people. Somebody should be asking questions about [the Johnson] report. That report is riddled with claims that are questionable."

"I can ride into town and present information, but what happens next is up to you," he said. "If you want a hotel, more power to you. If it succeeds, I'm perfectly comfortable saying Madison succeeded. I don't think it will."

Some people have been raising questions about who paid for Sanders' trip to Madison and whether he should register as a lobbyist. Both of the two developers vying for the project, Journeyman Group and Bob Dunn (of JDS Development), have registered as lobbyists.

Ald. Mark Clear, who attended one of Sanders' sessions, said he found it odd that someone would come here to advocate on it.

"It's an unusual thing to do, whether he's being paid or not. It's almost like lobbying," said Clear. "I wanted to make sure, especially if he were being paid by the hotel industry. I think the public should know that." (Several local hoteliers are urging caution on a new Monona Terrace hotel.)

Sanders told Clear during one session: "I'm not a consultant. I'm a full-time university professor."

Ald. David Ahrens, who invited Sanders, says that he paid for the trip and that Sanders has not asked for a consultant fee. Ahrens produced a carbon copy of a check for $315.80 that he wrote to Sanders for his airfare. Asked who is paying for his hotel accommodations at the Concourse Hotel, Ahrens said, "I'm going to have to pick it up and I hope I get a good rate."

Ahrens says the complaints about who paid for the trip are designed "to change the subject."

"Here are developers who are loaded with money, all these trade groups, the Chamber of Commerce -- numerous groups, speaking in favor of this," he said. "But you have one university professor who gives his analysis and people start crying foul."

Sanders' public presentation will be made available online by Madison City Channel, which also is presenting a presentation by Ahrens titled "Does Madison need a second convention hotel?" and a two-part series of interviews (one and two) by the Judge Doyle Square Committee of the competing development groups.

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