Heywood Sanders warns Madison that the convention industry has gotten so competitive that cities are offering cash to lure events to their facilities. The public administration professor at the University of Texas at San Antonio gave a series of lectures on the subject last week, as the city contemplates spending more on Monona Terrace.
In fact, Madison pays upwards of $150,000 a year to attract visitors to Monona Terrace, says Deb Archer, president and CEO of the Greater Madison Convention and Visitors Bureau. The money comes from hotel room taxes given to the Visitors Bureau.
The fund's most recent report shows that 15 events qualified for a total of $150,838 in 2012. Ford Ironman Wisconsin got the biggest payment with $35,000 for its September race. The smallest amount, $2,100, went to the Central Surgical Association for its February meeting.
The incentives are awarded based on a formula that takes into account the number of people coming here, how many nights they stay, and how many hotels they use, Archer says. The groups are also required to publicize Madison in their publications.
"It's an interesting fund to manage," Archer says. "We might allocate the money in 2013, but it isn't used until 2017." That's because conventions are often booked years in advance.
Sometimes, if a group fails to meet the terms of the incentive, the money is not awarded. "It's not a blank check, it's an agreement," Archer says. "We don't offer the amount until after the event. They have to deliver."
The Visitors Bureau has committed to paying $429,425 to conventions through 2020, a figure that will likely grow as more events are booked.
Sanders notes that many of the conventions Madison subsidizes are for Wisconsin groups that want to be in the state capital. "These are events Madison should be getting anyway," he says.
The Wisconsin Society of Science Teachers was given $2,585, the Wisconsin School Counselor Association $11,206, and the Wisconsin Dental Association $3,859. Some national groups also received incentives, including the American Fisheries Society, which got $4,247.
Sanders compares the incentives to car dealers giving discounts off the sticker price. "Once you start offering incentives, you face a situation where you're literally in a competitive downward spiral," he says. "Nobody buys anything until it's 80% off."
Ald. David Ahrens complains the arrangement drains the hotel room tax revenues, which could be used to fund other services. "It's just a continuous cycle, a closed loop," he says. "They come and stay in the hotel, pay a tax, and the tax just goes back to Monona Terrace."
Attacking the messenger
Heywood Sanders thought Wisconsin had a reputation for good governance. So he was disappointed when he clicked on Madison.com Tuesday morning to read a Chris Rickert column about his visit to Madison.
Rickert quotes Gregg McManners, head of Monona Terrace, calling Sanders a "hired gun" who "cherry-picks information."
"What's with these people in Madison?" asks Sanders, whose visit was paid for by Ald. David Ahrens. "He characterizes someone he's never met with insults. This is really high-quality local government."
McManners did not attend any of Sanders' talks. He tells Isthmus: "Heywood Sanders is known in our industry as someone who will not support a publicly supported project." He adds, "I didn't feel like I had to hear him speak to know what his argument was going to be."
Sanders counters that the "hired gun" description is more apt for others. There's George Austin, the former city planning director whom the city hired to manage the Judge Doyle Square project, the $200 million development the city is considering to help Monona Terrace; and C.H. Johnson Consulting, which has done studies for the city and which Sanders has been highly critical of. Sanders notes that Johnson's projections for other convention centers have not materialized. And he points out that the company's Madison study uses the same phrases as one it did for Des Moines, Iowa.
"I'm a hired gun because David Ahrens invites me to town," Sanders says. "You've got a consultant telling you word for word what he's telling Des Moines and you're not bothered by that?"