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Thursday, October 23, 2014 |  Madison, WI: 41.0° F  Mostly Cloudy
The Daily
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Faced with criticism, Monona Terrace omits data from 2013 annual report
Measuring the convention center's economic impact
Ahrens calls Monona Terrace's report 'pure political propaganda.'

Every year, Monona Terrace releases a report touting the amount of economic activity the convention center generates here.

Last year, Isthmus and others questioned the veracity of its data, pointing out inconsistencies and implausible assumptions. For instance, Monona Terrace reported that 5,000 people came to its largest convention, Ironman Wisconsin, in 2012, suggesting that most of them stayed in hotels for seven nights in a row -- despite the fact that the race lasts only one day. Another glaring issue: Only 2,827 people ran the race in 2012, and while many out-of-towners likely brought guests, they would probably not have stayed in separate hotel rooms, as the report implies.

This year's report about economic activity generated by Monona Terrace is similarly rosy, but with one noticeable difference: Hardly any data are included.

"First they spin, then they hide," says Heywood Sanders, a professor of public administration at the University of Texas at San Antonio and a critic of publicly funded convention centers.

It's typical for convention centers to make extravagant claims about how much economic benefit they generate, Sanders says, but "when they're pressed about exactly where those numbers come from or how they are derived, they're not necessarily forthcoming."

This year's annual report, prepared by Baker Tilly Virchow Krause and released last week, claims that Monona Terrace generated $32.5 million in direct spending last year and $52 million in economic benefits. Both numbers are almost identical to those from 2012.

In 2013, 45,229 people came to 67 events at Monona Terrace, roughly the same as in 2012. Its biggest conventions were Ironman (5,000 people), the spring Madison Marathon (4,320) and fall Madison Marathon (4,000) -- events that use Monona Terrace for support function but don't take place inside.

In previous years, the reports included breakdowns for each convention held at Monona Terrace, with attendance, the length of each event, the number of hotel room nights generated, and average spending per delegate. This year's report includes only attendance and the event's start date.

Gregg McManners, Monona Terrace's executive director, will not explain the omission. At first he says that this is the information Baker Tilly provided the city, but then agrees that Baker Tilly provides what the city asks for. He refuses to elaborate.

"I view the report to be accurate," McManners says. "We have vetted it carefully, based on prior criticism. We believe it's a valid study."

Kevin R. Heppner, regional managing partner of Baker Tilly's Madison office, could not be reached for comment. Last year, Baker Tilly did not respond to requests for comment about its report. Monona Terrace officials declined to meet last year with Isthmus to explain how the numbers are calculated.

The report comes as Madison contemplates investing heavily in Monona Terrace, with a headquarters hotel that is set to be part of Judge Doyle Square. The project -- estimated to take as much as $100 million in city aid -- is the biggest public project Madison has ever contemplated.

Asks Sanders: "Why is it that when there is an important, expensive public decision to be made, there is less information about Monona Terrace's performance rather than more?"

'Not a reliable sample'

Ald. David Ahrens, a critic of the Judge Doyle Square project, finds the annual reports worthless in evaluating Monona Terrace's economic impact.

He points out that the average spending data are based on an Internet survey from 2010-11. Only 1,525 people responded, half of them from a single event, the National Kidney Foundation U.S. Transplant Games. Based on this sample, Baker Tilly determined average daily spending figures for every conventioneer coming to Monona Terrace: $135.45 for a hotel room, $42.31 for food and drink, $4.32 for recreation, $15.62 for shopping, $16.38 for transportation and 4 cents for other expenses.

"They've extrapolated from that very select sample... every year since," Ahrens says. "It's not a reliable sample."

"For all we know, they may be low numbers," he adds. "They have no idea, and we don't either. But they get to this level of detail as if they were watching every conventioneer to see how many drinks they bought."

The report's most important number, in terms of economic benefit to the city, is how many hotel rooms are booked for conventions. When a hotel room is booked, it means someone came from out of town and likely spent money in restaurants and other places. Hotel stays also generate room tax revenue for the city.

But the city doesn't know how many room nights Monona Terrace generates, Ahrens says. "They have no idea whether a person stayed at a hotel or their brother's place in Waunakee."

Ahrens has asked the city's finance department to do an independent audit of the economic impact study. This will require Common Council approval.

"This report is a political argument for building an expensive and unnecessary hotel," Ahrens says. "It's pure political propaganda now."

Monona Terrace is trying to make contradictory arguments with the report, Ahrens says: "They have to say on one hand what a success it is, and on the other that it's failing and it needs a hotel."

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