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This is to certify that the

dissertation entitled

The Results of Convention Center Development
in Second-Tier Cities: Three Case
Study Investigations

presented by

Sherie Louise Brezina

has been accepted towards fulfillment
of the requirements for

Ph.D. degree“, Park, Recreation and Tourism
Resources

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THE RESULTS OF CONVENTION CENTER DEVELOPMENT
IN SECOND—TIER CITIES: THREE CASE

STUDY INVESTIGATIONS

By

Sherie Louise Brezina

A DISSERTATION

Submitted to
Michigan State University
in partial fulfillment of the requirements
for the degree of

DOCTOR OF PHILOSOPHY

Department of Park, Recreation and Tourism Resources

1 999

I

ABSTRACT

THE RESULTS OF CONVENTION CENTER DEVELOPMENT
IN SECOND—TIER CITIES: THREE CASE
STUDY INVESTIGATIONS

Multiple case study methodology was used to evaluate the results of
convention center development in second-tier cities. Three in-depth case
studies were conducted: the SeaGate Convention Centre, Toledo, Ohio; the
Rochester Riverside Convention Center, Rochester, New York; and the North
West Georgia trade and Convention Center, Dalton, Georgia. The goals of the
research were: (a) to better understand the results of convention center
development in smaller markets, (b) to better understand the role of the
feasibility study in the process, (0) to better understand convention center
operations and performance, (d) to better understand the process of evaluating
facility performance, and (e) to better understand how profit orientation affects
the operation and/or mission of the convention center.

Cities across the country have embraced convention center development
as a viable economic strategy for deteriorating downtowns. This researcher
investigated the results of convention center development and convention

tourism in three communities. The key findings of the research were that:

Sherie Louise Brezina

1. Feasibility studies are poor predictors of future facility event
activity and financial performance.

2. The feasibility study is viewed by key decision makers as a public
relations tool more than as a reliable source for judging probable future facility
event activity and financial performance.

3. Facilities designed and built specifically to be convention centers
were operating as civic centers, hosting mostly local public events.

4. The economic spin-off (i.e., hotels, restaurants, retail) from
convention center development was less than anticipated.

5. Economic and political pressure to be profit oriented increased
over time, changing management and marketing behavior to seek out high-
revenue-producing, typically local events, informally changing the mission from
the priority being placed on hosting convention and tradeshow events to the
priority being placed on hosting “gate events” and banquets.

6. The decision to develop a convention center had as much or more

to do with “politics” and city image enhancement as it did with economics.

Copyright by
SHERIE LOUISE BREZINA
1999

 

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ACKNOWLEDGMENTS

THANK YOU, GOD! I am grateful.

I wish to acknowledge Michigan State University and specifically the Park,
Recreation and Tourism Resources Department for providing me the opportunity
to pursue the _B_l_E_Sljob in the world—being a professor.

I am particularly grateful to my advisor, Dr. Donald Holecek, for his
valuable advice, criticism, and patience with my progress, and to Dr. Betty
van der Smissen for her thoughtful comments and suggestions during the
development and writing of my research, her belief in my abilities, and her open
door. Thank you.

Dr. Gordon Miracle’s and Dr. Edward Mahoney’s teaching and research
provided me inspiration. Their support throughout my graduate studies is
appreciated immensely.

I am indebted to Dr. Williamson, Chair of Health, Leisure and Sports at
the University of West Florida, who has provided me with an incubated
environment in the final writing phase of the research. Thanks to my colleagues
at the University of West Florida, Dr. Bridges, Dr. Philipp, Dr. Ryan, and Dr.
Schuler, who were quick with words of encouragement. Their sincere dedication
to the profession, combined with their energy and humor, made coming to work

each day a pleasure.

H. A. Welch and Beverly Brezina comforted me with kindness and
understanding as I pursued my doctorate degree. Words cannot express my
gratitude.

Special acknowledgment needs to be made to my daughter, whose
presence has added balance, focus, and direction to my life. Her young
childhood has been filled with far too many videos and nights sleeping on my
office floor as I worked to complete this research. Her exuberance for learning
and life remains undaunted and adds pleasure to every day. Victoria, I am
forever grateful.

Finally, this dissertation is dedicated to my father, Jerry Brezina, who
made my frustrations with the research and writing process seem like child’s play

when compared to his valiant day-to-day struggle with Alzheimer’s disease.

vi

TABLE OF CONTENTS

LIST OF TABLES ................................................ x

LIST OF FIGURES .............................................. xii
Chapter

I. INTRODUCTION AND PROBLEM STATEMENT ............. 1

Introduction .......................................... 1

Problem Statement ................................... 13

Objectives .......................................... 15

Delimitations ........................................ 16

Basic Assumptions ................................... 18

Limitations .......................................... 18

II. LITERATURE REVIEW ............... w ................. 22

The Changing City and Urban Planning Theory ............. 23

Convention Center Development ........................ 28

Convention Center Finance, Management, and Operations . . . . 37

Political Framework for Public Decision Making ............. 38

Research Methods ................................... 40

Case Study Research ............................ 42

Summary ........................................... 45

Ill. METHODS ......................................... 46

Research Design ..................................... 47

Study Questions ..................................... 50

Study Prepositions ................................... 57

Selection of Cases ................................... 59

Instrumentation ...................................... 63

Data—Collection Methods ............................... 65

Validity and Reliability Concerns ........................ 68

Construct Validity ............................... 68

Internal Validity ................................. 69

vii

External Validity ................................ 69

Reliability ..................................... 69
THREE CASE STUDIES AND CROSS-CASE COMPARISON
OF FINDINGS ....................................... 70
Case Study One: The SeaGate Convention Centre in
Toledo, Ohio ................................... 70
Description/Background .......................... 70
Interviews Conducted ............................ 76
Study Questions ................................ 76
Propositions ................................... 92
Case Study Two: The Rivergate Convention Center in
Rochester, New York ........................... 100
Description/Background ......................... 100
Interviews Conducted ........................... 104
Study Questions ............................... 104
Propositions .................................. 121
Case Study Three: The North West Georgia Trade and
Convention Center in Dalton, Georgia ................... 127
Description/Background ......................... 127
Interviews Conducted ........................... 135
Study Questions ............................... 135
Propositions .................................. 151
Cross-Case Comparison .............................. 159
Description/Background ......................... 1 59
Study Questions ............................... 162
Propositions .................................. 177
SUMMARY AND CONCLUSIONS ...................... 183
Summary .......................................... 183
Background .................................. 183
Review of Objectives ........................... 184
Review of Methods ............................. 185
Review of the Findings .......................... 188
Discussion of Findings ............................... 195
Literature .................................... 196
The Current Research .......................... 197
Feasibility Studies ............................. 202
Conclusions ....................................... 204
Urban Policy Implications for Using Convention Center
Strategy in Smaller Markets ...................... 207
Recommendations .................................. 209

viii

APPENDICES

A. LETTERS OF INTRODUCTION ........................ 213
B. INTERVIEW QUESTIONS ............................ 217
C. INTERVIEW RESPONSES ............................ 220
D. SUPPLEMENTARY TABLES .......................... 238
E. COMPARISON OF FEASIBILITY STUDY REPORT
CHARACTERISTICS AND PERFORMANCE MEASURES
OVER TIME ........................................ 241
F. CONTENT ANALYSIS RESULTS ....................... 244
REFERENCES ................................................ 251

4.1

4.2

4.3

4.4

4.5

4.6

4.7

4.8

4.9
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E1

F1

LIST OF TABLES

Toledo SeaGate Convention Centre—Projected Versus Actual
Operating Performance in a Stabilized Year of Operation ........... 77

Downtown Economic Activity Indicators for Toledo, Ohio ........... 83

Rochester Riverside Convention Center-Projected Versus Actual
Operating Performance in a Stabilized Year of Operation .......... 105

Downtown Economic Activity Indicators for Rochester, New York. . . . 112

North West Georgia Trade and Convention Center—Projected Versus
Actual Operating Performance in a Stabilized Year of Operation . . . . 136

Downtown Economic Activity Indicators for Dalton, Georgia ........ 144

Comparison of Each City and Facility, With Regard to Attributes
Important in Attracting Conventions and Tradeshows to an Area . . . . 160

Comparison of the Percentage Differences Between the Feasibility
Study Projections and the Actual Operating Performance, by

Performance Measure Category ............................. 163
Annual Convention and Tradeshow Event Day Occupancy ........ 165
Individual Responses with Ratings: Toledo Respondents ......... 239
Individual Responses With Ratings: Rochester Respondents ...... 239
Individual Responses With Ratings: Dalton Respondents ......... 240

A Comparison of Feasibility Study Report Characteristics and
Performance Measures Over Time ........................... 242

Ratings of Newspaper Article Headlines: Toledo SeaGate
Convention Centre ........................................ 248

F2

F3

Ratings of Newspaper Article Headlines: Rochester Rivergate
Convention Center ........................................ 249

Ratings of Newspaper Article Headlines: North West Georgia
Trade and Convention Center ............................... 250

xi

LIST OF FIGURES

1.1 Projected Growth of Convention Center Facilities From

1988to1995 ........................................... 3
2.1 Feasibility Study Process .................................... 30
3.1 Case Study Method ........................................ 49
3.2 Convergence of Multiple Sources of Evidence in Convention Center

Case Study (Single Study) ................................... 64
4.1 Floor Plan of the Toledo SeaGate Convention Centre ............. 71
4.2 Map of Toledo ............................................ 73
4.3 Toledo SeaGate Convention Centre Event Use by Type: Projected

Versus Actual Operating Performance in a Stabilized Year of

Operation ................................................ 78
4.4 Toledo SeaGate Convention Centre Event Days by Type: Projected

Versus Actual Operating Performance in a Stabilized Year of

Operation ................................................ 79
4.5 Floor Plan of the Rochester Riverside Convention Center ......... 101
4.6 Map of Rochester ......................................... 102
4.7 Rochester Riverside Convention Center Event Use by Type:

Projected Versus Actual Operating Performance in a

Stabilized Year of Operation ................................ 107
4.8 Rochester Riverside Convention Center Event Days by Type:

Projected Versus Actual Operating Performance in a

Stabilized Year of Operation ................................ 108
4.9 Floor Plan of the North West Georgia Trade and Convention Center . 128
4.10 Map of Dalton ........................................... 132

xii

4.11 Dalton North West Georgia Trade and Convention Center
Event Use by Type: Projected Versus Actual Operating
Performance in a Stabilized Year of Operation .................. 138

4.12 Dalton North West Georgia Trade and Convention Center
Event Days by Type: Projected Versus Actual Operating
Performance in a Stabilized Year of Operation .................. 139

F1 Rating of Toledo SeaGate Convention Centre Newspaper
Article Headlines ......................................... 245

F2 Rating of Rochester Rivergate Convention Center Newspaper
Article Headlines ......................................... 246

F3 Rating of Dalton North West Georgia Convention and Trade
Center Newspaper Article Headlines .......................... 247

xiii

 

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CHAPTER I
INTRODUCTION AND PROBLEM STATEMENT

Introduction

Since the end of World War II, many cities, large and small, in the United
States have been losing population as well as employment opportunities. Cities
have experienced the flight of the white middle class to the suburbs and a
decline in manufacturing employment. Retailing has followed the flow to the
suburbs and commercial strips in an effort to maximize profits. This trend has
led to a decline in city revenues and an increased burden on city support
services and other forms of relief such as welfare. The decline in population and
employment has caused economic hardship for cities in the form of lower
revenues and taxation. City revenues from both residential and commercial
property taxes, along with sales taxes, have dwindled (Fenich, 1992).

Rather than try to bring residents back from the suburbs, cities often
adopt a “what is good for business is good for the city” attitude and try to lure
business investment dollars back to the central business district. To stimulate
developmentlredevelopment, several urban-planning approaches have been
used, including the development of office buildings, theaters, hotels, sports

venues, and convention centers. Of the strategies employed, it is convention

centers and the conventions they host that seem to promise the most economic
payoff for the least cost.

Benefits often purported by proponents of the convention center
development theory of revitalization are that urban areas have the infrastructure
in place to support convention activities, the industry is environmentally friendly,
it provides employment for workers with low skill levels, the municipality has
control over development and Operations of the facility, it can be located in
blighted areas providing renewal, and it can stimulate adjacent private
development, increasing tax revenues and economic benefits to the municipality
(Fenich, 1992). It is the development of convention centers as catalysts for city
economic development that was the focus of this research.

Over the past 20 years, economic development strategies and, in many
instances, downtown revitalization efforts for cities, counties, and states have
undertaken the development of huge multi-million-dollar comprehensive
convention centers. “A comprehensive convention center is a public assembly
facility that is designed to host meetings and exhibits under one roof. It also has
provisions for banquet, food and beverage and concession service“ (Rutherford,
1990, pp. 78-79). Rutherford further defined comprehensive convention centers
as a relatively recent phenomenon, occurring in the last 30 years. Before the
19605, most cities built multi-purpose civic centers or specific-purpose venues
for local audiences—theaters, arenas, auditoriums, stadiums, speedways, tennis
facilities, horse tracks, and so on. Growth in the number of comprehensive

convention centers in the past decade is shown in Figure 1.1.

 

 

 

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350— 319
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Number of Facilities

Figure 1.1: Projected growth of convention center facilities from 1988 to 1995.
From The Dollars and Sense of Convention Centers by G. G. Fenich.
Unpublished doctoral dissertation, Rutgers University, 1992.

 

More than 400 of these large convention centers exist in the United
States (Fenich, 1992; Ghitelman, 1995; Trade Show Bureau, 1993). Growth
seems unabated as many existing facilities are adding more square feet, and
new facilities are under construction or on the drawing board in many cities. The
decision to construct these projects is fueled by increasing competition and
strong challenges to the convention, exposition, and meetings industry. The
huge capital outlay for the facilities typically is followed by decades of
commitment to operating deficits that are paid for by local and state taxes.

Nationally, convention center space has boomed over the past two
decades. In 1969, major convention centers covered 6.5 million net square feet

of space; in 1980, 11 million net square feet of space; in 1990, 17.7 million net

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square feet of space; and in 1998, 24 million net square feet of convention
space (Sanders, 1998).

The number of public convention centers continues to grow, despite
records that indicate most facilities are underutilized and lose money
(Ghitelman, 1995). Survey results from 450 facilities (Meetings and
Conventions, 1995) supported Ghitelman’s contention by finding that most
facilities’ operating expenditures exceeded revenues. The study indicated that
67% of facilities had operating expenditures exceeding revenues and that 11%
more “hoped” to break even. Only 22% of the facilities operated in the “black.”
Convention centers that are underutilized and lose money can become political
liabilities, dubbed “white elephants” by critical legislators, taxpayers, and the
local press. The past decade of tightening budgets, cuts in municipal services,
and increased user fees has made it more and more difficult for many cities to
find the dollars to support these behemoth structures once they are constructed.

Convention centers generally funded by local governments and used to
generate revenue for the city, local hoteliers, and merchants became popular
civic projects in the 19603 and 1970s (Montgomery, 1995). “By the late 19605,
most major cities either had a convention center or desperately wanted one.
After all, a center meant conventions and conventions meant visitors and money”
(Migdal, 1991, p. 78).

Historically, convention centers existed primarily to service the

community, and analysis of recent trends indicates that there is an

increasing pressure for convention centers to be profit centers. Most of

these facilities generate revenues through rental fees of exhibition and
meeting room space. Other revenue sources include food and beverage

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catering, concessions, and vending, electrical, telephone, stage

construction, lighting, plumbing, air and sound. (Montgomery, 1995, pp.

45-46)

According to Tiebal (cited in Rutherford, 1990), a challenge to the
tradeshow and exposition industry is the issue of facility profit centers.
Convention and exhibit facilities are being encouraged by their political
environments to become profit makers ’or at least break-even concerns, as
opposed to the conventional wisdom of the past that viewed convention and
exhibit facilities as “loss leaders” for other businesses in the community (p. 3). It
has been pointed out (Crystal, 1987, p. 50) that convention and exhibit facilities
are easy targets for politicians to point to as money losers. They then
demonstrate to their constituencies that they are being fiscally responsible by
requiring centers to break even or turn a profit.

The history and operation of convention/exposition centers in Europe are
much different compared to the United States. In Europe, building development
typically is private. The facility is an exposition “shoW’ producer, and rental
rates are set to ensure a profit for the private business concerns. In the United
States, private development is minimal because public ownership and
subsidization by states and localities keep rental rates artificially low, making
private financing and development unlikely. In the name of economic
development, some secondary markets are further committing future taxpayer
dollars by financing the development of support facilities such as headquarter

hotels. Distinguishing between the economic benefits that the convention

centers were originally developed to generate—hotels, retail, and eating

establishments to service the convention segment of the tourist industry—and the
financial support by local and state tax dollars extracted with high political and
economic costs has become increasingly difficult.

Why, then, are local and state decision makers willing to undertake the
development of large convention centers?

Although there is very limited research directly related to the topic of
convention center development and the decision-making process public officials
can use, support for the development of a convention center often comes from
various “interest” groups.

Typically, the hospitality industry and the chamber of commerce support
convention center development to increase hotel occupancy and retail,
transportation, restaurant, and entertainment sales. From a city-revitalization
viewpoint, a convention center development may spark development of office
space and possibly residential development to downtown cores that are void of
retail significance.

Besides the promise of the infusion of dollars from convention delegates,
secondary benefits often help justify publicly-paid-for convention center
construction. Assumed benefits include:

1. More tax revenues from state and local sales taxes, hotel
occupancy/bed taxes, food and liquor taxes, cigarette taxes, personal income
taxes, and commercial property taxes.

2. New job creation in hospitality, construction, and retail industries.

3. Service-specific private business development in travel,
restaurants, party planning, seminars, florists, caterers, and so on (Rutherford,
1 990).

Critics (Barranger, 1997; Mills, 1991; Peterson, cited in Ghitelman, 1995;
Sanders, 1998; Tabak, 1994) argue that the subsidizing-at-any-cost philosophy
adopted by many cities is alarming and ask the rhetorical question: Why should
governments be in the convention center business? Some industry consultants
who generate convention center studies share these misgivings. In an interview,
David Peterson, a well-known industry consultant with a background in
economics, stated that he saw no theoretical justification for the government’s
role in the field (Ghitelman, 1995). He stated, “If nobody had ever started
subsidizing convention centers, there wouldn’t be any need for it. Only those
centers where there was sufficient economic demand would get built. There’s no
reason to subsidize them except that everyone else does” (pp. 75-76).
Ghitelman also cited Edwin Mills, a professor of real estate at Northwestern
University’s Kellogg School in Evanston, Illinois, as doubting that the benefits of
convention centers offset the cost to taxpayers and advocating that governments
should start selling off their convention centers gradually over the next 10 to 20
years (p. 80).

In American Prospect, Barranger (1997) asserted that too many cities are
adopting the “carnival city model” with its publicly-paid-for attractions
(convention centers, stadiums, riverwalks, aquariums, and sometimes casinos)

and that the market is saturated. The unpleasant side effect is that the carnival

city model requires constant and expensive upgrading to remain competitive and
economically viable. To keep tourists coming back, the city must constantly
reinvent itself. Barranger used Chattanooga, Tennessee, as an example of a
carnival city model that is now continuously having to reinvent itself for the
tourists. “Although local governments try to disguise public funding for these
projects as taxes on tourists or special bond measures, inevitably money spent
on these carnival attractions is money not spent on other, more worthy public
investments” (p. 34).

The public policy decision-making process that leads to building a
convention center usually includes five stages: (a) discussion, (b) feasibility
study, (c) architectural drawings, (d) legislative approval, and (e) funding for
construction (Major Exhibit Hall Directog, 1993).

The decision to proceed with a convention center project often is highly
dependent on the findings of commissioned feasibility studies. These studies
take market, physical, and organization factors into consideration and make
estimates, projections, and forecasts as to the future success or failure of a
proposed convention center project. Although feasibility studies are routinely
undertaken to assist in the decision-making process, follow-up evaluation
research on the accuracy of feasibility-study projections and findings is scarce to
nonexistent (Sanders, 1998).

Heywood Sanders (1998) described the convention center development
process as filled with political rhetoric of advantageous economics supported by

a bulky and seemingly substantial “feasibility study.” Produced by national

consulting firms, these studies provide the rationale for more local convention
center space and the images of community benefits. According to Sanders, the
promise of thousands of new convention goers who, without a sizable
convention center, would hold their convention in another competitive city, as
well as the potential for economic improvement and new jobs, is tempting to
both public officials and the general public. Yet, the actual performance or
results of the convention center investment rarely are examined.

According to Tabak (1994), “These reports, through sheer bulk and
impressive-looking tables and charts, are clearly designed to impress the public
officials who order them. What they don’t do is withstand any sort of intensive
scrutiny” (p. 28).

Many arenas, stadiums, and convention centers are built as public-works
projects that carry a year-to-year debt service and operating loss. This loss-
leader philosophy of development and operation is becoming harder and harder
to sell to a fiscally conservative public and its public representatives who voice
concern that the convention center should minimally break even in terms of
revenues to expenditures for operations (Montgomery, 1995)..

In the mid-19803, the literature began to chronicle the change in
philosophy regarding convention center operations and finances. In an article
entitled “The Evolution of the Industry” in Meetings and Conventions, Hosansky
(1 986) stated,

Taxpayers and their representatives need to be convinced that capital

outlays for convention centers will repay the investment and generate the
sort of economic activity the feasibility studies and promoters promise. It

is no longer the case that such facilities need to be loss leaders; they are
under increasing pressure to be cost effective to the point of breaking
even. (p. 57)

The building growth that was robust during the 19803 has continued into
the 19903, despite no growth in the demand for space in the past few years and
rumors in the industry that a shake-up and downward spiral for business may be
the future (Tabak, 1994). “Simply building a convention center in most cities is
not an automatic guarantee that all the assumed benefits will immediately or
even eventually accrue. This is especially true for cities that are not considered
‘primary‘ markets for conventions and meetings” (Rutherford, 1990, p. 76).

Most of the more than 200 facilities built in the past 20 years have been
constructed in secondary or even tertiary markets (Aud-Arena Stadigm Guide.
1994; Tabak, 1994). Primary-market cities are those that have large, well-
designed convention centers, large inventories of first-class hotels, good
transportation, infrastructure, and an appealing city image. For this type of city,
demand for exhibit space will almost always outpace supply. However, in these

primary cities, the convention business often is just the icing on the cake for an
already booming tourist market (Tabak, 1994). According to Quinn (cited in
Rutherford, 1990), “Even the best planned convention centers in secondary
markets may suffer from the relentless construction of competitive structures
nationwide” (p.17). Facilities that are lacking in even one of the key criteria
considered important to meeting planners (i.e., first-class hotel rooms,
transportation, distance to airport, distance from hotel to convention center,

facility design, city image, and so on) may be overlooked by major national and

10

international conventions. Facilities that cannot draw major convention business

become “white elephants” and, according to Quinn (cited in Rutherford, 1990),

an economic drain rather than providing the economic benefits discussed earlier.
According to Peterson (cited in Rutherford, 1990),
Sizing facilities in second-tier emerging cities is the most challenging
because each 100,000 square feet affords additional opportunities for
events during the peak season; consequently, the optimum building
program will yield maximum delegates per square foot, for the minimum
dollars (annual debt service and operating cost) per delegate. At some
point, additional space will yield diminishing returns, meaning the proper
size has been reached. . . . Many times the emphasis is on building all the
budget will fund or the site will hold. The exercise becomes how much

market will fit in the box, rather than how big to build the box to fit the
market requirements. (p.16)

Another concern for decision makers once the facility is built is that the
measure of a convention center’s success does not follow traditional real estate
development measures such as return on investment and operating profits. In
feasibility studies, often-used industry performance indicators such as the
number of hotel room nights generated as a result of a convention that could not
be hosted in the city without the use of the convention center; the number of
conventions hosted by the facility that are considered citywide; annual occupancy
percentage; revenue-to-expenditure ratio; size (number of delegates) and
number of conventions hosted; number of events hosted in slow or shoulder
season; economic impact to the community based on the tourists; direct, indirect,
and induced spending in an area; number of persons employed in the tourism
industry; and enhancement of city image are estimated (Lundberg, 1994;

Meetings and Conventions, various issues). However, there has been little

11

systematic research on and reporting of guidelines or standards on which public
officials can, should, or do base judgments. Convention centers often have
mission statements or operational objectives. Without any guidelines or
standards of measurement, these objectives tend to be vague and difficult to
operationalize. Research to document standards of measurement that decision
makers can use to evaluate their convention centers’ performance is needed.

One final aspect of convention center development and public policy
decision making is that, once these facilities are constructed, the commitment to
them is ongoing. The debt service may be 20 to 30 years, yet often long before
the facility is debt free, necessary renovations or additional square feet are
constructed to keep the facility competitive, which reestablishes bond debt.
Public decision makers make long-term commitments of tax dollars without the
necessary decision-making tools to evaluate those commitments in the long term.

Across the country, municipalities in large numbers, more than 150 in the
past 10 years (Fenich, 1998), have adopted the convention center development
strategy as a means of easing urban woes and sparking economic development.
At the same time, more and more pressure is being placed on these facilities to
perform financially. Does this affect the mission and objectives of the convention
center? Is the facility behaving (operating) as a convention center, or does it
more closely resemble the municipal civic centers of the past? What is the role
of the feasibility study? How accurate are feasibility projections when compared
to actual operations? Is the municipality reaping the economic rewards

anticipated by developing the convention center, or is the convention center

12

 

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viewed as a drain on municipal resources? How are convention center
operations evaluated? Answering these questions and discovering more about
convention center operations and how convention center performance is
evaluated by those involved in convention center decision making were the focus
of this dissertation.

The significance of this research is that there has been very little
postoperational evaluation of convention center operations, even less study of
how decision makers, public officials, and facility managers evaluate the
convention center development process and convention facility operations, and
no study of how the trend of expecting convention centers to be financially
solvent may be affecting the operations and/or mission of convention centers.
This research contributes new information regarding convention center
development strategy as a part of urban planning theory in secondary markets.
The research may also contribute to the ever-present private-versus-public
theoretical debate over the proper role of government and government

subsidization of an industry.

Problem Statement
Cities across the country have embraced convention center development
as a means of bringing in convention tourism and revitalizing deteriorating urban
cores. These facilities cost millions of taxpayer dollars, and most operate at an
annual loss to the city. Convention centers historically were built as “loss

leaders” (i.e., the economic impact generated by the new construction,

13

convention-attendee spending, and spin-off business creation would more than
make up for the yearly deficit cost to the city). Today, facilities are experiencing
increasing political pressure to break even or make a profit, regardless of the
positive economic impact that may be generated from convention center activity.
This begs the questions: Does the new trend to be profit oriented change the
nature of operations at the convention center? Is the emphasis on profit or
revenues at odds with the mission of the convention center—hosting conventions?
How is convention center performance being evaluated by public officials,
decision makers, and facility managers? The specific goals of this research
were: (a) to better understand the results of convention center development in
smaller markets, (b) to better understand the role of the feasibility study in the
process, (c) to better understand convention center operations and performance,
(d) to better understand the process of evaluating facility performance, and (e) to
better understand how profit orientation affects the operation and/or mission of
the convention center.

The research involved an in-depth multiple case study analysis of three
comprehensive convention centers chosen from a pool of approximately 20
convention centers that met the study-design criteria. Feasibility studies, industry
publications, and academic journal articles were used to identify and select the
most commonly named, discussed, estimated, and/or measured variables or
criteria used as indicators of performance pre- and postdevelopment of
convention centers. In each of the three case studies, feasibility study

projections of performance for selected criteria were compared to the actual

14

convention center operating performance for these criteria once the facility was
built. Further, in each of the case studies, interviews were conducted with public
officials, decision makers, and facility managers to document how they evaluated
or assessed the operations of the convention center in meeting its intended
mission and what they believed to be the role and accuracy of the feasibility
study and the study’s projections. Each case study documents the operating
objectives or mission of the facility and how these objectives were
operationalized and measured. Finally, this research documents whether or not
the convention center’s operating and marketing behavior was congruent with the

mission of the facility.

Objectives

The objectives of the research can be divided into two distinct areas. The
first area of inquiry involved predictive accuracy of feasibility performance
measures, and the second area of inquiry involved performance-viability
evaluation. The following questions were addressed:

Predictive accurggy of feasibility performance measures:

1. What is the predictive accuracy of performance indicators in
feasibility studies of convention centers when the estimated or projected
performance indicators are compared to actual operating data once the facility is
built and in operation?

2. Can areas of strength and weakness be identified with regard to the
predictive accuracy of performance indicators in convention center feasibility

forecasting?

15

Performance viabiligj evaluation:

3. Once the facility is constructed and in operation, how is
performance evaluated by public officials, decision makers, and building
management? (Are the feasibility estimates used as performance indicators of
success or failure of the convention center? What is viability, and how is it
measured? How knowledgeable are public officials, decision makers, and
building management about convention facility viability?)

4. Are the attitudes and expectations of facility performance by public
officials, decision makers, and facility managers congruent with the mission
statement and/or operational objectives of the convention center?

5. Does profit orientation affect the operations and/or mission of the
convention center?

Delimitations

The focus of the study was on medium-size convention centers (50,000 to
250,000 square feet of exhibit space), built in emerging or secondary (not
primary) markets. The case studies were of comprehensive convention center
projects that:

1. Developed a new (not expansion of existing) convention center (for
clear analysis and comparison of operating performance to original feasibility
study).

2. Were built after 1980. (Facilities built before this date have been or
need to be renovated or expanded to keep them competitive; building

obsolescence becomes a factor for the facility.)

16

3. Had been in operation for at least 5 years. (This allows for a stable
or typical operating posture to be studied.)

4. Were publicly owned and operated. (A majority of United States
facilities are publicly owned, and the secondary data for research are easier to
obtain than is private facility information, which often is considered proprietary.)

5. Were 99; in a capital city (these facilities have a built-in state
association base and tend to compete for state/regional business rather than
national conventions).

6. Facility found in an emerging, not primary market. (Facility
development is built as a catalyst for economic development in an area through
visitation of tourists to a community for convention and trade show events.
Populations in the SMSA from 75,000 to 1.5 million were considered.)

7. Were medium-size facilities that had a main hall of at least 50,000
square feet, but not more than 250,000 square feet of exhibit space. (The
majority of conventions and trade shows held in this country can be
accommodated in a facility of this size.)

8. Were designated as convention centers as opposed to a multi-
complex, multi-purpose civic center, exposition center, arena, dome, or stadium
by using the term “convention center" in the official name and in
marketing/promotion.

9. The convention center cases chosen for study had the feasibility

work conducted by different consulting firms.

17

Basic Assgmptions

It was assumed that the firms/organizations that conducted the feasibility
analysis were selected by the government entities on the basis of their expertise,
experience, and knowledge of convention center feasibility analyses and were
paid accordingly. The assumption was also made that the firms or organizations
that conducted the feasibility analyses u3ed the best analysis techniques
available. It was also assumed, from a thorough review of published literature,
that i any follow-up evaluations had been conducted to ascertain the accuracy of
specific analysis techniques, this information remained proprietary to the firm or
organization. The intention of this study was not to indict the integrity of or give
credibility to one firm or organization’s feasibility study over another’s. The
purpose was to scrutinize, examine, and evaluate the predictive usefulness of
convention center feasibility analyses for public officials in the decision-making
process.

By comparing feasibility study forecasts to actual operating results, the
research was intended to identify areas of strengths and weaknesses in
feasibility forecasting for the convention center cases studied. The study findings
might indicate the need for further study and refining of feasibility-analysis

techniques used for convention center projects.

Limitations
The in-depth evaluation of individual case studies was chosen to gain

information about the predictive use of feasibility performance indicators for

18

public decision makers and provide information with which to develop a model or
guidelines that public officials may want to consider in judging their convention
centers viability once it is in operation. Theoretical propositions may follow;
however, the findings cannot be generalized to the population of convention
centers.

The research was limited to public facilities and did not address the
growing private convention center market. There are approximately 20 privately
owned facilities in the convention center size range considered here. Most of
these are operated by hotels or corporations such as Walt Disney World and
casinos.

The cases that are presented are not geographically representative of the
entire United States. The criteria used to select the case studies were developed
to make the findings as relevant and as comparable as possible for decision
makers in secondary markets who are acquiring or have acquired huge debt
obligations for convention centers that may or may not be reaping the promised
economic benefits for their communities. The screening process was as follows:

1. Identified all facilities with a main exhibit hall of 50,000 square feet
but not more than 250,000 square feet (micr Exhibit Hall Directory. 1993).

2. Screened out all facilities built before 1980, private facilities,
facilities other than convention-center designated, and those facilities in primary
markets over 1,500,000.

3. Omitted facilities built after 1993 and those that did not have 5

complete years of operating information.

19

The remaining convention facilities comprised the study population. The
selection of seven cases to study was proposed before the pilot study. After the
pilot study was conducted, the cases thought to be able to be researched were
narrowed from seven to three due to cost considerations and the time required to
do in-depth case study research. The facilities chosen to be studied were in the
following cities: Toledo, Ohio; Dalton, Georgia; and Rochester, New York. The
selection of these cities was based primarily on their ease of access for the
researcher, city image not based on tourism factors, and a geographic
distribution of writers from the Midwest, the South, and the Northeast.

Major industry experts view management as one of, if not the most,
important criteria to a convention center’s performance. This researcher did not
analyze what characteristics convention center managers might share.
Rutherford (1990) systematically presented data on convention center managers’
backgrounds, their buildings, and management issues.

The focus of this study was on using multiple case study methodology to
discover more about convention center development in second-tier cities; to
discover more about the role of the feasibility study in the process; to discover
more about the operations and performance measures of convention centers; and
to discover more about how public officials, decision makers, and facility
managers evaluate the performance of the convention center. This involved
performing heretofore not-conducted follow-up evaluation on feasibility study
projections, and contributing to broad-based knowledge of how feasibility study

outcomes are used in the public decision and policy process; using primary and

20

secondary data to evaluate operations, event activity, and performance of the
convention center, and interviewing public officials, decision makers, and facility
managers to ascertain how convention center performance is evaluated. An
additional, broader aim of the study was to evaluate convention center operations
and performance to see whether they followed the emerging trend of convention
centers being profit oriented, and how/whether that affected the mission of the

convention center.

21

CHAPTER II

LITERATURE REVIEW

A review of literature relating to convention center development,
operations, and public policy decisions regarding such indicated that there has
been limited direct research on the topic, but there has been very limited
research on follow-up evaluation of convention centers, no published
examination of the accuracy with which feasibility study projections mirror the
actual operating performance, and little study and documentation of what
convention center performance indicators local public officials, decision makers,
and facility managers use to evaluate the success or failure of the convention
center in meeting its operational objectives. The literature review is divided into
distinct categories to adequately cover the complexities of the research and at
the same time aid in understanding the subject. These categories are: (a) the
changing city and urban planning theory; (b) convention center development; (c)
convention center finance, management, and operations; (d) political framework

for public decision making; and (e) case study research.

22

The Changing City and Urban Planning Theory

Cities have always had a plethora of financial, technical, and intellectual
resources that have made them an important factor in the history of mankind
(Gartrell, 1988). As transportation improved, cities became the hub of activity for
geographic regions and as a place where people gathered to discuss the
common good or interest. Trade associations and professional, religious, and '
fraternal organizations would congregate in the cities about membership and
trading of goods (Montgomery, 1995). By the mid-18003, these trade, religious,
professional, and fraternal associations had begun to form and congregated in
cities in North America (Gartrell, 1988). These were the beginnings of much of
the convention activity that takes place in American cities today.

The changes that have taken place in American cities have been well
documented (Urban Land Institute, 1980). Among the significant changes has
been a shift in manufacturing, out of the downtown core to outlying areas where
land and labor are cheaper (Judd, 1985; Winsberg, 1980). The shift of the
middle-class population to the suburbs and the American economy toward
services has exacerbated the problem of declining populations in cities (Frieden,
1989; Stemlieb 8. Hughes, 1979). Retailers have followed the movement of the
population out of the city to the suburbs and into malls offering retailers greater
profit potential (Cooper, 1979; Hummel, 1991 ).

Declining resident populations and loss of vital job—creating businesses
created a financial burden in the form of decreased property taxes, corporate and

business taxes, and income and sales taxes (Cooper, 1979). The financial

23

problems are intensified for cities, which, unlike businesses, cannot necessarily
cut back on municipal services when tax revenues decline (Stemlieb, 1983).

Before the Reagan years and “new federalism," the federal government
returned large sums of money to local governments in the form of grants and
revenue sources for capital and operating subsidies. This reversed under
Reagan’s administration, which put programs into place to discourage
intergovernmental transfers for local and state government capital expenditures
(Botner, 1989; Fainstein & Fainstein, 1989). Federal monies were no longer
awarded just because a city asked and was put on a waiting list, but rather the
local government had to be justified by what or how much the local government
could finance (Peterson & Forbes, 1989). Local governments, when forced to
use their own often-limited resources, placed an emphasis on those projects
deemed to offer the greatest return on investment (Bingham, Hill, & White, 1990;
Camevale, 1988; Hinds, 1991).

The economic and physical deterioration of many American cities,
neighborhoods, infrastructure, and finances is evidenced in recurring newspaper
headlines and urban journals of the late 19803 and the 19903 (Fenich, 1992).
The strategy often adopted by cities to counter these problems and stimulate new
economic activity is “what is good for business is good for the city” and includes
plans for office buildings, luxury housing, government offices, arenas, stadiums,
and convention centers (Fenich, 1992). In this vein, cities have not directed
efforts at bringing back the resident populations, but rather “the city’s survival

depends upon economic vitality and it is only through investment that the city can

24

raise the taxes necessary to provide both quality public services and jobs“ (Judd,
1985, pp. 364-365). Thus, capital is redirected into the central city by coalitions
of businessmen and government leaders in an effort to elevate the value of the
central business district (CDB) (Holcomb & Beauregard, 1981 ).

The advocacy of the development of a convention center as part of urban
planning and urban revitalization was evidenced in the literature as early as
1954. Gelfand (1975) stated that convention halls were among one of the goals
of the Housing Act of 1954, catering to the business community. Holcomb and
Beauregard (1981) contended that the early urban development grants (UDAG)
were mainly hotel projects built to attract conventions and tourists to the city.

The urban plan often included transforming the image from deterioration to
vitality. Blighted areas of the city were torn down to make way for new urban
landscapes (Holcomb & Beauregard, 1981). Examples of a convention center
strategy for redevelopment of blighted areas are the Jacob Javits Convention
Center in New York City, built in an area referred to as “Hell’s Kitchen,” and New
Orleans, where an abandoned dock front was utilized (Fenich, 1992). The new
construction that follows creates the image of progress and vitality, stimulating
opportunities for new investment and consumption (Molotch, 1976).

One of these strategies, convention center development, as evidenced in
the preceding chapter, has been embraced in municipal redevelopment scenarios
across the country. These megastructures are huge, high-profile, and clearly
visible components of many redevelopment scenarios (Holcomb & Beauregard,

1981). “Various economic models contribute significant retail, transportation and

25

entertainment sales to attendees and delegates at conventions, meetings and
trade shows” (Rutherford, 1990, p. 73). There has been a veritable explosion in
the building of special-purpose facilities designed to make the planning and
execution of conventions and tradeshows convenient and attractive to their
managers and attendees (Rutherford, 1990). Before 1970, most facilities were
public assemblies or civic centers that did double or triple duty as auditoriums,
basketball arenas, or hockey rinks. Many of the facilities were dark, noisy boxes,
in undesirable parts of town, and not very functional (Rutherford, 1990). Cobo
Hall in Detroit, designed and developed in the late 19603, was the first
comprehensive convention center designed specifically to attract conventions
and tradeshows to the city (Hosansky et al., 1986).

The lure of convention tourism, and especially convention center
construction, has been the big theme of inner-city redevelopment schemes during
the last 10 years (Major, 1993). Convention centers are built in hopes of
enhancing and changing the poor image of the city (McGee, 1993).

Using a convention center as a centerpiece for revitalization, a city can
consciously try to remold its image into one of progress and prosperity by
attracting conventions and raising publicity and awareness levels.
Megastructures such as convention centers are important symbols in this new
image (Holcomb & Beauregard, 1981). The enhanced image is seldom
mentioned as being high on the priority list; economic arguments are usually
brought forth, such as increased business and sales the center will bring to the

city by bringing in convention visitors with a high propensity to spend money

26

(Oppermann, 1998). According to Fakeye and Crompton (1991), visitors to a city,
while attending a convention, gain first-hand experience, which if they have never
been to the destination before may effectively change their perceptions,
enhancing the visibility and overall destination image. In a 1986 article by Curt
Schleier entitled “Comeback Cities," of the six cities studied, all attempting to
reposition themselves in the minds of the outside world, each had included a
convention center strategy as a key ingredient in its redevelopment scheme.
With the degree of construction activity noted, cities of all sizes are
jumping on the convention center bandwagon and hoping to reap rewards
(Fenich, 1992). “Once associated with major cities, visions of economic renewal
combined with civic pride have brought convention facilities to smaller cities”
(McGuinness, 1982).
Breslow (1994) described the urban renewal and convention center boom
in bleaker language:
Desperate for a fix, with industry having long since fled, the middle class
continually flowing to the suburbs, and aid from the federal government
and state governments cut, cities are desperate for sources of economic
growth and tax revenue. Since most city residents have little spare cash,
affluent tourists are a good bet for bringing in funds. And a lucrative form
of tourism is conventions, sponsored by trade associations, professional
organizations, and membership groups. (p. 12)
Although these projects are filled with risk, civic boosters often include
powerful coalitions of backers, including business leaders, politicians,

construction trade unions, and the hotel and restaurant industries. Business and

conservative groups, who are quick to oppose spending government money for

27

the poor and downtrodden, have supported public subsidies for economic
development ventures (Breslow, 1994).

Many writers have suggested that cities do not build convention centers
solely to meet demand or for economic reasons, but as a matter of civic pride
(Fenich, 1992).

Still others feel this civic pride is really a matter of staying competitive, and

without a center or stadium a city is not keeping up or is not a world class

city. . . . Thus, cities may not use financial logic alone in deciding to build a

center, and this makes it more difficult to determine whether convention

centers are an asset or a liability to their host municipalities. (Fenich,

1992,p.35)

Convention Center Development

In studying the literature about convention center development,
operations, and public policy decisions regarding convention centers and the role
of feasibility studies in the process, most writers have come to the conclusion that
the research is, in fact, scant. Abbey and Link (1994), in reviewing the research,
concluded that research is limited on the convention industry and that the field is
ripe for new research opportunities. Much remains unstudied in the convention
segment of tourism. Research that may have been conducted is often proprietary
and/or published by private consulting firms. However, in his book _Th_e
Development and Management of Visitor Attractions, Swarbrooke (1995)
dedicated an entire chapter to the development process and the role of feasibility
studies. The adoption of Swarbrooke’s visitor-attraction definitions and

processes with regard to convention center development is both reasonable and

rational, given that his definition of development is “the construction of new

28

buildings and structures for the purpose of attracting visitors” (p. 99), which is the
key motivation for developing convention facilities.

The term “feasibility' study encompasses a wide range of types of studies
that differ somewhat with respect to their purpose and content. However, the
general goal of feasibility studies is clear: to test the potential viability of the
proposed project as accurately as possible before a decision is made whether or
not to go ahead with a project. Feasibility studies may have a number of
objectives and can include any combination of the following:

1. Testing as far as possible the financial viability of the proposed
attraction, which means calculating capital and operating costs and projecting
visitor numbers and income.

2. Clarifying and refining the original concept to reconcile it with issues
such as the market and financial viability and site availability.

3. Forecasting the likely nature and size of the target market or
markets for the attraction. Whereas formulae exist for this purpose, such
forecasting cannot be described as a precise science, given the large number of
variables involved and the uniqueness of each attraction.

4. Providing support and justification for any applications for finance

for the project that may be required, such as loans and grants.

5. Helping define the optimum site in terms of size, terrain, and
accessibility.
6. Supporting planning applications to demonstrate that there is a

market for the attraction.

29

7. Attracting potential sponsors, franchisees, and concessionaires who

may be required.
8. Analyzing specific operational issues such as labor availability.
9. Identifying sources of potential financial assistance.

10. Providing useful marketing information (Swarbrooke, 1995).
According to Swarbrooke (1995), in writing on feasibility studies for
attractions,

The consideration of the feasibility study as a systematic, logical, neutral
tool for rational decision making is a fallacy. It is important to recognize
that often feasibility studies are not carried outwith a high degree of
objectivity. In some cases, the study is designed to legitimize a decision
that has already been made, based on other factors such as views of
stakeholders. Furthermore, while a study should start with a clean sheet
of paper, this is rarely possible in reality. The site, project location, or
available capital may be predetermined.

Figure 2.1 is a stylized representation of the feasibility study process.

 

Preliminary concept —* Rough concept —> Market feasibility study .. Revise concept -’ Identify
location and site —+ Revise costs -+ Visitor number and spending projections » Financial
evaluation -> Identify sources of finance -> Detailed design and planning, including phasing

 

 

 

Figure 2.1: Feasibility study process. From The Development anwanaqement
of Visitor Attractions, by J. Swarbrooke, 1995. Oxford, Butterworth-Heinemann.
The feasibility study typically contains a market feasibility study to
determine whether a market exists for the idea or concept. Once the market is
known, site selection and possible income figures may follow to determine the
financial viability (Swarbrooke, 1995).
Feasibility studies are difficult to perform accurately, according to

Swarbrooke (1995), for a number of reasons, including:

30

1. The market is constantly changing. Consumer preferences, uncon-
trollable external factors, and government regulation all change.

2. Comparisons of attractions are difficult due to differences in
situations, making it difficult for operators to determine likely success or failure
based on comparisons.

3. The gestation period for the development of attractions is so long
that the assumptions on which the study is based relating to variables such as
interest rates, staffing, and building costs may be out of date by the time work
begins.

4. Many attractions, particularly those in the public sector, have
complex sets of objectives, some of which are contradictory. There is therefore
no simple objective such as profit against which to measure the potential
performance of a proposed attraction.

Sanders (1998), in evaluating the convention center development process
in a study of large convention center expansions, characterized the feasibility
study as bolstering the positive rhetoric of promised new jobs and economic
advancement with bulky and seemingly substantial research. These studies
provide the rationale for more local convention center space and community
benefits. Sanders (1994) also noted that:

The proposed local convention centers are technically not “feasibility

studies,” because they contain no substantive forecasts of revenues and

expenditures. However, they do sustain the arguments of the convention-

center promoters, with a remarkably similar set of arguments and
analyses. (p. 72)

31

According to Sanders (1998), feasibility methodology for convention
centers is very flawed. He cited flawed examples, including one study in which
attendance estimates for a convention center were based on an increase of 65%
more space, but the feasibility study projection simply had the new space filling
with convention-goers because of the additional provision of space, not market-
demand factors. No effort is made to estimate the effect of increasing
competition between cities as more facilities are developed or on the drawing
board. Typically, only the existing facility market is considered in the market
competition, with little or no consideration given to facilities that are in the
planning stages or being developed, often within driving distance to the city
considering a new convention center. Feasibility studies, according to Sanders,
are notorious for predicting increasing convention facility demand, and they
negate any decrease in demand for other already existing facilities, city owned or
private.

“To date, limited research has been conducted in the meetings area. The
research that has been undertaken has been done by three different groups: ( 1)
by the industry itself through meeting associations, (2) by trade publications
within the convention field, and (3) by universities” (Abbey & Link, 1994).

Economic impact studies in travel and tourism are undertaken to determine

specific activities’ effects on the income, wealth, and employment of the

residents of a given geographic area. The studies are conducted for
cities, counties, towns, states, provinces, and nations, and for individual
facilities (e.g., museums) and events (e.g., Olympic games). They often
relate to an annual period, although seasonal and event impact studies
are not unknown. The results indicate the contribution or cost of tourism

activity to the economic well being of residents of an area, usually in
monetary terms. (Frechtling, 1994, p. 359)

32

Limited research is available on the operations or economic impact of
convention centers once they are operational. The economic impact studies that
have been conducted typically were done before the development, usually as
part of a feasibility analysis to determine the viability of developing a convention
center. In discussing costs associated with developing a convention center,
financing, cost overruns, site acquisition, operating expenses, opportunity costs,
infrastructure costs, and ongoing police, fire, and grounds maintenance costs,
Fenich (1 992) stated,

Clearly the magnitude of these costs can be substantial and may be

greater and more all-encompassing than has been previously believed.

Exacerbating the impact of these costs is the fact that almost none of the

economic benefits cited in previous studies can be substantiated (through

documented empirical investigations) other than delegate expenditures,
which was studied by the International Association of Convention and

Visitor’s Bureaus (lACVB) and may therefore be of lesser magnitude or

even greater magnitude than estimated. (p. 68)

According to Fenich, the problem of unsubstantiated benefits, high costs, and
voids in research leaves many questions unanswered regarding the use of
convention center developing strategy.

At the industry level, economic impact figures often are generated by the
convention center or convention bureau as a way to justify their subsidization by
tax dollars. These studies often are criticized for overstating the impact of
convention spending in the community and the multipliers employed. Fenich
supported this conclusion in saying that

Even authors whose focus was academic (Var, Cesario, & Mauser, 1985)

note the paradox that while the number of convention centers continues to

grow, convention travel has received little research attention. They go on

to say that the research has been carried out either by public relations
officers or consulting firms which do not make their findings public.

33

Moreover, in large part the methods used by these organizations have
been rather ad hoc, i.e., developed for a particular purpose but lacking
general applicability. (p. 67)

Clearly, the tourism industry and the tourists who exemplify it are an
important and integral part of the economic fabric of the United States. However,
as bright as the hopes and potential of the tourism industry are, they pale when
compared to one of its sectors—the convention segment (Fenich, 1992).

Conventions and convention spending are the fastest growing segment of
the tourism industry. Conventions are a notably lucrative tourism niche for cities,
and, as might be expected, convention delegates spend more than the average
pleasure traveler. A conservative estimate would suggest that a city would need
to attract at least two tourists for every conventioneer to stimulate the same level
of economic activity (Fenich, 1992).

Using a convention center facility as the centerpiece of revitalization
creates the image of a vibrant downtown that will provide jobs, services, and
goods both day and night. It is surmised that the benefits will accrue to the city
as a whole (Holcomb & Beauregard, 1981).

Fenich (1992) capsuled the arguments that are made for using convention
center development as the centerpiece of urban revitalization this way:

Tourism and its lucrative convention subsegment have the potential to be

a significant contributor to the economic health of a municipality.

Conventions and their convention centers carry with them the possibility of

the greatest rewards with the least costs of all the possible strategies for

economic development. The industry is considered to be “smokeless” and
takes little out of the environment and, therefore, has few recognized
negative extemalities. It is one of the fastest growing segments of the US.
economy in terms of both dollars generated and employment and, in the

latter, employs individuals with relatively unsophisticated skill levels. Also,
convention center development can become the focus of urban

34

revitalization and can stimulate additional development of support services

such as hotels, restaurants, attractions, and retailing. Convention

attendees appear to prefer to hold their gatherings in urban areas, and
therefore, cities seem to have a comparative advantage over other

locations in attracting this industry. (pp. 32-33)

With the aforementioned arguments, it is little wonder that convention centers are
viewed like the white knight, arriving just in time to save the day, and cities
seeing only the good side and ignoring or not investigating their bad side, i.e.,
costs (Fenich, 1992).

Sanders (1998), in the article “Convention Center Follies,” gave
impressive evidence of large-city convention center expansion projects that have
not lived up to their projections. In Houston, the number of annual conventions
and trade show events is about one-half of the feasibility study estimates, and its
job creation no less modest. The Los Angeles Convention Center, with its recent
385,000-square-foot expansion, costing $500 million, reports that, rather than
boosting the attendance by two and one-half times, as was expected, it is
essentially doing the same level of business as was done by the smaller facility.
The Washington, DC, facility is operating at nearly full capacity; however, only
one-third of the events it hosts are nonlocal. The convention center is hosting
significantly fewer conventions and trade shows than the feasibility study
projected. Because the center is holding fewer conventions and trade show
events, total hotel room nights are only one-fifth of what the center was projected
to generate.

In Providence, the Rhode Island Convention Center has had a similar

performance record. The center is generating just one-third the feasibility-

35

 

projected hotel room nights. The facility is active, but with local events.
Philadelphia and Boston are both performing well below the feasibility projections

in terms of delegate attendance at conventions (convention size), and this, in

 

turn, generates fewer hotel room nights than projected. In Boston, which is in the
predevelopment process of a second large convention center across town, when
the current convention center closed for reconstruction and expansion, hotel
room stays rose. No significant gains in hotel room occupancy were recorded

when the convention center reopened for business. According to Sanders

 

(1998), there is no evidence that the Hynes Convention Center has had a
positive effect on Boston’s hotel business. Sanders’s research indicated that
many of the large convention centers are filled to capacity with local events, have
fewer delegates to conventions than projected, and as a result produce far less
economic impact in terms of visitor spending and job creation than what was
projected by the feasibility study.

According to Fenich (1992),

The literature would suggest that the process used by municipalities in

making a decision to undertake a convention center strategy for

revitalization is based more on local emotions than well-structured

empirical analysis. The approach of the majority of research to date

seems to focus only on the benefits and, to a large degree, ignores the

disbenefits. This is particularly true of proprietary studies. (p. 56)

Fenich’s (1992) research on convention centers indicated that the average
Public convention center costs about $2.5 million a year to fund, including
oParating and debt service. The average annual deficit is more than $800,000.

Fenich’s study results were based on a convention center operations mail survey,

with 81 responses from a possible 333 identified convention centers (p. 127).

36

Besides the staggering costs of developing a facility, and the yearly
operating deficits it generates, a third largely unaddressed cost when
implementing a convention center strategy for revitalization is opportunity
cost—that is, “the value or the next best use (or opportunity) for an economic good
or the value of that sacrificed alternative“ (Samuelson, 1985). For convention
centers, this would include municipally financed housing, health care, or even
investment in tourism promotions that attract visitors other than conventioneers,
and loss of property taxes on the convention center site. Likewise, infrastructure
costs for improvements and additional fire and police protection over several
decades rarely are figured into the cost of developing a convention center

(Ghitelman, 1988).

Convention Center Finance, Management. and Operations

The fundamental role of legislatures in the development of convention
centers is that of debate and passing legislation that authorizes some specified
governmental agency within the state to build such a center. Stipulations for
finance arrangements and facility governing are usually included in the
legislation. The legislation also may provide the center with a charter that
stipulates design, construction, operation, marketing, and promotion policy
(Richter, 1989).

Although financing may be stipulated by enabling legislation, it may also
be chosen by the operating authority from among many options. The most
common forms are some form of state or municipal bond issue that relies on the

“full faith and credit' of the issuing entity to generate the stream of revenues that

37

“7‘1

will retire the bonds and pay interest to investors. The most popular method is
the use of hotel surcharges/taxes to retire state or municipal issued bonds
(Rutherford, 1990).

In addressing management and facility operations, it is necessary to pay
attention to the concept of what the facility is supposed to do. This usually is
embodied in a mission statement that guides the selection of the management’s
activities on behalf of the owners of the facility. The policy-making board or
authority for most convention centers represents the ownership of the facility. On
behalf of the ownership, the board sets policy and direction for management to
follow. With very few exceptions, convention centers'usually are owned by the
public and operated by some designated board or authority on behalf of the
taxpayers of the state, region, or municipality. The policy-making authority will
appoint (again, in various ways) an executive, managing director who may also
be called president, chief executive, managing director, or some other title that
indicates the focal point between the center operations and policy-making

authority (Rutherford, 1990).

Political Framework for Public Decision Making
In the American tradition, a great deal of attention has been paid to the
way in which decisions are made and the way in which decision-making
processes are oriented toward majority rule. It might be argued that as a polity
we have concentrated more on developing procedures for decision making than
we have on evaluating the substantive outcomes that are produced when the

procedures are implemented and effectively used (Richter, 1989).

38

 

Richter (1989) and many other pluralism theorists have assumed that the
governmental structures and operating rules of the game are designed to achieve
this vague concept called the “public interest.“ Much conflict, controversy, and
political debate have focused on the means and outcomes that add to or subtract
from the public interest.

Planners and politicians occasionally weigh out loud the distribution of
political power in the decision-making process. Decision making in tourism tends
to mirror the distribution of political influence generally (Ashford, 1976).

Richter (1989) is a political scientist who has investigated tourism policy
internationally and has identified and documented large gaps in research with
regard to policy in various tourism sectors. She has called for more subnational
research on tourism policy in the United States.

Because convention tourism and the infrastructure developed around it by
cities and states is a subsector of the broader term “tourism,” related research
and literature on tourism policy is included in this research review.

According to Richter (1989), tourism succeeds or fails largely as a function
of political and administrative action and not as a function of economic or
business expertise. Faced with a shortage of personnel with the requisite
backgrounds, governments are forced to rely on the scarcely disinterested advice
of the travel/hospitality industry.

Systematic, empirical studies are still quite rare and tend to be focused on
easily measured quantitative criteria such as arrivals, expenditures, number of

complaints, length of stay, and crime statistics. Even when whole policies of

39

 

 

tourism promotion are studied, the emphasis is on efficiency rather than net
economic value. The reason, according to Richter (1989), is that it is easier to
tabulate numbers than to measure contribution or cost of a policy. In addition,
numerical studies are politically appealing in a probusiness, capitalistic nation.
Using numbers gives an aura of simplicity as well as objectivity.

Richter (1989) called for other approaches to studying tourism at the local
level. The unfashionable but ever-so-useful case study, undertaken at the local
level, is desperately needed if an appropriate data base is to emerge. Such
studies also have the heuristic advantage of being relatively inexpensive to
develop and offer the tourism/political science student a hands-on experience in
dissecting and analyzing a growing political topic in areas such as tourism and

recreational land use possibilities (Richter, 1989).

Research Methods

Rovelstad (1982) made a prima facie case that the tourism industry as a
whole makes less use of research than most other consumer-serving industries,
and much of the research it does undertake does not employ the most modern
technologies. Rovelstad was referring to applied research, which, by his
definition, is research with the purpose of assisting management decision
making, and it is done only if it is expected that the economic benefits will more
than offset the research costs.

Most of the research related to tourism facilities in the United States is in
the private domain and therefore is not publicly reported. A variety of techniques

currently are used to analyze the feasibility of specific sites for prospective

40

hotels, restaurants, resorts, and similar facilities, which have high initial capital
costs. Many are proprietary and largely confidential. Work on applications
employing regression analysis and several site-specific and regional variables
continues with some success (Rovelstad, 1982).

Beaman and Meis (1994) suggested that, for tourism research to be
effective, a mix of both applied and basic social science research is needed.
Although the dividing line between these two types of research is by no means
always clear, they can be differentiated by purpose. Applied research aids in
solving real-world problems, whereas basic research enhances our knowledge of
a phenomenon.

Methods and specific techniques emerge from the approach selected.
Typically, participant observation or field research and in—depth interviewing have
commonly been associated with the qualitative approach, and surveys and
experiments usually are quantitative.

A term often associated with methods is “triangulation.” It is possible to
combine the methods within an approach or to combine both qualitative and
quantitative methods within a positivist paradigm. Reichardt and Cook (1979)
suggested that combining methods is useful, particularly in evaluation, because a
variety of needs requires a variety of methods. One method can build upon
another, and methods have biases, so multiple methods can give more valid and
reliable information. Examples of studies combining methods include
Brandenburg et al.’s (1982) study of why people adopt recreation activities,

Glyptis’s (1985) study concerning attitudes toward women and sports, Samdahl’s

41

 

 

(1988) study of the meaning of leisure, Glancey’s (1986, 1988) studies of an
adult softball team and of the play-world of auctions, Howe and Keller’s (1988)
study of the evaluation of therapeutic recreation symposia (Henderson, 1990),

and Fenich’s (1992) study of the dollars and cents of convention centers.

Case Study Research

Case study research is a comprehensive research strategy (Stoecker,
1991). It is an all-encompassing method, with the logic and design incorporating
specific approaches to data collection and analysis (Yin, 1994). “The technical
definition of a case study is an empirical inquiry that (1) investigates a
contemporary phenomenon within its real-life context, especially when (2) the
boundaries between the phenomenon and context are not clearly evident” (Yin,
1994,p.13)

The case study is a separate research study that may or may not include
observation (Clark et al., 1998). The approach requires its own research design,
dependent on the questions the researcher seeks to answer. Problems with the
case study often concern where to begin and where to end the case being
analyzed (Clark et al., 1998). As a general guide, regardless of the complexity of
the problem or process, once the issue or problem area is defined, the
parameters of the unit of analysis, the case study should be clear (Clark et al.,
1998)

Case study strategy should not be confused with qualitative research (see
Schwartz 8. Jacobs, 1979; Strauss 8. Corbin, 1990; Van Maanen, 1988). A further

note is that some researchers have delineated between quantitative research and

42

qualitative research, based on a different philosophy (Cuba 8. Lincoln, 1989;
Sechest, 1991; Smith 8. Heshusius, 1986).

An example of generalizations drawn from a case study is Richter’s (1994)
study of the 1982 World’s Fair in Knoxville, Tennessee.

This revealed severe political problems which arose because of the speed

at which the infrastructure was developed and which led the host

community to be caught up in an inflationary spiral and housing squeeze
which resulted from this development. A message perhaps for host cities

seeking these large mega events. (Clark et al., 1998, p. 102)

Case studies can be single or multiple case study design, depending on
the reason the subject was chosen and how much external validity is necessary.
Single case studies work well for testing an already well formulated theory, or
studying a unique phenomenon. Multiple case studies, whereby a number of
case studies are investigated, may prove valuable in comparing and contrasting
findings (Clark et al., 1998).

One cannot generalize from a case study in the same way one can from a
statistical analysis. However, one can “test” theories already existing through a
comparison of the results of the study, and the results of that comparison can
strengthen the validity of the theories, help identify other cases, refine theory, or
contribute to falsifying the theory (Clark et al., 1998).

Problems often associated with the case study include lack of rigor of case
study research and sloppy work on the part of the investigator, allowing more
room for investigator bias. These problems also occur in experimental research

and survey research (Rosenthal, 1966; Sudman & Bradbum, 1982); however,

they may occur with more frequency in case studies (Yin, 1994). Further, case

43

studies do not allow for scientific generalizations (Kennedy, 1976; Yin, 1994).
Also, case studies often take a long time and result in massive, cumbersome
documents (Yin, 1994). Finally, case studies are very difficult to carry out. The
necessary skills for doing good case studies have not been defined (Hoaglin,
Light, McPeek, Mosteller, & Stoto, 1982).

Yin’s (1994) Case Study Research guides researchers in search of using
the case study as a rigorous method of research. This revised edition further
clarifies, through examples, the critical role of theory, both in designing the case
study and in generalizing from cases. The use of triangulation as a rationale for
multiple sources of evidence is advocated. The first edition of Yin’s book (1984)
received attention from those doing social and psychological investigations,
evaluation research, and public policy studies, as well as business management
and international studies. The use of the case study as a research tool in
business schools developed. An appreciation of the complexity of organizational
phenomena for which the case study method may be the most appropriate
research method was recognized. According to Yin (1994), the case study is a
preferred method when the “how“ and “why“ questions are being posed by the
investigator, the investigator has little control over events, and when the
investigation focuses on a contemporary phenomenon within some real life
context. These are explanatory case studies. Descriptive and exploratory case
studies also are useful. Regardless of the type of case study, investigators must
exercise great care in designing and conducting case studies to overcome the

traditional criticisms of the method (Yin, 1994).

44

Summary

The literature review documented an explosion in convention center
development over the past 30 years on the part of cities across the nation, as
part of an urban development strategy to revive deteriorating downtown cores.
Various economic models attribute significant economic impact to convention
center development and convention tourism. Other authors have suggested that
convention center development is more about civic pride than economics.

The review of literature indicated a lack of research with regard to
convention center development. The industry’s reliance on feasibility studies
without follow-up evaluation of their findings points to multimillion-dollar decisions
being made by community decision makers with little assurance as to the
accuracy of the performance projections. Limited research on convention center
operations is available, with most operations research the domain of private
consulting firms. Little or no research is available on follow-up performance
evaluations of convention center projects. Large gaps exist in subnational
tourism research, with the convention segment in dire need of both applied and
basic research. Multiple case study analysis as a research methodology is a
defensible choice for the study and explanation of convention center

development, performance, and evaluation.

45

 

CHAPTER III

METHODS

As part of public policy making, public officials/decision makers across the
country have developed convention centers as urban and economic revitalization
approaches, commissioning feasibility studies to assist them in deciding whether
or not to build multimillion-dollar comprehensive convention center projects.
These megastructures cost millions of dollars, and in recent years have been
under increasing political pressure to be profit oriented. This profit orientation or
minimally break-even philosophy of operation has created a dilemma for the
facilities because, historically, convention centers, in an effort to market the
facility, have subsidized convention activity through low-rental-rate structures that
did not cover the operating expenses of the facility.

The intention of this research was to gain a better understanding of the
results of convention center development (and the role of the feasibility study in
the process), convention center operations and profit orientation, and how
convention center performance is evaluated. The methods employed include
using primary and secondary data to investigate the feasibility study process,
documenting feasibility study projections and comparing them to actual operating

performance at the convention center, and using secondary data to compile and

46

document facility operating performance and event activity. In addition,
interviews with decision makers, public officials, and facility managers were
conducted to obtain information on how facility performance was evaluated. The

method of choice was case study investigation.

Research Design

Case study research designs have not been codified. Unlike other
research strategies, the potential “catalogue” of research designs for case
studies has yet to be developed (Yin, 1994). In Case Study Research. Design
and Method, Yin (1984, 1994) prescribed a basic set of research designs for
doing single and multiple case studies to help investigators design more rigorous
and methodologically sound case studies. The five key components of a
research design that are especially important are: (a) the study’s questions; (b)
its propositions, if any; (c) its unit(s) of analysis; (d) the logic linking the data to
the propositions; and (e) the criteria for interpreting the findings (Yin, 1994). In
this study, the researcher used Yin’s model of methodology to the extent possible
in the research design.

Case study designs fall into four types: single case (holistic), single case
(embedded), multiple case (holistic design), and multiple case (embedded
design) (Yin, 1994). The research design for this study was an explanatory, as
Opposed to exploratory or descriptive, multiple-case study.

The evidence from multiple cases is considered to be more compelling

than that from a single case study, which typically is chosen for its rare or

unusual nature. In multiple-case research, each case serves a specific purpose

47

within the overall scope of inquiry. One considers the multiple cases as one
would consider multiple experiments-that is, to follow replication logic.
Replication logic in multiple case studies calls for each case to be carefully
selected so that it either: (a) predicts similar results (a literal replication) or (b)
produces contrary results but for predictable reasons (a theoretical replication)
' (Yin, 1994).
An important step in all these replication procedures is the development of
a rich theoretical framework. The framework needs to state the conditions
under which a particular phenomenon is likely to be found (a literal
replication) as well as the conditions when it is not likely to be found (a
theoretical replication). The theoretical framework later becomes the
vehicle for generalizing to new cases. (Yin, 1994, p. 46)
An illustration, adopted from the research of Yin, Bateman, and Moore
(cited in Yin, 1984) for this research, is found in Figure 3.1. The initial steps
consist of theory development, case selection, and the definition of specific
measures. Each individual case study consists of a “whole” study, in which
convergent evidence is sought regarding the facts and conclusions for the case;
each case’s conclusions are then considered to be the information needing
replication by other individual cases. Both the individual cases and the multiple
case results were the focus of the report. Each separate case Indicates how and
why a proposition was demonstrated (or not demonstrated). Across cases, the

report indicates the extent of the replication logic and why certain cases have

predicted results and other cases have contrary results (Yin, 1994).

48

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Stud uestions

The heart of the case study method protocol is the study questions. The
characteristics of the case study questions differ from those of the survey
interview in two ways. The main purpose of the questions is to keep the
investigator on track as data collection proceeds. The questions form the
structure of inquiry and are not intended to be used as literal questions to be
asked of interviewees. Each question is accompanied by a list of probable E P'
sources of evidence. Sources may include individual interviews, documents, or i
observations. Empty “table shells" also may be included to help the investigator i
identify exactly what data are sought, to ensure that parallel information is
collected at the different sites, and to aid in understanding what is to be done with
the data once they are collected (Yin, 1994).

The researcher sought to find answers to the following questions from
case study investigations of public convention center projects.

Research Question 1: How close are the feasibility study estimates of
key performance measures to the actual operating results?

Sources of data:

1. Convention facility director.

2. Convention center feasibility study.

3. Convention facility records of annual performance measures.
Strategies:

1. Create a table and compare feasibility projections/estimates of

occupancy, event usage by size and type, revenues, expenditures, debt-service

subsidies, and other contractual arrangements to a typical year of operation.

50

2. Analyze interview responses to performance-measure section Items
8a, 8b, and 9:

Item 8a: How important are the findings of the feasibility study in the
development of convention facilities?

Item 8b: In your opinion, on a scale of 1 to 10, with 1 being Not accurate

at all to 10 being Extreme/y accurate, how would you rate the estimates!
projections given in feasibility-analysis studies for convention centers?

Explain.

Item 9: Has the [city name] convention center’s operating performance
closely resembled the feasibility-study estimates of the facility’s potential
for performance? Explain.

Research Question 2: How has the development of the convention
center contributed to downtown economic development?

Sources of data:
1. Community information—newspaper, city and county planning

documents, Chamber of Commerce information and annual reports.

2. Planning and economic development reports and documents.
3. Interview responses to Items 5a, 5b, and 6a.
Strategies:
1. Compare downtown area/activity pre and post convention center

development in central business district and/or in proximity to convention center.
2. Number of new and/or lost businesses reported from chamber, city
planners, convention management, and interviewees.
3. Number/types of new buildings or businesses surrounding the

convention center.

51

4. Review economic indicators of area’s economic health-number of
jobs, number of businesses, number of convention-quality hotels, number of
restaurants, tax base, economic development, and/or chamber annual business
reports.

Research Question 3: Are the attitudes and expectations for facility

performance of public officials, decision makers, and facility

managers compatible with the mission statement and/or operating
objectives of the convention center?
Sources of data:

1. Interview responses to Items 2a, 3, 4, 10a, and 10b:

Item 2a: In your opinion, what is the mission or objective of the
convention center?

Item 3: On a scale of 1 to 10, with 1 being Does not meet the mission or
objectives at all and 10 being Totally meets the mission or objectives of the
center, how do you rate the convention center?

Item 4: What specific standards of measurement do you use to evaluate
the operating performance of the convention center?

Item 10a: On a scale of 1 to 10, with 1 being Extremely unsuccessful and
10 being Extremely successful, how would you rate the operating
performance of the convention center? Explain.
Item 10b: In evaluating convention center performance, what do you
consider the determinants of success for convention center operation and
development?
2. Convention center/legislative-body documents regarding mission
statement/objectives.
Strategies:

1. Compare the interview responses to questions regarding the

mission or objectives to questions or standards of measurement and questions of

52

success or failure of development against the formal mission statement and/or
objectives.

2. Analyze stated mission/objectives to operation and marketing
practices, evidencing congruency or not.

Research Question 4: How do public officials, decision makers, and

facility management evaluate operating performance of the
convention center?

Sources of data:
1. Industry publications.
2. Convention center feasibility studies.
3. Review of literature, secondary data sources.
4. Interview responses to item 4:

Item 4: What specific standards of measurement do you use to evaluate
the operating performance of the convention center?

Strategies:

1. Document interviewees’ responses to performance questions with
regard to the convention center.

2. Compare interviewees’ responses to industry publication literature
and feasibility study performance measures.

3. Analyze interviewees’ evaluations of facility performance in relation
to accepted industry standards.

Research Question 5: What are the determinants of success for

convention center operation and development according to public
officials, decision makers, and facility management?

53

Sources of data:

1. Interview responses to Items 7, 10a, 10b, and 11:

Item 7: Knowing what you know today, what, if anything, might be done
differently in the development or operation of the convention center?
Explain.

Item 10a: On a scale of 1 to 10, with 1 being Extremely unsuccessful and
10 being Extremely successful, how would you rate the operating
performance of the convention center? Explain.

Item 10b: In evaluating convention center performance, what do you
consider the determinants of success for convention center operation and
development?

Item 11: Please discuss anything else you think is important to [city name]
convention center development and operation with regard to operating
performance or economic development.

2. Industry articles and publications on current industry practices of
performance.

3. Literature review, secondary data from convention center studies.

4. Content analysis of local newspaper coverage of convention center.
Strategies:

1. Document the responses to Items 10a and 10b regarding success

or failure and explanation given for rating.
2. Relate responses to Items 7 and 11 and 10a and 10b, looking for
evidence of congruency and logic.
Research Question 6: Have the mission and objectives of the
convention center changed over time?
Sources of data:

1. Interview responses to Item 2b:

Item 2b: Has the mission or objectives of the convention center changed

over time?
2. Convention facility internal records.
3. Legislative body, city, and county documents.
4. Convention center annual reports (if available).
Strategies:
1. Document actual formal changes by statement and explanation.
2. Document informal changes re: interviews.
3. Document and analyze differences in responses to questions by

position or relationship to convention center.
4. Analyze marketing and operation practices in relation to mission
and objectives.
Research Question 7: How positive or negative do public officials,
decision makers, and facility management believe public opinion is
regarding the success or failure of the convention center?
Sources of data:
1. Interviewees’ responses to Item 6b:
Item 6b: On a scale of 1 to 10, with 1 being Extremely negative and 10
being Extremely positive, how positive or negative is public opinion
regarding the convention center’s performance?
2. Content analysis of local newspaper-article coverage of the
convention center.
3. Any previously conducted public opinion survey regarding the
convention center.

4. Results of any initiatives, voting on referendums, or elected

legislative body positions regarding facility operation or development.

55

Strategies:

1. Document explanations of the interviewees’ perceptions of
convention center development and how those relate to their perceptions of
public opinion regarding convention center development and/or operation.

2. A rating system for the content analysis (+++ (3) extremely positive,
H (2) very positive, + (1) positive, (0) neutral, - (-1) negative, - (-2) very
negative, -— (-3) extremely negative) was used to categorize newspaper print
about the convention center. This analysis of content was subjectively judged by
observation of the newspaper headline and the main content of the article. The
analysis consisted of as many articles as were available in the study time frame
(10 to 15 years of information). The results of the content analysis were then
plotted on a time-series trend line documenting the positive/negative nature of
reporting to the public about the project over time.

3. Observation by story type or topic also was analyzed, i.e.,
marketing, finances, budget, and so on.

Research Question 8: How similar or dissimilar are more recent (late

1980s to 19903) feasibility studies of convention center projects to

the feasibility studies conducted for these cases?
Sources of data: Current (1988-1998) feasibility studies from various consulting
firms, obtained through inter-library loan.
Strategies:

1. Prepare a checklist/table to compare current scope, content,
utilization, and financial estimate/projection techniques with past studies used in

this research.

56

2. Compare the process and methods used in the more current studies
with those of the older feasibility studies used in this research.
3. Document the difference between past feasibility studies for

convention center projects and current feasibility studies.

Studv Propositions

The study propositions in the case study direct attention to something that
should be examined within the scope of the study. Propositions are more than
the “how" and “why” queries reflected in the research questions. They reflect
what should be studied, what important theoretical issues the study addresses
and suggesting where to look for evidence. The following propositions were the
underpinnings of this study and are followed by an explanation of how and where
the evidence to analyze these propositions was found.

Promsition 1. The linkage between what the feasibility study estimates of
performance projected prior to convention center development and actual post-
development operating performance is weak. The data and analysis of Research
Question 1 were used to support or refute Proposition 1.

Research Question 1: How close are the feasibility study estimates of key
performance measures to the actual operating results?

Proposition 2. The positive or negative perceptions that community
decision makers, public officials, and facility management have regarding the
convention center development have very little to do with the convention center‘s
post-development operating performance. The data and analysis of Research
Questions 1, 2, 5, and 7 were used to support or refute Proposition 2.

Reseagh Question 1: How close are the feasibility study estimates of key
performance measures to the actual operating results?

57

W How has the development of the convention center
contributed to downtown economic development?

Regamh Question 5: What are the determinants of success for
convention center operation and development according to public officials,
decision makers, and facility management?

Reseerch Question 7: How positive or negative do public officials, decision

makers, and facility management believe public opinion is regarding the

success or failure of the convention center?

Proposition 3. The attitudes and expectations of facility performance by
public officials, decision makers, and facility management are incompatible with
the mission statement and/or operational objectives of the convention center.
The data and analysis of Research Questions 3, 4, and 5 were used to support or
refute Proposition 3.

Research Question 3: Are the attitudes and expectations for facility

performance of public officials, decision makers, and facility managers

compatible with the mission statement and/or operating objectives of the
convention center?

Research Question 4: How do public officials, decision makers, and facility
management evaluate operating performance of the convention center?

Research Question 5: What are the determinants of success for

convention center operation and development according to public officials,

decision makers, and facility management?

Proposition 4. The development and operation of convention facilities in
secondary or tertiary markets are fraught with postoperational difficulties rarely
addressed in preoperational feasibility studies. The data and analysis of

Research Questions 4, 5, 6, and 8 were used to support or refute Proposition 4.

Research Question 4: How do public officials, decision makers, and facility
management evaluate operating performance of the convention center?

Reeeareh Questien 5: What are the determinants of success for
convention center operation and development according to public officials,
decision makers, and facility management?

58

R h ti n 6: Have the mission and objectives of the convention
center changed over time?

Reseergeh Question 8: How similar or dissimilar are more recent (late
1980s to 19903) feasibility studies of convention center projects to the
feasibility studies conducted for these cases?

Proposition 5. Over time, economic and political pressures change the
mission and objectives of the convention center from its original development and
operation purposes. The data and analysis of Research Questions 3, 4, and 6
were used to support or refute Proposition 5.

Reseerch Question 3: Are the attitudes and expectations for facility

performance of public officials, decision makers, and facility managers

compatible with the mission statement and/or operating objectives of the
convention center?

Research Question 4: How do public officials, decision makers, and facility
management evaluate operating performance of the convention center?

Research Question 6: Have the mission and objectives of the convention
center changed over time?

Selection of Cases

The scope of the research was confined to:

1. Publicly owned and managed, comprehensive convention centers
that were designed and developed for the main purpose of bringing national and
regional conventions and trade shows to the area to provide economic benefits to
the community and state. The majority of convention centers in the United States
are publicly, not privately, developed. The majority of facilities are managed
publicly, although the trend toward publicly owned, privately managed facilities
has been growing. Excluding hotel exhibit space, five out of six facilities are
owned by a city, county, state, or government authority (Igor Exhipit Hall

Directopy, 1993, p. 268). The secondary data needed for the study were more

59

readily available because the information was “public,” not proprietary, as is often
the case with privately owned or managed facilities.

2. All of the facilities chosen were designated as convention centers in
the name of the facility. The name designation as “convention center“ is
significant because it indicates the main purpose of the facility in the name, as
opposed to a multipurpose center or facility complex, which, by design and
priority, encourages civic, sport, and entertainment use for local residents’
enjoyment. These “civic” facilities are part of the community’s cultural complexes
and fill an important but very different function for the community than do
convention center facilities.

3. The comprehensive convention centers selected for the study had
been built since 1980. The boom in convention center development across the
country started in the 19705 and has continued through the 19803 and 1990s.
The building-obsolescence factor was a consideration in determining which
facilities to include as possible case studies. Many facilities built before 1980
have had or are in the process of major renovation and expansion to keep them
competitive. These facilities were not considered as possible cases for selection
because closings that occur during facility renovations are disruptive and make
the measures of performance before, during, and after the renovation unstable
and not typical.

4. The facilities selected for the study were of average size or at least
50,000 square feet of exhibit space and no more than 250,000 square feet of
exhibit space (considered medium-sized facilities in a categorization of small,

medium, large, extra-large, and mega facility—more than 1 million square feet).

60

The majority
mmmoda‘
lage or me;

An in\
litacilities l
between 10(
75,300 to 9E
74,999 squa
mare feel I
are general;

5.
years, The:
years marks
Dcslure, Ti

330500,],

6.
faClilIIES ll'l‘
mashing
imPast fro”
really iCIng

I . .
liege, "1ft;

The majority of conventions and trade shows held in this country can be
accommodated in a facility of this size. Only a small percentage require extra-
large or mega facilities of 500,000 to 1 million-plus square feet.

An inventory of exhibit facilities across the United States shows that: (a)
1 6 facilities offer 500,000+ square feet of exhibit space, (b) 116 facilities range
between 100,000 and 499,000 square feet of exhibit space, (c) 40 facilities offer
75,000 to 99,999 square feet of exhibit space, (d) 45 facilities offer 50,000 to
74,999 square feet of exhibit space, and (e) 30 facilities offer 25,000 to 49,999
square feet of exhibit space. Hotels also offer exhibit/ballroom space, but these
are generally privately held and were not the subject of this research study (M
W. 1993. r1268)-

5. The convention center must have been in operation for at least 5
years. The 5-year mark was chosen to allow for the facility to be over any initial-
years marketing lags and operational difficulties and to be in a typical operating
posture. This allowed facilities built through 1991 to be included in the study.
The request for information from the facility on a typical year of events, revenue,
and so on, was for the year 1996 for all facilities.

6. The facility must be in an emerging, not primary, market. The
facilities in the primary markets typically are in the enviable position of demand
outweighing supply. These convention centers, while having high economic
impact from visitor expenditures as a result of events held in their facilities, are
really icing on an already economically rich cake, supported by an exciting city

image infrastructure, support facilities, and convenient airport access.

61

 

 

Convenfi
waists for ‘30
emeiglng mark
visitation of ‘0':
gatherings “‘
As the r
competition to
cities are n0 “
mention ca
lazily was St
Given
tom SOOOOI
operated, is a
buildings wit?
markets the l
approximate
Stadium Gui
\
The f:
examination
Nonn
Roch
Tole:
The c
lei

sllowin:

Convention centers in secondary or tertiary markets often are built as
catalysts for economic development and increased economic benefits. In these
emerging markets, the development of a convention center is hoped to further the
visitation of tourists to the community through convention and trade show
gatherings. It becomes the reason visitors come to the community.

As the market becomes more saturated with large convention centers,
competition for convention groups increases. Huge exhibit halls in medium-size
cities are no longer a unique offering. As a result, more and more of these
convention centers are struggling to bring in the desired economic benefits the
facility was supposed to bring to the area.

Given the above-mentioned considerations, the total number of facilities
from 50,000 to 250,000 square feet of exhibit space, publicly owned and
operated, is approximately 75. Excluding facilities built before 1980 and those
buildings with fewer than 5 years of operating data, in secondary and tertiary
markets the pool of potential convention centers for case study research is
approximately 20 facilities (Meetings and Conventions. Gavel. Aud-Arena
W, and Major Exhibit Hall Directory).

The following three convention centers were selected for case study
examination:

North West Georgia Trade and Convention Center, Dalton, Georgia

Rochester Riverside Convention Center, Rochester, New York

Toledo SeaGate Convention Centre, Toledo, Ohio

The convention centers met the aforementioned delimitations, as well as

the following important reasons:

62

 

1, T
to be studied t
thorough inve:

mnsideration:

they were loc:
the researche
3.
he Northeast
4.
diversified eel
Uimtlunity a
5.
image,
6.
minder:
in

financial

8e.

ital/5,3 n5

vi

 

1. The pilot study led the researcher to decrease the number of cases
to be studied from the seven originally planned to three, to allow for a more
thorough investigation of each case and to meet time and financial
considerations.

2. These convention centers were chosen because the cities in which
they were located were within one to one-and-a-half day’s driving distance from
the researchers home.

3. The cities represented three distinct geographic areas: the South,
the Northeast, and the Midwest.

4. The cities were not tourism “dependent,” and they had healthy,
diversified economies. Convention center development was not the only

opportunity available for economic development.

5. The facilities’ main exhibition halls were similar in terms of square
footage.
6. The feasibility studies for the convention centers had been

conducted by different consulting firms.

The three convention centers also were chosen because of time and

financial constraints on the researcher.

Instrumentation
Secondary and primary data were collected to achieve the depth of
analysis needed to address the objectives of the study referring to the feasibility
estimates and actual operating performance for each case. ln-depth, face-to-face

interviews were conducted to address the objectives referring to perceptions,

63

attitudes. and c
management.
oenter was per
telephone inte
oenterleasibili
practices for o
The res
centers. Figur
the sources of
aProcess of tr
measures of s

in, 1994).

an

elite 3.2 Ci
Q88 Study (Sll

attitudes, and opinions of public officials, decision makers, and facility
management. Content analysis of the local newspaper print about the convention
center was performed. Finally, secondary data/actual studies and, if needed,
telephone interviews with firms/cities that recently had conducted convention
center feasibility work were used to document current industry standards and
practices for convention center feasibility studies.

The researcher used multiple sources of evidence in studying convention
centers. Figure 3.2, adapted from Cosmos Corporation (Yin, 1994), depicts how
the sources of evidence used in the research develop converging lines of inquiry,
a process of triangulation. Multiple sources of evidence provide multiple

measures of some phenomenon, addressing problems with construct validity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Yin, 1994).
Documents .
Content Archlval
analysis records
a. i /
FACT
Observations I T K Focused
direct telephone
Structured interviews
interviews
and surveys

 

 

 

FiQure 3.2: Convergence of multiple sources of evidence in convention center
case study (single study). From Case Study Research Design erg Methode (2“d
9d). by R. K Yin, 1994. Thousand Oaks, CA, Sage.

64

The St
depth, lace'l
g thering- L
participant it
were seiectE
In ea

mayor and/<
specialist. a
mnvention
were sougi
recommen:
interview re

interviewee

suggestior

interviewe:

Fro

most often

interviews

interview I
interviews
informatio

Wilhelm

gate-Collection Methods

The scope of this research required primary and secondary research. In-
depth, face-to-face focused interviews were the primary method of information
gathering. Letters of introduction and a copy of the questions posed to each
participant may be found in Appendixes A and B, respectively. The interviewees
were selected by position and by reputation or relationship with the case.

In each city, the initial interviews were set with the facility director, the
mayor and/or city administrator, the city planner and/or economic development
specialist, and a public official elected to the governing legislative body,
convention visitors’ bureau (CVB), or chamber of commerce. The interviews
were sought with the highest-level persons in these offices or those persons’
recommendations of the “best” or more knowledgeable individual in that office to
interview regarding the convention center. At the close of the interview, the
interviewee was told who was scheduled for interviews and was asked for
suggestions of three or four other persons in the community who needed to be
interviewed to gain a better understanding of the case.

From the suggestions of the initial interviewees, those names appearing
most often as suggestions to interview were targeted as participants, and
interviews were scheduled with them. This process is commonly referred to as
interview by reputation. The expectation was that between 5 and 12 face-to-face
interviews were necessary in each city. The cut-off was determined when no new

information or viewpoints were coming forth in the investigation and the

information being received became repetitive.

65

mes”
weirdest”il
“Walton cat

1' E
oonsttudion' I
However. 85 if
law. kept for 9*
invest?ation n

following

senter departr
orrtjeCt-t‘éVl‘eW
by the (tenant
2.
intonnation a!
Show Week‘s
M Urbar
1990).
3.
intonation: r
bu

cyst and fi

The secondary data necessary to investigate the study questions and to
provide multiple sources of evidence to assist in the analysis of the interview
information came from the following sources:

1. Feasibility studies. These studies are conducted before

 

construction. Many of the cases and documents are 10 to 15 years old.
However, as they are considered part of a public project, the documents are, by
law, kept for public record and review by the government body. Preliminary

investigation revealed that these documents may be found in one or all of the

following:
a. City, county, or state libraries.
b. City/county planning commission libraries, or department libraries.
c. Budget, finance, economic development, planning, and convention

center departments typically are issued copies of the feasibility study during the
project-review phase. The availability of these documents usually is determined
by the department that retains them.

2. Industg information. Various industry publications provide
information about convention center facilities and trends. These include Trade
Show Week’s Mejor Exhibit Hall Directory. Aud-Arena Stadium lntemetionel

Guide, Urban Land Institute Publications, and Meetings a_nd Conventions.

 

Introduction to the Convention, Exposition and MeetintLlndustrv (Rutherford,
1 990).

3. Qmmu1nitv information. The following sources provide community
irformation: newspaper archives, city or county directory, city telephone book,

budget and finance reports, convention center calendar of events, event-usage

 

records at the
objectives, anr
chamber of co
4. !
measures use
Event

(b) number oi
oi 'Othef eve
Avera
lnlmoveout .
Total conv.
Even:

W99, conver
Aver.
delegates tr
Anni

day added ’
BUIII

event multii
mebuildlng

Center pert:

records at the convention center, convention center mission statement and
objectives, annual reports, internal department marketing/operating records, and
chamber of commerce and city annual reports.

4. Performance evaluation measures. Performance evaluation
measures used in the study included the following:

Event use by type: Computed by adding (a) the number of conventions;
(b) number of tradeshows; (c) number of public consumer shows; and (CI) number
of "other" events.

Average event duration: Length of the event. does not include move-
inlmove-out days.

Total convention/tradeshow delegate days-number of attendees x event days.

Event days by type: Number of events x days of event for each event
type, convention, tradeshow, public consumer show days.

Average convention/tradeshow event size: Number of attendees or
delegates to events, and/or physical characteristics.

Annual attendance, all events: Number of persons using facility each
day added for each event all year.

Building occupancy: Total square feet of exhibit space used for each
event multiplied by the number of event clays divided by the total exhibit space in
the building by 365. Exhibition-space occupancy is used to gauge convention
center performance because the meeting rooms often are granted free of charge

in proportion to total exhibit space rented to convention and trade show groups

(Peterson, 1989).

67

 

Ar
divided b
Operating
different
monies a

IEVEHUE

restaure
area im
marketi

pfivate.

rEiluiri

Annual revenues-to-expenditures ratio: Annual operating revenues
divided by annual operating expenditures. This ratio indicates the amount of
operating revenues the facility generates, compared to the operating costs. The
difference, if negative (loss), is the annual operating deficit, which public tax
monies are pledged or required to cover. A ratio of 1.0 is the break-even point of
revenues to expenditures.

5. Community development measures: Support facilities (hotels,
restaurants in surrounding area), area appeal factors (hotels, airports, climate,
area image, transportation, and recreation), organizational/political structure,
marketing promotion organizations, community development initiatives, and

private-sector involvement.

Validity and Reliability Concerns

The research design of a study represents a logical set of statements and
requires certain logical tests. Four tests are common in social science research.
Yin (1994) identified several tactics for dealing with these tests in case study
research. According to Yin, an important revelation is that there are several
tactics to be used in dealing with these tests, and they should be applied through
the subsequent conduct of the case study. In the present case study research,
several of the aforementioned tactics were used to maximize quality control by

design.

Qonstruct Validity

Ensuring construct validity involves establishing correct operational

measures for the concepts being studied. The case study tactic used multiple

68

 

sources of BI

research pha

lntereal Vali'

lnterr
not in descri
relationship
distinguishe
explanation

validity_

EHSI
findings trc

retiitcallcm

eternal v;

Ryabilii
Est.
Study‘ Soc
VESults, T
developec

catissue.

sources of evidence and established a chain of evidence in the data-collection

research phase to increase construct validity.

Lntemal Vaiditv

Internal validity is established in explanatory or causal studies only, and
not in descriptive or exploratory studies. It is used in establishing a causal
relationship, whereby certain conditions are shown to lead to other conditions, as
distinguished from spurious relationships. The case study tactic used
explanation building in the data-analysis research phase to increase internal

validity.

Extemg Validity

Ensuring external validity involves establishing the domain to which the
findings from the study can be generalized. The case study tactic used was
replication logic in multiple-case studies in the research design phase to increase

external validity.

MM!

Establishing reliability involves demonstrating that the operations of a
study, such as the data-collection procedures, can be repeated, with the same
results. The case study tactic used to address reliability was to use a well-
developed case study protocol and develop a case study data base during the

data—collection research phase.

69

E
Toledo. ‘
meeting r

OWa‘ilor

The Univ

CHAPTER IV

THREE CASE STUDIES AND CROSS-CASE
COMPARISON OF FINDINGS

Case Study One: The SeaGate Convention Centre
in Toledo. Ohio
Description/Background
fiepfly. The SeaGate Convention Centre opened in 1987 in downtown
Toledo. The facility has 75,000 square feet of column-free exhibit space and 21
meeting rooms (see Figure 4.1). The facility operates as a 501 (c)(3) nonprofit
operation. Thirty full-time and 75 part-time staff are employed by the center.
The University of Toledo owns and operates 30% of the space, predominantly
the meeting rooms. Two hotels flank the convention center, and together they
have 622 available rooms. The parking lot under the facility has 700 spaces,
and several public parking lots are within walking distance of the SeaGate
Convention Centre.
Location. Toledo is a midwestern city that has experienced an economic
tumabout in the past few years. Toledo is the seat of Lucas County and has a
metropolitan-statistical-area population of 600,000. Located on the western
edge of Lake Erie, the Toledo area has a strong manufacturing base of glass,

PIastics, primary metal, fabricated metal, and automotive assembly, parts, and

70

 

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in. 1‘
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t ~ g . -
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\ .

.‘iloveable .g. Office * Registration Counter

 

 

 

 

 

   
     
 

 

I
I
_ I aoaulndproof A Box Office * Concessions
"_ Superior Street : Elevator 0 Rest Rooms 0 Pay Phones
Railing _%> Escalator 'I' First Aid 0 SECUFIIY
‘ L'niI'ersitv of Toledo
Q Covered E- S E] at SeaGate Centre
‘3, Storage Docks :2 [Iii
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25,000 sq. It. I 25,000 sq. It. I 23.0th sq. ft, ”D
I

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ItiIIIII ‘
E
7

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Hotel Hotel
Walkway Summit Street Walkway
Kitchen
I: . . Citiwalk
l ' ' O
.3. 9.9.3..
204
-399
. . .. 208
Exhibit Hall Ceiling El!)
207 Level Three
L309
211
I 0:.

 

 

 

 

' i o [‘1‘ :u git I
Second Balcon? Level

Level Two
FiQure 4.1: Floor plan of the Toledo SeaGate Convention Centre.

I— O
lirtiuxtlk

O

 

71

 

 

productio
Corporati
Lucas Cc

A;
MthO
interstate
Express,

Michigan

rmdtonh
mOderate

issaorr

If?

and pern-
1997.00l
tanked at

Valent'

production. Jeep, Dana Corporation, Owens Illinois, lnc., Owens Corning
Corporation, Tunova Corporation, and Libby, Inc., all have headquarters in
Lucas County. The area also has 13 financial institutions.

Approximately one-third of the population of the United States resides
within 500 miles of the county. Northwest Ohio is strategically located for
interstate, rail, and seaport access. The area is serviced by two airports: Toledo
Express, 30 minutes from downtown, and Detroit Metropolitan Airport in
Michigan, 50 minutes away. (See Figure 4.2)

Qli_m_at_e. The climate of Toledo is characterized as moderate due to its
mid-continent location and close proximity to Lake Erie. The area experiences
moderate rainfall, snowfall, and temperatures. The average annual temperature
is 58.6°F.

Culture and recreation. Toledo’s Museum of Art displays both traveling
and permanent exhibits. The Center of Science and Industry (COSI) opened in
1997, one block from the convention center. The Toledo Zoological Gardens is
ranked among the top-10 zoos in the country. A recently renovated theater, the
Valentine, in downtown Toledo is home to the Toledo Opera, ballet, and theater.
Toledo’s symphony is nationally recognized. Toledo has two semi-professional
teams. They are the Mud-hens baseball team and the Storm hockey team.

The Maumee Bay State Park, 1,860 acres of land on Lake Erie, has

beaches, public golf courses, and a resort and conference center on the
outskirts of Toledo. Lucas County has 17 private and public golf courses and

has hosted both PGA and LPGA tournaments. The availability of rivers, takes,

72

 

 

  
 

Direction Map to
Downtown Toledo

”3

 

4

 

 

 

 

 

 

FIQUre 4.2: Map of Toledo.

73

 

and quarri
skating or
In
Village. a
cost of liv
Q
costing S
portion, r
ITLCCVI
Convent
early 19
Corpora-
bonds ti

and ma
Industr

indI‘i’ldi

and quarries makes sailing, boating, swimming, fishing, waterskiing, and ice
skating popular activities.

The city is an hour’s drive from Cedar Point Amusement Park, Dearbom
Village, and the Henry Ford Museum. Toledo residents enjoy a relatively low
cost of living, and Toledo leads the state of Ohio in per capita income growth.

Organization. SeaGate Convention Centre is a public facility in Toledo,
costing $42 million to build. The University of Toledo owns the meeting-room
portion, and the Toledo-Lucas County Convention and Visitors Bureau
(TLCCVB), comprising SeaGate Convention Centre and the Greater Toledo
Convention and Visitors Bureau (GTCVB), owns the rest of the facility. In the
early 1980s, the TLCCVB incorporated as a private 501(c)(3) not-for-profit
corporation to build and manage the SeaGate Convention Centre. When the
bonds that financed the facility are paid in full, Lucas County will own the portion
of the facility now owned by the TLCCVB.

The GTCVB is housed in the SeaGate Convention Centre. It represents
and markets northwestern Ohio and components of the travel and tourism
industry in northwestern Ohio. The GTCVG employs 10 full- and part-time
individuals.

Financing. The financing for construction of the SeaGate Convention
Centre was not a traditional pattern of local government financing. “Lucas

County contributed eight million to purchase land where the facility is located.
The city of Toledo was prohibited by section 79 of the Toledo City Charter from
funding the construction of a convention center. An attempt to repeal the

legislation was turned down by city voters” (Citizen Study. 1996, p. 3).

74

revenue
oltundi
finance
the bor
steam
residu:

GICV

C0th:
Of T.
We
tun:
an:

IUE

The TLCCVB Board of Trustees set a precedent in the state of Ohio when
revenues from the hotel/motel tax, which before 1985 had been the main source
of funding for the CVB, were dedicated to making payments on the bonds that
financed facility construction. The dedication of this tax cannot be changed until
the bonds are retired (the year 2014 ) or are financed with another revenue
stream. The revenues from the tax are used to pay off the bonds, with the
residual revenue distributed between the SeaGate Convention Centre and the
GTCVB. The residual does not cover both the operating deficit of the SeaGate
Convention Centre and the promotional expenditures of the GTCVB (meg
M. 1996, pp. 3-4).

A “gentlemen’s agreement” was reached between the county and city to
fund the SeaGate’s deficits in the first 3 years of operation. The agreement was
never formalized, and as political leadership changed in the city from a city
manager to a strong mayor form of government, so too did the city and county’s
commitment to the facility. Since 1990 there has been no subsidy from the City
of Toledo or Lucas County for the operating deficit. Cash reserves were used to
cover the deficits. The GTCVB suffered, having no dedicated, consistent
funding source with which to market Toledo and the convention center. In
addition, Radisson Hotels defaulted on a Urban Development Action Grant
(UDAG) loan repayment, and the TLCCVB Board wrote off $7.4 million in debt.

This $7.4 million plus interest would have been direct bond retirement, freeing
the hotel/motel tax from debt commitment. A recent review of the SeaGate
Cehtre’s financial condition predicted it would be broke if measures were not

taken to correct funding for the center.

75

Interview
we Us
re cor

Q
uestior

c

Peratin
p .
IOJeCIIC

tc‘
LaI deI

Interviews onducted
Using the interview by position and reputation process, six interviews

were conducted in Toledo, Ohio. (See Appendix C, Interview Responses,

Question 1.)

Study Questions

Research Question 1: How close are the feasibility study estimates
of key performance measures to the actual operating results?

Table 4.1 provides a comparison of the SeaGate Centre’s actual
operating performance, in a stabilized year of activity, to the feasibility study

projections of performance for event use, event duration, event days by type,

total delegate days, and convention/tradeshow size.

The facility’s performance for event use by type indicates that the facility
was hosting 36 more conventions, 2 more tradeshows, and 5 more consumer

shows than the feasibility projections for these events on an annual basis (see

Figure 4.3).
The average event duration or the number of days each event occupies

the building, excluding move-in and move-out days, was 2.5 for conventions, 1
day less than the feasibility study projection; 3.0 for tradeshows, 1 day less than

the feasibility study projection; and 2.25 for consumer shows, 1.25 days less

than the feasibility study projection.

Event days by type or the number of days the facility was occupied, by
tYpes of events, was 125 days for conventions, 77 more days than the feasibility

Study projection; 39 for tradeshows, 3 more than the feasibility study projection;

76

 

and 32 da

atotal of E

Table 4.1
cperati

I‘

Pl
Event Us
Conve
Trades
Consu

Tot:

ix
Average
Conve
Trade.

ConSt
i\

Event 0
Com
Trade
Cons

Q
Tom C
[Hagar
\
AVerag,
Size

h~._-
AHHual
K

Bllildin

'\
Annual

Ratio

 

 

 

 

 

and 32 days for consumer shows, 2 more than the feasibility study projection, for

a total of 82 additional event days in these types of categories (See Figure 4.4).

Table 4.1: Toledo SeaGate Convention Centre—Projected versus actual
operating performance in a stabilized year of operation.

 

 
   

 

 

 

 

 

 

 

 

 

 

 

 

 

Event Use by Type
Conventions 14 50 +36 +257%
Tradeshows 1 1 1 3 +2 +1 8%
Consumer events 8 13 +5 +62%
Total 33 76 +43 +1 30%
Average Event Duration
Conventions 3.50 2.5 -1 .00 -29%
Tradeshows 4.00 3.0 -1 .00 -25%
Consumer events 3.75 2.5 -1.25 -33%
Event Days by Type
Conventions 48 125 +77 +160%
Tradeshows 36 39 +3 +8%
Consumer events 30 32 +2 +6%
Total 1 14 196 +82 +72%
Total Convention/Tradeshow 76.985 58,438 -1 8.547 -24%
Delegate Days
Average Convention/Tradeshow 3,079 927 -2,152 -70%
Size
funual Attendance, All Events‘ - - -
Building Occupancy 59% 64% 5%
Aflhual Revenues to Expenditures .56 .61 +5
Ratio
\

 

*This information is not available.

The total annual delegate days for conventions and tradeshows was

53.438. This was 18,547 less than the feasibility study projection.

The average convention/tradeshow delegate size was 927. This was

2'1 52 less than the feasibility study projection.

77

 

FlStile

 

8

 

"l
O

 

 

l

 

 

l

 

 

Number of Events
8 8 a 8 8

10—

 

 

 

Conventions Tradeshows Consumer Events Total

Event Type

;:;s;:::;: Feasibility study projections
I Actual operating performance

 

CiQUre 4.3: Toledo SeaGate Convention Centre event use by type: Projected
er Sus actual operating performance in a stabilized year of operation.

78

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Conventions Tradeshows Consumer Events Total
Event Type

_ ., Feasibility Study Projections
I Actual Operating Performance

 

FiQLIre 4.4: Toledo SeaGate Convention Centre event days by type: Projected
Versus actual operating performance in a stabilized year of operation.

79

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The findings from the data in Table 4.1 indicate that the center hosted
more convention, tradeshow, and consumer show events than the feasibility
study estimated; however, these events were shorter and had fewer delegates in
attendance. This performance suggests that the convention center hosted many
small-size events that may not have required more than 25,000 to 50,000 square
feet of space. The majority of the conventions held at the facility were not

exhibit-intensive. The events were predominantly state or regional events, as
indicated by the short average duration of the shows. Activity reports of events
at the center support this finding.

Building occupancy and revenue-to-expenditure ratios suggest that a

considerable number of entertainment, sport, and “civic” events were hosted by

the facility.
The feasibility study performance projections for the facility were much

different from the actual facility operating performance, except with regard to
building occupancy and building revenues to expenditures. The feasibility study
PrOjected three building-size scenarios, recommending that Option C, a 100,000-
square-foot facility be built. The study cautioned that if a facility was built with
less than the 100,000 square feet of exhibit space, with at least 800 hotel rooms

aVailable nearby, the facility would not operate at the optimal levels needed for

the city/county to realize significant economic benefits.

The facility size developed was Option 8, 75,000 square feet of exhibit
space and 500 hotel rooms available nearby. This facility attracts few national

con\Ientions, which have the most economic impact, and hosts many

80

 

 

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conventions that do not have exhibits, or limited exhibits. These events are less
economically significant than conventions that have exhibits. Many of the events

hosted at the convention center could be hosted by a large hotel facility as they

do not require large exhibition square footage.

The interview responses to Questions 8a and 8b (see Appendix C) in the
performance measures section suggest that the decision makers, public officials,
and facility management often viewed most feasibility performance projections
with suspicion. Several of the responses to questions about the feasibility study
made reference to its political purpose as a public relations or sales tool to
convince and to help educate the public to the need to build the convention

center that the leaders in the community wanted to build. One long-time

government leader’s response to the question about feasibility studies’ accuracy

stated, “The job of the consultant is to be selected; the job of the leader is to

lead” (4T, Question 8b).
None of the respondents interviewed believed that the operating

performance feasibility projections resembled the facility’s actual performance,

With the exception of the building director, who indicated that the operating

shOrtfall predicted in the feasibility study was accurate.

Research Question 2: Has the development of the convention center
contributed to downtown economic development?

The information used to answer this question came from a variety of
SOL-|rces, including community economic reports, interview responses,

he‘ltISpaper and magazine articles, and on-site observation.

81

 

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Toledo, Lucas County, and the state of Ohio are experiencing new vitality.
Strong state, regional, and local economic initiatives are showing results. A few
years ago, Ohio was dubbed a rust-belt state, losing both corporations and
people to the South and West. Toledo and Lucas County are benefitting, adding
3,423 new jobs and $245 million in new public and private capital investments
committed to expansion and redevelopment projects. 'Several of the projects are
near SeaGate Convention Centre and have the promise of adding appeal to the
area as a meeting destination (Toledo Regional Growth Partnership, 1996) (see

Table 4.2).

The information collected indicates that the SeaGate Convention Centre
is an important piece to downtown Toledo’s economic revitalization. The
waterfront area where the convention center is located is experiencing much
QFOWth and change. However, it is difficult to point to the convention center as
the stimulus as opposed to a contributor to that growth. The major development
Created in anticipation of the convention center’s tourism/convention draw-the

Marketplace—failed. Additional convention/business hotel rooms did not
materiallze as expected in the years following the convention center opening.

Five of the six persons interviewed thought that the convention center had

cOntributed to downtown economic growth and revitalization (see Appendix C,
QueStion Ga). The most frequently cited examples were the COSI museum and
the Stadium. The dissenting viewpoint is expressed by attributing the growth to
9°09! economic times, the opening of the Owens Corning world headquarters

a(”has the street, and the waterfront location. The interviewees rated the city of

82

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Table 4.2: Downtown economic activity indicators for Toledo, Ohio.

 

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block from convention center, opened in
1996 in closed marketplace space; includes
diner

Marketplace retail development next to
center to invigorate downtown and cater to
convention/tourism business closes afterjust
2 years

 

Two new micro-breweries opened in 1996 in
downtown area

No additional convention hotel development
near convention center, available rooms for
convention business approximately the same
as before center was developed

 

Strip of buildings across from convention
center entrance is being revitalized as
businesses

Owens Corning headquarters has its own
training facility rooms, no longer requires
convention center space

 

Owens Coming’s world headquarters recently
Opened new building across from convention
center on the waterfront

Several downtown restaurants have closed
over the past few years, without replacement

 

Valentine Theatre renovation

Night-life entertaining activity downtown very
minimal; city appears to close down for nights
and weekends.

 

Downtown beautification/riverwalk
levelopment

Convention Center appears 'tired,’ not well
maintained for age of facility

 

Three extended-stay hotel properties to open
downtown

\

Toledo downtown area relatively clean for a
city, visually very typical of a medium-sized
midwestern city. Concrete, glass-void of
much vegetation or green area

 

3951 Western takes over Riverview Inn next
to Convention Centre
I\

Convention Centre recessed on block, not
prominently featured

 

Libby Glass opens within walking distance of
when Centre

 

N&Stadium proposed behind SeaGate

 

UniVersity of Toledo part owners of Center
OOnti
fies to grow

 

Ecol'Iomic development plans to develop
winmentlwarehouse district downtown

 

 

 

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Toledo’s image before convention center development was an average of 4.6 on
a scale of 1 to 10, and is an average of 8.5 today (see Appendix C, Questions 5a
and 5b). From the explanations given, this improvement in image of downtown
is seen at least in part by decision makers, public officials, and facility
management as due to the convention center development and activity it houses

in the downtown area.

Research Question 3: Are the attitudes and expectations for facility

performance of public officials, decision makers, and facility
managers compatible with the mission statement and/or operating

objectives of the convention center?

Interview responses to Questions 2a, 3, 4, 10a, and 10b, as well as
convention center documents, were used to answer and analyze this question.
According to the SeaGate Convention Centre’s 1997 Strategic Marketing
Plan Blueprint for the Future, “The stated purpose of the convention center
Continues to be to attract new convention and tourism dollars to the city and
r egion, and create new civic opportunities within the community.” The report

states the mission as:

1. To serve as an organization dedicated to the excellence in its

operation and service delivery.

2. To serve as a catalyst for economic development and stability for

TOledo and Northwest Ohio.

3. To serve as a positive force for the community identity and city

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Interview responses to Question 2a regarding the mission and objectives
of the convention center (see Appendix C) varied. An admixture of the most-
often-cited responses includes providing a facility for conventions, tradeshows,
and special events; creating activity downtown; and enhancing the image of
Toledo to outsiders.

The rating of the convention center in meeting its mission (Question 3,
see Appendix C), on a scale of 1 to 10, yielded an average rating of 8.1, with a
response range of 5 to 10.

The responses to Question 4—What specific standards of measurement
do you use to evaluate the operating performance of the convention center?—
were varied (see Appendix C). Activity and mix of events were the most
frequently cited standards used to measure operating performance of the
convention center. In rating operating performance for the convention center
(see Appendix C, Question 10a), the average rating among respondents was
7.25 on a scale of 1 to 10, with a range of 5.5 to 9.

In response to Question 10b—In evaluating convention center
performance, what do you consider the determinants of success for convention
center operation and development?—the building director specifically mentioned
meeting the stated mission of the convention center.

The responses suggest that the decision makers, public officials, and
facility director believe that the SeaGate Convention Centre is meeting its
mission by positively promoting the city, and hosting conventions, tradeshows,

and special events. The respondents placed an emphasis on profit-loss ratios

85

when considering the success of the convention center’s performance, rather
than activity type and numbers of delegates to conventions or tradeshows.

Research Question 4: How do public officials, decision makers, and

facility management evaluate operating performance of the

convention center?

The performance indicators frequently cited in convention facility
literature, strategic plans, and feasibility studies are (a) the number of
conventions booked per year by type-national, regional, and state; (b) the size
of the convention in terms of delegates and exhibits; (c) the average length of
stay for conventioneers; (d) the number of hotels and hotel rooms used by the
convention group; (e) the annual building occupancy for conventions/tradeshows
and other events; (f) the revenue-to-expenditure ratio; (9) the subsidy or profit
margin; (h) client evaluations of service; (i) the operations-to-budget personnel
ratio; (j) revenue-production resources such as catering, equipment rentals, and
so on; (k) contractual services; (I) union relations; and (m) public/political
support.

The responses to the interview survey question-What specific standards
of measurement do you use to evaluate the operating performance of the
convention center? (see Appendix C, Question 4)—varied. Mix of events and
activity were the most frequently cited specific standards of performance.

lnterviewees’ average rating of the convention center’s operating
performance (see Appendix C, Question 10a) was 7.25 on a scale of 1 to 10,

With a range of 5.5 to 9.

86

 

 

In

In

Research Question 5: What are the determinants of success for
convention center operation and development according to public
officials, decision makers, and facility management?

Convention facility literature, industry insiders, and governmental
organizations frequently use some or all of the following criteria to determine
operation and development success for a convention center: (a) the economic
impact or economic spin-off created by facility activities on the community, (b)
the generation of hotel room nights, (c) the amount of bed tax generation, (d) city
image/landmark, (e) revenue generator, (f) the number of convention and
tradeshow events hosted per year, and (9) user evaluation surveys. These
performance indicators differ significantly with the handful of privately owned
and operated convention centers that use profitability and service to customers
as measures of success (Ghitelman, 1995).

The interview responses to Question 10b—In evaluating convention center
performance, what do you consider the determinants of success for convention
center operation and development?—the most frequently cited determinant was
building occupancy, followed closely by financial performance, i.e., profit/loss or
revenue generation. As noted previously, respondents gave the convention
center an average rating of 7.25, on a scale of 1 to 10, on the success of the
operating performance of the convention center (see Appendix C, Question
10a)

Survey Question 7—Knowing what you know today, what, if anything,

might be done differently in the development or operation of the convention

center? Explain-gave respondents the liberty of using hindsight in assessing

87

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the operation and development process of the convention center. Respondents
were allowed to elaborate on the positive, negative, success, or failure issues
about the process if they so chose. The most common responses fell into the
following categories: financing, ownership, and marketing (see Appendix C).

Research Question 6: Have the mission and objectives of the
convention center changed over time?

The formal stated mission of the convention center had not changed since
its inception. The 1997 Strategic Marketing Plan for the SeaGate Center clearly
stated the continued mission of the center:

SeaGate states its purpose is to attract new convention and tourism
dollars to the city and region, and create new civic opportunities in the
community.

The mission statement for the 501 (c)(3) not for profit corporation,
formed to build and manage the facility is and remains:
* to serve as an organization dedicated to excellence in its operation and

service delivery
* to serve as a catalyst for economic development and stability for Toledo

and Northwest Ohio

* to serve as a positive force for community identity and city image. (p. 2)

The Strategic Marketing Plan states the goals to accomplish the mission
are as follows:

Goal 1: “To build SeaGate Convention Centre’s financial self-sufficiency
each year.” This is accomplished through more communication and partnership
with local hospitality providers, booking six new conventions that drive 250-plus
hotel rooms on peak nights, targeting financially attractive events to increase

profitability, increase banquet and concession revenues, and attend seven

marketing promotion trips to association meetings to target to meeting planners.

88

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Goal 2: “To build a customer-focused service delivery system that will
reinforce SeaGate staff as important members of the service team, and will
strengthen their knowledge about client needs.” This is accomplished through
soliciting user experience feedback, boosting service evaluation surveys from
30% to 70%, and instituting employee morale-development incentives, updating
promotional materials, and developing a website.

Goal 3: “To establish SeaGate Convention Centre as a key catalyst
aiding economic development in downtown Toledo, in Lucas County, and in
Northwest Ohio.” This is accomplished through increasing media coverage,
undertaking public relations awareness efforts in the Community, producing a bi-
monthly calendar of events, and planning a 10-year birthday party celebration
for the facility.

In analyzing the stated mission of the facility in relation to the stated
goals, especially in terms of priority, the first goal relates to economic self-
sufficiency for the facility, not creating the most economic benefit to the
community. The emphasis on financial self-sufficiency significantly impacts the
financial operations decisions and marketing decisions of the facility
management and staff. Conventions and tradeshows in public facilities cost
centers money to host, rather than producing additional revenues. In the past,
this was looked at as the cost of doing business in a highly govemment-
subsidized industry that made up these tax dollars on economic gains realized
through the business brought to town by convention delegates. Sport and

entertainment events have the opposite effect on the center. The facility has the

89

potential to make money, producing a better-looking bottom line; however, the
economic benefits reaped throughout the rest of the community are minimal.

In reviewing news articles and convention center budget documents, and
interviewing the facility director, it was learned that most of the improvements
and investments made to the facility have been for retractable sport seating and
banquet amenities. This is further indication, along with the building director’s
comments and other interview responses, that activity downtown, not necessarily
the type of activity, is a major goal, not expressed in the formal mission. The
financial incentive to host sporting events is evident in the move to provide the
equipment needed to host sport events, even when monies for routine
maintenance and operations are not adequate.

Goals 2 and 3 do correspond to the stated mission.

Question 2b was: Has the mission or objectives of the convention center
changed over time? In response to this question, four respondents said the
mission or objectives had changed over time. One respondent said “No,” and
another answered, “I don’t know.” Four of the six respondents mentioned the
change in the mix of activities at the SeaGate Center.

Research Question 7: How positive or negative do public officials,

decision makers, and facility management believe public opinion is

regarding the success or failure of the convention center?

Participants were asked, How positive or negative do you think public
opinion is of the convention center’s performance? (Question 6b). The average

response by those interviewed was 4.9 on a scale of 1 to 10. Two respondents

did not give a numerical value but did state that public opinion was changing or

90

had changed from negative to more positive in the past few years. By
comparison, the public officials’, decision makers’, and facility managers’
average rating of the center's operation performance was 7.25 on a scale of 1 to
1 0.

The respondents’ view of performance success or failure of SeaGate was
significantly more positive than how they thought the general public viewed the
performance success or failure of the convention center. In elaborating about
this question, several of the respondents voiced an opinion that because the city
residents voted down funding for the convention center and the community
leaders built it anyway, many of the residents were negatively predisposed
toward the center, and even the best possible performance of the center would
not change their opinion from negative to positive.

Other indications of the community’s opinion toward convention facility
development were the voting down by the public of two separate referendums to
tax the citizens and build a convention center. A city statute specifically limits
the City of Toledo’s ability to use any city tax money to fund convention center
development. The county built the center, dedicating all future hotel bed tax
revenues to pay off the bond.

A review of the newspaper articles found in the Toledo Blade since the
opening of the convention in center in 1987 indicated that the headlines and
content of the coverage of the center had become more and more critical over
time. The focus of most articles was on the convention center’s financial

problems (see Appendix F).

91

Research Question 8: How similar or dissimilar are more recent (late
1980s to 1990s) feasibility studies of convention center projects to
the feasibility study conducted for this case?

The following studies were compared and analyzed for scope, content,
process, projection, and reporting characteristics to the Toledo feasibility case
study: Savannah, Georgia; Aurora, Colorado; Providence, Rhode Island; and
Pensacola, Florida. (Broward County, Florida, and Nashville, Tennessee, were
included to compare the Toledo study with other feasibility studies conducted in
the same time frame—the early 1980s.) (See Appendix E.) The results yielded
the following observations. The Toledo convention center feasibility study is

very similar in methodology, process, projections, and reporting characteristics

to more recent feasibility studies.

Propositions

Proposition 1: The linkage between what the feasibility study estimates of
performance projected prior to convention center development and actual
postdevelopment operating performance is weak. The information collected and
analysis of Research Question 1, depicted in Table 4.1, supported Proposition 1
for the following reasons.

1. The case study research indicated that the estimates of
performance for event use by type was underestimated by 43 events (130%
more) in the feasibility study compared to actual performance.

2. The case study research indicated that the average event duration

was overestimated by at least 1 day (29% less) for conventions and tradeshows

92

and 1.25 days (33% less) for consumer shows in the feasibility study compared
to actual performance.

3. The case study evidence indicated that the average event days by
type of event was underestimated by 82 event days (72% more) for conventions,
tradeshows, and consumer shows in the feasibility study compared to actual
performance.

4. The case study research indicated that the average convention/
tradeshow size was underestimated by 2,152 delegates (70% less) in the
feasibility study compared to actual operating performance.

5. The case study research indicated that building occupancy was
estimated in the feasibility study at 59%, whereas the actual building occupancy
performance was 64%.

6. The annual revenue-to-expenditure ratio was estimated in the
feasibility study to be .56, whereas the building’s average actual performance
was .61.

7. The profile of the event activity in comparing the feasibility study
performance indicators to actual performance for conventions, tradeshows, and
consumer shows at SeaGate Centre was composed of more events of the local
and state nature, using more event days, for less than average duration, and
having fewer attendees than projected in the feasibility study. The building
occupancy and annual revenue-to-expenditure ratio closely resembled actual
performance; however, the makeup of what constitutes the occupancy and

revenue/expenditures is very different. This building-event profile indicates a

93

facility that is underperforming in terms of intended economic impact on the
community as a result of the types of events SeaGate Centre actually hosts,
compared to the building event profile projected in the feasibility study.

In analyzing the interviewees’ responses to the performance section of
the survey (Questions 8a, 8b, 9, 10a, and lOb, Appendix C), the responses
suggest that the interviewees were unaware of what the feasibility study
projected for performance and did not view the study projections of performance
as important to how the facility was performing. The importance of the feasibility
study is the way it can be used in public relations, in public policy, and as a
sales tool for the unaware public. The feasibility study is viewed as a necessary
part of the political process a community goes through to build a convention
center.

Proposition 2: The positive or negative perceptions that community
decision makers, public officials, and facility management have regarding the
convention center development have very little to do with the convention center’s
post-development operating performance. The information gathered and
analysis of Research Questions 1, 2, 5, and 7 support this proposition, with the
exception of the facility’s financial performance, for the following reasons:

1. Public officials, decision makers, and facility management rated the
city image as significantly more positive than it was before convention center
development, boosting the city’s image from an average rating of 4.6 to an
average rating of 8.5 on a 10-point scale since the convention center was

developed.

94

2. Four of the six persons interviewed believed the convention center
contributed positively to the growth and revitalization of downtown Toledo.

3. The interviewees’ average operating performance rating was 7.22
on a 10-point scale.

4. The interviewees’ perception of how the public rated the
convention center’s operating performance averaged 4.93 on a 10-point scale,
which was significantly lower than their own 7.22 rating of performance.

5. The interviewees suggested it was the lack of “knowledge” about
the benefits of the convention center to the local economy that accounted for the
difference between their own opinion of the convention center's performance
and their view of the public’s perception of that performance.

6. Given the feasibility study projections, the SeaGate Convention
Centre is overperforrning in terms of convention business brought to the area.
However, because the events are dominated by small state conventions, the
economic impact generated as a result of the events hosted at the facility is less
than anticipated. Convention occupancy is relatively high, at 45% of annual
event occupancy.

7. Most of the decision makers’, public officials’, and facility
managers’ positive or negative ratings of the convention center development had
more to do with financial viability, downtown image enhancement, and marketing
than with the actual operating performance measures, such as types of activities

or business conducted at the center.

95

8. A content analysis of the local newspaper headlines and story
content since the SeaGate Centre’s opening showed a trend from generally
positive newspaper reporting about the center to very negative reporting in the
past few years (see Appendix F), with concentration of the facility's financial
problems. The facility director suggested that the relationship with the media
was changing from negative to more positive. He and others who were
interviewed believed the negative coverage over the past few years had
continued to flame an already disgruntled public with respect to the convention
center.

Proposition 3: The attitudes and expectations of facility performance by
public officials, decision makers, and facility management are incompatible with
the mission statement and/or operational objectives of the convention center.
The findings and analysis of Research Questions 3, 4, and 5 support Proposition
3 for the following reasons:

1. The attitudes and expectations expressed in the interviews with
public officials, decision makers, and facility management overwhelmingly
considered the center’s operating self-sufficiency as critical to meeting operating
objectives and goals. Marketing efforts and building financial-outlay decisions
were being made to bring the facility closer to break-even revenue-to-
expenditure ratio. The facility director stated that it was his responsibility to
close the gap between operating revenues and expenditures, and he believed
keeping his job depended on it.

2. The newspaper articles continued to run stories of the convention

center’s financial vulnerability, with headlines like “SeaGate Going Broke; Taxes

96

Called an Option” and “SeaGate Could Cost Neighbors” (Toledo Blade, March
22 and March 30, 1996).

3. Cooperation for Effective Government (CEG) released a study in
1996 detailing the financial crisis the convention center was in and predicted it
could run out of cash within 12 months if changes in the funding of its operations
were not made. The CEG recommended that, in the meantime, the county
should pay for two-thirds and the city one-third of the proposed $500,000 annual
subsidy to operate the center (CEG Study, 1996).

4. The findings from Research Questions 3, 4, and 5 suggest the
paradoxical situation with which the convention center and convention
management are presented: The more convention and tradeshows the center
hosts, the more operational debt it will generate. Yet, this continues to be the
stated mission of the center, and management is charged with and being held
responsible for reducing the gap between revenues and expenditures with a
priority of breaking even.

5. The mission statement does not address the financial viability of
the facility or self-sufficiency, and yet this emerged as the number-one marketing
priority for the facility in the 1997 marketing plan. The attitudes and
expectations of public officials, decision makers, and facility management
interviewed were that, in general, the facility was meeting or exceeding
expectations, except with regard to financial performance. This reflects the
curious position of the facility, which, in fact, is underperforming in operations for

the type of conventions and tradeshows it was intended to host, but actually

97

V '-

doing better than expected in terms of financial performance as presented in the
feasibility study.

Promsition 4: The development and operation of convention facilities in
secondary or tertiary markets are fraught with postoperational difficulties rarely
addressed in preoperational feasibility studies. The data and analysis of
Research Questions 4, 5, 6, and 8 support Proposition 4, as do a number of
secondary information sources, for the following reasons:

1. The interviewees suggested that the biggest postdevelopment,
unanticipated difficulty not addressed in the feasibility study was the financial
problems and funding difficulties the facility faced.

2. The feasibility study did provide a number of possible financing
options that had been used in the construction and operation of other convention
centers. Toledo did not use any of the recommended courses of action and, in
fact, enacted a new state law to allow for the bed-tax dollars collected
countywide to fund the construction of the facility. The facility had no formalized
or dedicated source of operating money, and, to date, no entity has stepped up
to the plate to assume this role.

3. The CEG report was commissioned to address the long-ten'n
prospects for the convention center’s financial viability. The report concluded
that unless changes were made and monies found to support the facility, it might
go broke within a short period.

Promsition 5: Over time, economic and political pressures change the

mission and objectives of the convention center from its original development

98

and operation purposes. The findings from Research Questions 3, 4, and 6
support Proposition 5 in the following ways:

1. The facility has received increasingly negative newspaper-article
coverage about its financial position.

2. The most recently hired facility director saw his success and the
building’s performance tied to financial returns from the activity at the facility.

3. The emphasis has changed from SeaGate’s being viewed as a
convention/tradeshow venue to a more flexible, multipurpose facility hosting

sport events and local banquets.

4. The city continues not to financially support the facility operations.

5. Self-sufficiency and breaking even were the expectations of those
interviewed.

6. . The above-mentioned attitudes reflect a growing debate in many

communities—that these huge facilities should now pay their own way, even
though that might not have been the original concept. In a 1995 article in
Meetings and Conventions magazine on private versus public convention center
funding, Ghitelman suggested that there is a strong argument for private funding
and that, for many cities, a return to supply and demand should be the
determinant, with those communities with sufficient demand relying on the
private sector to build profitable centers. Some privately owned centers do exist
and claim to be profitable. With management contracts to private groups
growing, selling off these huge financial burdens may be the next wave of

activity for cities that can find takers (Ghitelman, 1995).

99

Case Study Two: The Riveroate Convention
Center in Rochester. New York

Description/Background

fa_ciLty. The Riverside Convention Center opened in August 1985 in
downtown Rochester, New York. The facility has 100,000 square feet of exhibit
and meeting facilities, a 49,275-square foot Exhibit Hall, a 10,000-square foot
ballroom that can be used for exhibits, and 25 meeting rooms (see Figure 4.5).
The facility is linked to hotels, shopping areas, and a second-floor walkway,
which is especially useful during Rochester’s cold and snowy winters. A $40
million state grant built the center. Rochester Riverside Convention Center is
operated as a nonprofit corporation separate from the city government. The
center employs a full-time staff of 20 to 25 people. An additional 200 part-time
workers are used for food preparation and service. The convention center took
over the food service operation from Ogden, a contracted food service, after 3
years of operation. Three hotels connected to the center by overhead walkways
provide 1,200 convention-quality hotel accommodations.

Location. Rochester is the third largest city in New York state, with a
population of 231,636 in the city and a Standard Metropolitan Statistical Area
(SMSA) of 996,557 (see Figure 4.6). Rochester has a strong manufacturing
base of telecommunications, automotive products, biotechnology, polymers,
pharmaceuticals, and office equipment. Rochester dominates the world of high-
technology imaging and options. Bausch & Lomb, lnc., Eastman Kodak, Xerox,

the Gleason Corporation, Frontier Corporation, and Wegmans Food Markets are

100

 

 

     

 

     
 

   
  
 

 
 
  

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Figure 4.5: Floor plan of the Rochester Riverside Convention Center.

101

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102

 

headquartered in Rochester. Greater Rochester has 15 colleges and
universities, including the University of Rochester and the Rochester Institute of
Technology. Rochester is also home to several big and small local and regional
financial institutions. Direct, extensive road and train networks cut through
Rochester, connecting it to the Northeast. The New York State thruway is the
- major east-west corridor. Rochester International Airport is just 10 miles outside
of the city. Extensive water and rail transportation networks include the Barge
Canal., St. Lawrence Great Lakes Seaway, Amtrak, and Conrail rail systems.
ijmptp. Due to lake effect, Rochester experiences few days over 100°F.
in the summer and averages 5 days below 0°F in the winter. Rochester
experiences heavy snowfalls periodically. Daily maximum temperatures range
from 60°F in July to 16°F in January. The average annual temperature is 56°F.
Culture and recreation. Rochester has a long history with golf,
establishing one of the first public golf courses in the United States in 1899.
There are more than 30 public, private, and semi-private golf courses throughout
the Rochester area. The Erie Canal and Genesee River provide opportunities
for paddle-boating and tour-boating, as well as fishing charters. The beaches on
Lake Ontario provide summer recreation activities, wineries, and theater.
Cultural and heritage offerings include the following: The Memorial Art Gallery
at the University of Rochester houses major art exhibits; the Eastman House, an
interactive museum of photography and film; Rochester Museum and Science
Center; the National Women’s Hall of Fame; Seneca Park Zoo; Strong Museum

History Center", the Eastman School of Music; and the Rochester Philharmonic

103

Orchestra. In recent years, Rochester hosted the Ryder’s Cup, an international
golf championship, and the International Congress on Education for the Deaf.

Qrganization. The convention center is operated by the city as a 501
(c)(3) nonprofit organization. The center currently has a director who has been
in position since the center opened in 1985. Rochester’s promotion arm for
conventions, the Convention and Publicity Bureau, has been in existence since
1932, much before most American cities had such bureaus.

Financing. The facility was built with a state grant of $40 million, and it
carries no debt. The city and bed-tax revenues, along with fees generated by
the facility, pay for operating and maintenance costs._ The center has run
significantly higher deficits than anticipated. The facility took over the food
service operation in an effort to push its catering service and make more

revenue.

Interviews onducted

Using the interview by position and reputation process, five interviews
were conducted in Rochester, New York. (See Appendix C, Interview
Responses, Survey Question 1.) Rochester had a closed or limited environment
in terms of relationships and positions involved in the convention center. This
may be due to the long duration of the director, who has been there since the

facility’s opening, and the designed autonomy with which the center operates.
tud uestions

Research Question 1: How close are the feasibility study estimates
of key performance measures to the actual operating results?

104

Table 4.3 is a comparison of Rochester Riverside’s actual operating
performance, in a stabilized year of activity, to the feasibility study projections of
performance for event use, event duration, event days by type, total delegate

days, and convention/tradeshow size.

Table 4.3: Rochester Riverside Convention Center—Projected versus actual
operating performance in a stabilized year of operation.

 

 

 

 

 

 

 

 

Event Use by Type
Conventions/tradeshows' 38 28 -10 -26%
Consumer events 6 25 +19 +316%
Total 44 53 +9 +20%
Average Event Duration
Conventions/tradeshows 3.4 3.5 +.1 +3%
Consumer events 5.0 NA
Event Days by Type
Conventions/tradeshows 130 98 -32 -25%
Consumer events 30 NA NA
Total 160 — -
Total Convention] 106,350 73,263 -33,057 -31%
Tradeshow Delegate Days
Average Convention] 818 2,616 +17% +20%
Tradeshow Size
Annual Attendance, All 135,350 275,446 +140,096 +104%
Events
Building Occupancy 43% 78% 0.35
Annual Revenues to .48 .81 +33
Expenditures Ratio

 

 

 

 

 

 

 

Note. NA = Not available.

'The Rochester facility records and feasibility study are not broken down
into separate convention and tradeshow categories, so they are combined in the
table.

“The feasibility study projected a low utilization and a high utilization

building operation performance. A midpoint between the low/high utilization
projections was used in this table.

105

The facility’s performance for event use by type indicates that the facility
was hosting 28 conventions/tradeshows. (Rochester’s facility does not
distinguish in its record-keeping between conventions and tradeshows, nor did
the feasibility study. Conventions and tradeshows are combined into one event
category in the table.) This is significantly fewer than the projected 38 (26%
less) annual convention] tradeshow events projected in the feasibility study,
using the midpoint of the low/high utilization projections (see Figure 4.7).

The average event duration or the number of days each event occupies
the building, excluding move-in and move-out days, was 3.5 for conventions and
tradeshows. The feasibility study projection was 3.4 days for conventions and
tradeshows. The average number of days for consumer shows was not
available from the facility’s records. The feasibility study projected 5 days for
public consumer shows.

The event days by type was 98 for conventions and tradeshows. The
feasibility projections were 130 event days. This was 32 (25% less) fewer event
days than feasibility study projections. Numbers were not available for public
consumer shows. The feasibility study projected public consumer shows at 30
event days, using the midpoint of the low/high utilization projections (see Figure
4.8).

The total annual delegate days for conventions and tradeshows was
73,263. The feasibility study projected 106,350. This was 33,087 fewer annual
delegate days for conventions and tradeshows than projected in the feasibility
study, using the midpoint of low/high utilization projections.

The average convention/tradeshow delegate size was 2,616. The

feasibility study projected the average convention/tradeshow delegate size

106

 

 

 

 

 

 

 

88888

Number of Events

 

 

A
O
I

 

 

 

 

O
|

 

Conventions & Tradeshows Consumer Events
Event Type

. Feasibility Study Projections
I Actual Operating Performance

Figure 4.7: Rochester Riverside Convention Center event use by type:
Projected versus actual operating performance in a stabilized year of operation.

107

 

 

 

 

80-

 

 

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. . . .
ooooo

Number of Event Days

 

20 — ,_
.515“: '

 

 

 

Conventions & Tradeshows Consumer Events" Total‘
Event Type

 

Feasibility Study Projections
I Actual Operating Performance

*Data not available.

Figure 4.8: Rochester Riverside Convention Center event days by type:
Projected versus actual operating performance in a stabilized year of operation.

108

(national, regional, and state) in the 818 range, using the midpoint of the
low/high utilization projections. The actual operating performance was
significantly higher, 1,798 delegates per convention more, on average.

The Rochester Center keeps annual attendance figures. In 1992, the
annual attendance was 275,446. The feasibility study projections of annual
attendance for all events was 135,350, using the midpoint of the low/high
utilization projections.

Building occupancy, according to the facility director, averages 78%
annually. The feasibility study projected a 43% building occupancy.

The annual revenues-to—expenditures ratio was .81. The feasibility
projections estimated the annual revenues-to-expenditures ratio to be .48.

The findings from the data in Table 4.3 indicate that the convention center
was hosting fewer conventions and tradeshows than the study projected and
hosting a great many more consumer events and corporate meetings. The
conventions and tradeshows that the center was hosting had a significantly
higher average number of attendees than the feasibility study anticipated. The
make-up of the event mix accounted for the significantly higher annual
attendance number, the higher-than-anticipated revenues-to—expenditures ratio,
and the significantly higher building occupancy. The small number of
conventions and tradeshows hosted by the facility allowed for more available
days for high-revenue-producing events to be held in the facility. The corporate
meetings and private events increased banquet and catering revenues for the
facility.

The feasibility projections that most accurately reflected operating

performance at Rochester Riverside Convention Center were the average event

109

duration and the total number of convention and tradeshow attendees. The
actual performance revealed that the facility hosted far fewer conventions and
tradeshows than the feasibility study projected. However, the conventions and
tradeshows the facility did host had far more delegates in attendance. The
higher attendance may have been the result of marketing efforts to host more
regional or national conventions than state meetings.

Interview responses to questionsflutperformance meps_ur§§.
Responses to Questions 8a, 8b, and 9 (see Appendix C) in the performance
measures section of the survey suggested that decision makers, public officials,
and facility management viewed feasibility performance projections as part of the
political process, to make a case for funding the convention center or to gain
public support to build a facility.

Of the respondents who rated feasibility study accuracy on a 10-point
scale, the average rating was 6.5, with a range from 6 to 7. Those interviewed
indicated they did not perceive the projections to be particularly accurate and
often viewed them with suspicion, indicating that they believed there is a
‘ tendency of study findings to be positive toward building the center, and a
perception that the smaller the facility, the less accurate the feasibility study
findings may be.

The responses to Question 9 indicated that those interviewed believed
the facility’s operating performance closely resembled the feasibility study
estimates of future performance.

Research Question 2: Has the development of the convention center
contributed to downtown economic development?

110

The information used to answer this question came from a variety of
sources, including community economic reports, interview responses,
newspaper and magazine articles, and on-site observation.

Rochester, New York, home to many corporations’ world headquarters,
has had a diversified economy for many years. The recent years of overall US.
economic vitality have added to its growth. The Rochester Riverside Convention
Center opened in downtown Rochester in 1986 as part of a revitalization plan for
the downtown area. The downtown area, while certainly not dead, was suffering,
as many central cores of downtowns were, from a demise of retail, replaced by a
service and commerce center. The promised new headquarters hotel that was
originally scheduled to open in conjunction with the convention center's opening
did not open until 6 years after the facility opened, impeding the facility’s
marketing efforts to recruit large national and regional convention business for
several years. What finally brought the hotel to the downtown area took a
private-public partnership created to develop the hotel, as opposed to market
forces brought about by the opening of the convention facility. (See Table 4.4.)

The information collected and on-site inspection of the Rochester
Riverside Convention Center indicates that the center was built in the middle of
the downtown economic hub, along the Genessee River and main street. This
placement suggests that location in the downtown area was favored over
potential for expansion of exhibition space. The city’s growth and revitalization
is more active in the surrounding downtown communities of the city. The

midtown area, including the midtown mall, is suffering and scheduled for

111

Table 4.4: Downtown economic activity indicators for Rochester, New York

 

 
   

 

 

Center linked to rest of city by overhead Center not enough reason for private

 

 

 

 

walkway network developer to open a headquarters hotel

Hyatt Hotel opened in 1992 Urban flight-over the years, the city has
shrunk from 330,000 (1950) to 230,000
(1990)

Center in walking distance to 1,200 rooms Lost important retail anchors

Center located on river and river walkway City has history of racial strife

network

Area around center active; no boarded-up Midtown struggling

storefronts

 

City neighborhood revitalization and growth Limited committable convention-quality
taking place in downtown pockets rooms near center

 

Business districts outside of downtown
flourishing

 

Community college downtown

 

Numerous entertainment night spots

 

Multicultural atmosphere

 

Good bus transportation

 

Strong museum, heritage and arts facilities
and programs

 

Center manages own food service and
catering operation

 

More than 100,000 international visitors per
year

 

lntemational airport

 

1.5 million conventioneers come to town
each year

 

Strong leadership, business climate, largest
per capita export city in U.S.;wor1d
headquarters to several huge corporations

 

 

 

 

112

closure. The opening of the Hyatt Hotel, across the street and connected by the
over-street walkway, was started and then abandoned in 1987 and left as a
vacant shell until 1992, when it took a partnership of 10 private and public
entities to finish building the hotel. This is a testimonial to the community, city,
and business leaders’ determination to support the convention center and
midtown. The need for a public/private partnership to develop the hotel is also
testament to the "risk" associated with developing hotel properties in downtown
areas. Regardless of proximity to a new convention facility and the potential for
large convention activity, no single developer from the private sector could be
persuaded to build the hotel.

The convention center is an important addition to the midtown area,
assisting in the linkage of midtown via the river walkway system to the rest of the
downtown area. It is difficult to point to the convention center as an economic-
revitalization stimulus for private-sector investment in the immediate area
surrounding the convention center.

The interviewees’ responses to the economic development/public
perceptions section questions on the survey indicated that the respondents
thought the downtown was changing. There were both positive and negative
characterizations of types of changes. The respondents also had mixed
reactions to the role the convention center had played in the economic change.

The interviewees rated Rochester’s image before convention center
development as an average of 5.3 on a scale of 1 to 10, and an average of 6.2

at present (see Appendix C). All but one respondent answered that the

113

convention center had added “value” to the downtown area. The dissenting
respondent expressed the viewpoint that “the change in downtown to a more
negative image had nothing to do with the convention center but other economic
problems with the downtown area.”
Research Question 3: Are the attitudes and expectations for facility
performance of public officials, decision makers, and facility
managers compatible with the mission statement and/or operating
objectives of the convention center?
Interview responses to Questions 2a, 3, 4, 10a, and 10b, as well as
convention center documents, were used to answer and analyze this question.
According to a February 6, 1997, internal convention center document,
and reprinted from the original October 3, 1984, document, the Rochester
Riverside Convention Center’s mission statement is as follows:
The mission of the Rochester Riverside Convention center is to serve as
a catalyst in the generation of increased and maximum economic benefits
to the City of Rochester and Monroe County and to act as an enhancer of
the City and the County’s image internationally, nationally, regionally and
locally. This is accomplished by implementation of an aggressive
marketing/sales policy of prioritized selling to the convention, tradeshow
and meetings industry, with emphasis beyond the primary goal being
given to booking a reasonable mix of events intended to maximize
revenues while enhancing the quality of life in the community. All
endeavors are conducted in a highly professional, enthusiastic manner,
with aggressive pursuit and rapid, thorough follow-up as standard
operating procedure. (p. 1)
Interview responses to Question 2a regarding the mission and objectives
of the convention center (see Appendix C) had a common thread of providing a
facility for outside business (conventions) and a place for local business/

educational meetings and a source of civic pride.

114

The rating of the convention center in meeting its mission (Question 3,
see Appendix C), on a scale of 1 to 10, yielded an average rating of 9.2, with a
response range from 7 to 10.

The responses to Question 4--What specific standards of measurement
do you use to evaluate the operating performance of the convention
center?-were varied (see Appendix C). Activity level and occupancy were most
frequently cited. In general, interviewees were very positive with regard to the
facility's operating performance, although the standards of measurement used to
assess performance varied from one interviewee to another.

In rating the convention center’s operating performance (Question 10a),
the average rating among respondents was 8.75 on a scale of 1 to 10, with a
range from 8 to 10.

Respondents also were asked: In evaluating convention center
performance, what do you consider the determinants of success for the
convention center operation and development? (Question 10b). The responses
were varied and included attention to detail, type of business hosted,
attendance, good food service, economics, and maximizing profits.

The responses given suggest that decision makers, public officials, and
facility management were very positive toward the Rochester Riverside
Convention Center. They believed that it was meeting its mission and
performance goals.

Research Question 4: How do public officials, decision makers, and

facility management evaluate operating performance of the
convention center?

115

The performance indicators frequently cited in convention facility
literature, strategic plans, and feasibility studies are: (a) the number of
conventions booked per year, by type-national, regional, and state; (b) the size
of the convention in terms of delegates and exhibits; (c) the average length of
stay for conventioneers; (d) the number of hotels and hotel rooms used by the
convention group; (e) the annual building occupancy for conventions/tradeshows
and other events; (f) the revenue-to-expenditure ratio; (9) the subsidy or profit
margin; (h) client evaluations of service; (i) the operations-to-budget personnel
ratio; 0) revenue-production resources such as catering, equipment rentals, and
so on; (k) contractual services; (I) union relations; and (m) public/political
support.

The responses to the interview survey question—What specific standards
of measurement do you use to evaluate the operating performance of the
convention center? (see Appendix C, Question 4)—varied significantly. No
specific performance measure was cited by most or many of the interviewees.

lnterviewees’ average rating of the convention center’s operating
performance (see Appendix C, Question 10a) was 8.75 on a scale of 1 to 10,
with a range from 8 to 10.

Research Question 5: What are the determinants of success for

convention center operation and development according to public

officials, decision makers, and facility management?

Convention facility literature, industry insiders, and governmental

organizations frequently use some or all of the following criteria to determine

Operation and development success for a convention center: (a) the economic

116

impact or economic spin-off created by facility activities on the community, (b)
the generation of hotel room nights, (c) the amount of bed tax generation, (d) city
image/landmark, (e) revenue generator, (f) the number of convention and
tradeshow events hosted per year, and (9) user evaluation surveys. These
performance indicators differ significantly from the handful of privately owned
and operated convention centers that use profitability and service to customers
as measures of success (Ghitelman, 1995).

The interviewees responded to Question 10b-In evaluating convention
center performance, what do you consider the determinants of success for
convention center operation and development? The most frequently cited
determinants were number of attendees, financial performance (i.e., profit/loss),
economic impact, and food service. As noted previously, respondents gave the
convention center an average rating of 8.75, on a scale of 1 to 10, on the
success of the operating performance of the convention center (see Appendix C,
Question 10a).

Survey Question 7—Knowing what you know today, what, if anything,
might be done differently in the development or operation of the convention
center? Explain—gave respondents the liberty of using hindsight in assessing
the operation and development process of the convention center. Respondents
were allowed to elaborate on the positive, negative, success, or failure issues
about the process if they so chose. The most common responses fell into the
following categories: ownership/operations, financing, and complementary

support facilities in place (see Appendix C).

117

Research Question 6: Have the mission and objectives of the
convention center changed over time?

The formal stated mission of the convention center had not changed since
the building’s inception in 1984 (Rochester Riverside Convention Center, 1997).
Refer to the section on Research Question 3.

In response to Question 2b—Has the mission or objectives of the center
changed over time?—two respondents answered "Yes.” Another four
respondents said, “No.'

From interview information and newspaper articles, it was found that the
stated formal mission of the convention center had not changed. However, if the
mix of hosted events and operational emphasis of the center is studied, it can be
seen that a shift in emphasis has occurred since 1983, with more and more
emphasis placed on financial performance. Indicators of the shift include the
facility’s taking over the contracted-out catering and food service operation to
boost revenue from hosting banquets. The control of the revenue-producing
contracted-out catering and food service operation led to a marketing push to
host more large catered events such as weddings and corporate dinners and
fund-raisers, which tend to be local events. With the opening of the Hyatt Hotel
to serve as convention meeting headquarters, the facility should be experiencing
an increase in the number of national or regional conventions that it hosts. This
has not happened. The facility is averaging three additional conventions per
year since the hotel opened. The size of these meetings is larger than projected
by the feasibility study, although the average size of the meetings has not grown
since the hotel opened. This might suggest a marketing strategy that prioritizes

large local catered events in order to improve revenue-to-expenditure ratios.

118

A review of statements made to the press in the local newspapers from
promoters for development and later in the interviews with facility management
indicated that the convention center should at least break even in the near
future. This has yet to be accomplished, more than 10 years after the opening.
Yet it continues to be a stated goal. The gap between revenues and
expenditures is narrowing, and it could be argued that this is the result of the
facility management shifting orientation and efforts to pursue more lucrative
revenue-producing, locally oriented (nonconvention and tradeshow) events. The
evidence suggests an informal change in the mission of the facility over time.

Research Question 7: How positive or negative do public officials,

decision makers, and facility management believe public opinion is

regarding the success or failure of the convention center?

Participants were asked, How positive or negative do you think public
opinion is of the convention center’s performance? (Question 6b). The average
response by those interviewed was 8.12 on a scale of 1 to 10, with a range from
6.5 to 10. One respondent did not give a numerical response, stating that public
opinion was neutral” (see Appendix C, Question 6b). The public officials,
decision makers, and facility management had about the same view, although
their rating of average performance was slightly less—8 on the 10-point scale.

In elaborating on this question, the need to educate the public to the
convention center’s benefits to the community was stated. Also mentioned was
the community pride associated with the convention center and the recent facility
award it had received. Interviewees tended to discuss this question in terms of

their own use experience with the facility; very little was said about “public”

reaction or rating.

119

A review of newspaper articles indicated that coverage by the local paper,
the Rpphpster Democrat, of the convention center, other than the occasional
listing of events or openings, was minimal on an annual basis. The paper
carried coverage during the yearly budget allocation from the city, usually
highlighting the convention center's deficit. There were several articles over the
years covering the development of the Hyatt Hotel, which frequently mentioned
the convention center. The center is not proactive in soliciting or using the
newspaper for public relations efforts, according to the interview with the facility
manager, who has been director since the building opened. This might partially
account for the lack of newspaper space given to the center’s operations.

Research Question 8: How similar or dissimilar are more recent (late

19803 to 19905) feasibility studies of convention center projects to

the feasibility study conducted for this case?

The following studies were compared and analyzed for content, process,
projection, and reporting characteristics to the Rochester Rivergate feasibility
case study: Savannah, Georgia; Pensacola, Florida; Aurora, Colorado; and
Providence, Rhode Island. (Broward County, Florida, and Nashville,
Tennessee, were included to compare the Rochester study with the feasibility
studies conducted in the same time frame, the early 1980s.) (See Appendix E.)
The results yielded the following observation. The Rochester Convention
Center feasibility study is very similar in methodology, process, projections, and
reporting characteristics to more recent feasibility studies.

The Rochester Riverside Convention Center, because it eventually was

paid for, in part, by the state of New York UDAG funds, commissioned two

feasibility studies, which were done within two years of one another and by

120

separate consulting firms. The two studies were very similar in terms of content
and process, and the projections were consistent in terms of events, event types,

duration, and revenues to expenditures.

Propositions
flpppsjtjpfi: The linkage between what the feasibility study estimates of

performance projected prior to convention center development and actual
postdevelopment operating performance is weak. The information collected and
analysis of Research Question 1, depicted in Table 4.3, supported Proposition 1
for the following reasons.

1. The case study research indicated that the mix of events the facility
hosted was much different from the feasibility projections. The facility hosted far
fewer conventions and tradeshows and many more public consumer shows,
private events, and corporate meetings than projected by the feasibility study.

2. The case study research indicated that the annual attendance
figures for the facility were much higher than projected as a result of hosting
more consumer public and local private events.

3. The case study research indicated that the building occupancy was
significantly higher than projected as a result of hosting more events than the
feasibility study projected.

4. The case study research indicated that the economic impact to the
area was less than projected due to hosting fewer conventions and tradeshows

and more locally oriented events.

121

5. The case study research indicated that the conventions and
tradeshows that were hosted by the facility had an average delegate attendance
count more than twice as large as the feasibility study projections.

In sum, as shown in Table 4.3, the feasibility projections, using the
midpoint of the high or low scenario projected: (a) overestimated convention
and tradeshow events by 10 events; (b) underestimated consumer events by 19
events; (c) accurately projected convention/tradeshow event duration at 3.4
days—actual performance was 3.5 days, a negligible difference; (d)
overestimated event days for conventions and tradeshows by 32 days; (e)
overestimated delegate days for conventions and tradeshows by 33,087
delegate days; (f) underestimated convention and tradeshow average delegate
event size by 1,798 persons; (9) underestimated total annual event attendance
for all events by 140,096; (h) underestimated building occupancy by 35%; and (i)
underestimated the revenue-to-expenditure ratio by 33%.

In analyzing the interviewees’ responses to questions 8a, 8b, 9, 10a, and
10b in the survey performance section (see Appendix C), the responses
suggested that the interviewees viewed the feasibility study as very important to
the process of building a convention center, especially to obtain public support
for the idea. In discussion, several of the respondents voiced their belief that the
feasibility findings had a tendency to be biased toward development, so the
projections should be viewed with caution.

Proposition 2: The positive or negative perceptions that community

decision makers, public officials, and facility management have regarding the

122

convention center development have very little to do with the convention center’s
postdevelopment operating performance. The information gathered and
analysis of Research Questions 1, 2, 5, and 7 support this proposition, with the
exception of the facility’s financial performance, for the following reasons:

1. Public officials, decision makers, and facility management rated the
city's image as more positive than it was before convention center development,
boosting the city-image rating from an average rating of 5.3 to an average rating
of 6.3 on a 10-point scale.

2. Although they were not in total agreement about whether the
downtown was changing in a positive or negative direction (see Appendix C),
most of the interviewees agreed that the convention center was an important link
in the midtown revitalization effort.

3. The interviewees’ average operating performance rating was 8.75
on a 10-point scale.

4. The interviewees’ perception of how the public rated the
convention center’s operating performance averaged 8.1 on a 10-point scale,
which closely resembled their own performance rating of 8.75.

5. The interview responses indicated that the center was viewed very
positively by public officials, decision makers, and facility management in terms
of operation and fulfilling its mission. The Rochester Riverside Convention
Center is a public facility; however, it is quite autonomous in its operation and
management. The “players" sphere of those who are involved with the

convention center operation is minimal. During the interview process, is was

123

clear that the facility manager, who has been the director since the facility
opened, was looked to by community leaders, as well as the director himself, as
the only person really necessary to talk to regarding convention center
operation. The director, speaking for himself and the convention center board
he led, viewed the convention center as more than meeting its operation goals
and fulfilling its mission to the community.

6. The convention center operated an event mix much more closely
associated with the profile of a traditional civic center than a convention center,
with the bulk of the events serving the local and corporate public. The
convention and tradeshow business that the facility was designed and
developed to bring in, occupied the building only 6% to 7% (56 days) of the 365
annual event days in the exhibition center.

7. A content analysis of the few articles that had been written about
the center indicated that the articles tended to highlight the convention center’s
deficit financial position year after year (see Appendix F). The articles can be
characterized as neutral to mildly positive in tone. The facility director indicated
that news coverage was not something he sought for the center. The facility
operated quite autonomously.

Promsition 3: The attitudes and expectations of facility performance by
public officials, decision makers, and facility management are incompatible with
the mission statement and/or operational objectives of the convention center.
The findings and analysis of Research Questions 3, 4, and 5 support Proposition

3 only in part, for the following reasons:

124

1. The attitudes and expectations expressed in the interviews with
public officials, decision makers, and facility management indicated that these
individuals believed that the center was performing well and meeting its mission.

2. The operating and marketing policies and decisions appealed
predominantly to a mixture of events, among them local public, high-revenue-
producing events for the center.

3. Since the center’s inception, the goal as stated by management
has been to break even. However, the director maintained that this should not
be the focus of convention center operation as facilities are not meant to make a
profit but to be economic generators for communities. Events such as
conventions in effect “cost" the center revenues, to the benefit of the larger
economy.

4. The mission statement for the facility addresses a mix of events to
produce revenue as part of the marketing strategy, following a priority placed on
the booking of conventions and tradeshows.

Proposition 4: The development and operation of convention facilities in
secondary or tertiary markets are fraught with postoperational difficulties rarely
addressed in preoperational feasibility studies. The data and analysis of
Research Questions 4, 5, 6, and 8 support Proposition 4, as do a number of
secondary information sources, for the following reasons:

1. Interviews and newspaper articles suggested that development of
a nearby or connected headquarters, convention-quality hotel was extremely

difficult and an unanticipated problem for the convention center. This

125

significantly changed its marketing strategy in the first 5 years of operation from
marketing to national, regional, and state convention business to filling the
facility with public consumer shows and corporate meetings that did not require
large blocks of hotel rooms. The difficulty in getting the hotel developed resulted
in a number of what might be classified as negative news articles involving the
convention center. The hotel facility finally was funded and developed by a
public-private partnership after the hotel remained a vacant shell across from the
convention center for 4 years. The marketing efforts of the convention center
were not resulting in more conventions being hosted since convention-quality
hotel rooms became available, indicating that other local events already in place
may have become the facility’s (unstated) priority.

2. Rochester used $40 million in state UDAG funds to develop the
convention center. Thus, other than the yearly operational deficit, it did not
“owe” on the facility.

Proppsition 5: Over time, economic and political pressures change the
mission and objectives of the convention center from its original development
and operation purposes. The findings from Research Questions 3, 4, and 6
support Proposition 5 in the following ways:

1. The facility is increasingly “profit concerned.” According to the
director, he feels, as do many directors across the country, the pressure to
perform financially, which at a minimum means breaking even or achieving equal
revenues to expenditures for operation. The center was built under the

philosophy that convention centers are not supposed to make money, much like

126

a park or a museum, but they are an investment in a downtown area for image
and economic benefit to private businesses in the community.

2. The bookings suggest a facility that is very aware of the need to
produce revenue. The stated desire for more autonomy by management is a
desire to be freed from government regulation, so as to be able to be more cost
efficient and profit oriented.

3. These indicators suggest less emphasis on attracting more and
marketing to “cost” burden events such as conventions and tradeshows. One
way the facility has been particularly aggressive has been through its catering
and food service operation, to the point that it quite possibly competes with area
hotels and caterers for the area’s local banquet business. This is often a point
of contention in many communities.

C_ase Stupv Three: The North West Georgia Trade and
Convention Center in Dalton. Georgia

Description/Background

m. The North West Georgia Trade and Convention Center opened
in September 1991 in Dalton, Georgia. The facility has 143,000 gross square
feet on two levels, a 40,400-square-foot column-free exhibit space on the lower
level, a 10,800-square-foot banquet space that can also be used for exhibits,
and 12 meeting rooms. The facility also has a 3,500-square-foot outdoor exhibit
area, a 247-seat lecture hall theater, and an outdoor terrace adjacent to the

banquet hall as prefunction space (see Figure 4.9).

127

EXHIBIT HALL/ARENA/OUTDOOR EXHIBIT AREA
LOWER LEVEL

     
         
   

EXHIII‘I’ I
18.000 50. FT.

l
l
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(40.500 so.‘ FT. TOTAL)

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Figure 4.9: Floor plan of the North West Georgia Trade and Convention Center.

128

LODGING & BANQUET FACILITIES
UPPER LEVEL

   
  

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BELOW

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Figure 4.9: Continued.

129

The facility is located on a mountainside overlooking the city of Dalton. It
employs 27 full-time employees. The Greater Dalton area has more than 150
restaurants and 1,900 motel rooms, with 1,200 rooms proximate to the trade and
convention facility. The accommodations closest to the facility, and used by
those attending events at the center, are interstate motels, not convention-
quality hotels.

The original architectural drawings show a convention hotel next to the
center and the kitchen to service the center in the hotel. Although the city and
center have pushed for a brand-name convention-quality hotel next to the
center, to date the prospects for such a development'have not materialized and
are unlikely in the near future. The bulk of the money to build the $17 million
facility came from the State of Georgia Assembly. A five-member advisory
authority oversees the budget and operations of the center for the city and
county commissions, who split the annual operating costs of the facility.

The cost to develop the trade and convention facility in Dalton, Georgia,
was significantly less than that of the facilities developed in Toledo and
Rochester. This difference is attributable to several factors: (a) the land for the
convention center site was donated to the city; (b) the facility’s exhibition area is
on two floors, rather than one continuous span; (c) the facility does not have a
full-service kitchen on site; (d) the construction of the facility was nonunion; (e)
wages and materials in this part of the country are lower than in the Northeast or
Midwest; and (f) the design of the facility was not constrained by site

specifications found in placing facilities in downtown cores.

130

Location. Dalton, a city of approximately 23,000 people, is located in
Whitfield County; the county has a population of 79,000 people (1997). The
community slogan is “Dalton, the carpet capital of the world.” The community is
headquarters to the world’s carpet industry, a multi-billion-dollar industry. The
carpet mills employ more than 40,000 workers in the Dalton area. Other major
employers are Shaw Industries, Hamilton Medical Center, and Con Agra Poultry.
The industry mix is dominated by a 50% manufacturing base. The average
household income for the city and county is approximately $45,000 per year.
The Dalton transportation network is connected directly to Interstate 75 and US.
41. Other interstates within 30 miles of Dalton are l-24, l-65, and l-59. Atlanta’s
Hartsfield International Airport is 90 minutes away; Chattanooga’s Lovell Field is
30 minutes north and services the community. Norfolk/Southern Railway and
CSX Rail provide Dalton with commercial service.

Dalton is home to Dalton College, a state two-year college that serves the
community and also offers undergraduate and master’s degrees on its campus
through West Georgia and the Medical College of Georgia. The city is located
in the foothills of the Blue Ridge Mountains. The location is 30 miles southeast
of Chattanooga, Tennessee, and 90 miles northwest of Atlanta, Georgia. The
North West Georgia Trade and Convention Center is located on a mountainside;
markedly visible from l-75, it overlooks the city of Dalton. The center backs up
to the Chattahoochee National Forest (see Figure 4.10).

M. The average annual temperature in the Dalton area is 60°F. The

average temperature in July is 78°F, and in January it is 41°F. The humidity

131

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ashwlle '33 mlles Knoxwlle-IAS miles
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9

LL

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Huntsville-13 miles .

Birmingham-150 miles 0

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Figure 4.10: Map of Dalton.

132

 

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ranges from 50% to 60% in cooler months and 80% to 90% in warmer months.
The elevation in Whitfield County is 710 feet. The community has four distinct,
yet mild, seasons.

Culture and recreation. The Dalton-Whitfield County area has award-
winning recreational facilities, including tennis and racquetball courts, parks and
playgrounds, golf courses, swimming pools. The nearby state parks, lakes, and
national forests provide hiking, camping, fishing, boating, rafting, and canoeing
opportunities. Dalton’s Park and Recreation Department was recognized in
1990 with the Best in State award. Dalton has operated a model recreation
program since the 19505. The Creative Arts Guild, the Dalton-Whitfield County
Commission for the Arts, is the oldest local community agency in Georgia. The
Dalton area is in both Cherokee Indian history and Civil War history. Whitfield
County was the starting point of Andrew Jackson’s well-known Trail of Tears.
Thirty-two Civil War markers commemorating important activities and battles of
the Civil War can be found in the area. The history of the craft of tufted
bedspreads, which later led to rug making and, combined with new technology in
the 1950s, spawned the modern carpet industry, can be found in the Crown
Gardens and Archives Museum. Theater and ballet companies provide
community performances. The area is also host to several festivals and special
events throughout the year. The Creative Arts Guild’s annual festival attracts
artists and craftspeople from around the world.

Qrganization. The North West Georgia Trade and Convention Center is
operated by the City of Dalton and the Whitfield County Commission. The

convention center reports to the North West Georgia Trade and Convention

133

Center Authority. This Authority comprises five members: the city administrator,
the county administrator or a county commission representative, and three other
appointment members from the community at large. The facility director, hired
by the Authority, reports to them on matters of budget and operations of the
center. The center and its site belong to the City Building Authority until all
bonds expire. At that time, the city and county will have joint ownership of the
facility and the site. The city and county split the annual operating cost of the
facility as part of a 50-year agreement. The county pays its share to the city.
The facility is unique in that it has the separate but on-site Dalton-Whitfield
County Convention and Visitors Bureau (CVB) in its lobby. The personnel and
operating costs of the CVB are part of the facility’s annual budget appropriation.

Financing. The facility cost nearly $17 million to develop. The initial
plans projected a $12-million cost of development. The State of Georgia
Assembly provided an $8.2-million grant, followed by an additional $6-million
supplement to cover cost over-runs. The local governments floated a $10-
million revenue bond, of which $3 million was pledged to the center; $2.4 million
of this went toward development costs. The facility was first planned as a carpet
trade mart and presented as such to the state legislature. The carpet industry’s
powerful lobby is credited with getting the Georgia Assembly, for the first time
ever, to allocate money to a local center.

Two hundred thirty-eight of the nation’s 350 carpet mills are located in six
northwestern Georgia counties. All previous facility projects, like the Georgia
World Congress Center in Atlanta and the Jekyll Island facility, are state owned.

After the money was allocated, the plans for the facility changed from housing

134

permanent carpet displays to hosting conventions, tradeshows, concerts, church
retreats, and wrestling matches. During the year or two before the facility was
developed, the carpet industry’s marketing strategies significantly changed, and
this change affected the need for a Dalton carpet mart. The carpet industry's
marketing efforts moved away from a twice-a-year “show” mentality to a 12-
month-a-year marketing sales strategy. This eliminated the need for permanent
display showrooms.

The facility feasibility study assumed the use of the facility by the carpet
industry. The feasibility study’s utilization projections included use of the facility
by the carpet industry. The city and county share the annual operating cost of
the facility, which in a typical year has a revenue-to-expenditure ratio of .47.
The city and county pick up the deficit, which is approximately $650,000 to
$700,000 per year.

Interviews Cond_ucted_
Using the interview by position and reputation process, nine interviews
were conducted in Dalton, Georgia. (See Appendix C, Interview Responses,

Question 1.)

tud uesfions

Research Question 1: How close are the feasibility study estimates
of key performance measures to the actual operating results?

Table 4.5 is a comparison of North West Georgia Trade and Convention
Center’s actual operating performance, in a stabilized year of activity, to the
feasibility study projections of performance for event use, event duration, event

days by type, total delegate days, and convention/tradeshow size.

135

Table 4.5: North West Georgia Trade and Convention Center-Projected versus
actual operating performance in a stabilized year of operation.

 

 

 

 

 

 

 

 

 

 

 

 

Event Use by Type
Conventions 7 18 +1 1 +157%
Tradeshows 3 3 —- —
Consumer events 3 12 +9 +300%
Total 1 3 33 +21 +162%
Average Event Duration
Conventions 3.6 2.8 -.80 -22%
Tradeshows 3.6 2.0 -1 .6 44%
Consumer events 2.0 2.8 +.80 +40%
Event Days by Type
Conventions 27 50.4 +23.4 +87%
Tradeshows 9 6 -3.0 -33%
Consumer events 6 33.6 +27.6 +460%
Total 42 90.0 +48.0 +1 14%
Total Conventionrrradeshow 22,030 20,500 -1,530 -7%
Delegate Days
Average Convention] 575/575 350/500 -225/-75 -39%l13%
Tradeshow Size
Annual Attendance, All Events 36.813 178,631 +141 .81 8 +385%
Building Occupancy 16% 50% 34%
Annual Revenues to .32 .47 .15
Expenditures Ratio

 

 

 

‘The feasibility study projected a low-level and high-level utilization for
the facility. The numbers in this table reflect the midpoint between the low and

high utilization projections.

136

The facility's performance for event use by type indicates that the facility
was hosting 18 conventions and 3 tradeshows. This is significantly more
conventions than the projected seven annual conventions, using the midpoint of
the low/high utilization projections. The number of tradeshow events held
annually (three) is the same as projected in the feasibility study (see Figure
4.1 1).

The average event duration or the number of days each event occupies
the building, excluding move-in and move-out days, was 2.8 for conventions and
2.0 days for tradeshows. The feasibility study projection was 3.6 days for
conventions and another 3.6 days for tradeshows. The average number of days
for consumer shows was 2.8 days. The feasibility study projected 2.0 days for
public consumer shows.

The event days by type was 50.4 (87% more) for conventions, 6 (33%
less) for tradeshows, and 33.6 (460% more) for public consumer shows. The
feasibility projection was 27 convention event days, using the midpoint of the
low/high utilization projections. This was 23.4 more event days than feasibility
study projections. The feasibility study projection was 9 tradeshow event days.
The actual performance was 6 tradeshow event days. This was 3 fewer
tradeshow event days than the feasibility study projected. The feasibility study
projection was 6 for consumer show event days. The actual performance was
33.6 consumer-event event days. This was 27.6 fewer event days than the

feasibility study projected (see Figure 4.12).

137

 

(A)
01

 

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O

 

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01

 

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O

 

 

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01
I

 

 

Number of Events

 

 

 

Conventions Tradeshows Consumer Events Total
Event Type

 

Feasibility Study Projections
I Actual Operating Performance

Figure 4.11: Dalton North West Georgia Trade and Convention Center event
use by type: Projected versus actual operating performance in a stabilized year

of operation.

138

 

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g 80
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D
E 60
m
>
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Conventions Tradeshows Consumer Events
Event Type

 

Feasibility Study Projections
I Actual Operating Performance

Figure 4.12: Dalton North West Georgia Trade and Convention Center event
days by type: Projected versus actual operating performance in a stabilized year
of operation.

139

The total annual delegate days for conventions and tradeshows was
20,500. The feasibility study projected 22,030, using the midpoint of the
low/high utilization projections. The total annual attendance performance figures
fell within the feasibility study projection range.

The average convention delegate size was 350, and the average
tradeshow delegate size was 500. The feasibility study projected the average
convention delegate size (national, regional, and state) at 575. The actual
operating performance was 39% lower for conventions, approximately 225 fewer
delegates, and 13% lower for tradeshows, approximately 75 fewer delegates.

The North West Georgia Trade and Convention Center keeps annual
attendance figures. In 1996, the annual attendance was 178,631 for all events.
The feasibility study projections of annual attendance for all events was 36,813,
using the midpoint of the low/high utilization projections. The actual operating
performance for annual attendance was approximately 141,000 (385%) higher
than the projections. This number is plausible because of the much higher than
projected public consumer shows hosted by the facility and the large
entertainment events the facility has hosted. '

The building counts all events in its event totals and does not separate
out the events held in the main exhibition hall. In a telephone conversation with
the city manager of Dalton, he reviewed his Convention Board Authority notes
and estimated the main exhibit hall’s annual occupancy for all events at 50%.
The feasibility study projected 16% building occupancy.

The annual revenues-to-expenditures ratio was .47. The feasibility

projections estimated the annual revenues-to-expenditures ratio to be .32.

140

The findings from the data in Table 4.5 indicate that the convention center
was hosting more conventions and tradeshows than the study projected and
hosting a great many more consumer events. The conventions that the center
was hosting had fewer attendees, on average, than the feasibility study
anticipated. The projections were close for the number of tradeshow events and
the average number of delegate days for tradeshow events. The make-up of the
event mix accounted for the significantly higher than anticipated annual
attendance numbers for all events. The convention center was hosting many
more consumer shows, entertainment events, and conventions than projected in
the feasibility study.

The feasibility projections that most accuratelyreflected operating
performance at the North West Georgia Trade and Convention Center were the
average event duration and the total number of tradeshows and tradeshow
delegate attendees. Actual performance revealed that the facility hosted more
conventions and tradeshows than the feasibility study projected. However, the
conventions the facility did host had fewer delegates in attendance, and they
stayed for less time (event duration). The facility routinely booked from 65% to
75% of its business from within Whitfield County, and about 25% to 35% from
outside Whitfield County. The high attendance reflects the use of local events
that are attracting primarily local attendees.

ln_te;view resmnses to ggestions a_QQu_tperforrfltce measu_res.
Responses to Questions 8a, 8b, and 9 (see Appendix C) in the performance
measures section of the survey suggested that decision makers, public officials,
and facility management viewed feasibility performance projections as important

in securing state monies and part of the political process. But as the feasibility

141

study recommended not building the center, and it was built, the study’s
projections were viewed as inaccurate, a bad study, or irrelevant due to changed
circumstances in the carpet industry.

Of the respondents who rated feasibility study accuracy on a 10-point
scale with 10 as high, the average was 6.5, with a range from 5 to 7.5. In
discussion, comments about feasibility study accuracy ranged from “Itwas fairly
accurate in hind sight, but at the time, did not think so” and “went ahead and
built the facility anyway,” to “not accurate” and “not accurate; the operation was
exceeded.”

The responses to Question 9 were mixed and evenly divided. The
interviewees’ responses fell into three categories, with three not knowing, three
responding that the projections were close to accurate, and three responding
that the facility was not meeting expectations and that the operating performance
did not resemble the feasibility study estimates of future performance.

Research Question 2: Has the development of the convention center
contributed to downtown economic development?

The information used to answer this question came from a variety of
sources, including community economic reports, interview responses, newspaper
and magazine articles, and on-site observation.

Dalton, Georgia, is undeniably the carpet capital of the world. The original
impetus for building a facility was to build a permanent carpet mart or trade
center that would house permanent exhibits and have space when not using the
exhibition floor to lease to other outside events. The location of the trade center
that could be seen from the l-75 corridor, which sits high on a mountain bluff, was

considered because the land was given to the center and it was highly visible,

142

showcasing Dalton’s prominence as a carpet center. A downtown location was
never really considered until well into the planning and development phase, when
the carpet industry drastically changed and no longer conducted its business on
the tradeshow floor. By that time, it was too late to realistically consider changing
the site to a downtown location. The area around the l-75 corridor has seen
tremendous growth, with several highway motels, an outlet mall, and new
restaurants, as well as the convention center, being developed in the past 10
years. The downtown proper was struggling, as many small cities have been,
with businesses closing and no new ones taking their place. The city has a
“Mainstreet’ program in place to help in the revitalization effort. The lion’s share
of the l-75 activity, including the convention center business, stays in that area
about two miles from the downtown core. Some residual business, from people
stopping to visit the mall or at the convention center, makes its way downtown.
The condition of the downtown is of concern to the community at large. (See
Table 4.6.)

The interviewees' responses to the economic development/public
perceptions section questions on the survey indicated that the respondents
thought the downtown was facing challenging times and that the Convention and
Trade Center, while certainly not hurting downtown, was not doing much to
improve it. There was some discussion in a few interviews that the Downtown
Development Authority’s working jointly with the convention center had been
positive for downtown.

The interviewees rated the City of Dalton’s image before convention center
development as an average of 5.8 on a scale of 1 to 10, and an average of 7.6 at

present (see Appendix C). The response range was quite large, from 2.75 to 8.

143

Table 4.6: Downtown economic activity indicators for Dalton, Georgia.

 

 
   

 

Highly visible to thousands of people passing
by on l-75 north-south conidor

No convention hotel-quality rooms next to
center

 

40,000 people per day get off at the exit
where the trade and convention center is
located

New motels near highway developed for
interstate traffic and outlet shopping tours
and patrons

 

Convention and Visitors Bureau housed in
center, enabling lines of communication and
showcasing center

Carpet industry no longer uses permanent
showrooms

 

Center has support of chamber, carpet
industry, and some key politicians

Downtown area not reaping significant benefit
of convention trade center business; most of
it stays near interstate

 

Facility design is flexible, allowing for mixed
uses

Downtown area suffering; nightlife and
entertainment activity minimal

 

Facility is modern and well maintained

Downtown retail closing with no
replacements, augmented by retail outlet mall
development

 

Retail outlet mall provides close-by, within-
walking-distance activity to convention and
tradeshow attendees

Difficult to find operations and unskilled labor
who will work for the wages the center can
offer due to the carpet industry’s higher-
paying wage structure. Almost no
unemployment; carpet industry has to import
from other countries to get enough workers

 

Several new chain restaurants have been
developed at this interstate exit, providing
additional dining choices to attendees

The Convention and Trade Center has been
a political issue since its consideration.
Public has not necessarily supported its
development or operation. It became a
central issue in a county commission election

 

Walking/running paths at nearby college
provide attendees with additional fitness
activity

No kitchen on site

 

Active downtown development authority
organizations

 

Stable city and county administration

 

Very healthy local economy; very little
unemployment

 

Strong carpet lobby to go to state on Dalton’s
behalf

 

 

 

144

 

In discussion, the convention center was not specifically cited as contributing to

a better image for Dalton.

Research Question 3: Are the attitudes and expectations for facility
performance of public officials, decision makers, and facility
managers compatible with the mission statement and/or operating
objectives of the convention center?

Interview responses to Questions 2a, 3, 4, 10a, and 10b, as well as
convention center records and documents, were used to answer and analyze
this question.

According to a September 22, 1997, internal convention center budget
request document sent to the budget committee, the North West Georgia Trade
and Convention Center’s mission statement is as follows: “To make a significant
economic and cultural impact on the Northwest Georgia community through
impeccable commitment to constant improvement and excellence in customer
service and operating efficiency" (North West Georgia Trade and Convention
Center, 1998, p. 27).

Interview responses to Question 2a regarding the mission and objectives
of the convention center (see Appendix C) had a common thread of providing a
facility space for industry, outside business (conventions), and the community,
as well as enhancing the economic base through activities.

The rating of the convention center in meeting its mission (Question 3,

see Appendix C), on a scale of 1 to 10, yielded an average rating of 7.2, with a

response range from 4.5 to 8.

145

The responses to Question 4—What specific standards of measurement
do you use to evaluate the operating performance of the convention
center?-were varied (see Appendix C). Activity level (from conventions to
wrestling), management and marketing, and finances-breaking even were most
frequently cited. The need for a hotel and kitchen was also mentioned as a
missed business opportunity. The interviewees were tentative with regard to the
facility’s operating performance, and the standards of measurement used to
assess performance differed considerably from one interviewee to another.

In rating the convention center‘s operating performance (Question 10a),
the average rating among respondents was 7.9 on a scale of 1 to 10, with a
range from 6 to 9.

Respondents also were asked: In evaluating the convention center
performance, what do you consider the determinants of success for the
convention center operation and development? (Question 10b). The responses
were varied and included hotel bed tax collection (hotel room use) and economic
development. Also mentioned were facility designed for flexibility, number of
meetings, ambitious management, community acceptance and satisfaction, and
repeat use.

The responses given suggest that decision makers, public officials, and
facility management were moderately positive toward the North West Georgia
Trade and Convention Center. They believed that it was meeting its mission ,

but not necessarily its performance goals so far.

146

Research Question 4: How do public officials, decision makers, and
facility management evaluate operating performance of the
convention center?

The performance indicators frequently cited in convention facility
literature, strategic plans, and feasibility studies are: (a) the number of
conventions booked per year, by type—national, regional, and state; (b) the size
of the convention in terms of delegates and exhibits; (c) the average length of
stay for conventioneers; (d) the number of hotels and hotel rooms used by
convention groups; (e) the annual building occupancy for conventions!
tradeshows and other events; (f) the revenue-to-expenditure ratio; (9) the
subsidy or profit margin; (h) client evaluations of service; (i) the operations-to-
budget personnel ratio; (j) revenue-production resources such as catering,
equipment rentals, and so on; (k) contractual services; (I) union relations; and
(m) public/political support.

The responses to the interview survey question—What specific standards
of measurement do you use to evaluate the operating performance of the
convention center? (see Appendix C, Question 4)—varied significantly. No
specific performance measure was cited by most or many of the interviewees.
Several of the responses (see Appendix C) concerned measures often cited in
industry publications and convention center literature as standard indicators of
performance, as specified in the preceding paragraph.

lnterviewees’ average rating of the convention center's operating

performance (see Appendix C, Question 10a) was 7.9 on a scale of 1 to 10, with

a range from 6 to 9.

147

Research Question 5: What are the determinants of success for
convention center operation and development according to public
officials, decision makers, and facility management?

Convention facility literature, industry insiders, and governmental
organizations frequently use some or all of the following criteria to determine
operation and development success for a convention center. (a) the economic
impact or economic spin-off created by facility activities on the community, (b)
the generation of hotel room nights, (c) the amount of bed tax generation, (d) city
image/landmark, (e) revenue generator, (f) the number of convention and
tradeshow events hosted per year, and (9) user evaluation surveys. These
performance indicators differ significantly with the handful of privately owned
and operated convention centers that use profitability and service to customers
as measures of success (Ghitelman, 1995).

The interviewees responded to Question 10b—In evaluating convention
center performance, what do you consider the determinants of success for
convention center operation and development? The most frequently cited
determinants were categorized as amount of event activity, management-
community relations, and economic impact. As noted previously, respondents
gave the convention center an average rating of 7.9, on a scale of 1 to 10, on
the success of the operating performance of the convention center (see
Appendix C, Question 10a).

Survey Question 7—Knowing what you know today, what, if anything,

might be done differently in the development or operation of the convention

center? Explain-gave respondents the liberty of using hindsight in assessing

148

the operation and development process of the convention center. Respondents
were allowed to elaborate on the positive, negative, success, or failure issues
about the process if they so chose. The most common responses fell into the
following categories: ownership-citylcounty, education of community upofront,
labor shortages due to the carpet industry's more competitive wages and
salaries, and complementary support facilities in place (hotels and kitchen)
when facility is built.

Research Question 6: Have the mission and objectives of the
convention center changed over time?

The formal, written mission of the convention center had not changed
since the building’s inception in 1991. Refer to Research Question 3, Dalton
case study.

In response to Question 2b—Has the mission or objectives of the center
changed over time?—five respondents answered “Yes.” Another two
respondents said, “No,” and two said they did not know.

From interview information and newspaper articles, it was found that the
stated formal mission of the convention center had not changed. However,
several interviewees in discussion indicated that the center was just finding its
mission and objectives, since the impetus for building the facility and seeking
state funds had been very political and, in fact, had changed significantly during
the development process. The evidence suggests an informal change in the

mission of the facility over time.

149

Research Question 7: How positive or negative do public officials,

decision makers, and facility management believe public cpinion is

regarding the success or failure of the convention center?

Participants were asked, How positive or negative do you think public
opinion is of the convention center's performance? (Question 6b). The average
response by those interviewed was 6.1 on a scale of 1 to 10, with a range from 4
to 8.5. In discussion, several respondents indicated that community attitude
toward the project had been “cool” in the beginning and during its first few years
of operation. New management was brought aboard to foster better community
relations, and some respondents believed there was improved public opinion
toward the convention and trade center.

By comparison, the public officials, decision makers, and facility
management gave an average performance rating of 7.9 on a 10-point scale,
with a range from 6 to 9. Their own perceptions of the facility’s operating
performance were higher than they perceived the general public’s perceptions to
be. In elaborating on their responses to this question, the need to educate the
public to the convention center’s benefits to the community was stated. Also
cited was the community’s predisposition that the facility never had their
support, so they were judging it on bottom-line revenues to expenditures; many
people, therefore, considered it to be a white elephant.

A review of newspaper articles indicated that the topics most often
covered by the local Dalton paper, the _D_ajlv Citizen News. were the financing of

the center’s development, the political snags and posturing over the facility by

elected local and state politicians, and the direct cost of the facility to local

150

taxpayers on a yearly basis. The rate-structure-reduction proposal for local
groups was also covered in the newspaper. The facility, according to the
marketing director, had not actively courted the local news media in a campaign
to educate the public as to the economic and social benefits the facility provided
to the community, except in relation to public events it was hosting.

Research Question 8: How similar or dissimilar are more recent (late

1980s to 19905) feasibility studies of convention center projects to

the feasibility study conducted for this case?

The following studies were compared and analyzed for content, process,
projection, and reporting characteristics to the North West Georgia Trade and
Convention Center feasibility case study: Savannah, Georgia; Pensacola,
Florida; Aurora, Colorado; and Providence, Rhode Island. (Broward County,
Florida, and Nashville, Tennessee, were included to compare the Dalton study
with the feasibility studies conducted in the same time frame, the early 1980s.)
(See Appendix E.) The results yielded the following observation. The Dalton

feasibility study is very similar in methodology, process, projections, and

reporting characteristics to more recent feasibility studies.

Propositions

Proposition 1: The linkage between what the feasibility study estimates of
performance projected prior to convention center development and actual
postdevelopment operating performance is weak. The information collected and
analysis of Research Question 1, depicted in Table 4.5, supported Proposition 1

for the following reasons.

151

1. The case study research indicated that the mix of events the facility
hosted was much different from the feasibility projections. The center hosted
many more consumer and public entertainment events than projected by the
feasibility study. Further, the facility hosted almost triple the number of
conventions anticipated. The number of tradeshows hosted by the center
matched the number of tradeshows projected in the feasibility study.

2. The case study research indicated that the annual attendance
figures for the facility were much higher than projected as a result of hosting
more consumer public and local private events.

3. The case study research indicated that the building occupancy was
significantly higher than projected as a result of hosting more events than the
feasibility study projected.

4. The case study research indicated that the economic impact to the
area was slightly higher than the feasibility study projected due to the facility's
hosting more convention events than projected. The facility also hosted more
public local events that produced a small economic impact from hotel room
nights generated by event organizers, entertainers, and outside suppliers who
stayed overnight.

5. The case study research indicated that the conventions and
tradeshows that were hosted by the facility had an average delegate attendance
count smaller than the feasibility study projections.

6. The case study research indicated that the convention, tradeshow,

and consumer events were shorter in duration than projected by the feasibility

152

study. Because the facility had more convention events, but they had fewer
attendees and the duration of the events was less than projected, the economic
impact of hosting more convention and tradeshow events than projected was
quelled.

In sum, as shown in Table 4.5, the feasibility projections, using the
midpoint from the high or low scenario presented: (a) underestimated '
convention and tradeshow events by 11 events; (b) underestimated consumer
events by 9 events; (c) overestimated convention and tradeshow event duration
by 22% and 44% respectively; (d) underestimated consumer event-day duration
by 40%-actual performance was 2.8 days; (e) underestimated event days for
conventions by 23 event days (or 87%); (f) overestimated tradeshow event days
by 3 event days (or 33%); (g) accurately estimated total delegate days for
conventions and tradeshows as 22,030 delegates, using the midpoint-the actual
performance indicated 20,500 convention and tradeshow delegate days; (h)
underestimated convention and average delegate event size by 225 people (or
39%) and underestimated tradeshow event size by 75 people (or 13%); (i)
underestimated total annual event attendance for all events by 141,818 (or
385%); (j) underestimated building occupancy by 34%; and (k) underestimated
the ratio of revenues to expenditures by 15%.

In analyzing the interviewees’ responses to questions 8a, 8b, 9, 10a, and
10b in the survey performance section (see Appendix C), the responses
suggested that the interviewees viewed the feasibility study as very important to

getting state money for the development and as contributing to general ideas

153

regarding a facility. Several respondents said outright that the feasibility study
findings were inaccurate or that they dismissed the results because the carpet
industry’s marketing focus changed from permanent showroom displays and
would not want to be the main occupants of the center, and this change was not
reflected in the study. The study did not recommend going ahead with the

' development. However, the community proceeded and built the center, so the
nonpositive recommendation and findings of the feasibility study did not
dissuade the decision makers from going fonlvard with the project. In discussion,
more than one respondent commented that the community had always felt
removed from the convention center process, and the'facility had never had wide
community support. The feasibility study findings, and subsequent ignoring of
the results, only helped further erode public support for the project. One
interviewee offered the view that the feasibility projections were fairly accurate,
in hindsight.

Proposition 2: The positive or negative perceptions that community
decision makers, public officials, and facility management have regarding the
convention center development have very little to do with the convention center’s
postdevelopment operating performance. The information gathered and
analysis of Research Questions 1, 2, 5, and 7 support this proposition for the
following reasons:

1. Public officials, decision makers, and facility management rated the

city’s image as more positive after development than it was before the

154

convention center was developed, boosting the city-image rating from an
average rating of 5.8 to an average rating of 6.3 on a 10.point scale.

2. The interviewees’ comments with regard to the convention center's
impact on downtown economic growth were divided as to the influence the
convention center had had on the downtown area. Those answering “No”
pointed to the growth really happening and thriving by the-Interstate exit and the
downtown losing retail to the shopping outlet/convention center area. Those
answering “Yes” pointed to the tremendous growth of restaurants, shops, and
hotels near the Interstate, which had a spill-over effect on the downtown area.
The economic development of the downtown area was viewed as a joint effort of
the Downtown Development Authority and the convention center.

3. The interviewees’ average operating performance rating for the
trade and convention center was 7.9 on a 10-point scale.

4. The interviewees’ perception of how the public rated the
convention center's operating performance averaged 6.1 on a 10-point scale.
This was lower than their own rating of the facility’s performance-7.9 on a 10-
point scale.

5. The interview responses indicated that the center was viewed
somewhat positively by public officials, decision makers, and facility
management. There was some discussion and comment regarding the center’s
not yet fully meeting its mission. The reasons most often cited were the lack of a

convention-quality hotel and in-house kitchen facility-that is, autonomy in its

155

cperation and management. The facility’s deficit became more of a political
issue each year that the facility did not break even.

6. The convention center operated an event mix much more closely
associated with the profile of a traditional civic center than a convention center,
with the bulk of the events serving the local and regional public. Once the
bottom fell out in terms of the local carpet industry’s use for the facility, the
facility’s marketing strategy switched from a trade mart emphasis to conventions
being the priority. Convention and tradeshow business, which the facility was
designed and developed to bring in, occupied the building 6% to 7% (56 days) of
the 365 annual event days in the exhibition center.

7. A content analysis of the articles that had been written about the
center indicated that the articles had centered on the support facilities the
convention center needed to be competitive and successful. The politics
regarding the annual funding of the convention center deficit between the county
and the city also had made news. Because of the predominantly public events
the facility hosted, the local paper also carried coverage of these events, or at
least a photograph with a caption. The newspaper coverage of the convention
center can be characterized as neutral to quite positive in tone (see Appendix
F).

Proposition 3: The attitudes and expectations of facility performance by
public officials, decision makers, and facility management are incompatible with

the mission statement and/or operational objectives of the convention center.

156

The findings and analysis of Research Questions 3, 4, and 5 support Proposition
3 only in part, for the following reasons:

1. The attitudes and expectations expressed in the interviews with
public officials, decision makers, and facility management indicated that these
individuals believed that the center was performing well, with the potential to
hold more events.

2. The operating and marketing policies listed a priority booking
system for the exhibit hall. Carpet events and conventions and tradeshows had
first priority; multiple—day public consumer shows had second priority; local,
multiple-day events had third priority on space; and single-day events had fourth
priority.

3. The mission statement is general, without measurable performance
objectives. It is: “To make a significant economic and cultural impact on the
Northwest Georgia community through impeccable commitment to constant
improvement and excellence in customer service and operating efficiency"
(North West Georgia Trade and Convention Center, 1998, p. 27).

4. The mission statement for the facility does not address mix of
events or priority of events in order to achieve its mission. In discussion, many
statements were made that indicated the facility was not meeting its mission yet,
but there was promise that it would. The reasons given for being hopeful was
that management changes had been made, and a possible hotel in the future

next to the convention center would help bring in convention business.

157

Proposition 4: The development and operation of convention facilities in
secondary or tertiary markets are fraught with postoperational difficulties rarely
addressed in preoperational feasibility studies. The data and analysis of
Research Questions 4, 5, 6, and 8 support Proposition 4, as do a number of
secondary information sources, for the following reasons. Interviews and
newspaper articles suggested that development of a nearby or connected
headquarters, convention-quality hotel had been extremely difficult and an
unanticipated problem for the convention center. The marketing strategy for the
convention center had to change its focus from the carpet industry to
conventions and tradeshows, and the center did not have a headquarters hotel,
which often is required by convention groups. The difficulty in getting the hotel
developed resulted in a number of negative news articles involving the
convention center. The facility’s “free land” donated to the center caused much
conflict in terms of political heat for the center during the development process.
The lack of an in-house kitchen facility had hurt the center, in terms of revenue
collections and marketing, in hosting conventions that needed catering, and in
hosting large local events that required catering. The facility had a much higher
annual occupancy number and higher event numbers than projected by the
feasibility study for the convention center. However, this occupancy was below
average by industry standards; depending on the source used, facility size, and

location, industry average occupancy ranges between 59% and 72%.

158

Proposition 5: Over time, economic and political pressures led to change
in the mission and objectives of the convention center from its original
development and operation purposes. The findings from Research Questions 3,
4, and 6 support Proposition 5 in the following way.

The facility in Dalton has had its mission change several times from
inception. Originally, it was billed as a carpet mart and was sold that way to the
Georgia State Assembly, from which it received funding. Circumstances
changed, and it became a trade and convention center, without the addition of a
nearby convention-quality hotel, no in-house catering facility, and increasing
attention to the budget deficit it has yearly. It has rededicated itself to be more
and more of a multipurpose civic center, hosting a large number of public,

revenue-producing, and entertainment events for the local residents of Dalton.

Cross-Case Compafipp

Description/Background

' lnfonnation presented in Table 4.7 permits a comparison of each city and
facility, with regard to attributes important to attracting conventions and
tradeshows to an area.

ELility. Each case represents a medium-size convention center in a

second-tier city for conventions and has, at least in part, the requisite amenities
to host convention business. The facilities opened between 1983 and 1991, and

the operation data are from 1996.

159

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Location. The facilities included represent the northeastern, midwestern,
and southern regions of the United States. Two of the facilities are in the
downtown core, and one is on the outskirts of the downtown area, near the
interstate.

Me. All three areas are considered to have moderate climates.
However, Rochester, New York, can have extreme snowfall from the lake effect,
and Dalton, Georgia can be quite humid in the summer.

Culture and recreation. Toledo and Rochester are larger than Dalton and
have well-developed and supported cultural, arts, and entertainment offerings.
Dalton has a model park and recreation community and has outdoor recreation
offerings because of its Blue Ridge Mountain access.

Organization. All three facilities are publicly owned. Toledo and
Rochester are governed by Convention Authority Boards that have a 501 (c)(3)
nonprofit corporation status. Dalton’s convention center has a convention
authority, which is funded and managed by the City of Dalton. In Dalton, the city
and the county split the cost of running the facility, and both will own the facility
after 50 years. Toledo shares the facility meeting rooms with the University of
Toledo.

Financing. The SeaGate Convention Centre was financed by special
legislation that allowed the hotel/motel tax to pay the special revenue bonds to
finance the construction of the facility. The University of Toledo had a $10
million grant given to it by the state to finance a convocation center as part of the

financing package. Cost to build the center was $42 million.

161

Rochester's Riverside Convention Center was financed with a state grant.
The cost to build the facility was $40 million.

The North West Georgia Trade and Convention Center was paid for, in
large part, by the State of Georgia. The City of Dalton did float a revenue bond
and pledged $3 million of that to the center. The cost to build the facility was

$17 million.

tud uestions

Research Question 1: How close are the feasibility study estimates
of key performance measures to the actual operating results?

A comparison across the three cases is presented in Table 4.8, which
gives the percentage difference in each performance measure category between
what the feasibility study projected and what has occurred in actual operation at
each facility. The last column is the average difference for this performance
measure category when the differences are averaged across all three cases.
This table indicates the percentage difference. The percentage difference under
or over the feasibility projection when compared to actual operation has both
positive and negative implications for the operation, marketing, and economic
impact of the facility on the community.

Comparing the feasibility study projections to actual operating results and
comparing these findings in a cross-case comparison for each performance
measure yielded interesting findings. The feasibility study projections or
estimates of performance were poor predictors of event use by type in all three

cases and poor predictors of actual attendance at all events in all three cases.

162

Table 4.8: Comparison of the percentage differences between the feasibility
study projections and the actual operating performance, by
performance measure category.

 

 

 

 

 

 

 

 

 

Event Use by Type

Conventions +257% +26% +157% +146%

Tradeshows +18% +26% 0% +15%

Consumer events +62% +316% +300% +226%

Total +130% +20% +162% +104%

Average Event Duration

Conventions -29% +3% -22% -18%

Tradeshows -25% +3% -44% -24%

Consumer shows -33% - +40% -
Event Days by Type

Conventions +160% -25% +87% +91%

Tradeshows +8% -25% -33% -22%

Consumer shows +6% - +460% +233%"

Total +72% - +1 14% +93%“

Total Convention/Tradeshow -25% -31% -7% -21%
Delegate Days
Average Convention] -70% +220% -39%/-13% +1 10%I101%
Tradeshow Size “"
Annual Attendance, All Events — +104% +385% +245%'“'
Building Occupancy +5% +35% +34% +25%
Annual Revenues to +5% +33% 0.15 +.18
Expenditures Ratio

 

 

 

 

 

 

“Toledo and Dalton only.
“Toledo and Rochester only.
“'The very high overestimation of Rochester’s average convention]
tradeshow size should not diminish the significant underestimation of Toledo and
Dalton’s average convention/tradeshow size.

“Rochester and Dalton only.

163

The feasibility study projections or estimates of performance were fair predictors
of event days by type in all three cases, fair predictors of building occupancy in
all three cases, good predictors of total convention delegate days in all three
cases, and good predictors of annual revenue-to-expenditure ratios in all three
cases.

In analyzing the projection differences, one of the most critical findings
was that, in all three cases, the feasibility study projections for the performance
measures involving conventions were significantly different from the actual
operating performance. The feasibility study underestimated the number of
conventions at the SeaGate Convention Centre by approximately 257%,
underestimated the number of conventions at the Rochester Riverside
Convention Center by approximately 26%, and underestimated the number of
conventions at the North West Georgia Trade and Convention Center by
approximately 157%.

The research findings shown in Table 4.9 indicate that, for all three
facilities, the number of event days for conventions and tradeshows was not
close to capacity when compared. to the days available for convention and
tradeshow event day bookings.

The feasibility study projections, when compared to actual operating
performance for consumer shows, were weak for all three facilities. The
feasibility study projections underestimated consumer shows by 62% at the
SeaGate Convention Centre, 316% at the Rochester Riverside Convention
Center, and 300% at the North West Georgia Trade and Convention Center in

Dalton.

164

Table 4.9: Annual convention and tradeshow event day occupancy.‘

 

Number of Event Days Percentage Occupancy

 

 

 

 

 

 

 

Toledo 168 46%
Rochester 98 27%
Dalton 56 1 5%

 

”The most often used industry standard for optimal occupancy for a
convention facility is 70% of maximum (365 days) or approximately 265 days).

The feasibility study projections were weak in projecting average
convention/tradeshow size. The feasibility study projections, when compared to
actual operating performance, underestimated the size in Toledo by
approximately 70%, underestimated the size in Dalton by 39%, and
overestimated the size in Rochester by 220%. Average convention/tradeshow
size is an important number for convention center development because it
indicates requirements of groups for convention-quality rooms and meeting room
facilities.

The underestimation of the number of consumer events in all three
facilities is further reflected in the annual attendance figures for the Rochester
and Dalton convention centers. The feasibility projections averaged a 104%
underestimation for Rochester and a 385% underestimation for Dalton. Toledo
did not keep annual attendance records for all events, but because there were
more than double the number of consumer shows than projected by the
feasibility study, similar higher building attendance results than projected by the

feasibility study could be expected.

165

The feasibility study projections came much closer to actual operating
results when estimating average event duration, tradeshow projections, and
convention/tradeshow delegate days. The building occupancy projections, when
compared to actual operating results, were very close for Toledo’s SeaGate
Convention Centre, coming within a 5% difference. With regard to occupancy,
the Rochester Riverside Convention Center had a 35% difference between the
feasibility study’s projections of performance and actual operating performance.
The North West Georgia Trade and Convention Center had a 34% difference
between actual performance and the feasibility study’s projection.

The feasibility study projections for the annual'revenues-to-expenditures
ratio underestimated the facilities’ revenue projections in all three cases. This
was due largely to the projection of fewer revenue-producing consumer events.

Interview responses twestions about performance measures.
Responses to Questions 8a, 8b, and 9 (see Appendix C for each ease) in the
performance measures section of the survey suggested that, in each case,
decision makers, public officials, and facility management viewed feasibility
study performance projections as important in securing funding and as part of
the political process. The public officials, decision makers, and facility
management viewed the feasibility study as a necessary step in the process of
ultimately developing the convention center. The responses regarding the
accuracy of feasibility study performance projections ranged from 4 to 7; no

respondent gave the feasibility study a rating higher than 7 for accuracy.

166

The responses to Question 9, concerning whether the interviewees
believed the facility's operating performance closely resembled the feasibility
study estimates of future performance, differed across the three cases. A
synopsis of the responses follows. Concerning the Toledo SeaGate Convention
Centre, respondents indicated that convention operations did not resemble the
feasibility study’s estimates of performance. At the Rochester Riverside
Convention Center, the perception of interviewees was that the convention
center’s operating performance closely resembled the feasibility study
performance projections for the facility. Dalton respondents indicated that the
feasibility study was inaccurate to begin with since the study was for a very
different facility than was built. Further, they said the operations did not
resemble the feasibility study’s performance projections.

Concerning the accuracy of the feasibility study projections (Question 8b),
the interviewees average rating was 5.3 for Toledo, 6.7 for Rochester, and 6.5
for Dalton. These ratings reflect a sentiment that was voiced by many of those
interviewed in all three cases-that the feasibility study projections were more
about getting the convention center developed than about accuracy of
performance projections for the proposed facility (7.5). In discussion, comments
about feasibility study accuracy ranged from “It was fairly accurate in hindsight,
but at the time, [we] did not think so,” to “Went ahead and built the facility
anyway,” to “Not accurate,” to “The operation exceeded expectations.”

The responses to Question 9 were mixed and evenly divided. The

interviewees’ responses fell into three categories. Three respondents said they

167

did not know, three responded that the projections were close to accurate, and
three said the facility was not meeting expectations and that the operating
performance did not resemble the feasibility study estimates of future
performance.

Research Question 2: Has the development of the convention center
contributed to downtown economic development?

The information used to answer this question came from a variety of
sources, including community economic reports, interview responses,
newspaper and magazine articles, and on-site observation. In Rochester and in
Toledo, retail shopping businesses continue to close, and the cities are
struggling to keep the downtown areas alive after 5 pm, when a majority of the
people who work downtown leave for the suburbs and the city closes up. The
convention business from delegates has not been enough to reverse this trend
in downtown areas. Dalton acknowledges the change in the central core from
retail center to a government services and business commerce center and has
promoted more retail development along the interstate corridor through outlet
shopping and restaurant development. The convention center is built in the
same vicinity, along the interstate about two miles from city center. The spill-
over effect on the downtown area from convention and tradeshow delegates to
the convention center has been minimal. In each case, the area immediately
surrounding the convention center is in a redevelopment, or in Dalton’s case a
new development, stage fostered by community economic development

initiatives. Each of the three communities studied has worked to take advantage

168

of its natural resource attributes in planning the convention center location.
Toledo and Rochester both chose site development along the large, scenic
rivers that run through their cities, and Dalton chose a very visible site high on
the Blue Ridge Mountain that overlooks the city. For most of the 19905, these
communities have been in a growth and prosper stage with the rest of the US.
economy and are economically robust. The communities are not typical tourism
economies, but instead are manufacturing based, each having world
headquarters corporations in their communities. While most of the persons
interviewed in each city believed that the convention center has had a positive
impact on their communities, it is difficult to directly pOint to the convention
center development as the catalyst for growth in the area, and not just the
expanding economy in general. In each case, the convention center has not
brought the anticipated economic gains in the immediate vicinity of the
convention center. And certainly, the gains that have been made have been
slower in coming than anticipated in all three cases. In each case study, the
facility has had significant problems in attracting a convention-quality hotel to
open next to the convention center. In each case, the convention center
development alone was not enough to entice a private developer to come in and
build a hotel adjacent to the convention center. Each facility opened without the
necessary complement of quality hotel rooms needed to attract conventions to a
facility. The communities had hoped to open their convention facilities at the
same time as a new convention-quality hotel opened up next to them, but this

did not happen for many years, and in Dalton’s case it still has not happened.

169

The role of the convention center in economic revitalization for the downtown in
each case was viewed by public officials, decision makers, and facility managers
as important in improving the image of the city and providing meeting space for
outside and local publics. The majority of those interviewed rated the image of
the city as higher after the convention center was built than before it was
developed.

The average interview rating before the convention center was built was
4.6 for Toledo, 5.3 for Rochester, and 5.8 for Dalton. The average rating of the
city at the time of the interview (after the convention center was developed) was
8.3 for Toledo, 6.2 for Rochester, and 7.6 for Dalton. “Although not all of this
better image making can be attributed to the convention center, most of the
respondents indicated that at least in part the improved image had to do with the
convention center development.

Research Question 3: Are the attitudes and expectations for facility

performance of public officials, decision makers, and facility

managers compatible with the mission statement and/or operating
objectives of the convention center?

Interview responses to Questions 2a, 3, 4, 10a, and 10b, as well as
convention center records and documents, were used to answer and analyze
this question.

Interview responses to Question 2a regarding the mission and objectives
of the convention center (see Appendix C for each case) had a common thread

from case study to case study of providing space for outside groups,

conventions, and tradeshows and providing space and entertainment for local

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groups and enhancing the economic base through activities held at the center.
In each case, the deficit was a point of concern and contention to public officials,
decision makers, and facility management. This concern to at least have the
facility break even on operations can be at odds with the stated mission of
bringing in outside convention and tradeshow events that do not generate the
revenue for the building that public shows, corporate meetings, and
entertainment events generate. On the other hand, convention and tradeshow
events, which generate low revenue for the facility, have a much greater
economic impact on the community than public tradeshows, corporate meetings,
or entertainment events.

When there is great concern for the financial viability of a facility, the
facility suffers from not meeting the expectations of the performance in the eyes
of decision makers, public officials, facility management, and often the public,
even though it may in fact be fulfilling its stated mission. From interviews,
documents, news articles, and observations, financial viability seems to be of
growing importance in all three of the cases studied.

In comparing the case study results from interviewees’ responses to the
rating of the convention center in meeting its mission (Question 3, see Appendix
C for each case), on a scale of 1 to 10, the results were an average rating of 8.1
for Toledo, 9.2 for Rochester, and 7.2 for Dalton,

The responses to Question 4—What specific standards of measurement
do you use to evaluate the operating performance of the convention

center?—were varied (see Appendix C for each case). Activity level,

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management and marketing, and finances-breaking even, economic impact, and
hotel room nights generated were some of the most frequently cited answers
from case to case. With regard to operating performance, the standards of
measurement used to assess performance differed considerably from one
interviewee to another in all three cases.

In rating the convention center’s operating performance (Question 10a),
the average rating among respondents was 7.3 for Toledo, 8.8 for Rochester,
and 7.9 for Dalton on a scale of 1 to 10.

Respondents also were asked: In evaluating the convention center
performance, what do you consider the determinants of success for the
convention center operation and development? (Question 10b). The responses
were varied, and the most frequently cited determinants across all three cases
can be categorized into general areas of: hotel bed tax collection (hotel room
use), economic impact and development, financial operations, community
relations, and management.

The responses given suggest that decision makers, public officials, and
facility management in all three cases believe that the facility is meeting its
mission. In the cases of Toledo and Dalton, the performance goals are viewed
as yet to be fully realized. Rochester rated high on both meeting its mission and
performance.

Research Question 4: How do public officials, decision makers, and

facility management evaluate operating performance of the
convention center?

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The performance indicators frequently cited in convention facility
literature, strategic plans, and feasibility studies are: (a) the number of
conventions booked per year, by type—national, regional, and state; (b) the size
of the convention in terms of delegates and exhibits; (c) the average length of
stay for conventioneers; (d) the number of hotels and hotel rooms used by the
convention group; (e) the annual building occupancy for conventions/tradeshows
and other events; (f) the revenue-to-expenditure ratio; (9) the subsidy or profit
margin; (h) client evaluations of service; (i) the operations-to-budget personnel
ratio; (j) revenue-production resources such as catering, equipment rentals, and
so on; (k) contractual services; (I) union relations; and (m) public/political
support.

The responses to the interview survey question—What specific standards
of measurement do you use to evaluate the operating performance of the
convention center? (see Appendix B, Question 4)—varied significantly. No
specific performance measure was cited by most or many of the interviewees.
Several of the responses (see Appendix C for each case) concerned measures
often cited in industry publications and convention center literature as standard
indicators of performance, as specified in the preceding paragraph. No set of
preferred performance measures or standards of measurement typically used to
evaluate a convention facility’s operating performance can be drawn from the
responses. Different standards are used by each individual in evaluating
performance, and because the typical profit/loss measurement used in the

private sector may or may not be an appropriate standard, the criteria used are

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not clear. There does not seem to be a priority among the standards of
performance cited by most of the respondents in each of the three case studies.

Research Question 5: What are the determinants of success for

convention center operation and development according to public

officials, decision makers, and facility management?

Convention facility literature, industry insiders, and governmental
organizations frequently use some or all of the following criteria to determine
operation and development success for a convention center: (a) the economic 1
impact or economic spin-off created by facility activities on the community, (b) I
the generation of hotel room nights, (0) the amount of bed tax generation, (d) city
image/landmark, (e) revenue generator, (f) the number of convention and
tradeshow events hosted per year, and (9) user evaluation surveys. These
performance indicators differ significantly from the handful of privately owned
and operated convention centers that use profitability and service to customers
as measures of success (Ghitelman, 1995).

The interviewees responded to Question 10b—In evaluating convention
center performance, what do you consider the determinants of success for
convention center operation and development? Each case’s public officials,
decision makers, and facility management had differing views as to the
determinants for success of the convention center. The most frequently cited
determinants across cases were categorized as amount of event activity,
financial performance, and economic impact.

Survey Question 7—Knowing what you know today, what, if anything,

might be done differently in the development or operation of the convention

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center? Explain—gave respondents the liberty of using hindsight in assessing
the operation and development process of the convention center. Respondents
were allowed to elaborate on the positive, negative, success, or failure issues
about the process if they so chose. Each of the respondents gave answers that
were specific to their facility’s development experience and ongoing operations.
The most common responses across case studies fell into the following
categories: ownership—citylcounty-and management-public or private—of the
facility, education of community from the beginning regarding the purpose and
benefits of facility, convention-quality hotel development needed to open at
same time as center, financial arrangements and considerations, and money for
marketing.

Research Question 6: Have the mission and objectives of the
convention center changed over time?

In each case, the formal written mission of the facility had not changed.
Upon examination of the marketing priorities and operation behavior of the
facilities, as well as from interviews with management and convention authority
board members, it was evident in each case that informal changes had occurred
to the mission.

In response to Question 2b—Has the mission or objectives of the center
changed over time?—the interviewees indicated that:

Toledo respondents: Four of the six respondents acknowledged that a

 

change in the mission had occurred over time.

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Rochester respondents: Four of the five persons interviewed did not
think the mission had changed.

Dalton respondents: Five respondents answered, “Yes.” Another two
respondents said, “No,” and two said they did not know.

In each case, whether the public officials, decision makers, or facility
management believed that the stated mission of the facility had changed or not,
the evidence from financial concerns, marketing, and operations behavior
suggests an informal change in the mission of the facility over time.

Research Question 7: How positive or negative do public officials,

decision makers, and facility management believe public opinion is

regarding the success or failure of the convention center?

Participants were asked, How positive or negative do you think public
opinion is of the convention center’s performance? (Question 6b). The average
response by those interviewed was 5.0 for Toledo, 8.1 for Rochester, and 6.1 for
Dalton, on a scale of 1 to 10.

By comparison, the public officials, decision makers, and facility
management gave an average performance rating of 7.3 for Toledo, 8.8 for
Rochester, and 7.9 for Dalton, on a 10-point scale. Across the cases, the public
officials, decision makers, and facility management rated the facility higher in
performance than they believed the general public would rate the facility. In
each case, comments were frequently made about the need to educate the
public to the benefits of the convention center to the community.

A review of newspaper articles across cases indicated that the topic most

often covered by the local papers was the budget, which usually highlighted the

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facilities’ deficit financial position year after year. This “negative” coverage was
viewed as a problem for many of the public officials, decision makers, and facility
management interviewed in each of the cases.

Research Question 8: How similar or dissimilar are more recent (late

19805 to 19905) feasibility studies of convention center projects to

the feasibility studies conducted for these cases?

Recent feasibility studies are 'similar to the Toledo, Rochester, and Dalton
case studies when comparing such studies for content, process, projection in
terms of utilization, revenues-to-expenditures financial information, and
recommendations. Very little change has occurred in the research methods

used to make projections of facility performance and produce convention center

feasibility and market studies over the past 10 years. (See Appendix E.)

Propositions

Proposition 1: The linkage between what the feasibility study estimates of
performance projected prior to convention center development and actual
postdevelopment operating performance was weak. The information collected
and analysis of Research Question 1, for the Toledo, Rochester, and Dalton
case studies depicted in Tables 4.1, 4.3, 4.5, and 4.8) supported Proposition 1
for the following reasons.

1. The case study research indicated that in each case the mix of
events the facility hosted was much different from the feasibility projections.

2. The error of feasibility estimates with regard to convention events
ranged from approximately a 26% underestimate of the number of events in

Rochester to a 257% underestimate of the number of convention events in

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Toledo. The average convention event underestimate error by the feasibility
study was 146%. Tradeshow events were much closer in estimation; there was
a range from 0 to 26% underestimation, with an average 15% feasibility study
underestimate error in the number of tradeshow events held.

3. Higher building occupancies and more consumer events were
hosted in each facility than projected by the feasibility study projections.

4. Depending on the case, the average percentage differences either
overestimated or underestimated convention events and either underestimated
or overestimated convention delegate attendance. Underestimating or
overestimating convention delegate attendance, if these differences are
substantial, significantly impacts the realized economic value of the convention
center to the community.

Proposition 2: The positive or negative perceptions that community
decision makers, public officials, and facility management have regarding the
convention center development have very little to do with the convention center’s
postdevelopment operating performance. The information gathered and
analysis of Research Questions 1, 2, 5, and 7 support this proposition for the
following reasons:

1. In each case, public officials, decision makers, and facility
management rated the city’s image as more positive after development than it
was before the convention center was developed,

2. Each facility’s mix of events suggested that the facilities are

operating more as a “civic center” than as convention centers.

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3. In all three cases, the convention center had not produced the
predevelopment-anticipated effects of drawing new lodging, retail, and
entertainment offerings to the immediate area around the convention center.

4. From case to case, each individual used different standard
measurements of performance to assess the facilities’ operating performance.
No set standards of measurement for performance could be drawn from the
responses given. However, one measure did surface as a central concern, that
being the operating deficit associated with all three facilities.

5. The public officials, decision makers, and facility mangers rated
their facilities in varying positive degrees on operating performance and
believed that their facilities were successful and fulfilling the mission of a
convention center.

Proposition 3: The attitudes and expectations of facility performance by
public officials, decision makers, and facility management are incompatible with
the mission statement and/or operational objectives of the convention center.
The findings and analysis of Research Questions 3, 4, and 5 support Proposition
3 only in part, for the following reasons:

1. In reviewing and comparing the three cases, the attitudes and
expectations expressed in the interviews with public officials, decision makers,
and facility management indicated that many of these individuals believed that

the centers were performing well.

 

2. Rochester was believed to be meeting both its mission and

operating performance goals and rated high on the successfulness of the

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convention center, with a 8.8 rating out of 10. Toledo and Dalton were thought
to be meeting the mission but not necessarily the operating performance goals.

3. In analyzing the mission statements and operations of each case,
each statement placed a high priority on convention business. The attitudes and
expectations of several people interviewed indicated they placed a high value on
financial viability or expressed a break-even mentality about the facilities’
operation. These attitudes and expectations are incompatible, at least in theory,
with placing priority on the convention and tradeshow business that costs the
facility to host.

4. In all three cases, the rental rate structure of the facility supported
the formal mission statement. The rental rates for conventions and tradeshows
were set artificially low (daily rate does not cover daily operating expenditure) for
the facility to be able to compete successfully for a convention and tradeshow
marketplace that is heavily subsidized by local governments that cover yearly
deficits. The rates for all other events were higher and allowed the facility to
break even or profit from the events hosted.

Proposition 4: The development and operation of convention facilities in
secondary or tertiary markets are fraught with postoperational difficulties rarely
addressed in preoperational feasibility studies. The data and analysis of
Research Questions 4, 5, 6, and 8 support Proposition 4, as do a number of
secondary information sources, for the following reasons:

Interviews and newspaper articles suggested that development of a
nearby or connected headquarters, convention-quality hotel had been extremely

difficult and an unanticipated problem for the convention centers in all three case

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studies. In Rochester, this was achieved, but through a 10-member community
partnership and six years after the convention facility opened. Toledo does
have a quasi-convention-quality hotel next to the center; however, this hotel is
used primarily by the world headquarters corporate offices of Owens Corning
company across the street. A new owner has taken over a hotel that stood
vacant on. the corner next to the convention center for nearly two years. Dalton
has several motels around the center but has yet to attract a nearby convention-
quality hotel. The problems of not being able to attract a convention-quality
hotel were not addressed in any of the three cases’ feasibility studies. This
finding indicates that prospective conference-type hotel investors were far less
enthusiastic about these facilities’ potential as viable convention centers than
were those who promoted their development as convention facilities.

Potential problems surfacing as a result of ownership and financing have
plagued both the Toledo and Dalton facilities. These ownership problems were
not foreshadowed in the feasibility studies.

Proposition 5: Over time, economic and political pressures have led to
change in the mission and objectives of each convention center from those
initially projected. The findings from Research Questions 3, 4, and 6 support
Proposition 5 in the following way.

In each case, the facility has had rising pressure placed upon it the longer
it is in operation to be profit concerned or at least financially viable (break-even).
This changes the priorities in marketing and operations to be revenue driven.
Management makes decisions to host high-revenue-producing events. This is

reflected in the marketing efforts to attract local events to use the facility and the

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expenditure of operating and capital outlays to pay for equipment and amenities
necessary to host these events, such as additional telescopic seating, draping
for the facility for banquets, additional staging, and so on. Producing revenue to
lower the yearly deficit became a main concern of management of the facility.
As mentioned earlier, revenue-producing conventions and tradeshows are rare
and are not compatible, in theory, with a facility that focuses on financial viability

or break-even revenue-to-expenditure operations.

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CHAPTER V

SUMMARY AND CONCLUSIONS

Summon
Background

Public investment in convention centers continues to grow in small,

I

medium, and large metropolitan areas, despite records that indicate that most
facilities are underutilized for the purpose for which they were developed—
convention and tradeshow use. Most facilities suffer significant annual losses,
and many facilities are rendered obsolescent long before their debt service is
retired.

Proponents of convention center development are typically from the
hospitality/business sector of a community and city government officials who
hope a convention center will infuse new life into deteriorating downtown cores.
The promise of additional jobs in the hospitality, construction, and retail sectors;
more tax revenues; and an enhanced city image is the rationale used to support
building a convention center. Expansions are often justified as keeping up with
the existing competition from other cities that have developed bigger, improved
convention center models. This advocacy position is strengthened with the
recommendation of a commissioned feasibility study to develop or expand a

convention center.

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Critics argue that the market is saturated and that new convention centers
and expanded existing centers simply split the pie into smaller and smaller
pieces, thereby placing additional financial stress on existing facilities.
Opponents of building more and more exhibition space accuse cities of
adopting, in effect, a “carnival city model,” in which future taxpayer dollars are
pledged for paying for convention centers, stadiums, hotels, aquariums,
riverwalks, and sometimes casinos that require huge outlays of capital and
require constant and expensive renovation to remain competitive and
economically viable.

The decision to proceed with a convention center often depends on the
findings of a commissioned feasibility study. The estimates and projections
regarding the potential market, the competitive environment, financial
performance, and expected economic impact to the area are used to forecast the
facility’s future success or failure in attracting convention and tradeshow activity
to the proposed convention facility. These routine feasibility studies have had
very limited scrutiny in terms of follow-up evaluation research of the studies’
findings and the projections’ predictive value. Complicating the
postdevelopment evaluation of a facility’s success or failure in meeting its
mission is that there has been very little systematic research and reporting of the
guidelines or standard measures public officials, decision makers, and facility

managers use to evaluate the convention center’s operating performance.

Review of Objectives

The researcher examined two distinct areas of inquiry, using case study

analysis. The first area of inquiry was the predictive accuracy of the feasibility

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performance measures. This was achieved by comparing the feasibility study
projections of the proposed facility’s operations to the actual operating
performance of the facility once it was built and in operation. The second area
of inquiry involved the performance evaluation of the convention center
operation by public officials, decision makers, and building managers. Public
officials, decision makers, and facility managers were surveyed as to their use of
the feasibility estimates as a gauge to measure and evaluate the operation
performance of the convention center and their confidence in the estimates
provided in the convention center feasibility study. The researcher examined the
attitudes and expectations of facility performance by public officials, decision
makers, and building managers in relationship to the formal mission statement
and objectives of the convention center. Finally, the researcher used
information from the interviews and convention facility operation documents to
evaluate profit orientation and, if present, its possible effects on the operation

and/or mission of the facility.

Review of Methods

The researcher sought to find answers to a set of questions by employing
case study investigations of public convention center projects which drew upon
multiple sources of evidence. Documents, archival records, secondary data,
internal documents, newspaper articles, face-to-face interviews using a focused
survey instrument, and direct observation were used. The research questions
were:

1. How close are the feasibility study estimates of key performance

measures to the actual operating results?

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2. How has the development of the convention center contributed to
downtown economic development?

3. Are the attitudes and expectations for facility performance of public
officials, decision makers, and facility managers compatible with the mission
statement and/or operating objectives of the convention center?

4. How do public officials, decision makers, and facility managers
evaluate Operating performance of the convention center?

5. What are the determinants of success for convention center
operation and development according to public officials, decision makers, and

facility managers?

6. Have the mission and objectives of the convention center changed
over time?
7. How positive or negative do public officials, decision makers, and

facility managers believe public opinion is regarding the success or failure of the
convention center?

8. How similar or dissimilar are more recent (late 19805 to 19905)
feasibility studies of convention center projects to the feasibility studies
conducted for these cases?

It was answering these eight research questions that was the focus of the
case study investigations.

The underpinnings of the study were set forth in five study propositions
for each case that addressed what should be studied and important theoretical

issues that the study addressed. The five propositions were:

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1. The linkage between the feasibility study projections of
performance prior to convention center development and actual
postdevelopment operating performance is weak.

2. The positive or negative perceptions that community decision
makers, public officials, and facility managers have regarding the convention
center development have very little to do with the convention center's post-
development operating performance.

3. The attitudes and expectations of facility performance by public
officials, decision makers, and facility managers are incompatible with the
mission statement and/or operational objectives of the convention center.

4. The development and operation of convention facilities in
secondary or tertiary markets are fraught with postoperational difficulties rarely
addressed in preoperational feasibility studies.

5. Over time, economic and political pressures lead to changes in
missions and objectives of convention centers from those on which feasibility
studies are based.

The three cases studied were: the SeaGate Convention Centre, Toledo,
Ohio; the Rochester Riverside Convention Center, Rochester, New York; and
the North West Georgia Trade and Convention Center, Dalton, Georgia. In
addressing the research questions and propositions through case study
investigation, the dissertation findings provide (a) a better understanding of the
results of convention center development in smaller markets, (b) a better
understanding of the role of the feasibility study in the process, (c) a better

understanding of convention center operations and performance, (d) a better

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understanding of the process of evaluating facility performance, and (e) a better
understanding of how profit orientation affects the operation and/or mission cf

the convention center.

Review of the Findings

Research Question 1. In the three convention center cases examined,
Toledo, Rochester, and Dalton, it was found that the feasibility study estimates
of key performance measures for the proposed facility, when compared to the
actual operating performance of the developed facility, were poor predictors of
operating performance. The feasibility study estimates, when compared to
actual operating performance, underestimated and overestimated key
performance measures; it was difficult to define the direction or degree of error
found in each performance measure category. The finding of the three cases
analyzed is that the actual facility utilization performance did not resemble the
projected feasibility studies’ utilization and performance projections.

The interviews conducted with public officials, decision makers, and
building managers in all three case studies revealed that the utilization
projections given in the feasibility studies were not perceived to be particularly
accurate. The rating given to feasibility forecasting accuracy averaged 6.3 on a
scale of 1 to 10 for the three cases. The community leaders interviewed clearly
indicated that they recognized the weakness of feasibility study projections;
however, many of these community leaders indicated that the value of the
feasibility projections is not the accuracy of utilization and/or performance
projections, but rather the feasibility study is part of the political, public relations,

and financing process that is necessary to develop a convention center. The

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price tag for these “political” feasibility studies with performance utilization
projections that are often inaccurate ranges from $25,000 to nearly $100,000.
The average cost for the feasibility work in the case studies reviewed was
$40,000 to $50,000.

mm Qgestion 2. In each of the three cases, the contributions the
convention center had made to downtown economic development were mixed.
In each instance, the convention center was viewed by a majority of those
interviewed as an additional positive asset or offering for the community.

In Toledo, Rochester, and Dalton, the convention center had not yet
provided the anticipated economic spin-offs hoped for in the predevelopment
phase of the convention center project. 'A particular source of friction in all three
cities had been the development of a nearby headquarters convention-quality
hotel to complement the exhibition facility. The hoped-for private development
of hotel properties did not materialize until several years after the convention
center opened in Rochester and Toledo, and Dalton has yet to see a
convention—quality hotel be developed.

The downtown areas for Toledo, Rochester, and Dalton have been
metamorphizing over the last decade into service and business centers, with
little new retail, residential, or after-hours entertainment offerings in the vicinity
of the convention center. The development of the convention centers did not
seem to be reversing this trend.

It could be argued that Toledo and Rochester are actually embracing
what critics call a “carnival model” of revitalization. Rivervvalks, stadiums,

cultural attractions, and infrastructure improvements have been developed or

189

 

 

 

are on the drawing board in the area immediate to the convention center, with
the hope of giving the downtown core a booster shot to immunize the city against
further deterioration. The convention center, an integral part of the plans, has
not produced the promised economic benefits that proponents and often
convention center feasibility studies use to justify convention center
development.

Dalton, on the other hand, has adopted a philosophy that the downtowns
of today are government and business service centers, void of much retail or
entertainment. In keeping with this position, the convention center was built two
miles from the city center on a mountain, just off the interstate, in an area of
rapid restaurant, motel, and outlet retail development. The anticipated spillover
effect of this convention center on the downtown area was minimal, and this
appears to have been the result.

Best-arch Question 3. In the three cases, Toledo, Rochester, and Dalton,
the attitudes and expectations expressed by public officials, decision makers,
and building managers were often incompatible with the stated formal mission of
the convention center. To many of those interviewed, the concern over the
facility’s annual financial performance and the need for the facility to break even
outweighed the concerns as to the type of utilization occurring at the facility.
None of the facilities’ mission statements include financial performance goals in
terms of breaking even or revenues exceeding expenditures for operations. The
mention of bringing in business with economic impact is considered. There are
no specific objectives for day-to-day operation costs. Most of the persons

interviewed in all three cases were aware that most convention centers run an

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annual deficit. The average deficit figure is well over $800,000 annually (Fenich,
1992). The facilities studied averaged an annual deficit of more than $550,000.
There seemed to be the expectation, or at least hope by many of the public
officials, decision makers, and facility managers interviewed, that their particular
facility would be able to overcome its deficit position and break even financially.
Research Question 4. In all three cases, the public officials, decision
makers, and facility managers did not consistently express the same
performance measures as indicative of the facility’s success or failure. The
standards of measurement most frequently mentioned by those interviewed,
across cases, were heads in beds or hotel room nights and economic spinoff.
These are measurements typically used in feasibility studies and industry
literature; however, all interviewees used their own measurement standards,
assigning their own weight or priority to evaluate convention center performance.
Research Question 5. In all three cases, the people interviewed rated the
facility quite high in terms of operational success, an average score of 8 on a
scale of 1 to 10. The determinants of success most frequently cited were heads
in beds, economic impact, and financial performance. The difficulty with this
finding is that the order of magnitude or agreed-upon measures of success to
use in evaluating the convention center’s success vary from one person to
another, and there is no consensus among those involved with the convention
center as to what are the appropriate performance measures to use.
Beiearggpestion 6. In each case studied, Toledo, Rochester, and
Dalton, the stated mission and objectives had remained formally the same since

the building was opened. In each case, although not stated in the formal

191

 

mission, annual financial performance had become more and more of a concern
over time, with breaking even or getting as close to breaking even between
revenues and expenditures becoming an objective of facility managers. This is
borne out in the marketing behavior and event bookings at the facilities that are
trying to host more and more revenue-producing events.

Research Question 7. The public officials, decision makers, and facility
managers in the three cases analyzed, Toledo, Rochester, and Dalton,
perceived that public opinion toward the convention center’s success was lower
than their own opinion of the success of the convention center. The most often
cited reason for the disparity was the need to educate the public about the
benefits of a convention center to the local economy and the role of the media in
repeatedly printing stories that focus on the convention center’s financial plight.

Research Question 8. In reviewing more recent (late 19805 to 19905)
feasibility studies for convention centers across the country and comparing them
to the SeaGate Convention Centre, the Rochester Riverside Convention Center,
and the North West Georgia Trade and Convention Center feasibility studies, no
significant changes have occurred in the way that feasibility studies are
conducted. Also, the methods used to calculate and project event utilization,
marketing, financial information, and site recommendations are similar from
study to study.

Proppsition 1. The research clearly indicates that for the three cases
examined, Toledo, Rochester, and Dalton, convention center feasibility study
estimates of performance with regard to event utilization, when compared to

projections of how use of these facilities would be distributed, varied markedly

192

from how they are actually being used. The degree of disparity between the
projected operating performance and actual operating performance was
substantial for facility utilization/activity. Conventions and tradeshows were
projected to be the dominant use; however, community events turned out to be
the dominant use. The interviewees’ doubts about the accuracy of the feasibility
study estimates of facility uses were supported by the findings from this study.

Proposition 2. In all three convention center cases, the public officials,
decision makers, and building managers who were interviewed perceived the
facility to be performing well, all but financially, and were quite positive in their
attitudes toward the center. As the research has shown, the facilities studied
were not performing well in terms of their intended missions. The centers were
hosting significantly more local and public revenue-producing events than
anticipated. The conventions and tradeshows that are being held in Toledo and
Dalton are significantly smaller in size and delegate attendance than had been
projected, and in Rochester, fewer conventions and tradeshows are being
hosted than anticipated; however, they are of a larger delegate size than
projected. '

In all three of the selected case studies, Toledo, Rochester, and Dalton,
the facilities were functioning much more like a “civic center” than a convention
and tradeshow facility. This postoperating performance regarding event
utilization has not negatively affected the public officials’, decision makers’, and
building managers’ perceptions of the convention centers’ operating
performance. Conversely, the facilities all have better revenues to expenditures

or debt ratios, largely as the result of the many local and public revenue-

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producing events. These facilities’ average annual deficit is less than the
industry average. This did not positively affect the public officials’, decision
makers’, and building managers’ perceptions of facility finances.

Proposition 3. In part, the attitudes and expectations of facility
performance by public officials, decision makers, and facility managers are
incompatible with the stated formal mission statements of the facilities, which do
not include statements with regard to yearly financial, break-even goals. Over
time, in all three cases studied, the financial performance or revenue-to-
expenditures ratio has taken on more and more significance as the operational
objectives of the facilities have changed over time and they have become more
and more focused on financial operational viability.

Proposition 4. In each of the three selected case studies, a major
stumbling block to marketing and hosting large convention and tradeshow
events has been the needed, concurrent development of a convention-quality
hotel, to act as headquarters for the meetings held at the convention center.
This scenario was not “considered” in the feasibility studies. Another problem
that was not addressed by the convention center feasibility studies is the difficult
political and financial problems a facility can endure, brought on by the
organizational environment or convoluted ownership of the convention center.
As demonstrated in the three cases, a convention center can serve several
different government bodies, with none wanting to take financial responsibility
for the facility or facility marketing.

The detail of the feasibility study, except in a passing statement or two,

did not address the need for a dedicated source of marketing funding for the

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convention center. Other than describing the different types of management
structures found in convention centers across the country, the feasibility studies
provided little direction as to the management structure that works best or may
work best in a particular situation.

Promsition 5. The missions of the convention centers studied changed
over time from the original development and operating purpose of hosting large
convention and tradeshow activity. Activity and financial viability have become
more and more important to the facilities studied. Pressure is brought to bear on
managers to make the facility at least “break even.” In the cases studied, the
pressure can come from local newspaper coverage of the facilities’ financial

position and as issues in elections of local representatives.

Discussion of Findipgs

The case studies of the Toledo SeaGate Convention Centre, the
Rochester Riverside Convention Center, and the North West Georgia Trade and
Convention Center are certainly not a basis for making broad generalizations to
the larger population about the accuracy of convention center feasibility study
projections. Nor can the evaluation process and criteria that the political official,
decision maker, and building manager interviewees from these case studies
used to determine the success or failure of a convention center operation be
generalized to the larger population of community public officials, decision
makers, and building managers. This research, along with other recent research
on large-city, large convention center expansions, brings up several implications
worth noting and potential directions for future research in the convention center

development process and evaluation of convention center operations.

195

 

Mug

The literature is divided on the economic benefits a convention center
brings to a given community. The argument centers on the spending of public
funds on large convention facilities to bring in outside visitors and stimulate
economic growth in the private sector, as opposed to spending the public funds
on other public needs like education, transportation, police protection, and so
on.

Proponents of convention center development use estimates of increased
economic impact, job creation, and positive image for the area to propagate the
merits of new convention center development. Often proponents advocate
locating the center in the downtown area as a “fix” for lagging and deteriorating
urban cores. The feasibility studies paid for and conducted by major national
consulting firms or economic consultants provide the prodevelopment camp with
studies that project continued expanding convention center space demand well
into the next century. The feasibility study typically forecasts economic gains
through a series of chains of multiplications that turn visitors into dollars for the
community. The projected number of new annual convention visitors is
multiplied by the presumed average stay, then by the average daily spending,
and finally by a “multiplier” intended to capture the economic impact of dollars
that are “re-spent” within the community (Sanders, 1998).

Opponents, or those not enamored of the projected convention center
economic-benefits argument, have become more critical in recent years. This
criticism has been leveled as local community governments have become more

and more financially strained to provide basic government services to residents,

196

 

as recent research provides evidence that convention centers deliver far less
economically than promised by the feasibility studies, and as in a number of
cases the expenditure of hundreds of millions of public dollars has had almost
no effect on individual communities. Critics contend that feasibility studies focus
on building space requirements large enough to generate the big economic-
impact numbers needed to justify the public investment, rather than to fit the
likely market area. These studies compare building the facility to a no-build
scenario of “zero economic impact.” Opportunity cost is not considered. No
attention is given or proposed to comparing other alternative investments or
returns for the public investment dollars (Sanders, 1998).

In his report on large convention center expansions, Sanders (1998) cited
impressive evidence that large convention centers, often presented as the best
examples of convention center operation and economics, are functioning well
below expectations, hosting fewer conventions and tradeshows, hosting
conventions that are smaller in delegate attendance than projected by the

feasibility studies, and as a result are generating fewer hotel room nights.

The Current Research

This case study research indicated that Toledo’s, Rochester’s, and
Dalton’s convention centers, in smaller cities and in emerging, not primary
tourist/convention markets, have had similar experiences to the large cities that
have expanded their convention centers. These facilities, which were built to
attract convention and tradeshow business to the area, are very similar to the
larger convention centers that Sanders (1998) reported on, from the standpoint

that all three of the convention centers studied are used a majority of the time as

197

civic center complexes for local events. The conventions and tradeshows in all
three of the facilities studied have less economic impact to the area than
expected, either from having less delegate attendance (are a smaller size) than
projected in the feasibility studies or from hosting fewer convention events than
projected. The convention centers studied often host conventions that do not
necessarily require the large exhibition space and in many cases could easily be
accommodated in a medium to large hotel with meeting room and ballroom
space.

The research findings indicated that, for all three facilities, the number of
event days for conventions and tradeshows was not close to optimal capacity
(265 days or 70% occupancy). Toledo’s convention/tradeshow usage was 168
days or 40% of available capacity, Rochester's convention/tradeshow usage was
98 days or 27% of available capacity, and Dalton’s convention/tradeshow usage
was 56 event days or 15% of available capacity.

The results of the interviews with public officials, decision makers, and
building managers illustrate the complexity of convention center performance
evaluation. Given that the convention centers studied are underperforming in '
convention and tradeshow utilization, it is interesting that in all three cases a
majority of those interviewed perceived the convention center as meeting its
mission and functioning well operationally, except for the yearly deficit.

The standards of performance used to judge the convention center's
operation are not clear, consistent, or prioritized, varying from individual to
individual interviewed. The comments regarding performance objectives and

measures ranged from “the facility is a loss leader and is never expected to

198

 

break even and/or make a profit” to “the facility should strive to break even and
make an annual profit.” The interviewees revealed an understanding and
appreciation of many of the industrywide and feasibility study performance
measures leading to economic benefits for a community. However, there was no
consensus on which performance measures are to be adopted to gauge facility
performance or what priority is placed on which industrywide performance
measures to use for a particular facility.

The interviewees’ responses to questions concerning the convention
center feasibility studies’ accuracy for performance measures indicated that
most of those interviewed—public officials, decision makers, and facility
managers-regarded the projections with suspicion. On average, they gave
Question 8b, concerning the accuracy of convention center feasibility study
projections, one of the lowest average responses (6.1) of any of the items they
were asked to rate on a scale of 1 to 10 (see Appendix D).

When the information from the comparison of feasibility study utilization
projections to actual operating performance and the information from the
interviewees are considered together and analyzed, the research supports one
of the underpinning propositions of the study: The convention center feasibility
study is much more about policies and process than about utilization projections
that are accurate and can be relied on as guidelines for facility size, design, and
marketing decisions.

Across the cases, the interviewees highlighted that the feasibility study
findings are used by advocates of convention center development to make the

public argument for development of a large convention facility with public funds.

199

The numbers provided by the feasibility study are used to project new job
creation in the construction and operation phase, additional visitor spending in
the community, and an enhanced community image to compete for convention
business with other cities across the country that have similarly sized facilities.

The process of developing the convention center can become politically
heated, with ramifications of this public discourse felt long after the convention
center is built and in operation. The Toledo case study analysis revealed that
the convention center project was a “political hot potato” from its inception. The
project was pushed by key elected officials. In two referendum votes, citizens of
Toledo defeated the proposition of monies being spent on convention center
development or operation. The county, with the use of special legislation from
the state to use hotel bed tax revenues from the area, built the convention center
in downtown Toledo. The funding situation limited the size of the facility that
could be constructed, and in the drive to build a convention center, a smaller
facility was developed than had been the optimal size recommended by the
feasibility study. Since its inception, the Toledo SeaGate Convention Centre,
while actually performing at the highest level of utilization for conventions and
tradeshows of the three cases analyzed, has suffered the most negatively from
not having a dedicated source of funding for operations from year to year. It is
viewed as a facility that is often resented by the citizens of the community who
voted it down.

Rochester’s development history is perhaps more typical of the
development process for convention centers. It was part of redevelopment

initiatives for revitalizing downtown urban cores in the 19805. There was less

200

local opposition to the convention center, in part because the majority of the
funding was to come from Urban Development Action Grants from the state of
New York. The convention center was viewed as an important link to stimulate
business for hotel, entertainment, and retail businesses. Other than a delay in
getting a complementary headquarters hotel built across the street from the
convention center, the convention center has not suffered from a negative image
within the community at large. The Rochester center has a high level of overall
utilization. The actual convention and tradeshow events and attendance at
those events is below the number of conventions and tradeshows projected by
the feasibility study for the Rochester Riverside Convention Center. Of the three
facilities studied, Rochester appears to have the most potential, due to its size,
reputation, and complementary facilities, to host the most convention and
tradeshow business.

In Dalton, the strong carpet industry lobbied to get a trade center built
with state funding. When the carpet industry did an about-face in response to
new marketing strategies that did not require large permanent showrooms, the
process of getting state funding was already rolling. Community leaders joined
with the carpet industry in the request, changing the facility from a trade center
to a convention and trade center facility, with the focus of bringing in outside
visitors to the northwest Georgia area. The Dalton facility is one of few
examples in the country in which a feasibility study’s findings did not support
construction of the facility. But the community built the convention and trade

center anyway. The Dalton facility’s utilization for conventions and tradeshows

201

was the lowest of the three cases analyzed. However, it is hosting several more
conventions and tradeshows than the feasibility study projected it would.

As these cases indicate, the reasons city and business community
leaders have for advocating the use of public taxpayer monies for the
development of large convention centers vary from city to city. In all three of
these cases, the convention center was advocated as using the public
investment of funds by city/county government to spur new private investment in
an area proximate the convention center. In all three of these cities, the
convention center is viewed by those interviewed as contributing to an enhanced
city image. However, the economic spinoff from the convention center has been

less than anticipated.

Feasibility Studies

The implications from the research regarding convention center feasibility
studies is that the studies done for Toledo, Ohio; Rochester, New York; and
Dalton, Georgia, convention centers were not good predictors of convention
center utilization by event type, event size, or event duration. The facilities’
activity and attendance rates are higher than projected because of the large
number of local events these facilities are hosting and not convention and
tradeshow business for which the facility was designed and financed to
accommodate.

In the cases of Toledo and Rochester and to a lesser extent Dalton, many
of the local events held at the convention center are in competition with those
held at other public and private facilities in the area. Many of the smaller-sized

conventions that are hosted would fit as well in a private hotel or conference

202 ‘

 

center. This displacement was not part of the feasibility study's economic impact
projections. From a review of other feasibility studies conducted during the
same time frame as the feasibility studies that were done for Toledo, Rochester,
and Dalton, and from reviewing convention center feasibility studies conducted
in more recent years as well as recent literature reviews of convention center
research by Sanders (1998) and Fenich (1992), the following observations
emerge:

1. The feasibility study methods used for the cases analyzed were
typical and not unique, albeit the feasibility research recommendation in Dalton
did not favor development of the convention and trade center.

2. The methods used to develop convention center market feasibility
studies have remained relatively unchanged over the past two decades. The
consulting firms and economic consultants continue to make estimates based on
an ever-expanding convention/tradeshow market and to recommend facilities of
a size necessary to create the large economic impact numbers communities
need to justify the convention center development. The feasibility studies
reviewed did not consider a competitive market-share analysis of what happens
as additional facilities (that may already be approved and in the planning or
development process) are added to the marketplace, further slicing the
convention and tradeshow business into small pieces. Little or no attention is
given to the displacement of existing businesses in a community, or the
opportunity cost of investing the public monies elsewhere. The feasibility

studies provide the community with minimal information details on ownership,

203

1

 

management, marketing, and financial issues, which often plague convention

facilities once they are developed.

Concltfions

The convention center boom over the last two decades continues,
undaunted by the proliferation of larger and larger and more and more
convention facilities spread over more of the country. Conflicting reports as to
whether or not the convention and tradeshow market is growing, stagnating, or
perhaps declining abound. During the same time frame, public-sector
involvement shrunk and city budgets shrunk in cities across America, often
significantly cutting basic services. Convention center developers, armed with
positive feasibility study findings projecting great economic benefits of additional
jobs and tourism dollars and an enhanced city image, continued to grow
unabated, even in cities where other capital needs and basic services were often
not being met. Although often portrayed by negative images and reports in local
newspapers, and less than enthusiastic citizen support, communities such as
Toledo, Rochester, and Dalton have been able to muster political resources at
the local and state levels to develop convention centers.

The findings of the three case studies of convention center development
in emerging markets of Toledo, Rochester, and Dalton indicated that:

1. Actual performance is much different from the utilization projections
by the feasibility studies for conventions, tradeshows, and consumer events.

2. As a result of the difference in activity between the projected and
actual performance, the anticipated economic benefits (job and tourism dollars)

to the city or area have fallen short of expectations.

204

3. Public officials, decision makers, and facility managers are
suspicious of feasibility study utilization projections and do not view the
projections as particularly accurate.

4. The feasibility is viewed by public officials, decision makers, and
facility managers as part of the political and public relations process, more so
than as a guideline upon which to develop building and marketing strategy.

5. The evaluation criteria used to assess the convention center's
operating performance varied from individual to individual. Typical industry
standards and criteria were mentioned, but absent was the priority as to how
these standards or measures should be used to evaluate convention center
operations.

6. Public officials, decision makers, and facility managers had a
positive attitude toward the convention center and believed the center was
meeting its mission and objectives. The overwhelming concern to those
interviewed was the financial viability of the center, more so than the types of
utilization activities.

7. The stated mission of the convention center has remained the
same. However, as the facilities get older, more and more concern is voiced and
pressure is put on facility managers to break even financially. As this occurs,
the facility evolves more and more into a civic center that hosts occasional
conventions and tradeshows, rather than the other way around.

8. Convention center feasibility study methodology and reporting
have remained relatively unchanged over the past two decades. If large

convention centers are not living up to their economic expectations (Sanders,

205

1998), then the findings of this multiple case study research on smaller,
emerging-market convention center developments may be illustrative of a larger,
inherent problem with convention center feasibility study methods and reporting.
This research found very large differences between projected facility utilization
for conventions, tradeshows, and consumer shows and actual operating
performance once the convention center was developed and in operation.

Although some of the differences may be attributable to management and
marketing decisions not studied here, the differences are significant enough to
question the current practices and the value of performing feasibility studies in
the convention center development process. The interviewees tended to view
the feasibility study as a public relations tool and to be used for political
purposes by those advocating convention center development in the community.

9. The trend to have the convention center be profit oriented or at
least break even was validated in each of the three cases studied. This profit
orientation has changed the event activity and marketing of the convention
center and may covertly be encouraging the use of the facility as a “civic” center
with profitable “gate” events over convention and tradeshow events that “cost”
the facility to host.

10. In all three cases, the decision to develop a convention center,
although based on economic projections, had much more to do with “politics”

and city image enhancement than with economics.

206

 

rban Poli lm lications for sin onvention enter
Strategv in Smaller Markets

Small and medium-sized cities have jumped on the bandwagon of
developing convention centers as an economic catalyst to urban revitalization.
The risk for smaller cities is high, both economically and politically. The money
pledged to support the convention center's capital and operating costs is
significant in proportion to the local government budget, and the convention
center project often becomes a political battleground for local elected officials.
To further complicate matters, the decision makers often rely on feasibility
studies to be both public relations tools for the project and the definitive guide to
future facility performance. 1

The case studies of Toledo, Rochester, and Dalton indicate that
communities considering the development of a convention center as an
economic catalyst may do well to recognize from the outset these factors:

1. Most public convention centers do not break even.

2. There is increasing political pressure on convention center
managers to break even.

3. If being profit oriented or breaking even is a goal, this needs to be
incorporated into the mission statement.

4. Most convention centers host a majority of civic events and only a
small number of actual convention events.

5. For the most part, convention centers are a net economic benefit to
the community, although probably much less so than economic forecasts project

(Fenich, 1992).

207

6. Private-management, private-ownership facilities are on the rise
and indicate profitability and a possible long-term future trend for the industry.

7. A majority of all conventions (75% or more) can be held in hotel
properties (Abbey & Link, 1994).

8. Recent research on destination appeal (Fenich, 1992; Opperrnann,
1991) suggests that the key to destination selection by convention meeting
planners may be the city itself, which was rated as much more significant than
the availability of a convention facility. This suggests that decision makers need
to consider the entire city’s destination appeal. Simply building a convention
center does not automatically bring convention and tradeshow activity to an
area.

9. Facility performance guidelines and desired event activity levels
should be determined from the beginning, upon which to make management!
marketing decisions and judge convention center performance.

10. Political leaders need to recognize that the convention center may
not be just about economics, but may be fulfilling other social needs of the city,
such as image enhancement, keeping up with competition in other cities, or
providing a public facility for the community. This may help in deciding whether
this is the best use of taxpayers” money.

11. Finally, if the goal is to develop a convention center regardless of
the cost to the taxpayers of the community, one lesson from centers already built
may be that, to get a public project completed, overestimate the benefits and
underestimate the costs, and keep touting high economic benefits by boosting

numbers (Breslow, 1994; Fenich, 1992).

208

Recpmmertdations

Recent studies and this research have begun to document the flawed
projections of future event utilization found in convention center feasibility
studies. The research findings suggest that new convention center feasibility
study methodology, process, and reporting may need to occur in order to get
more accurate performance projections that communities can use with
confidence, as guidelines for the development and postdevelopment standards
of measurement upon which to evaluate convention center operating
performance.

The trend over the past 10 years for facilities to be profit oriented is
changing the objectives and operations of convention centers across the
country. This study documented the focus on performance at convention
centers to be financially viable. This creates a dilemma for management and
may be undermining the mission of the facility to market and host conventions
and tradeshows. Public officials, decision makers, and facility managers need to
clearly establish how convention center performance will be evaluated and
operationalized, realizing that promoting a profit orientation may be undermining
the larger mission: hosting conventions and tradeshows.

The cases studied in this research bring up several questions for
communities considering building a convention facility. The first and most
obvious is: What is the community really building this facility for? Is it truly to be
a dedicated convention and tradeshow facility, or is the facility more likely to be
operated as a civic center? How much subsidy and for how long is the

community willing to pay for this facility? What are the true costs, the realistic

209

benefits, and likely outcomes for the community in building a convention facility?
Is it possible to offer incentives to private developers to build an adequate-size
facility that meets the community’s needs? If breaking even is a goal, what are
the advantages and disadvantages to private or public management of the
facility? And finally, in hiring a consultant to do the feasibility projections, is the
document to be used as a public relations tool, or is the expectation that the
feasibility study provides realistic projections of the facility’s performance level
once in operation? Answering some of these questions at the beginning of the
development process would help the community end up with a facility it both
wants and can afford.

Research on convention centers’ development, operations, and marketing
and management is scant. The findings of this case study research and cross-
comparisons raise additional research questions that need to be answered,
using the larger population of convention centers across the country. Questions
that should be investigated include: What percentage of convention center
building occupancy is really being used for conventions and tradeshows as
opposed to local events? What type of management ownership works best?
Can convention centers meet their mission and break even financially? What
does the addition of new facilities and square footage do to the market at
existing facilities?

The lack of research on the convention and meetings industry provides a
myriad of opportunities for research. This study’s findings are a small step
toward a better understanding of the results of convention center development in

second-tier cities within the context of urban and economic development. The

210

three case study investigations support earlier research of the most-often—given
political, economic, and social arguments used by community leaders in support
of or against convention center development. The research sheds new light on
the role of the feasibility study in the convention center process. The study
provides for a better understanding of how communities evaluate the success or
failure of convention center development and operations. Overall, the research
findings contribute to a better understanding of the convention and meetings

industry, a significant subsegment of the tourism industry in need of study.

211

APPENDICES

212

 

APPENDIX A

LETTERS OF INTRODUCTION

213

 

To Whom it May Concern:

This is to introduce Sherie Brezina, a highly qualified individual, pursuing a
doctorate degree in Park, Recreation and Tourism Resources from Michigan State
University. Ms. Brezina has convention facility working experience and teaches
tourism courses. Her research involves case studies of convention centers in
emerging, secondary markets. Toledo, Ohio and the Seagate Convention Center is
one of three cases being studied.

The purpose of the research is to gain perspective on the role of the convention
center in downtown economic development or revitalization and to document
measures of performance used to evaluate the convention center through interviews
with public officials, decision makers and facility management. There is a paucity of
research and evaluation of convention facilities outside of that conducted by private
research firms for a fee. We believe this research will further the understanding of
convention center development and operations related to performance measures. A
list of questions the study seeks answers to is attached.

In the interest of time, Ms. Brezina has designed the study to be a focused
question interview format and should not require more than a half hour of your busy
day. Given your experience and expertise your responses to the questions poised
are extremely important. We appreciate your voluntary agreement to participate in
the study by conducting the face to face interview with Sherie Brezina. Your desire
to refuse to answer specific questions or expound upon others will be strictly
respected. In the interest of confidentiality, individual names of participants will not
be used in the written report.

Please feel free to call me if you have questions or would like to confirm this
information (517) 353- 0793. On behalf of the Park, Recreation and Tourism
Resources Department and Michigan State University we thank you for your time
and providing our student, Sherie Brezina with this research experience. Please let
Ms. Brezina know if your would like a copy of the report findings.

Sincerely,

“7244/1492

Dr. Donald Holecek, Professor
Dissertation Committee Chair

214

 

 

 

MICHIGAN STATE

UNIVERSITY

 

To Whom it May Concern:

This is to introduce Sherie Brezina, a highly qualified individual, pursuing a
doctorate degree in Park, Recreation and Tourism Resources from Michigan State
University. Ms. Brezina has convention facility working experience and teaches
tourism courses. Her research involves case studies of convention centers in
emerging, secondary markets. Rochester, New York and the Rochester Riverside
Convention Center is one of three cases being studied.

The purpose of the research is to gain perspective on the role of the convention
center in downtown economic development or revitalization and to document
measures of performance used to evaluate the convention center through interviews
with public officials, decision makers and facility management. There is a paucity of
research and evaluation of convention facilities outside of that conducted by private
research firms for a fee. We believe this research will further the understanding of
convention center development and operations related to performance measures. A
list of questions the study seeks answers to is attached.

In the interest of time, Ms. Brezina has designed the study to be a focused
question interview format and should not require more than a half hour of your busy
day. Given your experience and expertise your responses to the questions poised
are extremely important. We appreciate your voluntary agreement to participate in
the study by conducting the face to face interview with Sherie Brezina. Your desire
to refuse to answer specific questions or expound upon others will be strictly
respected. In the interest of confidentiality, individual names of participants will not
be used in the written report.

Please feel free to call me if you have questions or would like to confirm this
information (517) 353- 0793. On behalf of the Park, Recreation and Tourism
Resources Department and Michigan State University we thank you for your time
and providing our student, Sherie Brezina with this research experience. Please let
Ms. Brezina know if your would like a copy of the report findings.

Sincerely,

(Zest/KM

Dr. Donald Holecek, Professor
Dissertation Committee Chair

215

MICHIGAN STATE

UNIVERSITY

 

To Whom it May Concern:

This is to introduce Sherie Brezina, a highly qualified individual, pursuing a
doctorate degree in Park, Recreation and Tourism Resources from Michigan State
University. Ms. Brezina has convention facility working experience and teaches
tourism courses. Her research involves case studies of convention centers in
emerging, secondary markets. Dalton, Georgia and the Northwest Georgia Trade
and Convention Center is one of three cases being studied.

The purpose of the research is to gain perspective on the role of the convention
center in downtown economic development or revitalization and to document
measures of performance used to evaluate the convention center through interviews
with public officials, decision makers and facility management. There is a paucity of
research and evaluation of convention facilities outside of that conducted by private
research firms for a fee. We believe this research will further the understanding of
convention center development and operations related to performance measures. A
list of questions the study seeks answers to is attached.

In the interest of time, Ms. Brezina has designed the study to be a focused
question interview format and should not require more than a half hour of your busy
day. Given your experience and expertise your responses to the questions poised
are extremely important. We appreciate your voluntary agreement to participate in
the study by conducting the face to face interview with Sherie Brezina. Your desire
to refuse to answer specific questions or expound upon others will be strictly
respected. In the interest of confidentiality, individual names of participants will not
be used in the written report.

Please feel free to call me if you have questions or would like to confirm this
information (517) 353- 0793. On behalf of the Park, Recreation and Tourism
Resources Department and Michigan State University we thank you for your time
and providing our student, Sherie Brezina with this research experience. Please let
Ms. Brezina know if your would like a copy of the report findings.

Sincerely,

(yew/W.

Dr. Donald Holecek, Professor
Dissertation Committee Chair

216

APPENDIX B

INTERVIEW QUESTIONS

217

Interview Questions

City Person’s Name
Title/Relationship Date Time

1. Please provide a brief sketch of your relationship with the development and/or
operation of the convention center.

Mission/Objectives

2. A. In your opinion, what is the mission or objective of the convention center?
B. Has the mission or objectives for the convention center changed over time?

3. On a scale of 1 to 10, with 1 being “Does not meet the mission or objectives at
all” to 10 being ”Totally meets the mission or objectives of the convention
center,” how do you rate the convention center?

4. What specific standards of measurement do you use to evaluate the operating
performance of the convention center?

Economic Development/Public Perceptions
5. A. On a scale of 1 to 10, with 1 being extremely negative and 10 being

extremely positive, how would you rate the image of [City Name] prior to
the development of the convention center?

B. Using the same scale, what rating would you give the city image today?
6. A. How has the convention center contributed to downtown economic
growth and/or revitalization?
B. On a scale of 1 to 10, with 1 being extremely negative and 10 being

extremely positive, how positive or negative is public opinion regarding
the convention center’s performance?

7. Knowing what you know today, what, if anything, might be done differently in
the development or operation of the [City name] convention center? Explain.

Performance Measures

8. A. How important are the findings of the feasibility study in the development
of convention facilities? Explain.
B. In your opinion, on a scale of 1 to 10, with 1 being not accurate at all and

10 being extremely accurate, how would not rate the estimates/
projections given in feasibility analysis studies for convention center?
Explain.

9. Has the [City name] convention center's operating performance closely

resembled the feasibility study estimates of the facility’s potential for
performance? Explain.

218

10. A. On a scale of 1 to 10, with 1 being extremely unsuccessful and 10 being
extremely successful, how would you rate the operating performance of
the convention center? Explain.

B. In evaluating convention center performance, what do you consider the
determinants of success for convention center operation and
development?

Other Considerations

11. Please discuss anything else you‘think is important to [City name] convention
center’s development and operation with regard to operating performance or
economic development.

12. These are the persons/positions l have plans to interview:

 

Please give me three or four other individuals” names that I should interview to
have a complete understanding of this particular case:

 

 

THANK YOU VERY MUCH!

219

APPENDIX C

INTERVIEW RESPONSES

220

Interview Responses-SeaGate Convention Centre, Toledo, Ohio

 

1. Please provide a brief sketch of your relationship with the development and/or
operation of the convention center.

IT Economic Development Office. Indirect relationship with center. The
building brings in visitors. This has economic impact on downtown and
economic developments.

2T President of Chamber. No direct relationship. Chamber used to run
marketing ‘end; now separate.

3T Member of Convention Board. Appointed by the city. Convention center
and CVB merged. Current mayor's suggestion to interview for city’s
input

4T County Administrator since 1984; facility opened in 1986.

5T Former Mayor, former CVB Director. Proposed convention center in
1972.

6T President and CEO of convention center and CVB. Hired in 1991 to am
facility.

MissionIObjectives
2A. In your opinion, what is the mission or objective of the convention center?

1T To promote city. Development new attraction opportunities, sell city
resources. Integral component to downtown marketing of city. Provide
entertainment to community.

2T Provide location to business groups, large gatherings and tradeshows.
Accessible location to community, asset in selling city.

3T Provide facility for conventions, tradeshows, special events. Marketing
end to promote community to outsiders.

4T Economic catalyst to downtown and area. Aid identity and help in
revitalization of Toledo effort. Regional gathering point.

ST Show off city. Help with revitalization of downtown. Spin off dollars
economically into the community.

6T Activity at any cost; don’t worry about revenues.

28. Has the mission or objectives for the convention center changed over time?

1T
2T
3T
4T
5T

6T

I don’t know.

I have not noticed a change.

Evolved . . . interest in space use and economy has changed. Bookings
up, generating more activity at the convention center.

Role changed. Convention center did not “save” Portside Festival
Marketplace from closing. Urban center has changed.

Has changed . . . type of events held . . . more sporting events to keep it
financially secure.

Yes; be an activity generator for downtown; put heads in beds. Second
is economic spinoff.

221

On a scale of 1 to 10, with 1 being “Does not meet the mission or objectives at
all” to 10 being ”Totally meets the mission or objectives of the convention
center," how do you rate the Toledo SeaGate Convention Centre?

1T 6.5

2T 10

3T 10

4T 5 (oversold)
5T 7.5

6T 10

Average response 8.1 on a 10-point scale, with a range of responses from 5 to
10.

What specific standards of measurement do you use to evaluate the operating
performance of the convention center?

1T Activity downtown, number of events.

2T I don’ t measure. Increased use in appropriate fashion, mix of events,
this has expanded.

3T Bookings, activities, convention/tradeshow activity. Effectiveness of
marketing operations.

4T Compare against other Ohio convention centers. Budget and money
going out. Management is turning around financially.

5T Not designed for multipurpose use; mainly for convention
use-conventions and tradeshow business.

6T Activity, occupancy. Currently 645. Hotel occupancy and daily rate up.

Economic Development/Public Perceptions

5A.

On a scale of 1 to 10, with 1 being extremely negative and 10 being extremely
positive, how would you rate the' Image of Toledo prior to the development of
the convention center?

1T Not here, I don’t know.

2T I wasn’t here, but my view is Toledo’s image is better from national
exposure in print publications and increased attractiveness of downtown.

3T 4 to 5, 4.5

4T 7
5T 5
6T 2

Average response 4.6 on a 10-point scale, with a range of responses from 5 to
10.

222

SB.

6A.

68.

Using the same scale, what rating would you give the city image today?

1T 7 or 8, 7.5

2T 10

3T 8 or 9, 8.5
4T 7

5T 9+

6T 9+, very positive image

Average response 8.3 on a 10-point scale, with a range of responses from 7 to
10.

How has the convention center contributed to downtown economic growth
and/or revitalization?

1T Serves as an anchor for downtown. Baseball center is being considered
behind center.

2T Brings in people to spend money at restaurants, COSI Museum.
Economic generator, residential re-growth downtown, some converted
apartments. Occupancy rates at hotel and center up. Baseball
stadium’s location linked to convention center. Has brought in business
to revitalize downtown area.

3T Political system changed to strong mayor form of city management.
Mayor’s top three projects are downtown. Convention center, hotels,
and businesses led to two other hotels being built downtown.

4T No. Hotels like Radisson, next to convention center, built because of
Owens Corning wortd headquarters across street.

5T Important part of puzzle. Area cleaned up aesthetically better. Opening
of COSI.

6T Yes. New stadium, Riverwalk investment, farmers’ market, micro-
breweries, sports arena. Create activities through conventions.

On a scale of 1 to 10, with 1 being extremely negative and 10 being
extremely positive, how positive or negative is public opinion regarding the
convention center’s performance?

1T 5
2T 4
3T 5.5 to 6
4T 5

5T Positive, changing as people move downtown. Public has not seen
value of a convention center.

6T Was negative, complete reversal, multitude of activity is positive, media
now behind convention center.

Average response 5.0 on a 10-point scale, with a range of responses from 4 to
5.75.

223

7. Knowing what you know today, what, if anything, might be done differently in
the development or operation of the Toledo convention center? Explain.

1T Advertise resources to local organizations to extend regional marketing
campaign. More event planning.

2T Fund differently. Do referendum, build bigger facility, better educate the
public.

3T Section 79 prohibits city from being involved in center’s financing. More
action on city’s part to put money into CVB for marketing center.

4T Do funding and construction differently. Only way at the time . . . city
pushed it, county built it, city has not lived up to its end. '

5T Happy with it; great facility.

6T County should have assumed ownership and operate as department and
hire management company to operate. Money being spent to cover
deficits could then be used to market facility.

 

Performance Measures

8A. How important are the findings of the feasibility study in the development of
convention facilities? Explain. '

1T Made to order. Political momentum builds, project develops a life of its
own.

2T Look at options, possible uses, performance markets, location, etc.
Identifies the need to build in the community.

3T Most feasibility studies viewed with suspicion. Who’s paying may
determine what study says. Marketing, financial packages, and models
help. Feasibility studies can be objective.

4T Did not read at time. Always knew feasibility study is part of the public
relations process.

5T Very important Needed to convince public, part of sales process.

6T Very important. Important to render an independent judgement, not just
those that hired them . . . Has to be done, size, organization, location
recommendations important.

BB. In your opinion, on a scale of 1 to 10, with 1 being not accurate at all and 10
being extremely accurate, how would not rate the estimates/ projections given in
feasibility analysis studies for convention center? Explain.

1T Do not want to answer.

2T 7—Extremely important. Identifies detractors and supporters. Fund-
raising awareness. Lousy and good studies, make client happy, find a
way to recommend building.

3T 5—To me, very important. Studies tend to be optimistic. Usually need to
be updated by the time released. Can’t predict economic up/downtums
very well.

4T Lots of assumptions in small print Pushed to limit, outcome/results often
predetermined due to the politics of the process, so not accurate.
Consultant’s job is to be selected. Leader's job is to lead.

5T 5—Average accuracy.

224

10A.

108.

6T 4-In Toledo’s case study, projections overly optimistic in convention
market. Sizing, infrastructure overty ambitious. Leaders wanted center
built anyway.

Average response 5.3 to a 10-point scale, with a range of responses from 4 to
7.

Has the Toledo convention center’s operating performance closely resembled
the feasibility study estimates of the facility’s potential for performance?
Explain.

1T Falls short. Budget shortfalls. Feasibility study more rosy picture than
what has happened.

2T I don’t know that. Always in financial trouble.

3T Has exceeded expectations. Prior to five years ago, in financial trouble.

4T Did not look at financials. Findings different than actual.

5T Facility has taken time to meet projections/estimates.

6T Operating shortfall was accurate; built as pure convention center.

On a scale of 1 to 10, with 1 being extremely unsuccessful and 10 being
extremely successful, how would you rate the operating performance of the
convention center? Explain.

1T 7—Could be better, more selling opportunities locally. No
mismanagement.

2T 6—Because of financial constraints.

3T 89, 8.5-Well managed, operated; design good. Needs to be bigger.

4T 5.5—Operations limited due to inadequate funding for marketing. Room
to do more.

5T 7-8, 7.5—Getting better all the time.

Average response 7.3 on a 10-point scale, with a range of responses from 5.5
to 9.

In evaluating convention center performance, what do you consider the
determinants of success for convention center operation and development?

1T Access to local development, local government and business support,
cost to user, recreation and entertainment activities available.

2T Occupancy, revenues/expenditure ratio for upkeep and maintenance.
Good service, flexibility.

3T Use, heads in beds, repeat business.

4T Occupancy, profit, loss, type of events, outside events, large public
events for community.

5T Number of people from outside the community; heads in beds.
Economic spin-off, profitability/subsidy levels.

6T Operating revenues. Meeting mission statement, image in community.

225

 

 

Other Considerations

11.

12.

Please discuss anything else you think is important to Toledo convention
center's development and operation with regard to operating performance or
economic development.

1T
2T
3T

4T

5T
6T

Revitalization of downtown; incentives for new business.

Terrific improvement on entire city's look over past years.

Market facility, city/county, funding needed. Revision of hotel/motel tax
from 2% to 4%.

Work on being a “host” community. Need more support from community
to financially support.

Challenging process we are still in.

Replace state law needed; need two boards-one for CVB, one for
Centre.

These are the persons/positions l have plans to interview: mayor or his
designee, county administrator, economic development official, CVB head or
board member, chamber head, city council representative. Please give me
three or four other individuals that I should interview to have a complete
understanding of this particular case. ’

1T
2T
3T
4T

5T

6T

Tom Latchem, President of Regional Growth Partnership

Private-sector people on board.

Joe Moran, president of Downtown Toledo

Harry Kessler, Jim Hazelman, past politicos during process; Ed Bismark,
vista capital.

Tom Latchum; Barney, past director now in Indianapolis; Lewis Sacksby,
retired.

Rich Thielan, Joe Moran, Mark Visoske, Sandy lsenberg, Pres. of Board,
Jim Hartney Port, Ed Seike.

226

Interview Responses—Riverside Convention Center, Rochester, New York

 

1. Please provide a brief sketch of your relationship with the development and/or
operation of the convention center.
1R President of the Greater Rochester Visitors Association, Inc. Serve on
board of the Association, work closely with the Downtown Convention
District, which is made up of three hotels across river from convention
center, hotels connected to convention center, and the Convention and
Visitors Association.
2R Project coordinator for the city on the convention center development;
have worked on downtown development since 1967.
BR Executive director of the convention center since it opened.
4R County legislator for Monroe County. Selected as president of the
Convention Center Board.
5R Staff for Economic Development Department of city, which was the
agency responsible for developing the convention center.
Mission/Objectives
2A. In your opinion, what is the mission or objective of the convention center?
1R Dual purpose—provide central, quality meeting place downtown for
business and public shows, and is the comerstone of the collection of
properties (hotels included) for outside visitor business. Facility excellent
source of civic pride for city.
2R Not all the same—build activity downtown, put Rochester back in
competition for convention business, part of renewal of downtown
revitalization of midtown.
3R Bring in new convention and tradeshow business.
4R Provide (needed) component of visitor industry in Monroe County.
Provide top-notch facility for business, education, and community
gatherings.
5R Attract people to Rochester to meet and spend money; economic
benefits, conventions.
23. Has the mission or objectives for the convention center changed over time?

1R

2R
3R
4R
5R

We more clearly recognize Rochester’s “niche” in national marketing due
to convention centers and hotels. We can compete; facility is
competitive.

No comment.

No—has changed.

Can't comment on this; probably, no.

No.

227

On a scale of 1 to 10, with 1 being “Does not meet the mission or objectives at
all” to 10 being ”Totally meets the mission or objectiws of the convention
center,” how do you rate the convention center?

1R 9-Very high-excellence in management, excellence in physical
environment, cleanliness, etc. We are number one for last three years;
have won top award [for] convention center in New York state.

2R 10-Very high.

3R 10
4R 7—Always need improvement.
5R 10

Average response 9.2 on a 10-point scale, with a range of responses from 7 to
10.

What specific standards of measurement do you use to evaluate the operating
performance of the convention center?

1R We are number-one rated in New York state—won award.
2R Tough to say-very positive.

3R Number of events/dollars to community.

4R Capacity, occupancy level, room tax collected.

5R Bookings per year/quality of service.

Economic Development/Public Perceptions

5A.

58.

On a scale of 1 to 10, with 1 being extremely negative and 10 being extremely
positive, how would you rate the image of [City Name] prior to the development
of the convention center?

1R 5
2R 8.5
BR 2
4R 6
5R 5

Average response 5.3 on a 10-point scale, with a range of responses from 2 to
8.5.

Using the same scale, what rating would you give the city image today?
1R 6—Convention center added value.

2R 4-Nothing to do with convention center, problem with downtown.
Economic base strong to begin with and remains so.

3R 5
4R 8
5R 8

Average response 6.2 on a 10-point scale, with a range of responses from 4 to
8.

228

6A.

63.

How has the convention center contributed to downtown economic growth
and/or revitalization?

1R Other area apart from downtown has revitalized; a lot invested in core.
Waiting for outcome. [No]

2R Downtown has changed. I don’t know. [Don’t know]

3R Has, by the number of hotel rooms—Hyatt, Sheraton Crown, Radisson to
become Plaza, Historic Development designation, evening activity in
area. [Yes]

4R Overall, yes. New hotel construction, area around convention center
impacted. [Yes]

5R Public shows bring people downtown regularly. Hyatt struggling, starting
to do better. Skywalks to midtown plaza, connection via convention
center and hotels. Positive for retail merchants. [Yes]

On a scale of 1 to 10, with 1 being extremely negative and 10 being
extremely positive, how positive or negative is public opinion regarding the
convention center‘s performance?

1R 7

2R 6.5

3R 10

4R NA—can’t rate; part of life, neutral; no one calling.
5R 9

Average response 8.1 on a 10-point scale, with a range of responses from 6.5
to 10.

Knowing what you know today, what, if anything, might be done differently in
the development or operation of the [City name] convention center? Explain.

1R Educate the public; educate the media to benefits.

2R Space restricted due to site. Had to make trade-offs, but end result
worked.

3R Hasn’t got political operating authority. Privatize the way it is organized.
ls different than any other center and assists in independence and
flexibility.

4R Self-sustaining financially would be nice.

5R I don’t know. Hyatt or other hotel there when facility opened.

Performance Measures

8A.

How important are the findings of the feasibility study in the development of
convention facilities? Explain.

1R Feasibility is necessary for earty stages.

2R Major factor in plunging head, defines what you are trying to build.
Necessary to have people support it; political.

229

83.

10A.

108.

3R Depends who does the study-expert/nonexperts. Strong feeling [that] if
taxes are to go up, government needs to substantiate what they are
planning on doing. Gives parameters of project

4R No, vast.

5R Very important—basis for decision making.

In your opinion, on a scale of 1 to 10, with 1 being not accurate at all and 10
being extremely accurate, how would not rate the estimates! projections given in
feasibility analysis studies for convention center? Explain.

1R 7—Consistently lead to positive. If you don’t do it, can’t build it. Is a
formidable tool.

2R NA/gives perspective.

3R 6—Overall, major buildings. They are accurate, more so than for smaller
buildings in second-tier markets.

4R NA/can’t access.

5R 7—Depends on consultants-how qualified (some are not that).

Average response 6.7 on a 10-point scale, with a range of responses from 6 to
7.

Has the Rochester Riverside Convention Center‘s operating performance
closely resembled the feasibility study estimates of the facility’s potential for
performance? Explain.

1R Yes, as far as I know. [Yes]

2R I don’t know.

3R Has closely resembled in type of event days. [Yes]

4R I can’t assess.

5R I don’t know. Perception is that it has; management works so well.

On a scale of 1 to 10, with 1 being extremely unsuccessful and 10 being
extremely successful, how would you rate the operating performance of the
convention center? Explain.

1R 9

2R I don’t know
3R 8

4R 8

SR 10

Average response 8.75 on a 10-point scale, with a range of responses from 8 to
10.

In evaluating convention center performance, what do you consider the
determinants of success for convention center operation and development?

1R Attention to detail, quality of food, high maintenance standards,

maximize profits, well-trained employees, thread political needle.
2R Financial operation; number of people and number of heads in beds.

230

3R Number of attendees, dollars generated, perception of facility to public.
4R Economy, economics, not economic impact.
5R Attendance, type/quality of business, good food service, good design,
flexible building.
Other Considerations
11. Please discuss anything else you think is important to [City name] convention
center’s development and operation with regard to operating performance or
economic development.
1R Always positive/constructive participation in tradeshows (with CVA).
Convention center gives rise to dissatisfaction about concentration of
efforts on downtown; written in executive study.
2R Difficult project; city/state/county two clients to serve city and state
agency. Time frame quick on a complex site. Hyatt perspective also
tough to get built.
3R Goes back to objectives. Fills void in community. Major corporate
functions brought here because of facility being here-Xerox, Kodak,
Ryders Cup, PGA.
4R No
5R Part of downtown development plans, 1977 to 1987. Design
controversial; objections have died down since development
12. These are the persons/positions l have interviewed or plan to interview. mayor

or his designee, county administrator or a representative, economic
development official, CVA head or board member, chamber head, city/county
representative, facility director. Please give me three or four other individuals
that I should interview to have a complete understanding of this particular case.

1R
2R

3R
4R
5R

Tom Mooney, Chamber president.

Tom Ryan, former mayor, Susan Forbes, former economic development
commissioner.

Pete Lawson, Hyatt, HSMA representative.

Nothing

Fashun Ku; Torn Mooney, Chamber, Greg Marshall, CVA

231

1. Please provide a brief sketch of your relationship with the development and/or
operation of the convention center.
1D Executive Director of CVB, trade center employee, 1 year in position,
2-1/2 years as CVB assistant
ZD County administrator, facility jointly owned by city and county.
3D Chairman of NorthWest Georgia Trade and Convention Center Authority.
4D Executive Director of Downtown Development Authority (14 years).
SD Chamber, Vice—President of Business Services and Industry Council.
BD Assistant to city administrator for 16 years.
7D Mayor of Dalton for 10 years.
BD Director of Marketing and Sales, assistant director of facility.
90 Carpet and Rug Institute executive.
Follow-up telephone interviews with city administrator of 7 years.
Director of Marketing and Sales and Assistant Director of facility (new).
Note: Director position “in search process” while in Dalton and in follow-up
telephone interviews.
Mission/Objectives
2A. In your opinion, what is the mission or objective of the convention center?
1D Provide meeting space; bring in outside associations.
2D Enhance economic base.
3D Bring carpet meetings “back” to Dalton (however, industry has changed).
4D Provide place for community; bring in outside groups.
5D Serve region business; state-of-the-art technology and space; bring in
big conventions.
6D Broader horizon for industry, convention business, outside people.
70 Economic impact to Dalton.
80 Bring in groups that generate hotel sales.
9D Civic center, place to host tradeshows.
28. Has the mission or objectives for the convention center changed over time?

1D
20
3D

40
SD
60
70

Interview Responses—North West Georgia Trade and
Convention Center, Dalton, Georgia

 

Don’t know.

I don’t think so. [No]

Changed mission due to change in carpet manufacturing marketing. No
longer need a permanent exhibit space. [Yes]

Just beginning to define right; responding with special events. [Yes]
Objectives have stayed the same—new partnering happening. [No]
Promote industry and trade. [Don’t know]

Mission changed prior to opening from carpet emphasis to economic
impact to downtown from outside events. [Yes]

232

 

8D Yes-new management to promote new mission-conventions and
tradeshows, second carpet third local events.
9D Yes; changed from regional carpet showroom.

On a scale of 1 to 10, with 1 being ”Does not meet the mission or objectives at
all" to 10 being ”Totally meets the mission or objectives of the convention
center,” how do you rate the convention center?

1D
20
3D
40
SD
GD
70
BD
9D

0'

mmsmmoosipco
01

Average response was 7.2 on a 10-point scale, with a range of responses from
4.5 to 8.

What specific standards of measurement do you use to evaluate the operating
performance of the convention center?

10 Convention center misses business; do not have attached hotel. People
don’t realize potential/lack understanding.

ZD Use of facility—not near capacity for hotel/motels. Best drawing card is
wrestling.

30 Budget, expenses, number of events, different groups, annual figures.

40 Conventions, dollars spent, economic indicators.

SD Business and industry market. Problem—no kitchen.

6D Monthly report/calendar of events, budget.

70 Management/marketing orientation.

BD Need hotel, full-service kitchen.

9D Service provided balanced to cost-breaking even/bottom-line numbers.

Economic Developmenthublic Perceptions

SA.

On a scale of 1 to 10, with 1 being extremely negative and 10 being extremely
positive, how would you rate the image of [City Name] prior to the development
of the convention center?

1D Idon’t rate.
ZD 4~No hotel/motel, restaurant

30 8
4D 6.5
SD 7
6D 5
7D 5.5

233

 

 

SB.

6A.

68.

80 2.75
9D 7.5

Average response 5.8 on a 10-point scale, with a range of responses from 2.75
to 8.

Using the same scale, what rating would you give the city image today?

1 D 7

20 5.5
30
40
SD
SD
70
8D
90

ooxroooooooopo
(It

Average response 7.6 on a 10—point scale, with a range of responses from 5.5
to 8.

How has the convention center contributed to downtown economic growth
and/or revitalization?

1D I don’t think so. [No]

20 No—more outlet stores, additional businesses, motels, hotels.

30 Yes-joint efforts positive, working with DDA.

4D Yes-joint project-benefits downtown.

5D No—supported by downtown demographics

SD Yes-attracted hotels, restaurants,

70 Yes—hasn’t hurt it; have to work all the time

8D Yes-l-75 exit explosion of stores, restaurants, hotels-not downtown.

90 No—Not much for downtown; l-75, new restaurants, hotels, public shows

Yes=5;No=4

On a scale of 1 to 10, with 1 being extremely negative and 10 being
extremely positive, how positive or negative is public opinion regarding the
convention center’s performance?

1D 8.5

20 4—Never had big community support.

3D 5—Many people “never“ have set foot in center. “Aloof feeling way up on
the hill.”

40 Community fairly positive.

5D 7—Some ii" negative.

6D 6

7D 7.5—“Started at about 3; now 7 or 8.”

8D Improved-more positive over last year and a half.

9D 4.5-Negatively based on bottom line; don’t indicate reason.

234

 

Average response 6.1 on a 10-point scale, with a range of responses from 4 to
8.5.

Knowing what you know today, what, if anything, might be done differently in
the development or operation of the [City name] convention center? Explain.

1D New hotel; full-service catering kitchen.

20 Hotel, proper land, no strings-careful preplanning, don’t huny.

SD Addition of kitchen; educate community that bottom line profit/loss is not
indicative of whether it is beneficial to community.

4D Contract for hotel.

5D Kitchen and hotel property; negotiate better land deal.

60 Build adjoining hotel, restaurant in planning stage.

70 On-site hotel a must.

8D Kitchen, hotel, more marketing money in budget.

90 Kitchen-better realistic marketing budget over get go—educate
community to benefits.

Performance Measures

8A.

88.

How important are the findings of the feasibility study in the development of
convention facilities? Explain.

1 D I don’t know.

ZD Did not have community support-feasibility study meant nothing in
building it. Study said N_o.

3D Circumstances changed dramatically; findings were irrelevant.

40 Important for general idea; help convince public, but political process.

SD Real important to get state money.

6D 4110.

7D Important for state grant.

8D Completely inaccurate—difficult to address.

90 Don’t know.

In your opinion, on a scale of 1 to 10, with 1 being not accurate at all and 10
being extremely accurate, how would not rate the estimates! projections given in
feasibility analysis studies for convention center? Explain.

1 D NA.

2D It was pretty accurate (our answer then was it wasn’t a good study-was
justification—built anyway).

3D Study was irrelevant to what was developed; not accepted, but operation
has exceeded expectations according to estimates.

4D 7/10.

5D Npt accurate.

SD I don’t remember one being done.
70 7.5

8D 5

9D Don’t know.

235

10A.

108.

Average response (n = 3) of 6.5 on a 10-point scale, with a range of responses
from 5 to 7.5

Has the Dalton convention center's operating performance closely resembled
the feasibility study estimates of the facility's potential for performance?
Explain.

1 D NA.

20 I think projections are close-not sure.

30 Don’t know.

4D Numbers for use, types of events different

5D Close to operating performance; now more different

6D Not doing as well as projected; want more/longer conventions. Desire to
be more of community center.

7D Hasn’t met expectations yet

BD No, I don’t think so.

9D Don’t know.

On a scale of 1 to 10, with 1 being extremely unsuccessful and 10 being
extremely successful, how would you rate the operating performance of the
convention center? Explain. '

1D 9
2D Made progress; long way to go. Big deficit, excess of $112 million.
3D 7

4D 8
SD 8
SD 9
70 7.75
8D 8
9D 8

Average response 7.9 on a 10-point scale, with a range of responses from 6 to
9.

In evaluating convention center performance, what do you consider the
determinants of success for convention center operation and development?

1D Location, flexibility, exhibit space.

ZD Sales tax collection, economic impact (hotel/motel needed).

3D Facility well designed, good location; good for promotions, banquets.

4D Economic development/number of people.

50 Number of meetings—business and industry

6D Ambitious management; intent use.

7D Satisfaction and acceptance of community, economic impact.

8D Management relationship in community—repeat business. Evaluations of
groups toward facility; new ideas.

9D Room use, occupancy rate, types of events; out of turn people,
economic report.

236

 

Other Considerations

11.

12.

Please discuss anything else you think is important to [City name] convention
center's development and operation with regard to operating performance or

economic development.

1D Customer service orientation as key. Nonunion hall—focus more on
outside.

ZD Pretty much discussed.

3D Need to proceed with Carpet Museum—package what we have locally.

4D Discussed most—limited time.

50 More collaboration better. Six or seven carpet industry leaders got
together and wanted trade center built, feasible or not.

60 Joint city/county project difficult to do.

7D Parking problems/kitchen, political philosophy divides, slows down
process. City/lcounty .

BD Skilled workers had to keep hotels/restaurant. . Budget.

90 Education process of community

 

These are the persons/positions I have interviewed or plan to interview. mayor
or his designee, county administrator or a representative, economic
development official, CVA head or board member, chamber head, city/county
representative, facility director. Please give me three or four other individuals
that I should interview to have a complete understanding of this particular case.

1D
20
3D

4D
SD

60

7D

8D
90

Sounds like you have most positions covered.

Phil Foster, legislature; Harold Brooker, Chair, County Commission
Smith Foster, Rick Meyers; Erwin Mitchell, legal counsel; Normal Brickett,
CEO hospital; James Brown, state appointment.

Don Cape, utilities; Chris Gosswich, planning commission; Ray Elrod.
Randal Merrit, Trade Center Authority; Kathryn Wise, CRI; Teresa Davis;
Wanda Ellis.

Leonard Whaley, county administrator, Jerry Albertson, Convention
Authority member, Bob Seaton, planning; Faye Martin, clerk; Deforest
Pans.

Leonard Whaley.

Ann Walker, Convention Authority Board; Kathryn Wise.

Wanda Ellis, Floor Covering Institute; Smith Foster, Masterpiece
Finishes.

237

APPENDIX D

SUPPLEMENTARY TABLES

238

Table D1: Individual responses with ratings: Toledo respondents.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Question
Respondent Average
3 5A SB 68 BB 10A Rating
Response
1T 6.5 NA 7.5 5 NA 7 6.5
2T 10 NA 10 4 7 6 7.4
3T 10 4.5 7 5.75 5 8.5 6.8
4T 5 7 7 5 NA 5.5 5.9
5T 7.5 5 9+ NA+ 5 7.5 6.8
6T 10 2 9+ NA+ 4 9 6.8
Average 8.1 4 6 8.3 5.0 5.3 7.3
question
response

 

Mean response = 6.8

Table DZ: Individual responses with ratings: Rochester respondents.

Average question response = 6.4; response range = 5.9-7.4

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Question
Respondent Average
3 5A SB 68 BB 10A Rating

Response
1R 9 5 6 7 7 9 7.2
2R 10 8.5 4 6.5 NA NA 7.3
3R 10 2 5 10 6 8 6.8
4R 7 6 8 NA NA 8 7.3
SR 10 5 8 9 7 10 8.2
Average 7.3 5.3 6.2 8.1 6.7 8.8
question
response

 

Mean response = 7.3

Average question response = 7.4; response range = 6.8-8.2

239

 

 

Table D3: Individual responses with ratings: Dalton respondents.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Question
Respondent Average
3 5A 5B 6B 8B 10A Rating
Response
10 8 NA 7 8.5 NA 9 8.1
2D 4.5 4 5.5 4 NA 6 4.8
3D 7 8 8.5 5 NA 7 7.1
4D 8 6.5 8 NA 7 8 7.5
5D 8 7 8 7 NA 8 7.6
8D 8 5 8 6 NA 9 7.2
7D 7.5 5.5 8 7.5 7.5 7.75 7.3
8D 8 2.75 7 NA 5 8 6.2
9D 6 7.5 8 4.5 NA 8 6.8
Average 7.2 5.8 7.6 6.8 6.5 7.9
question
response

 

Mean response = 7.0

Average question response = 7.0; response range = 4.8-8.1

240

 

 

 

 

APPENDIX E

COMPARISON OF FEASIBILITY STUDY REPORT CHARACTERISTICS
AND PERFORMANCE MEASURES OVER TIME

241

 

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243

 

 

APPENDIX F

CONTENT ANALYSIS RESULTS

244

 

Rating

+ ++3

++2

+1

 

1984 1990 1997 Year

Average rating of articles for year plotted
Based on 43 Newspaper Article Headlines and Content

 

Legend

(3) +++ Extremely Positive
(2) ++ Very Positive

(1) + Positive

0 0 Neutral

(-1) - Negative

(-2) -- Very Negative

(-3) --- Extremely Negative

 

 

 

Figure F1: Rating of Toledo SeaGate Convention Centre newspaper article
headfines.

245

Rating

+++3

++2

+1

 

1985 1990 1995 Year

Average rating of articles for year plotted
Based on 10 Newspaper Article Headlines and Content

 

Legend

(3) +++ Extremely Positive
(2) ++ Very Positive

(1) + Positive

0 0 Neutral

(-1) - Negative

(-2) -- Very Negative

(-3) --- Extremely Negative

 

 

 

Figure F2: Rating of Rochester Rivergate Convention Center newspaper article
headfines.

246

Rating

+++3

++2

+1

 

1986 1990 1996 Year

Average rating of articles for year plotted
Based on 23 Newspaper Articles and Headlines

 

m

(3) +++ Extremely Positive
(2) ++ Very Positive

(1) + Positive

0 0 Neutral

(-1) - Negative

(-2) —- Very Negative

(-3) --- Extremely Negative

 

 

 

Figure F3: Rating of Dalton North West Georgia Convention and Trade Center
Newspaper Article Headlines.

247

Table F 1: Ratings of newspaper article headlines: Toledo SeaGate Convention

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Centre.

Rating Newspaper Article Headline Date
++ Entire 10 Acres for Convention Center Bought 1984
+ Convention Center Set for Takeoff-Convention Center History 1984
H Bond Package for Convention Center Sold 1985
+ Convention Site Sold to County 1986
+ SeaGate Centre Is Top Choice of Name Panel I 1986
+++ Toledo's Newest Jewel 1987
++ SeaGate Centre Readies for march 27 Dedication 1987
+++ Ohio Convention Centers: 1988 Economic Impact 1988
0 Convention Centers Lose Money, But Boost Cities 1989
0 Fiscal Cmnch Bears Down on SeaGate , 1990
+++ SeaGate Centre Turns 5 and 1“ Monthly Profit 1992
+ Deal Near on Convention Center Seats 1992
0 SeaGate Seeks $1 Million Loan for Arena Seats 1992
- Convention Center Faces Tough Sell on Local Funding 1992
+ SeaGate Centre Means Business, Says Chief 1992
++ Prep Basketball—SeaGate’s Debut Deemed a Success 1994
H Religious Groups Bring More Business to SeaGate 1995
- Convention Bureau Not Satisfied With City’s Contribution 1995
- SeaGate Plight‘s Remedy Sought 1996
-- SeaGate Going Broke; Taxes Called an Option 1998
- SeaGate Could Cost Neighbors 1996
- SeaGate Space Called Problem for Convention 1997

 

 

 

 

Source: The Toledo Blade Toledo, OH.

 

248

Table F2: Ratings of newspaper article headlines: Rochester Rivergate
Convention Center.

 

 

 

Rating Newspaper Article Headline Date

++ It’s Center Stage for the Riverside-$40 Million Project Opens With 1985
Fanfare-and Hopeful Talk

+++ A New Center of Attention-Expectations Are High for City’s High Tech 1985

Hall That Opens This Week (p. 2) It Opens Friday to Great
Expectations, But Faces Fierce Competition... (p. 3) And Some Local
Merchants Fear It’ll Take a Bite Out of Business

 

 

 

 

 

 

 

 

 

 

 

- Ryan Targets Food Profits-Would Use Catering Service Money to 1988
Reduce Convention Center Deficit
- Convention Center Still Losing Money 1989
+ Millionth Patron Cited Down by Riverside 1989
- Ryan Asks Funds for Center Deficit 1990
+ Convention Center Shows Improvement 1990
H Revenues Up At Convention Center 1991
- Convention Center Shows Deficit 1991
+ Convention Center Attendance Up, But Falls Short of Record 1993

 

 

Source: The Democrgtic Chronicle. Rochester, NY.

249

Table F3: Ratings of newspaper article headlines: North West Georgia Trade

and Convention Center.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rating Newspaper Article Headline Date
+ Trade Center Details Come to Light 1986
- Fought for Trade Center-Murphy Takes Senate to Task 1988
+ Dalton Could Support a Facility If Not Proposed Trade Center, 1986

Study Shows
++ Now Up to Senate, House OKs Funds for Center 1987
+++ Senate Committee OKs $5.8 M for Center 1987
+++ Convention/Trade Center a Reality; State to Provide $8.23 Million 1987
Grant
++ Hanis to Budget Funds for Dalton Carpet-Trade Mart 1987
+++ Center a 'Foregone Conclusion” 1987
++ Dalton Picks Possible Site, Greets Tom Murphy 1987
+ Harris Asks for Dalton Project in Budget 1987
+ City Accepts Trade Center Grant 1987
- Murphy Presses on for Carpet Center 1987
+ County Signs Center Contract 1988
+++ Work at Trade Center Site Going Ahead of Schedule 1989
++ Plans Unveiled for Dalton’s $12 Million Convention Center 1989
H» Earth Is Being Moved for North West Georgia Trade Center 1989
+ Contractor Found to Build Trade Center 1990
- Dalton Carpet Mart Looks More Like Civic Center 1990
- Commission Supports Trade Center But Chairman Reviews 1993
Ongoing Problems With Facility Policies
- Trade Center Head Disappointed With Budget 1993
-—- Commissioner Questions Trade Center's Budget 1993
- Financing Snags Plans for Trade Center Hotel 1993
0 Rep: Lower Local Trade Center Rates Not a Sound Idea 1993

 

Source: The Daily Citizen News, Dalton, GA.

250

 

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