Let’s increase the hospitality tax and build a convention center

Filed under: Opinion,Print | Tags:,

Perhaps now they wish they would have pushed harder.

I’m talking about any of the various business interests in town that are scrambling to find a venue for their expositions and conferences now that the Phil Long Expo Center is closing its doors.

Finding adequate space isn’t their only issue.

Just try asking The Broadmoor’s Steve Bartolin to open his 60,000-square-foot conference center to the Housing and Building Association’s annual home and garden show. With its 6,000 attendees trampling through flooring, painting, plumbing and gardening exhibits, there just ain’t no way.

The problem might have been avoided if the push for an honest-to-goodness convention center had been better orchestrated and promoted more aggressively.

So here’s an idea: How about we build one now?

Paying for it will be as easy as imposing an ever-so-slightly higher lodging and rental-car tax. A few tourists might balk, but most won’t even notice it. Bartolin and others in the industry don’t like the idea, fearing it’ll drive business away. But one of the region’s leading economic thinkers believes otherwise.

“We could easily double our LART taxes without any fallout,” Tom Zwirlein, a professor of finance at the College of Business at UCCS, told tourism reporter Rebecca Tonn in last week’s Business Journal.

The LART, which is expected to raise $3.95 million this year, consists of a 2 percent lodging tax and 1 percent auto rental tax. It has been unchanged since 1995. Combined with city, state and county taxes, the total tax for renting a room in the Springs comes to 9.4 percent. Compared to Denver’s 14.85 percent, it’s a steal. The lodging portion of that tax is 10.75 percent for Denver, vs. 2 percent in the Springs.

Building a convention center isn’t a new idea. In fact, it received considerable debate about five years ago before being shelved by the City Council.

Had we gone ahead with construction at that time, there’s no doubt the center would have lost money amid the downturn. But we also would have seen thousands of building-trades jobs created during the construction phase, and the surrounding area would have seen new economic activity for years to come.

I think it’s also safe to predict that, with the additional convention business we surely would have drawn, hotels in our market — even those with their own meeting space — would have seen new business.

Washington, D.C., hotel interests understand the whole better-good argument well.

Earlier this week, ground was broken on a new $537-million convention center hotel in Washington. The hotel association says other hotels within walking distance of the center welcome the new competition. “(Hotel) managers have always been 100-percent behind this — all boats rise,” said Emily Durso, president of the association. “They’re big-picture guys. One new convention a year is $40 million (in additional) spending. So they all benefit.”

A lot will need to happen to make a convention center here a reality.

For starters, lining up political support will be critical. A few months from now, we’ll be voting on an almost entirely new slate of City Council members. Let’s be sure to support candidates with the backbone to stand up to the anti-everything, Doug Bruce contingent.

It also will be important that the language in any new tax measure clearly spell out that the dollars are to be used for tourism only. Hospitality marketing took a big hit this year after the cash-strapped city robbed the Convention and Visitors Bureau of part of its LART allocation.

Naysayers will object that this isn’t a good time for a community debate on anything that requires spending money. But it’s going to take at least a year or two before even a ballot measure can be presented to voters, let alone plans made for a ground-breaking.

Convention centers aren’t always money-makers. They have bad years amid the good. The Phil Long Center, which will soon be home to the Springs Church, lost money.

But it’s not hard to imagine conference planners scratching the 92,000-square-foot center from their lists because of its inadequate parking and location in north Colorado Springs, too far for conventioneers looking to spend down time in downtown.

So now we’re left with a center that’s about to close and some the area’s largest trade shows without a place to go.

Their best hopes? A vacant big-box retail location somewhere.

As a temporary fix, that might do. But it’s not going to work for a city with world-class ambitions.

Should Colorado Springs build a downtown convention center? Vote in the CSBJ Poll.

Allen Greenberg is the editor of the Colorado Springs Business Journal. He can be reached at allen.greenberg@csbj.com or 719-329-5206.

8 Responses to Let’s increase the hospitality tax and build a convention center

  1. The Broadmoor was instrumental in defeating the Proposition in 2004-2005 & will prevail again. Looking to the future is not a prominent feature of our little Village. Great Idea … but it will never fly here because of the “cheap” mentality of the people. Just ask Terry Sullivan how crushing the last defeat of your admirable idea was ……

    RJF
    November 12, 2010 at 10:49 am

  2. I have to agree with RJF. The Broadmoor isn’t too worried that there is no place for the HBA and other trade shows – not their market. Not even the combined efforts of the Chamber, Terry Sullivan and the downtown developers were able to make it happen once the voters got a chance to say no way. The ease of the initiative process is a real impediment to visionary leadership.

    Bob Stovall
    November 12, 2010 at 1:41 pm

  3. So that’s it? The voters say no once and everyone gives up? Times change. Sensibilities change. You can throw up your hands and suggest there’s no way. Or we can lock a few of the smart people in a room, come up with a campaign that makes sense in today’s context and push for what’s good for this city.

    Allen Greenberg
    November 13, 2010 at 7:49 am

  4. The Broadmoor and Steve Bartolin will exhibit their selfishness once more on this issue.

    While they argued last time that the tiny tax increase to tourists would cause them to lose business, as soon as the effort failed, they instituted their own $12 “resort fee” for all guests.

    There is no question that the benefit to the community would far outweigh the costs, but you need to find a way to get around the Broadmoor’s selfishness and the money they will put behind defeating it.

    buddy
    November 13, 2010 at 9:29 pm

  5. The idea has merit and deserves further study to see if you can support such a facility. You’re a different market than DC though so it’s apples and oranges to go with that comparison.

    Don’t have a build it and they will come attitude, get a study done. See if you have the infrastructure to support more meetings/trade shows and if a new facility can co-exist and compliment current product and try it again.

    Also look at other things that could be enhanced with an increase in taxes, marketing campaigns, signage, etc…

    RCC
    November 14, 2010 at 7:36 am

  6. I take some offense with the statement that “Building a convention center isn’t a new idea. In fact, it received considerable debate about five years ago before being shelved by the City Council.”

    In fact, many of us on Council were in favor of a new convention center, as were many members of the Urban Renewal Authority, on which I also sit. We were excited by some of the possibilities we saw, especially in concert with the Southwest Urban Renewal Area. However, the voters approved a Charter change in 2005 that started off with (article 11-70):

    “The City of Colorado Springs shall be prohibited from planning, building, funding, or financing a convention center, with or without a hotel or other ancillary structures, unless a majority of voters gives prior approval to the complete project at a regular or special municipal election.”

    So here’s the Catch 22: how do we start the process of thinking about a new convention center if we are prohibited from even “planning” one? And how do you get the voters to approve a “complete project” if we can’t plan, fund, or finance under the rules of the charter?

    This proposed charter change was a campaign issue when I ran for re-election in 2005. I heard several of the candidates say (me included) that a charter change too severely tied our hands when planning for the City but a slick campaign for the charter change won out.

    You can blame Council for some things, but not this one.

    Scott Hente
    November 16, 2010 at 8:27 am

  7. Sorry, Allen. I have to agree with Scott. There was a tremendous effort made to move discussion about a downtown convention center forward. There were multiple supporters, the Chamber, EDC, developers and planners. Some of the leadership behind the idea did so at great professional risk to himself. The interests that opposed the idea, led by the Broadmoor, knew exactly what they were doing when they said that the City couldn’t even engage in the discussion. They ran the measure as an anti-tax measure. Note the language that voters have to approve the complete project, not just the idea of discussing the project. If we are going to have any public effort to start the planning process, then help identify a “few smart people” who can initiate the planning and then initiate a measure for the ballot that will repeal or satisfy the Broadmoor initiative.

    Bob Stovall
    November 16, 2010 at 2:56 pm

  8. Guys, read the piece with a little more care, please. I never blame the City Council for any of this.

    Allen Greenberg
    November 18, 2010 at 2:07 pm