October 9, 1997

How You'll Pay for DC's Biggest Boondoggle Ever

By Beth Solomon

This article was originally published by the Washington Regional Network for Livable Communities in a fax newsletter called "Intersect."

If you thought the District was in bad financial shape before, watch the city sign the biggest blank check in its history to build an undersized convention center at Mt. Vernon Square -- subsidized by you.

Since late last year, official convention center cost estimates have bolted from $450 million to $550 million to $650 million (not including an $85 million asset, the downtown land). Now the GAO says the budget is more like $737 million, and the newspapers say the sole bidder on the project, Clark Construction, bid $100 million over budget. That adds up to $837 million in cash out of pocket.

But whose pockets? D.C. taxpayers, of course. The hotel and restaurant associations, served by Council members Jack Evans and Charlene Drew Jarvis, are backing a piece of legislation before the D.C. Council that would trigger an automatic surtax on D.C. businesses and sales of certain goods to pay for shortfalls in convention center financing.

Not that D.C. businesses and consumers aren¹t already paying. Contrary to the convention center pushers' oft-repeated line, D.C. businesses and residents are currently taxed to pay for the convention center through the corporate and unincorporated business income and franchise tax, taxes on restaurant meals, and sales taxes on certain other items.

The change is that the new legislation would allow the Mayor to raise the dedicated taxes as much as needed to pay for the project -- but only if costs exceed available funds.

That¹s the funny part -- "if" costs exceed available funds. Estimated costs for the project are already 90 percent higher than last year -- before one spade has been turned.

"There¹s a point at which this [convention center] becomes too expensive to do," said Frank Smith, Ward 1 Councilmember and heretofore friend of the project. "If it starts to look like a billion-dollar project, maybe we need to look somewhere else."

But don¹t count on Smith to step out of line on a project that has almost every politican in town marching to the heavyweight hotel and restaurant associations' tune. Even Eleanor Holmes Norton, who privately expresses worry about the Mt. Vernon location of the convention center, plans to grab $50 million to $150 million saved from unused Barney Circle funds to pay for a Metro build-out for the project.

Conventioneers better use it. The Mt. Vernon Square convention center includes zero parking spaces for its expected 42,000 average large-size crowds, with an estimated 60-80 local events happening there each year. Watch a historic residential neighborhood become a parking lot. There are other problems, like 300-400 truck trips per day grinding past residential blocks. And hundreds of buses going back and forth each day between the convention center and hotels in neighborhoods like Dupont Circle and Woodley Park.

But the most recognizable indication of impending disaster is the extent to which the same people are making the same mistakes that got us to this point in the first place.

"The only problem with the old convention center was that it couldn't be expanded," Evans told a Dupont crowd blithely. No one could have said it better than the man who wants D.C. to build a huge new convention center -- with no room to expand.

When the old convention center was built just 14 years ago, it was the 6th largest in the nation. The proposed Mt. Vernon center, says the GAO, will be the 8th largest on opening day. But it also will have no room to expand. While D.C. builds 730,000 square feet of exhibition space, set to open in 2001 --

• San Diego will have 554,000 square feet of exhibition space by 1998, with approval to build another 625,000 -- all on one floor.
• Las Vegas will have over 1.1 million square feet in 1998.
• Orlando built 700,000 in 1996 and is expanding to 1.1 million by early 1998. Orlando now is planning for 2.2 million square feet total.
• Boston is planning now for 800,000 square feet with room to double that space.
• Chicago already has over 2 million square feet.
• Atlanta has nearly 1 million square feet.
• New Orleans has 1.1 million square feet, with room to grow.
• New York City has 760,000 square feet.

How do you spell white elephant? Convention center backers don¹t like to be questioned on these issues, or to discuss the alternative site north of Union Station, which a federal panel recently said might make a lot more sense. The conventional response is, "If we don¹t build it now, Virginia is ready to take it from us." But Rep. Tom Davis (R-VA) isn't pushing D.C.'s Mt. Vernon Square center for no reason. As the GAO reported last month, the District can expect $4 million per year in increased revenue from construction of the convention center, while "the Washington metropolitan area" can expect to collect $28 million each year. And suburban taxpayers will reap the benefits without having spent a dime. Conventional wisdom.

(The D.C. Council Committee on Finance and Revenue will hold a hearing October 14 at 9 am on the financing plan for the proposed convention center. For more information, call Beth Solomon at the Shaw Coalition, (202) 789-7864.)