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Loss leader: Pueblo’s Convention Center is losing money and its economic impact is unknown

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The Pueblo Convention Center is what they call in the retail business a loss-leader, such as a toaster or TV sold for a loss during the holiday season to get customers into a store to spend more money. The convention center operates in the red in the hope it attracts enough people to Pueblo in order to to spend money at restaurants, hotels or local businesses.

This is the basis for the argument that the expansion of the convention center, which is part of phase I of the Regional Tourism Act, will fuel Pueblo’s economy. More space means more conventions and events and people, and that means more money spent in Pueblo by tourists.

While numbers show that the expansion will likely have a positive impact on Pueblo’s economy, it’s hard to tell how much better it would be for the economy because there is no record of its impact thus far.

PULP checked with the Pueblo Urban Renewal Authority, Pueblo Chamber of Commerce, Pueblo Economic Development Corporation, County Economic Director of Economic Development Chris Markuson and the Pueblo Convention Center. Nobody had an economic impact study of the convention center beyond what’s expected of the expansion.

The economic impact is just not something being recorded, most offices said. Or, they wouldn’t be tasked with collecting that information.

The convention center, however, is working on getting an analysis done, said the center’s general manager Brian Hoffman. That study would likely include the past year or two, but he’s uncertain at this point how broad the study would be.

What is known is what the expansion is projected to do for business in Pueblo.

City sales tax would equal about $199,000, and $33,000 of that would be economic development, according to Hunden Strategic Partners, a Chicago-based analytical firm that studied the impact of the expansion back in 2010.

Including county, state and lodging, the expanded convention center would provide around $585,000 in tax revenue.

Those numbers have been estimated on what Hunden believes attendees will spend while in Pueblo.

The expansion is expected to bring roughly 28,000 guests per year who will spend the night. On average, they’ll spend $138.97 per day, the report said. Hunden also expects 95,000 guests will come for the day and spend $28.79.

Today, the convention center loses, on average, $400,000 per year — a cost the taxpayers payers pick up, according to a recent study of the convention’s finances by PURA board commissioner Daniel Ramos.

And it’s likely that there will be a deficit in the future as well.

In the first year of operation, there will be a $528,000 deficit, according to the Hunden report. Operation costs will be around $1.7 million. By 2017, expected operations costs will be $2 million.

After year four, the report said the convention center may break even — profit will cover operating and staffing the building. Plus, the expansion would create a total fiscal impact of more than half a million dollars.

This is the ideal scenario, the convention center creates enough revenue to sustain itself and bring money to the community.

The center’s past and current state, however, looks much different. Much murkier.

Ramos’ report showed that the convention center only profited six out of the last 60 months because attendance is consistently not met.

In 2013, the center brought in 6,748 less people than they budgeted. In 2012, they were down 4,171. In 2011, the gap was nearly three times that at 12,490, and in 2010 it was 11,784. In 2009, the convention center fell 14,844 visitors short.

“The months that the convention center profits, tourism pays for that,” Ramos said. “The months it doesn’t, taxpayers pay for.”

Vendor fees, operating fees paid to the city by local businesses, keeps the convention center operating. The fees also help fund Memorial Hall.

That means taxpayers are funding the convention center, and the fiscal impact isn’t being recorded.

What is unknown is how much of that $400,000 coming from vendor fees is being offset.

The center was built in 1997, upon taxpayer approval, for $9.4 million. But PULP was unable to find any documents that projected the impact of the convention center would have on the downtown area or local businesses.

“I do know there were tons of documents for many many years about building a convention center as I was located in the City Manager’s Office from 1985 – 1995,” said City Clerk Gina Dutcher. “The problem is records retention and what was kept and what was destroyed over the years, as it would have only been defined as correspondence and not anything official.”

Another problem, she said, is that when city administration moved out of city hall remaining records were transferred to an old Quonset hut, where they’re currently being stored.

It’s possible to request a document about the convention center around 1997, Dutcher said. But one would have to know exactly what they were asking for because they are so difficult to find now.

Regardless, those numbers, if they exist, haven’t been a part of the conversation for the expansion.

Expansion is expected to bring more events and, obviously, more people. What the convention center loses in people from not hitting projected numbers with around 440 events per year, would ideally be made up because there’d be more events that have the potential to attract a greater attendance.

Some events have been lost due to the size of the convention center, said Hoffman.

With the expansion, an exhibition hall would allow the convention center to attract sports, such as cheerleading and gymnastics, boat shows, car shows and trade shows that require more space.

Hoffman said he knows that they’ve lost events simply because there wasn’t enough room. Even with current conventions, he doesn’t believe the center is as suitable as it could be.

In January, the center hosted a convention for Colorado’s county clerks. The space was constantly being flipped to fit the group’s needs, Hoffman said. With more square footage, that wouldn’t be necessary.

But the question remains would larger events come to Pueblo even with an expanded convention center.

The Hunden report surveyed over 1,000 sports event planners and meeting planners to understand their needs and gage the likelihood of using Pueblo’s expanded convention center.

Forty-seven percent of respondents said they’d maybe be interested in using the space, while 24 percent gave a solid yes, they would be interested in using the space.

The survey also asked respondents to rate Pueblo (1-10) as a destination. The average was 5.25.

Hunden regarded this as good, as “many national event planners indicated that they are unaware of what Pueblo has to offer,” but the city would have to work hard to get the word out about an expanded convention center and Pueblo as a destination.

Most of those visitors would be coming from around the Mountain West and Plains region, the report said. Sixty-three percent would be from outside of Pueblo.

The expansion’s $14.3 million price tag will likely be funded by the half-cent sales tax.

In the beginning, the project was supposed to be bonded out, but when time ran out and no private developer jumped on board, it was up to PURA to facilitate the loan. Their two options are a private loan or a half-cent loan.

The project is eligible for the half-cent sales loan because the jobs, by definition, are primary jobs. In December, city council voted 4-1 to allow tourism-related jobs to qualify for half-cent funds.

Construction is expected to bring in 77 workers. That will create roughly $8.3 million in new income. Long term, Pueblo can expect around 211 jobs.

“It’s not an impressive number on paper,” said Beth Gladney, PURA board chairwoman. Bringing in people is the important part. “Our goal is to see Rosario’s packed every night.”

If you ask current Pueblo City Council President Steve Nawrocki, who is also a board member for PEDCO, the group responsible for attracting businesses to Pueblo that could utilize the half-cent funds, whether a company looking to relocate to Pueblo that could create 120 direct jobs would be a likely candidate for $14.3 million, his response is similar to Gladney’s.

They’d also be considering the thousands of people the $14.3 million would likely bring to Pueblo.

In June, five city council members voted down using the half-cent money. Three of them, Ami Nawrocki, Sandy Daff and Chris Kaufman have resigned from their seats on council since then.

Today, current council president Steve Nawrocki said it looks likely the loan will be approved without those three council members.

The only other option for funding the expansion is through a private loan. PURA has approached Sunflower Bank, but it’d be more costly, possibly $1 million more, according to John Batey, PURA executive director. Using the half-cent money also adds around $2.25 million to its fund.

RTA makes the tourism projects possible because local governments are allowed to keep a portion of state sales tax. In Pueblo’s case it will get that money for the next 50 years.

But some are concerned that Pueblo isn’t a destination just yet.

“There’s a difference between having a convention center in a city and being a convention center city,” said former councilman Chris Kaufman in a phone interview.

He lost support of the expansion when it couldn’t be funded through a bond. Favoring the expansion isn’t about enjoying its success, he said, it’s about bringing people to the city. And there’s a question of if that’s possible.

Even some supporters of the financing, such as current council president Steve Nawrocki, don’t believe Pueblo is doing a good enough job of branding itself.

“They’ll spend the night, but we have to figure out how to keep them here longer,” he said.

The conversation about better branding has started and he added half-cent funds should go toward that too.

But based on his findings, Ramos doesn’t believe the expansion will draw in enough people to offset the cost.

“You’re going to have a bunch of door-greeters greeting nobody,” Ramos said.

Batey disagrees. For every dollar lost at the convention center, he said, seven more is created in the community.

But PURA was not able to provide any kind of documentation proving that statistic.

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2 Comments
  • notagain

    this is so pitiful. i cant believe they’re wanting to fund this. the benefit of the expansion seems to be under false pretenses. pueblo needs to find a different edge and differentiate its self from everywhere else. the convention center is a mistake.

    • TC

      Absolutely. This is the whole “putting lipstick on a pig”. Steve nawrocki and the whole PURA/PEDCO clown group fail to realize people will not stay in a dirty unsafe town with little to do but spend 30 minutes walking around the “Riverwalk” The convention center will just line the pockets of the few rich people in town who live off the taxpayer’s money to build these follies. They get paid and the citizen’s are left with money pits to maintain. This 35 year old philosophy has not worked yet, why in god’s name do they think it will work now. Glad I am leaving this dying/dead town.

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Push to legalize marijuana upends governor’s race in New Mexico

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ALBUQUERQUE, N.M. — Democratic gubernatorial candidate Jeff Apodaca on Thursday called for the expansion of New Mexico’s medical marijuana program and for legalization of recreational use, saying the poverty-stricken state is missing out on millions of dollars in tax revenues and jobs that could be spurred by the industry.

Apodaca released his plan solidifying his position as a supporter of legalization as the race for governor heats up.

Apodaca pointed to New Mexico’s history as the first state to allow for research and experimentation with marijuana as a therapeutic drug. It was his father, then-Gov. Jerry Apodaca, who signed that legislation in 1978.

The research program stalled and it wasn’t until 2008 that New Mexico rolled out its medical cannabis program.

“Why are we shooting for being the last to legalize cannabis for adult use?” Apodaca said.

The push for legalization comes as New Mexico’s medical marijuana program has grown exponentially in just the last two years. Producers licensed under the program reported record sales of more than $86 million in 2017 and the number of patients enrolled now tops 50,000.

“We know the medical benefits of it. And we also know the opportunities of legalization for adult use,” Apodaca said, suggesting expansion of the long-standing medical marijuana program along with legalization could result in an estimated $200 million of additional tax revenues for the state.

The state’s largest producer, Ultra Health, announced that it has acquired farmland in southern New Mexico and has plans for what the industry says could be the largest cultivation facility in North America.

The property spans nearly one-third of a square mile (81 hectares) in Otero County. It will include 20 acres (8 hectares) of indoor cultivation, 80 acres (32 hectares) of outdoor cannabis fields and another 100 acres (40 hectares) of outdoor hemp fields.

Ultra Health president and CEO Duke Rodriguez said the company is preparing for a future in which New Mexico stands to benefit from expanded medical use and possibly recreational use.

Apodaca’s plan calls for lifting the current limits on the number of plants producers can grow and reducing costly licensing fees.

Other Democratic candidates have been more cautious.

U.S. Rep. Michelle Lujan Grisham said she would work with state lawmakers to ensure there are adequate health, safety and enforcement measures in place. She called for a “thorough analysis” of recreational pot programs in other states as part of that effort.

Lujan Grisham was in charge of the state Health Department when the medical marijuana program began. Aside from the legalization debate, she said supporting producers to create the latest medicines and methods to help patients would help create jobs and expand the industry.

State Sen. Joseph Cervantes, another Democratic candidate, has sponsored unsuccessful legislation to decriminalize possession of small quantities of pot but has said the state is lacking infrastructure and isn’t ready yet to legalize.

Cervantes recently lauded efforts at the local level by the state’s largest city — Albuquerque — to decriminalize possession of small amounts. He said he would do the same as governor and that it would mark a first step.

Republican congressman and gubernatorial candidate Steve Pearce expressed reservations about legalization at a forum earlier this month. He said it might create a stumbling block for people trying to climb out of poverty and addiction to other drugs.

“I just don’t see how it fits that we’re going to deal with addiction and yet we’re going to tell people, ‘This one is OK.’ I’ve watched it for a lifetime. I just am very nervous with recreational marijuana,” he said.

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‘For fun’ killing reveals vulnerability for homeless Native Americans in New Mexico

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The morning a homeless man was shot and killed in Albuquerque, police say surveillance videos showed him running down a street before sunrise, and then gunfire flash in the dark.

Native Americans make up only 4 percent of the population, but account for 44 percent of people living on the streets, raising the likelihood they will be victimized when there is an attack on the homeless.

Ronnie Ross, a 50-year-old from the Navajo Nation town of Shiprock, had been shot a dozen times, including once in the forehead and temple, and four times in the back, according to a criminal complaint. Police say the two teenage suspects charged with murder this week apparently shot him “for fun” as they came and went from a hotel party nearby.

The homicide marked the latest in a series of brazen killings and assaults of homeless Native Americans in the city. In Albuquerque, Native Americans make up only 4 percent of the population, but account for 44 percent of people living on the streets, raising the likelihood they will be victimized when there is an attack on the homeless.

A 2014 survey showed 75 percent of homeless Native Americans in Albuquerque had been physically assaulted.

“Just being harassed is part of everyday life, but it’s not as much harassment as it is overgrown bullying,” said Gordon Yawakia, who works at the Albuquerque Indian Center and was once homeless himself. “What do you do when people are against you and then the authorities are against you and you’ve got nobody, you know?”

In 2014, Allison Gorman and Kee Thompson, both Navajo, were beaten to death as they slept in a vacant lot. While authorities did not say the men were targeted because they were Native American, activists disagreed and the deaths spurred the creation of a city task force to address Native American homelessness that now-former Mayor Richard Berry said could set the stage for changes for the population across the Southwest.

Now, Ross’ death is underscoring how difficult it may be to protect and find solutions for the city’s Native American homeless population.

“When I hear a story like this it adds fuel to the fire,” said Dawn Begay, who is the city’s tribal liaison, and works with the homeless through a local nonprofit. “Where we’re headed is a good direction but it has to happen faster.”

Ross’ killing in March came three months after the body of Audra Willis was found decapitated in an area not far from the Sandia Mountains that line the city’s east side. The 39-year-old had come from To’hajiilee, a tiny Navajo community west of Albuquerque, and records show she had multiple addresses during her time in the city, including at the Albuquerque Indian Center.

Willis’ especially grisly death sent shockwaves through Albuquerque, just as the beatings of Thompson and Gorman had three years earlier.

The two men had been killed on a July 2014 night when authorities say three boys — ages 15, 16 and 18_returned home from a night of drinking and decided to attack them as they slept on a mattress. The men were beaten with a wooden table leg, cinder blocks, and other objects, police said. One young suspect later told authorities that the teens had beaten dozens of homeless people, though apparently none others fatally.

In Ross’ death, the complaint filed against the 15- and 17-year-old suspects does not identify a motive, but says the two teenagers bragged to friends about the shooting.

According to police, friends and acquaintances of the boys — whom The Associated Press is not naming because of their ages — said the suspects had been showing off a gun at the party, and had said to others that they had shot a man. At one point, the younger boy also said to a close friend at the party that he shot a “hobo” in the back.

The boys made one more stop at the scene to find Ross still alive, prompting the older boy to shoot him multiple times, according to the complaint.

“It’s completely disturbing,” said Officer Simon Drobik, an Albuquerque police spokesman, said Tuesday. “They just shot this guy for fun.”

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The Last Castro; Raul retires as Cuban president

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Raul Castro turned over Cuba’s presidency Thursday to a 57-year-old successor he said would hold power until 2031, a plan that would place the state the Castro brothers founded and ruled for 60 years in the hands of a Communist Party official little known to most on the island.

Castro’s 90-minute valedictory speech offered his first clear vision for the nation’s future power structure under new President Miguel Mario Diaz-Canel Bermudez. Castro said he foresees the white-haired electronics engineer serving two five-year terms as leader of the Cuban government, and taking the helm of the Communist Party, the country’s ultimate authority, when Castro leaves the powerful position in 2021.

“From that point on, I will be just another soldier defending this revolution,” Castro said. The 86-year-old general broke frequently from his prepared remarks to joke and banter with officials on the dais in the National Assembly, saying he looked forward to having more time to travel the country.

In his own half-hour speech to the nation, Diaz-Canel pledged to preserve Cuba’s communist system while gradually reforming the economy and making the government more responsive to the people.

“There’s no space here for a transition that ignores or destroys the legacy of so many years of struggle,” Diaz-Canel said. “For us, it’s totally clear that only the Communist Party of Cuba, the guiding force of society and the state, guarantees the unity of the nation of Cuba.”

Diaz-Canel said he would work to implement a long-term plan laid out by the National Assembly and communist party that would continue allowing the limited growth of private enterprises like restaurants and taxis, while leaving the economy’s most important sectors such as energy, mining, telecommunications, medical services and rum- and cigar-production in the hands of the state.

“The people have given this assembly the mandate to provide continuity to the Cuban Revolution during a crucial, historic moment that will be defined by all that we achieve in the advance of the modernization of our social and economic model,” Diaz-Canel said.

Cubans said they expected their new president to deliver improvements to the island’s economy, which remains stagnant and dominated by inefficient, unproductive state-run enterprises that are unable to provide salaries high enough to cover basic needs. The average monthly pay for state workers is roughly $30 a month, forcing many to steal from their workplaces and depend on remittances from relatives abroad.

“I hope that Diaz-Canel brings prosperity,” said Richard Perez, a souvenir salesman in Old Havana. “I want to see changes, above all economic changes allowing people to have their own businesses, without the state in charge of so many things.”

But in Miami, Cuban-Americans said they didn’t expect much from Diaz-Canel.

“It’s a cosmetic change,” said Wilfredo Allen, a 66-year-old lawyer who left Cuba two years after the Castros’ 1959 revolution. “The reality is that Raul Castro is still controlling the Communist Party. We are very far from having a democratic Cuba.”

After formally taking over from his older brother Fidel in 2008, Raul Castro launched a series of reforms that led to a rapid expansion of Cuba’s private sector and burgeoning use of cellphones and the internet. Cuba today has a vibrant real estate market and one of the world’s fastest-growing airports. Tourism numbers have more than doubled since Castro and President Barack Obama re-established diplomatic relations in 2015, making Cuba a destination for nearly 5 million visitors a year, despite a plunge in relations under the Trump administration.

Castro’s moves to open the economy even further have largely been frozen or reversed as soon as they began to generate conspicuous displays of wealth by the new entrepreneurial class in a country officially dedicated to equality among its citizens. Foreign investment remains anemic and the island’s infrastructure is falling deeper into disrepair. The election of President Donald Trump dashed dreams of detente with the U.S., and after two decades of getting Venezuelan subsidies totaling more than $6 billion a year, Cuba’s patron has collapsed economically, with no replacement in the wings.

Castro’s inability or unwillingness to fix Cuba’s structural problems with deep and wide-ranging reforms has many wondering how a successor without Castro’s founding-father credentials will manage the country over the next five or 10 years.

“I want the country to advance,” said Susel Calzado, a 61-year-old economics professor. “We already have a plan laid out.”

Most Cubans have known their new president as an uncharismatic figure who until recently maintained a public profile so low it was virtually nonexistent. Castro’s declaration Thursday that he saw Diaz-Canel in power for more than a decade was likely to resolve much of the uncertainty about the power the new president would wield inside the Cuban system.

“The same thing we’re doing with him, he’ll have to do with his successor,” Castro said. “When his 10 years of service as president of the Council of State and Council of Ministers are over, he’ll have three years as first secretary in order to facilitate the transition. This will help us avoid mistakes by his successor, until (Diaz-Canel) retires to take care of the grandchildren he will have then, if he doesn’t have them already, or his great-grandchildren.”

Cuban state media said Russian President Vladimir Putin congratulated Diaz-Canel and thanked Castro for the many years of cooperation between the two countries, while Chinese President Xi Jinping also reaffirmed his country’s friendship with Cuba and expressed interest in deeper ties.

At the U.S. State Department, spokeswoman Heather Nauert expressed disappointment at the handover, saying Cuban citizens “had no real power to affect the outcome” of what she called the “undemocratic transition” that brought Diaz-Canal to the presidency.

Vice President Mike Pence tweeted at Castro that the U.S. won’t rest until Cuba “has free & fair elections, political prisoners are released & the people of Cuba are finally free!”

Diaz-Canel said his government would be willing to talk with the United States but rejected all demands for changes in the Cuban system.

With Castro watching from the audience, Diaz-Canel made clear that for the moment he would defer to the man who founded the Cuban communist system along with his brother Fidel. He said he would retain Castro’s cabinet through at least July, when the National Assembly meets again.

“I confirm to this assembly that Raul Castro, as first secretary of the Communist Party, will lead the decisions about the future of the country,” Diaz-Canel said. “Cuba needs him, providing ideas and proposals for the revolutionary cause, orienting and alerting us about any error or deficiency, teaching us, and always ready to confront imperialism.”

Diaz-Canel first gained prominence in central Villa Clara province as the top Communist Party official, a post equivalent to governor. People there describe him as a hard-working, modest-living technocrat dedicated to improving public services. He became higher education minister in 2009 before moving into the vice presidency.

In a video of a Communist Party meeting that inexplicably leaked to the public last year, Diaz-Canel expressed a series of orthodox positions that included somberly pledging to shutter some independent media and labeling some European embassies as outposts of foreign subversion.

But he has also defended academics and bloggers who became targets of hard-liners, leading some to describe him a potential advocate for greater openness in a system intolerant of virtually any criticism or dissent. International observers and Cubans alike will be scrutinizing every move he makes in coming days and weeks.

As in Cuba’s legislative elections, all of the leaders selected Wednesday were picked by a government-appointed commission. Ballots offered only the option of approval or disapproval and candidates generally receive more than 95 percent of the votes in their favor. Diaz-Canel was approved by 604 votes in the 605-member assembly. It was unclear if he had abstained or someone else had declined to endorse him.

The assembly also approved another six vice presidents of the Council of State, Cuba’s highest government body. Only one, 85-year-old Ramiro Valdes, was among the revolutionaries who fought with the Castros in the late 1950s in the eastern Sierra Maestra mountains.

___

Associated Press writer Ben Fox contributed to this report.

 

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