Loss Leader: Council’s position on the expansion of the troubled convention center
When city council votes tonight whether to approve using $14.4 million from the half-cent sales tax fund to expand the convention center they will do so with the expectation it will enhance growth and economic development in the community, but council, along with other city and county officials and agencies can’t provide information on the current status of economic impact of the convention center.
To date, only one study has been provided to the PULP that shows the economic impact of the convention center and it’s a projection for post-expansion. So, how much more economic impact can Puebloans expect from the convention center expansion? That information doesn’t exist.
What the report does provide is the expected sales tax after the expansion, $199,000, and the expected economic development from the expansion, $33,000. There would be $585,000 generated in county, state and lodging taxes.
Pueblo could expect as many as 28,000 guests that would stay overnight and spend an average of $138.97 and 98,000 guests that would stay the day and spend around $28.79.
Figuring out if that’s a good deal for Pueblo’s economy in the long run is difficult because there aren’t any current numbers to compare to the projections.
“I see it as a means of creating a new venue for the downtown area to attract people to support small businesses and hopefully stimulate more private investment in the riverwalk and downtown.” – Council President, Steve Nawrocki
In February, PULP reported that the convention center loses, on average, around $400,000 each year, according to numbers ran by PURA board member Daniel Ramos. The Hunden Report expects the convention center would run on a $585,000 deficit in its first year of operation. By year four the center is expected to turn a profit.
Many council members saw the lack of impact information on impact as unfortunate, but not a reason to abandon the plan.
Council President Steve Nawrocki told the PULP that he views the expansion as an amenity for Pueblo that will draw in visitors — such as the ice arena or soccer fields.
“I see it as a means of creating a new venue for the downtown area to attract people to support small businesses and hopefully stimulate more private investment in the riverwalk and downtown,” Nawrocki said.
Despite the unknown, Schilling also said he thinks the loan makes “perfect business sense” because it will draw in more people and add $2.1 million to the half-cent fund as the money is repaid.
“If 50 people come here and buy hamburgers, and we double that (the number of travelers), how many hamburgers are we going to sell?” Schilling said, speaking hypothetically.
Councilman Dennis Flores agreed that the expansion and loan is a step in the right direction for Pueblo.
“I would hate to see what downtown would look like without the convention center.” Councilman Ed Brown
“Sometimes information like this is difficult to pinpoint,” Flores said. “But there’s no question that the center has impacted the retail community and hotels.”
Councilman Ed Brown pointed to a statistic widely cited in the expansion discussion: For every dollar lost operating the convention center, $7 more is created in the community. PULP was unable to find any support of that.
At this point Brown seems to be on the fence with his vote.
“I would hate to see what downtown would look like without the convention center,” Brown said. “But I might just vote against it (using half-cent money) to show that the stance against it wasn’t for nothing, but it’s a positive thing for Pueblo.”
Three former council members, Chris Kaufman, Ami Nawrocki and Sandy Daff, voted against using half-cent money for the expansion last year. They are no longer on city council. There’s also been an effort from local citizens to prevent the loan. Ted Freeman, local activist and regular attendee at city council meetings, is organizing a petition to put the question on the ballot. He’ll need 3,000 signatures.
Councilwoman Eva Montoya told the PULP she does not support the expansion.
“I said I would support the RTA, but how can I vote for it if I don’t know where the money was before?” Montoya said. “I’m not going to rubber stamp anything if they can’t explain to the citizens.”
Councilmen Chris Nicoll and John Cordova were unavailable for comment.
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