Wednesday, August 16, 2006

Coralville's Hotel: "Trust But Verify"

The Gazette has displayed more orgastic enthusiasm for a hotel than I thought possible from anyone, Editorial, "Showcase Day for Coralville, Corridor," The Gazette, August 15, 2006, p. 4A. Here are some quotes:
  • "New visitors -- and the cash they carry -- will head by the thousands each year to the convention center."
  • "Area restaurants, shops, service centers and entertainment venues will see increased traffic when those big conferences are in town."
  • "The overall conventon business in the Corridor is almost certain to increase."
  • "The progressive, creative leadership of this community [Coralville] continues to add to its impressive resume. . . . Coralville's reputation as a growing, prosperous and exciting community."
  • "The Iowa Rver Landing Project . . . will be one of the more fantastic gateways of any Iowa city. . . . [A] first-rate first impression."
  • "It's great to see the Coralville Marriott Hotel & Conference Center open for business."
Lest a whisper of dissent be heard, The Gazette issues this preemptive strike: "Only a very short-sighted view of tourism and community development would have anyone suggesting there's a downside . . .."

Far be it from me to express "a very short-sighted view of tourism and community development." I wish Coralville well with its new hotel. From the photos, I would not characterize it, as the rain forest's exasperated Ted Townsend and David Oman once did, as "another everyday, uninspiring hotel." It appears to me to be a perfectly acceptable commercial hotel, with some nice touches, like the library of Iowa writers' books. I'll probably bike by and take a look at it at some point. And c
learly, no one gains if it fails to produce all that is hoped for it.

But frankly, I think it's far too early to express either the downside -- or the boosters' enthusiasm of The Gazette. I'm reminded of two one-line bits of wisdom: President Ronald Reagan's borrowed line, "Trust, but verify," and, from a sign on a school superintendent's wall, "In God we trust . . . all others bring data."

The Gazette has a well-deserved reputation as a champion of openness in government -- open meetings and public records. What better target for it to focus on than this publicly-funded project?

Let's find out if there's a downside. Let's look at the data. It ought to be public, given that we're paying for this project. This is a real opportunity to address and resolve some of the issues surrounding grants of public money to private profit.

The Des Moines Register has just provided a very useful series of articles on some of the downsides of TIFs. In addition to the ones that never really pay back what is promised, at a minimum there does seem to be a little inequity in making generous grants of public money to some businesses, while denying it to those that compete with them.

Economic development economists note that "new" businesses and jobs are often just the result of moving the chess pieces on the board.

For example, another of Coralville's big, publicly funded projects was the Coralridge Mall. In the early years it was doing $100 million gross annually. But "new business," new dollars to our area? Not quite. Retail sales in surrounding counties declined by almost as much, about $90 million.

The Gazette acknowledges that, "Other Iowa cities, especially Cedar Rapids, will lose a few conventions," but then goes on to assert that "the overall convention business in the Corridor is almost certain to increase." "Increase" like the Coralridge Mall increased retail sales in its market area?

Area-wide numbers are sometimes a little hard to track.

But what should be easy are things like the new hotel's average annual hotel occupancy rates; not "no vacancy" reports from football weekends, but averages from spring, summer, fall and winter combined. It should also be possible to get some comparison between market-wide hotel-motel occupancy trends during the few years prior to the new hotel and afterwards.

Ditto for the 30,000-square-foot conference center.

Today's Press-Citizen reports that "There are five major events planned at the conference center, including the Iowa League of Cities annual convention next month; the Upper Midwest Region Association of College and University Housing later this year; the American Legion state convention in 2007; the Iowa state Association of Counties annual convention in 2008 and 2009; and the National Association of Cancer Center Development Officers annual meeting in 2008." Mike McWilliams, "Coralville Venture Kicks Off," Iowa City Press-Citizen, August 16, 2006.

Now don't get me wrong. I think it's great they've already booked two conferences for 2006, one for 2007, two for 2008 and one for 2009. But this should be their big booking season, with the excitement, the publicity given this new "fantastic gateway." And five conferences in four years does not exactly fulfill The Gazette's promise that
"New visitors -- and the cash they carry -- will head by the thousands each year to the convention center."

At the end of a year (including year five, and year ten, as well as year one when it's "the newest" in the area), we need to know: how many days were those convention facilities actually used, and how many days were they nothing but 30,000 square feet of unused additional space, expensive to heat or cool, just sitting vacant? Again, what actually was the impact on regional convention business; how much was lost by convention facilities in Cedar Rapids, Iowa City and elsewhere; how much did the regional total of convention attendees vary from past trends?

"In The Gazette we trust" -- but I'd also like to "verify;" I'd like the paper to provide us a little data once it's available.

Only then will we really know if it's "short-sighted" to be concerned about a possible "downside" to this example of public funding of commercial businesses.

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