On May26th, NewsLanc reported:
“According to the Convention Center Authority, the deficit each year amounts to approximately $500,000, largely because of a shortfall in projected revenue from the Hotel Room Sales Tax. (It reportedly has a cumulative short fall of over $2 million.)”
We have now been advised that there was confusion at the time concerning the question that the NewsLanc editor posed to the Convention Center Authority Board and the appropriate answer concerning the amount of “short fall” should have been one million dollars for the year.
There was no intentionally cover up. NewsLanc is advised that the figures are discussed openly at committee and board meetings.
This commentary exposes one of the great miscarriages of both journalism and politics involved with this project.
There are 2 sides to any accounting equation, revenue and expenses, and that applies to both private AND public projects. That includes project like our little CC, even the ones that are supposed to LOSE money.
The media and those who pushed this project only ever spoke about one side…revenue. The revenue in the case of the CC is hotel taxes. Hotel taxes, like many revenue based taxes, are just as the proponents suggested, pretty stable sources of funding. It is true that our hotel tax revenue has disappointed of late and there are any number of reasons why that is the case but in the big picture, these swings are minor. While we have not seen much growth, not even close to the ridiculous pre-construction LCCCA estimates, that revenue stream is not going anywhere.
As cheerleader-in-chief Gib Armstrong once said, it would take a TMI like event to cause such a drop in hotel taxes as to jeopardize the project. That is the BIG LIE, and it was never challenged or questioned by LNP. What about the other side of the ledger? What about EXPENSES?
It is on the expense side where the real peril of this project exists. Why? Because like a bunch of lemmings being led to the edge of a cliff we accepted the numbers that were bought and paid for by the LCCCA as gospel. Hotel taxes won’t fall by 50% but why won’t expenses rise by 100%, 200% or 300%?
Why will we be different on this than other centers? I mean I know that we are different but why will our expenses be different? If we did not run at least 50% beyond projections on the expense side, we would be defying the odds.
So now, we start to hear about exactly this and we ask ourselves, why didn’t anyone ever mention this possibility before? Why?
Because the 50% partner in the only entity that will make any money off of this project also controls the local media and they never mentioned it, NOT EVEN ONCE!
The LCCCA is making a heroic effort to keep its expenses under control. Unfortunately, there are major situations which the LCCCA has little or no control over:
– Cooper-Carry designed a facility so elaborate and so grandiose that large parts of the “integrated facility” cannot have their energy costs significantly reduced. From the Vine Street lobby on the lowest level, to the second-floor balcony, to the hotel lobby and the hotel restaurant along East King Street, there is an massive open space a city block long and up to four stories high. A large part of this area has exterior walls that include immense plate glass windows. Heating and air conditioning costs for this space are proportionately shared between the hotel and convention center; however, the vast majority of this cavernous space is the responsibility of the LCCCA, and because of its configuration it must be kept at a comfortable temperature even when the main convention hall is empty – which is the vast majority of the time. (The LCCCA is in the process of installing thermal film on many of the plate glass windows.)
– The LCCCA is responsible for providing and maintaining large areas which primarily profit the hotel. This includes all meeting rooms on the third and fourth floor (including the 9,700 sq. ft. Heritage Ballroom), 50% of the hotel lobby, 100% of the connecting bridge between the parking garage and hotel lobby, and 100% of the hotel kitchen, along with other parts of the “integrated facility”. This places a significant financial burden on the LCCCA without producing a significant amount of revenue.
Taxpayers – represented by the LCCCA – are securely bound to an “integrated facility” and iron-clad agreements from which there may be no practical means of relief.