November 01, 2002
Meetings & Conventions: Newsline newsline.gif (8042 bytes)   MUNICIPALITIES PAY THE PRICE TO BUILD CONVENTION HOTELS
More Cities Fund Hotel Projects
Public entity number one: Chicago Hyatt McCormick Place In an effort to compete with other Texas cities, officials in Fort Worth announced in September plans to spend $130 million on a publicly owned, 600-room convention center property. Set to open in 2006, the hotel likely would be run by Hilton Hotels Corp. The move has become increasingly common as frustrated city officials, tired of waiting for private developers to build costly headquarters properties, are opting to fund projects themselves (Houston and Austin already have publicly financed hotels). “It’s difficult [for private developers] to finance these $200 million to $300 million properties, because banks are looking for 40 to 50 percent equity,” said Reint Reinders, president and CEO of the San Diego Convention and Visitors Bureau, where talks are under way to build a publicly subsidized hotel near the convention center. In other cities:

After a series of delays from a private developer, Los Angeles voted in May to create a nonprofit corporation to issue tax-exempt bonds for a $280 million, 1,200-room convention center hotel.

Up for consideration this month in Pittsburgh’s state legislature is a 3 percent car-rental tax that would fund a new headquarters hotel.

In April 2002, after three years of private-sector financing problems, Denver decided to build a city-owned, Hyatt-managed convention center hotel by early 2006.

Elsewhere, cities are claiming success. The Chicago Hyatt McCormick Place has posted profits since opening in 1998, according to the Metropolitan Pier and Exposition Authority, the public agency that owns the hotel and the convention center.

But for a number of reasons, cities must walk a fine line when providing public funds for what are typically private enterprises. For example, the Fort Worth deal spurred complaints from hoteliers who fear a tax-exempt facility would be able to undercut area room rates.

Others argue cities should not expose themselves to such financial burdens. “Cities aren’t in the business of being hotel investors,” said one industry consultant who asked not to be identified. “It’s problematic when the private investment market determines the project is not feasible, and the municipality moves ahead with it anyway.”


What Association Executives Earn The gender gap in earnings grows in relation to size of organization, according to a 2001 compensation survey. Male CEOs Female CEOs Trade association $136,775 $92,125 Individual membership association $139,241 $85,204 Total staff size: 2 or fewer $75,000 $60,000 3 to 5 $95,640 $77,000 6 to 10 $116,550 $108,000 11 to 20 $138,200 $126,000 21 to 50 $201,923 $159,280 51 to 100 $237,900 $145,518 More than 100 $287,600 $249,233 Total annual budget: $300,000 or less $67,600 $54,789 $300,001 to $500,000 $75,600 $68,579 $500,001 to $750,000 $90,000 $72,800 $750,001 to $1 million $102,000 $87,525 $1,000,001 to $2.5 million $118,800 $112,425 $2,500,001 to $5 million $170,000 $137,100 $5,000,001 to $10 million $227,750 $160,585 $10,000,001 to $15 million $225,994 $171,750 More than $15 million $285,000 $256,269 Source: American Society of Association Executives

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