Sunday, April 20, 2008

Conventional Folly

Shopping Mall Scam

Portsmouth has for at least the last twenty years been plagued by the Shopping Mall Scam. The crux of that scam was that a downtown shopping mall would revive downtown Portsmouth. That scam, which goes back at least to 1980, persisted until Neal Hatcher’s proposed Shopping Mall finally bit the dust a few years ago. If Hatcher couldn’t produce a mall with the city government in his pocket, no one could. Downtown Portsmouth is the last place any developer with sense would want to build a mall. You don’t build malls downtown, anymore than you build battleships in Arizona, and for good reason. There is not much water in Arizona or space in downtown Portsmouth. Malls are built on the outskirts or even better miles away from a downtown, on undeveloped relatively cheap land, not in a downtown where traffic cannot be accommodated, and not where you have dozens and dozens, if not hundreds of pieces of property that need to be negotiated for or acquired through the time-consuming, politically volatile and expensive avenue of eminent domain.

Now that a stake has finally been driven through the heart of the downtown Shopping Mall Scam, along comes a new scam to take its place: the Portsmouth Convention Center. Probably very few people in Portsmouth have ever heard of Heywood T. Sanders, but they should. A professor at the U. of Texas in San Antonio, he is a leading authority on convention centers. Among the conclusions he has reached, after twenty years of studying the subject, is that convention centers, and the new hotels that often accompany them, usually create far fewer economic benefits and far more problems in the communities in which they are built than had been expected. Most convention centers/hotel complexes are at best revenue-neutral and at worst a financial drain on local taxpayers and municipal governments.

Testifying before a U.S. House of Representative subcommittee in March 2007, Sanders said, “Forecasts of thousands of new convention attendees boosting local economies with millions of dollars in new spending, yielding thousands of new jobs are the common currency of local convention center development proposals and related consultant market studies.” That currency, Sanders suggests, is counterfeit; the optimism that proposed convention centers generate is unjustified. But that’s not the end of the convention center scam, for when existing convention centers do not live up to expectations, the argument is made that the reason they are not doing well is that they are not large enough: to succeed, they need to expand. So the convention centers become even bigger and so do the problems.

As for the hotels that are frequently part of a convention center package, Sanders in his House testimony warned they are as unlikely to generate growth as the convention centers themselves. “While consultant market and feasibility studies for these hotel projects indicate little public risk,” he pointed out, “with hotel operation forecast to generate sufficient net income to pay for debt service, those forecasts have almost invariably proven incorrect.”

Consultant Racket

Part of the problem with convention centers are the consulting firms that communities hire to make preliminary studies. Those firms almost always conclude that a convention center/hotel complex is a slam dunk that will lead to more visitors, more revenue, and more growth. In a 2000 interview in ArtVoice, Sanders said, “I’ve read about forty different feasibility studies. And you know, not a single one says don’t do it, don’t build a new center. Not one even says this might not be a good idea, or maybe you should be cautious. Every single one says ‘build it, you’ll do great.’ ” “If you build it they will come” works in the movies but not in reality, and Portsmouth, last I heard, was still located in reality, though too many of its residents try to escape from its poverty and despair with drugs and other forms of dope. CEO N. R. Augustine,of Martin Marietta said, “Hiring consultants to conduct studies can be an excellent means of turning problems into gold, your problems into their gold.” I have never lived anywhere that has had more consultants per capita than Portsmouth. What Portsmouth urgently needs is a consultant who can end its dependence on consultants.

The development of the consultant field is one of the great rackets of the last half century. Consultants can always come up with the facts and figures to justify whatever it is the groups that hire them want to do. Do you think consultants would be in business very long if they didn’t? Convention center consultants are to the present what medicine men were to the past. Medicine men promised to make hair grow on bald heads, the consultants promise that convention centers will rejuvenate depressed downtown areas. The most profitable of these convention center consultants is, ironically, a firm named Johnson Consulting!

Consultants can be used to demolish as well as build. If you want to tear down a city hall or municipal building to make way for a convention center/hotel complex, hire a consultant firm to come up with a study that concludes the building is a public hazard and should have been torn down ten or twenty years ago, even though the building is only about 75 years old and its municipal architectural twin sister, a U.S. Post Office located just up the street, constructed at the same time, is doing just fine thank you. Want to stick the taxpayers with an empty leaking relic of a department store that is 125 years old and no retail merchant in his right mind would want? Then hire a consultant, or appoint an advisory committee, to decide that building is just the place to invest $12 to $15 million public dollars to convert it into a “Civic Center” that is supposed to help to revive the dead downtown area. Never at a loss for scams, Portsmouth has two of them to save downtown: the City Center Scam and the Convention Center Scam. Meanwhile, downtown Portsmouth continues to be a magnet for prostitutes, drug-dealers, and antique/junk shoppes.

White Elephants

Speaking of antique/junk shoppes, convention center/hotel complexes in dozens of American cities have turned out to be white elephants. We’re talking about cities as visitable as New York, Boston, Chicago, San Diego, and Philadelphia, whose convention centers have not attracted enough visitors to justify what they cost to build and operate. If those cities have not attracted enough tourists to justify their convention centers, what is going to attract enough tourists to Portsmouth to justify its convention center/hotel? The floodwall murals? In a digital age of high definition TV and stunning graphics, of YouTubes and Photoshop boobs, the floodwall murals represent a quaint but static form of visual stimulation and entertainment. An honest appraisal of the economic impact of the murals, one in which paid consultants were not involved, would probably reveal they have not helped the downtown much economically. Even if Todd Book’s purloined rock ends up at the Welcome Center, I would say that the number of tourists who visit Portsmouth will remain at best a trickle. If a $38 million dollar bridge could make little apparent economic impact on downtown Portsmouth, why would a $20 million plus dollar convention center/hotel complex? The only thing that probably would attract enough tourists to Portsmouth to justify a convention center/hotel complex would be casino gambling, but until gambling comes to pass, Portsmouth should take a pass on a convention center/hotel complex.

And before we have casino gambling in Portsmouth, we should have a little more risk in our local economy. But it is the systematic elimination of risk and competition, the stacking of the deck, the loading of the dice, that is stifling our local economy. The game is fixed and when people like Hatcher play he is really playing with house money, which in this case means public funds. That competition is the lifeblood of the American economy is one of the great American myths, and no where that I have been is that more a myth than in Portsmouth. The proposed convention center/hotel complex in Portsmouth will presumably be financed in the way the Hatcherville SSU dormitories were. The taxpayers will take all the risks and Neal Hatcher, or whoever the developer-in-waiting is, will be guaranteed he can’t lose.

There is an extensive bi-partisan conspiracy to keep the game fixed. Anyone who comes to work in Portsmouth doesn’t need a consultant to tell him or her that loyalty or at least submission, is rewarded and criticism is punished; that just as long as you don’t try to change anything, you are welcome; that just as long you are willing to put up with cronyism, incompetence, and corruption, you will fit in; and that just as long as you are willing to go along, you will get along. In Portsmouth to get along you need to learn the local dialect, in which “forward” really means “backward,” “philanthropist” really means “crook,” and “news” really means “lies.”

Big Boys

“The immediate proponents [of convention centers] often are hotel owners and Convention and Visitors Bureaus,” Sanders said in ArtVoice. “But it’s usually the big boys, the major players in local business, who are really behind it. These are people who have a tremendous amount of money invested in the entire downtown area, and when the city’s economy is doing poorly they’re desperately concerned that they could lose a good part of what they’ve put into downtown.” I have not read a more accurate description of the role of Portsmouth’s “big boys” in our chronically depressed economy. The reason for our big boys’ fixation with downtown Portsmouth is that they were stuck with virtually worthless downtown property, but they refuse to take a loss on it. Why should they when they know how to make the public pay? What they have learned to do, instead of taking a loss, is find governmental agencies or public institutions, such as SSU, to take the unmarketable property off their hands, properties such as the Marting Department Store, George Clayton’s Kenrick’s Department Store, and Herbert Singer’s so-called Adelphia property. Where is the County Welcome Center, and where will the proposed City Center and the new police complex be located? On these otherwise unmarketable properties. City planning in Portsmouth consists off taking worthless properties off the hands of the big boys and trying to figure out what to do with them.

Javits Center: Going Nowhere

Sanders argues that “revitalization works where you have multiple small-scale undertakings, not blockbuster public investments. Compare [Manhattan’s] SoHo to the West Side projects around the Javits Center—one wasn’t centrally planned at all, it just happened as people discovered inexpensive space available in attractive buildings, and it’s thriving. The other has received all kinds of public attention and isn’t going anywhere.” Then he cites an example closer to Portsmouth. “I saw the same thing in Cincinnati: one area had quietly become a hub for diverse small enterprises—restaurants, offices, entertainment—attracting them with nice buildings and low expenses, and it was full of people; across town was the area the city had been trying to revitalize via a plan involving large direct public investment, and it was dead, no one around. Big-box development just doesn’t work.” Portsmouth’s convention center/hotel complex is not going to work either, no matter what the design of the building.

A survey conducted by SSU students found that about half the people interviewed thought downtown Portsmouth was ugly and unsafe. If Portsmouth’s $38 million dollar Bridge to Nowhere has made no apparent improvement in downtown Portsmouth, why would a $20 million dollar convention center/hotel located right next to it? Why has the Ramada Inn been a basket case for the last twenty years, earning the nickname “Queen of the Rust Belt,” but a hotel right across the street is supposed to be the salvation of downtown Portsmouth? Forget the pipe dreams and concentrate on getting rid of the crime and ugliness of downtown Portsmouth. But that will take new faces in city government and a new police chief, one who is not trying to intimidate citizens in their sixties, seventies, and eighties from speaking out on behalf of progress and accountability from public officials. Horner has labeled these elderly citizens “domestic terrorists,” when their worst crime is producing blogs like this and refusing to buy into Portsmouth’s latest scam, a convention center/hotel complex. What we get from our public officials is not leadership but collusion, not wisdom but conventional folly.

Bridge to Nowhere