A recent editorial in the Providence Journal lauding the Rhode Island Convention Center deserves some push-back. The writers applaud those who “invested” in the center back in the ’90s for their “courage and imagination on the basis of eye-popping numbers:
The analysis, conducted by Conventions, Sports & Leisure International of Plano, Texas, found that the Rhode Island Convention Center, the Dunkin’ Donuts Center and the Veterans Memorial Auditorium generated $838 million in total economic impact for the State of Rhode Island from fiscal year 2013 through 2017.
That far exceeds the costs of running the facilities, including $23 million a year in state bonding costs.
This isn’t a reasonable number to proclaim for these purposes. A quick search turns up the iteration of the report from 2015, which tells pretty much the same story, and it shows that the great majority of traffic in the three venues considered (the Convention Center, the Dunkin’ Donuts Center, and Veterans Memorial) is local. As the report puts it, “It is appropriate to assume that much of the spending from attendees that are from the local area is “displaced”, or would have taken place somewhere in the local economy if the event had not been held.”
This is compared with the result if we switched out the venues for three holes in the ground. The $838 million of economic impact assumes that none of the customers would have spent their money locally, that none of the employees would have had jobs, and that none of contractors would have found other clients. The study makes no attempt to estimate how much additional impact the center has over any likely alternatives if it weren’t there. If the land remained in private hands, the owners would have had incentive to sell it, the buyers would have had incentive to develop it, and the developers would have had incentive to figure out the most efficient things to develop.
The study also doesn’t consider that the government spending that has bolstered the center could have been used for something else, like leaving money in people’s pockets to spend and invest in the ways that they considered most important.
In short, the Convention Center hasn’t been a scandalous disaster, but proclaiming “guts and vision” for investing other people’s money seems a bit overstated.