Charlotte considers subsidy for cities’ convention

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by STEVE HARRISON / Charlotte Observer

WCNC.com

Posted on November 24, 2012 at 4:52 PM

CHARLOTTE, N.C. -- The Charlotte City Council will consider Monday whether to support an effort to host the 2017 National League of Cities convention, which could cost taxpayers up to $1.3 million – one of the largest subsidies needed to bring a meeting to come to Charlotte.

The National League of Cities hasn’t officially committed to hosting its annual meeting again in Charlotte but has instead asked that the city bid, according to the backup material for Monday’s meeting.

The league convention would be one of the larger meetings the city has hosted, with an estimated 3,500 visitors using 15,000 hotel room nights. The National League of Cities is a nationwide organization of elected and municipal officials.

The convention would be much smaller than the Democratic National Convention, which used more than 75,000 hotel room nights, as well as the weeklong CIAA basketball tournament, which uses more than 40,000 nights. The Charlotte Regional Visitors Authority pays the CIAA $1 million a year in exchange for hosting the tournament.

City staff said Charlotte would have to pay between $1 million and $1.3 million to the National League of Cities, which would be used for “shuttle costs, mobile workshops, final evening event, spouse and guest programs, and other host city requirements.”

The money wouldn’t all come from the city of Charlotte. When Charlotte hosted the convention in 2005, the National League received about $1 million – divided among the city, Mecklenburg County, the Charlotte Regional Visitors Authority, local towns and some private donors.

Deputy City Manager Ron Kimble has said the city contribution seven years ago was about $300,000. If other donors don’t come forward with money, it’s possible the city contribution could be higher.

Democratic council member Michael Barnes said he will likely vote for the commitment, in part because a number of organizations and governments are expected to contribute. “As far as the source of funding, there will be a number of partners,” Barnes said. “If you look at the cities who do host it, it’s a major city or a city that’s about to become a major city.”

Boston is hosting this year’s NLC convention, in December. The 2013 meeting will be in Seattle. In recent years, cities nationwide have had to offer larger and larger subsidies to attract conventions.

Because many cities – Charlotte included – have expanded their convention centers, they are increasingly hungry to land meetings and tradeshows. At the same time, the convention industry hasn’t grown much in the last decade, which has resulted in organizations like the National League of Cities being able to ask for large incentives.

The city has estimated the 2017 NLC meeting would generate $8.3 million in economic activity, which would translate to about $5.5 million in direct spending from visitors and delegates.

It’s unclear if the event is large enough to generate enough new taxes to pay for the incentives.

The direct spending from NLC visitors could generate $785,000 in new state and local sales taxes, which includes the county’s hotel/motel occupancy tax and a 1 percent tax on prepared food and beverages.

Kimble, in an email to the Observer earlier in the year, said the NLC “is not a money loser for anybody.”

Charlotte City Council member James Mitchell, a past president of NLC, said Mayor Anthony Foxx and CRVA chief executive Tom Murray are making a sales pitch to the organization this week. It isn’t known how many cities the NLC are considering for the convention.

Mitchell said he expects Charlotte to be able to use new venues that weren’t built when the NLC was last in the city. They include the NASCAR Hall of Fame, the EpiCentre entertainment complex and a new baseball stadium for the Charlotte Knights, which is under construction. “We can have an event at the stadium to showcase how we revitalize downtown,” Mitchell said.

Council members had previously agreed to the incentives, but that was for hosting the convention in 2016.

The CRVA guarantees the CIAA basketball tournament $1 million each year for bringing the event to Charlotte. The city and Mecklenburg County each pay $200,000 a year, with the state, CRVA and private donors paying the rest.

The CRVA has estimated the CIAA tournament generates more than $2 million in new local and states, based on nearly $30 million in direct spending.
 

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