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Now That It's Here, Will They Come?

Steady Flow Of Out-Of-Towners Into The City Seen As What Will Make Or Break Adriaen's Landing

May 29, 2005
By JEFFREY B. COHEN, Courant Staff Writer

For two long decades of starts, stops and sputters, the idea of a successful convention center in Hartford was a convention center that actually existed.

Now, the facility is funded. The building is up. And in four short days, the Connecticut XPO 2005 for Business will mark the official opening of the jewel at the heart of the Adriaen's Landing redevelopment project.

The first success is achieved.

So now it's time to look forward, convention center backers say. As this part of the city morphs from a construction zone to a convention zone, as thousands of out-of-towners prepare to visit, as the city prepares for those visitors and as the business of conventions, banquets and trade shows becomes a daily reality, it's time to refocus the question and ask:

What will "success" mean from now on?

For the state, success starts with the numbers.

In development lingo, the convention center is called a "loss leader."

That is, the building and its operation will, by design, lose money: The convention center will cost roughly $5 million a year to operate, and it will make about $3 million from rental, event services, food and beverage and other fees. The state's Capital City Economic Development Authority, the agency that is in charge of Adriaen's Landing, is projecting a $2.5 million deficit for the center's first 13 months of operations.

One small way that the development authority and the Waterford Group, which will run the convention center, have decided to gauge their success is in hard numbers: If Waterford can make the center less of an operational "loser" from the financial perspective, it will make more money.

But that's all academic, convention backers say. To strictly look at what those in the industry call "direct revenue" as a measure of the facility's success would be to miss the point - a "loss leader" such as the convention center isn't intended to make exhibit halls full of money.

"What we're looking for is the building to do what it's designed to do - house conventions when the predominant population are people coming from somewhere else," said James McCarvill, who works not in Hartford but in Providence as the head of the Rhode Island Convention Center Authority. His operation, just a decade old, faces much the same challenges as Hartford's. "If it were just about the direct revenue, you'd never do it."

Instead, convention centers are supposed to be the economic engines that draw visitors who will stay in hotels, eat in restaurants and buy in shops, leaving behind their out-of-state money and tax dollars when they go. The development authority estimates that the state could get more than $5 million in tax revenue the first year alone, more than offsetting the building's operational loss on paper. Whether that happens will be one small way of judging the building's short-term success.

The development authority will have some goals of its own. First, even though the convention center is a "loss leader" and is expected to lose money, the authority still needs the legislature to find the $2.5 million to fill the hole in its operating budget.

Also, the authority has to make sure it doesn't lose the funding it needs to market the convention center.

According to state budget documents, Gov. M. Jodi Rell granted the agency's more than $5 million request for the 2006 fiscal year. Of that, $2.5 million was for marketing the new center; the legislature's appropriations committee reduced that figure by $1.5 million. That reduction, if not changed in budget negotiations, could threaten the public profile of the convention center, not to mention the existence of H. Scott Phelps' Greater Hartford Convention and Visitors Bureau - which depends on development authority funding.

Bringing In Business

Ben Seidel, executive director of the convention center, gets up from his desk and grabs his calculator, the kind with the roll of paper attached at the top. He starts running numbers.

He's trying to make a point about the importance of "stacking" to the building's success: finding and booking the right mix of events to maximize both operating revenue and citywide economic impact.

To prove his point, he punches away on his calculator. He could do a local fundraiser and bring in $240,000 in sales revenue to the center in eight hours. Not a bad take.

On the other hand, he could do a full-size, national convention that would bring in only around $100,000 in direct revenue to the facility - but its guests could leave between $8 million and $10 million in cash in the city.

Putting the calculator down with a thud, Seidel raises his eyebrows.

"It's a no-brainer," he said.



A 2000 study by the consulting firm KPMG set the benchmarks for bookings: 32 conventions and trade shows, 10 consumer shows, 35 banquets and receptions, 20 other events and 70 meetings - a total of 167 events in the first year alone.

As of April 22, the center was forecasting 200 events: 25 conventions and trade shows, 15 consumer shows, 40 banquets and receptions, 20 other events and 100 meetings. But while the total number of events forecast for the first operating year exceeds the KPMG goals, it's the mix, not the number, of events that will make the convention center a success. And whether the first year's mix - with fewer than targeted conventions that make broad use of the city's hotels - will generate the type of citywide benefit Seidel and others are hoping for remains to be seen.

Timothy Shea, the development authority's acting assistant director, said finding that balance is "the million-dollar question."

"The numbers are the numbers," Shea said. "If they're not doing their job in terms of bringing in business to the building, that will be the strongest indicator. ... But we don't have any reason to believe that will happen."

The City Connection

But that's all spreadsheets and wonk talk.

For those who call the city home, the building that is their newest, most recognizable feature has to bring other successes in its wake.

One very concrete way to judge the building's success will be to see if its neighbor - the retail and entertainment district formerly known as Front Street - is complete.

"Three years from now, if the entertainment and retail district is built and succeeding, I think in large measure, its success could be attributed to the convention center," said John Palmieri, the city's director of development services. "It doesn't have to happen, but I think it's an important measurement."

Taking a step back from Adriaen's Landing, Mayor Eddie A. Perez and others agree that for the building to be more than a dollars-and-cents success for the city, the two will have to be better integrated. And that means implementing the long-talked-about circulator bus to take convention center visitors to other parts of the city, he said.

"We're now in our second phase, and I still think a downtown circular to make sure we have easy access to public transportation is the key," Perez said, adding that security and neighborhood aesthetics are also priorities.

Bernadine Silvers, president of the Sheldon/Charter Oak neighborhood group, agreed, saying that the convention center cannot be a success if it exists in a vacuum.

"It's not going to be successful if the only thing that it does is have people come to that little geographic area," she said.

If people want Italian food, there should be a way for them to get to Franklin Avenue, she said. Hispanic food, Park Street. And so on. And there must be initiatives in place to help businesses in those areas adapt to the changing clientele, she said.

State Sen. John Fonfara, D-Hartford, has pride in the city, but sees a lot of work left to be done to make the city a success for those who come to it, leave their money here, and go back home. What will they tell their friends of Hartford? he asked.

"For it to succeed, in my opinion, Hartford has to be a much different city than it is today," he said. "I know this is going to sound critical of the city that I've lived in all my life and that I love ... but as it stands now, our face is a little dirty."

"The second chapter hasn't been written," Fonfara said, adding that the state needs to be less "myopic" and make sure it makes good on its convention center investment. "And, maybe more importantly, it hasn't even been articulated by the appropriate people."

Finally, for Phelps, the guy who has been waiting for more than two decades for these days to come, it will take the commitment of the entire state - its politicians, its professionals, its people - to make the convention center an enduring success.

"It will be hard to be totally successful unless we have the buy-in from the region," he said, saying that those in and around Hartford have to take pride in Hartford. People in the region need to rethink how they view Hartford and accentuate its positives, Phelps said. Then, they need to help sell the city to the regional and national groups they belong to, he said.

"Now we've got to make this work, and we've got to work hard at it," Phelps said.

Reprinted with permission of the Hartford Courant. To view other stories on this topic, search the Hartford Courant Archives at http://www.courant.com/archives.
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