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New meeting space could be boon

State panel is told expansion would boost economy, add thousands of jobs

By Katie Johnston Chase
Globe Staff / June 16, 2011

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An expanded convention center in Boston could pump an additional $222 million a year into the local economy, bring in 186,000 annual visitors, and create or support 7,300 construction jobs, according to the Massachusetts Convention Center Authority.

The new analysis was presented yesterday by authority officials to a state panel appointed to review a proposed $2 billion expansion of the Boston Convention & Exhibition Center that would include nearly doubling the meeting space and adding a 1,000-room hotel nearby. Next week, the panel will discuss recommendations that will be detailed in the final report to the state.

Many members of the 27-person panel, called the Convention Partnership, have said they are leaning toward recommending an expansion. But critics of the project point out that the convention industry has been suffering, even as the amount of convention space nationwide has expanded, and that there is intense competition for the up to $200 million in public subsidies that will probably be needed to pay for the hotel.

“You’ve got so many demands for public resources, and they are all competing. And do you want to choose the one in which the number of people attending conventions has gone from 126 million in 2000 to 86 million in 2010?’’ said Charles Chieppo, a longtime critic of the proposal who heads a Massachusetts public policy research firm.

In Boston, visitors to the John B. Hynes Veterans Memorial Convention Center and the Boston Convention & Exhibition Center fell from 870,000 in 2008 to 645,000 last year, although the convention authority is forecasting a reversal, with attendees climbing back up to nearly 782,000 this year.

The expansion would allow the center to host events that are too big for the existing space, said James Rooney, the executive director of the convention authority who leads the panel. Over the past five years, Rooney said, the shortage of hotel rooms and space limitations at the convention center have cost the city 61 events, which would have generated $140 million in economic impact and $8.6 million in tax benefits a year.

Currently, there are only 1,700 hotel rooms within a half mile of the exhibition hall, putting Boston well below the 8,000 rooms near the Philadelphia convention center and the 6,600 rooms near the exhibition space in Baltimore.

But Heywood Sanders, a professor at the University of Texas at San Antonio who tracks the convention industry, said the report was filled with assumptions that evoked the world of car sales. “You classify anybody who walks into your showroom and walks out without buying a car as lost business,’’ he said.

The panel has explored a number of possibilities for financing, including getting the state to increase the hotel tax by 1 to 2 percent; raising other tourist-targeted taxes and fees in the Boston area; and tapping into city and state revenues that would be generated by the project.

Yesterday, Rooney detailed another funding option — having the Legislature increase the amount of money from the state’s tourism fund; most of the money from the fund is directed to general state operations, not to convention-specific causes.

“There’s already enough taxes collected within the tourism industry’’ to fund the project, said Rooney, adding that in reality it would probably take several sources of income.

The authority’s projection that the expansion would create or support 7,300 jobs during construction, and as many as 2,300 permanent positions — was of particular interest to the Patrick administration.

“Today’s presentation touched on one of Governor [Deval] Patrick’s top priorities — job creation — and the impact the potential expansion of the convention center could have on creating jobs for the Commonwealth,’’ said Alex Zaroulis, spokeswoman for the Executive Office of Administration and Finance.

Beyond the contribution the expanded convention center would bring to the local economy, Rooney said, there is great value in the kinds of events it could bring to Boston, including a major biotechnology conference that can’t squeeze into the current facility.

“Events in these key industries should come to Boston because this is the place where that innovation, where that intellectual capital exists,’’ he said. “And if Boston’s going to be a leading 21st-century, knowledge-based economy, world-class city, we need to be able to have those assemblies.’’

But several panel members contacted remain unsure of their position. Michael Widmer, president of the business-backed Massachusetts Taxpayers Foundation, said he needed to see more details about financing and how the recommendations are laid out.

“In an ideal world, would we expand the convention center? Almost certainly,’’ he said. “However, do the benefits of an expansion justify the large public investment required? Not at all clear.’’

Katie Johnston Chase can be reached at johnstonchase@globe.com.