What would it cost to build a downtown convention center?

Simplified: The city would have to spend between $225 and $250 million to build a new downtown convention center that would likely still operate at a deficit, according to a draft report from Johnson Consulting presented to the Riverline District Steering Committee on Tuesday afternoon.

Why it matters

• The City Council in December voted to spend $8 million to purchase a roughly 8-acre parcel of land near the 10th Street viaduct with plans to build a downtown convention center.
  • Since then, Mayor Paul TenHaken has become more vocal about the need for this project to have community support – culminating in a meeting earlier this year in which the mayor called for a third-party organization to step up and take over leading the project forward.
• But none of that passing-of-the-baton is going to move forward until the city gets its next full report from Johnson Consulting – a Chicago-based group hired back in March 2023 to determine the "highest and best use" of the Riverline District property.
• A draft of that report was presented to the steering committee Tuesday afternoon, outlining, for the first time publicly, the potential financials of the project. That includes costs to build, ongoing operational costs, revenue projections and an estimated potential economic impact of as much as $55.8 million per year.

"The opportunity of the land you have available with Riverline is really a generational opportunity," Johnson Consulting Principal Brandon Dowling told committee members.

Ok, back up a second. Why a convention center? Don't we already have one?

Yes – and there's a plan to turn the existing convention center into indoor recreation space if all moves forward in building a new convention center downtown.

The short answer is that consultants ultimately recommended a convention center of the options considered as the "best use" of the property.

The long answer is this:

And also this:

What did we learn on Tuesday?

Committee members got a more detailed look at the financials, as well as some of the specifics of the project – including a recommendation of adding 300 to 400 hotel rooms to downtown to accommodate future convention-goers.

• Consultants also recommended the facility have 135,000 square feet of usable convention space in addition to more than 200,000 square feet of back-of-house and "pre-function" space. For context, the current convention center has 60,000 square feet of usable convention space.

What about the financials?

Convention centers themselves aren't historically a big money-maker in and of themselves, but the idea is that when people come to town for a convention, they're spending money.

• Dowling shared the example of someone coming to town for a conference and then going out to eat at Ironwood Steakhouse, leaving a tip for the server and the ripple effects of that spending – e.g. the restaurant then spends more on supplies because it's selling more; the server spends more because they're earning more.

That's what's behind the estimated $55.8 million annual economic impact.

• It's unclear, though, how that compares to the annual impact from the existing convention center, and when asked for further clarification, consultants were unable to provide a response.

Johnson Consulting projects the city will see between $892,000 and $1.4 million in additional tax revenue as a result of a new downtown convention center.

• That extra tax revenue could then offset the estimated cost of running the downtown convention center. Within five years of the new facility, the city could come out ahead by $1 million (assuming that a portion of those additional tax dollars go back to subsidizing the convention center.)

Here's the chart from Tuesday's presentation for anyone who wants to see it all laid out:

What happens next?

Johnson Consulting is expected to have the final report completed by mid-August.

Then, City Councilor Rich Merkouris, who's also chair of the steering committee, said the committee will re-group and talk about potential next steps – including finding whoever is going to take over this project if it's not going to be city-led.

It's worth noting that in all of this, on the horizon, the city is operating on a timeline. If either a convention center or some other project with significant economic impact isn't built on the site within five years of the purchase date, the seller has a chance to buy back the Riverline District land.