Make a profitable investment: upgrade convention center
By Michael Lewis
The visitor industry keeps adding jobs and flowing cash to us despite a weak economy, but to our growing detriment we force a key industry asset to under perform.
After a decade of debate, we still can't agree to modernize the Miami Beach Convention Center, although money has been on hand since 2004 and even more is now available.
First, Miami Beach officials delayed it, saying they had more important things to do. Now some county commissioners are talking about building a center elsewhere instead.
The 1.1 million-square-foot, city-owned center hasn't expanded in 17 years while competitors have built state-of-the-art sites. There's no decent space for banquets or corporate meetings. Parking is skimpy. The center needs modern audio-visual setups. The exhibit halls are plain concrete boxes.
Last year, the chairperson of the Greater Miami Convention & Visitors Bureau, which markets the center, called it an embarrassment. Maria Sastre at the time branded an upgrade "the most important topic in the industry."
It still is.
This week the bureau's sales team is in New Orleans at the ConferenceDirect annual meeting, trying to sell Miami-Dade to 200 planners who pick sites for 5,200 meetings a year that produce $344 million hotel room revenue and vast economic spin-off.
Better hope they aren't looking for a modern center.
In the 1990s it was hard to sell the center because we were short of high-quality hotels nearby. That barrier fell with the opening of the Loews Miami Beach, the Royal Palm Resort and now upgrading of the Eden Roc and Fontainebleau, two hotels that together offer 2,100 rooms.
But other cities haven't been idle, building not only top-level hotels but first-class convention space. Sunshine, sand and South Beach alone aren't strong enough magnets for meeting planners, even though our center leases for far less than others.
The center spans four blocks with 70 meeting rooms and more than 500,000 square feet for exhibits. Large as that is, it's far smaller than new centers. Worse, it's just a concrete box. Top-end meetings want more.
We do use the center 70% of the time. But with upgrades that we can now afford we could lure more upper-end conventions whose guests would spend far more in our hotels, stores and restaurants.
After all, we're perfectly situated for conventions that bring in Latin Americans and Europeans who can fill upscale hotels and spend heavily. Think Art Basel, which boosted our global reputation while also serving our own cultural community quite well, thank you.
But while the exhibit hall hosts 60 to 75 events a year, its flaws deter business-oriented events that bring spending on the Art Basel scale.
What's at the center today? The BOTS IQ National Robotic Competition, with 2,000 people for five days. Students from middle school through college are competing with robotic creations that they design and build. They exercise their mathematical reasoning and scientific analysis.
Welcome, glad to have you. A great event, and the convention center is a great venue for your competition.
But while the convention bureau estimates the event's impact at $834,750, that's just $83.48 per day per person — far below what an upper-end business event would bring.
Although our visitor industry employs more than 106,000, up 1.6% in a year, and although hotel rates are the second highest in the US and meetings and conventions bring us $1 billion a year, a center upgrade could produce more.
Right now we've got a 50-year-old exhibition hall, not a true convention center.
How could a major corporation convene there? It couldn't hold a banquet or gather into general session without having to leave the center.
The long-planned addition of 48,000 square feet could seat 3,000 at dinner or 5,000 in a meeting. The area, with carpeting and chandeliers, would feel like a ballroom, not a concrete box. It might even have adequate kitchens.
A parking garage is still vital; it could fit in the center's sea of surface lots.
At the start of the decade, an upgrade was to cost $50 million. When city officials argued against it, costs had risen to $75 million to $100 million. The price now has probably passed $100 million. The longer we wait, the higher the cost and the more business lost.
But even in these painful days, we can expand. Voters approved county bonds in 2004 that earmarked $55 million for the job. And as the visitor industry prospers, the 3% tax on all hotel rooms except in Bal Harbour and Surfside is accumulating tens of millions of bonding capacity that could help.
There's also $60 million from that tax — levied to lure visitors — that's being diverted to build a baseball stadium, which wouldn't add visitors. Should that misappropriation fail, $60 million more could flow to the convention center.
Unlike baseball, conventions add jobs and spread money countywide. Gains are by no means limited to Miami Beach, though it's the key beneficiary. Still, Miami Beach officials have been slow to grab the brass ring.
Spending funds already available on a growth industry that will repay the whole county many times over is a no-brainer.
Business needs to encourage both Miami Beach and Miami-Dade County's officials to bring the convention center into modern times for the benefit of all of us — and do it now. Every day we wait is costing us, big time.