Miami Beach Voters In A Bind Must Add A Convention Tax
Written by Michael Lewis on August 2, 2012
By Michael Lewis
Miami Beach voters are being asked to take a leap of faith Aug. 14 to pass a tax to expand their convention center. It’s a leap worth taking.
Despite turmoil in the city, which seeks a permanent manager as municipal scandals swirl, an improved convention center is not just good for taxpayers — it’s vital.
We gave the center its last major upgrade in 1989, when it grew to fourth largest in the US. But as other cities have competed, the Miami Beach Convention Center now ranks 30th.
It’s true that Miami Beach can never hope for its center to be in the top 10 again, because the city is too constricted to permit that growth. Our center is less than a fifth the size of McCormick Place in Chicago, less than a quarter the size of the Orange County Convention Center. We’re not going to catch up.
Further, no massive convention center will rise soon on the mainland. There’s no developer, no money, no plan. Talk in downtown Miami focuses on a much smaller center for business meetings, and even that is still just talk.
So let’s set aside hope of competing for massive conventions that others seek. But shouldn’t we compete for corporate meetings that we can no longer woo?
The obvious reason to improve the center is to add jobs. A study last year by the Washington Economics Group said we’d add 3,852 jobs by presenting a competitive center.
Beyond the jobs, conventions feed the bottom lines of hotels, restaurants, transportation companies and retailers.
Less directly, they also bring into the county well-heeled visitors who can and do rent or buy residences, invest in businesses here and sometimes become permanent residents. The better the quality of conventions we attract, the more likely are those who attend to add these longer-lasting local links.
These economic benefits all argue for Miami Beach residents to agree to add up to 1% on the taxes for hotel room rent with proceeds going for the convention center. After all, as proponents argue, the money isn’t coming out of our pockets but from visitors.
Unfortunately, adding to taxes levied on visitors raises the cost of coming here. Meetings and conventions are price sensitive. So the tax to make us more competitive on conventions also would make us slightly less competitive.
Further, residents are being asked to fund a plan so fluid that it doesn’t exist.
A city proposal to expand the center rests on finding one or more firms to take unknown slices of the 52-acre convention center area and propose developments that include an expanded center plus untold other projects. Those projects might or might not fit the needs of Miami Beach and the county. One inappropriate use bandied about is a casino on city land.
Then there’s the financing, also unknown even if the tax passes.
Financing wouldn’t have been needed if a stream of convention development tax revenues for the next 40 years hadn’t been diverted to fund bond repayments to build a stadium for the Miami Marlins. As Miami Beach dithered about the convention center, the Marlins emptied the cookie jar.
Thus, the need for a tax to refill that jar.
Bill Talbert, CEO of the Greater Miami Convention & Visitors Bureau, which is pushing for the tax, says it could yield $8.5 million a year, which could be bonded to get $100 million toward a center upgrade.
There’s also $55 million earmarked from bonds that county voters approved in 2004 for hundreds of capital projects. The county has yet to issue the batch of bonds that would fund the convention center.
Where would the rest of the convention center money — an untold amount — come from? Mr. Talbert says proponents will talk to the next county mayor chosen in the August election to see about the county’s role.
That’s all amorphous enough to make Miami Beach voters question why they should be the first to commit funds with no guarantees of what they would get, or when. It’s a good question.
Still, setting aside sun, surf and sand, the convention center is Miami Beach’s principal asset. And it’s declining daily, affecting the city and the county as well.
The convention center is so vital that dubious voters are virtually forced to take that leap of faith in their government, in the county as a whole and in the visitor industry, because they cannot afford not to.
It’s no sure thing that increasing taxes on Miami Beach hotel rooms will send the community’s economy soaring. The only sure thing is that if voters don’t invest in their principal asset, the convention center, their economy will sink.