Expert says TEE Center study is flawed

Before casting their votes on building a $38 million trade center, some Augusta commissioners wanted to hear from Haywood Sanders, a Harvard-educated public policy professor who contends that cities are recklessly plunging into such projects while demand for exhibit space is plummeting.

Dr. Sanders said he was eager to talk to them, too, and he had even gone over some information sent to him by the Augusta Convention & Visitors Bureau and convention center operator Augusta Riverfront LLC.

But that meeting never happened, even though the commission voted 9-1 in September to have City Administrator Fred Russell look into bringing the University of Texas-San Antonio professor to Augusta, whether in person, through a teleconference or in a conference call.

Dr. Sanders said that had something been set up, he would have told commissioners that the information he received, including the visitors bureau's seven-year-old feasibility study by Duluth, Ga.-based Strategic Advisory Group, is riddled with mistakes, outdated and "fundamentally incorrect."

The study concluded that an exposition center built adjacent to the Radisson Riverfront Hotel -- now Augusta Marriott Hotel & Suites, which contains the existing convention center -- would have a $25 million-a-year economic impact and would create 630 jobs, both directly and indirectly, including construction work.

"If Augusta's going to go ahead and build a TEE center based on that study, I wish them well," Dr. Sanders said Monday, "but it's only going to produce a fraction of what they say it's going to do."

He said he could not cite specific flaws in the study because he didn't have it in front of him. On Tuesday he was wrapping up the semester and did not return phone calls.

With a $38 million TEE center having passed by a 7-1-1 vote Monday, along with a $10 million parking deck and $37.5 million in investment in the Laney-Walker/Bethlehem area over 50 years, Dr. Sanders' contentions are a moot point now as far as shaping debate.

He said he feels city officials never intended to bring him in, and they wasted his time.

"I find it a little curious," he said. "I think the mayor and Fred Russell have done a great job of not getting my input, which is their right to do."

Mr. Russell said there was no plot to keep him out. He said Dr. Sanders was scheduled to speak by phone at a Dec. 3 meeting, but it was canceled because Commissioner Corey Johnson had a death in the family.

However, Matt Aitken's runoff win two days earlier on Dec. 1 to claim the District 1 seat had already virtually guaranteed at least six votes for a Reynolds Street TEE center next year.

"I don't think (Dr. Sanders) would have changed anybody's mind, anyway," Mr. Russell said. "I don't see any sense to bring him in now."

The professor's name came up in September after visitors bureau president and CEO Barry White gave a presentation to commissioners urging them to support a TEE center.

Betty Beard, who made the deal with Don Grantham to fund inner-city projects using a $1-a-night hotel fee but later soured on building an exposition center during a recession, countered Mr. White by asking if he was familiar with Dr. Sanders' work. That morphed into a vote to try to bring him to Augusta.

A professor in the College of Public Policy, Dr. Sanders wrote a 2005 report for The Brookings Institution criticizing the "arms race" to build and expand trade centers. The report said overall attendance at the 200 largest trade show events languished at 1993 levels.

Dr. Sanders told The Chronicle that his findings still hold up and that, if anything, conditions have grown worse. Cities throughout the country are losing money on exhibition centers, he said, and are offering discounts and incentives that make competition even stiffer. And centers keep getting built because they hold out the hope of stimulating business for the hospitality industry and boosting downtown development for property owners, he said.

Before Monday's vote, Ms. Beard asked Mr. Russell what happened to the plan to bring in Dr. Sanders. He replied that he couldn't get him here, that he was supposed to speak Thursday, but the meeting was canceled.

The four subcommittee meetings that were held all featured pro-TEE center speakers -- Mr. White, inner-city revitalization consultant Jesse Wiles, Hyatt hotel developer Courtland Dusseau and debt management financial adviser Diane McNabb.

"I think it was a disservice to the citizens of Augusta," Ms. Beard said of omitting Dr. Sanders. "Frankly, I just wanted the truth. I wasn't trying to sabotage it as such. I just wanted to hear from all sides."

With the deal approved, now comes the reckoning, Ms. Beard said, but it's going to take years before Augusta finds out for sure whether the TEE center was oversold.

"It may be five or 10 years," she said. "It may be when we have to foot the bill."

Mr. White said Monday's vote only continues the work that started on the riverfront in the 1990s, which has been successful so far. He said if he wanted to, he could line up 50 experts to counter Dr. Sanders.

"We've had a tremendous year in the hospitality industry, in our hotels, compared to our competition," he said.

Augusta Riverfront LLC President Paul Simon said that to gauge the TEE center's future, one must look not at trade centers in large cities but at those in cities such as Columbia, which is expanding its facility.

"All I can tell you is that, from our perspective, we think it will bring a lot of people to town," Mr. Simon said.

Reach Johnny Edwards at (706) 823-3225 or johnny.edwards@augustachronicle.com.

2002 PREDICTION

In 2002, the Augusta Convention & Visitors Bureau commissioned a $50,000 study by Duluth, Ga.-based Strategic Advisory Group LLC to determine whether a new convention center should be built in Augusta. After considering six different spots from Belair Road to North Augusta, the study centered on the Radisson Riverfront Hotel Augusta -- now Augusta Marriott Hotel & Suites, which contains the existing convention center -- as the preferred location for a trade, exhibit and event center.

The company' conclusions:

- The TEE center will have a $25 million per year economic impact.

- It will create 630 jobs, directly and indirectly, including construction work.

- It will generate $1.42 million in state and local taxes in its first year.

- It will operate at a $176,000 per year loss, but an increase in visitors would raise $515,000 more in additional hotel, mixed-drink and sales taxes.

- It will cost between $16.4 million and $20.2 million.

The study was last updated in 2004, still predicting a $25 million per year economic impact but raising the projected cost to $27 million.

Source: Augusta Chronicle archives; Augusta Convention & Visitors Bureau President and CEO Barry White

 

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