March 5, 2012 — The Greater Baltimore Committee’s proposed development of a new arena and hotel connected to an expanded convention center near Baltimore’s Inner Harbor would generate hundreds of millions in new visitor-related spending, up to $25 million in new annual tax revenues for the city and state, and would significantly enhance the city’s competitive position as a meeting destination, according to an independent feasibility report issued March 5.
The combined project would spawn between $235 million and $308 million in annual direct and indirect spending and would yield the city and state between $19 million and $25 million in new combined annual tax revenues, according to a report by Crossroads Consulting Services released by the City of Baltimore and the Maryland Stadium Authority.
The proposed project, unveiled last May, is a major agenda item for the GBC, said President and CEO Donald C. Fry. The concept calls for the arena and hotel to be funded privately, with the state funding the convention center expansion.
The study, conducted under the auspices of the Maryland Stadium Authority, was commissioned to assess market demand and convention industry trends, the convention center’s competitive position in its market, and to calculate, among other things, the potential economic and tax revenue benefits that could be derived from the project.
“The feasibility report’s findings and recommendations confirm the significance of the convention and tourism industry to Baltimore and the state of Maryland,” said Fry. “It highlights the need to invest in the expansion of the convention center and the synergy that could be generated by this project. This is a critical hurdle to overcome as we seek public dollars for this project.”
Maryland Governor Martin O’Malley has included $2.5 million in his proposed FY 2013 capital budget for preliminary planning for the convention center expansion on the publicly-owned site of the center’s existing east wing. The arena and hotel would be built on the adjacent Conway Street site owned by Willard Hackerman.
Fry acknowledged that, due to difficulties in securing private money for building arenas, private-sector funding for the arena and hotel is not yet in place. “The GBC is working with Mr. Hackerman to reach out and identify all potential avenues of private-sector funding for the project,” he said.
Market demand for events in Baltimore “has equaled and potentially exceeded” the Baltimore Convention Center’s supply of space, according to the report.
The convention center “is operating at or near practical maximum occupancy in its exhibit and ballroom space.” Such attributes “are typically an indicator that additional space is warranted by market demand,” the report states.
It notes that Visit Baltimore indentified 243 potential meetings and trade shows that were lost because the convention center was either too small to accommodate them or that space was not available on the dates needed.
A single convention or trade show drawing an average attendance of 5,200 people for 3.5 days is estimated to generate $6.5 million, 100 jobs and nearly $900,000 in state and local tax revenues.
Conversely, market research suggests that the impact of doing nothing “will likely result in a decline of event activity over time.” A 15 percent decline, for instance, would result in an estimated loss in of $78.4 million in spending, most of which would occur in the city. Such a decline would result in estimated lost tax revenues of $2.1 million and $4.3 million in the city and state respectively, according to the report.
Meanwhile, proposed private-sector development initiatives that would be spawned by the combined project provide a unique opportunity to “significantly change” the convention center’s surrounding and enhance the city’s competitive position as a meeting destination, the report states.
Study: New arena, larger convention center would transform city — Baltimore Sun
Study: New Baltimore arena, expanded convention center should be attached — Baltimore Business Journal