Ringside: Big white elephant?

New center opened with unresolved cost and labor issues that have plagued it for years.

March 06, 2011|By Paul Davies, Inquirer Columnist
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  • DAVID M WARREN / Staff Photographer
  • DAVID M WARREN / Staff Photographer
  • Arch Street at the Convention Center's new $786 million expansion. While unions are part of the problem, politics are even more so.

Would you invest $786 million in a business that lost millions every year, charged more than most of its competitors, and left many customers angry and unwilling to return?

Well, you just did.

Welcome to the bigger, but not much better, taxpayer-financed Convention Center.

State and local officials cut the ribbon Friday on the expanded center. The event marked the end of the most expensive public works project in state history.

The added space is expected to help the center compete for bigger conventions, which should attract more visitors to Center City hotels, restaurants, and retailers.

But the expansion comes with risks. The recession has hurt the convention industry. Customers are mobile and know it's a buyers market.

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Even before the slowdown, the center lost millions most years. The losses are projected to grow in the short term because of increased debt service to fund the expansion. The hope is that more and bigger conventions will cover the increased costs.

But it's not a matter of building a bigger hall and the customers will come.

Amazingly, the state plowed ahead with the $786 million expansion without resolving the cost and labor issues that have plagued the building for years.

According to a recent study, the price of labor at the Convention Center cost the city's hotel industry 400,000 nights of business between 2007 and 2009.

The high cost of labor was the main reason dozens of conventions went to other cities. Cockamamy work rules by the six labor unions also chase away business. No city has so many unions working at a convention center.

Consider the laptop-computer rules. Exhibitors can set up laptops for their own personal use. But if a laptop is used for audiovisual purposes, then a member of the stagehands union must do the job. Cost: $37 an hour.

Using a laptop to register conventioneers requires someone from the electricians union at $46 an hour.

Just to set up a booth, the carpenters charge $107 an hour, almost 30 percent more than the national average.

It's not just nonunion cities that are cheaper. Some costs are higher here than in Chicago, Boston, and Washington.

Exhibitors also complain about shabby treatment from the unions.

Ahmeenah Young, the center's executive director, is negotiating a new agreement with the unions. She declined to discuss details, but she said workers needed to know they were in the hospitality industry. Fine. But deals and promises have been made before, with improvements being incremental at best.

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