The high cost of ignoring the truth: Sacramento Convention Center

23 Sep, 2013 by Katy Grimes

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The City of Sacramento, usually on the wrong side of economic sense and accountability, is planning to build an even bigger, more expensive Convention Center, despite $16 million in annual losses over a 10-year period, and cumulative losses of $218 million over the past 14 years.
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Rather than outsource the convention business, as most large cities are doing, Sacramento officials believe “If you build it, they will come.” But that only works in the movies, and usually through the hard work of folks in the private sector using their own money and sweat.

The Sacramento Bee has now joined the cheerleading squad for building a larger, staggeringly expensive convention center, despite the facts. The Bee has also blatantly joined the city supporting the use of additional public subsidies for a new NBA arena in downtown Sacramento.

Just the facts, m'am

The facts come from Eye on Sacramento, a public policy watchdog looking out for public interest in local government. EOS recently released a well-researched, scathing report of the finances of the Sacramento Convention Center. Eye on Sacramento found the annual $16 million convention center deficit is being funded by the city’s 12 percent hotel tax. “Fully four-fifths of the $20 million annually brought in by the hotel tax is consumed by losses at the convention center, while most California cities use their hotel tax revenue to fund an array of services, particularly support for the arts,” EOS reported.

“The 'backbone' of any financing plan for the entire project would be the city’s 12 percent hotel tax, which is still paying for the center’s last expansion – an $80 million project in 1995,” the Sacramento Bee editorial said. “Once that $8 million a year in debt service comes off the books in 2021, boosters want to use it again. They’re also looking into federal tax credits, plus possible private money.”

“There’s some time to sort all this out since the project would be constructed in phases, over seven to 10 years,” Bee editors opined. “The theater renovation probably wouldn’t start until spring 2015.”

The Sacramento Bee editorial board has had the Eye on Sacramento report for nearly three weeks, but refuses to do a news story about it. Instead, they barely mentioned the report in their editorial.

In their editorial, the Bee's editors grossly understate the convention center's annual losses at $800,000, even though Eye on Sacramento said the $16 million annual convention center loss/hotel tax subsidy was publicly confirmed as being accurate by the city's convention center manager, Judy Goldbar in interviews with two local television stations.

It has become painfully obvious the Sacramento Bee is now in the business of protecting the City of Sacramento's credibility for the coming political fight over the arena subsidies. Sacramento's newspaper of record has been reduced to an enabler for government lies and taxpayer abuse.

In my story last week about the Convention Center project, I said, “In the real world, private sector businesses outgrow existing facilities before committing to build larger structures. Building a bigger convention center will not turn Sacramento into a destination city, and will only force Sacramento taxpayers deeper into the unsustainable money pit.”

Never in my life have I seen a newspaper intentionally try to hide the truth about government deceit and malfeasance — outside of Venezuela, Cuba, the USSR or some other worker's paradise.