Jackson Convention Center: The $65 Million Question | Jackson Free Press | Jackson, MS

Jackson Convention Center: The $65 Million Question

"If you build it, will they come?" is a recurring question in the discussion about Jackson's proposed convention center. Supporters say that a convention center is a smart investment by the city in the future of its downtown, as well as an opportunity to kick start business tourism and take advantage of the fact that Jackson is a regional hub for Deep South commerce. Opposition, led by some prominent members of the Mississippi hospitality association, issue a familiar refrain—no new taxes.

This spring, the state Legislature passed HB 1832, which put a referendum on the Nov. 2 ballot for Jackson voters; if it passes, then a restaurant and hotel-bed tax increase on all such businesses in the city of Jackson will be used to raise the $65 million the city needs to begin construction on the convention center.

What's a Jacksonian to do? You can start by planning to vote—this November, Jackson voters will have a referendum question on their election ballot asking them to fund the convention center with a 1 percent increase in the tax on Jackson restaurants, a 3 percent tax increase on hotel beds in the city and a 3 percent additional tax on catering services at the convention center itself.

Is It Needed?
On its face, the question is actually quite simple—does Jackson need a convention center in order to grow as a city? The Jackson Capital City Convention Center campaign says yes—and it's got some backing, including the downtown banks, 100 Jackson restaurants, the MetroJackson Chamber of Commerce and others. A constant refrain is that Jackson is the only capital city in the country without one, which is dramatically represented by one of the slides you see offered by the campaign—picture 49 cities (and states) on one side of the slide, and one city—Jackson, Miss.—on the other side of the slide, under the heading "Without."

Maybe that's an emotional argument. After all, it's also possible that a convention center is a good idea in theory, but that it shouldn't be built using the current funding proposal. That's the position expounded by Mike Cashion, executive director of the Mississippi Restaurant and Hospitality Association (MRHA). In early 2004, MRHA supported a convention center bill on the condition that it would have included a broad-based 1 percent (or less) sales tax in Jackson. When political wrangling changed the city's position—Mayor Harvey Johnson decided to go with a hospitality tax—the MRHA dropped its support.

Now, a number of prominent members of the Mississippi Restaurant and Hospitality Association who've formed the "Enough is Enough: No New Taxes" political action committee say that the funding mechanisms are wrong, that they should not be focused exclusively on hospitality. They also mention that the convention business has imploded in the past few years and that Jackson's convention center could be competing with bigger venues—New Orleans, for instance—which have seen a decline in convention traffic since we left the 1990s behind.

Best-Case Scenario
A study by C.H. Johnson Consulting in Chicago (commissioned to help sell the convention center proposal) claims the Capital City Convention Center would have a net positive economic impact of $37 million each year, including 700 full-time jobs. During construction, 300 temporary jobs will be created and the act of spending the $61 million that's slated for construction will inject $98.4 million into the local economy according the study's figures. (That even includes the extra dollars spent by the guys in hardhats.)

Let's say it gets built. Why would people come to Jackson? Wanda Wilson, president of the Jackson Convention and Visitors Bureau, offers two main reasons—accessibility and affordability. "Jackson sits at the crossroads of I-55 and I-20," Wilson said. "The interstates make driving accessibility a breeze; more people can drive rather than having to fly; those who want to fly can fly into Jackson."

Indeed, there's one argument that suggests that the overall downturn in convention business in this country is due, in part, to an increase in wariness about flying to attend meetings. (A lagging economy and the dot-com crash haven't helped, either.) Larger venues, including places like New Orleans and Las Vegas that are traditionally very strong convention destinations, have seen a 50 percent or more drop in attendance in recent years.

Why Jackson?
Wilson acknowledged that convention planners will often pick resort locations in order to entice convention goers into making the trip. But the flipside of convention planning is being able to book a reasonably inexpensive convention—one that allows more conventioneers to attend simply because they can afford it.

"The hotel rates are affordable; the services at the convention hotel are such that the meeting planner will not have to have the registration costs they [might encounter in other cities]," said Wilson. "They can reduce those rates and have more delegates attend."

Such conventions are more business-as-usual affairs: people actually show up to learn something or get something done, with the nightlife or entertainment being secondary. Beau Whittington, president of Convention Display Services and a member of the convention center executive committee, said that business focus will play to Jackson's strength.

"For years, a hardware company has produced a show in Jackson that brings 1,200 people to Jackson for three days. We're losing them because we don't have a convention center—they've been at the Trade Mart—they're moving it to Baton Rouge, which has expanded dramatically," Whittington said. "But we'll get the hardware company to come back to Jackson. It's in the center of their market. Jackson is a convenient place for them to come."

Both Whittington and Wilson suggested that another reason Jackson will get conventions is that it will simply be "in the mix" for convention planners. Convention planners move their shows to different cities just to add a little interest for their attendees; if Jackson has a shiny new convention center, then a number of shows in the Southeast will give Jackson a shot. Campaign manager Derrick Johnson (who is also president of the state NAACP) is certain that a number of religious institutions—which are categorically averse to gambling Meccas such as the Gulf Coast or Tupelo—would also like to have their conventions in Jackson.

In fact, he, Whittington, and Wilson are optimistic (perhaps to a fault) that the convention center will be booked; the study by Johnson Consulting estimates that 30 event hall events (130 total events) will happen in the first year, growing to 48 event hall events and 173 total events in the third year that the convention center is open. Whittington and Wilson both said that they feel the estimate is very conservative.

‘No' New Taxes
Mike Cashion of the MRHA isn't as optimistic. He invited me to his office in Flowood, where he and Nick Apostle, local restaurateur and president of the local chapter of the MRHA, pointed to the problems that New Orleans is having with its convention business, and the problems that Knoxville, Tenn., and Shreveport, La., are having with their convention centers, requiring more money to shore them up. Cashion also brought up San Marcos, Texas, Corinth, Miss., and Birmingham, Ala.—all of which are struggling on some level of convention center or public exhibition hall debt.

Cashion and Apostle argue that the tax on restaurants is a burden on Jacksonians, especially harsh on "those who can least afford it," said Cashion. "Jackson's millage rate is highest in the area. Jackson's car tag rate is the highest in the area. The mayor has just approved a ‘nominal' increase in the water and sewage bill. We have to stop nickel and diming the people who can least afford to be nickeled and dimed."

It is worth noting that the MHRA supported the convention center when it was going to be paid for by an across-the-board sales tax, even though that tax would affect all Jacksonians—rich and poor—including those who avoid restaurant dinners and shop for lower-cost meals at the grocery store. That said, few would disagree that Jackson's overall tax burden is high, even if its restaurant tax is a bit lower than some surrounding communities.

It is also true that the hotel tax increase is considerable, and it won't just be paid by out-of-towners. Local businesses will foot the bill for housing new employees and clients. (Hotel taxes can adversely affect low-income wage-earners who use weekly hotels for stop-gap housing. At $600 per month, for instance, the extra taxes mean $18, or well over 3 hours work at minimum wage.)

Cashion emphasized that they weren't against the convention center initially; only that they now feel the approach to funding it is irresponsible and risky, partly because the hospitality taxes will take longer to pay off the debt for the convention center than a flat sales tax increase in Jackson would have.

If the center doesn't take off and do well—if Jackson's economy sputters or if restaurants and motels fail or leave the city limits, then the tax receipts from the hospitality tax may not make up enough of the debt service. That might require a future tax on Jackson residents to pay for convention center operations. "When we've tried to validate the numbers externally, we've had questions," Cashion said.

Where Things Are Headed
Convention business in the U.S. is indeed tough, most convention centers lose money, and the economic benefit of a convention center can vary dramatically.

In the case of Knoxville and Shreveport, their solutions to disappointing convention business have been more investment—each city is now working on a city-subsidized convention hotel. The "host hotel" issue is brought up again and again—few convention centers thrive without a host hotel connected (or at least contiguous) to the center; the Capital City Convention Center has no funding for a host hotel, although there's a plot where one could go in the plans. Given current trends, it's unlikely that a hotel company would build one in Jackson without considerable subsidies.

And that host hotel could be a big issue—with only 508 rooms within walking distance of the convention center, conferences with thousands of attendees would need to stay at High Street and I-55, where another 1,200 rooms await. It could be a nice problem to have, but it might also encourage event planners to choose more accommodating cities.

Support for the Capital City Convention Center plan appears to be strong—this week the Capital City Convention Center campaign will announce a list of supporters, including over 100 restaurants in Jackson, companies such as BellSouth and Marriott, and religious organizations. On Thursday, Sept. 23, Jeff Good and Dan Blumenthal, co-owners of BRAVO! and Broad Street Baking Company, are holding their own press conference at Banner Hall to pledge support for the convention center.

The opponents have strong support as well with much funding reportedly coming from outside the city. Cashion said: "MHRA provided the ‘seed' money to start up and create the structure. We have received several corporate contributions and numerous individual contributions from restaurateurs and hoteliers." He declined to detail the specific funders.

From here, it's a footrace, with supports looking for 60 percent of Jackson voters to believe that there's a pent-up demand for convention space—while detractors try to encourage voters to dump this proposal and second guess whether Jackson needs a convention center at all.

(Note: This story has been edited to reflect the fact that the final bill, HB 1832, does not include a $2 fee on rental cars as part of the funding mechanism for the project. I regret the error in the print edition. - TS.)

Previous Comments

ID
168617
Comment
I'm worried there might be a glut of convention centers. If the convention center does get approved, let me suggest one strategy to attract conventions - First Rate Architectural Style - inside as well as outside!! That will give Jackson a competitive advantage in that regard. Putting the center within reasonable walking distance of the cultural activities will immensely help as well.
Author
Philip
Date
2004-09-22T11:20:32-06:00
ID
168618
Comment
At the press conference, Marriott pledged $5,000 to the campaign effort and full support. Folks standing with the mayor to support the plan included Leland Speed, Ben Allen, Derrick Johnson, Margaret Barrett Simon, Bettye Dagner-Cook and many others. More updates soon.
Author
ladd
Date
2004-09-22T13:15:33-06:00
ID
168619
Comment
Whether or not a convention center is a good idea, I don't think it should be the centerpiece of effort to revitalize downtown Jackson. Out-of-towners don't make a place lively. Locals make places lively, and that draws out-of-towners. I think revitalization efforts shouldn't focus so much on drawing in visitors and getting Jackson's own people downtown. I think there are three important steps to making this happen. First, build residences and lots of them. Condos, lofts, townhouses...build dense resdential developments so that there will be a core mass of people downtown at all hours. This will create a market for things like restaurants and music clubs, the kind of things that make downtowns lively and fun to be in. The second step is to put thigns like grocery stores downtown. Living downtown will be hard without being able to shop for food nearby. A discount retailer like Target wouldn't hurt either. One of the attractions of living in an urban downtown is being able to do your shopping within a short walk of your home. That's a lot less stressful than fighting the traffic on Lakeland Drive. (Being able to walk to your job is an advantage along those same lines.) The third step is to improve public transportation. When you put lots of people in a small area, traffic and parking become very big problems. The more people can live without cars, the easier life will be, not only for those who don't drive and dont' have to deal with traffic, but also for those who do have to drive. Putting homes, offices, and stores within walking distance (as described above) is part of making car-free living possible. Transit is also an important piece of the puzzle. Car-free people need to be able to get to other parts of town for work or pleasure, and more frequent bus service serving more areas of the city later into the evening is essential for that to happen. These are the things that will make Jackson's downtown a lively place to be. Only then will it be a place that out-of-towners will want to come to for conventions, business, and for pleasure. We have to realize that it's revitalization that brings visitors, not the other way around. Mark Michalovic Philadelphia, PA (but former Jackson resident and Millsaps grad)
Author
Mark Michalovic
Date
2004-09-23T10:30:20-06:00
ID
168620
Comment
Here's a link to a story about Bravo's announcement supporting the Convention Center that run last issue.
Author
ladd
Date
2004-10-06T15:32:07-06:00
ID
168621
Comment
JFP Endorsement: Convention Center: Yes We recommend a vote for the convention center initiative. Three reasons have put us over the edge. First, despite arguments to the contrary, we believe downtown Jackson can become a great place to live, visit and open businesses in the next decadeóthatís part of our mission at the JFP. Second, weíve looked at the numbers presented by the convention center supporters, and we believe the plan is both more conservative and reasonable than opponents have charged. Third, the announcement of an agreement for a largely residential redevelopment of the King Edward couldnít have come at a better time, as it addresses some of our concerns regarding a focus on community and downtown residents. Having said all that, the key to any successful convention center is professional management and effective marketing of the host city. Weíre going to ride the city administration hard to make sure it lives up to both, while encouraging small business and a creative, entrepreneurial spirit in our downtown. More JFP Convention Center Stories: The Convention Center Quandary Center Foes Hold Court Pennies for Your Votes Zen and the Art of Optimism (See last half)
Author
ladd
Date
2004-10-27T22:17:48-06:00
ID
168622
Comment
BTW, all, I just got a fax that the "Enough Is Enough" opponents of the Convention Center are having a press conference at the Cabot Lodge in Belhaven today at 2:30 p.m., to present Dr. Heywood Sanders, a critic of convention centers, to the media, should anyone want to go and ask questions.
Author
ladd
Date
2004-10-28T09:14:19-06:00
ID
168623
Comment
Othor Cain writes: " I'm hosting a 2 hour radio show tonight on WMPR 90.1 In regards to the convention center and the need to support it. All are welcome to come by and voice their support. Elected officials and those seeking office and the general public. The show is from 6-8pm TONIGHT...TONIGHT!"
Author
ladd
Date
2004-11-01T16:57:46-06:00
ID
168624
Comment
The Convention Center is not the centerpiece for Downtown Jackson. It is the final piece of a whole complex that will be the centerpiece. Starting on the east side of Pascagoula and Lamar and walking west, you have Thalia Mara Auditorium for large scale productions. Right behind that is the display hall that has housed the recent major museum exhibits. Then there is the Art Museum, the Museum Cafe for smaller receptions and the Planetarium, which is capable of showing IMAX movies. Cross lamar street via the overhead crosswalk and you are in the Convention Center. It will have 90,000 square feet of display space, kitchen facilities, and all the amenities that make a convention center. From there you walk straight into the new Telecom center - a state of the art high-tech communication center, which will also have meeting space as well as a T-3 trunk line. I can't say that other cities don't have this, but I don't know of any. It will not host just conventions, but local events such as innaugural balls, Mistletoe Marketplace, and other events that have outgrown the Trade Mart. What does it cost you? If your yearly Jackson restaurant tab is $1000, you will pay $10.00 into the convention fund. That's 1 Grey Goose martini with tip. A small amount to pay for something so important. You pay much more when you visit another city. Enough is enough? I don't think so. Jackson needs this. Vote FOR the Convention Center. Update: On Thursday morning, Jeff Good and Dan Blumenthal, owners of BRAVO! and Broad Street restaurants, announced that they were pledging 1% of their sales between now and the election to the Capital City Convention fund. Good and Blumenthal both expressed support for the convention center, saying it would be good for business and downtown Jackson. Good says they chose the 1% approach "to validate how inconsequential 1% is to a restaurant transaction, when compared to the great good it can serve." Good estimated that his company's total donation could be $5000 or more, based on the prior year's sales.
Author
Charly
Date
2004-11-01T19:17:05-06:00

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