Not Even Philly Politics Can Stop CC Expansion

Jack Ferguson, executive vice president of the Philadelphia Convention & Visitors Bureau, said it comes with the territory.

"We watched all the politics in Boston," he said, of the hoops officials in that city jumped through to get the Boston Convention & Exhibition Center built.

"We are watching the politics at Javits," he said, of the struggle to simply break ground on an expansion at the Jacob K. Javits Convention Center in New York.

And, apparently, he's watching the politics unfold in his own city as a $700 million expansion of the Pennsylvania Convention Center gets underway. The only difference is that in Philadelphia, the expansion is already quite a way along: Both the governor and state legislature have approved financing, and demolition has begun on buildings near the convention center to make way for an additional 260,000 square feet of exhibit space and 72,000 sq. ft. of meeting space by mid-2009.

"There's a project going on," Ferguson said. "The awarding of contracts has been sent out."

And yet ...

News reports in both the Philadelphia Inquirer and the Philadelphia Daily News have hinted of a growing schism between Pennsylvania Gov. Edward G. Rendell and the Pennsylvania Convention Center Authority over who should run the expanded venue. And a report by the Boston-based Economic Development Research Group commissioned by the governor that questions the economic feasibility of the expansion was completed in March, but made public for the first time just this month, and only then after it was first leaked to local reporters.

The latest sticking point is a draft lease agreement between the state (which owns the building) and the convention center authority board (which operates it). Included in the draft agreement is a laundry list of items the state wants the authority to make decisions on, ranging from personnel to marketing and contracting. Most importantly, however, the draft agreement would give the governor the authority to hire and fire the executive director.

Not lost on the local media is the fact that Rendell has been highly critical in the past of current convention center CEO Albert Mezzaroba and former PCCA Board Chairman Michael Nutter.

(Nutter resigned from the board last spring when he announced he would be a candidate for mayor of Philadelphia. Since then, he has won the Democratic primary election and is the overwhelming favorite to win the upcoming general election.)

The Economic Development Research Group report described a nationwide surplus of exhibit space, but acknowledged the circumstances are somewhat different in the Northeastern United States.

In fact, project manager Lisa Petraglia said the professed strategy of the convention center and CVB to solicit smaller, albeit high-end, meetings in the life sciences, health care and pharmaceutical sectors was "probably a smart strategy."

"We did recommend they make a serious commitment to meetings in the health care and pharmaceutical sectors," Petraglia said, "but it doesn't look like that's where the two organizations really want to go."

She said meetings in those sectors are asking for more and more meeting space, something that won't necessarily be available once the expansion is done.

According to the most recent TSW Major Exhibit Hall Directory, the average U.S. convention center has 208,963 square feet of exhibit space and 46,543 sq. ft. of meeting space, roughly a 4-to-1 average. When completed, the Pennsylvania Convention Center will have about 700,000 sq. ft. of exhibit space and 162,000 sq. ft. of meeting space, very close to that 4-to-1 average.

Petraglia suggested that's an indication the convention center and CVB are really interested in attracting large tradeshows, not smaller, more lucrative meetings.

"If you look at the plans, it's really to get mega-events," she said.

Ferguson said, to the contrary, the new space being added gives the convention center flexibility to be used in any number of ways.

"That flexibility allows us to have two conventions simultaneously of 3,000 to 3,500 (hotel room nights) on peak nights," he said. "It allows us to attract back shows at Javits that left because we didn't have enough space. There's no hidden agenda here."

Meanwhile, all parties involved went to great lengths to say the negotiations between the governor and the convention center board would be resolved.

In a statement to Tradeshow Week, Pennsylvania Secretary of the Budget Michael J. Masch said, "There's no reason to think that all of that won't get done in a way that is satisfactory to all parties."

Ferguson said the $700 million expansion is the largest public construction project in the history of Pennsylvania and, if the state is assuming responsibility for the debt service, it should have some say in how the center is run.

"As the state takes over the debt service, the governor should be involved," Ferguson said. "He doesn't want to take over; he wants a professional organization to run the building."