FLASHBACK:
"$1.1b plan for convention center meets skeptics" by Casey Ross | Globe Staff April 10, 2014
Boston’s largest convention center will lose tens of millions of dollars
in business in coming years unless the state authorizes a $1.1 billion expansion of the facility, Massachusetts convention chief James Rooney told lawmakers Thursday.
All so the elite will have a nice place to hold their meetings and parties.
But the expansion proposal faced questions from legislators and others who raised concerns that the financial benefits of the plan would not justify the cost.
Some also questioned whether Boston should get so much funding when
other communities are in danger of losing money for cultural and tourism
activities.
“Where I am, 110 miles from the State House, no one wants to keep footing the bill for construction in Boston,”
said state Representative Nicholas Boldyga, a Republican from
Southwick. “They come here very infrequently, and they’re upset because
they can’t even get $10,000 a year for their cultural council budgets.”
I couldn't have $aid it better myself.
*****************
“We have tried to craft a financing mechanism that allows monies
collected in Cambridge and Boston to pay for this,” said Rooney. He
noted no tax increases would be
required by the legislation that proposes the expansion. Nearly all the
funding would come from existing fees levied on hotel and tourism
activities in Cambridge and Boston. If those funds fall short, statewide hotel tax revenue would be used to make up the shortfall.
Rooney appeared before the legislature’s Committee on Bonding, Capital
Expenditures and State Assets, which will make a recommendation on the
bill to the House and Senate. It is unclear when the measure will come
up for a final vote, but the legislative session ends in July.
Rooney said the expansion would place Boston among the top five
convention destinations nationwide, generating $184 million more in
annual economic benefits for the state and $12 million in additional
taxes each year.
“The creation of the BCEC was a wise investment by the Massachusetts
Legislature,” Rooney said. “And we have an opportunity to do more --
more in terms of job creation, more in terms of attracting additional
major conferences and meetings, more in terms of tourism activities.”
Some critics of the expansion say it would take money away from other priorities by extending the length of time the state would need to pay off debt for the facility. Without the expansion, they say, tax revenue now raised for the convention center fund could be used to cover other expenses by 2034. Under the expansion proposal, the state could be paying off debt on the facility until 2060.
Hey, that will make the BANKERS HAPPY!
“The cost of that would be approximately $5 billion to the
Commonwealth,” said Charles Chieppo, a senior fellow at the Pioneer
Institute, a nonpartisan research organization.
Rooney said that expansion of the South Boston hall has always been
contemplated and, in any case, taxes that go into the convention center
fund will be needed to operate the facility beyond 2034.
In addition to the expansion, Rooney also wants to construct thousands
of additional rooms around the convention center, which suffers from a
lack of available rooms nearby. There are 1,700 rooms within walking
distance of the facility, compared with 8,000 or more in New Orleans and
other cities that compete with Boston.
It's a richer's world, folks.
Currently, 500 new hotel rooms are under construction across from the
Boston Convention & Exhibition Center. But Rooney wants to build a
larger headquarters hotel that would add another 1,200 to 1,500 rooms.
The state’s convention center authority is awaiting responses from
developers interested in building that hotel.
Rooney has acknowledged that construction of the headquarters hotel will almost certainly require government financial assistance because private developers have been unwilling to accept the risk of funding those projects. But he said such assistance come in the form of tax forgiveness or discounted leases, as opposed to direct subsidies.
You just never mind those service cuts and state neglect.
“There are ways to structure this that don’t require me or the state or the city to put up cash,” he said.
Then where is it coming from, $cum?
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Related: Conventioneers Caught in Boston Globe Briar Patch
Yeah, maybe you want to hold your $hin-dig in another city.
"Convention center funding cut over concerns of deal" by Casey Ross | Globe Staff June 07, 2014
A Massachusetts Senate committee Friday stripped $110 million from a bill to expand Boston’s largest convention center amid accusations that the money had been added as a hidden subsidy to build a towering hotel near the facility.
The Senate’s committee on bonding made the change after Gregory Sullivan, the state’s former inspector general, called the bill “a sweetheart deal” for the future developer of a planned 1,000- to 1,200-room headquarters hotel across from the Boston Convention & Exhibition Center.
The bill originally authorized a $1 billion expansion of the South Boston convention hall to help attract larger events and meetings. Earlier this year, the proposal was amended to add $110 million — the same amount as a funding shortage identified for the headquarters hotel in financial statements by the Massachusetts Convention Center Authority.
Though the bill does not explicitly earmark the $110 million for a hotel, the financial statements estimate that the authority would need to raise that much money to help a private developer build the massive hotel at an estimated total cost of $700 million.
Sullivan raised questions about the revised expansion bill at a Senate hearing this week and called it a “sweetheart deal” in a Globe column by Jeff Jacoby on Wednesday. The column reported Sullivan’s accusation that the additional $110 million amounted to a hidden subsidy for the developer of the headquarters hotel project.
See: A ‘classic sweetheart deal’
In an interview with the Globe on Friday, James Rooney, executive director of the convention authority, said the $110 million was included as a security reserve to make up for any potential shortfall in funding to pay off debt for the expansion. He said the reserve would help market the bonds to finance the expansion and reduce overall borrowing costs.
Why do you have to BORROW and BOND when the state already collects tax dollars?
Whom are they really $erving?
Rooney said he did not know who suggested that the reserve fund should be included in the bill.
Uh-huh.
***********
In a June 4 letter to Sullivan obtained by the Globe, Rooney denied the money was ever meant as a subsidy for the hotel that would be built on property owned by the Massachusetts Port Authority near D and Summer streets.
“Nowhere in this bill is there a mention of Massport or the headquarters hotel project,” Rooney wrote. “And nothing in this bill changes the laws which govern the way that hotel project procurement process will be conducted.”
Sullivan said he was pleased the Senate committee changed the bill, saying the move was necessary to prevent public funds from being misused. In an interview, he accused Rooney of “sneaking” a hotel subsidy into the broader convention center expansion bill without disclosing it.
“It’s not a small amount of money,” said Sullivan, now research director for the Pioneer Institute, a nonpartisan public policy group. “I don’t think there’s the faintest chance it’s a coincidence that the amount added to the bill is $110 million.”
The Senate’s bonding committee amended the bill to remove the $110 million and added language preventing the convention center authority from using any of the expansion proposal’s funding for a hotel project. The bill would permit the state treasurer to borrow an additional $100 million for a reserve fund if it was deemed necessary to sell the bonds.
“I am satisfied with this bill that the taxpayers’ interests are protected,” said Senator Brian A. Joyce, a Democrat from Milton who chairs the bonding committee. “At the end of the day, this expansion does increase construction jobs and permanent jobs, and will have a significant positive impact on the greater Boston economy.”
The committee voted Friday to recommend the bill for approval by the Senate, which could vote on it as early as next week.
The House of Representatives last week overwhelmingly approved the expansion measure at the higher $1.1 billion amount. The House and Senate versions will have to be reconciled before final passage of the legislation.
A top official with Governor Deval Patrick’s administration said it is not unusual for bond bills of this size to include a reserve fund, but did not recall discussing that provision related to this project.
“It has always been the intention that only $1 billion be expended on the expansion of the convention center, and the Senate bill is consistent with that,’’ said Scott Jordan, undersecretary of the Office of Administration and Finance.
In addition to the removal of the $110 million, Joyce’s committee amended the bill to reduce the term of bonds for the expansion from 40 years to 30 years, a change he said could save taxpayers up to $480 million.
WHAT?
The FINANCING is going to cost ALMOST HALF the PROJECT in DEBT INTEREST PAYMENTS ALONE?!!!
What a BAD, BAD BILL!
All so the elite of Bo$ton and their political $laves can have a nice place to party.
**************
Rooney has been pressing for the expansion of the convention center and construction of more hotel rooms since 2009. He has said the center needs more exhibit space to compete for larger trade shows and meetings. It also needs thousands of additional hotel rooms to accommodate show attendees, Rooney has said....
It's a richer's world.
The funding of the convention center expansion and the hotel project has generated months of debate.
Bonds funding the expansion of the hall itself would be repaid with existing taxes on hotel rooms, taxi rides, rental cars, and other tourism-related activities in Boston and Cambridge.
That project would more than double taxpayers’ investment in the South Boston convention hall, which initially cost $850 million to build in the late 1990s. Rooney has said the expansion would increase the facility’s economic impact by $184 million a year, or 35 percent, and create thousands of construction and permanent jobs.
In their public descriptions of the project, convention authority officials have always said the headquarters hotel could require between $100 million and $200 million in public assistance. Construction of such large hotels typically requires public support because private developers are unwilling to accept the entire financial risk.
Mega hotels were recently built in Dallas and Houston completely with public financing. Washington, D.C., approved a 50 percent subsidy for a 1,200-room Marriott, and San Diego provided a 21 percent subsidy for a 1,200-room Hilton, among others.
In Boston, the 793-room Westin waterfront hotel next to the Boston Convention & Exhibition Center was built with $33 million in public funds that covered about 16 percent of the total development cost. That hotel opened in 2006.
Related: A Tuft Night at the Westin Copley
I won't stay there again.
In pursuing construction of the larger headquarters hotel, the convention center authority has said a similar subsidy would be needed to fund the project. Last week, the authority announced that several major hotel companies have expressed interest, including Hilton, Hyatt, Omni, Marriott, MGM, and Starwood Hotels & Resorts....
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Related: Sandberg Leans Back
Also see: Union fight divides workforce at DoubleTree
I'm not staying overnight anyway.
