Anxiety grows over planned two-year closure of downtown convention center
After we wrote earlier this month about the bad economics of the Kentucky State Fair Board’s decision to close the convention center for two years while it undergoes a $180 million renovation and expansion, we heard from a lot of people. Most were business owners in that and nearby parts of downtown, saying they didn’t know whether they’d be able to survive that kind of hit to their business.
One retailer told us he expects to lose as much as 75 percent of his business during the doldrums. He added that the Fair Board’s plan to move some events to the KFC Yum! Center might soften the overall blow to downtown, but the other part of that plan — to move conventions to the fairgrounds — would be devastating.
A source based in Louisville who works in the convention industry (mostly out of town) agreed, telling us the fairgrounds would be a “tough sell.” That person suggested sprucing up the mothballed Louisville Gardens to substitute for the KICC. Frankly, that’s an awesome idea.
Yet another bemoaned the fact that the Fair Board seemed to be kneecapping the city at a time when it could pick off business from Indiana after the business backlash against its “religious freedom” law.
And to cap it off, we’re hearing economic development folks in both the private and public sectors have also been up in arms about the planned closure, which IL estimated would cost $163 million in lost spending, jobs and wages over two years. The main gripe: If we’re such a sophisticated, urbane, regionally competitive city, then why can’t we figure out how to walk and chew gum at the same time?
Fair Board CEO Rip Rippetoe attempted to answer that question in a damage-control piece in Business First after our story came out. He acknowledged that one of the 18 conventions already booked for the two-year closure period had canceled (literally one day after the news broke) but kept a stiff upper lip. He said keeping the convention center open during renovations would add eight to 12 months of construction time to the project, and maybe increase the cost.
To which we say this: Using a study by Convention, Sports and Leisure International provided to us by the Fair Board, which shows $53.3 million in annual direct spending at KICC post-renovation, it would take 10 years to cover the cost of the losses during closure (that doesn’t include the $180 million reno cost). What’s another year or less of construction, compared with a two-year interruption in momentum that coincides with more than 1,000 new hotel rooms coming online downtown and more direct investment in the urban core than at any time in recent memory?
We asked the Fair Board to talk to us about all this, but we didn’t get a reply. We also asked if they’ve performed an economic impact study of the two-year closure. Crickets.
Now, we won’t ignore the upside to this. Developer Steve Poe (Aloft Hotel) and Hudson Holdings Principal Steven Michael (Starks Building) are only two of the numerous downtown players who’ve told us the convention center renovation was key to their decisions to build and invest in the city’s core right now.
So that’s the long view. And it remains such whether the convention center closes or not.
GLI plans focus on Export-Import Bank, broadband in D.C. visit
For the first time since 2009, the chamber of commerce will head to D.C. for a “fly-in” to meet with the region’s congressional delegation on key issues. Those include rolling back the Obama administration’s recent regulations regarding net neutrality, making permanent certain tax breaks for charitable giving and businesses, and lifting some EPA regulations and portions of the Affordable Care Act.
Each of those issues is stalemated in Congress right now, victims to the two parties’ seemingly endless partisan rancor and brinkmanship. But fear not! There are other areas where GLI thinks it can get somewhere, areas where the partisan lines are a little fuzzier. Among them is reauthorization of the Export-Import Bank.
The Ex-Im Bank, as it’s shorthanded, provides loans and insurance to help U.S. companies finance international trade. Congress must reauthorize the bank’s charter, which is set to expire June 30. Long a bipartisan place of agreement, the bank has drawn fire from conservative Republicans in recent years, who claim it’s a mechanism for the Obama administration to choose winners and losers in business.
Amid that backdrop, we thought it’d be interesting to take a look at the impact of the Ex-Im Bank around these parts. Over the past three years, the bank has plugged $94 million into Kentucky exporters in support of $264 million in total export value. In Louisville during that time, the bank has provided more than $39 million in financing to 14 local companies.
Here’s a chart with the details (the far-right column is total export value, and the one to its left is the bank’s contribution):
The Wall Street Journal reported last week that Senate Majority Leader Mitch McConnell said he would allow a vote on the bank’s reauthorization, although he would vote against it.
“I personally think the Ex-Im Bank has outlived its usefulness and ought to go away,” McConnell told WSJ. “But I’m not going to prevent a vote from occurring on it.”
In an interview Friday, GLI VP of Government Affairs and Public Policy, Sarah Davasher-Wisdom, told IL that the organization would lobby hard for Congress to approve the bank’s charter.
“If we do not reauthorize the charter, GLI believes it will undermine the ability of small businesses to compete,” she said. “It’s a good way to increase revenue, create jobs and promote exports. It’s very important to our economy.”
GLI heads to D.C. May 13 and 14. The group, which is expected to include 35 business leaders, will meet with McConnell, White House Director of Intergovernmental Affairs and Deputy Assistant to the President Jerry Abramson, Sens. Rand Paul and Dan Coats, and Congressmen Hal Rogers, John Yarmuth, Brett Guthrie, Luke Messer and Todd Young.