Thursday, February 12, 2009

The Case for the Med Mart

More than 100 people stuffed themselves into a too-small room in City Hall today, jamming the doorways. Council members from Martin Sweeney to Joe Cimperman to Sabra Pierce Scott sat at the hearing table, all to hear MMPI make their case about why Cleveland should have a Medical Mart and why they want to build it under the downtown Mall.

The developer’s presentation about their business plan had a little new news since their last presentation in 2007. It’s clear that the Medical Mart is a gamble, one that might be a challenge to launch or sustain, but that could also pay off big.

“We’re introducing a new, better way for the medical industry to go to market,” said MMPI vice-president Mark Falanga. They want the country’s largest medical manufacturers to lease showrooms in the Mart, to show off their products to trade-show-goers. “We believe we will need to subsidize those showrooms heavily to get them to try something new,” Falanga said.

Falanga says MMPI's sales teams have approached 15 to 20 leading medical manufacturers, pitching the Med Mart concept. They show "great interest," he says, but "they're waiting for more detail." Same reaction when MMPI talks up the Mart at health trade shows. "Many of [the companies] participate in 20-25 trade shows a year. There's a tremendous cost to ship [their products] in and out." Having one place to exhibit them year-round could save them a lot of expense, Falanga says.

The developer resurrected its estimates about economic spinoff from the mart and convention center, numbers I think we heard in 2007. They project they’ll attract 60 trade shows and 100 conferences a year, with 4,000 attendees on average, spending an average of $1,100 each in Cleveland -- attracting direct spending of $330 million a year. If that’s true, the city would attract enough visitors’ spending in three years, $1 billion, to more than equal the 20 years of sales tax money that will pay for the project. (Update, Friday a.m. -- They also used a "multiplier" of 3 to estimate money circulating in town, bringing the project's estimated economic impact to $1 billion a year.)

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