County gives Jackson ultimatum: Sell convention center or else

Check out WKYC's report from Tuesday night about the city and county's intense negotiations about the convention center site (video above, video and text version here). Mayor Frank Jackson, quiet for most of the Medical Mart/convention center debate, is taking a tough stand in negotiations with the county. Jackson wants the county to pay $25 million for the current convention center and Public Hall.

The county commissioners say $17.5 million is their final offer. If they don't get it by Friday, they say they'll consider other sites. No, not Tower City -- several sites near University Circle. (I think this likely means the Cleveland Play House property on Carnegie.)

Jackson is also standing up for Positively Cleveland, insisting its budget not be slashed and diverted to the Medical Mart. (See my coverage of this issue here and here.) Tom Beres, WKYC's political reporter, asked Tim Hagan about it, and Hagan sounds ready to gut the convention and visitor's bureau. "Positively Cleveland is not as important to the future of this community as a new convention center with a Medical Mart," he tells Beres.

Positively Cleveland's Dennis Roche, making the case for his organization, warns Cleveland could end up like Colorado, which lost a third of its tourism after eliminating its tourism bureau. A representative of a Gateway hotel says cutting the bureau's budget would be "very stupid." The commissioners might also vote to raise the tax on hotel rooms from 4.5% to 6.5%.

On tonight's 7 p.m. broadcast, WKYC reported another idea has come up in negotiations: the city might keep Public Hall, and the new project could stretch west instead -- to the site of the county administration building.

This may just be a negotiating stance or ploy, or a serious way to cut the selling price. If the county or city are serious about the idea, it'd open up two huge issues:

-The county would move to a new headquarters -- reigniting the debate about where it should move and whether it can afford another big new project. See my June 2008 article "Tower Play," about the Ameritrust Tower, which showed that constructing a new county building would add millions of dollars a year to the cost of government.

-MMPI has said it can start booking trade shows into a renovated Public Hall within a year of starting the project. That, it has argued, is key to being "first to market" -- getting a Cleveland Medical Mart going before a possible competitor in New York City opens. Leaving Public Hall out of the project would eliminate that competitive advantage.

Update, Thu. a.m.: In today's Plain Dealer, Jones confirms the Cleveland Play House is an alternate site. The story says the county administration building could become part of the Mall site for the project if negotiations for the private property south of it fall through. (That fits what I've been hearing.)

Positively Cleveland president: "We have an important role to play"

I talked to Positively Cleveland’s president, Dennis Roche, today about the news that the county may cut his organization’s funding to help fund the Medical Mart project. He made a strong case for preserving what Cleveland’s convention and visitor’s bureau does for the city.

“We have an important role to play, both with the new convention center project and the existing business already in place,” Roche says.

“Last year, we sold about 200,000 [hotel] room nights. About 160,000 of those were non-convention business. … You hear, in the early years, the convention will add 200,000 room nights. But we were already doing that without a convention center. The trick is going to be doing that while preserving the business that is there.”

MMPI vice-president Mark Falanga told me Friday that he believes hotel tax money will be a second source of revenue to pay for the Medical Mart. That likely means budget cuts for Positively Cleveland, which gets $5.5 million a year from the county hotel tax. County commissioner Peter Lawson Jones told me yesterday that the county will probably tap the hotel tax for the Med Mart, and that Positively Cleveland will likely have a reduced role and budget after the project starts, because MMPI will take the lead in booking the new convention center.

But Roche points out that most of Positively Cleveland’s budget goes to promoting tourism and non-convention meetings. “If you let the tourism and meeting trade atrophy and build the convention trade, you really are not gaining a lot as a community.”

Positively Cleveland used to book a lot of conventions, Roche says: Union meetings, government meetings, and large shows related to manufacturing. Industrial groups, he says, like to book conventions in their market — which includes Cleveland. But most of them have stopped booking in Cleveland over the last 10 years, choosing new centers in other cities instead. The problem is our antiquated 1920s convention center, with its low ceilings, many columns, and difficult truck access, he says.

Once we have a new convention center, Roche wants to win back the business Cleveland has lost. “We have relationships with trade organizations,” Roche says. “[We can] refer back to the times when they did have us in their rotation. I don’t think those things tend to be on MMPI’s natural radar. MMPI has made it very clear their focus is medical meetings. We want to supplement that.”

After the conversations I’ve had in the last few days with Roche, Jones, Falanga, and Fred Nance, I see two points about the Med Mart deal that have gotten little attention:

As MMPI focuses on making the Medical Mart work, Clevelanders will need to keep asking what non-medical business the convention center can attract.

Also, although the county commissioners plan to sign the Medical Mart and convention center deal this Thursday, they haven’t decided if they’ll use the hotel tax as a second source of funding for the project — and it hasn’t figured out what effect that would have on our convention and visitor’s bureau.

Update, 4/22: Mayor Frank Jackson is defending Positively Cleveland in negotiations with the county, and insisting on using the new convention center for non-medical conventions.  See my new post.