MORE NONSENSE FROM CITY HALL AND DOWNTOWN

The basic question is do we need a new convention center? Recently there was a puff piece written by Kevin Kane, CEO of the Memphis Convention and Visitors Bureau, "If they build it, they'll definitely come here." Mr. Kane makes over $250,000 in salary as head of the bureau. In making the case for a new $600 million dollar convention center, he points out the following. 1) No property taxes or any other taxes on local residents were used for the project completed in 2003 to expand the Cook Convention Center. He says that this expansion has generated over $200 million in new business in five years. Yet when you look at the total sales tax income for the City of Memphis from 1999 to 2007 as a percentage of General Fund Revenue for the City of Memphis, it is flat at 12%. Moreover, when you look at local sales taxes over the same ten year period, the percentage of general fund revenue has gone down from 26% to 19%. However, there has been one increase in tax revenue to the city of Memphis. Unfortunately, that is property taxes which as a percentage of General Fund Revenue have gone from 28% to 38%.

In order to further check on the facts on the convention center, I obtained a copy of the Memphis Cook Convention Center Financial Statement dated June 30, 2007 which is attached. It was not easy to get this document even though it states in the latest 2007 Comprehensive Annual Financial Report for the City of Memphis and for Shelby County that the statement is available at 225 N. Main. It was not available and I finally had to get it from a friend who had some influence.

In going through the statement I noted that they exceeded the budgeted event days, attendance and rental revenue by a considerable amount. However, in spite of exceeding the budget figures, they managed to lose $3.5 million dollars. The interesting fact on the financial statement is that the City of Memphis and Shelby County governments contributed $3.2 million dollars to cover the loss. I have to wonder if Mr. Kane forgot about this contribution when he stated in his article that the Cook Convention Center is not costing the taxpayers any money.

Any revenue projections coming from CEOs of convention centers or consultants who have an interest in seeing a project go forward have to be taken with a large portion of salt as I have never seen a consultant with a negative report or a convention center CEO who did not want to expand his operation, regardless of the cost to the taxpayers.

Click here to see the convention center financial statement