RALEIGH – Can North Carolina’s economic-development needs be met by sports, conventions, and tourism?
Lots of policymakers in Raleigh and across the state apparently believe so. They are engaged in a variety of building projects and subsidy programs intended to draw conventioneers, sports fans, backpackers, whitewater rafters, family vacationers, and conventioneers. Armed with the usual nonsense about tourism being our second-largest or third-largest industry – funny how rarely these assertions get checked out – and some half-baked public-finance notions of multiplier effects, lobbies for brand-new sports arenas, concert venues, arts facilities, and convention centers are pretty much getting what they want.
The City of Raleigh is planning a $200 million-plus downtown project with a new convention center and an adjacent, subsidized hotel. According to a poll taken earlier this year by the Center for Local Innovation, Raleigh and Wake County voters wouldn’t approve this project if asked in a public referendum. To which local officials reply, essentially, “who’s asking ‘em”? Charlotte already has a new center, to which it has now built a darling little $40 million toy trolley that will cost taxpayers a million or more annually to run back and forth carrying, reportedly, some passengers. Speaking of the Queen City, its coming uptown arena, again built largely with public dollars, will house a new NBA franchise that will immediately start to compete with other sports and recreational offerings in the region – and is, oddly, expected to improve an already overbuilt market for concerts and other spectator events in the area. Cities from Wilmington and Jacksonville on the coast to various communities in the piedmont and west are planning similar projects.
Even when the hucksters don’t get precisely what they want, they still seem to have a serviceable fall-back position. In Cabarrus County just northeast of Charlotte, a fiscally conservative county commission properly said no to the idea of subsidizing a new convention center and 300-room hotel near the Lowe’s Motor Speedway. So the developer went to city officials in Concord and a local tourism authority and seems close to a (probably lucrative) deal.
The path from extravagant promises to mundane realities in this area is so well-worn that unwary municipal travelers are likely to trudge right into the fiscal equivalent of the water table. Costs soar beyond projections. Predicted crowds and convention business don’t materialize. What economic activity does appear around the new project largely comes from elsewhere in the area, as households and businesses spend a more-or-less fixed amount of their budgets on entertainment and end up choosing one local expenditure over another. As Steven Malanga wrote in the Manhattan Institute’s City Journal earlier this year, desperate hopes that convention centers will rejuvenate downtowns and replace lost jobs have been commonplace across the country, from sea to pining sea. These hopes are almost always dashed.
Sports is a business. Conventions are a business. Concerts and circuses are a business. Even the “fine” performing arts are commercial in nature, though practitioners are sometimes loath to admit it. In each case, those who stand to gain the revenue have every right and incentive to seek to entice customers, local or not, to patronize their establishments. They have no right, but a strong incentive, to force taxpayers to foot some of the bill and take much of the risk. Right now, the taxpayers’ elected officials perceive no countervailing incentive to say no. Time for that to change.
Hood is president of the John Locke Foundation and publisher of Carolina Journal.