RALEIGH -- The City Council on Tuesday voted to extend a fund Raleigh Convention Center officials use to offer deep discounts and incentives for groups that use the facility through 2017-2018, and add $150,000 to the fund this year.
But the council delayed vote on the convention center’s request to increase the annual pot of money from $350,000 to $500,000 every year through 2018. Instead, council members to discuss the issue in two weeks after Wake County’s commissioners consider a similar request from convention center officials.
Raleigh’s governing body also approved one-time funds of $316,000 for next year’s NHL All Star game.
The council’s actions ultimately have to be approved by the county commissioners.
Faced with increasing competition for national convention business managers of the convention center say they need the additional funds to stay competitive in the down economy.
Money for the Business Development Fund comes from countywide hotel/motel and prepared food taxes, which have declined in recent years. The convention center uses it to pay for groups to use the $221 million facility, a common practice for convention centers, which justify the loss in revenue by the money injected in the local economy by conference attendees sleeping hotels, eating in local restaurants and dropping dollars in local shops.
For example, at least 14 groups attending conventions from last month through next June paid or will pay $1 or nothing, a discount that would have meant nearly $532,000 in the convention center’s coffers had full price been paid. Convention center staff point the $22 million they estimate those groups spent locally as reason for offering those discounts.
Some, such as the conservative John Locke Foundation, have been highly critical of that practice, arguing that the public loses out by subsidizing the building and paying to attract visitors to a concentrated area of the city.
