Deficit shrinks at Durham convention center

New managers cut $700K from previous year’s shortfall

jwise@newsobserver.comNovember 19, 2012 

  • Lawsuit withdrawn for now The Convention Center’s former operator, Shaner Hotel Group of State College, Pa., has dropped a lawsuit against Durham County and the city of Durham – at least, for the time being. Shaner filed the suit last summer in a federal court. County Attorney Lowell Siler said last week that the parties had agreed the dispute should be handled in a state court instead and Shaner had withdrawn the original action. The suit has not yet been re-filed, Siler said, and the hotel company has not indicated a definite intention whether it will carry on the case or not. Shaner claimed the city and county violated a 1997 “air lease” agreement under which it has rights to use the hotel and some areas of the Convention Center.

After the Durham Convention Center’s first year under new management, Durham taxpayers are more than $700,000 better off.

For fiscal year 2011-12, the center’s operating deficit was $297,223, according to its annual report. Under the previous management company, the 2010-11 deficit was about $1 million, after a 2009-10 deficit of almost $1.4 million.

“We’re very pleased,” said Patrick Byker, chairman of the center’s board, who reported last week to county commissioners and City Council members.

In early 2011, the city and county hired Global Spectrum, a Philadelphia subsidiary of Comcast Inc., to run the jointly-owned center. Shaner Hotel Group had run the convention center for 15 years, but a consultant’s review of the center’s finances recommended that the city and county consider other operators.

Public-owned convention centers typically operate at a deficit, but the consultant concluded that Durham’s was inordinately high. The center’s budget anticipated a deficit of almost $637,000 in 2011-12. Due to renovations, the convention center operated for only 10 months of the fiscal year; for a full 2012-13 year, the budgeted deficit is $572,000.

According to the annual report, Global Spectrum’s use of staff and energy efficiency, and renegotiated supplier contracts, accounted for significant savings. Utility costs were down 41 percent and labor costs for food and beverage service were down 43 percent. Salaries were cut 35 percent.

At the same time, the center benefitted from a $6.9-million renovation that included new heating and air conditioning, a new sound system and lighting and new floor and wall coverings.

“We have a top-quality facility that can go toe-to-toe with any other convention center in the Southeast, I think, in terms of quality,” Byker said.

Officials receiving the report did mention areas that need improving, though, including an outdoor fountain that has required significant maintenance and repair work, and the need for more staff training.

Wise: 919-641-5895

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