Should Portland fight even harder to stay relevant in the convention industry?
Or did the decision to put the Oregon Convention Center on the east side of the Willamette forever doom the Rose City's convention industry?
Those were the key questions Friday as two experts in the convention industry, Thomas Hazinski and Heywood Sanders, debated at a City Club of Portland lunch forum.
Hazinski and Sanders have sparred for years on the future of the convention industry, with Hazinski's analysis showing room for growth in the convention industry, and Sanders' studies finding that the industry is shrinking.
"You in the city of Portland are faced with a decision about whether, or how, you're going to participate in the convention industry," Hazinski said. "You are well regarded as a second-tier (convention) city. Rain or shine, planners like to come here."
Sanders pointed to declining attendance of events at the Oregon Convention Center, and increased competition among convention destinations around the country.
"This discussion we're having is a discussion … they have had and continue to have in Salt Lake City – the same consulting firm recommended a 1,000 room hotel. They're the same discussions going on in Miami Beach," Sanders said.
Hazinski disagreed with Sanders that convention business is faltering, saying that the industry adapts to the economy at large. But, he agreed there is overbuilding in the convention industry.
"What people are doing is competing on other fronts," Hazinski said. "A headquarters hotel has become an essential element of your convention center package.
"Some cities have better potential than others," Hazinski said. "I think Portland is in a position where it has better potential than most second-tier cities," he said, pointing to the lively downtown Portland area.
But the Oregon Convention Center isn't downtown, as Sanders pointed out, noting a 1978 scoping report, when Portland was still mulling where to put a convention center.
A site in the Lloyd District, Sanders said, was not recommended because it was farthest removed from the downtown hotel core – so far removed, Sanders said, "it's at a sufficient distance as to raise serious questions as to its suitability for convention business."
Moderator Len Reed, an associate editor at The Oregonian, pointed out that a lot can change in 35 years, noting that a decade ago, few people would have wanted to visit the Pearl District for a pleasant experience.
The debate wasn't just about the convention industry. Reed asked Hazinski and Sanders whether the public's investment in the project was reasonable and rational.
"The public sector bears very little risk in this deal," Hazinski said. "Hyatt's investment of $115 (million) to $120 million is at their risk. They're putting the full faith and credit of the Hyatt Corp. behind that. There's no public sector obligation to support the ongoing operations of the hotel."
But, Reed pointed out, if the hotel doesn't meet expectations, wouldn't there be repercussions for the public sector? Yes, Hazinski responded, room taxes from other hotels in the city and vehicle rental taxes would be used if room taxes generated at the Hyatt don't meet expectations and reserves aren't available.
Sanders speculated that Hyatt might think this project is fairly risky if the company didn't just build it on its own.
"Every public dollar in this deal is a testament to risk," Sanders said. "Hyatt just bought a hotel in Orlando for $717 million. It didn't ask for any public money. If Hyatt felt there was no risk here, they wouldn't ask for that kind of commitment."
But, in an introduction to a question during the session's question-and-answer session, Metro Councilor Sam Chase pointed out that the public investment isn't necessarily a way to offset risk. He said the public is buying a location, a room block agreement, access to minority and women-owned small businesses and a union agreement.
"Do you have less risk than if you took it on totally publicly? Yes," Sanders said. "Do you have no risk? No."
City Club member Kurt Wehbring asked whether digital interactions and social networking are replacing the need for conventions.
"It's a tough thing to get at," Sanders said. "I've been trying to tease out the reality of that for quite some time. Looking at individual meeting events, you see a gradual decline in things that used to be a must-go meeting."
But other sectors of the industry are picking up the slack, Hazinski said.
"San Antonio recently had a gaming conference. It recently drew 10,000 young people. They came there to watch other people play online video games," Hazinski said. "That is the way the industry evolves. People are hungry to be face-to-face."
"A lot of those folks are local folks," Sanders replied. "They didn't come to San Antonio from far away."
Hazinski is a consultant with Chicago-based HVS, which has contracts with Metro for analysis of the hotel project. Sanders is a professor at the University of Texas at San Antonio.
The debate is scheduled to air at 7 p.m. Friday on KOPB 91.5-FM and on Portland CityNet 30 at 8 p.m. Friday.