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Pros, cons of Las Vegas hosting 2016 GOP National Convention


CARSON CITY — Bringing the Republican National Convention to Las Vegas in 2016 might generate some valuable but intangible benefits by giving Nevadans a national stage to show the rest of the country that they go to church, shop for groceries and play with their kids just like everyone else.

A Florida official who helped bring the 2012 Republican National Convention to Tampa Bay pointed to such intangibles after the event:

“Tampa Bay took center stage this week for an event that captured the international spotlight, and Tampa Bay was showcased like never before,” said Host Committee President and CEO Ken Jones. “I know without a doubt that we have left a lasting impression in the minds of those who have visited, and I am certain they will leave wanting to come back again and again.”

Nevada Lt. Gov. Brian Krolicki, who is chairman of the Nevada Host Committee, said the opportunity to host the convention is a chance to “put Las Vegas and Nevada on the world map like never before.”

Las Vegas, which is already the entertainment capital of the world, will have a chance to host one of the “most observed events on the planet,” he said.

Another Nevadan, Democratic U.S. Sen. Harry Reid, said the GOP convention would be “good for business.”

But there is some scholarly disagreement over whether such an event, which would draw about 50,000 elected officials, delegates and news media for a week, would provide any economic benefit to Southern Nevada.

EXPERT: GOOD FOR THE ECONOMY

The Nevada Host Committee, which announced last week it would pursue the convention, points to a study by Brian Kench, an associate professor of economics at the University of Tampa, as evidence the event would be good for the economy.

Kench analyzed the effects of the 2012 Republican National Convention on Tampa Bay, finding that direct expenditures totaled $214 million with a total economic impact of $404 million.

But Kench said the dynamics might be different for Las Vegas. August, when the GOP conventions have traditionally been held, is a slow time for Tampa Bay, he said.

“Our hotel capacity is in the 50 percent range,” he said. “So the convention came at a time that drove that number up to the 90s.”

Kench said the economic question that needs to be answered is what is gained or lost if you substitute an event like the convention for what would be the typical business for that week.

“For us we didn’t lose much,” he said.

The Las Vegas Convention and Visitors Authority reports show that hotel occupancy in August of 2013 approached 88 percent.

But Alan Feldman, senior vice president of public affairs for MGM Resorts, said the company would see the convention as a positive both economically and for the city and state as a whole.

“To have the focus of the GOP political world on Las Vegas, on Nevada, for a few days would all in all be a very good thing,” he said. “The economic benefits are also substantial.”

Hotel occupancy is high in August but at reduced rates because it is not convention season, Feldman said. So the event would tend to push up hotel rates and generate income from ancillary sources including food and beverage, he said.

“This is exactly the type of business that would do well here for all of us,” Feldman said.

Security and other issues would have to be addressed, but there is plenty of time to work that out, he said.

BENEFITS FOR LAS VEGAS QUESTIONED

A counter view was presented by Victor Matheson, an economics professor at the College of the Holy Cross in Worcester, Mass., who questioned whether Las Vegas would benefit economically from hosting the convention.

Not only would a national convention displace gamblers with low-rolling politicians for a week, it also would be a security nightmare for the Strip, he said.

“It would be a huge economic hit rather than an economic plus,” Matheson said.

And for the Republican Party, picking a city known for its gambling, drinking and other vices might not be the image it would want to present heading into a presidential election, he said.

“Regardless of the image Las Vegas would like to have, or like to shed, the fact is it is still Sin City,” Matheson said.

Matheson, who studies the impacts on cities of major sporting events such as the Super Bowl, co-authored a paper in 2009 that examined the economic impact of the Democratic and Republican national conventions on local economies.

The analysis from 1970 to 2005 found that the presence of a national convention had “no discernible impact on employment, personal income, or personal income per capita in the cities where the events were held.”

During the 2004 Republican National Convention in New York, attendance at Broadway shows was off 20 percent, Matheson said.

KROLICKI: EASY CALL TO MAKE

Krolicki echoed Feldman’s comments that the Republican National Convention would come during a slow time for the convention business in Las Vegas.

“There is a reason why 22,000 conventions decide to hold their events in Las Vegas annually,” he said. “We have an excellent infrastructure to host such events. We can do this better than anyone else in the world. This is what we do.”

Krolicki also said the committee would not have been formed if there were any concerns about raising the $50 million to $60 million in donations and sponsorships or with the facilities needed for the event.

“The due diligence and the other legwork that has gone into determining whether Las Vegas can submit a convention bid has been exhaustive,” he said.

The issue of whether the Thomas &Mack Center is adequate to serve the needs of the convention has also been resolved, but Krolicki would not elaborate.

“We believe we have a very clever resolution to the venue challenge, although it is premature to announce what that strategy is now,” he said.

One possibility is to use a new arena expected to be constructed by MGM Resorts starting next year with a completion date in the summer of 2016. The Anschultz Entertainment Group (AEG), is partnering with MGM on the construction of the new arena on MGM land. Phil Anschultz, who owns AEG, is a billionaire and major Republican donor.

Other cities have reported both economic and public relations benefits from holding the convention.

The Host Committee for the 2008 Republican National Convention in Minneapolis-St. Paul reported economic benefits totaling $170 million in new money for the local economy, exceeding projections.

“In addition to the tangible results offered by this report, there are also many intangibles that will continue to benefit us like the thousands of stories that are circulating about the amazing attributes of our cities,” Minneapolis Mayor R.T. Rybak said in 2009.

It’s not just Republican conventions that reportedly are good for business. The Democratic National Convention held in Charlotte, N.C., in September 2012 was the single largest event in the city’s history and produced an economic impact of $163.6 million, according to Mayor Anthony Foxx.

But the report by Matheson and his colleagues found that “the promoters’ rosy economic projections are overstated, and these events have a negligible impact on local economies.”

Contact Capital Bureau reporter Sean Whaley at swhaley@reviewjournal.com or 775-687-3900. Follow him on Twitter @seanw801.

 

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