$1 million to market a conference center? Now that's real money
The Baker City Council snuck $1 million in new spending through on a Tuesday night, pledging $100,000 a year for 10 years to support marketing of the proposed Geiser Grand conference center.
It would have been nice if the city had given the public time to digest this proposal. It's not hard to imagine that the public still thought the conference center project was suspended.
The absence of an agenda item, much less a staff report, on $1 million in new spending doesn't suggest this decision was made after much due diligence.
More like desperation.
So what can the city do to calm the inevitable public skepticism?
Write the city's claims about the conference center into the new contract with Sidway Investment Corp.
If SIC signs on the dotted line and delivers the results, the money continues.
If they don't, the contract should give the city the option of reinvesting the public's money elsewhere.
The problem is that, so far, it hasn't been SIC that has been making wild promises about the facility's impact on Baker City. It's been city officials who've sold themselves (and continue to try to sell the public) on alleged outcomes of the project outcomes that look less and less probable the closer you look at them.
Just consider , repeated by the mayor, city manager and community development director, that the conference center will generate $2.7 million in economic impact in its first year.
That's quite the payback on a $100,000 per year investment. You'd be a fool not to buy in.
But where does that $2.7 million figure come from?
They're citing the findings of the by the Orbis Group Inc. All sorts of government and quasi-government groups applauded this study when it was released in February.
But did they read it?
We've had time and cause lately to give the economic impact analysis another look.
It's interesting stuff. Check it out for yourself at
On Pages 24 through 27, Brian Cole of the Orbis Group makes the case for how the conference center will have $2.7 million worth of direct financial impact and then some.
Here's how he gets to $2.7 million:
1. If the conference center serves 30 groups in its first year, and if ...
2. Those groups average 150 people in size, and if ...
3. Those groups meet for an average of three days each, and if ...
4. Those visitors each spend $200 per day, then the conference center's direct impact on the local economy will be $2.7 million.
Cole projects the number and size of groups would grow each year, predicting that by 2011 some 90 groups of 300 will use the conference center for a total of 270 days that year, resulting in more than $16 million in direct spending by conference goers.
Cole then uses those figures to derive everything from projected increases in room taxes (from a $14,900 increase under the 2007 projections, up to $89,000 with the 2011 projections) to the number of "indirect" jobs created by the conference center, another figure city officials are prone to trot out in support of the conference center subsidy.
$2.7 million. A couple dozen or hundred new jobs. More room taxes.
That's what city officials claim will happen. So that's what city officials should insist on in the new contract.
Tie the $100,000 subsidy to annual targets for conference attendance and TRT receipts. If the conference center meets those expectations, the subsidy continues. If it doesn't, the subsidy is reduced or eliminated.
For city officials to insist on anything less means they've been selling the public a false bill of goods.