Nov. 15–An expert who has analyzed convention centers and supporting hotels across the nation is raising major red flags about Madison’s pursuit of a new hotel to support Monona Terrace.
Heywood Sanders, professor of public administration at the University of Texas-San Antonio, says there’s too much supply and limited demand for convention space and that Madison could follow rocky experiences of other cities in making a huge public investment for a new hotel as part of the proposed Judge Doyle Square project covering two blocks near Capitol Square.
Two high-power development teams are now vying to team with the city on the mixed-use project on the Madison Municipal Building and Government East parking garage blocks that could cost roughly $150 million to
$200 million.
Sanders’ comments drew mixed reviews but got the attention of city officials and others.
Sanders, who has written extensively on the economics of convention centers, said city after city uses rosy estimates provided by consultants as justification to expand convention centers, build hotels to serve them, or both, only to find that performance doesn’t meet projections.
A buyers’ market for meeting planners has forced some cities to make concessions to attract business such as free rent at convention centers and cash incentives, said Sanders, who likened the competition to “an arms race.”
Sanders, invited to Madison by Ald. David Ahrens, 15th District, an adamant critic of the new hotel, made two presentations to groups on Thursday. Ahrens paid for Sanders’ travel and lodging.
Ahrens, a retired researcher at UW-Madison, has already offered an analysis saying there’s no evidence to support the need for a hotel or that it would significantly increase use of the convention center, and a lot of evidence it could hurt existing hotels and cause other damage.
Ald. Mark Clear, 19th District, said he found it “kind of strange” Ahrens would sponsor Sanders to come here, and found both to be defensive and aggressive during a lunchtime presentation.
But Clear wants to learn more. “It definitely made me think about what we’re dealing with here,” he said. “The reason we’re doing the project is not just to increase business at Monona Terrace. We have to make sure to take a holistic view.”
Judy Frankel, communications manager for the Greater Madison Convention and Visitors Bureau, which has campaigned for the new hotel, said the Judge Doyle Square project is important and that the bureau intends to “look at all parts of the conversation.”
Sanders said many hotel studies for cities are done by the same consultant, C.H. Johnson Consulting of Chicago, which produced a 149-page report in 2012 that said Madison must build a new hotel to keep Monona Terrace competitive. Sanders challenged data and projections in Johnson’s study for Madison, as well as that study’s projections for convention center hotels in Baltimore, Fort Worth, Texas, and Overland Park, Kan.
C.H. Johnson president Charles Johnson IV could not be reached.
