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Mayor of Anchorage Pushing for a $93 million
 Downtown Convention Center
By Richard Richtmyer, Anchorage Daily News, Alaska
Knight Ridder/Tribune Business News

Sep. 17, 2004 - With a site-specific proposal in hand and commitments from the city's nonprofit tourism booster and the developers to cover any losses or cost overruns, backers of a proposed new downtown Anchorage convention center regrouped Thursday to renew their campaign to sell the public on the idea.

"We think this is an incredible shot in the arm for Anchorage," Mayor Mark Begich said at an Anchorage Convention & Visitors Bureau luncheon Thursday.

"We've answered a good chunk of the questions people had last time, and we'll do more as we move forward over the next several months," Begich said.

The convention and visitors bureau, which uses public and private money to market Anchorage as a destination for visitors and conferences, is the main champion of the proposal and will lead a grass-roots campaign to convince voters it's a good idea, said Bruce Bustamante, the bureau's president.

"Now's the time we're going to have to be mobilizing within our industry to help get the message out about this fabulous project," he said to the crowd of about 150 supporters. City officials last week endorsed a proposal from JL Properties and Venture Development Group to build a $93 million civic and convention center behind City Hall. It will be built only if voters next spring approve an increase of the city's hotel bed tax from 8 percent to 12 percent to pay for it.

The city would sell bonds backed by the additional bed-tax revenue, and the proceeds would be used to pay for the convention center.

A similar ballot proposal, which requires a 60 percent vote to pass, failed in 2002, with just 46 percent voting for the hotel tax increase.

Proponents chalked up the negative vote to unanswered questions about where it would be built, how much it would cost and what would happen if the increase in convention business anticipated doesn't materialize. City boosters have long centered their downtown economic development plans on a larger convention center, arguing that it would draw bigger conventions, create jobs and fill hotel rooms.

Skeptics have argued that a larger center could run big deficits that city taxpayers ultimately would bear if the conventions don't come.

Currently, half the city's 8 percent bed tax goes to the convention and visitors bureau to pay for its marketing programs. The group also collects dues from its members.

The bureau, which runs the Egan Convention Center, would operate a new convention center, and last week it agreed to tap its half of the bed tax to cover any operating shortfalls of a new center, Bustamante said.

The developers would cover any overruns in the construction cost, Begich said, noting he expects their agreement in writing within a few weeks.

The proposal is for a 193,000-square-foot center to be built on a parking lot between the Atwood and Conoco Phillips buildings, between Seventh and Eighth avenues. It would be almost three times the size of the Egan Center, and the plan calls for keeping the Egan in use. The two buildings would be only a couple of blocks apart and would be linked with covered walkways.

In addition to 700 permanent jobs and 800 temporary construction jobs, the new center would mean tens of thousands more "bed nights" for Anchorage hotels, Begich said.

"People who think it's just the downtown area are incorrect. This is a benefit to the whole city," he said, drawing a round of applause from the supporters at Thursday's meeting.

But Terry Latham, who manages the Best Western Golden Lion in Midtown, wasn't among those clapping. In fact, he skipped Thursday's meeting altogether.

"I still think it's smoke and mirrors," Latham said. "It didn't pencil out two years ago, and it won't pencil out this time."

Latham doubts a new convention center would pay for itself, especially in light of the downward trend in room rates.

Developers have added more than 700 new rooms, most in Midtown, and room prices have been declining. The city's bed tax revenue also dipped last year, to $10.3 million after two years at $11 million.

Latham aims to connect with like-minded tourism business people to present a more skeptical view of the convention center proposal.

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(c) 2004, Anchorage Daily News, Alaska. Distributed by Knight Ridder/Tribune Business News. For information on republishing this content, contact us at (800) 661-2511 (U.S.), (213) 237-4914 (worldwide), fax (213) 237-6515, or e-mail COP,

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