Convention Center expansion too rosy?

A study funded by the Pew Charitable Trusts concludes that boosters of the planned $700 million expansion of the Pennsylvania Convention Center are likely overselling its benefits.

The report by the Boston-based Economic Development Research Group found that the Pennsylvania Convention Center Authority (PCCA) and the Philadelphia Convention and Visitors Bureau (PCVB) made their case by comparing optimistic projections for an expanded center to an overly pessimistic forecast if the center stays as it is.

"From where we sit, it seems that the PCCA-PCVB are thinking too positively and banking on a single robust forecast of post-expansion activity for the [Convention Center]," the report found.

The Convention Center expects attendance to more than double from its current 200,000 a year to 410,000 in 2014 when an expanded center is fully functioning.

"Given the current national convention market, this type of growth seems highly unlikely," the report states.

The study doesn't conclude that Convention Center expansion, for which funding was approved by the Legislature in July, is a bad public investment.

But the report cautions that national declines in convention business and the expansion of capacity in other cities will put Philadelphia into tough competition withother cities.

The report notes that expansion will enable Philadelphia to compete for just 33 events it's currently too small for, "but it will do so along with 61 other exhibition centers that are also big enough to host these shows."

According to Pew, the report was requested last year by Gov. Rendell's chief of staff and completed this spring.

Many in the city's hospitality community were aware the study was under way and were curious when no report appeared. The governor's office declined to release the report to the Daily News.

Rendell said in a brief interview in July that he'd seen a summary of the report and still believed expansion was a good investment.

"If you asked me if you could get that money to address other challenges in Philadelphia, would it be better spent that way, then I believe the answer is yes," Rendell said. "But the problem is, we wouldn't get the money unless it's for a major capital project."

The $700 million expansion is being funded by state gambling revenues. Among the other findings in the study:

* Because competition will be intense for megashows, the Convention Center will need to focus on getting smaller and midsized trade shows and conventions, and hosting more than one event at a time.

* Despite a labor agreement in effect since 2003, exhibitors still see the Convention Center as burdened by unnecessary work rules that add expense and delay. "Costs at the center are still high, even for the Northeast," the report concludes.

* The Current Convention center is underused. "We estimate the [Convention Center's] occupancy rate (in terms of square feet days) at well under 25 percent," the report concludes. It recommends a thorough analysis of how space is configured and how events are booked.

The consultants also report that the expansion's boosters, the Convention Center Authority and the Convention and Visitors Bureau, refused to provide information the consultants requested.

"They promised to be helpful, but eventually it just got down to stonewalling," said Lisa Petraglia, EDR's director of economic research who managed the project.

Officials from both the PCCA and the CVB deny the consultants were refused any information.

"We spoke to them and anything that was in our hands, they got," said Convention and Visitors president Tom Muldoon, who also defended the optimistic projections of success for an expanded center.

"All our stuff has been reviewed by three different [consulting] outfits. The state uses it, and no one has come back to us to challenge it," Muldoon said. *