Hightower fails to meet needs, creates more burdens

All the Bob Odom-built sugar mills in Louisiana cannot produce enough of the white sweetener to sugarcoat the colossal drain on the city of Shreveport caused by its new convention center and, worse, soon-to-be-opened publicly-owned hotel.

Mayor Keith Hightower, whose political fortunes will be tied with his bringing the center about to fruition and any appearance of success of it, along with the city-paid managers of it, have done their best to spin some favorable news out of it by announcing it had exceeded initial expectations in a number of categories. Of course, they neglected to mention a couple of things, one being that it takes years to judge the performance of such a structure, so any conclusions rendered now mean nothing.

The other they downplayed is far more troubling: will the revenue, both direct and indirect, the facility is anticipated to bring in pay for the operating costs? The managers answered that concerning direct revenues: no, not ever. They predict the best case scenario of losing only $900,000 annually (so far it’s twice that), but then city officials incredibly optimistically argue that the remainder will be made up by the hotel and money pumped into the local economy by out-of-town visitors.

Oh, really? Leaving aside for the moment that the hotel is predicted to lose even more money than the center, let’s just investigate this claim that sales and occupancy taxes will make up the difference. To begin, assume the loss per year is only $980,000 (a figure this low essentially sneered at by perhaps the most preeminent researcher in this area, the Heritage Foundation’s Ron Utt, who thinks the loss will be much higher in the face of declining convention demand and increasing supply). Let’s also assume that for every dollar spent that otherwise would not have been spent on Shreveport hotels and restaurants as a result of the center, the city sees 7 percent of that.

Doing the math, it shows that convention attendees and exhibitors would have to spend $14 million a year. Assuming the typical person in these categories spends $350 in Shreveport for their trip. This means the center would have to books events that total per years 40,000 people visiting Shreveport, or about an 800-(non-local-)person convention a week! Also keep in mind that the vast majority of events, as admitted by the managers, so far booked are local in nature. Even if it can achieve half of this level, that’s still a $490,000 loss a year.

But the news gets much worse. When all is said and done, including the interest paid on the bonds to build it, the city will have forked over in the neighborhood of $200 million for the center. That’s $1,000 for every resident in Shreveport at current population levels, for the privilege of something that will lose them about another half million dollars a year. And just how many police officers could the city hire at half a million a year to keep city councilmen from being shot at and small businessmen from being murdered?

And again, there’s the hotel to consider. The only independent study ever done to assess its profitability concluded it would lose hundreds of thousands of dollars a year. Throw in the roughly $75 million in principal and interest it will take to finance the hotel and with the center’s cost, just think how much of the infrastructure problems facing Shreveport, totaling in the hundreds of million of dollars, could have been solved in the near future. Instead, taxes and fees will go up to reverse the crumbling – one reason being the city’s bonding capacity has been stretched beyond recognition by these facilities.

The sheer folly of it all was stated no better than by Utt, whose remarks deserve to be quoted here in full: “What your folks are doing is deplorable. It's an awful waste of money. Are there no unmet needs in Shreveport? Of course not. If you want to benefit the city, you might want to think first about what are truly the public needs that only government can provide.”

As Hightower closes out his mayoral reign and after, look for him and his pals to try to distract the public as much as they can from these facts, that inescapably lead to the conclusion that Democrat Hightower – and a City Council Democrat majority – cared more about building monuments to themselves as part of an economic development strategy that preferred to boost egos and deliver business to cronies rather than to empower the peoples’ ability to grow the economy, through preserving the city’s assets and reducing the monetary burdens (taxes, fees, regulations, and the like) on the citizenry.