A New Convention Center for Las Cruces: Yes and No?

By
M. Gene Aldridge
Board of Directors NMIRI
Public Policy for the 21st Century
     Las Cruces, NM - Soon the City Council of Las Cruces and a number of citizens groups will be moving toward a goal that has been the dream of many here for several years. The goal is a convention center for Las Cruces.

The question is not whether we need one in Las Cruces, but rather who should fund such a project? To be sure, the convention business can be quite good for local businesses and increase the economic activity for the area, but why should tax money be spent on such a project that benefits corporations? If it is such a good deal, why aren’t the corporations funding it themselves? Shouldn’t voters be allowed to vote on such a publicly funded project?

As of September 11th the U.S. has many more persons and groups seeking smaller venues away from big cities while driving their cars to centers of economic activity for conventions. Forecasting these new trends is difficult. Budgets by corporations for activities that occur in convention facilities have been slashed in recent years. Planners now look for different sites to hold meetings for corporations. This all bodes well for potential markets that might be attracted to Las Cruces, NM., especially in the winter months.

The big cities like Las Vegas, Chicago’s McCormack Place, Orange County Convention Center, New Orleans Convention Center and Georgia’s World Congress Center can afford to accommodate to markets that shift and change around convention and visitor activities, but what about smaller venues like Las Cruces? Just to upgrade facilities in the future can be a challenging task, not to mention controlling runaway costs for managing such a facility.

As we have stated many times in the past, if New Mexico is to be successful at economic development then it must get past the idea that it is government that must do the economic development funding. When I arrived in Las Cruces many years ago, I was astounding at a response from local private sector professionals when I inquired about the economic development program here. They said they could not move forward with economic development because the “state” did not give them a grant here. Can you imagine? The private sector could not move forward because the state did not fund them?

This kind of thinking about economic development drives this state closer to socialism all the time. We must find better ways, via the private sector, to ensure that our economic development success is based upon sound management and market driven ideas that will work so that the tax payer is not left holding the bag when the deals go sour. I need not remind our residents that it was only a few years ago that a much different city council wanted to take over the El Paso Electric Company, a private investor owned utility. Millions of dollars were spent on legal fees by the tax payer. They were stopped by this effort by many good citizens that were alerted by our studies at NMIRI, but also by others in the Chamber of Commerce and financial community who saw through this awful nightmare.

A convention center is needed for Las Cruces. It should be funded, however, with private association dues by those that benefit most from the convention center, namely, the hotels, restaurants and businesses. There are existing associations that could locally tax themselves for such an effort without engaging the city government in this kind of activity. The City government of Las Cruces should do all it can to cheer them on, to encourage their investment in such a project, and to foster this kind of economic activity in Las Cruces via tax relief if the voters approve. However, to tax businesses that may not want to participate in such an activity or to enlist the tax payers as investors in such a project without the benefit of effective management and marketing skill sets at the city level of government is foolhardy at best. It is not something the government should be doing.

We support the idea of convention center for Las Cruces, but we do not support tax money being used for such a facility without full voter approval. If the deal is so good, then it will make money and be driven by market forces to help local businesses. Those local businesses can tax themselves for such an effort and if they do invest, they will ensure that it is a success for our fair city. Without local investments in such efforts there are few market incentives for ensuring the success. All we have to do is look to the local hospital situation and see how the City has managed our health care to remind us of what the real role of government should be in Las Cruces.

We understand that there are local business professionals who have in interest in building the convention center and providing the necessary square footage for success. We also understand that competition with other cities that use public support for their convention centers is part of the economic risk, but this can be built into the calculus of the risk management for the project. Those local business professionals should make it known to the City of Las Cruces and to the local businesses of their interest and move this project along toward a privately financed convention center. It is time that Las Cruces get off the public dole. The convention center is one activity where we can all benefit using private sector market driven economics instead of laboring the tax payer at a time of economic downturn. Public policy in Las Cruces and New Mexico needs to be carefully crafted now and into the future.

The City Council in June should not vote to approve the convention center until all the data is forthcoming about the role that the private sector might play in such an economic development project. Taxpayers where are you? The Chamber of Commerce should lead the way on this along with MVEDA and others who know that the best form of economics is free market economics, not more corporate welfare.

Convention center, yes, but the public funding for a convention center, the answer should be no.