Convention center due a serious review
There is greater truth to the headline in the 2/17 Daily Herald: "Convention center had a great fall." The story is about Marriott's upwardly revised 2010 business plan for the convention center/hotel.
The revised plan predicts the convention center/hotel will contribute $2.6 million this year to its 2010 $11.4 million debt service. Another $5.9 million comes from taxes.
Because of the convention center's deficit, we have to use about $3 million from fast-dwindling reserves to make ends meet.
This isn't the way it was supposed to be - certainly not what Village Board cheerleaders for the convention center/hotel wanted to believe it would be. The $225 million facility went forward in 2004 based upon Village Board acceptance of the financial projections made by consultant HVS, which remains the facility's asset manager.
The 2004 HVS study projected that in 2010, the convention center/hotel would contribute about $7 million to the $11.4 million interest due. Village Board President Al Larson believed HVS's study actually underestimated its potential.
Conversely, I was skeptical about the HVS projections and concerned about the risk to Schaumburg taxpayers. On 6/25/04, I presented to the Village Board the views of analyst Professor Heywood Sanders, who thought the actual revenue would be closer to 50 percent of what HVS projected.
Marriott's revised projections for 2010 are only 37 percent of what was projected. It is now left to Schaumburg taxpayers to pick up the pieces. What do we do, besides pay higher and higher taxes to cover the losses?
It has been suggested we sell it now, while interest rates are low. But, interest in buying the facility is likely also low. Rightly or wrongly, our best interests are to maximize its value, if only to minimize our eventual property tax bailout.
The time is ripe for a top-to-bottom review of the convention center/hotel by a probing Village Board or independent citizen committee. When we have done all we can to make it as attractive an asset as possible, all options should be on the table for civic discussion and Village Board action.
Barry Newman
Schaumburg