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CRVA business proves elusive to city leaders

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The city of Charlotte owns the Convention Center, but it farms out the management of the building and overall tourism efforts to the taxpayer-supported Charlotte Regional Visitors Authority.

The city’s elected officials know little about the economic impact of the convention business. In fact, they don’t know much about the Charlotte Convention Center at all.

In an interview last year, Mayor Anthony Foxx said he didn’t know the share of Mecklenburg’s hotel business that is attributable to the Convention Center. He guessed that just under half of all hotel rooms sold in the county were tied to conventions.

Former council member Edwin Peacock said he assumed it was about 60 percent. Council member David Howard pegged the number at 25 percent. Beth Pickering, first elected in November, put the Convention Center’s share of hotel business at one-third.

The reality is that in fiscal year 2011, the convention center’s share of the countywide hotel market was 2.7 percent.

The CRVA doesn’t give elected officials – or anyone else – context about its impact to the overall hospitality industry.

For instance, in its request to the city for funding this year, the CRVA said its goal is to “consume 6.5 million hotel rooms” in the Charlotte metro area. In reality, the CRVA has little to do with that business.

All CRVA bookings, including the Convention Center, total 6 percent. That includes small meetings in hotels, weddings and family reunions. Most hotel rooms are filled by people here on business.

This spring, City Council member Michael Barnes was upset that the CRVA continued to pay former chief executive Tim Newman as part of a severance agreement. Barnes asked City Manager Curt Walton if the city could scrutinize all CRVA expenditures, as the city did last summer when Newman was under fire for his management practices.

Walton said that the city could withhold CRVA’s money, but he admitted the city’s staff doesn’t have enough expertise to know if the money is being spent correctly. “It’s a very specialized industry,” Walton said.

“The council only knows what the CRVA tells us,” said council member Warren Cooksey, who previously served as a board member on an organization that preceded the CRVA, the Charlotte Convention and Visitors Bureau.

Neither the city nor the CRVA are aware of any study that examined how many jobs and how much new tax revenue the Convention Center generated.

The CRVA did a two-page analysis of economic impact earlier this year in response to Observer questions, but the tourism authority now says some of its findings were based on flawed data.

Under pressure from the City Council, the CRVA board hired a new chief executive, Tom Murray, in December. Council members had been upset about Newman’s management of the CRVA, including inflated attendance estimates for the NASCAR Hall of Fame and his expense account spending.

Murray, a former chief operating officer with InterContinental Hotels Group, has reorganized the CRVA, including letting Newman go as a senior sales executive.

Murray said he made a pledge with his leadership team that each member would act in an “ethical manner.”

The CRVA said he recently reviewed Observer questions about visitor spending projections. He agreed there were problems in its estimates. Still, Murray has said in interviews with the Observer that the Convention Center is performing well.

“It’s not about a profit-loss business,” Murray said. “We look at how we create economic impact. We think the story is good.”

The City Council and mayor appoint members of the CRVA’s 13-member board, which is responsible for hiring the chief executive.

After last year’s controversy about Newman, some elected officials said they would nominate board members to better scrutinize the CRVA.

One new member is Russell Sizemore, an attorney with K&L Gates, who doesn’t have a background in the hospitality business. He said the Charlotte hotel industry’s rebound after the recession is a good sign.

“Those numbers are back where they were before the downturn,” Sizemore said.

The Mecklenburg hotel industry is indeed posting increases in occupancy and revenue for each room sold.

Asked how much the Convention Center is a part of those gains, Sizemore said he didn’t know. “I don’t have a guess,” he said. “That would be a great question to ask (chief executive) Tom Murray.”

While the City Council wanted more scrutiny of the CRVA, chief Murray wants the board to step back. He will hold six board meetings annually, down from 12.

“The board became much more involved (in the daily operations),” Murray said. “I asked them to move back and let me do the decisions.”

Harrison: 704-358-5160
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