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To win business, Charlotte must pay to play

If Charlotte has landed a big convention, the group is likely getting a discount to come.

With a glut of exhibit space and a struggling meetings industry, the convention business has become a buyer’s market, with groups commanding hundreds of thousands of dollars in incentives.

Experts say the trend toward subsidizing rent began with second-tier cities like Charlotte, which were desperate to fill convention center space.

In 2005, a Maryland task force noted that the money-losing Baltimore Convention Center couldn’t compete with cities subsidizing rent; the report recommended the center start doing the same thing.

In Cincinnati, the city’s convention center website openly advertises its freebies: It offers free rent, plus $15,000, as long as a group’s catering bill is at least $300,000.

In Charlotte, convention center subsidies are called “business development awards.” Those CRVA funds are given as enticements along with hotel room discounts.

Most of the subsidies come in rental discounts. The CRVA maintains that it still receives revenue, usually from catering. But the deep rental discounts contribute to the convention center’s annual operating loss.

National League of Cities 2016

$1.3 million

Charlotte plans to bid for this convention.

• The total amount of incentives offered could be up to $1.3 million in cash and in-kind services, according to the city. That could include some general fund tax dollars for police and fire.

The group would book 15,000 hotel room nights.

CIAA basketball tournament

$1 million annually

• The CRVA pays the CIAA $1 million a year, which includes $400,000 in general fund tax dollars from the city and Mecklenburg County. The state pays $166,000, and last year the CRVA contributed $350,000. The CRVA also gives the CIAA the convention center rent-free for its fan fest.

Some of the $1 million guarantee comes from private donors.

The basketball tournament is held at the Time Warner Cable Arena, but the CRVA considers it a convention center event.

It was responsible for about 41,000 hotel room nights in 2011, according to the CRVA.

American Bus Association 2009 and 2013

$930,000

• For the 2009 American Bus Association marketplace, the CRVA paid the group’s convention center rent, worth $136,000, and spent more than $400,000 on the group, including $8,000 in limo rides for bus VIPs.

The ABA is returning in 2013. The CRVA has set aside $500,000 to cover expenses for that trade show.

The CRVA said the ABA is important because it gives them a chance to impress tour bus operators, who might bring tourists back.

Democratic National Convention 2012

$500,000-$1 million

• The DNC will use the Charlotte Convention Center to host media for the three-day event in September. The DNC won’t pay rent for the building and has right of first refusal for the convention center for 27 days, starting this past week.

The CRVA won’t say exactly what the space is worth because it doesn’t have a “buyout” price for the building. It also said the city of Charlotte offered the building for free when bidding on the DNC.

The DNC will use roughly 75,000 hotel-room nights.

American Legion Summer 2014

$440,000

• The legion will use $360,000 worth of Charlotte Convention Center space, according to its CRVA contract.

The convention center will waive most of those fees, except for $93,000 in rent. Visit Charlotte, a marketing branch of the CRVA, is picking up that amount.

The CRVA has budgeted more than $43,750 for shuttle buses, $20,000 to promote the group and $10,000 to help pay for a Legion parade.

“We won’t take a bid from a city that doesn’t offer us complimentary rental,” said Richard Holmes of the American Legion, which is expected to book 19,000 room nights.

Shriners 2012

$175,000

The group used $157,600 of rental space, according to its CRVA contract, but the convention center gave the Shriners a $107,600 discount.

Visit Charlotte, part of the CRVA, paid $50,000. In addition, Visit Charlotte spent $18,300 for a reception for the Shriners when they convened in Toronto in 2010 to recruit them.

The Shriners were expected to book 19,980 hotel-room nights but used 13,000 hotel-room nights.

National Rifle Association 2010

$163,000

• The CRVA estimated the group would use nearly $149,000 in rental space. Visit Charlotte paid $80,000 of that, and the convention center waived the rest. The CRVA also set aside $15,000 to cover other expenses for the group.

The 2010 convention booked roughly 13,000 hotel-room nights.

Barbershop Harmony Society

$97,500

• The CRVA offered the singers more than $97,000 in subsidies to bring an upcoming convention to Charlotte.

The group passed because it wanted a larger hotel and another city offered more money.

The barbershop singers prefer to pit second-tier cities against one another to keep costs low.

“We can’t afford a first-tier city,” said Dusty Schleier of the Barbershop Harmony Society. “We do places like Kansas City, Louisville, Nashville.”

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