Happy Holidays!

Happy Holidays!
7 min 7 sec - Dec 23, 2006
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Porcupine Ridge Pipeline

Just to set the record straight (there is an error in the desnews article)-- Centerville City has no agreement with Holly EP. While City Officials are negotiating a potenial franchise agreement, the City may still decide not to enter into an agreement and may force Holly to make a decision on condemning property.

Where do politicians get the crazy idea that the world needs yet another convention center? From the experts, of course.

I have written a letter to the county commissioners on my opposition to the expansion -- I may publish that at a later time.

This is a Forbes Article that I find useful when considering the expansion of the County Convention Center.

The Answer Is Always Yes
Victoria Murphy, 02.28.05

Where do politicians get the crazy idea that the world needs yet another convention center? From the experts, of course.

Portland, Ore.'s trade show business was thriving back in 1997, when the city hatched plans to double the size of its Oregon Convention Center to 368,000 square feet, the largest in the Northwest.

Today, $116 million in bricks, mortar and carpeting later, Portland's trade hall is struggling. It lost $5.5 million last year on $15.3 million in revenue. Occupancy since the expansion has fallen from 71% to 43%. The Wood Technology Showcase, a Portland event for 34 years and one that expansion boosters cited as needing the enlarged venue, has been postponed because of lagging attendance. The same run-down buildings and third-rate restaurants that always surrounded the center, like Burgerville and a deli that sells sushi and Beanie Babies, are still there.

"We haven't set our sights on being profitable," says Oregon Convention Center's executive director, Jeffrey Blosser. "These are challenging times in our industry."

Challenging? The business is a mess, plagued by a taxpayer-funded burst of expansion and a continuing dearth of customers. Over the last decade cities' annual capital spending on centers has doubled to $2.4 billion, according to a study by the Brookings Institution. The projects are frequently backed by expensive feasibility studies from consultants that rarely give a thumbs-down. Forty-four new or expanded halls are in the works, in hot spots such as Las Vegas and not-so-hot spots like Albany, N.Y. Seven million square feet will be built in the next few years, adding to the 64 million square feet now standing.

Unmentioned at ribbon-cutting ceremonies is that the space will be impossible to fill. The biggest 200 shows, a rolling list measured by Tradeshow Week, are using the same amount of space they did in 1992. Attendance has fallen at most centers, even those with new space such as in Indianapolis, Chicago and Atlanta. The thriving destinations, Orlando, Fla. and Las Vegas (which just announced a $400 million expansion), are stealing smaller shows away from other cities, stuffing in several at a time. The smaller trade halls are discounting, even giving space away.

A common excuse of the convention center builders is that Sept. 11 cut travel. But trade show attendance peaked in the mid-1990s. Something more fundamental is going on: Shows in general are far less relevant. Consolidation in industries like manufacturing, retail and technology has left a smaller pool of exhibitors. And far more trade now gets done in China, which is rapidly adding shows and square footage of its own.

Newell Rubbermaid pulled out of the International Home & Housewares Show in Chicago in 2001 to target retailers more directly. It opened a sales office near Wal-Mart in Bentonville, Ark. Since 2001 the Nike Swoosh hasn't appeared on booths at any of the big retail shows like Magic Marketplace or the Super Show. Oracle no longer spends big bucks on trade show booths.

So why is the concrete getting poured in Jackson, Miss., Peoria, Ill. and Spokane, Wash.? Politicians, playing local hero, are incapable of finding reasons not to build. Even when voters reject new taxes, as in Portland, Pittsburgh and Columbus, Ohio, new space goes up anyway, backed by hotel taxes or bond issues.

Portland's story is particularly telling. Prior to the 1998 city election Portland's visitors association estimated the center had missed out on $17 million in convention business over six months because the center was too small. The regional tricounty government proposed an $82 million general obligation bond to pay for the expansion, but taxpayers overwhelmingly nixed it. So Multnomah County floated a separate bond backed by higher taxes on hotel rooms and car rentals, allowing the expansion to proceed. In the meantime new, rival centers were going up all along the West Coast.

The expansion was completed in 2003, with eco-friendly touches like an outdoor "rain garden." City fathers boasted of landing the 2005 National Square Dance Convention and its 10,000 high-steppers.

The euphoria was short-lived. Apart from big auto and gardening shows, last year's schedule was packed with what the industry dubs "smerfs," which stands for social, military, educational, religious and fraternal groups. These visitors typically pack four travelers in a hotel room and don't have corporate credit cards to blow on expensive meals.

By the end of 2004 the center's finances were in bad shape. To get 34 decent-size shows, the center had to indirectly waive rental fees for the organizers of 10 of them. The building would have lost $15,000 a day if not for $6 million in tax subsidies. Hotels are 60% occupied, as fewer than 30% of convention-goers last year came from outside Portland.

The fix, says center director Blosser, is a new 600-room convention hotel, backed by the city. "We lose a lot of shows because we don't have a big hotel. But it doesn't pencil out for a private company; a hotel here would need help," he says. Blosser commissioned Strategic Advisory Group, an Atlanta consultancy that specializes in convention center and hotel studies, to assess the idea. SAG says the new hotel will bring in annual spending of $116,000 per room.

Maybe Blosser should run those numbers past the folks in St. Louis. In 2003 St. Louis followed a $270 million convention expansion with a 1,081-room, $265 million adjacent hotel, paid for with public and private money. Hospitality Consulting Services projected 800,000 room-nights per year citywide with the addition of the Renaissance hotel. Instead St. Louis is getting only 400,000. A nearby McDonald's closed shop. The neighborhood remains lackluster, punctuated by a store peddling gold chains and a discount sneaker outlet.

In August Moody's downgraded the city's $50 million hotel bonds even deeper into junk. The development group will likely have to drain the $5.7 million left in its reserve fund to service the debt and come up with additional money from stakeholders like Kimberly-Clark. "The assumptions that go into feasibility studies are the problem," says Anne Van Praagh of Moody's. "The outside firms have no financial stake in the business."

Robert Canton, director of PricewaterhouseCoopers' convention and tourism practice, offers this defense: "We don't recommend to build or not to build. We're just being asked if there is a potential demand."

The answer is almost always yes. Out of 75 potential projects reviewed by the firm that Oregon hired, only 4 were deemed completely unfit. SAG partner Jeffrey Sachs says that is evidence of his shop's "objectivity." "You lose clients if you shoot down projects. They've already made up their minds by the time they come to us," he says.

Where do the experts get their rosy predictions? "We have to make a lot of assumptions. This industry isn't tracked very well," says Sachs. The most oft-cited data come from Tradeshow Week, which is owned by Reed Elsevier, a British company that also produces 430 trade shows. Its primary measure of the industry's health is its annual list of the 200 best-attended shows, making for a convenient survivor bias, and based solely on data from show managers who have an interest in masking serious declines.

Advisers' conclusions often fly in the face of logic. Consulting firm Convention, Sports & Leisure was hired by Cincinnati in 1999 to ask meeting planners what they thought of the city as a show destination. Only 39% answered positively, trailing perceptions of Kansas City (60%), Boston (56%) and Nashville (62%). CSL subtly encouraged construction by suggesting the city could improve its image. Cincinnati is under way with a $160 million expansion. A study for Minneapolis done by Coopers & Lybrand in 1994 went so far as to suggest that obvious obstacles to success like frigid temperatures and location could be overcome by "specific marketing efforts."

The slump is good news only for show managers. The Quilts Market show is getting space at Kansas City's soon-to- be-expanded center for no cost, and hotels are paying for the show setup. "I definitely had the upper hand in negotiating," says Quilts Market opera

Mystery 2nd Place Finisher

Can you identify the famous politician (wearing the nice pinstripes) that is about to be the 2nd place finisher in this State Track 800m race photo? (Hint, it's not Part Time Politician)

Convention Center Expansion is a Bad Idea

In my humble opinion, putting more taxpayer dollars into the money losing convention center is a bad idea. Convention Centers don't make money for anyone but the local hotels around them. If the Davis Center expands, it will soon have to compete with larger venues like the Salt Palace and South Towne Convention Center--which means bigger losses.

I can understand the argument of increased economic growth to the surrounding area (restraunts & hotels), but it's not like Layton is really hurting for new restraunts. Rather than concentrating the efforts in one part of Layton, I suggest we put efforts into developing other parts of the county.

If we are going to have to put taxpayer money (tourist tax) into another money losing project -- let's get something good out of it. A regional theater and performing arts center in South Davis County would benifit the overall community a lot more than adding a few more hotel rooms to Layton.

This is why the public thinks the Utah Legislature has no ethics

In my opinion, Senate President John Valentine has crossed the line by joing the Zion's Bank Board of Directors. While he has always been a strong bank supporter -- it's clear that he was only offered the prestigious Board Seat because of his leadership position in the Senate.

The President of the Senate and Speaker of the House should not be joining outside boards while they are in a leadership position--especially such a controversial position as a major bank board.

I can understand a politician continueing to serve on a board, if he had been on the board before his election, but to join the board after being elected Senate President--just doesn't give the public a lot of confidence in our elected officials.

Baseless Confidence -- WSJ Opinion

Baseless Confidence -- It may take a defeat in November for the GOP to unlearn the lessons of power.

I am afraid the Peggy Noonan may be right again. People are tired of the Republicans in Washington saying one thing, but doing another. I think she summed it up well with: "One party has beliefs it doesn't act on. The other doesn't seem to have beliefs, only impulses."

Cities finding getting wired pricey, passe ???

Below is my response to Jay Evenson's article in the Deseret Morning News last Sunday.

Dear Editor Evenson,

I would like to respectfully offer a different opinion than the one presented in your Sunday editorial titled Cities finding getting wired pricey, passé.

I thought it ironic that you mentioned Nobel Economist Milton Friedman. Mr. Friedman taught that competition and choice was good for consumers and for the economy. One of the goals of the UTOPIA project is to provide a network platform for increased competition and choice for residential and business consumers. I suggest that Mr. Friedman would also agree that the municipal open infrastructure model is both economically and technically more efficient than the monopolistic infrastructure models of our current telecommunications infrastructure that the lobbyists in Washington are working so hard to protect.

Modern economists teach that competition lowers prices and improves quality. Thousands of Utahans in UTOPIA cities have benefited from competition as Comcast & Qwest have lowered their rates significantly in response to UTOPIA service providers coming to their neighborhood. Thousands of households are now getting more services and saving hundreds of dollars a year in real money as service providers compete for their business.

The Deseret News still seems to be under the impression that UTOPIA is only about high speed internet. Internet access is just one of the many applications on the network. Currently, along with thousands of users enjoying high speed internet, UTOPIA services providers are providing Voice (phone) and Video (TV) services to satisfied customers.

Your comments about wireless internet are what motivated me to write you. By profession, I am an RF engineer and have spent the last decade designing mobile, fixed and wi-fi wireless networks for a living. I currently manage the Wireless Consulting Practice for Cisco Systems, a company which sells hundreds of millions of dollars of wireless infrastructure and services to large businesses, service providers and many of the cities mentioned in your article.

Wireless technology is becoming cheaper and more ubiquitous every year. Wireless provides mobility--the ability to communicate using the same device in many places. But as a wireless network designer, I have to plan ahead, because each wireless base station or wireless access point eventually connects to the WIRED infrastructure, which must be able to support the increased traffic from wireless applications. Just as freeways and collector roads must be built to support rapid residential growth, we must have a strong wired infrastructure to support the kind of wireless services that will be coming in the next few years.

The growing trend of Municipal Wireless networks is real and is expanding rapidly -- but Municipal Wireless networks also have some real limitations. Despite the recent media hype, just because Google is mentioned in the same article as a planned wireless network, the laws of physics do not change. Radio channels are crowded, interference is common, and scalability is a challenge. Municipal wireless hotspots are not yet reliable for high quality voice and definitely not yet capable of streaming high quality HDTV into every home.

Your editorial infers that communities must choose either wireless or fiber as their choice for next generation infrastructure. I see “fiber to the home” and wireless deployments as complementary in most cases. Consumers will not choose mobility over bandwidth -- they will choose both. They will want high quality video conferencing at work, HDTV on the big screen at home, AND mobile internet when they walk out the door. The key is to build infrastructure that will enable whatever applications come to the market--regardless of the bandwidth demand. As wireless applications grow, so does the demand on the wired infrastructure.

If you remember back two years ago at this time, Qwest tried to scare us all into believing that Wi-Max was going to make fiber deployments obsolete. Since that time, Qwest has yet to deploy Wi-Max, but they have quietly been deploying fiber to the home in new developments where they can guarantee there will be no competition from other service providers.

About three years ago, I read in the Deseret Morning News about the ridiculous idea of a group of cities trying to band together to build a fiber optic network. I thought to myself -- this is a recipe for disaster. The government messes up everything -- how could Government ever build or operate effectively something as complicated as a modern optical network?

Instead of taking the DesNews opinion as fact, I decided to investigate further myself. I found that while it was easy to criticize the idea at a high level, when I dug deeper and studied the project in detail, the concepts and design had merit. I went from a vocal critic of UTOPIA to a cautious supporter and now serve on the Board of UTOPIA in an effort to do my part to try help UTOPIA execute correctly and make this project a success.

Our federal regulatory environment has discouraged the market from investment in telecommunications infrastructure, especially in underserved areas. As local leaders and citizens, we have the choice to continue to complain about Washington, or take action and do something about it. Rather than sit back and criticize, leaders should choose to take action and try to improve the situation.

The jury is still out on the financial success of the UTOPIA project, so let's not call the case before all the facts are known.

Are there risks with the UTOPIA project? Absolutely yes! Are the risks worth taking? Absolutely yes!

I would gladly accept an invitation to meet with you or the Deseret News Editorial Board to provide an update on the exciting progress of the UTOPIA project , or an invitation to write a guest editorial.

Respectfully,

Paul Cutler
Centerville City Council

UTOPIA Board of Directors

Vegtable Garden Anyone?

I spent many years trying to get off the farm....but now I propose that Centerville offer "gardenless citizens" a chance to return to our farming roots. Just south of City Hall, there is more than a 1/2 acre of vacant cultivated land, that will not be utilized by the City for a few years. This could be divided into small lots (say 15x40?) and those citizens who don't have thier own vegtable gardens in their backyard. A small fee ($15?) would cover the cost of the water for the summer.

Just think of all those little kids who could "learn to work" by hoeing a few rows of veggies....

Rude, Petty Utah lawmakers

Civility is definately not the Utah Legislature's strength.....
Senator Stephenson, who has never been a candidate for either the "teamwork and collaboration" award or nominated for the "Mr. Nice Guy" title, seems to have temporarly forgotton that when you act rude to a reporter, you will probably read about it in the paper.....

Problematic Language

State legislators, it seems, only make the news by acting sketchy. I wasn't so surprised, therefore, to see the following problematic language in a Deseret News sub heading in an article entitled "Legislators seek say over U.S. Senators":

State lawmakers working around 17th Amendment

Say what? Surely they mean working within the 17th amendment, or at worst cleverly manipulating it? Nope. As sketchy State Senator Howard Stephenson explains:

"The 17th Amendment was a huge mistake," Stephenson said Monday, the day he introduced what he calls "a soft repeal" of the 1914 amendment to the U.S. Constitution that called for popular election of the U.S. Senate.

Maybe someone should explain to our dear friend, who was elected by a majority of a small locality, how a constitutional amendment works.

First, two thirds of both houses of Congress have to propose the amendment. The first hurdle, therefore, is difficult to say the least (just ask any of Bush's judicial nominees, who were desperate to get 60 votes in the Senate, not 67, and who didn't even have to worry about the House).

Second, after passage in both houses of Congress, the proposed amendment has to be ratified by three quarters of the state legislatures. This is actually a more difficult hurdle than the first, which explains why there have only been fifteen amendments to the U.S. Constitution in the last 200 years.

In 200 years we've had around 50 presidential elections, several thousand congressional elections (435 House seats alone every two years), and apparently a few too many state legislature elections. The 17th Amendment has more authority behind it than State Sen. Stephenson will ever have--no matter how much power he tries to grab.