Moscone Center loses its competitive edge 

The centerpiece of The City’s critical convention business, the Moscone Center, has lost its competitive edge, and tens of millions of dollars are expected to be spent dragging the aging facility into the 21st century.

The 964,000-square-foot convention center has hosted some of the region’s largest and most prestigious conventions, including Oracle OpenWorld and MacWorld.

But one of its three buildings dates back to 1981, and larger and more modern facilities are poaching conventions away from San Francisco, leading to The City’s coffers and businesses taking a hit. City and industry officials will spend tens of millions of dollars from new hotel taxes to update and expand the once-visionary convention center by building an underground hall.

Tourism is San Francisco’s top economic engine, and conventions account for more than one-third of The City’s $8 billion annual tourism industry.

The tax dollars generated by tourists — especially by conventioneers who spend large sums during multinight hotel stays — help pay for essential services such as public safety, road improvements and parks. Tourism-based industries already are reeling from a dismal 2009, and an uptick is not expected this year.

Other cities have started using newer and larger convention centers to lure events away from San Francisco, which is losing business as a result, according to Moscone Center General Manager Dick Shaff.

Groups that use the center for conventions are “demanding improvements,” he said.

“Phoenix just spent $800 million building a brand new convention center, and they’re driving very hard bargains,” Shaff said. “It’s a very competitive environment.”

The loss of conventions to other cities compounds recessionary woes plaguing The City’s tourism industry.

“Last year was our worst year in quite some time,” San Francisco Convention and Visitors Bureau Executive Director Joe D’Alessandro said. “I don’t see 2010 being much better.”

To help arrest the convention business’ local decline, hoteliers and city lawmakers in 2008 created the Tourism Improvement District, which levies 1 to 1.5 percent in new taxes on hotel visits.

The new taxes will fund improvements to the Moscone Center and The City’s tourism marketing strategy.

Roughly $38 million from the new tax is budgeted to be spent expanding and improving the center.

The first five years of work will focus on improving the existing buildings, the oldest of which lacks sufficient power outlets for the high-tech companies that use it for conventions, according to D’Alessandro.

A massive underground expansion of a tunnel beneath Howard Street that connects two buildings could create a large single convention room in the second half of the decade, he said. Some major improvements could be completed within two years, D’Alessandro said.

jupton@sfexaminer.com


Paying a visit

$8.5 billion Total visitor and convention spending in 2008
16.4 million Days spent in San Francisco by visitors
$175 Average daily spending by visitors to San Francisco
$290 Average daily spending by conventioneers
35.3 percent Visitors who come to San Francisco for a meeting or convention
963,929 sq. feet Moscone Center meeting and exhibit space
$198.42 Average daily rate for a hotel in October

Sources: San Francisco Convention and Visitors Bureau, City Controller’s Office

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