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Mass. House approves $1.1b convention center expansion

The Boston Convention & Visitors Center.

Matthew J. Lee/Globe Staff

The Boston Convention & Visitors Center.

A $1.1 billion expansion of the Boston Convention and Exhibition Center could begin within the next 18 months after the Massachusetts House of Representatives approved a bill Wednesday authorizing funding for the massive project.

The 130-19 vote was a major milestone for the proposal, which has received support from Governor Deval Patrick and Senate President Therese Murray. It would increase the size of the convention center by 60 percent, an expansion that the convention authority says is needed to attract the nation’s largest meetings and trade shows.

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The Massachusetts Convention Center Authority also said Wednesday that several top hotel companies have joined a separate competition to build a 1,000-room headquarters hotel next to the South Boston facility. Among the companies to submit letters of interest were Hilton, Hyatt, Marriott, MGM Resorts, Omni, and Starwood Hotels & Resorts.

The new hotel and expansion of exhibit space would put Boston among the top convention destinations in the United States, according to James Rooney, executive director of the Convention Center Authority. He said the expansion, expected to be completed in 2019, would create thousands of jobs.

“This creates real economic activity,” he said. “Our economy is grounded in knowledge-based industries, and the ability to host events and thought leaders from major international corporations in Boston is something a world-class city needs to be able to do.”

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Critics of the planned expansion argue that Boston is adding to a nationwide glut of convention space that has left cities building ever-larger facilities to fight for business in the volatile meetings industry.

“What we’re looking at here is spending a whole lot of money to tread water,” said Charles Chieppo, a senior fellow at the Pioneer Institute, a nonpartisan research organization. “I think what’s behind this is more the fear of losing market share than any realistic hope of capturing a larger share of a shrinking market.”

The debate about the expansion has carried on for months, though few fervent skeptics have emerged in the Legislature. The bill still needs formal approval from the governor and the state Senate.

The Senate is expected to vote by the end of the legislative session on July 31, and Murray recently signaled strong support.

The project to expand the convention center, which state officials say will require no new taxes, will be funded from existing fees on hotel rooms, taxis, and other tourism business in Boston and Cambridge. Those fees would be used to pay interest on bonds financing the expansion plan.

While the plans do not require an increase in those fees, critics complain the project would take money away from other priorities by extending the length of time the state will need to pay off debt for the facility.

Under the expansion proposal, the state could be making debt payments on the facility until 2060. Chieppo has said the project will cost the state an additional $5 billion during that extended period.

Rooney has said that expansion plans for the South Boston hall, which opened in 2004, were always contemplated. Regardless, he said, taxes that go into the convention center fund will be needed to operate the facility decades into the future.

Construction of the hotel and a 1.3-million-square-foot addition to the convention hall would contribute to a burst of development on the South Boston Waterfront, which has been re-branded as the city’s Innovation District. Several towering residential and office buildings are rising across the neighborhood, which has also attracted several new restaurants and stores.

The new exhibit space, ballrooms, and meeting rooms would be built to the south of the existing hall, on parking lots along D and Cypher streets.

The Convention Center Authority has estimated that the expansion will generate an additional $184 million a year in economic activity through spending on restaurants, hotel rooms, and other tourism and entertainment activities.

Rooney said the additional exhibit area will allow the facility to attract larger trade shows that now bypass the facility because of the limited space. He has also pushed for construction of more hotel rooms around the facility because event attendees are now forced to stay at accommodations across the city.

Currently, there are 1,700 rooms within walking distance of the Boston Convention & Exhibition Center, compared with 8,000 or more in New Orleans and other cities that compete with Boston. Another 500 hotel rooms are under construction across from the facility.

The headquarters hotel is planned for land owned by the Massachusetts Port Authority, known as the Core Block site, across the street from the convention center near the intersection of D and Summer streets. As many as 200 more rooms would be added across from the facility on Summer Street.

Rooney has said that project will probably require government assistance, though the amount has not yet been determined. Few hotels of that size have been built in the United States without some public funding. Hotel developers have been unwilling to accept the risk of building such large facilities without government backing.

Large hotel companies have signed up with an array of developers to bid for the right to build the headquarters hotel. Among the developers involved are The Davis Cos., Extell Development Corp., Rida Development Corp., The Fallon Co., and the Drew Co.

The pool of bidders will be winnowed in the coming months by the Convention Center Authority, with the goal of selecting a developer by the end of the year.

The hotel would open with the expanded convention hall in 2019.

More coverage:

4/11: Expansion plan for convention center meets skeptics

1/15: Event planners hear cities pitch venues

10/03: State asked to OK bigger convention center

Casey Ross can be reached at cross@globe.com. Josh Miller contributed to this report.
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