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The Boston Globe

Business

State Senate OK’s convention center expansion

It’s hoped the expansion project will help attract larger events to the facility and spur tourist spending into the state’s economy.

Matthew J. Lee/Globe Staff/File

It’s hoped the expansion project will help attract larger events to the facility and spur tourist spending into the state’s economy.

The Massachusetts Senate on Thursday approved a $1 billion expansion of the Boston Convention & Exhibition Center to help attract larger events to the facility and spur tourist spending into the state’s economy.

The 31-to-6 vote came after a lengthy debate, with several Republican senators sharply questioning the economic benefits of the proposal. They were overwhelmingly defeated by Democrats, who argued the project will generate more than $180 million a year in additional spending on meals, hotel rooms, and other products.

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The Senate’s approval will allow construction of the expanded hall to begin within 18 months. The House has already signed off on the bill; Governor Deval Patrick must sign it, but his administration has already offered support.

The project will increase the size of the South Boston hall by 60 percent, adding a total of 1.3 million square feet of exhibit space, ballrooms, and meeting rooms. The Massachusetts Convention Center Authority is also pursuing a separate project to add a headquarters hotel near the facility with up to 1,200 rooms.

“It is our belief that the return for the taxpayers will be greater than the funds we are expending,” said Senator Brian A. Joyce, a Democrat from Milton, adding that the bill “protects taxpayers” by ensuring contracting for the project will be carefully monitored.

Republican senators argued that expansion is a taxpayer-funded giveaway to an industry that may not generate the promised economic benefits.

They pointed out that the Boston Convention & Exhibition Center failed to achieve some of the benefits initially projected, such as the number of hotel room stays it would generate.

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In 1997, a consultant estimated construction of the center would results in 670,000 hotel room stays per year by 2009; instead, it only generated about 313,000 that year.

“Apparently, the theory now in the Commonwealth is that if you build something and it doesn’t perform up to expectations, just make it bigger,” said Bruce Tarr, a Republican from Gloucester.

Stephen Brewer, a Democrat from Barre, said that the convention center proved to be a powerful economic engine for the state, attracting huge crowds of attendees and producing more than $620 million in additional spending last year. “I believe the economic vitality of having a world-class convention center is well worth it.”

James Rooney, executive director of the convention center authority, has said the expansion is needed because the Convention & Exhibition Center is not big enough to compete for the nation’s largest meetings and trade shows.

He has also said thousands of new hotel rooms must be built to accommodate show attendees.

The expansion of the convention hall itself will be funded from existing taxes and fees on hotel rooms, taxi rides, rental cars, and other-tourist related activities. Rooney has said the hotel project will probably need between $100 million and $200 million in subsidies.

In a statement last night, he thanked the Democratic leadership for supporting the bill. “The analysis of this expansion proposal has been going on for five years, and we are grateful that our lawmakers have undertaken such a comprehensive examination.”

Over the past several days, the expansion bill has undergone a flurry of amendments. The senate’s bonding committee stripped $110 million amid accusations from the state’s former inspector general that the money had been inserted as a hidden subsidy for the headquarters hotel project.

The bill approved last night also included language barring any of its fund from being used for the hotel project, as well as a provision that requires the convention center authority to notify the state’s inspector general if it deviates from state procurement procedures during the expansion effort.

Senator Mark Montigy, a New Bedford Democrat who voted against the expansion, sharply questioned the proposal and the need for additional hotel subsidies.

“The notion that we would need to subsidize private hotel developers in one of the hottest real estate markets in the world is nonsense,” he said.

Rooney has said, however, that the additional hotel rooms will pay off by attracting more business to the convention hall.

Cities around the country have routinely subsidized large hotel projects in recent years because private developers have been unwilling to accept the risk of building them entirely with their own funds.

Hotels with some or 100 percent taxpayer financing have been built in Dallas, Houston, Washington, D.C., and elsewhere.

Several companies have expressed interest in building the headquarters hotel in Boston, including MGM, Omni, Hilton, Marriott, Hyatt, and Starwood Hotels and Resorts. The convention center authority will solicit formal bids for the project in coming months.

If funding for the hotel is approved, it would be built in concert with the expanded convention center over the next several years.

More coverage:

6/7: Convention center funding cut over concerns of deal

5/28: Mass. House approves $1.1b convention center expansion

4/10: $1.1b plan for convention center meets skeptics

Casey Ross can be reached at cross@globe.com.

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