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Boston Convention Center expansion encounters no opposition at State House hearing

Posted by Your Town  November 13, 2013 04:37 PM

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Legislation facilitating a $1.1 billion expansion of the Boston Convention and Exhibition Center encountered no opposition at a hearing Wednesday, with proponents saying the larger facility will not require higher taxes or fees and will deliver an economic punch and good-paying jobs.

Testifying before the State Administration Committee, South Boston Rep. Nick Collins said fears from more than a decade ago that the BCEC would overwhelm the area “never came true” and called the facility, which opened in 2004, a “great neighbor.” Collins described the center’s expansion as a “necessity.”

Massachusetts Convention Center Authority Executive Director James Rooney said Boston since 2000 has seen the largest growth in convention market share of any U.S. city, underscoring the need to expand.

The bill relies on existing hospitality industry charges to finance the expansion and leverage private hotel development valued at $700 million. During his testimony, Rooney introduced a time-sensitive aspect to the legislation, saying plans call for capitalizing on the current low interest rate environment.

“We do hope to take advantage of that,” he said. “There is some fear that those rates will go up over the next year.”

After the hearing, Rooney said architects of the project’s financing built in “some cushion” for interest rate changes while reemphasizing the role rates play in financing.

The legislation relies on conservative economic growth modeling, Rooney said, in projecting that sufficient revenues will be spun off by existing Boston-area taxes and fees on hotel rooms, sales and meals taxes, trolley tour levies, and a $10 rental car surcharge. Those levies were instituted in the 1990s to fund the BCEC’s construction.

Rooney said the bill was crafted with input from the Executive Office of Administration and Finance, overseen by Gov. Deval Patrick, and the state Treasury, which is run by Treasurer Steven Grossman.

Committee Co-chairman Rep. Peter Kocot (D-Northampton) said after the hearing that the BCEC bill is “not just a Boston bill,” predicting ripple effects from convention business and a “huge economic impact” from expansion.

“In terms of them figuring out the financing, I think that’s all done,” said Kocot, adding, “We would like to try to get it moving ASAP.”

In addition to the convention center expansion, the Convention Center Authority plans to develop two mid-priced hotels across the street from the BCEC, expand the Westin next door and develop a “headquarters hotel” above nearby Interstate 90. All those new hotel rooms will help feed the expansion’s monetary needs.

Calling demand for conventions in Boston “off the charts” and noting the authority is turning down major convention business, Rooney said current and planned hotel development and expansion in the seaport area will address a room shortage that has hampered convention bookings.

There should be around 4,000 hotel rooms around the center but there are only about 1,700, Rooney said, forcing convention-goers to resort to buses, taxis and trains to get to their hotels, adding to convention costs, and making Back Bay hotels unavailable for the Hynes Convention Center across town.

The BCEC is the largest building ever built in New England, Rooney said, but about two dozen convention centers in the United States are larger, with some twice the size of the BCEC. By adding 335,000 square feet to the 516,000 square foot facility, including an additional ballroom and 1.5-acre outdoor event space about the size of Post Office Square, only about a dozen convention centers in the U.S. would be larger than the BCEC, he said.

Collins and Sen. Linda Dorcena Forry (D-Dorchester), who also represents the convention center area, estimated the project would create 4,700 construction jobs and 2,100 permanent jobs.

The legislation calls for the expansion to be built using a project labor agreement, a construction method favored by unions and opposed by some non-union contractors. Rooney said the project labor agreement language in the bill mimicked similar language in the 1997 law governing the center’s construction.

Committee co-chair Sen. Kenneth Donnelly said he wanted to ensure local workers are hired for the project, mentioning other Bay State job sites where he noticed many license plates from Rhode Island and New Hampshire.

Massachusetts Lodging Association President Paul Sacco, a member of the convention center authority board and former Omni Hotels executive, supported the center’s expansion. Sacco said he predicted before the center was built that it would need to be expanded in 10 years.

“Supporting this bill is very important to the future of Massachusetts, not just Boston,” Sacco said.

With public officials concerned about the costs associated with large public works projects, Rooney, who played a role in developing financing plans for the Big Dig in a previous job, reminded them that the $850 million BCEC, authorized under a 1997 law, was built on time and on budget.

Unions and convention industry officials also testified in support of the bill, echoing the appetite for new jobs and positive economic benefits associated with bringing outsiders into the city for major events.

To tout the project and legislation needed to launch it, supporters placed full-color 18-page convention center authority booklets on all of the seats in the State House hearing room prior to a hearing on the bill (H 3695), which was crowded with lobbyists and interest group representatives.

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