With spotlight, political conventions bring hassles for host cities

By Lois Romano
Washington Post Staff Writer
Wednesday, February 23, 2011; 11:48 PM

When the call finally came, middle-aged men pumped their fists in the air as dollar signs danced in their heads. After two failed attempts to nab the Republican National Convention, Tampa had gotten the nod for 2012. The local host committee was ready for the coveted spotlight, the financial windfall and even the dreaded drama that inevitably come with political conventions. Still, the headaches started a little sooner than expected.

Within months of the announcement last May, it was apparent that the Republican National Committee's newly installed operation in Tampa was spending money wildly with little to show. Last month, new RNC chief Reince Priebus agreed, abruptly firing the party's Tampa staff. The dust-up generated ample publicity - but the not the kind Tampa had envisioned.

"Yes, it was a distraction," said Ken Jones, president of the Tampa Bay host committee. "It did not slow us down, though - we secured the venue, signed contracts, booked the hotels. But optically, it was a distraction."

As Tampa and Charlotte, the site of the 2012 Democratic convention, prepare to host upward of 50,000 visitors next year, the early euphoria has been eclipsed by the overwhelming reality of executing a massive, extraordinarily high-profile event with thousands of moving parts.

National political conventions can be a boon to a local community, often catapulting it onto the national and international stage. For five intense days, Tampa and Charlotte will host journalists and politicos, chief executives and presidents. Fifteen thousand hotel rooms will be occupied, thousands of jobs will be created, and the cities' skylines will be featured on the evening news.

But with the good fortune come huge hassles - messy fights over money, clashes with the national party committees and bickering with the staff of the eventual nominee. Add to that the inconvenience to residents as the city center is jammed by visitors, the loss of business to local establishments not involved in the festivities and the pressure on the community to raise $50 million for the extravaganza.

Although city officials tend to head into conventions anticipating a substantial economic boost, some research shows that the benefits may be overstated. A study by the economics department of Holy Cross College in Worcester, Mass., which looked at conventions from 1970 to 2005, concluded that a convention has "no discernible impact" on the local economy. The study argued that the big money ends up going to national businesses, such as hotel chains, and new jobs are short-lived.

"There's always this initial euphoria that this is going to be a jackpot - that everyone is going to make a gazillion dollars - and that is not true," said David Passafaro, president of the host committee for the Boston 2004 Democratic convention. In the end, the Boston committee had a surplus because, according to Passafaro, it resisted any pressure from the national party to spend money it did not have.

In fact, some cities in recent years have decided that the cost and political messiness just aren't worth it. Los Angeles declined an opportunity to bid for the 2008 convention. Philadelphia Mayor Michael Nutter did not have his city compete for the 2012 Democratic convention, and Orlando officials turned down an invitation from the GOP to bid. Both cities cited the extraordinary cost of hosting in a tough economic environment.

"It brings in tremendous revenues and exposure, but it's a very expensive endeavor," said Terry McAuliffe, former head of the Democratic National Committee.

Still, many cities are eager to host, knowing it could be a giant public relations boost. Officials in Atlanta believe that hosting the Democratic convention in 1988 helped the city land the 1994 Super Bowl, and then the biggest prize of all: the 1996 Olympic Games.

In its bid to host the Republican meeting in 1996, San Diego was desperate to repair its reputation after a brewing political scandal two decades earlier prompted the GOP to pull out just 90 days before the convention.

And in 2000, Los Angeles was eager to show the world that after a prolonged recession, an earthquake and riots, the city was a viable place to do business.

But that turned out to be a harder climb than expected.

Seven months before the Democratic convention, L.A.'s Republican mayor, Richard Riordan, fired the head of the host committee after fielding complaints from Democrats that planning and fundraising were woefully behind. He appointed Deputy Mayor Noelia Rodriguez to take over the planning, which was in shambles.

"We were fearful that we were going to miss our opportunity to get a boost, to generate business for the city," Rodriguez said. Few contracts had been signed, and money was scarce.

"It was worse than anyone ever knew. . . . We were underwater, $7 million in the hole," recalled McAuliffe, who said presidential nominee Al Gore asked him to step in and save the convention. "The electricians wouldn't work. No one was being paid."

McAuliffe said he ended up calling in four $1 million letters of credit. Supporters had issued the letters as security to get the bid for the city, but they had not expected that they would be called in. "I told them I had no options - we weren't going to have a convention," McAuliffe said.

Experience has shown that conflicts arise almost inevitably between the hosts and the national party. The host committee commits to raising at least $50 million and is contractually obligated to pay for much of the effort: a huge media party, security, transportation for delegates and retrofitting the hall to suit the televised convention - probably the largest single expenditure.

Jack Ford, executive director of the host committee in San Diego, said he would advise cities to secure a contract with the RNC with "as few grey areas as possible" to avoid a tussle over money. "But let's be honest," he added. "It's their party. And if we sign up, we have to deliver."

The federal government also allocates money for the convention - about $17 million in 2008. Since the terrorist attacks of 2001, Congress has made $50 million grants to help cities defray security costs.

In Tampa, local organizers and national party committee members became alarmed last year that the RNC's Committee on Arrangements was rapidly plowing through money, using a line of credit backed by federal funding. By the end of the year, it had spent $636,000 on travel, hotels, staff salaries and a rented waterfront home for then-RNC Chairman Michael Steele's longtime personal assistant.

"We could see what was happening, but Steele was a great supporter of Tampa, so it was hard," said a member of the Tampa host committee, who spoke on the condition of anonymity to talk candidly.

Priebus had no such issue. Within 48 hours of his election, the new RNC chief fired the staff that had been put in place by his predecessor. The party, he said, "had had enough with some of the questionable expenditures. "

The host committee in Tampa has pledged to raise $40 million from corporate and private donors, and Jones, its chair, is convinced that will happen.

That will be tougher for Democrats in Charlotte, since President Obama has ruled out accepting corporate dollars.

"Yes, it's going to make it more challenging . . . but we went into this with our eyes open," said Will Mille, executive director of the Charlotte Host Committee. "I've never seen this kind of excitement from people . . . from the community."

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