Philly Breathes Sigh of Relief

Three months before hosting the Professional Convention Management Assn. annual meeting, Philadelphia got the official go-ahead for a $632 million expansion of its Pennsylvania Convention Center.

The Oct. 12 announcement by state Gov. Edward Rendell was just in time to give attendees at the Jan. 8–11 meeting a concrete message about the city's convention offerings, said Tom Muldoon, president of the Philadelphia Convention & Visitors Bureau.

"This allowed us to maximize the potential impact of PCMA," Muldoon said. Without the governor's approval, he added, "that great opportunity of having 1,600 to 1,800 meeting planners here would have been lost. This gets it done."

The governor's release of the first $16 million needed for construction drawings ended a 10-month delay on the project. The funds will also help the PCC Authority to begin the process of acquiring land for the new space.

Although $400 million of the expansion funding is already in the state budget, it still needed to be freed by the governor, who wanted strict assurances from the PCCA before he released money for the expansion, which is the most expensive capital project in state history.

In January, the governor said he would hold off the funding authorization until the PCCA came up with an operating budget, infrastructure budget and marketing plan for the expansion, and hired a professional management consultant (SMG was contracted) to review and make recommendations on the center's expansion and current operations.

With Rendell apparently satisfied by the response from convention center officials, the state, PCCA and Philadelphia Redevelopment Authority signed the agreement.

"This is great news that we are moving toward our goal of creating an expanded convention center that will help us attract additional tourism dollars," Rendell said in a statement. "All the tools and safeguards are in place to move forward with a successful expansion."

The remaining $232 million would most likely come from a bond offering, to be repaid with the revenue generated by slot machine operations throughout the state, according to Michael Nutter, PCCA board chairman and a Philadelphia councilman, who initially expected the governor to release funding by December 2004.

Although the rising cost of construction materials continues to threaten many major U.S. construction projects, Muldoon is confident that the expansion will stay on course.

"There are contingencies. They built in some inflation numbers (into the budget)," he said. "We feel good. Nothing's going to stop this thing. We're going to build it, and we're going to be successful."

The Pennsylvania CC has also tried to alleviate labor problems that have concerned exhibitors and show managers in the past. The hiring last year of PCCA COO Dittie Guise was in line with a 10-year customer satisfaction agreement put in place in 2003. At the same time, a single entity, the Elliot Lewis Corp., now manages all six trade unions working in the facility.

Guise said she is excited about the announcement, especially because leading the expansion was one of the reasons why she came to Philadelphia. She added, "We've got a lot of faithful clients that have outgrown (the center)."

Also this month, Rendell delivered $750,000 in funding to support the development and construction of the Bayfront Convention Center in Erie, Pa. The venue is scheduled to open mid-2007 with 29,000 square feet of exhibit space.