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I'm Not Picking on San Jose. Really.

By Rachel Wimberly, Associate Editor -- Tradeshow Week, 7/30/2007

I suppose Team San Jose could get the idea I have it in for the unusual public-private entity that runs both the CVB and convention center in the northern California city. In the last few months, I've written two lengthy stories detailing their recent woes.

But really, I don't. I think what the group is going through could happen to any CVB or convention center anywhere that makes a commitment to turn itself into a profitable enterprise.

The first story, “Do You Know the Way, San Jose?,” concerned a city audit that concluded Team San Jose had not exactly fulfilled the contract it had with the city of San Jose. The second, “The Way to (Team) San Jose is Bumpy” (obviously we have an affinity for a certain song), dealt with a Santa Clara County Civil Grand Jury report that found the city at fault for awarding Team San Jose the contract in the first place.

When Team San Jose, the brainchild of Dan Fenton, its current CEO and chairman, first surfaced, the city was having a tough time. The dot-com bust had all but wiped out most of the robust technology-related tradeshows that had made the Silicon Valley their home in earlier years. What shows survived were abandoning San Jose for San Francisco's newly built Moscone Center. The city was in a pickle.

In steps Fenton, CVB head at the time, with a unique proposal: All the various communities associated with drawing business and leisure visitors to the city – including labor – would come together and form a public-private organization that would be in charge of not only the CVB, but also the San Jose McEnery Convention Center. Fenton called it “one-stop shopping” that could handle all of an organizer's tradeshow and meeting needs. The city bought the idea, and agreed to subsidize the convention center with funds from a transient occupancy tax. Team San Jose promised to work in such a way that would call for a subsidy that would diminish over the years, as well as increase overall revenue.

Everyone, it seems, had good intentions when Team San Jose and the city signed on the dotted line in July 2004.

Fast forward to July 2007, and the relationship has had more than a few bumps in the road. Fenton, who continues to stand resolutely behind Team San Jose, has faced the criticism head on, and he's gotten plenty of it. First and foremost, even the best intentions sometimes go awry, and Fenton's original projections – for both revenue and the required city subsidy – were off the mark. What he should have known, what almost everyone who runs a convention center finds to be true, is that the building itself is rarely, if ever, a profit center. Many, many local governments subsidize their convention centers.

The center might not be the cash cow, but most of the time it is the most important reason tradeshows and meetings are drawn to a city, along with their accompanying substantial economic impact.

Fenton told me he has tried, mostly without success, to explain that Team San Jose has increased the number of events at the center, thus generating more revenue for the local economy, than its predecessors. So far, his explanation has fallen on deaf ears, except for mine.


Author Information
Rachel Wimberly is associate editor of Tradeshow Week. She can be reached at rachel.wimberly@reedbusiness.com

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