Ever since the Modesto Convention Center opened in the 1980s, it’s had an operating loss. The deficit results from failure to find renters most days of the year.
The Modesto Coin Club has held its annual shows at the center in June of every year for over 15 years. Despite the club’s loyalty, convention center management discouraged the club’s business and finally succeeded in getting rid of the non-profit. The club has taken its business elsewhere.
Leaders of the Modesto Coin Club have complained for years that the convention center created barriers to booking a firm date for an event because a larger convention sponsor might want to book more rooms than the club did. Management’s fear was that the room the club rented annually would keep a large out-of-town sponsor from having enough space to book the entire center.
“A bird in the hand is worth two in the bush” is not a policy principle at the Modesto Convention Center.
In addition, because the club is a non-profit, the room rental rate was provided at a discount compared to for-profit convention sponsors. Given the rate structure, non-profits are considered non-preferred customers by the center management.
In the current year, the Convention Center doubled the room rate charged the non-profit coin club, forcing people who run the club to relocate this year’s convention to a hotel outside Modesto city limits.
Although the Convention Center was originally built to benefit the citizens of Modesto, or so the proponents of the project promised, the center management encouraged the club’s show to move outside the community using unfriendly policies!
Every year, Modesto’s taxpayers subsidize the convention center with a management that prevents citizens from using it. Thus, the center is presently being run almost solely for the benefit of out-of-town users; most local customers can’t afford the rent.
Can the Convention Center Ever Turn a Profit?
As long as Convention Center room rates exceed the current market value of the rooms, the facility will never book enough events to break even. As long as the management drives away business, rooms will remain empty more often than occupied. Meanwhile, taxpayers continue pouring money into a perpetual loser.
Many clubs, including the Modesto Coin Club, would like to use the Convention Center’s smaller rooms for monthly meetings. But the management prefers to keep a room empty rather than offer an affordable room that serves the community. As a result, various local clubs hold meetings in privately owned donated meeting spaces.
Although the convention center was built to serve the community, it is not being run in a manner that serves Modesto’s citizens. Will the Modesto City Council ever take action to fix the problem? The deficits will never end if we keep listening to excuses for failure. No one on the city council has taken a good look at the Convention Center’s operating policies for years. Mediocre results come from mediocre policies that have buried the original purpose for building the center.
Citizens should demand better, but no one seems to care.
Ultimate Solution?
As Modesto’s budget gets perennially tighter, subsidies to the convention center become less and less affordable. In the fiscal year 2012-13, the center lost almost half a million dollars.
The choices are simple: We can sell the convention center. If a buyer can’t be found, either let the center fall into foreclosure or demand that the bank restructure the debt to reduce the deficit and make breakeven more feasible.
The other option is to improve management such that the facility eventually breaks even. But someone has to make an effort to do this. Almost four decades of losses are too much for our strapped city to bear.
