City Government and Arts & Entertainment, etc. and Conventions and Lucas Oil Stadium and Indiana Convention Center and Politics and Tourism & Hospitality and Government & Economic Development

Political conventions fell short on return on investment

May 31, 2014
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It isn’t often that a city walks away from invitations to bid on two events with a combined economic impact of up to $450 million. But that’s exactly what Indianapolis did this year when it spurned offers to bid on the 2016 national conventions for Republicans and Democrats.

Daunting scheduling and fundraising challenges scuttled the bids, but the city’s latest Super Bowl setback might make the 2020 political conventions alluring.

leonard hoops Hoops

“We’d definitely take a look at it,” said Visit Indy CEO Leonard Hoops. “We’re not ruling anything out for 2020.”

Indianapolis’ candidacy as a host for the 2016 Democratic National Convention became public in April when a handful of news outlets including CNN published a list of finalists.

City officials were quick to say they’d pulled their hat out of the ring. That move was stunning for a city as eager to fill its growing downtown convention center and hotel inventory as Indianapolis is, and had some wondering if the choice was partly politically motivated.

political-factbox.gifIndianapolis Democratic Party Chairman Joel Miller lashed out at city leaders, claiming the decision was “blatantly political.”

“The excuse that we don’t have enough hotel space and private funding to attract a political convention is simply ludicrous,” said Miller, noting Indianapolis has successfully hosted many other high-profile events.

Hoops countered that the decision not to pursue either the 2016 DNC or RNC was “a pure analysis of return on investment.”

“This is not partisan,” said Marc Lotter, spokesman for Mayor Greg Ballard, a Republican. “This is strictly a business decision. And one we analyzed in depth.”

It’s worth noting, Hoops added, that Visit Indy officials and Ballard decided to turn down an invitation to bid on the 2016 RNC in January, more than two months before they were extended—and subsequently turned down an opportunity to be among a handful of cities to bid on the DNC.

“The mayor [alone] didn’t turn down the DNC,” Hoops said. “I consulted with my board and ultimately that was our recommendation. The negatives simply outweighed the positives when we analyzed these [political] conventions.”

Though the DNC and RNC are set to occur in the summer, exact dates have not been set, requiring a host to hold blocks of dates. The RNC, Republicans said, is most likely to happen in June, while the DNC will likely be in July or August.

Undeniable allure

City leaders weren’t always unwelcoming to the prospect of hosting political conventions. In 1998, then-Indiana Sports Corp. Chairman Jack Swarbrick was tabbed by then-Mayor Stephen Goldsmith, a Republican, to make an all-out bid for the 2000 RNC.

Indianapolis outran a field of a dozen competing host cities, and sources with knowledge of the vote said Republican committee members favored bringing the event here. But in the end, Republican leaders agreed on Philadelphia primarily because of its proximity to more deep-pocketed potential donors.

National political conventions have an undeniable allure for a host city.

The RNC and DNC each draw 50,000 visitors, including 10,000 VIPs such as members of Congress and assorted dignitaries.

The events also attract 15,000 credentialed media members. That’s three times the number that cover a typical Super Bowl.

National TV ratings for the most-watched parts of either convention range from 22 to 30, which means 24 million to 33 million U.S. homes tune in, according to New York-based Nielsen Media Research. The event also draws a sizable international audience.

The economic impact for the RNC or DNC, most economists agree, is on par or slightly higher than for a Super Bowl. Studies commissioned by recent host cities have pegged visitor spending connected to those conventions between $165 million and $225 million.

The RNC in 2000 was a jewel worth pursuing because “it brought an enormous amount of exposure for the city,” Swarbrick recalled, but he thinks that is “significantly diminished” now.

Swarbrick Swarbrick

“When we were bidding [in 1998], it was a time when candidates were decided at the national convention and platforms were determined, so there would have been a week of intense media scrutiny with our city as a backdrop,” said Swarbrick, now the University of Notre Dame athletic director.

With the presidential candidacy often determined long before the national convention and with platforms no longer rigorously debated at the event, Swarbrick thinks it might have less allure.

Two other main factors motivated the city to pursue the 2000 RNC: a huge economic impact and bringing in hundreds of national movers and shakers who could potentially funnel business to the city, Swarbrick said.

Significant downsides

But city leaders weighed significant downsides in 1998 before pursuing the bid, Swarbrick said, adding that some of those downsides have been exacerbated over the last 16 years.

“The decision of whether or not to pursue it back in 1998 was a somewhat close call,” Swarbrick said. “I could understand why they wouldn’t want to pursue it now.”

The primary factor in turning down the Republicans’ and Democrats’ offers to bid this time, Hoops said, was the 12-week period both groups require to host their convention.

The Indiana Convention Center and Lucas Oil Stadium would have been virtually unusable for the eight weeks it takes to set up the convention, the week the convention is held, and three weeks of tear-down, Hoops said.

The Super Bowl, by comparison—including setup, the week-long event and tear-down—occupied the convention center and stadium for 19 days.

Bankers Life Fieldhouse was considered for the DNC, but with the WNBA Indiana Fever’s summer schedule and other events at the 18,165-seat venue, scheduling the event there just two years out would have been extremely difficult. The massive amount of auxiliary space a national political convention needs—including 250,000 square feet for a media center—would have made that location nearly impossible.

Hotel concerns

Dora, Jim Jr. Dora

“The closure of the Indiana Convention Center for the length of period needed for a political convention would have an enormous negative impact on area hotels,” said Jim Dora Jr., CEO of General Hotels Corp., which operates 11 area hotels, including downtown and airport properties. “That is substantially too long to have the Indiana Convention Center standing empty, especially during … the prime time of year for this city to draw conventions and meetings.”

During Super Bowl time in February, the convention center and LOS “are significantly less busy” than in the summer, Hoops added.

Up to 18 conventions and events—including the massive GenCon gaming show, which has a $49.5 million economic impact, and Indiana Black Expo—would have been hurt during the time frame both conventions will take place in 2016, Hoops said.

In 2000, Indianapolis “simply didn’t have the number of conventions and other events crowding the calendar,” Swarbrick said. “Which of course is a good thing for the city. It shows how much [Indianapolis] has grown.”

Trying to reschedule existing events wasn’t terribly appealing to city officials, and relocating them was even less so.

“There’s a long line of cities that would love to get their hands on our convention business,” Hoops said. “You don’t want to give these conventions that come here year after year a reason to go try out another community.”

The hotel requirements for a national political convention—15,000 to 20,000 within 30 minutes of the city center—are more difficult for the city to meet than the Super Bowl bid requirements, said Hoops, but he thinks something might have been worked out if the city decided to pursue the bid.

Funding challenges

Fundraising to host either the DNC or RNC might have been the greatest challenge.

The host city is required to raise $55 million to $60 million, about twice as much as is needed to host a Super Bowl.

Tens of millions more would have been needed for security. While a federal grant often covers that, the host city must provide 3,000 to 4,000 police officers for every day the convention is held. About 10,000 to 15,000 protesters descend on host cities for national political conventions, which causes further security concerns.

“It can be quite a bit more challenging to raise money for something like a political convention as opposed to something more unifying like a Super Bowl,” Hoops said. “No matter which of these events you host, you have to remember a good chunk of your constituency is not going to be happy about hosting it. The state RNC or DNC would have to get behind this in a big way.”•

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