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The Fredericksburg Expo and Conference Center generates tax revenue for the city, but is losing money each year.
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Fredericksburg leaders are considering subsidizing the Fredericksburg Expo and Convention Center by $300,000 a year for three years.
City Manager Phillip Rodenberg and Economic Development Director Kevin Gullette presented the idea to City Council members last night. Council members gave the green light for the proposal to be put on their November agenda.
Expo Center owner Tom Ballantine said his facility is generating nearly $700,000 a year in tax revenue for the city, but he's losing money because he faces a disadvantage when he competes with convention centers in other cities.
That disadvantage has two causes:
Development at Central Park hasn't happened fast enough to provide the hotel rooms and unique attractions that the center needs around it to lure event planners.
Most of Fredericksburg's competitors are either publicly built or heavily subsidized, and those governments are willing to give away the cost of renting their facilities to lure convention attendees with money to spend. Since Ballantine doesn't benefit from the tax dollars that outside spending generates, he has no incentive or reason to give away his facilities.
The subsidy will come with a performance agreement. It will require the center to show an annual increase in business, give the city some free use of the center and designate the center as Fredericksburg's backup emergency shelter.
If the center goes out of business during the three-year period, the city will have a lien on the property to recoup its money.
Money for the grant would come from the city's general fund reserve, and the Economic Development Authority might contribute some of it.
Rodenberg said paying the subsidy is better than losing the center and its ability to draw tourists to town.
"It's our estimation that we really can't live without them," he said.
Most privately owned event halls are strictly expo centers that host boat shows, flea markets, home shows and similar events.
They don't have the costly banquet halls, kitchens and meeting facilities that convention centers have to keep up. They also don't draw overnight guests from very far away.
Most convention centers--like Fredericksburg's top competition in Hampton, Virginia Beach and Richmond--are publicly built and subsidized.
Ballantine was--and still is--confident that he can make a private convention center work if it is a part of the Celebrate Virginia tourism campus the Silver Cos. has promoted.
That was to include the United States National Slavery Museum, four hotels, an entertainment complex and a "destination retail complex."
So far, the only items that have come to fruition are two hotels. A third is under construction.
Plans to build a high-end Wegman's grocery by 2009 were recently announced.
The Slavery Museum, which Ballantine said helped put his company over the top in deciding whether to invest in a convention center in Fredericksburg, keeps pushing back its projected opening date.
Still, Ballantine says he's optimistic about what the development will be in the future.
No representatives from the Silver Cos. were at yesterday's meeting, and asked what he knew about Celebrate Virginia's progress, Ballantine said, "At this point, I am probably more confident with what's coming than I have been at any point thus far."
He said that additional hotel openings in the development will help, and that the proposed Rappahannock Ridge music-themed complex is "critical" to helping him draw events.
Ballantine asked the council members to look at the impact he has on city economics beyond just what his conventioneers are spending. He said the hotels that are being built on Fall Hill Avenue next to him have no reason to be there if the Expo Center goes away.
"Every day the city is reaping a substantial benefit from us being here," he said. "We just need help to make sure we stay here."
Emily Battle: 540/374-5413
