Convention Center

Watchdog Indiana Home Page Watchdog Lebanon Home Page

A "Convention" Center, to be located near the livestock barns on the south edge of the Boone County 4-H Fairgrounds along County Road 100 South, has been proposed by the Boone County Commissioners . The Center would be owned by the County and leased to Boone County 4-H Clubs, Inc., which would operate and maintain the Center. The County already leases the Fairgrounds to the 4-H Clubs; about 50 years are left on the 99-year lease.

The 4-H Clubs would likely book its own arena events, such as the annual 4-H Fair. The Boone County Tourism Council wants to establish a convention and visitors bureau, and hire an executive director, to promote and lease the Center for general convention purpose such as car shows, auctions, agri-business affairs, arts and crafts festivals, dog shows, gun shows, banquets, and family gatherings. 

The Tourism Council, which gets its funds from the innkeepers tax, approved $250,000 "seed money" to get the Center project underway. Kenneth A. Sebree & Associates, Inc., was hired on April 15, 2002, by the Commissioners for $100,000 of this money to design the Center. The Center would have 45,000 square feet (up to 10,000 square feet would be a conference area). There would also be offices and a commercial kitchen facility. Other amenities include asphalt paving, auxiliary air conditioning, and a climate control system. Construction of the Center would cost AT LEAST $3 million. 

The Center should not be built at this time. There are a number of reasons why the Boone County Council should postpone this nice-to-have project in favor of needed property tax relief.

One reason for postponement is the poor economic performance of a similar nearby facility. The Hamilton County Exhibition Center was built at a cost of $2.3 million in 1997 on the Hamilton County 4-H grounds. Increased rental rates and a stronger effort to increase rental uses are being considered to help offset Hamilton County Fairgrounds losses – mostly from maintenance costs – totaling as much as $1 million since 1998. It is not realistic to expect a Boone County convention center to be much more successful than the similar Hamilton County operation.

Another reason to postpone the Center is its poor return on investment. Let’s assume the following optimistic scenario: (1) innkeepers, sales, and income taxes would increase $50,000 a year because of convention center activities; and (2) the net annual revenue would be $39,600 ($75,600 revenue less $36,000 operating expenses). Dividing the $3 million convention center cost by the $89,600 annual direct revenue increase yields a payback period of 33 years. To justify this crummy return for our hard-earned tax dollars, the Center’s proponents try to claim the Center will generate a significant economic input.

Supposedly, Center users would spend a great deal of money in our commercial establishments, which would be "multiplied" by related additional spending. There would indeed be some money spent in local restaurants and shops. But most of the Center visitors would travel 40 minutes down I-65 and spend most of their money at the cultural venues in Indianapolis. Whatever few jobs would be created, would be low-pay and low-benefit. The true economic impact from the Center would not significantly reduce the payback period.

The most important reason for postponement is that the money to build the Center is needed now for a much more important purpose. The Boone County Council is allowed by Indiana Code 6-3.5-6-13 (b) to increase the homestead credit on our property tax bills by an amount up to 8% (i.e. from 20% to 28% in 2003). The homestead credit increase would be paid for by reduced COIT distributions to the County’s local governments; school funding would not be impacted. Because of the court-ordered property reassessments, the net property taxes paid by Boone County homeowners in older, well-kept neighborhoods could significantly increase next year. Some of these homeowners are on fixed incomes and cannot afford the higher property taxes they will receive.

Instead of building a nice-to-have convention center, the County Council should act now to increase the homestead credit rate as much as possible to provide some protection for our most vulnerable citizens. The Center should be postponed to a future year where the accumulated innkeepers tax would provide a greater down payment on reasonable 4-H building improvements.

The Center is, quite simply, a "nice-to-have" speculative venture. Its importance pales in comparison to the NEED for a homestead credit rate increase.

Watchdog Indiana Home Page Watchdog Lebanon Home Page

This page was last updated on 03/19/10.