The city government of Dallas, Texas is seeking bids from private management companies interested in taking over day-to-day operations of the Kay Bailey Hutchison Convention Center, the 12th-largest such facility in the United States.
The facility, currently owned and operated by the city’s Department of Convention and Event Services, is funded by revenue from taxes on hotel occupancy and alcohol purchases.
City Manager T. C. Broadnax will consider bids and proposals on June 28 and recommend a chosen firm by September.
Government Mission Creep
E. S. Savas, a professor at Baruch College, former assistant secretary of the U.S. Department of Housing and Urban Development, and a policy advisor for The Heartland Institute, which publishes Budget & Tax News, says running a convention center is not a core competency of government.
“Running a convention center is not, basically, a government undertaking,” Savas said. “It’s necessary in the sense of raising money, but running a commercial convention center is really not the kind of thing governments are good at. It’s a commercial activity, and you’re better off if you can find a private organization with extensive experience in this field—and successful experience in this field—to run it for you, provided you have a good contract and you measure the performance of the contract.”
Wants More Reform
Carine Martinez-Gouhier, a managing editor with the Texas Public Policy Foundation, says the proposal is a step in the right direction for the city’s taxpayers.
“Real privatization would be government selling the convention center to the private sector and getting out of a business it shouldn’t be in in the first place,” Martinez-Gouhier said. “Right now, the outstanding debt for the center is still enormous, and most of the revenues for the center come from taxpayer money. Why should taxpayers fund a business—the convention center here—that cannot stand on its own?”
Savas says lawmakers should always be considering privatization efforts, even small steps like those being taken in Dallas.
“All cities should scrutinize the different functions they’re doing, and if their citizens complain about particular kinds of departments, they ought to examine the possibility of using private firms,” Savas said. “The public is slowly recognizing all this, and local governments would be wise to go ahead of the trend and spot where they can provide better and more cost-effective services to their taxpayers.”
Counting the Costs
Martinez-Gouhier says city lawmakers should work to wean the convention center off taxpayer funds.
“Eventually, the goal should be to reduce how much it has to rely on taxpayer money and see if private management can really raise more revenue from events, if they’re able to make a profit just from the activities of the convention center,” Martinez-Gouhier said. “Otherwise, they should consider the opportunity cost of keeping the convention center. We always talk about the economic impact that those convention centers have, but we don’t talk about the opportunity cost.”
