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March 10, 2014

Proposed Expansion of Anaheim Convention Center Stirs Controversy

In California, Anaheim's City Council is scheduled to vote Tuesday on a proposed $180 million expansion of the Anaheim Convention Center – a move that, the Orange County Register reports, is aimed to keep growing events such as NAMM in town. But not all parties are in favor of the idea...

The project, which would be the seventh expansion since the Convention Center opened in 1967, would create 200,000 square feet of “flexible space,” according to Jay Burress, the president and CEO of the Anaheim/Orange County Visitor & Convention Bureau. The expansion would enlarge the city-owned center's usable space to 1.8 million square feet, which could be used for exhibits, a ballroom and/or a breakout area for meetings.

But the proposed expansion is not winning lauds from everybody. According to the Voice of Orange County, industry experts are saying that that the plan will put the city’s general fund at "tremendous risk because flawed revenue assumptions are all but certain to fall short." A city staff report made public late Friday said that the proposal calls for adding over $200 million to the general fund debt – more than double the current city facilities debt. Tampa-based Crossroads Consulting Services reportedly estimated that the expansion would bring in between 292,400 and 350,200 additional guest stays annually. 

But with other West Coast cities like San Francisco, Los Angeles and San Diego also expanding their own convention centers, Anaheim may still face the same competition for business. While the ACC is already reportedly one of the largest convention centers on the West Coast, it may not be enough to attract the large-scale events that bring in the big bucks. A 2012 CEIR study on convention centers noted the “unrealistic concessions" CVBs and tourism boards are making to book business. “The current excess supply is more likely to come into balance through a reduction in inventory than an increase in demand,” the report noted.
But, as Burress told the Register, the improving economy is a good motivator for expansion. “The demand is almost back to pre-2008 levels,” he told the paper.

According to the Anaheim/Orange County Visitor & Convention Bureau, the county saw a rise in visitors last year, with 44.4 million visitors (an increase of 1.4 percent) reflecting an overall increase of about 600,000 visitors to the region.

Visitor spending in Orange County during 2013 jumped nearly 10.1 percent to $9.6 billion, compared to $8.7 billion in 2012, representing a $900 million year-over-year increase. However, much of this growth came from leisure travel rather than business. 

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