Tuesday, August 12, 2014

Chicago Spending Millions To Provide Subsidies To Lure And Retain Conventions

The State of Illinois may be broke, but it still has $20 million a year to spare which it provides to the two convention authorities in the Chicago area to help provide tens of millions in subsidies to help lure and retain conventions hosted at the McCormick Place and Rosemont convention centers according to the Chicago Sun-Times. "A pot of taxpayer money they guard so tightly they’ve tried to keep secret how it’s spent, the Chicago Sun-Times has found." The Sun-Times found that as much as $26.5 million of taxpayer dollars have been paid out over the past three years to lure conventions to Chicago. Among the top five recipients were:
  • International Home & Housewares Show (60,000 attendees)-$1.993 million
  • Radiological Society of North America (53,169 attendees)-$1.596 million
  • International Manufacturing Technology (100,000 attendees)-$1.363 million
  • Radiological Society of North America (52,980 attendees)-$1.183 million
  • National Restaurant Association (61,503 attendees)-$1.1 million
Subsidies are offered to even smaller-sized conventions. The Pet Industry Christmas Trade Show that drew less than 7,500 persons received two, back-to-back subsidies of $236,000 each. Even religious organizations are receiving the subsidies. The Muslim American Society was paid a $384,000 subsidy to host its convention in Rosemont.

The Metropolitan Pier & Exposition Authority and Rosemont's convention center both denied numerous requests the Sun-Times made to provide information on the subsidies doled out to individual organizations. "They said revealing that information might anger the organizers of conventions that didn’t get any money and might help other cities lure away conventions that now come here," the Sun-Times reported. The Sun-Times got the information from the State Comptroller's Office, which handles the incentive payments paid out using state funds. The money isn't paid directly to the show's organizers; rather, it is used to reduce the rent the organization's pay for convention space use. Because the Sun-Times was unable to see either McPier's or Rosemont's records, the subsidies could be even larger than revealed.

I think it's time the Indianapolis media got off their collective butts and started digging into the records of Visit Indy to determine how much taxpayer dollars being laundered through the nonprofit organization that only benefits downtown convention business is being used to subsidize conventions hosted at the Indiana Convention Center overseen by the CIB. The CIB subsidizes the operations of Visit Indy to the tune of millions of dollars annually to hide how public dollars are being spent. It's time that Visit Indy was forced to open up its books and start revealing how it spends its money, including mega commissions it is paying to overpaid employees of Visit Indy, whose salaries dwarf that of average workers in Indianapolis and, in particular, the very low paid jobs the downtown hotels and restaurants create that rarely provide any benefits. I've always heard rumors that people who work for organizations that host conventions and trade shows are open to taking bribes from local conventions folks to choose their city unbeknownst to their employers. Visit Indy entertains these decision-makers very lavishly while they're in town discussing convention business. The temptation is there.


Flogger said...

Alas, the Local Media will not investigate the Crony-Capitalism in Indianapolis.

I looked over the CIB Financial Statement ending 12/31/2012. It states the following:

"In December 2012, the CIB and Visit Indy agreed to extend the term of the agreement until December 31, 2014 and thereby
continue to provide base compensation in the
amount of $9,030,000 in 2013 and 2014.

In addition, the CIB contributed $3,000,000 to Visit Indy
in December 2012, portions of which may be credited against the base compensation or refunded to
the CIB in 2013 or 2014, respectively, if certain conditions are not met by Visit Indy.

As mentioned previously in these notes, the CIB has also entered into an Interlocal Agreement with
the Department of Metropolitan Development of the City of Indianapolis and Marion County. This agreement provides $8,000,000 of annual assistance that will be used to fund the CIB’s payments to Visit Indy.

In 2010, an Interlocal Cooperation Agreement was established pursuant to which the Metropolitan Development Commission of Marion County, Indiana, acting in its capacity as the Redevelopment
Commission of the City of Indianapolis, Indiana (the “Redevelopment Commission”), provides $8,000,000 of funding annually to the CIB to further their mutual purposes, including to better assure the CIB’s funding sources for Visit Indy, Inc.

So I guess if I added this up correctly the Base Compensation plus The Metropolitan Development "Contribution" is $17M a year to Visit Indy. Maybe $20M if you include the "Additional CIB Contribution."

There is no mention of the Strings attached to these pay-offs, i.e., Performance expectations, etc. Is there a contract the Public can view??

You might think in the tradition of Capitalism Visit Indy should be self-sustaining via contributions from Private Industry, but Capitalism does not work for the CIB as whole. Crony-Capitalism does however.

Gary R. Welsh said...

The NGOs funded with our taxpayer dollars are nothing more than money laundering schemes to hide from the public what they can't get away doing with our taxpayer dollars through expenditures of governmental units. Imagine if you owned a business like one of the downtown hotels who are allowed to use our public taxpayer dollars to do all of their advertising for them for free, along with soliciting for them the greatest share of their annual revenues. Hell, they don't even have to use their own money to wine and dine potential clients. Visit Indy uses our taxpayer dollars and does that for them. It's a criminal racket that needs to be shut down. It's not our responsibility to totally fund the marketing budgets of the downtown hotel and restaurant businesses.

Anonymous said...

C'mon, the Convention Industry is the foundation of the economic engine that is downtown Indy!