Building a Convention Center

Congratulations! You have just been appointed to your city council. You discover that a hot topic soon to be brought before the council is the construction of a convention center. Your initial research shows that several midsized cities are considering the construction of a convention center as a way of increasing economic activity including job creation. The challenge that these cities face is how to finance the convention center-projected costs are $100 million. Voters may resist a ballot to increase local taxes (either property or sales); however, there is the transient occupancy tax (TOT)-that consists of taxes paid by people at local hotels. However, that tax is already earmarked for various local charities-and as we know all good politicians want to get reelected. Therefor, voting against several worthy causes would not be popular.

Discussion Questions:

1. How can the center be financed and built? The city could float a bond on the market, or could raise the TOT tax, but that might dissuade some groups from coming to your city because other cities have lower TOT’s.

2. What would you do in this situation?

3. What information would you need I order to make the best decision if faced with deciding to support or oppose the convention center?

Answer the above question and include references.