HispanicBusiness

The Democratic National Convention will be Charlotte, N.C.'s most prestigious event, bringing tens of thousands of visitors and worldwide exposure.

It's the crowning achievement of the city's two-decade quest to become a world-class convention destination.

What's less known are the tens of millions of dollars in taxpayer money spent to compete in the convention business and the wildly inflated projections of economic impact used to justify the Convention Center's construction and expansions.

In fact, the city of Charlotte and the Charlotte Regional Visitors Authority have not scrutinized how the Convention Center has performed. Elected officials who oversee it do not understand it.

Yet they have continued to pour money into the convention business, even in the face of a national glut of meeting space and Charlotte's inability to fill its building.

The Charlotte Convention Center has cost taxpayers as much as $30 million annually for construction debt, operating losses and incentives worth of hundreds of thousands of dollars to win business. The promised payback from the investment hasn't materialized.

Meanwhile, Charlotte residents pick up much of the tab: Most Convention Center funding comes from a countywide 1 percent tax on restaurant and bar bills -- a majority of which is paid by Mecklenburg County residents who dine out.

Consider:

--Since its 1995 opening, the center has fallen dramatically short of projections.

When the Convention Center was being planned, it was forecast to produce 528,800 hotel-room nights a year to fulfill its mission of putting "heads in beds." That would have been about 20 percent of all rooms sold in the county.

It has never come close to that.

In fiscal year 2011, it produced 142,000 room nights -- 2.7 percent of all rooms sold in Mecklenburg, according to an Observer analysis of hospitality industry data.

It would take hosting five Democratic conventions a year, every year, to meet the original projections.

--The Charlotte Convention Center is usually empty, with its exhibition halls used 35 percent of the time last year. The average for similar-sized convention centers is 57 percent.

Charlotte struggles to fill its center in part because there is so much competition with other cities, which have made large investments in convention centers even as the meetings industry has been in a slump.

The result is too much meeting space and too little demand.

--Charlotte has joined a common practice among second-tier tourism cities in offering deep discounts to groups to win their business.

To land the American Bus Association's annual trade show in 2009, for instance, the CRVA paid the group's rent at the Convention Center, worth $136,000; it paid the group more than $200,000 to help sponsor ABA conventions in 2007 and 2008; it spent $100,000 on a party for the group at the Charlotte Motor Speedway; and it offered $125,000 on other expenses, including $8,000 in limo rides for convention VIPs.

The American Legion, coming in 2014, is penciled in for $440,000 of discounts, including $360,000 in free rent.

But even opening the checkbook doesn't mean Charlotte gets the best conventions.

A majority of the city's high-profile events -- which have required large subsidies -- are part of an industry category called SMERF, which stands for social, military, educational, religious and fraternal.