My Favorites
My Favorites
Add Page
Add Page
You have 0 items saved in "My Favorites"
Use "My Favorites" to collect pages and downloads that you would like to keep in one place. To store a page, click on the "Add to My Favorites" button at the top of the page. To store a download, click on the plus button next to the download link. My Favorites will be saved for seven days.
    << See All News Stories

    Republican Convention Cushions Cleveland's Coffers

    It wouldn't be a political convention without balloons. 
    So if the 2016 Republican presidential nominating convention keeps the tradition alive, about 100,000 red, white and blue balloons will rain down on delegates when the convention ends its run at Quicken Loans Arena. 
    Off the top of her head, Melissa Miller, owner of Pink Gorilla Balloons in Bedford Heights, figured that 100,000 balloons, plus the cost of inflating them with air (not with the more expensive helium) and rigging netting at the ceiling to hold them for the grand finale, will run the Republican National Committee about $60,000. 
    That's a small part of the economic impact on the region from money that will be spent between now and when the balloons fall. 
    The Republicans in town for the convention will not just spend their money at hotels and restaurants. The spending will radiate to car rentals and limousine services, parking lots, shoe stores, dry cleaners and on, down to balloons. 
    So, many businesses in Northeast Ohio may now be making the same wish Miller expressed over the phone last Wednesday, a day after the RNC announced it would bring its next convention to Cleveland: “I hope it's going to impact me.” 
    The political circus can't help but bring out-of-town money into the city, though it's likely no one will ever know for sure exactly how much, though economists and others have made their best guesses for past conventions. 
    A University of Tampa study of the impact the 2012 Republican convention had on the Florida city pegged the direct spending at $214.1 million. A similar study looking at the impact of the Democrats' 2012 convention in Charlotte, N.C., came up with a $91 million estimate. 
    For the 2008 conventions, a post-convention study found that the Republican convention that year gave the Minneapolis regional economy a $153.7 million bump while the Democratic convention that year boosted the Denver economy by $266.1 million.
    A shot in the arm
    Divergent estimates may reflect some wrinkles in time and location, and it's not possible to estimate which city's experience Cleveland will emulate. But the convention will give the nearly $200 billion regional economy at least a modest, one-time shot in the arm, said Cleveland Heights economist Jack Kleinhenz. 
    “This is money that is coming (into the region) that wouldn't otherwise come into this economy,” said Kleinhenz, who is president of the National Association for Business Economics. “It will provide jobs, though possibly only for a short period of time. But on the other hand, there will be other expenditures that will be made that may have a permanent effect.” 
    Kleinhenz said that if the city shines while it's in the media spotlight that can translate into more convention and tourism business. “The spillover effect is very important,” he said. “Having this kind of showcase is hard to duplicate, it's international,” he said. 
    Those numbers are for direct spending and don't include the spinoff and trickle-down dollars that inflate economic impact studies. Most economists discount studies that use a multiplier to expand the estimate of dollars brought into a regional economy by things like conventions and sporting events. 
    “You shouldn't have the multiplier in there at all because there are so many shenanigans that go on with that,” Kleinhenz said. “Just focus on how much direct spending will be generated by the delegates, the supplies and anybody else who comes to Cleveland from outside. Once you get into multipliers all sorts of nonsense creeps in.” 
    Another reason for not projecting the secondary economic impact is that it is often offset by spending for things like infrastructure or security improvements. 
    A report on the economic impact of the 2012 Democratic convention in Charlotte, N.C., said $8.2 million was spent before the convention on improvements to publicly owned Time Warner Cable Arena and privately owned Bank of America Stadium for modifications for television broadcasting, staging and lighting and upgrading electric and technology systems. 
    However, Kleinhenz said, some of those expenses can turn into a longer-term benefit. “It could be a good incentive to get some of these things done,” he said. 
    At a press conference following the Republican announcement, Cleveland's civic leaders said the decision will give a number of planned projects, including the remaking of Public Square and several slow-moving hotel projects, a June 2016 completion deadline.
    Tracking the numbers
    Economists also said convention host cities have to realize that some of the financial benefits the convention brings are diminished by what they call “negative substitution.” 
    “Regular business just completely disappears because everyone (who normally comes into the convention zone) just disappears,” said Victor Matheson, an economics professor at the College of Holy Cross in Boston who has studied the economic impact of political conventions. “In 2004, when New York City hosted the Republican convention, attendance at Broadway shows was down 20% that week, compared to comparable periods. You always have ghost-town stories.” 
    The easiest spending to track is hotel rooms. 
    University of Tampa economics professor Brian Kench reported that the 40,000 people who came to the Florida city for the 2012 Republican nominating convention spent $18 million for 75,972 hotel room nights at an average of $236.52 per room night. 
    Similarly, Tourism Economics Inc., a Wayne, Pa., consulting firm that prepared the economic impact study following the Charlotte convention, estimated that 35,000 Democrats and their followers spent $22.6 million there for hotel rooms during the week before, during and after the 2012 Democratic convention. 
    The Charlotte study estimated total visitor spending — including food and beverages, retail purchases, local transportation and other recreation spending, in addition to lodging — at $34.5 million. It also noted, however, that the price of a hotel room during convention week was double what it was in the weeks leading up to the convention. 
    A 2009 report by the Minnesota-St. Paul 2008 Host Committee said that the 45,000 people drawn to the Twin Cities by the 2008 Republican convention spent an average of $1,600 over six days and created jobs paying $100 million in wages. 
    The host committee and other organizations held more than 300 hospitality events at hotels and other venues, including 10,000 people who attended a media party along the Mississippi River and 9,000 people at a delegate party at the Minneapolis Convention Center. 
    The Charlotte study reported that 1,196 events were attended by convention goers, including trade group meetings, concerts, and even golf outings. 
    To beef up security in Charlotte, the city brought in law enforcement officers from neighboring counties and from as far away as Atlanta and Chicago. A federal grant of $50 million covered most of that cost, including $500,000 spent on hotel rooms for out-of-town law enforcement personnel. 
    The Charlotte study even calculated that the convention generated $1.4 million in insurance and banking fees. 
    The Tampa study also gauged spending in Tampa Bay on telecommunications infrastructure improvements and upgrades at $125.3 million. 
    Unquantifiable will be the value on future convention and tourism business from what is hoped to be positive media coverage of Cleveland. 
    But Joe Roman, the ever-optimistic president of the Greater Cleveland Partnership, emphasized that point several times last week. 
    “It cost $4 million for a 30-second spot on the Super Bowl,” he said. 
    “We're getting four days.”