Double-barreled convention centers: city takes aim at convention economic stimulus.

• Author: Kalytiak, Tracy
• Position: TOURISM

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Wall Street saw its worst day in seven years just before the much-anticipated $111 million Dena'ina Civic and Convention Center opened in Anchorage, and the stock market endured even more pummeling in the weeks afterward.

But Municipality of Anchorage officials, convention organizers and a Texas professor who studies the economic impact of large U.S. convention centers agree that the sour economy likely will not hinder Anchorage in paying back voter-approved bonds sold to finance the glistening new structure facing Seventh Avenue.

The reason: A portion of the municipality's 12 percent hotel-room tax proceeds is designated to repay the revenue bonds voters approved in 2005, bonds that the nonprofit CIVIC Ventures Inc. issued in 2006 to cover costs of building the 215,000-square-foot center. The municipality's projections counted on a 1 percent annual increase in hotel-room tax proceeds, but the municipality has seen a 6 percent annual increase in those proceeds so far.

"Those revenues would have to fall by more than half to not be able to meet the debt service," said Heyward Sanders, an urban studies professor at the University of Texas-San Antonio, who wrote a 2005 report on convention centers for the Brookings Institution.

"We're in very uncharted financial territory," Sanders continued. "As we face economic recession here and globally, it's clear there will be cutbacks in travel. But will the cuts be sufficiently great to wipe out half of Anchorage's hotel tax revenue and do so in a way that the reserves are wiped out as well? It's possible, but at this juncture it doesn't seem very likely to me."

Anchorage Mayor Mark Begich said the decision about which room-tax projections to use was made to account for such things as economic downturns, world affairs, natural disasters and terrorism.

"A good reference point to this is Anchorage's recovery after 9/11," Begich wrote in an e-mail. "While Anchorage, like many cities, lost some business, our recovery by comparison was much quicker than others. In fact, we only missed goal that year, 2001, by around $59,000--an incredible testimony to the draw of this state as a safe, yet exotic destination."

GAINS FOR THE LOCAL ECONOMY

While Sanders isn't concerned about Anchorage's ability to meet its debt payments, he said he views with a skeptical eye projections related to the convention center's economic impact for the Anchorage area.

The professor cited a 2005 study done by...