The Buffalo Convention Center will need a 24 percent increase in its county subsidy next year to offset anticipated declines in rental revenue and food sales, officials said Friday.
Managers of the county-owned facility have submitted a budget request for $1.46 million in county funding, up $285,000 from the current year. They said the projected shortfall is a reflection of the facility's increasing difficulties in landing large conventions, coupled with intensified competition within the Buffalo area for hosting smaller events.
Dan D. Kohane, chairman of the convention center's board of directors, said managers are taking internal steps to try to reduce expenditures, including the planned elimination of 1.5 administration positions and reductions in the operational equipment budget. Kohane said the facility has 35 full-time employees and uses part-time workers on an as-needed basis.
"Beyond these measures, there are few alternatives available to the convention center other than a complete shutdown of the building during certain parts of the year and/or limiting the sales force which is responsible for generating sales," Kohane wrote in a letter to County Executive Joel A. Giambra.
The request for a substantial increase in county aid comes at a time when county officials appear receptive to earmarking additional dollars to address capital needs, including roof repairs and upgrades to the building's electrical system.
County Legislator John W. Greenan, R-West Seneca, who sits on the convention center's board of directors, said he's optimistic that $500,000 will be appropriated in the coming year for capital improvements.
"We've had numerous discussions and the county is absolutely committed to making sure that this building is in good working order," said Greenan.
Deputy County Executive Carl A. Calabrese agreed with Greenan, noting that a special committee that helps to chart capital spending priorities has recommended funding for the convention center in the coming year. But when it comes to the request for a 24 percent increase in operating funds, Calabrese said the administration is making no promises.
"That's a large increase and it will have to be weighed against all other competing interests," said Calabrese. "Of course, our number one interest is to cut county taxes."
Kohane warned last month that the facility could be facing a $300,000 budget gap in the coming year. Officials have been eyeing new revenue-generating strategies, including the possibility of offering some groups reduced rental rates, going after events sponsored by not-for-profit organizations, and even aggressively pursuing the prom market. Kohane said the facility is also looking at joint-sponsorship of events in an effort to increase food and beverage sales, a major source of revenue.
Officials said the convention center continues to lose business to other regions that have either built new meeting facilities or upgraded existing ones. They said the recent face lift at the Adam's Mark hotel has also cut into the convention center's business. The waterfront hotel successfully positioned itself as a stand-alone mini-convention facility for smaller groups. Over the past year, 11 groups that were considering the convention center ultimately picked the Adam's Mark, according to Richard Geiger, president of the Greater Buffalo Convention & Visitors Bureau.
Kohane defended the board's request for a 24 percent increase in its county subsidy, claiming the convention center generates far more money in direct and indirect sales than it receives from local government.
"Over the last two years, the county's investment in the convention center has returned $66 million in economic impact," said Kohane, referring to the multiplier-effect used in the convention industry to measure how money spent by visitors ripples through the local economy. "That's a 30-1 return."