Officials: Utah Valley Convention Center has put as much money back into economy as amount of original bond

The Utah Valley Convention Center has now been open and operational for a little longer than five years, and experts say it has brought significant economic impact to Utah County.

The event center, for which the county originally bonded $40 million to pay for its construction, hosts upwards of 110,000 attendees annually for anything from banquets to trade shows to conventions.

Though the county is currently paying approximately $2.2 million per year on the bond payments — and will continue to do so through 2039 — economic impact estimates show the center is contributing more than $12 million to the local economy annually.

Economic impact

According to numbers provided by Danny Wheeler, general manager of the Utah Valley Convention Center, the economic impact for 2016 totaled $12.3 million. The total economic impact of the convention center since it first opened is $52.1 million — more than the amount of the original bond to pay for it.

Those numbers are calculated using an economic impact calculator that estimates how many day visitors, versus overnight visitors, will be attending the convention center’s events. For overnight visitors, an impact of $170 per person per day is calculated based on how much each is expected to spend on hotels, restaurants, entertainment and shopping.

For day visitors, that number is estimated much lower, at $63 per person per day based on the amount of money that might be spent on food, entertainment and retail.

“This building was built to raise the boats of all the businesses around,” said Joel Racker, the president and CEO of the Utah Valley Convention and Visitors Bureau. “It’s not just to cover the bond payment, it’s to bring in groups that will eat in restaurants on Center Street or go shopping at the mall.”

The estimates are conservative, Wheeler said, because for overnight visitors, they only count people based on blocks of hotel rooms that are contracted for an event.

So if 500 people are coming to an event, they may sign a block for 250 rooms, Wheeler said. The rest may stay with friends or family, or at a different hotel that was not part of that room block.

“Obviously, we know there’s more impact there than we’re even calculating,” Wheeler said.

The Utah Valley Convention and Visitors Bureau is responsible for attracting people to visit Utah County, regardless of whether or not they will be using the convention center. However, Racker said about 61 percent of the economic impact the bureau brought in during 2016 was tied to the convention center.

“Of the $10 million economic impact from last year, $6 million was as a result of the convention center,” Racker said.

Though the convention center provides a venue for many local events, it’s the visitors who are brought in from out of town who are really driving that economic impact, Racker said. Besides the need to stay in a hotel, people from out of town are also more likely to patronize local businesses.

“We are wired to shop when we’re traveling,” Racker said.

That’s why the bureau keeps much of its efforts focused on bringing in conventions from out of state. The fact that Utah County is home to two large universities helps with that mission, Racker said.

Most professors belong to some kind of an association that is part of their area of teaching, and those connections can often be used to convince those associations to hold their events in Provo, Racker said.

“(Brigham Young University) and (Utah Valley University) are like little gold mines for us,” Racker said.

Though more local events are held than out-of-town events, Wheeler said the conventions that draw large numbers of out-of-town visitors are the most lucrative as far as economic impact.

“We only host 10 to 12 true conventions a year, but those make up about 40 percent of the economic impact,” Wheeler said.

It also factors into how events are booked at the convention center, with out-of-town conventions being allowed to book further out than locals.

“That ensures that we keep the calendar open for the most valuable businesses in our community,” Racker said.

Overall benefit or burden?

Utah County pays off the bond using money from the Tourism, Recreation, Cultural and Convention Facilities, or TRCC, tax, as well as from the Transient Room Tax, or TRT.

Though county revenues from the TRCC tax have steadily risen since 2012, when the convention center opened, Thompson said the convention center can’t take all the credit for that.

“I would say that the growth in general has contributed to the increase in TRCC revenue, more than the convention center,” Utah County Clerk/Auditor Bryan Thompson wrote in an email. “Though the Convention Center has contributed to the increase.”

By the time the county pays off the whole bond, it will have paid nearly $30 million in interest in addition to the original bond, according to numbers provided by Thompson.

Utah County Commission Chairman Bill Lee said he was uncomfortable with a previous commission making the decision to “get into the convention center business.” That was a job Lee felt would be better left for the private sector to fill.

But, separating his qualms about the role of government, Lee said it’s hard to deny the convention center has brought economic benefits to Utah County.

“I think the county was premature in getting into the convention center business,” Lee said. “But it did, it’s here, so now I have to take a common-sense approach of how can I make it better.”

Part of making the convention center function better, Lee said, is working out the parking at the venue.

Utah County filed a lawsuit against Provo at the end of May for what Utah County views to be a breach of contract concerning parking at the convention center.

The lawsuit claims that the convention center is losing money because of a lack of defined parking spaces which Provo was supposed to provide according to an interlocal agreement entered into in 2009.

Racker said the convention center was a strategic move on the part of Utah County and Provo and has allowed the county to continue to progress.

“I’m thankful for the foresight the commission had in building this,” Racker said.

He did express some concern about how few hotels are located close to the convention center, but said the anticipated Hyatt Place hotel coming to downtown, which is now under construction, will help alleviate some of those needs.

“It’s exciting to see that the investment made by Utah County, and kind of their vision of what it would do to the local economy, has come to fruition,” Wheeler said. “We’ve seen that in the form of outside visitors who have pumped dollars into our local economy.”