Expanding municipal convention centers

The $600 million expansion of the Phoenix Civic Plaza is expected to bring more conventions to the city, but a new report by a Washington think tank questions the public benefit of expanding municipal convention centers.

Transcript:

>> Michael Grant:
Tonight on "HORIZON," a number of bills introduced this legislative session aimed at taking power away from the judiciary. The chief justice and vice-chief justice of the Arizona Supreme Court join me to talk about the battle between the two branches of government. Plus, the $600 million expansion of the Phoenix Civic Plaza is expected to bring more conventions to the city, but a new report by a Washington think tank questions the public benefit of expanding municipal convention centers.

>>> Michael Grant:
Good evening, I'm Michael Grant. In tonight's headlines, a pilot program to replace soda and junk foot at public schools with healthy snacks is called a success by the State Superintendent of Public Instruction. Tom Horne says the eight schools involved in the study proved they can make as much money offering healthier drinks and snacks as by selling junk food. Right now, schools can make tens of thousands of dollars by selling soda, candy and other junk food on campus. A lobbyist for the Arizona Soft Drink Association says the report included too few schools and three did not have vending machines. The Superintendent of Public Instruction is encouraging lawmakers to pass House Bill 2544, that bans schools form selling soft drinks and junk food at school snack bars and vending machines.

>>> Michael Grant:
Concerned with the growing influence of the judiciary, a number of lawmakers have introduced bills that would lessen the court's power in Arizona if passed. Here is a brief look at a few of them. House Bill 2405 would transfer control of adult and juvenile probation from the courts to county supervisors. House concurrent resolution 2026 would amend the constitution allowing the legislature, not the Supreme Court to set court rules and supervise lower courts. SCR 1025 prohibits a court from entering a judgment that requires state spending of a million dollars or more without legislative approval. Other bills seek to limit the power of the Supreme Court over justice courts. Joining me to talk about the judicial system in our state is Charles Jones, the chief justice of the Arizona Supreme Court. Chief justice Jones will retire in June after 10 years on the Ben of. Also here is Ruth McGregor, vice chief justice. Good to see you both. Just the rough and tumble between branches or more than normal this year?

>> Charles Jones:
I think it has gotten a little rougher. The makeup of the legislative branch has changed and these measures that you've referred to are all such that the judicial branch of government would be harmed and substantially impaired, in my view. We have prided ourselves in this nation on having what we refer to affection Natalie as an independent judiciary, a branch of government that is co-equal and independent of the others, yet we have measures designed as far as we can tell to undermine and impair the judicial ability of the courts to do their job.

>> Michael Grant:
And justice McGregor, we'll talk about some of the proposals in just a minute, but there has been, it seems to me, a growing trend, over the past four or five years, where more of these bills have been introduced. Am I reading the headlines wrong or is it a trend?

>> Ruth McGregor:
Well, I think over the last several years, the numbers have been fairly consistent, and the topics have been fairly consistent. As the chief mentioned, and as you said, most of them are aimed towards somehow take ago authority or power from the judicial branch and placing it in the legislative branch. So they have that common theme to them. In pure numbers, I'm not sure we have any more this year than we have in the last several sessions.

>> Michael Grant:
Maybe we're just giving them a higher profile.

>> Ruth McGregor:
Maybe, but there are a lot

>> Michael Grant:
Justice Jones, what about the -- I do want to touch on the budget situation. I know the state has been in not good budget straights. What is the budget situation look like?

>> Charles Jones:
When we entered the budget shortfall period that has been with us in recent years, the last three years, really, we recognized as a branch of government that along with all other branches and departments of government, we would have to look carefully at our situation and cut back where we could, and where we deemed it appropriate. Remembering always that the judiciary is a branch of government. It is not simply another agency or department, and it has a constitutional responsibility to do its job, and there are core duties that must be performed and must be funded. On the other hand, we've taken some severe cuts in our budget that have affected programs that are under the umbrella of the court, for example, probation you mentioned is one, and other court programs, our model court program for juveniles and our fill-the-gap program that was designed to re-engineer the civil justice system, primarily in Maricopa County, but in other counties of the state as well. Those programs have suffered over the last three years, and hopefully we're coming into a situation where we won't have to face quite that same situation, but again, it depends on the legislative branch because they hold the power of the purse in our government and will make those determinations.

>> Michael Grant:
How did the court system fair in the Governor's proposal?

>> Ruth McGregor:
The governor is not permitted to make a recommendation as to the judicial branches.

>> Michael Grant:
I was not aware of that.

>> Ruth McGregor:
She uses last year's budget as a placeholder within the budget.

>> Michael Grant:
I see.

>> Ruth McGregor
: I think there was a footnote that mentioned an increase that the courts were making but she does not make a recommendation.

>> Michael Grant:
What's worse, you have to deal with the JLBC and the appropriations committees directly. That's why you get the big bucks.

>> Ruth McGregor:
That's why we always do, right.

>> Michael Grant:
Justice Jones, let me move to some of these proposals. One bill would take adult and juvenile probation away from the courts and give it to County supervisors. In one respect, probation does seem to a certain extent more like an executive function than a judicial function. How does that come about in the first place?

>> Charles Jones:
The reason we have judicial supervision and administration over probation services is the close working relationship that probation officers necessarily have with trial judges, judges down at the Maricopa County superior court, for example and the other counties. The courts depend heavily on probation officers in preparing such things as pre-sentence reports and the like. By placing them within the executive branch, which would probably be the case here, then you lose that relationship and the benefit of having judicial supervision over the probation process in our State, and it simply is fraught with more difficulties and problems in my opinion are threatened as a result of that move. I would oppose the move simply because I think it's a much better working system as we've seen over the last many years.

>> Michael Grant:
On other hand, the executive more routinely manages large departments and personnel and procurement and I suppose all those sorts of functions that we associate with this?

>> Charles Jones:
Yes, but probation officers perform a quasi-judicial function. They are preparing reports and working with people who are under the direct supervision of the court. In Arizona, we have in the neighborhood of 65,000 convicted felons on our streets under probation at one level or another, either standard probation or intensive probation, and they are under the strict supervision of the Court. The probation officers are the agents of that program who actually oversee and work with probationers.

>> Michael Grant:
Uh-huh.

>> Charles Jones:
They perform really a more quasi-judicial function than an executive function. That's why it works better. I think that's why it was placed there in the first place.

>> Michael Grant:
A bill that we have seen a couple, three times at least, is the one that would shift the power to adopt court rules from the Supreme Court to the legislature. First off, what -- explain what court rules are. What's the power that we're talking about.

>> Ruth McGregor:
Sure. When somebody brings an action to the court, in order to have an orderly process for it to move through the court, we need rules of procedures. They define the procedures the court follows in resolving these various disputes. So we're really talking about how the court is run, not how the court decides cases, but how they actually move through the system. It's traditionally a judicial function. It's something that, you know, we probably -- I think almost certainly know more about the way our system works than another branch of government. Our constitution, incidentally, also gives the legislature the power to adopt their rules of procedure. Which also makes sense. They know what rules they need to make things work.

>> Michael Grant:
What is the argument -- I don't know that I've ever heard the argument articulated in favor of this concept to shift that rule-making power to the legislature. Have you -- I realize you don't sport it, but what's the argument for it?

>> Ruth McGregor:
We've been asking for the last several years, as a lawyer, as you well know, what we try to do first is to define the problem, and then see what possible resolutions there could be. We've been asking what's the problem with the court's use of its rule-making power. We really don't know exactly what the problem is. What we try very hard to do as a court system is to adopt rules that keep a level playing field, that don't favor one side or one viewpoint over another. The only thing that I can see would be an advantage for the legislature of having this power, if it were to be used in a way that tilted the playing field, that made one political view have an easier time of making it through the court system or prevailing in the court system. Other than that, I can't really see any reason to try to do the switch.

>> Charles Jones:
The last thing that a party who appears in court wants to have happen is to go away feeling that his decision has been made on a political basis, and the rule making --

>> Michael Grant:
Unless it's a political case.

>> Charles Jones:
Well, but even there, decisions of courts must be reasoned and they are.

>> Michael Grant:
Sure.

>> Charles Jones:
But here, we have rule-making authority that provides a level playing field for all parties that come before the court. We do our level best to do that. If you place it in the hands of the legislative branch with ultimate authority over that, then you subject yourselves to such things as special interest groups who have the ability to lobby the legislature, or even the initiative process, the initiative referendum process that would place it in the hands of the people voting. And these are subtle rules, and they are rules designed to protect -- you know, there is an irony at work here. We are seeking to protect the independence of the courts, and we see across the world at this time nation after nation that want independence in their court system. The first thing that the Iraqi people asked for was an independent judiciary. Justice Kennedy of the United States Supreme Court went to Europe and met with Iraqi judges just a few months ago, and that's what they wanted. That's what will have to come about, and yet here at home we see these efforts that are being made that would clearly undermine what we have been doing in Arizona for many decades and building an independent judiciary and placing control of the rule-making authority and the budget and all kinds of things in the hands of the legislature. That's what we have a problem with.

>> Michael Grant:
Well, it's contempt for the familiar. Merit selection of judges in the two largest counties of the state, and for that matter at the appellate level as well, there's always a bill in the hopper to cut that one back. This one has an interesting twist, though. It would not only elect the judges, but it would apportion them by a supervisorial district. Easy for me to say. I take it you are not in favor of returning to an elected system of judges.

>> Ruth McGregor:
Merit selection has really served Arizona very well. In 1974, we changed from direct election of judges in our large counties and the appellate courts. I think a lot of people don't realize at that for someone to be considered for a judicial position, they have to file a very long detailed application, and then a commission made up of 10 lay people and five lawyers, all of whom have been confirmed by the senate, consider all of those applications. They interview those they select and then send on at least three names to the Governor. The list has to be politically balanced. They can send more than three names.

>> Michael Grant:
Right.

>> Ruth McGregor:
And the Governor must select from that list. That means that anyone who is not qualified, trust me, will not get through the commission. These people --

>> Michael Grant:
That's a pretty good vetting process.

>> Ruth McGregor:
Yeah, they do their job very carefully. So every person who has a chance to be appointed as a judge has been through that vetting process and we know that they are capable of being a good judge. Arizona has really benefited from that. We've also managed to not have in our large population areas, contested elections with millions and millions of dollars being spent. And again, it's something that when we ask people is there a problem with the quality of the judiciary in Arizona, is that what you are concerned about, that's never the underlying problem.

>> Michael Grant:
I think one of the articulated concerns, though, is, sure, it's a good to the extent that -- it's a good selection process, but let's face it, people can take right turns, and the real problem is communicating sufficient and adequate information to the public so that they can realistically exercise their retention or non-retention power. Any merit, if you pardon the expression, to that argument?

>> Charles Jones:
Yes. When you work with a program or process over many years, you perceive areas that could be improved. I think it goes without saying that there is room for improvement. We do a very good job as justice McGregor has mentioned with the selection process, but there are some things that we've looked at that would be do-able in the retention process that would improve it dramatically. We didn't have retention in the merit process until the early '90s when changes were made. We went along with the merit selection. We put judicial performance review in place for the retention process in 1992, I believe it was, and we've worked with it since then, but there are always areas of improvement. But they could be done internally, they could be done by rule, and I think people would be very happy with that, but, we see these bills in the legislature that would take it in a different direction.

>> Michael Grant:
Almost out of time, but I do want to touch on the subject of once again a bill to shift control of justice courts, lower courts, JP courts to the legislature from the courts. What's wrong with that idea?

>> Charles Jones:
Well, the Arizona constitution provides for a single integrated judicial system, and there is merit in having uniformity and consistency see all up and down the line within the judicial system. There is no room in an integrated system for one court here and another there to go off and do its own thing or do what it wants. That's what is threatened with threatened with legislation of that nature. It would be easy, once you sever the administrative umbilical from the Supreme Court or the authorities invested in our constitution, and you spread it out among 83 justice of the peace courts in Arizona, you lose the ability to maintain consistency in the law.

>> Michael Grant:
Chief Justice Charles Jones, thank you for joining us. Vice chief justice Ruth McGregor, our thanks to you as well. Best of luck in the legislative world.

>>> Michael Grant:
A report by the Washington D.C. based Brookings Institute raises questions about the benefits of cities expanding convention centers. That report comes as Phoenix is in the midst of construction to double the space of its Civic Center. The $600 million project began last year and will be finished by 2008. The report by the Brookings Institute found that cities who increased convention space haven't seen a significant boost in use or attendance. Paul Atkinson has more.

>>Reporter Paul Atkinson:
Phoenix is one of 44 American cities expanding or building new convention centers at taxpayer expense. The Brookings institute's reports space available, the realities of convention centers as economic development strategy takes a collective look at whether adding more convention space is worth it. The report tracks the increase in spending on convention centers from 1.2 billion in 1993 to an average of $2.4 billion the last three years. The author of the study, University of Texas San Antonio professor of public administration, Haywood Sanders writes, state and local investment in these large scale developments have long been justified in terms of the broad local economic impact they generate, the presumed result of thousands of visitors staying over in local hotels multiple nights with their spending summing to millions each year. In truth, however, convention centers themselves are expensive, money-losing propositions. The report documents city after city where new convention space was added without much increase in conventions or attendance. Sanders rights, the overall convention marketplace has shifted dramatically, in a manner that suggests that a recovery or turnaround is unlikely to yield much increased business for any given community. Less business, in turn, means less revenue to cover facilities' expenses, and less money injected into local economies. That's not good news for those footing the bill of the expansion of Phoenix Civic Plaza. The state is paying $300 million. City taxpayers another $300 million. The expansion comes as convention business remains stagnant. In 2000 Phoenix conventions were hosted. In 2002, there were fewer conventions, 44, but more delegates, 133,000. Last year, the same number of events, with a slight drop in out of state visitors. The bottom line, the Brookings institute reports warns that expanding centers may not be the panacea it's made out to be. Rather as Phoenix has done, it may lure cities into spending more money on such things as hotels without the promise of a return on the investment.

>> Michael Grant:
What does the report mean for Phoenix-one of 44 cities expanding convention centers? Earlier I talked to Scott White.

>> Michael Grant:
Scott, the author of this study that says that convention centers are in truth expensive, money-losing propositions. Obviously you don't agree with that statement.

>> Scott White:
No.

>> Michael Grant:
Why not?

>> Scott White:
Well, it's a tremendous economic impact for the destination. Individuals are coming in for these conventions to have educational content. Associations produce these shows to do business to business between a particular trade association and their suppliers. Individuals are coming into our destination to do business and to spend money. Each individual that comes into our destination spends an estimate beside $1500 per convention. Right now, for our destination, we're averaging about $125,000 delegates that are coming into our city each year, and we're hoping with the expansion to grow that to 375,000 delegates in the future.

>> Michael Grant:
Focusing on the economics of the convention or trade show itself, does the convention center try to -- I'm sure it tries to -- but does it make a lot of money on that function itself? Or does it look more toward the ancillary economic benefits that you talk about in terms of hotel occupancy and therefore the tax revenues to the city and food and beverage and those kinds of things?

>> Scott White:
We look at both. We really evaluate each piece of business on its individual merits, what time of year it comes into the city, obviously our high season is January through April time frame, and we have our summer groups and our fall business. We really look at it from a total individual standpoint, the amount of rental revenue they will spend in the building, how much food and beverage revenue, the delegates coming in and how much they will spend on hotel room rates, restaurants, transportation, shopping and all of the other aspects that go into a visit. We look at it holistically from every aspect you can imagine, both from what they are going to spend in the convention center and what they are going to spend in the destination and the trickle-down effect that has.

>> Michael Grant:
For example, 2004, I've got a note here, 44 conventions to the convention center, about 132,000 attendees. Did the City of Phoenix actually make -- when it got to the end of 2004, did it actually make money or at least break even on the convention facilities themselves?

>> Scott White: I can't speak on the convention center itself, but to give you an idea, 44 groups with that many attendees, you are looking at an economic impact roughly of probably $110-115 million into the community. What that does is really improves the quality of life for you and I as residents, because those tax dollars are going directly back into not only the city, but the county and the state covers. That's why this expense is a partnership not only with the city but with the state on a hotel tax of a little over 12%, the state collects 5-1/2%, the city collects 4.8% and I forget the numbers that go to the entities in the county and prop 302, so forth.

>> Michael Grant:
Scott, how does it break out for the City of Phoenix in the convention business that arrives in terms of, let's say, a split between conventions and trade shows? I mean, is most of it convention business, less than trade shows?

>> Scott White:
They are one and the same. Convention and trade shows, a convention and a trade show are one and the same.

>> Michael Grant:
I guess I was thinking more of veterans of foreign wars, et cetera, having a convention --

>> Scott White:
sure.

>> Michael Grant:
Whereas the electronics manufactures having a trade show.

>> Scott White:
And again, I'm not quite sure -- can you repeat the question for us?

>> Michael Grant:
I just wondered what sort of overall mix there was, because one of the points made in the study at least, is that trade shows in particular have been impacted by technological improvements, things like video conferencing and that kind of thing, so I wondered how much of the -- what the business mix was of that and whether or not that's a valid point here.

>> Scott White:
No, it varies from year to year. The mix, I don't have the number off the top of my head. It's higher on the convention end of things versus say the paternal or type of conventions that you are talking about. But the telecommunications and the age -- everybody thought it was going to have a greater impact than it has, but people really want to do business face-to-face. There is a component of doing business with an individual where you can sit down and actually discuss the needs of their particular business, and have a relationship. We're in a very relationship-oriented industry, and it's not a transactional industry where you want to call up and say "I need 50 items of X, Y, Z." It's very relationship driven for us as we book the conventions, but as they come, they develop a relationship not only with the city but their exhibitors develop a relationship with their attendees.

>> Michael Grant:
Who is Phoenix's competition?

>> Scott White:
It's Denver, Salt Lake City, Anaheim, Seattle, Portland sometimes. Sometimes we come up against San Antonio and Houston. Once in a while San Diego, as we now expand the convention center and add additional hotel rooms in the downtown, you'll find that we'll probably start competing with places like Indianapolis and St. Louis, Orlando, it's going to vary, each particular association have different by laws dictating on how they rotate their business. A lot of times they have to rotate it around the country between east and west, depending on where their membership base is. This is the largest revenue generator for there organization. They want to go to a destination that's going to afford them the best attractive package to attract exhibitors and attendees. If you have a choice between two conventions in 2005, and one is in Phoenix, and one is, say, in Minnesota, I think it's quite likely who you are going to pick in the middle of February, which convention you are going to go to.

>> Michael Grant:
Certainly if you are scheduling at that time. Scott White, thank you for joining us.

>> Scott White:
Thank you very much, appreciate it.

>>Reporter Mike Sauceda:
Governor Janet Napolitano is facing big issues this legislative session like the future funding of all-day kindergarten. She may have to battle conservatives in the legislature on issues as abortion but is joining with them on protecting the 10 commandments. Governor Janet Napolitano, Thursday at 7:00 on "HORIZON."

>> Michael Grant:
If you would like to ask the Governor a question, please E-mail that question to [email protected]. Thank you very much for joining us on this Tuesday evening. I'm Michael Grant, hope you have a great one, good night.