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Space race, space glut

THE BALTIMORE SUN

Baltimore must expand its convention center again or risk losing ground in the meetings industry, according to the head of the city's convention and visitor association.

To the south, Washington is building a center with 750,000 square feet of exhibit space. To the north, Philadelphia is trying to double its space. Boston is constructing a convention center with twice Baltimore's space.

"We have to be cognizant of what other cities are doing," said Carroll R. Armstrong, president and chief executive of the Baltimore Area Convention and Visitors Association. "We've got to keep improving the product. They're forcing our hand."

He considers it crucial to double the facility's exhibit space, to 600,000 square feet, at an estimated cost of $250 million.

"When you look around at what's happening today, getting a headquarters hotel and expanding the facility just turns out to be the price of admission," he said. "Then it's up to us to play the game. But we've got to level the playing field a little. We need to take this seriously."

In a recent interview, Mayor Martin O'Malley deferred to Armstrong on whether an expansion is necessary.

"What does Carroll say?" the mayor asked. "Sure, it would be nice to expand it someday."

If the United States Olympic Committee chooses Washington-Baltimore to enter the international race for the 2012 Summer Olympic Games, he said, it will be especially important to evaluate an expansion.

The USOC will announce that decision in November.

Baltimore's last expansion occurred as many other cities were building new convention centers or expanding old ones - all hoping to win the advantage in what the Professional Convention Management Association estimates is a $100 billion-a-year business.

Like Baltimore, other cities that expanded also failed to achieve significant gains in the convention war. The story has been the same in Washington; Charlotte, N.C.; New York; Minneapolis; St. Louis; Philadelphia; and Honolulu, according to industry experts.

"Seemingly without exception, [people] called for more space, regardless of a city's location, weather, historical performance or even apparent appeal," said Heywood T. Sanders, chairman of the department of public administration at the University of Texas in San Antonio and an expert on the convention industry.

The result is a glut of space, but no real competitive advantage, experts say.

In 1995, there were 61.3 million square feet of exhibit space in the United States and Canada, according to Tradeshow Week, which tracks the industry. In five years, that number grew to 65.5 million square feet, and it is expected to swell to almost 82 million square feet in the next three years.

"Competition for trade shows and conventions is very fierce," said Michael Hughes, a spokesman for Tradeshow Week. "When one or two expand, it sets off a series of expansions."

Nevertheless, Armstrong said, he hopes to move ahead this year with a marketing study on another expansion for Baltimore.

"If we don't do something, they're going to suck the market share that we built right out of here, and we won't be able to do anything but stand around and watch it," he said.

But Jim Widman, an owner of the Admiral Fell Inn who hopes to bring a Hilton Garden Inn to downtown, said the BACVA should focus on the existing convention center's success.

"You've got to fill up what you've got before you go back and ask for lots more millions to expand," he said.

At the same time, the experts warn, Baltimore is engaged in a costly race it simply can't win.

"In a world in which everybody is expanding, then in essence having more space doesn't matter anymore, because everyone has more space," said Sanders.

"Everyone has gobs more space in a market that isn't expanding."

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