Sen. Tim Melson, Rep. Lynn Greer, Judge Ed Tease and the other members of the Agricultural Authority Board want to build an agricultural event center in Lauderdale County.

Among the many reasons such a project is ill advised is the method these gentlemen have chosen to employ to finance this boondoggle. None of these men, as far as I know, is investing any of his own money to build this thing.

They, against promises made to the electorate, have extended the two-cent gasoline tax, which will generate around $800,000 a year. An additional $1.2 million in TVA in-lieu-of-tax money is being appropriated from the Lauderdale County Commission, from Florence and other city councils, and from the Lauderdale County and Florence City schools.

If spending one’s money on one’s self ensures that money would be well spent, then spending other people’s money on other people practically guarantees it will not be efficiently spent. Such is the case with the proposed ag center.

Before examining the feasibility study and the economic impact study produced by Convention Sports and Leisure (CSL), consider a couple of observations.

Heywood Sanders, one of America’s foremost urban development experts, has written a political history of the role played by convention center consultants in the building of convention centers around the country. The title of his book, "Convention Center Follies," explains it all.

In his book and in much of his other published work, Professor Sanders demonstrates that forecasts and projections of the future economic impact of convention centers produced by convention consultants like CSL bear little or no resemblance to actual results.

In city after city, Professor Sanders documents actual performance was often one-half to one-third of what consultants had promised. For example, according to the Charlotte Observer, the Charlotte Convention Center has cost taxpayers as much as $30 million annually for construction debt, operating losses and incentives worth hundreds of thousands of dollars to win business. The promised payback from the investment never materialized.

Closer to home, after years of running deeply in the red, Lee County, Mississippi, decided to close its agricultural event center and give the buildings to a Mississippi State University Research Station.

With such poor track records, one wonders why firms like CSL are even hired. Well, according to one consultant’s answer, ”You lose clients if you shoot down projects. They’ve already made up their minds by the time they come to us.”

Given the timing of the decision to build the ag center and the subsequent hiring of CSL, it sure appears this is the case for Melson, et al.

Given the common practice of convention center consultants to deliver rosy scenarios, and strong cases for building convention centers, Melson, Greer and Tease must be mighty disappointed in the $50,000 they paid CSL. After reading the 84-page feasibility study, it’s easy to understand why Melson was reluctant to make it available to the public.

In its feasibility study, CSL chose comparable agriculture/equestrian facilities in 17 cities against which to determine the feasibility of an ag center in Lauderdale County. Their comparable analysis includes: 1) demographics —population, income, corporate base; 2) operations, and 3) market demand of each of the 17 cities.

Demographics — CSL reports that Florence ranks considerably below average in all three demographic metrics — 13th in population, 15th in income, and 13th in corporate base.

Operations — In terms of financial performance, every one of the 17 comparable ag/equestrian/livestock facilities operated at a loss and required substantial public subsidies to cover expenses. The average annual loss was over $600,000.

Market demand — CSL conducted 50 telephone interviews with event planners and promoters to assess potential users willingness to use an ag center in Lauderdale County. After reading the reasons given by promoters for not considering Lauderdale County in their future plans on pages 53-57, it is easy to understand why an ag center here would face formidable odds in generating a positive economic impact.

In a presentation to the Florence Rotary Club, members of the Agricultural Authority Board projected 1,200 events annually at the proposed ag center. It is not surprising that CSL was unable to manufacture such an impressively large estimate.

The last 17 pages of the feasibility study present lots and lots of numbers and tables that purportedly represent CSL‘s estimate of the economic impact of the ag center. Little or no explanation is given on the assumptions and methodology employed to create these estimates, so it is difficult to judge the accuracy of them.

For example, in serveral of the tables is a line item “HB 534, 527, 525” associated with an annual cash inflow of $2.3 million, no explanation is given for this entry.

In another line item a $300,000 annual contribution is listed as “County Operating Support.” I am unaware if the Lauderdale County Commission has appropriated such an annual sum for the proposed ag center.

In the last four or five pages, CSL presents its estimates of the economic impact of the proposed ag center. Again, it is difficult to assess the accuracy of the estimates since CSL does not explain how it came up with these figures.

Furthermore, some of the values in one table are inconsistent with values in another.

For instance, on Page 80 is a table showing the economic impact increasing each year during the first five years of the ag center. By the fifth year, CSL projects an annual economic impact of $9.8 million. On page 83, the 20-year cumulative total economic impact is listed as $145 million, which implies an annual economic impact of $7.25 million.

Now compare either of these figures with CSL’s estimate of the economic output given in the separate 13-page Economic Impact Analysis. In the table on Page 12, the annual economic impact is estimated to be $22 million. (Note in passing that the $31 million figure quoted by Sen. Melson overstates the projected economic impact of the proposed ag center because it includes almost $10 million that would have occurred whether the ag center was built or not.)

So, what accounts for the difference between the $7.25 million figure in the feasibility study and the $22 million figure in the separate Economic Impact Analysis?

A possible reason is that the $22 million figure includes the estimated economic impact of the ag center master plan, which includes not only the ag center facilities but also a 200-room national-branded hotel and 200,000 square feet of retail and restaurant space. If these are the only reasons for the difference, then two-thirds of the total economic impact relies not on ag/livestock facilities, but on facilities constructed and operated by private concerns.

So, is the annual economic impact of this thing close to $10 million (Page 80 of the feasibility study), or is it around $7 million (Page 83 of the feasibility study), or is it $22 million (Page 12 economic impact analysis)? Your guess is as good as mine.

However it turns out, CSL is covered. The Ag Authority Board, maybe not so much. And neither are we taxpayers, who will be forced to pay for this ill-conceived and ill-planned boondoggle for the next 40 years.

Barry Morris

Florence

(2) comments

Jerry DeGregory

Thank you, Barry Morris. Your observations deserve more publicity than they are likely to get, but they are still very much worth the time and effort you put into it. We apparently have far too few public officials who actually examine the data with a critical eye. It is their job but they obviously do not do it. It is not your job, but you did! Sincere thanks.

joe hurst

You tell 'em Doc.

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