Do taxpayers need to shell out $900 million for an expanded convention center and new arena to revitalize Baltimore? According to the state government and the Greater Baltimore Committee (which never met a corporate welfare scheme it dislikes), they do. Before the state goes down this road, it may be wise to take a second look at the supposed benefits of all this taxpayer spending.

The report, completed by Crossroads Consulting, can be found here. I haven’t read the entire thing, but have skimmed it. As is the case with other reports of this type, there seems to be a glaring flaw here: it only summarizes the benefits, not the costs, of such a facility. It says there will be a variety of new spending and new tax revenue from such a facility, but it does not take into account the economic cost of building such a facility.

For instance, to pay for this convention center, money will be extracted from the taxpayers one way or another. This money, had it not been spent on the convention center, would have remained in the hands of these taxpayers, who would have used it to buy things or invest. All the jobs created by this spending will be lost, something that is, as far as I can tell, unmentioned in the report.

There’s also a nagging sense that their economic projections are a bit too optimistic. As our own Marta Mossburg pointed out:

Consider Las Vegas, a top destination, where convention center attendance was 1.31 million in 1999 and 1.16 million in 2010 after a massive expansion earlier in the decade. Lest people think it was all due to the economy, peak attendance was 1.7 million in 2006 — or a 30 percent increase in attendees after a doubling in size of the center. The GBC proposal would more than double the current convention space in Baltimore.

In nearby Philadelphia, the number of convention center-related room nights in 2010 was 179,000, or the lowest since 1994. In D.C., the number of convention center-related room nights dropped 27 percent from 2008 to 2010.

The most recent numbers on the $305 million, publicly financed Hilton Baltimore are from 2009 and show a $31 million cumulative loss since opening. If new figures told a different story, we would have known about it by now. Standard & Poor's affirmed a negative outlook on some of the hotel bonds in January based on poor convention bookings. Convention Center attendance is down 25 percent since 2008.

Steven Malanga of the Manhattan Institute echoes this view:

The convention business has been waning for years. Back in 2007, before the current economic slowdown, a report from Destination Marketing Association International was already calling it a “buyer’s market.” It has only worsened since. In 2010, conventions and meetings drew just 86 million attendees, down from 126 million ten years earlier. Meantime, available convention space has steadily increased to 70 million square feet, up from 40 million 20 years ago.

There are other things Baltimore could do to attract tourists. As the Crossroads report noted, Baltimore has one of the highest hotel taxes in the nation. Lowering that tax would make the city more affordable, giving it a price advantage over other convention cities. But spending hundreds of millions of dollars on a new convention center that is unlikely to live up to the grandiose claims of its backers? That seems like a bad idea to me.