Party time

The Democratic National Convention in Charlotte might not deliver the dollars promised, but publicity will be priceless.
By Erin Dunn

With about 35,000 people expected to visit Charlotte next month for the Democratic National Convention, city leaders hope to leverage the benefits of the political spectacle past the four days it’s in town. Measuring the economic impact of political conventions is a tricky equation, with different inputs and outputs depending on who’s doing the calculating. The event should give the region a shot in the arm, injecting $150 million or more in benefits, organizers say. But such sums are vastly overstated, according to a 2008 study that analyzed both parties’ national conventions from 1972 to 2004. “What we found is we can’t identify any significant economic impact from the conventions being in town,” says Victor Matheson, associate professor of economics at College of the Holy Cross in Worcester, Mass., one of three authors.

A major reason: loss of business from the conventions’ “crowding-out effect.” For example, when the DNC came to Boston in 2004, it displaced a U.S. gymnastics event and a boating festival, which would have brought in more than $110 million, according to Beacon Hill Institute at Suffolk University in Boston. Economists there calculated the convention’s impact at only $14.8 million — far below the official estimate of $154.2 million. Crowding-out could be more pronounced in Charlotte because of the city’s size, Matheson says. “A large number of delegates can fill up Charlotte a lot faster than New York City.” But if a convention is held outside a city’s peak tourism season, it displaces fewer visitors, he says. During the past decade, hotel occupancy in September has averaged 62.5%, making it Charlotte’s eighth-busiest month.

Mayor Anthony Foxx believes you have to look closer to home to predict what the Democratic convention could do for the Queen City’s future. See what happened to Atlanta, he says. “You can’t tell me the Olympics coming to it in 1996 wasn’t related to the convention in 1988.” The DNC provides Charlotte a global stage, and the benefit of that publicity is hard to measure. “The value is really the free media coverage that comes out of it, the ability to have corporate and political leaders come here and allow the local business community to make the pitch that this is a good place to do business,” says Eric Heberlig, an associate professor of political science at UNC Charlotte who has studied conventions. Foxx, who is co-chair of the convention host committee, adds, “I don’t view this convention as a transaction — you put this money in, and you get this money out. It’s much more than that. It’s an opportunity for our city and our state to take a leap, to move into new territory in the minds of people around the world. Now is our opportunity to tell this story.”

Other factors could affect the convention’s success. Organizers are reportedly lagging in raising $37 million to put on the event, partly because of self-imposed restrictions that forbid corporate donations and limit personal contributions to $100,000. If protests turn violent, they can create a negative image for the city. Charlotte likely will draw more demonstrators than Tampa, Heberlig says. Not only will the president be here, but it takes place after the GOP convention. “You don’t want to get arrested at the first one and miss the second one.”