Events DC is Boondoggle

Counterpoint

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It’s budget season in DC. This week, our councilmembers will be marking up the Mayor’s proposed budget. In theory, this is when the Council should hold the Mayor accountable and steer taxpayer money to where residents need it most. In reality, the Council will most likely continue its trend of less-than-inspiring legislating and approve a budget very similar to the Mayor’s.

For a thorough analysis of what’s in (and not in) the proposed Fiscal Year 2020 budget, visit the DC Fiscal Policy Institute and the DC Policy Center. My focus is exclusively on DC’s very own boondoggle: the Washington Convention and Sports Authority or Events DC.

Events DC’s mission is “to generate economic and community benefits for the residents and businesses of the District of Columbia by creating the premier event experience in the nation’s capital, and through the promotion of Washington, DC, as a world-class tourist destination.” To achieve its mission, Events DC, among other activities, operates the Convention Center; manages RFK and the St. Elizabeth’s Entertainment and Sports Arena; and plans and supports special events. Although its mission is a worthy one, it does not require over $200 million.

It’s time for the Council to take a close look at how Events DC wastes our money. I will help.

The Mayor proposes a budget of $213,801,102 for Events DC for FY 2020, a 6.6 percent increase from this year’s budget. Of that budget, $149,497,000 comes from sales taxes: 1 percent from restaurants and 4.75 percent from hotels. In other words, 70 percent of Events DC’s budget draws from taxpayer funds. The other 30 percent comes from a variety of operating and non-operating revenue.

Of note, the Convention Center accounts for approximately $20 million in Events DC revenue each year. That doesn’t sound too bad until you realize that its expenses are in excess of $50 million.

Why does the Convention Center lose money every year? Maybe, it is because the Convention Center holds fewer and fewer events. Between 2009 and 2014, the Convention Center averaged 210 events each year. In 2015, it hosted 233 events; in 2016, it hosted 217 events; in 2017, it hosted 184 events; and in 2018, it hosted 167 events. At this rate, in 2021, the Convention Center will host only 101 events. At an average revenue of $120,000 per event, the Convention Center will only raise $12 million in 2021. The Convention Center isn’t self-sufficient in any sense of the word.

Taxpayers don’t just pay for other people’s parties; they also pay to fill Events DC’s coffers. For FY 2019, the DC Auditor estimates that at the end of the year, Events DC will have an excess reserve of $189 million or $13 million more than it had at the end of 2018.

Let’s assume for a moment that Events DC’s mission is worth $137 million (the amount needed to cover expenses). Why are we steering $13 million to Events DC’s reserves? Shouldn’t we spend the money on real issues, like building affordable housing, improving our schools and fixing our transit infrastructure?

Now let’s assume we don’t want to pay for other people’s parties and the Council requires Events DC to raise enough revenue to cover its expenses. The Council would not need to appropriate just $30 million to cover the Convention Center’s expenses. It could then spend even more on housing, schools, and roads.

Although Events DC does not release its itemized expenditures, we do know how it spends some of our money. What if the Council were to require Events DC to provide an itemized accounting of how it spends every dollar of the additional $107 million? We could decide what we believe is a good use of our money and whether we want to spend it elsewhere.

Let’s hope our councilmembers decide now is the time to stop funding other people’s parties and filling Events DC’s coffers.

Michael Bekesha has been a Ward 6 resident since 2010. He ran for the Ward 6 Council seat in November 2018. He, his wife Holly, and their rescue dog Sprocket live in Navy Yard. He identifies as an Urban Republican. He may be reached by email or on Twitter.