You might think state lawmakers would be a little more careful with the public’s money while the nation is struggling to recover from a recession.
And yet, as Utah’s legislative session is winding to a close, an effort is afoot to give tax credits to anyone who would agree to build a large convention headquarters hotel near the Salt Palace Convention Center in downtown Salt Lake City.
We’ve been over this before, folks — many times over at least 20 years. Using taxpayer funds to help build a hotel is bad for so many reasons. It would undermine other hotel owners and drive down room rates. Quite simply, if it were profitable to build such a thing, a private developer already would have done it.
SB267, a bill by Sen. J. Stuart Adams, would allow tax credits to the owner of such a new hotel under certain conditions. The county has been desperate for years to see such a thing built. Proponents say it is necessary to allow the city to adequately compete for larger conventions.
Convention planners don’t like to spread their delegates out among several downtown hotels. They like them all to be in one place, with extra hotel meeting space to accommodate their needs. Such a hotel would rise about 15-20 stories, and would most likely stand just across the street from the convention center.
It might be a cool addition to the skyline, but when government interferes in the private marketplace, there are consequences.
Eighteen years ago the county commissioned a study on this idea by Economics Research Associates. It said a large convention hotel would likely eat into the profits of some existing hotels. That hasn’t changed.
The Deseret News has consistently opposed this idea. I quote from a recent editorial: “…the impetus to get a hotel project off the ground has to come from the private sector. Government should not be in the business of undertaking risk, particularly if it is unclear how large the risk is. In this case, if the upside potential were clearly visible, private developers would have already jumped in. And if government plays a role, that would hardly be fair to existing hotels that now benefit from housing convention delegates.
“The convention and tourism business is clearly an important part of Salt Lake City’s economy. Government should do what it properly can to encourage its growth, particularly by removing unnecessary obstacles. But to assume for itself the role of a commercial developer is a step too far.”
We don’t need any more government meddling in competitive markets, and we especially don’t need to be granting tax credits for such a thing at a time when taxpayers and businesses are straining against economic uncertainties.
SB267 is a bad idea.