The 24-foot-long sign at Halftime Pizza across the street from the FleetCenter isn’t exactly welcoming to the Democratic National Convention: “Say!!!!! D.N.C. Thanks for Nothing!!! Go Bush.”
The pizzeria and several other businesses near the downtown convention site have chosen to close during next week’s gathering. A handful in a special security zone were ordered to close as part of the security measures for the first national political convention since the Sept. 11 attacks.
“They almost ran everybody out of the neighborhood,” Halftime owner Mark Pasquale said. “This convention became a private party, not a party of the people.”
Costly security precautions here and in New York City for the GOP convention have dampened anticipation of an economic boon for their hosts. Economists say cities once eager for the spotlight — and visitors’ dollars — may not be as quick to bid on conventions in the future.
“People are just really going to be thinking about these very carefully,” said William Wheaton, a Massachusetts Institute of Technology economics professor. “My guess is that at the end of the day, instead of having 30 to 40 cities competing for convention business, you’re going to have 10.”
In Boston, where Democrats will gather July 26-29 to nominate a presidential candidate, security concerns have prompted the planned closure of some 40 miles of highway leading in and out of the city, disruption of rail service, random bag checks on the subways — even the removal of trash cans, mailboxes and newspaper boxes from street corners.
Many businesses plan to close or cut back hours during the week as employees face unprecedented commuting hassles.
Those security measures have driven up costs. They also have thrown more unknowns into the task of measuring how much money a host city can expect to gain or lose, let alone gauging the intangible civic image-building benefits — a pursuit that has always been more art than science.
“The cost-benefit analysis of conventions pre-9/11 was very iffy to begin with,” Wheaton said. For Boston, he said, “There better be some benefits — otherwise, it’s a horrible money-losing proposition for the city as a whole.”
$147 million gain in L.A.
An analysis of the impact of Democrats’ 2000 convention in Los Angeles by the city’s convention and visitors bureau found a $147 million gain to the local economy from delegates, the media and convention guests, as well as from direct and indirect convention-related spending.
But the study did not account for costs, including extra police deployments and the shutdown of L.A.’s Jewelry District during convention week due to fears of demonstrations, said Jack Kyser, chief economist at the Los Angeles Economic Development Corp.
Kyser questioned how much the event did to boost the city’s already-high profile.
“For Los Angeles, the hope was the news media would come in early and this would be the chance to show them the real L.A,” Kyser said. “Instead, the media came in literally the day before.”
“Conventions aren’t what they used to be,” he said. “Given the extra security efforts after 9/11, it really makes it questionable.”
Philadelphia, which hosted the Republican convention in 2000, saw an actual direct impact of $170 million from the event, after costs were taken into consideration, according to a study by the convention’s organizers.
Rick Anderson, Atlanta’s chief financial officer, said he wouldn’t characterize the Democratic convention in 1988 as an economic boon or bust for the city. However, there were benefits that can’t be calculated in dollars.
“City government didn’t have many out-of-pocket costs of hosting it,” said Anderson, who was deputy commissioner of finance at the time. “It definitely wasn’t a bust. Economically, I wouldn’t call it a boon.”
In New York, where the GOP convention will be held at the end of August, organizers expect 50,000 visitors, compared with 35,000 descending on Boston.
New York Mayor Michael Bloomberg has projected an economic gain of up to $265 million, compared with the $154 million forecast in Boston by Mayor Thomas Menino’s staff. But the Boston study was conducted before authorities announced the traffic restrictions and other security measures.
$8 million loss projected
Researchers with the Beacon Hill Institute, a public-policy think tank at Boston’s Suffolk University, project an $8 million loss when all the costs are taken into account. That study also examined costs from moving or canceling events that are now not being held in Boston because of the convention and preparations for it.
A similar analysis the Beacon Hill Institute conducted of New York’s GOP convention projects a $163 million benefit, more than $100 million less than the city’s own projection.
Both cities are receiving federal aid to help cover some of the security costs.
Results from a survey released Tuesday found few Boston businesses expect to see a windfall, with only 11 of the 100 respondents expecting to see an increase in business during convention week.
Edward L. Glaeser, a Harvard economist and co-director of the university’s Taubman Center for State and Local Government, said he anticipates a net loss in the end.
“It is impossible for me to imagine that the economic benefits outweigh the enormous costs of hosting a convention in the post-9/11 era,” Glaeser said. “If it were up to me, I would suggest Las Vegas — or some equivalent tourist town — as the hosts for all of our future political conventions.”