Expansion of Javits

Gov. Eliot Spitzer declared in a speech eight months ago that he would build a “thoroughbred” of a convention center in New York City and scrap the $1.8 billion plan he had inherited to expand the black-glass Javits Convention Center on the West Side.
Since then, state officials — struggling with escalating costs, competing demands and limited land — have had to shrink their ambitions, devising a series of alternative plans that provide a far more modest expansion than envisioned three years ago.
Now, in the latest blow to the governor’s ambitions, the city’s hotel association is balking at requests to triple the hotel tax earmarked for the expansion. That could force state and city officials to abandon plans for an expansion and settle instead for simply renovating the Jacob K. Javits Convention Center.
Last Tuesday, the hotel association, which had sought to expand the Javits Center since it opened in 1986, wrote a letter to state and city officials saying that under no circumstances would its members agree to a penny more than the $1.50-a-night room tax the state started collecting in 2005. State and city officials had suggested raising the tax to $4.50 per night to pay for the increasingly expensive expansion.
If government officials cannot stay within the original budget, the association said, they should just fix the leaky roof on the convention center, install a new air-conditioning system and put on a new facade. Forget about the additional space for exhibits or meeting rooms.
“The hotel association has decided that the project has become much too expensive, and any further contributions from the hotel industry would, in our judgment, be counterproductive,” said Joseph E. Spinnato, president of the Hotel Association of New York City. “The association would rather that the money already budgeted be used to repair and renovate the existing center.”
Trade show operators and producers have also criticized some of the proposals drawn up recently by state and city officials.
When the price tag for one plan soared beyond $3 billion this summer, some producers said it could not be justified. They recommended that officials renovate the Javits Center and consider building a new convention center at Sunnyside Yards in Queens.
“To add marginal square footage and spend $3 billion or $4 billion seems like a prohibitive solution,” said John F. O’Connell Jr., chief operating officer of Freeman, a general contractor that moves many of the trade shows in and out of the Javits Center.
Officials said that they were still reviewing five smaller alternatives with varying amounts of meeting and exhibit space, with price tags ranging from $1.7 billion to $2.7 billion, and that they hoped to wrap up their review in January.
Patrick J. Foye, a co-chairman of the state agency overseeing the expansion project, the Empire State Development Corporation, declined to comment on the hotel association’s letter, saying he did not want to negotiate through the newspapers.
The expansion of the Javits Center, which stretches along 11th Avenue from 34th to 38th Street, was approved by the Legislature in 2004.
The state and city agreed to provide $350 million each, while the hotel industry agreed to the room tax, which enabled the state to raise $645 million in a bond offering.
Manhattan hotels have enjoyed record occupancy and rising room rates in the past five years. One major hotel operator said trade shows accounted for no more than 6 or 8 percent of annual revenues at West Side hotels, and so there is less interest in a very expensive expansion partly financed through a hotel tax.
The original $1.8 billion expansion plan was developed by Deputy Mayor Daniel L. Doctoroff and Charles A. Gargano, who was Gov. George Pataki’s top economic development official. But it came under fire from trade show producers and their contractors as unworkable.
In March, Governor Spitzer issued his pledge to come up with a bigger and better plan than the previous one — which state officials say had a true cost closer to $3 billion.
In the meantime, the review dragged on, with an estimated $35 million spent on consultants and architectural plans over the past year. The hotel association said $109 million had already been spent on the project.
At the same time, the constantly rising price of construction materials has driven costs up by an estimated $17 million a month.
State and city officials are also dealing with competing demands for space. The hotel industry favors additional meeting rooms to attract trade shows that bring visitors to New York, who book hotel rooms. Javits customers like the Auto Show want more exhibit space for consumer shows that attract more local residents.
State officials say they could raise $1.5 billion more for the plans now under consideration — all of which are smaller than the original — by doubling the hotel tax for the expansion while the state and the city increase their investment by $250 million each.