Massachusetts Gov. Charlie Baker halted the expansion of the Boston Convention and Exhibition Center, questioning whether the project's economic impact could justify the state taking on an additional $1 billion in debt.
Baker also replaced seven of the 13 board members of the Massachusetts Convention Center Authority, which oversees and operates the facility along the South Boston waterfront. It opened in 1997.
The new board, Baker said Wednesday, could reconsider the expansion plans, which originated five years ago. The proposal called for adding 1.2 million of square feet, including 335,000 square feet of exhibit space to the existing 516,000 square feet.
Last year the state legislature and Baker's predecessor, Deval Patrick, approved a bill enabling the Convention Center Authority to borrow up to $1 billion to fund the expansion, backstopped by a mix of hotel room, car rental and sales taxes. The bill allows for increased hotel taxes in Greater Boston if Massachusetts to fall short on its debt obligations.
State officials had originally planned for a late winter bond sale, but Baker held off when he took office in January.
The impending departure of James Rooney after a decade as the convention center's executive director also cast a cloud over the expansion plans, said Baker. Rooney will leave in July to become chief executive of the Greater Boston Chamber of Commerce.
"The environment has changed greatly [since], and the Seaport district has experienced an economic boom," Baker said in a statement. "Plunging ahead now, when the data on the expansion's feasibility is mixed, combined with the change of leadership at the MCCA would be irresponsible given the vast amounts of taxpayer dollars necessary to not only build but operate the expanded facility."
During the annual Massachusetts investor conference last December at the convention center, Rooney said the expansion was necessary for Boston to compete against other major cities. "It's about Boston's role in a 21st century global economy," he said. "We'll never transfer Boston into something like Las Vegas, but if we can move into the top five, that would be enough."
Speaking to reporters on Wednesday, state Secretary of Administration and Finance Kristen Lepore questioned whether the center could fill enough hotel rooms to justify issuing the debt, and said even with the expansion, Boston's would only be the 15th-largest convention center in the country.
Boston-based think tank Pioneer Institute lobbied Patrick last year not to sign the bill, saying revenue projections were overly optimistic and that provisions of the bill encouraged secrecy.
