The Business Outside The Denver Convention

Organizers of the Democratic National Convention in Denver say it will pump as much as $160 million into the local economy. Experts say the total will be more like $16 million. Businesses in the Mile High City are optimistic, though some are slashing prices to make sure the convention isn't a bust for them.

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RENEE MONTAGNE, host:

Well, another thing, Steve, since everyone attending that Democratic National Convention wants to locate as close as possible to the event, most of the hotel rooms in Denver are booked. The convention is bringing up to 50,000 people to Denver. They're expected to spend money on everything from meals to souvenir shot glasses of the Mile High City.

The city hopes to get an economic boost worth $160 million from this convention. As NPR's Jeff Brady reports, that may be a bit optimistic.

JEFF BRADY: The numbers are impressive. The Democratic Party alone has reserved more than 17,000 hotel rooms. The federal government has given the city $50 million to spend on security, but overstating the financial benefits of a big event like a political convention happens all the time, according to Alan Sanderson. He's an economics professor at the University of Chicago.

Mr. ALAN SANDERSON (University of Chicago): If you take whatever number a chamber of commerce or somebody, a promoter, is going to give you and move the decimal place one to the left, it's probably much closer to the truth.

BRADY: Sanderson says convention organizers often fail to distinguish between gross and net benefits. For example, if a hotel raises its rates $150 a night...

Mr. SANDERSON: That extra $150 all leaves the city. It goes to wherever the hotel's headquarters are, and they're not Denver. If you were staying at a mom-and-pop hotel, a higher percent of the revenue would stay in the metropolitan area.

BRADY: And Sanderson says at a history-making convention like this one in Denver, delegates and reporters are likely to stick close to the arena rather than skip out to go shopping. That's bad news for Jamie Sutherland(ph), who manages Players Clothing. He called up merchants in Boston to find out how well they did when the Democrats were there four years ago.

Mr. JAMIE SUTHERLAND (Retail Store Manager): They had a little increase and not much. So what we're doing here also, we marked our stuff down 50 to 70 percent off.

BRADY: And Sutherland is getting a little creative. There's a sign outside announcing the store's liberal discounts. Over at the Brown Palace Hotel, all the rooms are full, and in the lobby there's someone who's using the convention to launch a new business.

Greg Hartman heads Sustainable Cards. The company makes hotel key-cards out of biodegradable wood. Ninety hotels in Denver are trying out the cards just for the convention. Hartman says a lot of people throw away those plastic key cards, and that adds up.

Mr. GREG HARTMAN (Sustainable Cards): You're talking about 240 million cards winding up in the garbage each year. So that's the equivalent of almost 10 triple-seven airplanes being thrown away made of plastic each year.

BRADY: A few blocks away, Joe Wood(ph) is standing in the water, on the edge of Cherry Creek, which runs through downtown Denver. He navigates a long boat with passengers up and down the creek.

Mr. JOE WOOD (Boat Operator): These are Venetian style, but they're actually punt boats from Cambridge, England.

BRADY: Wood says the nonprofit group that owns the boats is extending its season just for the convention.

Mr. WOOD: We would normally have closed by that time, but we're staying open especially for it and hiring some extra people to meet the demand that we're hoping will be there.

BRADY: Wood says he traveled to England recently, and when people found out he was from Denver they had all kinds of questions about the city and the convention. That kind of exposure is pretty valuable, even if the promised economic benefits don't live up to expectations. Jeff Brady, NPR News, Denver.

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