Our sister newspaper Crain's Chicago Business has a report on what went wrong in the city's convention business, resulting in McCormick Place losing several events, including the 2012 and 2015 NPE trade shows. Among the findings: internal memos from the Metropolitan Pier and Exposition Authority, (the agency known as McPier that runs McCormick Place) that the agency "made an unprecedented effort" to keep NPE in Chicago. According to the story: "McPier offered financial incentives for the triennial plastics show to stay in 2012 and 2015, including discounts on space rental and price freezes for services and labor. (McPier redacted the exact numbers from the documents it provided Crain's.)" Juan Ochoa, McPier's CEO, "even laid off 100 electricians to demonstrate his commitment to making some changes," the story says. Ochoa told Crain's that McPier probably didn't stand a chance. As we all recall, the Society of the Plastics Industry Inc.'s NPE executive committee decided to move the 2012 and 2015 shows to Orlando, Fla. NPE was declining and it "needed to create a diversion," Ochoa told the newspaper. "The [higher costs] were certainly an excuse for them to leave the city, especially since we gave them the most aggressive package of incentives we had given to any show during my tenure." Crain's reported that SPI reported a 28 percent drop in show attendance between its 2006 and 2009 events, and a 24 percent decline in membership revenue in the same period, forcing the group to lay off one-third of its staff. Crain's also reports: "[An SPI spokesman] says the association is looking forward to its upcoming Orlando event and will not comment on what happened at McCormick Place or on the state of its finances. But a spokesman for the Chicago riggers union confirmed that up to 75 of its members will travel to Orlando to help secure the heavy machinery on the show floor, working at Chicago labor rates and with all expenses paid." The NPE saga is a small but interesting part of the story, "Crain's investigation: The high price of political payback at McCormick Place," by James Ylisela Jr. The story is on the newspaper's website today, and will be in the Nov. 14 print edition. To add some context to the story, keep in mind that attendance at the 2009 NPE show suffered because of the impact of the Great Recession. SPI membership also took a major hit with the economic crisis. Is it a surprise that McPier offered unprecedented incentives to keep NPE? No way. As we reported at the time, the five-day NPE2009 show generated $95.3 million in direct spending, according to the Chicago Convention and Tourism Bureau. The numbers for the 2006 show -- held in healthier economic times -- were even better, an estimated $154.7 million. McPier had to pull out all the stops to try to keep that business in the city. Is it possible that SPI's NPE executive committee would have voted to move NPE to Orlando regardless of what McPier offered? I don't know, but it's possible. It's not a big scoop to say many NPE exhibitors who were unhappy with McPier. Remember the $345.39 that one exhibitor paid for four cases of Pepsi, and how that story captured how many felt they were being ripped off in Chicago? I've talked to exhibitors who felt that real change in Chicago would never happen unless they moved the show to Orlando, at least for two show cycles. Some definitely felt a warm fuzzy feeling about dealing with Orlando and the Orange County Convention and Visitors Bureau, especially in comparison to McPier. Some exhibitors say Chicago never got serious about changing its convention center until it became clear that SPI was serious about moving the show. For the record, I think Chicago is a great place for NPE. Geographically, it's almost perfect for a U.S. manufacturing show. Exhibitors and attendees are familiar with the city and the venue. And you can't beat June in Chicago. But after holding NPE in Chicago since 1971, some SPI members were looking for a change, Cost was a big part of the decision to move the show. SPI says exhibitors in Orlando will save an estimated $10 million on travel and exhibiting compared to what they would have paid in Chicago. There are still some big questions to answer about the future of NPE, not the least of which is whether companies will really save that much money. But I expect the 2012 show will be better than 2009. The economy is better, and manufacturing in North America has stabilized. And now Orlando -- not Chicago -- is poised to benefit from a stronger NPE.
Report: Chicago's high costs were an 'excuse' to move NPE
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