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H&R Block takes convention out of state; KC officials upset

  • Kansas City Star
  • Published Sunday, May 30, 2010, at 12:06 a.m.
  • Updated Sunday, May 30, 2010, at 3:01 a.m.

Kansas City convention officials are steamed at H&R Block for not bringing a company convention worth $3.5 million to its hometown, despite a huge discount from Bartle Hall.

Instead, a consultant working for Block has told the Kansas City Convention & Visitors Association the choices had been narrowed to Las Vegas or Orlando, Fla., saying both cities offered rates and concessions for the early November event that couldn't be beat.

But the association estimated that Block could have saved $680,000 by not flying an estimated 800 local employees to an out-of-town convention site and accommodating them in hotels.

"You would hope that a local business, particularly one that's had such cooperation from the community, would feel some sense of obligation and commitment when determining where a significant piece of business will go," said Bill Lucas, association chairman.

Block officials said bids they received from other cities were more cost-effective and provided an opportunity to house all 3,000 attendees in one hotel.

"Kansas City is always our first choice for meetings and events — when it makes logistical, business and financial sense," company spokesman Gene King said in a statement.

The chance to land the three-day Block event — the association estimated that it would have had an economic impact of $3.5 million — popped up in early May when a flood swamped Nashville, Tenn. The water damaged the Gaylord Opryland Resort & Convention Center, where the Block event was scheduled, forcing the company to look elsewhere.

"We heard about this opportunity about two weeks ago when they decided they needed to relocate," said Rick Hughes, the association's president. "We tried to put a good deal forward.

Bartle Hall was not exactly free, but Oscar McGaskey, city director of convention and entertainment centers, said Block could have rented the facility at one-third the published rate — a discount worth $82,115 over three days.

"I'm disappointed Kansas City didn't get it," McGaskey said. "Not having a convention like H&R Block in Kansas City is a concern because we don't have opportunities to get that revenue."

Lucas pointed out the city and state provided substantial tax incentives in 2004 to help the company build its $138 million headquarters that opened in 2006.

As part of the headquarters deal, Block demanded that the city redevelop the blocks near their new project that became the Kansas City Power & Light District.

The entertainment center was developed with an eye toward boosting the city's convention business.

As for the incentives, Block last year repaid about $1 million to the state for failing to meet the employment goals established for the headquarters deal.

The company promised that it would retain 1,222 existing Kansas City jobs and that 263 more people would be hired within four years, according to the development agreement signed in 2004.

Following recent layoffs, Block employs about 1,100 people in Kansas City.

As for the city and state tax increment financing provided, there is no penalty involved. That is because TIF generally is a performance-based incentive based on the tax revenues generated by the project.

Block's decision runs counter to some other major local corporate citizens, Lucas said.

"We always hope a locally headquartered business will look at their hometown first," Lucas said. "Hallmark and Cerner have pulled a lot of their events back to Kansas City."

Cerner Corp., the North Kansas City-based medical software giant, brought its annual Cerner Health Conference back to downtown Kansas City in 2008 after holding it outside the area for seven years.

At the time, company officials said they were returning the event, valued at $4.5 million, to capitalize on the new downtown improvements.

A Hallmark Cards spokeswoman said that while the company did not have a policy regarding where events were held, it was bringing about 650 people to town in July for a retail summit of Hallmark Gold Crown store owners, and 300 managers of corporate-owned stores are due for a management conference in August.

King said Block hosts more than 50 meetings each year in Kansas City, including one last week that brought 100 field leaders to town.

Kansas City officials said they could have hosted the major Block event comfortably because of the large number of local delegates who would not have needed hotel accommodations.

The association estimated that Block would have needed 1,400 rooms at the peak of the event, and 2,100 were available, counting core downtown hotels and those at Crown Center.

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