FMI MULLING TRANSFERRING CONVENTION FROM CHICAGO

ELLIOT ZWIEBACH

WASHINGTON -- The Food Marketing Institute here may seek to move its annual convention from Chicago if that city cannot lower hotel rates and eliminate excessive exhibition-related labor costs.

In a letter to Chicago Mayor Richard M. Daley, Timothy M. Hammonds, president and chief executive officer of the FMI, wrote, "We are now reluctantly re-evaluating our future in Chicago against other markets that offer similar benefits for lower cost."

Hammonds told SN last week he would like to see the annual convention remain in Chicago. "What we're telling the city is, we'd like them to fix the problems so we can stay. We like Chicago.

"[But] in a year when the boom economy and relative good health of the food industry should have produced record attendance," Hammonds said, total registration fell from 35,000 in 1997 to 34,000 in 1998, including a decline of 13%, or about 1,500 people, in on-site registrations.

According to Hammonds, the FMI has been holding its conventions in Chicago for the past 15 years in large part because no other city had facilities that could accommodate its needs. However, now that Orlando, Fla., is building convention facilities larger than Chicago's 2.1 million-square-foot McCormick Place, the FMI has other options, he told SN. FMI officials said the institute's contract with McCormick Place, which is renegotiated annually, runs through 2000. Any decision to move would require two years' notice.

In a reply to Hammonds' letter, the mayor's office acknowledged the problems he cited, and responded, "to that end, the mayor has called upon the entire trade show community to band together to improve the situation."

Other trade associations besides the FMI have also expressed interest in seeking alternative sites to Chicago, including the National Housewares Manufacturers Association, which said earlier this month it is considering moving its International Housewares Show to Orlando in 2001 because of concerns with labor issues, transportation and hotel space; and the Radiology Society of North America, which told SN it will move its convention from Chicago to Orlando in 2002 and alternate between Chicago and Orlando beginning in 2004, citing labor jurisdiction issues and transportation concerns.

Hammonds wrote in his letter that work rules and hotel rates were the two major problem areas "that force us to confront this decision [to consider moving the site]. Both of these require your input on our behalf for FMI to remain in the city."

The letter said work rules do not refer to labor rates, "which are comparable to other major convention venues, [but to] the hidden costs that exhibitors must bear and [that] add excessively to the overall cost of participation on the show floor. Elimination of the prohibitive and costly work rules that are not common in other cities would add attendee value and open the door for us to expand our exhibit floor, bringing even more dollars into the city."

Hammonds urged Daley to use his influence with the Illinois State Legislature to enact legislation that would simplify "the complicated union environment and work rule provisions in McCormick Place . . . to provide relief to the many small- to mid-size companies that are unable to exhibit in our show."

That legislation was defeated by a handful of votes earlier this year but was subsequently reintroduced, "and our letter gives support to the need to pass that bill," Hammonds told SN.

The FMI's other major concern is the high cost of hotel rooms -- "in excess of $300 per night, escalated by general managers eager to cash in rather than to build longterm relations," Hammonds wrote.

He told SN the number of rooms usually reserved for FMI convention-goers was cut back this year "because the economy is so good that the hotels were able to sell rooms to transitory business people at higher rates than the convention rates. But that's not going to help them hold onto their convention business longterm.

'We feel they should pay attention to their best, repeat customers first and not make it tougher for shows that come there."

In the reply from Daley's office, M. Bridget Reidy, Daley's deputy chief of staff, wrote, "Your story, along with many others, is testament as to why the mayor is seeking to change the situation at McCormick Place.

"The mayor recognizes that the work rules add to the overall cost of producing a show at McCormick Place. The mayor also recognizes that the hotel and transportation industry must also participate in any solution that will ensure the longterm viability of conventions in Chicago."

The mayor's office could not be reached for further comment.