Officially nominating your party's presidential nominee isn't a small affair. The 2012 Republican National Convention recently adjourned in Tampa, Florida. after tropical storm Isaac threatened to derail the event. The event brought 2,286 delegates and 2,125 additional alternate delegates from the 50 states, District of Columbia and five U.S. territories. In addition, more than 15,000 members of the media converged on Tampa, Fla. and made it the second-largest media gathering this year behind the 2012 Summer Olympic Games in London. Technology allowed the event to be streamed live over the Internet creating what organizers called a "convention without walls." An event of this size has a high price tag, but who picks up the tab? Surprisingly, most of the bills were sent to Tampa's municipal government.

The Cost
Tampa, Fla. mayor Bob Buckhorn called the convention the city's "coming out party." He believes that spending roughly $20 million to host the convention made a big impression on the more than 50,000 visitors and that it was well worth the cost. He hopes that the visitors take a second look at Tampa as a place to build a business. In addition, he believes that the local economy will get a major boost. Before the convention, he said that visitors would pour around $150 million into local businesses.

However, the cost goes far beyond the $20 million to host the convention. Along with the money spent for security, the city of Tampa government, using local funds along with a $50 million federal grant, gave the city a major makeover. Old infrastructure was torn down, bridges were lit up with colored LED lights, $2.7 million was spent on beautification and a major makeover to the city's international airport was completed.

Was It Worth the Cost?
Tampa, like other cities, has a looming budget deficit that resulted in widespread layoffs that were needed to get the city's finances under control. This has made some people question whether the city could afford such a large event in times of hardship.

A sandwich shop near the convention center reported that only two customers visited for lunch on one of the convention days, and another restaurant owner speaking to reporters said that business was significantly lower than average during the convention. Reports like these are widespread throughout the media. Although some business owners blame tropical storm Isaac for keeping people out of the Tampa area longer than expected, some have seen other problems. The sub shop that saw only two customers could only be reached by asking a police officer to open a security wall, and other security measures like the multiple road closures left some businesses inaccessible to customers during the convention.

Other business owners reported that some events were organized in a way that kept convention goers confined instead of encouraging them to visit local businesses throughout Tampa and the surrounding communities. Philip Porter, an economics professor who studies the economic impact of major events, called the $150 to $200 million estimate, "absurd." He believes that if 50,000 came to Tampa for the convention and purchased food, T-shirts and other small items, that they wouldn't have spent $200 million.

The Bottom Line
The figures are not yet available for the 2012 convention, but if the 2008 Republican National Convention that took place in Minneapolis/St. Paul is used as a guide, Tampa, Fla. should expect to see $150 to $175 million worth of local economic benefit. According to reports, the Minneapolis/St. Paul convention brought roughly $168 million in direct and indirect spending. That's a decent return for hosting a party.

Related Articles
  1. Investing

    Which GOP Candidate Brings What to the Table?

    What are the major GOP presidential candidates' economic plans and how do they differ?
  2. Retirement

    The Cities Where the Ultra-Rich Retire in Florida

    Understand why the Florida communities of Miami Beach, Palm Beach and Key West serve as magnets for the ultra-rich retirees who descend on the state.
  3. Retirement

    The 5 Best Retirement Communities in Sarasota, Florida

    Discover five of the most popular retirement communities in the Sarasota/Bradenton area of Florida, and why retirees are choosing that area for retirement.
  4. Economics

    Benefits of China Changing It's One Child Policy

    China's one-child policy is changing, and investors are looking for ways to cash in. The reform might not have the effects that many anticipate, however.
  5. Entrepreneurship

    START-UP NY: How a Tax-Free Zone Would Work

    START-UP NY is an initiative designed to attract companies to New York State by giving them 10 years of tax breaks. Sounds good, but is it a success?
  6. Economics

    Explaining Economic Integration

    Economic integration reduces or eliminates trade barriers among nations, and coordinates monetary and fiscal policies.
  7. Investing

    How Much Money Will It Take to Become President in 2016?

    Learn why the 2016 presidential election is likely to be the most expensive race ever, and estimate how much it is going to take the eventual winner to prevail.
  8. Investing

    Will Donald Trump Be Able to Fund His Entire Campaign?

    Discover why Donald Trump's extravagant wealth and vast net worth may still not be sufficient to self-finance a successful presidential campaign in 2016.
  9. Economics

    The 3 Top Things to Know About Donald Trump's Economic Views

    Learn how Donald Trump's economic views are big on confidence but short on specifics. Identify the candidate's top three areas of focus.
  10. Economics

    What's a Price Ceiling?

    A price ceiling is the maximum amount a seller can charge for a product or service.
  1. What is the Social Security administration responsible for?

    The main responsibility of the U.S. Social Security Administration, or SSA, is overseeing the country's Social Security program. ... Read Full Answer >>
  2. Where are the Social Security administration headquarters?

    The U.S. Social Security Administration, or SSA, is headquartered in Woodlawn, Maryland, a suburb just outside of Baltimore. ... Read Full Answer >>
  3. Is the Social Security administration a government corporation?

    The U.S. Social Security Administration (SSA) is a government agency, not a government corporation. President Franklin Roosevelt ... Read Full Answer >>
  4. How does the role of Medicare/Medicaid affect the drugs sector in the U.S.?

    Medicare and Medicaid have enormous influence on the pharmaceutical, or drugs, sector in the United States. For instance, ... Read Full Answer >>
  5. What are the ethical arguments against government subsidies to companies like Tesla?

    The ethical argument behind government subsidies is that they should be put into place to help industries that will, in turn, ... Read Full Answer >>
  6. What do I do if I think an accountant is in violation of the Generally Accepted Accounting ...

    The Financial Accounting Standards Board (FASB) promulgates generally accepted accounting principles (GAAP) in the United ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Term Deposit

    A deposit held at a financial institution that has a fixed term, and guarantees return of principal.
  2. Zero-Sum Game

    A situation in which one person’s gain is equivalent to another’s loss, so that the net change in wealth or benefit is zero. ...
  3. Capitalization Rate

    The rate of return on a real estate investment property based on the income that the property is expected to generate.
  4. Gross Profit

    A company's total revenue (equivalent to total sales) minus the cost of goods sold. Gross profit is the profit a company ...
  5. Revenue

    The amount of money that a company actually receives during a specific period, including discounts and deductions for returned ...
  6. Normal Profit

    An economic condition occurring when the difference between a firm’s total revenue and total cost is equal to zero.
Trading Center
You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!