VIRGINIA BEACH — The city’s 20-year-old convention center struggles to generate enough revenue to cover its expenses, but there’s room for improvement, according to a consultant who conducted an economic analysis of the venue.

Adam Sacks, president of Tourism Economics, provided the City Council on Tuesday with an overview of two studies that analyzed the operations and economic impact of the Virginia Beach Convention Center on 19th Street at the Oceanfront.

Though the convention center is subsidized by the general fund with more than $2 million a year to cover the gap in revenue generated, Sacks said the center supported 814 jobs and generated $9.8 million in state and local taxes, of which $5.1 million was local.

“It’s actually not a loss leader if you look at it holistically with the taxes generated,” Sacks said.

Sacks said the return on investment is worth it but could be better. He stressed the positive economic impact of the center on the local economy and noted that comparable venues charge for parking and are connected to a headquarter hotel.

It’s a refrain the City Council has heard many times before.

“Not having a convention center hotel does limit your opportunity,” Sacks said.

The study utilized data from 2023 when the convention center hosted 275 events with nearly half-a-million participants. Those events included consumer shows, convention and corporate meetings, sports and tournaments and trade shows.

More than half of the visitors spent the night in the city, 34% were local and 14% were day visitors from out of town. Of the people who came from out of town, they spent $76 million in the local economy on lodging, restaurants, retail, recreation and transportation including parking.

The convention center’s economic impact — based on off-site spending by meeting participants, purchases from supplier industries and employee spending in the local economy — totaled $110.8 million. Of that, $27 million was spent on lodging, and $24 million on food and beverage.

The analysis also compared Virginia Beach’s percentage of operating expenses paid by operating revenue to 11 other comparable venues including the Baltimore, Tampa and greater Richmond convention centers.

Virginia Beach landed near the middle of the pack with 63 cents on the dollar covered by revenue. Tampa led with a $1.09 coverage ratio; the Roland E. Powell Convention Center in Ocean City, Maryland, had the lowest ratio, at 36 cents, and like Virginia Beach, was the only other center without a hotel.

In 2023, a city audit that looked back five years revealed the annual cost of running the Virginia Beach Convention Center had exceeded the amount of revenue it brings in by more than $2 million .

At that time, City Auditor Lyndon Remias recommended a deep dive into the convention center’s revenue and expenses and how that would affect its long-term sustainability.

Last year, the City Council ordered a study of the convention and sports center district . Six previous studies over two decades all concluded the convention center needs a headquarters hotel and a bigger, mixed-used project that can go along with it, according to the city.

That study also determined 19th Street is suited for a 360-room headquarters hotel with a signature restaurant and rooftop bar; 950 residential units with retail wrapping around the base of the buildings; and a “town center concept” of walkable restaurants and bars along 19th Street.

Such a project would require approximately 3,500 parking spaces to include 1,660 for the residential units; 400 for the hotel and 1,500 for the convention center or the sports center, according to the analysis.

Mayor Bobby Dyer has said he’s interested in pursuing a cost analysis for a headquarters hotel and parking garages. At Tuesday’s meeting, Vice Mayor Rosemary Wilson said a parking garage needs to be a priority.

“We’re a victim of our own success and we’ve got parking issues,” Wilson said. “We really got to get our arms wrapped around this.”

In a few weeks, the City Council will hear details of a preferred plan for the central beach area which includes the convention center district. City staff and consultants with Renaissance Planning and Dills Architects have designed the plan for roughly 80 acres of land. City Manager Patrick Duhaney said it will recommend where to build a parking garage and other development.