By Steve Patterson
St. Louis (KSDK) - It's a bombshell. A guaranteed infusion of more than $6 million of direct spending in St. Louis is spoiled after the announcement of a canceled conference.
The U.S. General Services Administration is canceling its GovEnergy conference scheduled for August 19-22 at the America's Center in Downtown St. Louis.
The city is feeling the consequences stemming from wasteful spending at a government conference in 2010.
The GSA was scrutinized and investigated in April following released video from a lavish 2010 Las Vegas conference that cost more than $800,000.
The spending led to congressional hearings and resignations. It also created new federal guidelines for future conferences to regulate spending. Officials with the St. Louis Convention and Visitors Commission say they were told those regulations were not being met.
The convention would have been this year's largest August conference at the America's Center, bringing more than 4,000 government workers to the city and infusing some $6 million dollars in direct spending.
Because of the short notice, ten area hotels that have blocked out close to 2,500 rooms will not be filled and some 1,500 hospitality workers are likely affected or out of work for that week.
A third party handling the GSA reservation tells the CVC they are able to The GSA is able to invoke a 'force majeure' or 'force of God' clause. This means reimbursement of any kind may be refuted.
At least one hotel, The Renaissance St. Louis Grand is fighting the pullout.
An official with the hotel tells NewsChannel 5 they had more than 900 rooms reserved and are set to lose an estimated $400,000. They are reviewing their options for legal action.
"It's a Huge disappointment," said CVC Sales VP John Bettag. "It's very difficult for us to recoup. The properties will have a difficult time recouping. That month of August is going to be a difficult month for us."
A GSA spokesperson released the following statement on Thursday:
"After a rigorous review of the 2012 GovEnergy Conference, GSA has postponed this year's conference because it does not meet the new guidelines that GSA has put in place for conferences and contracts. There were many unanswered questions about how the conference was structured and the contracts, and there was not sufficient time to address the problems raised. We are working hard to make sure that all parties are treated fairly, and we are open to returning to St. Louis in the future."