2004 site selection summary

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Here's an excellent summary from George Washington U of the 2004 site selection process. Except for the later date of the 2008 convention, I would expect the process to be similar. Highlights:

Democrats had considered four cities to host the 2004 Democratic National Convention: Boston, Detroit, Miami, and New York City. On November 13, 2002 they announced that they will hold their convention in Boston, marking the first time a major political party has held its convention in the city. On December 17 officials from the city and the Democratic National Committee signed the contract in a ceremony at FleetCenter.
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The Democrats' site selection process began in October 2001, when the Democratic National Committee sent out letters to the 34 largest cities inviting them to consider hosting the party's 2004 convention. The introductory letter outlined Preliminary General Requirements.
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On February 28, 2002, the Democratic National Committee invited 10 cities -- Atlanta, Baltimore, Boston, Chicago, Dallas, Detroit, Houston, Miami, New York City and Pittsburgh -- to submit proposals

Other requirements included 17,000 hotel rooms and unlimited access to the convention hall for 3 months. (Although this was considerably shortened for the Republican Houston convention in 1992.