That appears to be a distinct possibility.
Back story is here.
Bob Novak wrote on this before Christmas. He says blame will be heaped at the door of Howard Dean, and that Hillary Clinton may not be very happy with the outcome:
Democratic National Chairman Howard Dean faces a dilemma for siting the party's 2008 national convention. He would prefer Denver, but he may have to be content with New York.
Denver lacks sufficient hotel facilities, a suitable arena and labor union support, not to mention adequate financing. But when New York was leaked as the site, the reaction was so negative that Dean delayed a decision. Party members complained that it would be the fourth out of the last nine Democratic conventions scheduled for New York. Backers of Hillary Clinton don't want her nominated in her place of residence. George H.W. Bush and John Kerry lost elections when nominated in their respective hometowns of Houston and Boston.
A footnote: The Democrats' first choice for '08 was Minneapolis, a rare city that wanted the conventions in this round. But Republicans beat them to the punch in scheduling their convention there. Democratic party rules prohibit them from convening in the same place (as they did in Miami Beach in 1972).
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