voiceofsandiego.org: Slop... The Plenary Session (Part I): A Dissolving City Talks Convention Center Expansion

I have been brewing a theory for a while that the as the city of San Diego continues to struggle financially, there will be a directly proportional rise in a decentralization of core government services and infrastructure efforts.

Plenary Session Part I

Neighborhoods will start to look after themselves and provide what they need or want in parks, amenities, even public safety. To be even clearer: If you care about, say, a skate park in your neighborhood you'll form a little group, collect money, pay for its upkeep and then look across the park at something else the city is neglecting, etc.

This is already happening, of course. The city has dozens of business improvement districts, each of which basically exist to pick up where the government has left off. The area's hotel owners have banded together to pass their own tax to market the region and fund pet projects. This is how the San Diego Convention and Visitors Bureau, in the midst of a severe budget crisis, has found itself with more money to spend than ever before.

So when I heard about the task force being formed to study whether the city should (not "could") build an enormous expansion to its already very large convention center, I started to ingest the news with this preconceived notion in mind.

Here the city is, falling apart, but somehow preparing itself for the costliest construction project it has perhaps ever undertaken.

Either we're nuts, or some are gathering together, getting ready to pass the collection plate to make sure that while the city sinks, something they care about survives.

This is smart on their part. Whether I or anyone else disagrees, we should all understand what's going on. So I've spent as much time as I could spare the last couple of days talking to people involved about the Mayor's Citizen Task Force on the Convention Center Project.

Notice, first off, the name of the Task Force: It's the Mayor's Task Force on the Convention Center Project. The most important part of the discussion, whether it should be a project at all, is already decided and framed appropriately.

Steve Cushman, the chairman of the Port Commission and a co-chairman of the task force, wanted me to know it's not a given, yet, though, that this is a project the city's leader will pursue no matter what.

"The mayor said: 'Tell me if this doesn't make any sense. If you do, I will drop the issue -- never bring it up again," Cushman said.

My guess is that the task force will not tell the mayor that it doesn't make sense. Over coming days, let's try to figure out whether we think it does.

I've done a few interviews and have been reading a bunch of documents, and over the next few days I'll roll out what I could collect.

But if you all give me a hand, we might come out with more insights. I'll repost all the best comments and observations.

So! Insight posse, let's get to work. Here are some documents I need help reviewing:

-- SCOTT LEWIS

crazy

Posted by Ryan | reply to this comment
August 4, 2009 6:45 pm

My home is in foreclosure, I owe on credit cards, student loans and I can't afford to buy the kids clothes for school. I know how to get myself out of this mess......I'll build an addition onto my house. The Taskforce has zero loyalty and responsibility to the citizens of SD. The exist to serve their specific constituents. This is a bad idea from day one. Especially in the midst of the worst financial meltdown since the Great Depression, with no bottom in sight. Why does these political idiots always seem so different when running for office? Once they get elected, any thought of doing things different goes right out the window.

Posted by KP | reply to this comment
August 4, 2009 8:48 pm

Actually, KP, if you would build an addition on your house and then rent it out for more than the monthly payment on the home improvement loan, it might not be such a bad idea. Even if the rental only broke even, you might make some money by providing some additional services like cooking meals, running errands, etc. The problem is that since your home is in forclosure and you owe on credit cards, I doubt that anyone would lend you the money for the home improvements. The real question is whether the city is in that same boat.

Posted by April | reply to this comment
August 5, 2009 9:01 am

And, to follow this train of thought. If no lender would offer a loan, would you then attempt to create a bond offering (or some other debt instrument), at high rates, that would saddle your heirs for decades? Also, would you attempt to "sell" your family and neighbors that it wouldn't cost anybody, anything, to do all of this?

Posted by Dale Peterson | reply to this comment
August 5, 2009 9:58 am

How about if KP builds the addition and rents it out for about half the additional mortgage payment and is only able to rent it out for about half the time? With that windfall, he can hire a cleaner, a gardener and a cook (all at minimum wage) to try and increase the occupancy rate while simultaneously providing several of the low-skilled low paying service jobs that we seem intent on making the backbone of our local economy.

Posted by Paul | reply to this comment
August 5, 2009 10:13 am

Why should we expand the Convention Center to cover half of downtown? Because, if we don't, Comicon will move to Annaheim or Las Vegas. Boo, hoo, hoo. All the geekoids will no longer be able to strut around in their Empire Storm Trooper suits. Grown adults, mostly out of work, will no longer be able to peruse the latest comics aimed at testing their mental acuity to the limit. Oh, yes. And then, there is all the money Comicon brings into the city. Well, folks, not one single centime of that Comicon money ever reaches my wallet, no matter how indirectly. If you are honest with yourself, you know the same applies to 99.9999% of the population. Those who profit are the hotels, the Gas Bag Quarter restaurants and the homeless who beg around the Center. Let them pay for construction of more Convention Center -- not taxpayers.

Posted by Edgar | reply to this comment
August 5, 2009 7:36 am

Scott, have you contacted Heywood Sanders (professor of public administration at the University of Texas at San Antonio)? That might give some interesting insight. He gave a presentation to the task force, and reportedly they weren't too happy with him. He was quoted in an article as saying “What the convention center is crying out for is not a task force but a serious independent audit and analysis of the center’s performance ... The center’s performance needs to be verified independently because, right now, all people have to go on is what the convention center management tells us.” He also said that San Diego's “civil servants have shown a remarkable capacity to misstate, misrepresent, control the facts ... They have done it on pension benefits, city finances, sewage treatment plants, the ballpark, and they are doing it again on the convention". (http://www.sandiegoreader.com/news/2009/jun/10/city-light-1/)

Posted by Paul | reply to this comment
August 5, 2009 8:33 am

I have spoken at length with Mr. Sanders and will have an interesting (hopefully) post about his observations.

Posted by Scott Lewis | reply to this comment
August 5, 2009 1:22 pm

That is good to hear. I will be interested to read what you gleaned from that. He seems to be a lightning rod for this topic around the country and is roundly criticized by some. I am curious not only in what he said but in how credible you found him and his studies.

Posted by Paul | reply to this comment
August 5, 2009 2:41 pm

Ok, I'll bite. Part 1. Mission is biased toward finding ways to “make it work.” Of the 15 “members of the public,” how many were just “citizens” and not politically-connecte folks? What communities and stakeholder groups did they represent? Were any planning group representatives selected? An interesting sidenote – I notice that the convention industry has grown similarly to lobbyists. As professional organizations and trade groups have gained political clout and attention, attendance at their professional association's or trade group's conventions seems to be growing. If politicians were serious about listening to their constituents and not necessarily the lobbyists, do you think attendance at these conventions and conferences might wane or stagnate?

Posted by Concerned Taxpayer | reply to this comment
August 5, 2009 9:15 am

We have already paved over far too much of our downtown waterfront catering to private interests like the convention center, Doug Manchester, other big hotel developers and the cruise lines. If the city won't hold the Port accountable for preserving our dwindling bayfront spaces for the public, we'll have to depend on the Coastal Commission to do the job. Its too bad that the City of San Diego doesn't value its own waterfront. Like everything else, the politicians and bureaucrats simply allow big downtown real estate developers like Tucker Sadlers and Manchester everything. Its easier than thinking for themselves. Thanks for Scott for blowing the whistle, finally.

Posted by Watcher | reply to this comment
August 5, 2009 9:15 am

Forget 'counting on the Coastal Commission'! Peters & crew just 'gave away $292,000' of public taxes (lease money paid by a developer) on the kettenburg project to the Driscoll boat yard, who's refused 'building' anything whilst bringing in monthly 'rents' on his two+ 160 ft. long yachts on his docks! Forget that $300,000 have been paid in permit fees, he probably doesn't have 'funding' now... We've let the 'fox' be in charge of the hen house at the Coastal Commission now!

Posted by Fat chance | reply to this comment
August 6, 2009 10:27 pm

Scott: Go to the task force's website and you will see that the mandate the group was given by the mayor didn't ask if an expansion is a good idea. Instead the mayor is asking the group to advise him on how to make it happen. What this whole episode shows is that folks like Carol Wallace, Hal Sadler and Perry Dealy call all the shots on our downtown waterfront, and that Mayor Sanders and Steve Cushman are just their handmaidens. Tucker Sadler is already making big bucks, paid by the convention center board (not the city) with the jobs of 1) determining the feasibility of an expansion, and 2) designing that expansion. The company has no reason to point out all the problems related to such a project when it is being paid by the very coroporation that wants the expansion built, and the meter's running.

Posted by Watcher | reply to this comment
August 5, 2009 9:15 am

Across the nation, convention centers (including our own) have been expanded unnecessarily and sit empty many days of the year. The project proponents argue that "if we build it, they will come." But this is truly a belief with no hard evidence to back it up. This feeds into the bias in favor of expansion that I mentioned. The CC board has been told by a few of the most lucrative clients that the existing facility is no longer large enough to accommodate them and they might take their convention business – and with it, the tax revenues they generate - elsewhere. This action would leave dates open for other conventions of the size that our current CC can handle. If and when those outgrow SDCC, others will come along to fill those holes. There are only a few mega-conventions at the top of the pyramid; there

Posted by Michael-Leonard | reply to this comment
August 5, 2009 9:19 am

I read on the Union Tribune an article (http://www3.signonsandiego.com/stories/2009/aug/05/1n5water005636-oval-park-isnt-part-waterfront-plan/?success) on the cruise ship terminal that is beginning construction today and on the Voice of San Diego your article on the convention center. It seems to me like the harbor area has become more and more a commercial area and less and less a public area. I mean, I'll never go on a cruise and I'll never go to a convention. So I'm quite frustrated, as you can tell. It seems like the port commission pretty much acts with impunity; we don't elect them and Sacramento is the only one that controls these guys, but they seem to be turning a blind eye to the Port. Meanwhile, your news organization and the Union Tribune is watching them do this bait-and-switch junk and the Port is just ignores it. Anyway, do you know of some pressure group that can keep the Port in line?

Posted by Robert | reply to this comment
August 5, 2009 9:22 am

The draft recommendation frames Heywood Sanders statements to the committee as supporting their position. They took as a positive that he couldn't get enough information to say the Convention Center is not successful. Not a ringing endorsement, especially in light of his other comments in my previous post. Their "prospective room nights lost" number is a hoot. What I really want to know is what the actual occupancy rates are when there are no national conventions with overnight guests, compared to rates for national conventions, compared to room night projections after any expansion (completely different and dramatically smaller than the mythical "prospective room nights lost" number they threw out). Then look at how much it is going to cost us for the realistic net gain (including costs to run the expanded center and subsidies to get big conventions to come here).

Posted by Paul | reply to this comment
August 5, 2009 10:42 am

Part 2. Pg8+ of PJ's presentation shows me that they need my taxes to go up (sales, property, TOT, special assessments, etc.) in order to fund expansion. I have only ever been to the CC once to attend one day of a conference that did not even fill the CC. Sometimes, I like to take a staycation and explore my city. All those "tourist specific" taxes are not "tourist specific," they actually impact the folks that live here too. With Obama certain to raise taxes and let other tax breaks expire in 2010, can this region's taxpayer base afford any plan that would raise any state or local taxes, fees, or assessments (or any other name for taxes they can think of)? We have other needs (repairing roads, fixing water infrastructure, libraries open later, etc.) for which it might be more wise to raise taxes.

Posted by Concerned Taxpayer | reply to this comment
August 5, 2009 10:58 am

At yesterday's task force meeting I raised concerns about the 1-3% food & beverage tax increase being considered (for the Gaslamp District) because it would price out many locals from enjoying the restaurants within the area. This is a major policy issue. Should the Gaslamp District be a place that only conventioneers and the privileged can enjoy?

Posted by Lani Lutar | reply to this comment
August 5, 2009 1:34 pm

Perhaps. Many of my local friends never go down there anyway because parking is a mess and the general quality of the dining and entertainment experience subpar compared with other locations in the city.

Posted by larry | reply to this comment
August 5, 2009 4:20 pm

Let's not forget downtown is a community with 30,000 residents; projected to grow to 90,000 by 2030-ish. Should they have to drive outside of their neighborhood to enjoy a meal at a restaurant so that the convention center can be paid for? The same goes for the folks that work downtown.

Posted by Lani Lutar | reply to this comment
August 5, 2009 5:59 pm

If they choose to live or work there, then yes.

Posted by larry | reply to this comment
August 6, 2009 6:54 am

Ms. Lutar - Larry is being silly. I don't live or work d/t but sometimes travel there to eat dinner or lunch iwth my wife who works there. Of course residents and perhaps workers choose to live/work d/t for the downtown feel. Some, like my wife, have no choice - that's where the job is. Sometimes I go downtown to meet my wife for lunch. She's only blocks from the CC. Why should we have to pay more just to eat lunch d/t? Increase the tax and we won't eat there anymore, plain and simple. If there was a way to have a resident incentive that reduces the tax burden on SD residents, I might go along with that. But that does not help the issue of if we raise taxes on tourists/conference attendees only, will they still come?

Posted by Concerned Taxpayer | reply to this comment
August 6, 2009 8:16 am

Concerned Taxpayer, I think we're in agreement about the meal tax. Your other question is more complicated. I'll respond to your post below in a short while. I'm enjoying this healthy dialogue and appreciate Scott Lewis for seeking reader feedback on the topic. This is certainly more balanced input than we've received at public hearings. I would encourage everyone with an opinion on the issue to submit a letter for public record at: link I'm surprised more Task Force members are not weighing in and responding to reader comments and concerns.

Posted by Lani Lutar | reply to this comment
August 6, 2009 8:56 am

Among the questions still unanswered.....1) What conventions/shows that are true "targets of opportunity" require more square footage than the convention center has avaliable. 2) How realistic is it to believe that meeting planners will "split" the center with another show? (i.e. add space and suddenly the calendar is much more open). 3) What is the attendance trajectory for key shows in our portfolio? Other than comi-con what is the projections for which shows (and how many) will bump up against limitations. 4) Since tourist focused taxes are going up, what is the dynamic analysis for how much business is lost because of those increased taxes (in other words, the current analysis assumes that there is NO negative impact from increased TOT or rental car taxes i.e. a static analysis).

Posted by Erik | reply to this comment
August 5, 2009 10:59 am

Erik: Some of your questions are addressed in the ERA study (http://bit.ly/15Inft). I researched question #4 independently because the PJ consultants said that "it would be too speculative and require complicated econometric modeling" to respond, when I asked the same question. The results of my research are found here (http://bit.ly/12Osx5) and here (http://bit.ly/j6sT2). I found it interesting that demand for urban hotels is relatively inelastic. Restaurant demand, on the other hand, very price sensitive.

Posted by Lani Lutar | reply to this comment
August 5, 2009 5:41 pm

Part 3. Some questions - I’d like to know if attendees would be more less likely to attend knowing we were going to increase the amount they paid for hotels, food, travel, etc. Is this even a consideration when event planners plan these conventions and conferences? Don’t property taxes go to the GF? Or would this assessment/tax/charg be a separate property tax line item? Just because they had no one provide public comment, doesn’t mean the public isn’t interested. Have you watched the mayor’s video on the task force’s website? He mentions the revenue generation that conventions bring that help fix roads and pay for police and fire. However, I’m not getting how the revenue from tourists and conference attendees goes to pay for general fund things if there is no link to the general fund, as the task force claimed in their report.

Posted by Concerned Taxpayer | reply to this comment
August 5, 2009 11:03 am

Concerned Taxpayer: Yes, meeting planners take affordability of the destination into account. See page 49 of the ERA report (http://bit.ly/15Inft). As for potential increased revenue to the general fund, see page 9 of the same report. Those figures come with lots of assumptions, so just keep that in mind. In theory, the general fund would benefit from increased hotel and sales tax revenues over and above the amount needed to cover the debt payment. In other words, while the increased portion of a hotel tax would be dedicated to debt payment, a portion of the existing hotel tax goes to the general fund. If there are more visitors to SD, you could expect to capture more hotel tax revenue for the general fund.

Posted by Lani Lutar | reply to this comment
August 5, 2009 5:09 pm

Looked at pg. 49. Since the planners consider affordability to be a statistically significant (79%) part of the equation, would making SD more expensive by raising taxes, fees, and assessments, make them less likely to book an event here than, say, in Orlando or Las Vegas? I'm guessing the answer would be less. If less, then how much does that eat into the anticipated extra 20 events they anticipate will be booked with the expansion? Which leads me to pg. 9. So the theorized $17.1M extra to the city is above and beyond the debt obligation? That assumes the extra 20 events. If more expensive=less events, how much of this revenue gets reduced? 79%? No doubt similar arguments were made to expand the CC the first time and to get Petco Park built, so how have those worked out? Is the city getting more or less revenue than was theorized?

Posted by Concerned Taxpayer | reply to this comment
August 6, 2009 7:02 am

I am curious about your last question myself. How much revenue increase did we see as a result of the ballpark and first convention center expansion. I think we can all agree the ballpark did have non-financial benefits of revitalizing that part of downtown -- like Horton did decades before -- but I am still curious as to the financial upside.

Posted by Desdichado | reply to this comment
August 6, 2009 10:39 am

The answer to this very important question is one that I've asked at several meetings and again in writing, as reflected in this document (http://bit.ly/GhJ0C) as question #12. Unfortunately, I was told that this was not the purview of the task force. I believe it's absolutely critical that we understand if there may be an increased liability to the city as a result of the expansion. At the last meeting, we were once again told that we would not be presented with this information. Instead, the pro forma will go directly to the Mayor AFTER the Task Force makes its recommendation. This makes no sense to me. Incidentally, I just learned that the city's subsidy, out of the general fund, for the current convention center will increase from $4 million to $8.5 million in 2015.

Posted by Lani Lutar | reply to this comment
August 6, 2009 11:44 am

Part 4. I'm all for creative solutions in order to expand public access to the waterfront d/t, increase revenue to our city, and expand our tourist and visitor base. However, when developers and promoters want to take advantage of the taxpayer base to line their pockets, I have to speak up. Some here have commented that the cc sits empty for many days of the year. What if they used some of the empty days and space to house the homeless and get a tax credit instead of looking to increase our taxes locally? What if you used some space to create public areas in the CC that would educate and serve visitors and citizens alike about the bay, military, etc.? I fear the only purpose this cc serves is to line the pockets of the rich, while depleting our area of natural resources and waterfront and public space.

Posted by Concerned Taxpayer | reply to this comment
August 5, 2009 11:07 am

This responds to commentsfrom political science professor Heywood Sanders from Texas, mentioned above by Edgar. Mr. Sanders demands audits (already done and redone) because his political theory is that it is impossible that any entity owned or controlled by government is capable of doing a good job.In fact, The Convention Center is audited annually by independent, expert auditors who report to the Convention Center Corporation Board, not to either convention center staff or the City. The audit report is thereafter provided to the Independent City Auditor. Additionally, a the Mayor's request, the Convention Center recently underwent a performance audit, which examines all aspects of its performance under guidelines for the non-profit sector. Their comprehensive audit showed no anomalies in financial or legal matters. And to clarify, Convention Center employees work for the non-profit Convention Center Corporation; they are not eligible for city pensions or insurance benefits.

Posted by Bob Nelson | reply to this comment
August 5, 2009 11:07 am

Rather than paraphrase Heywood Sanders, here is the opinion he wrote in the UT on June 28, 2009 (http://www3.signonsandiego.com/stories/2009/jun/28/lz1e28sanders214918-benefit-community-often-overso/). As for audits, the last "Independent City Auditor" quit because his position was moved to report to the mayor, the mayor was looking for a "team player", and the following (from a VoSD article): The IBA noted that the conclusion of Torell's report had been "substantially modified." A draft originally given to the IBA described the city's internal controls over financial reporting as "minimally adequate to assure timely and accurate preparation of the City's annual financial statements. The final report, after it had been run through the mayor's staff, said the internal controls "have improved to permit timely and accurate preparation of the City's annual financial statements." You'll excuse me for not putting a lot of stock into the "independent" part of our City Auditor.

Posted by Paul | reply to this comment
August 5, 2009 11:52 am

This is a really good add to the conversation. I was not aware that the auditor that planned a less than positive report on the convention center was basically forced out in favor of a "team player." For what it's worth, my observations suggest that this is really standard practice in business and government as long as no one is forcing an objective opinion on decision makers, so this shouldn't be a surprise.

Posted by Robert | reply to this comment
August 5, 2009 4:49 pm

Let's get real. There are no independent auditors, when it comes to City of San Diego!

Posted by Steve K | reply to this comment
August 5, 2009 1:33 pm

Mr. Nelson. It might be a good idea to put on your reading glasses when going through these comments. I never referenced Heywood Sanders. (I'm not going to tell you who did, because I'm going to make you look for yourself.)

Posted by Edgar | reply to this comment
August 5, 2009 6:35 pm

The hoteliers' story is a fascinating one. In 2004, they set out to convince San Diegans that they couldn't shoulder an increase in the TOT. "Would kill business! Taxes too high! Etc." Having succeeded, their response was "Cool! Now we can tax ourselves and instead of some of that money being spent on cruddy stuff like roads, police, and fire protection for everybody, we can plow all of it into commercials telling people to come to San Diego!" Sigh... // Scott, I agree that this dissolution of the city is the direction of things here and now -- and also that bad municipal governance is partly to blame. But let's not let off too easily the civic culture which refuses to stand up to this sort of privatization and corporate welfare. The hoteliers' approach is precisely what DeMaio advocates, no?

Posted by Augmented Ballot | reply to this comment
August 5, 2009 11:31 am

Scott: Sanders didn't ask the task force whether the expansion is a good idea or not, just to advice him on how to make it happen. The task force staff and consultants are all being paid by the Convention Center Corporation, so they all have conflicts of interest, since the corporation wants the expansion built, at taxpayers expense since the Port won't pay for yet another expansion. Tucker Sadler is being paid by the corporation to both determine the feasibility of an expansion and design said expansion. As long as the meter's running, don't expect Tucker Sadler, which made millions off the first expansion and other downtown projects, to find any problems at all with the idea. Other than the fact that the city's going broke and can't afford to saddle residents and businesses with yet more taxes to pay for yet another bayfront boondoggle.

Posted by Watcher | reply to this comment
August 5, 2009 11:50 am

Visit link to see all the presentations and documents reviewed by the Task Force. By the end of the day, the site should be updated with materials from yesterday's meeting. SDCTA independently researched some of the issues raised by other readers. Go to link and visit "News and Highlights" to see our short reports.

Posted by Lani Lutar | reply to this comment
August 5, 2009 11:57 am

Another note on the draft paper: It cites Heywood Sanders from 2004 saying there are two successful convention centers (Vegas and Orlando) and two others that have some positives but he had too little data to go on (San Diego and Anaheim). First, I am wondering why you cite his comments from 5 years ago, since you just had him in the room and could have asked his current opinion. Second, since Las Vegas is cited as your prime example of a star in the convention field, here is the year over year drops in Las Vegas convention center attendance from the same month the previous year (2009 vs 2008): January (-20.6%), February (-34.8%), March (-30.0%), April (-23.0%), May (-32.9%) (http://www.lvcva.com/getfile/ES-YTD2009.pdf?fileID=479). Las Vegas put an $800 million convention center expansion on hold. I didn't find those numbers in the draft report. Orlando to follow.

Posted by Paul | reply to this comment
August 5, 2009 12:25 pm

ALL the documents, testimony, letters, etc. presented to the Task Force are publically available at link Many of the comments made speak to discussions/testimon that were part of the public meetings that began in February. I encourage your readers to dig through the site.

Posted by Steven Johnson | reply to this comment
August 5, 2009 12:43 pm

Here are the numbers for Orlando (2009 vs 2008): January (-22.9%), February (-13.9%), March (-29.4%), April (+3.7%, April 2008 was very poor), May (-67%), June (-7.5%). Well, there are the numbers for the two stars, Vegas and Orlando, that the draft report argues that San Diego is most like and wants to compete with. While comparing San Diego to the two most "successful" convention cities, I missed the draft report listing the these numbers for Orlando and Las Vegas. To its credit, it did at least note that Las Vegas has put its latest expansion on hold.

Posted by Paul | reply to this comment
August 5, 2009 12:59 pm

Tell me--how do the taxpayers of San Diego benefit from the Convention Center?

Posted by Steve K | reply to this comment
August 5, 2009 1:24 pm

The answer to your question, Steve K, is: THEY DON'T. Ergo taxpayers should not have to pay for an expansion of the center. Let those who will derive financial benefit from any expansion pay for it. That would be the hotels, Gas Bag Quarter restaurants and tourist attractions, and the panhandling homeless in and around the Convention Center and the Gas Bag.

Posted by Edgar | reply to this comment
August 5, 2009 6:43 pm

Your comment raises a point that I've been trying to make for a number of months while serving on the Task Force. I don't think it's appropriate to say "let those that benefit pay" if you're referring to new or increased taxes and fees. Because ultimately, those taxes and fees are paid for by taxpayers, not the business owners. Yes, a good majority may be paid for by visitors, but if you look at our visitor statistics, you'll find that the largest percentage of visitors to SD come from southern california. It wasn't that long ago that retirement benefits were raised in SD because "we had to keep up with competing cities" in the state. And thus, one city after the next increased retirement benefits to unsustainable levels. Do we really want to start a tax competition with our neighbors to the north and east?

Posted by Lani Lutar | reply to this comment
August 5, 2009 8:14 pm

You don't think it is appropriate to let those that benefit pay?!?!? Do you want to rethink that statement? If the businesses that benefit from the convention center don't make enough from the business to pay for the facility, then why in the world should we be in that business? You have it exactly backwards. If the users of the facility do NOT pay for it through increased taxes and fees, then the general taxpayer in fact DOES end up paying for it through either increased taxes or reduced services. It sounds like convention businesses want to have their cake and eat it too. They want a free convention center to fill their establishments, plus they want low taxes on their customers so they will come in larger numbers and spend more. How nice for them, while we pay the bill.

Posted by Paul | reply to this comment
August 5, 2009 9:58 pm

So, we should let every Tom, Dick and Harry taxpayer in the city of San Diego pay for a White Elephant they will never use nor from which they will never derive a dime , directly or indirectly? What is fair about that? A tax war or, as you put it, a tax competition with our Southern California neighbors? To put it bluntly, who cares? Those who will make money and make it in copious quantities are forced into a tax competition with the same class of fat cats in Long Beach, Anaheim, Riverside and LA. Again, who cares? That certainly is no reason to dump the cost off on the taxpayers, many of whom are now just ekeing out an existence on low wages, are laid off, or are swamped by financial problems. Doug Manchester is not in that boat. Your argument is specious.

Posted by Edgar | reply to this comment
August 5, 2009 10:09 pm

Paul and Edgar, my point is that the proposed taxpayers that would be paying for the convention center expansion may not be the users. And there are downsides to creating special districts limited to the gaslamp area (see my post above about pricing out locals). Likewise, if you take money from a public agency (Port or CCDC or other) there are tradeoffs as well, because you'd have to give up other projects to build the convention center expansion. The only "pure" user-based fee would be a convention center user fee. The rest of the proposed taxes and fees presented to the Task Force would also burden non-users. The policy question is: Are the direct and indirect benefits of a convention center expansion greater than the burden on some non-users?

Posted by Lani Lutar | reply to this comment
August 6, 2009 7:35 am

The do not, repeat NOT, NOT, NOT, build the damned thing. I don't care how "pretty" it makes downtown, it is for other, already obscenely wealthy, people to make gobs more money and the taxpayers have to pay for it? It that happens, then we really have come to the point where the inmates are running the insane asylum. Do you REALLY have any idea what you are saying and just how ridiculous it is?

Posted by Edgar | reply to this comment
August 6, 2009 8:30 am

Edgar, how is framing the policy question ridiculous? You've made your point and your opinion is clear. I'm higlighting the implications of various options. I haven't said build it. It would be ridiculous not to ask serious questions about the $750 million+ investment under consideration.

Posted by Lani Lutar | reply to this comment
August 6, 2009 8:49 am

What is surreal in this argument is the very idea of making the poor, overburdened taxpayers of this city foot the bill for somebody else's golden-egg-laying goose. You believe that the citizens of San Diego should somehow be greatful that people come from other areas to spend their money in San Diego. I am replying, "horsefeathers!" because there is no benefit to those who would be paying. Tell me again how we are all better off because some schmoe from Reseda comes here with his children to look at comic books. There is no trickle-down effect in this scenario.

Posted by Edgar | reply to this comment
August 6, 2009 4:21 pm

A CC user fee would be perfectly appropriate, just as a seat tax on Petco events would be appropriate for paying off its bonds. It is disingenuous to argue that since taxing businesses whose primary customer base is convention guests would also tax a small percentage of people who are not convention guests, that we should instead put the burden on the average San Diego taxpayer who in general has zero financial interest in the CC. CCDC could be a sponsor (except that they already owe the city $100+ million), but the Port should not be involved. The Port's primary mission is to "Promote the Port's maritime industries to stimulate regional economic vitality". There is nothing "maritime" about a convention center. There is no legitimate Port reason for it to take up so much valuable port land, or get any Port money.

Posted by Paul | reply to this comment
August 6, 2009 9:22 am

Paul: I have not stated that the average SD taxpayer should be burdened with financing the expansion. In fact, most people are probably not aware city taxpayers are already subsidizing the existing convention center at $4 million annually. The subsidy is scheduled to increase in 2014. I'm in process of trying to figure out how much the city's liability will increase at that time. I'll post the info when I get my answer.

Posted by Lani Lutar | reply to this comment
August 6, 2009 11:29 am

Response from Mary Lewis, City's CFO: "Hi Lani, The annual debt service related to the Convention Center Expansion Financing is $13.7 million, and the final maturity date is April 1, 2028. The financing is a General Fund obligation. However, the Support Agreement between the City and the Port District provided for payments of $4.5 million annually ($90 million total) through June 30, 2014, which has assisted the City with its annual debt service payments. The City pays its portion out of the Special Promotional Fund. After the Support Agreement payments terminate, beginning in Fiscal Year 2015, the City would need to provide the additional $4.5 million in funds. Regards, Mary" Special thanks to Ms. Lewis for her quick response.

Posted by Lani Lutar | reply to this comment
August 7, 2009 1:13 pm

First - when most people do an evaluation of an idea they usually look at the pros and the cons. Where were the cons? This is not an evaluation ... this is a sales pitch. Second - this "draft" report says that supply of convention center square space is up nation wide ... and demand for conventions is down. This tells me all the historical numbers are out the window. Usually when supply is up and demand is down those who negotiate for convention bookings are very aggressive on price. Third - Where do they get these numbers? Is there an independent audit of these facts or do we just assume these highly biased people are providing good numbers. Seemly like a whole lot of positive spin.

Posted by Mike Daniels | reply to this comment
August 6, 2009 7:49 am

One of the earliest comments was the most spot on. An independent audit should be the beginning point for all the discussion. Without that independent effort, everything else we will hear is merely propoganda, call if what you will. When developers plan a hotel, they estimate the utilization of the facility. That is called the expected occupancy rate. I am not impressed by the occasional blockbuster show like ComicCon but, rather, what is the utilization rate of the facility year-over-year. That should guide the decision regarding additional investments. On the face of it, with our streets crumbling and our water pipes disintegrating, diverting three-quarters of a billion dollars away from existing infrastructure requires a huge amount of civic hubris.

Posted by Myron Shelley | reply to this comment
August 6, 2009 9:46 am

Amen! While I hate audits because they take so long and are very expensive I think this is a MUST when you are talking about either taking existing tax revenue or increasing taxes to get the revenue.

Posted by Lee | reply to this comment
August 6, 2009 10:21 am

Lani Lutar reveals something crucial. The staff decides what questions they will answer, which experts are qualified, and who gets any information. Since the staff obviously benefits from expansion, there is no way their reports can be trusted. City Hall works the same way. Right Scott? Ballpark, Stadium, CC expansion, Grantville Redevelopment...all projected to make money, all resulting in big hits to the taxpayers. Similar boards blessed the staffers' preordained conclusions then and now. Lani's SDTCA should help "blighted" Grantville fight injustice instead of hanging around with the "Head in the Sanders" downtown.

Posted by Fred Williams | reply to this comment
August 6, 2009 8:19 pm

The Plenary Session (Part I): A Dissolving City Talks Convention Center Expansion

Published: Tuesday, August 4, 2009 7:36 PM PDT

-- SCOTT LEWIS

Scott Lewis on Politics

The Scott Lewis on Politics blog, abbreviated cleverly as SLOP, is a collection of observations, insights and the occasional scoop on public affairs in San Diego. Please feel free to e-mail Scott at scott.lewis@voiceofsandiego.org.

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