San Diego’s hoteliers got what they wanted from the city on Tuesday. The City Council gave them more control over the Convention Center’s operations. The decision comes on the eve of the hoteliers’ vote on financing the center’s expansion through higher hotel-room taxes.
The hotel owners are trying to squeeze greater influence over the center in exchange for their support of the expansion. By controlling the center’s sales and marketing, they could direct more events to their own hotels and offer better deals to groups wanting to book the center.
They argue fattening their bottom lines also fattens the city’s tax revenues. Organized labor and Convention Center staff contend that giving hotels power over the center’s marketing could hurt existing operations and leave taxpayers liable if sales goals aren’t met.
I’ve covered the specifics of this issue in recent days so I’m instead going to focus on three takeaways from Tuesday’s events. We’ll call them the three R’s: Rush, Rhetoric and Results.
You wouldn’t think that a $3.1 million annual contract would create such a ruckus. But on Tuesday, the council chambers were packed.
Mayor Jerry Sanders stayed through the two-and-a-half hour meeting, as did his current and past chiefs of staff. Other high-level policy advisors buzzed in and out. Suit-wearing business leaders and hoteliers filled the front rows. Orange-shirted union members filled the back.
At stake was the Convention Center’s management. Right now, the Convention Center Corp., a public agency, handles the center’s sales and marketing. Hoteliers, Sanders and expansion boosters wanted to switch that control to the San Diego Convention & Visitors Bureau, or ConVis, a private organization. The proposed marketing contract is for $3.1 million a year.
Before Tuesday’s vote, and even after it, no one estimated the effect on the bottom lines of the hoteliers, the center and city taxpayers. The switch didn’t even appear on the council agenda until Friday. Few details about the plan’s impact surfaced in the meantime.
But the council went forward anyway, voting 7-1 to give the go-ahead for the switch.
And without details on the deal’s financial effects, all that’s clear is the hoteliers won and labor lost.
The council decision came a few hours after the Convention Center’s nonprofit board similarly approved the switch. Its Tuesday meeting was its second in two days. Another sign of the rush: Both of the board’s meetings happened by phone.
Last night, one of the board’s nine members, Mick Musella, submitted his resignation in a one-sentence fax without giving a reason.
Musella is chairman of the ConVis board.
The words people used in the council hearing Tuesday spoke to the intensity of feeling on this issue. Union members compared the marketing switch to the Chargers ticket guarantee and previous pension decisions, some of the most infamous deals in the city’s history.
“This could be the worst decision you all make in your entire time here at the City Council,” said Carlos Cota, who heads San Diego’s stagehands union.
On the other side, backers of the switch struggled to make their points consistent with past rhetoric about the Convention Center expansion and the center’s marketing now.
For months, boosters have cast the $520 million expansion as a win for San Diego, guaranteed on its own to attract more conventions. On Tuesday, though, their argument shifted: If the center expands, the city would have to market it better to make sure more conventions come.
Before the expansion was enough. Now backers say they need something more.
“The expansion alone will not guarantee the growth of the (visitor) industry,” Sanders said. “It requires an aggressive approach to sales and marketing. The convention industry is highly competitive and we must be able to outsell other cities.”
Like many other speakers, Joe Terzi, who heads ConVis, tried to walk a line between praising the Convention Center’s management, while emphasizing that his organization could do a better job.
“They have been exceptionally successful in running what I consider to be one of the most well-run and highest-quality centers that I’ve had an opportunity to experience,” Terzi said. “But frankly if you look at the booking patterns and what the center has been able to achieve, the booking patterns have been stagnating over the last number of years.”
Most of the end of the council meeting focused on procedural issues. The council required all the vital questions about the deal’s effects to be answered at a future committee hearing. It also left the Convention Center in control of booking events less than 18 months away. No council members save David Alvarez, who voted against the deal, questioned the underlying motivations.
Liam Dillon is a news reporter for voiceofsandiego.org. He covers San Diego City Hall, the 2012 mayor’s race and big building projects. What should he write about next?
Please contact him directly at email@example.com or 619.550.5663.
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