On Monday, the San Diego City Council is set to approve a plan to pay for the $520 million Convention Center expansion.

The council will decide whether to borrow money and pay it back using three different sources: a special tax on hotel guests, a contribution from the Unified Port of San Diego and money from the day-to-day operating budget. This is the first time the council will weigh in on the entire package.

The expansion has had many moving parts over the past four years and it’s easy to get confused. Here’s how to get caught up quickly.

The Three Sources of Money

• A Special Tax on Hotel Guests

In the spring, hotel owners approved a special tax that will charge their guests an extra 1 percent to 3 percent on their bills to finance the majority of the expansion. Visitors staying at hotels closer to the Convention Center will pay more than those in far flung areas. This tax is expected to raise up to $37 million a year for the next three decades, or more than $1 billion in total.

• The Port District

The port, which controls the land planned for the expansion, has pledged $60 million, or $3 million a year for the next two decades. The port is contributing for 20 years instead of 30 in the hope that the city can pay off the expansion debt more quickly.

• The City’s Day-to-Day Budget

The city plans to spend $3.5 million a year for the next 30 years, ($105 million total), to make up the final piece of the financing puzzle. This is the same pot of money that pays for police, libraries, road repairs and other general services. Backers say this contribution is justified because the city expects to receive more than that amount each year in hotel-room tax revenue generated by the expansion.

What’s Still Left

Monday’s vote is a big step toward the Convention Center happening. But others remain along the way. Two of the most significant hurdles are out of the city’s direct control. The special visitor tax is in court because it’s unclear whether the city could legally pass it without a public vote. And the California Coastal Commission, which regulates waterfront development, has yet to rule on the expansion.

Mayor Jerry Sanders’ office hopes both issues will be resolved by early 2013. But rejections by either a judge or the commission could send the expansion back to the drawing board.

And while the council is deciding on the entire financing plan for the first time Monday, it isn’t formally starting the expansion yet. That would happen after the court and Coastal Commission weigh in. The amount the city actually pays could change, for instance, depending on interest rates when it tries to borrow money.

For More Information

• Watch our San Diego Explained on the Convention Center expansion featuring superhero “Make It Rain Man.”

• Read our Convention Center expansion Reader’s Guide, which breaks down these issues in greater detail.

• Check out the city’s staff report on the financing plan, and let me know if you see anything of interest.

Liam Dillon is a news reporter for Voice of San Diego. 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 liam.dillon@voiceofsandiego.org or 619.550.5663.

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    Written by Liam Dillon

    Liam Dillon is senior reporter and assistant editor for Voice of San Diego. He leads VOSD’s investigations and writes about how regular people interact with local government. What should he write about next? Please contact him directly at liam.dillon@voiceofsandiego.org or 619.550.5663.

    4 comments
    Murtaza Baxamusa
    Murtaza Baxamusa subscribermember

    Bottom line: taxpayers will be footing the bill for financing of the project in case hoteliers do not perform as per to their claims.

    Murtaza
    Murtaza

    Bottom line: taxpayers will be footing the bill for financing of the project in case hoteliers do not perform as per to their claims.

    Don Wood
    Don Wood subscriber

    Didn't the city council learn anything from their various stupid pension votes? Putting the city even further into debt when its already broke makes no sense. Taxpayers will get stuck with the bill again.

    Don Wood
    Don Wood

    Didn't the city council learn anything from their various stupid pension votes? Putting the city even further into debt when its already broke makes no sense. Taxpayers will get stuck with the bill again.


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