Mayor Kevin Faulconer did not support a sales tax increase backed by police. He doesn’t seem to support a tax increase for infrastructure needs throughout the city. And a hotel-room tax hike for a new Chargers stadium was a nonstarter his pollster said would be impossible to pass.

But the mayor has found a tax increase he will take to voters: a hotel-room tax hike to expand the Convention Center along the waterfront.

It would be a smaller expansion than the one the city tried to build before a court threw the plan out. It would be a cheaper expansion — about $410 million as opposed to the $560 million project imagined before.

It would still, however, face fierce legal opposition and a high threshold for voter approval.


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The news came with the release of a much-anticipated report about whether the Convention Center’s clients would support a different type of expansion. The report says both options — a separate facility across the street or a bigger bayfront facility — would make more money for the city and local economy than the current one.

But a bigger facility standing alone would do better. Here’s the breakdown the report provided:

conventionbayfrontvcampus

The mayor says he found the study so persuasive that he has made his decision not to support a split convention center.

“Our customers have spoken and what they’ve said is they want to have us continue to push for a contiguous expansion,” said Steve Cushman, chairman of the Convention Center Corp. and the mayor’s point man on expansion efforts.

That will likely not be welcome news to JMI Realty, whose leaders proposed a convention campus near Petco Park across the street from the existing facility. It would be adjacent to a new hotel JMI would build.

The mayor is open to someday pursuing the campus alternative and there is support for JMI doing the hotel.

“Headquarters hotels are always dear to convention planners. The Hyatt and the Marriott are fabulous but like all good hotels, they’re pretty full all the time. Five-hundred new rooms at the Hilton and 1,600 across the street are going to be very valuable to our Convention Center,” Cushman said.

JMI representatives declined to comment.

If their plan is dead, so is any remaining hope from some Chargers fans that the football team might be lured back to the negotiating table if moving downtown was in play. The Chargers argued for a joint-use convention center and stadium for years — making the point along with others that the former plan to expand the Convention Center relied on a faulty legal argument that the city and hoteliers could raise taxes without a vote of the people.

Lawyers Craig Sherman and Cory Briggs, representing separate clients, proved that argument correct and crushed the Convention Center plan. The Chargers briefly championed a vision to work with JMI on combining this separate convention center facility with a stadium.

We all waited to see whether the mayor would support a split convention center or remain loyal to the original idea to simply add on to the existing facility along the bayfront.

Now he’s made his call.

The mayor wants voters to approve hotel-room tax hike that will fund the Convention Center's waterfront expansion.

But that’s not the end of the story. Not only does the mayor need to persuade voters to increase taxes, he also has to overcome another lawsuit from Briggs, who believes a larger Convention Center illegally blocks access to the waterfront.

“It’s the only remaining open space on the South Embarcadero and they propose to put a box on it. That’s not acceptable,” Briggs said. “We’re not going to spend one cent talking about a waterfront facility. It’s illegal and it’s not going to happen.”

The project did get Coastal Commission approval but Briggs’ suit was formidable.

“We’ll continue to work with Cory to try to move forward on this project. The mayor and I and Cory have been able to work together on a number of projects and would certainly hope somehow we can continue to work with him,” Cushman said.

While that fight continues, the mayor will also have to persuade voters to sign off on his plan in overwhelming numbers. No major opposition can arise against tax proposals seeking two-thirds support if they are to succeed.

Of course, the mayor already did want to raise hotel-room taxes to expand the Convention Center as a city councilman. But in the past, he did not want voters to get to approve them.

The court forced him to change his mind.

This won’t be an easy sell.

In 2004, with the hotel-room tax rate at 10.5 percent, voters twice rejected increases to it — one of the efforts had the backing of nearly all hotel interests along with police union, firefighters and an array of civic organizations. It got 64 percent of the vote, just short of the required 66.7 percent.

Now the hotel-room tax rate is effectively 12.5 percent — as hotels were able to impose their own 2 percent levy on top if the city’s without a vote of the people. The Tourism Marketing District, overseen by members of the visitor industry, decide how that 2 percent is spent. (That is also being challenged in court — and Briggs has separately proposed a ballot initiative that would wipe it out and raise the entire hotel-room tax to 15.5 percent, allowing the city to spend it how it might wish.)

I asked the mayor’s staff why they thought voters would support a tax increase in overwhelming numbers when other ideas were written off as impossible.

“The fact that expanding the Convention Center will grow our economy, will bring in revenue to pave roads and will help attract and retain large events like Comic-Con gives voters many compelling reasons to support it,” wrote Matt Awbrey, the mayor’s communications director.

Correction: The original piece quoted Cushman as supportive of a 600-room hotel near Petco Park. It’s actually 1,600-rooms as envisioned. And a previous version said the mayor was not open to a split convention center, but only a hotel across the street. He prefers and is pursuing the contiguous expansion but is open to both the alternative and the hotel, his spokesman wrote in a followup.

    This article relates to: Convention Center, Land Use

    Written by Scott Lewis

    I'm Scott Lewis, the editor in chief of Voice of San Diego. Please contact me if you'd like at scott.lewis@voiceofsandiego.org or 619.325.0527 and follow me on Twitter (it's a blast!): @vosdscott.

    37 comments
    Bob Stein
    Bob Stein subscriber

    Lots of good thoughts here from intelligent, knowledgeable and well-meaning people. 

    But here’s the thing my fellow travelers, one important reason hoteliers, real estate developers and football team owners get the subsidies and approvals they want from local government is because they have the power to frame and control the public debate, separate from their  control over elected officials, who in turn further frame and control the public debate, not to mention create the laws that enshrine the debate. 

    They do this work through the various well-funded and on-going professional trade groups they created to promote and advertise their interests to the public, the media and voters when necessary; groups like the Chamber of Commerce and The Lincoln Club.  And they fund this work out of the marketing budgets of the businesses of their club members, making it easy for them to pay for the work that needs getting done.  Politics is just a cost of doing business for them.

    On the other hand, their opponents are typically ad hoc groups of amateur and woefully underfunded civilians manning the barricades over some quickly unfolding real estate steamroller, or the roar of the local media marginalizing them as obstructionists, or even worse -- people who are an embarrassment to San Diego! 

    It’s all quite an interesting and rigged game, and the impressive resistance put up by a handful of local lawyers and their clients aside, it can’t change until those who oppose the interests of hoteliers, developers and sports moguls figure out a way to establish and collectively fund their own on-going communications infrastructure whose job is to continually counter the San Diego party line.

    There’s a way to do this.  More later.

    Robert Cohen
    Robert Cohen subscriber

    @Arizona Bread As I recall the amount of spending related to getting a yes vote for Petco Park was at least 11 to 1, and that was just actual cash contributions.  Add to that the publicity from local TV, radio and of course the UT,  which not only overwhelmingly  supported the project but also vilified vocal opponents.   Once a plan is put in place, the railroad engine gets fired up and steamrolls its way to the desired end.

    Richard Gardiol
    Richard Gardiol

    If the City needs to expand the convention center in order to "bring in revenue to pave roads" then something is very wrong with the management of this City. 

    David Crossley
    David Crossley subscriber

    @Dean Plassaras  --I agreed with your initial statement, but now that you have amended it to show a remodeled Dolphins Stadium (something the Chargers will never agree to--especially if they have to pay for it), I no longer agree with you.



    Dean Plassaras
    Dean Plassaras

    @David Crossley @Dean Plassaras What the Chargers want or don't want is irrelevant.


    Once you realize that they have no real options you dictate terms to them. You just don't ask them to tell you what they want. It's called leadership. The grown up has to come up with the vision and they weak party to follow.


    Our job here is to decide what is reasonable and doable. Once we reach such decision then the local team has to abide by our decision and not the other way around.

    tomp
    tomp subscriber

    Am I reading the numbers right?  If the city puts up $410M one time, the increment to the 10.5% TOT is $6.267M/yr, which, not counting interest, would require over 65 years to pay back that $410M.   Even if the $1.2M annual increment to the TMD is rolled into the payoff, it would require 55+ years to pay back the $410M.  That doesn't cover any operational or maintenance outlays, which the city is underpaying currently on the extant convention center. 


    What am I misinterpreting here?  Or, is this a case of the mayor thinking that it is a great idea for the city taxpayers to put up $410M of city funds so that hoteliers can make an extra $37M/yr profit? 

    Don Wood
    Don Wood subscriber

    The primary beneficiary of an expanded convention center are the big hotel owners. They want the city to make their guests and other city taxpayers pay for the expansion, since they're not willing to pay for it themselves, out of their own obscene profits. The city could end up with two different initiatives that would raise the TOT tax next year. One would use the additional tax money to pay down the city's gaping infrastructure maintenance gap. The other would ask taxpayers to raise taxes so the city can give the hotel owners their expanded convention center. Maybe they will call that one the "hotel owners corporate welfare grab".  

    lorisaldana
    lorisaldana subscriber

    This is fantasy. How will creating more low income jobs generate more taxes for the general fund to pay for infrastructure etc.?

    Call it what it is: a blatant subsidy- what some would call corporate welfare- provided for those who have conttributed most generously to Faulconer's mayoral campaign.

    From a policy/economic perspective, how is subsidizing the service/hospitality/tourism industry, that typically pays under $30K/yr. *, helpful overall in a city like San Diego, with a higher average cost of living and already low tax base?

    At least other cities in California (LA, SFO) that have higher TOT rates have also increased their minimum wage, resulting in better paying jobs for locals. But Faulconer vetoed efforts to increase wages. And the hospitality/service industry associations paid for signature gathering efforts to place a lower wage proposal on a future ballot.

    At these average industry wages, employees in restaurants near the convention center or in the new hotel won't be able to afford typical rents, buy a home or do other things that are needeed to support the regional economy.

    So again- how is this going to help average San Diegans in the long run?

    * VofSD documented these low wages in a March 2013 report, http://www.voiceofsandiego.org/all-narratives/tourism-economy/middle-class-tourism-jobs-fact-check/ noting:

    "Data from the state’s Employment Development Department, which tracks labor trends in the state, shows the average San Diego County travel industry worker brought in a wage that would amount to less than $30,000 annually.

    "From January to March 2012, the county’s leisure and hospitality workers brought home an average of $430 a week or an estimated $22,360 annually. Wages dropped slightly from April through June to $414 a week."

    Cory Briggs
    Cory Briggs subscribermember

    @lorisaldana  Somebody needs to find a link to the song by the Canadian rock band Triumph, "World of Fantasy," so we can use it as a trope for reactions to nutso ideas like a contiguous expansion. :-)

    moleman
    moleman subscriber

    No surprises here. How often is the convention center even used? Comic-con is only there for one week. No justification for the kind of money the city will need to spend on it. Plus, they can't even maintain the current convention center properly. Why would they be able to maintain a larger one?

    And don't these convention center events just take up hotel space that normal tourists would use?

    wobbly2014
    wobbly2014 subscriber

    I question the information in the chart...why would a contiguous expansion with less floor space have more employees than the campus option? Seems like you might get a duplication of jobs with two buildings...then again perhaps the existing convention center is so inefficient and poorly run.....well that's another story. I sense a bias in the report.

    A few days ago the City announced a big plan to spend $150 million to  co-ordinate traffic lights. A convention center. A stadium. Water and sewer up grades. Street repairs. New City Hall. Maybe we can make the tourists pay for all that stuff too. Expectations are nice and an important part of planning...but unrealistic ideas lead to unachieved goals. 

    Cory Briggs
    Cory Briggs subscribermember

    @wobbly2014 I'll give you another reason to view the chart with great skepticism: The cost estimates come from a lawyer, not a construction estimator.  Charles Black is the principal behind CB Urban Development.  The prior expansion plan and the tax scam shot down by the appellate court last year were partly his brainchild, according to what I've been told by folks at the CC.  (If at first you don't succeed, try and try again.)


    Look at note 1 to Table ES-1 in the CSL report.  The source for CSL's cost estimates is CB Urban Development in March 2015.  The reference is to a memo from Mr. Black to city COO Scott Chadwick on March 9, 2015.  In the memo -- which I have and will happy to share with anyone -- his cost estimate for Option A-2 is the same as the CSL report's estimate for the scaled-down contiguous plan, and his cost estimate for Option B is the same as the CSL report's estimate for the non-contiguous plan.


    Here are some of the key "disclaimers" at the beginning of the esquire-cum-construction-estimator's memo: (1) Area estimates are "approximations based on hand-drawn sketches." (2) "There can be no certainty regarding actual construction costs until the City selects an alternative, engages a design and construction team and obtains a guaranteed maximum price contract for the selected alternative."  (3) The cost estimates exclude FF&E (furniture, fixtures, and equipment).


    In other words, the cost estimate was based on back-of-the-napkin sketches (perhaps literally), provided by someone who has no confidence that it reflects the final price that the taxpayers will have to absorb, and was low from the beginning because it didn't include a substantial part of what it will take to build out an expanded facility that can actually be used by people.  

    This means that the CSL report's conclusions about return on investment are fundamentally flawed because the cost estimate -- an essential component of any sound ROI analysis -- is thoroughly unreliable.

    Yes, folks, this is how San Diego operates.

    Cory Briggs
    Cory Briggs subscribermember

    A little over two years ago, my clients and I began screaming (not literally) at the media and the city's leaders because they were claiming that a contiguous expansion was the ONLY viable option.  They made this false claim based on what is known as the AECOM report.  What the media and public officials failed to do was read the actual report.  They seemed content to read the contiguous-expansion boosters' press releases selectively quoting the report and offering their own spin on what the report said.  We called them out as frauds, but nobody was listening.


    Now we have the CSL report.  And while the boosters are hailing this report as further "proof" that a contiguous expansion is the only viable option, the report itself says just the opposite.  If you read the data rather than the spin, the CSL report makes it clear that a non-contiguous expansion is also viable.  It might not be as lucrative, but it is equally viable.  One key difference that the report does not mention is the number of legal and financial hurdles that a contiguous expansion faces.  Before the report's release, a lot of progress had been made toward a compromise involving a non-contiguous expansion that would have put the private sector on the hook for more of the CC costs, that would have allowed for the Chargers to go downtown if they agreed to pay their portion, and that would have protected Mission Valley and the waterfront from bad future development.  Our city's leaders, taking their cue from the hoteliers, blew that up yesterday.


    True to San Diego, the leaders will continue to see what they want to see, give away the farm to their political donors, and ignore an opportunity to do something that benefits a broad cross-section of the community.  And we have nobody to blame but ourselves because we keep putting people like this in office.

    Frank De Clercq
    Frank De Clercq subscriber

    Cory, you are spot on! My experience with the City is that they only hire consultants who will write what they want them to write. If you don't agree with what they want reflected in the outcome, you don't get hired let alone paid!

    David Benz
    David Benz subscriber

    @Cory Briggs It's less viable if it is less lucrative.  

    You are completely out of touch with reality when you continually argue for the combined stadium/convention center expansion plan.  The "convadium" plan was idiotic from the beginning because the NFL's scheduling priority makes it next to impossible to book any weekend conventions in the expanded center for 5+ months of every year. I don't know who is paying you to champion this nonsense but I get a sense that you don't know much about the NFL and what they demand from their venues.  

    You are a fraud for claiming the much more expensive "Convadium" plan would "benefit a broad cross-section of the community" when it's nothing more than a massive taxpayer gift to the Spanos family.  The one option that will actually "benefit a broad cross-section of the community" is for everyone to tell our city leaders, the Chargers, and the hoteliers that they can forget about using any public funds for a stadium or for an expanded convention center. Like it or not, this is by far the most viable option.

    The Chargers are gone, thank god, San Diego will be better off running them out of town.  It's time for you and everyone else to get over it.

    Cory Briggs
    Cory Briggs subscribermember

    @David Benz @Cory Briggs David, perhaps you haven't been reading what I've been writing.  My clients are not advocating for a Chargers stadium downtown.  They are advocating for giving the voters the right to decide whether there should be a non-contiguous expansion that gives the Chargers the option of becoming part of the facility.  If the Chargers aren't interested or the logistics cannot be worked out, then -- if the voters approve -- the expansion could still go forward in a non-contiguous manner.  I've said that consistently.  

    Furthermore, none of my clients has ever suggested that the Chargers be given taxpayer money.  In fact, my clients have been arguing AGAINST giving the team taxpayer money -- both downtown and in Mission Valley.  If the team wants to be downtown and the voters say okay, it needs to bring its checkbook. Again, I have said that consistently.


    Lastly, as Todd Gloria recently acknowledged, if the hoteliers want an expanded convention center, they should be picking up the tab for it.  Increasing tourists taxes to pay for an expansion is not only DOA at the ballot box but bad public policy.  The compromise that my clients have been trying to broker for the last six months requires the hoteliers to bring their checkbooks too.  And again, I have said that consistently.


    You might not like the "convadium" idea.  My clients don't have a preference one way or the other on that narrow issue.  What they do care about is giving the voters the final word and not limiting the options to a bad deal for taxpayers in Mission Valley, which -- until yesterday's idiotic announcement about a special tax for a CC expansion -- was what all of us were facing.

    David Benz
    David Benz subscriber

    @Cory Briggs Cory, it's ridiculous for you to claim that our only options are a crappy deal in Mission Valley or the moronic Convadium nonsense.  Why do you refuse to mention the fact that we don't have to do either plan?  We also don't have to expand the convention center.  Your claim that "all of us were facing" a bad deal in MV is flat out false.


    There is no "deal" in Mission Valley and the only thing we are facing is the Chargers moving to LA.  You and your "clients" should work on getting the Q condemned so we can put an end to those operating losses.



    Cory Briggs
    Cory Briggs subscribermember

    @David Benz @Cory Briggs The voters can say no, which is perfectly fine.  But if the mayor moves forward with his plan to pump $350 million into a new MV stadium -- whether the Chargers are there or not, which is how the EIR was sold -- then that is a bad deal.

    David Benz
    David Benz subscriber

    @Cory Briggs You are going to have to provide a link to that claim.  Everything I've read states there wont be a new NFL stadium without the Chargers.

    Who are your clients? the Chargers?  Sounds like it.

    I'll bet you that there wont be a January special election.

    Cory Briggs
    Cory Briggs subscribermember

    @David Benz @Cory Briggs My clients are San Diegans for Open Government and the San Diego Navy Broadway Complex Coalition.  I do not work, and have never worked, for the Chargers.


    You need to go watch the city's video archives for the vote to approve $2.1 million for the EIR.  Also just track Scott Sherman's comments on Mighty 1090 and elsewhere in the press.  Several elected officials have made the claim that we'll still be able to make good use of the MV EIR.  Try google.

    David Benz
    David Benz subscriber

    @Cory Briggs Come on Cory, you know that claiming "we'll still be able to make good use of the MV EIR" is not the same thing as claiming they are going to build a new stadium when the Chargers leave.

    I already watched the video of the CC approving the EIR funds and it was an embarrassment. Scott Sherman is an idiot, the Jags are not moving to San Diego.  I know a hell of a lot more about this topic than Scott Sherman or anyone at 1090.

    David Crossley
    David Crossley subscriber

    @Dean Plassaras @David Benz @Cory Briggs  --The problem with trying to remodel the Q is you need to get the seats closer to the field.  The easiest way to do that would be to extend the field level seats towards to field while lowering the actual field.  That is not an option due to the water table.  Then, you have the problem of the upper level seats being too far from the field (a necessary evil since both baseball and football were played there).  Also, the pitch of the lower level seating bowl needs to be more extreme.  By the time all of this is done, the city would be better off building a new facility.  Considering the financial health of the city of San Diego, that also is not an option.  The Chargers are not going to pay for a remodel, so this leaves multiple options:  1) Stay at the Q as is long term--not likely.  2) Move to Carson--fantasy.  3) Move out of state--possible, but not preferred by the team.  4) Move to Inglewood with the Rams--likely, depending upon whether negotiations between the league, the Rams, and the Chargers are successful.  I can only assume that negotiations are taking place.

    Dean Plassaras
    Dean Plassaras

    @David Crossley @Dean Plassaras @David Benz @Cory Briggs


    You are making 2 wrong observations:


    1. If you watched the video on the Sun life stadium you will notice that the seats are arranged on prefabricated concrete support elements which are shown in the video.


    2. The city will do nothing about this renovation. The NFL + Local owner will do everything and perform the renovation from start to finish. All the city has to do is approve the plan and specs.


    Now please watch the seating video again to understand how the installation of the new system works. The Sun Life stadium in Miami is identical to the Q (same type of dual purpose stadium to accommodate both baseball and football). 


    https://www.youtube.com/watch?v=Wnl3WCt1h38


    Hint: the answer to your seating question is around minute 0:56. 

    David Crossley
    David Crossley subscriber

    @Dean Plassaras @David Crossley @David Benz @Cory Briggs  --I watched the video (time in my life I will never get back).  The fact the used concrete riser are irrelevant--all they have done is replaced the moveable seats with permanent ones.  If the same thing was done here, it would do nothing to improve the pitch angle of the field level seating.  There will be nothing for the city to approve, as the Chargers and NFL will never submit any such plans.


    The stadiums are similar (in that both football and baseball were played there) but not identical.

    David Crossley
    David Crossley subscriber

    @Dean Plassaras @David Crossley @David Benz @Cory Briggs  --Whether I understand construction, engineering and architecture is irrelevant.  What is relevant is the fact that the Chargers are not interested in a remodeled Qualcomm Stadium--especially if they are expected to pay for the remodel of a facility they don't own.

    Robert Cohen
    Robert Cohen subscriber

    Matt Awbrey's quote in the last paragraph is pure fantasy.  A convention center expansion will not pave roads or grow the economy.  Independent studies have shown no real economic gain from these centers.  Yes, Comic-Con is nice, but does it really have a major effect on the overall economy of SD?  I doubt it.


    Good luck to the mayor if he thinks he's going to get a 2/3s vote on this when in any election you can count on 1/3 of the voters automatically voting "no".  Maybe they'll try a special election and sneak it through, but it's a very tall mountain to climb.


    I guess the Chargers are relieved that they didn't do what Scott Sherman and Ron Roberts have been asking them to do if the team wanted a downtown stadium.  They have been asking the Chargers to sign a 5-7 year lease so the city could rectify the problems that exist for a downtown stadium site.  But if it's not going to be combined with a convention center expansion, it's hard to see how a stand-alone stadium would be viable, though I doubt a "convadium" would be either.  So the city is all in on Mission Valley.  That sound you hear is the loading of moving vans that have the words  "L.A. or bust" on the sides.

    David Benz
    David Benz subscriber

    @Robert Cohen And we should all thank our lucky stars that we are getting rid of the Chargers.

    Another year and I've already been to more than 8 (number of NFL regular season games) concerts and other events in LA, north of the Carson and Inglewood stadium sites.  I've been going to LA for 35 years to see concerts, Chargers fans are too lazy to drive to Carson/Inglewood on Sundays.


    Sadly all of these people from every side are full of crap.  It doesn't matter if it's Faulconer and his Stooges, Fabiani and Spanii, or even Cory Briggs and his "clients".  They all have their own agendas and none of them are interested in doing what's best for San Diego.

    Frank De Clercq
    Frank De Clercq subscriber

    Well said Chris. Convention Center expansion and a new Chargers Stadium should be paid for by those that stand to benefit: developers, hoteliers, Chamber of Commerce, businesses, etc It should come as no surprise to anyone that Faulconer would support the expansion for those that support him financially. He's the voice for all those that stand to benefit, All this talk about how that revenue will rebuild San Diego's infrastructure and pay for police and firefighters is just another clever sound bite written by his handlers. Just follow the money. If he doesn't do what those special interests tell him to do, they'll find someone else who will. After all, aren't they the ones that write his speeches for him? Thank you Cory Briggs! San Diegans appreciate and love the hard work you put in representing all the citizens of this great city, not just the top 1%'rs!

    Chris Brewster
    Chris Brewster subscribermember

    Hard to differentiate the argument for convention center construction from stadium construction. The primary beneficiaries of the former would seem to be hotels and restaurants. The primary beneficiaries of the latter would seem to be team owners. Jobs? One time construction jobs and a lot of low wage tourism industry jobs. Just as many have suggested that NFL team owners should pay for stadia, should the hospitality industry not pay for convention facilities?

    lorisaldana
    lorisaldana subscriber

    thank you for looking at the overall and long term economic impacts.

    What's the point of subsidizing an industry that creates mostly low wage jobs, that fluctuate seasonally, resulting in people who either work multiple jobs to survive here or live in a perpetual underclass?