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Idea of Split Convention Center Going from Nonstarter to Maybe, Possibly OK

For years, boosters of a Convention Center expansion and city leaders insisted that a contiguous facility was vital and no offsite expansion would satisfy the clients they hoped to attract. That's now changing.

John Moores' JMI Realty has withdrawn its financial support of a study going forward that might provide data to support a non-contiguous expansion of the facility. JMI has a vision of a split convention center that might also allow for construction with a new football stadium.

Not that long ago, any suggestion that the city could expand the Convention Center with a separate building across the street or farther away was met with derision from boosters and city leaders who were committed to a contiguous facility.

Now the mayor’s point man on the expansion project and the current chairman of the Convention Center Corp., Steve Cushman, is signaling he’s changing his mind. At the same time, a new study is going forward that may show an offsite campus is best for the customers the Convention Center wants to attract.

It’s a slow-motion flip of prevailing opinion of downtown boosters and city leaders that could have major implications for the future of the waterfront.

Cushman has spent six years pushing for a waterfront, contiguous expansion of the San Diego Convention Center, first as a port commissioner, then as co-chair of the mayor’s citizen task force.

Now, as chairman of the San Diego Convention Center Corporation, Cushman isn’t so sure that’s the best site to expand or if an expansion is merited at all.

“It is truly is up in the air,” Cushman said at a board meeting last month, before advocating against spending more money to secure the planned site of the contiguous expansion, known as Fifth Avenue Landing. “It would be totally irresponsible, even if we had the money, to go spend $13.8 million to take over the remaining nine years of this lease because we have no project.”

The words hung heavy in the air and signaled a marked change in the posture of a man who’d worked hard on the 2010 deal to secure the contiguous expansion site. That plan called for the Convention Center to spend millions to buy out a private company’s port lease that expires in 2024.

City leaders have been making the case ardently for many years that a non-contiguous facility simply would not attract conventions.

In 2013, Cushman’s predecessor as chairman of the Convention Center Corp., Phil Blair, wrote in Voice of San Diego that it was a closed case:

“While a non-contiguous expansion would likely be utilized, it won’t be from the client base that uses the current facility,” he said, citing a study.

But much has happened since then.

Last year, funding was lost for the $520 million contiguous expansion and $14 million lease purchase balloon payment when an appellate court ruled a hotelier-approved hotel tax illegal.

The Convention Center lost its rights to the land after it missed the final May 6 payment deadline, and now Fifth Avenue Landing executives plan to resurrect their plans for a standalone hotel on the property, or pursue putting a mega Ferris wheel on the four-acre site.

Another legal challenge to the project’s Coastal Commission approval is still under way, further stalling the troubled project.

And now Cory Briggs, the lawyer challenging that approval, is outright advocating a non-contiguous expansion of the facility.

Cushman explained to his colleagues, “If in fact we’ve got three to five years of legal in front of us, and we then have to go in and architecturally draw the center and get all of that through, and then we have to bid the center, then we have to build the center, you are getting pretty close to the end of that lease, quite frankly.”

Given the turn of events, the tide may be shifting toward an expansion downtown, namely Tailgate Park, located adjacent to Petco Park and six blocks away from the existing Convention Center.

Cushman has stressed the importance of a new $90,000 study by Convention, Sports & Leisure International due out in August that will tell public officials whether clients still demand a contiguous expansion, or if an offsite location will work.

“We just need to know what it is that our customer wants,” Cushman said May 28, noting that market conditions may have changed since 2009, when an expansion report by consultant firm AECOM came out.

Photo: Sam Hodgson

Photo by Sam Hodgson

Many who know Cushman describe him as a pragmatist, and say his openness to an offsite expansion is merely a reflection of that. Others worry a developer donation secured by Cushman to help pay for the study will produce biased results.

Cushman declined to comment for this story.

The bill for the study was to be split three ways between the city of San Diego, the Convention Center and JMI Realty, former Padres owner John Moores’ real estate company.

JMI has repeatedly sought backing from public officials for an off-site Convention Center expansion at Tailgate Park, a lot owned by the city and currently under lease to the Padres through 2034.

“The cost of the study was close to $100,000, so in order to afford the study, the corporation said they can put in a third of the amount of money and my understanding is that Steve Cushman, as the mayor’s special assistant on the expansion, worked with JMI to secure the other balance of the money,” Steven Johnson, Convention Center spokesman, told members of the city’s budget review committee May 7.

That didn’t sit well with Council President Sherri Lightner, who asked if there was a conflict of interest.

Johnson said the authors of the study were reputable and “I feel pretty strongly that they will put forward a very fair and balanced study.”

“I guess we’ll see with the results of the study whether there’s a conflict of interest or not… I think it would be good to have a briefing on this,” Lightner said.

Following concerns, JMI recently pulled their contribution, said JMI Realty CEO John Kratzer.

“At the end of the day, we hope they’ll do good independent research,” Kratzer said. “Someone perceived our involvement being a problem. We said fine, we will back away from it.”

Kratzer said at this point, the strongest path forward is one that replicates the plans for the waterfront expansion on Tailgate Park, avoiding overlap onto other properties, like Mission Brewery and a large MTS bus maintenance facility. Architects have told him it’s possible and can accommodate a few back-house additions, he said.

“It’s unfortunate the bayfront expansion didn’t happen, we supported that. We are saying let’s move on and identify a viable alternative that will keep our market growing,” he said. “I just think Steve is realizing the bayfront isn’t going to happen and he is looking to alternatives. … His job has been to expand the Convention Center and that’s what I think he’s trying to do.”

Kratzer declined to share his ideas for how the expansion would get funded, but said he believes there are multiple options. “I think it will be less expensive than the bayfront expansion was going to be and I think it can be financed without going to a vote of the people.”

Most detractors of the non-contiguous expansion paint an image of convention-goers walking between both sites, but Kratzer said that’s unlikely.

“If you did this noncontiguous facility, that would be a separate group that took that building and what you’d have is perhaps three conventions at the same time. … This is not going to be a situation where one convention gets split between Tailgate Park and the existing. That is not likely going to happen.”

The exception is Comic-Con.

“At the end of the day Comic-Con is not our typical tenant. Having said that, they’ve proven that they can be successful taking multiple venues,” said Kratzer, noting Comic-Con events get booked in hotels across town, including the Omni Hotel, owned by JMI.

Cushman is not the only one keeping his options open.

At a March 5 event, Mayor Kevin Faulconer quipped, “We’re just going to build it wherever (opponent) Cory Briggs promises not to sue us.”

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