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The Waterfront Convention Center Expansion Has Never Been This Hopeless

Its most prominent backers are falling off, one by one. The city of San Diego no longer even controls the land it would need. The plan faces a passionate foe in court. Yet its remaining backers are still deeply committed – and think there’s a chance they could overcome all of that.

The movement to expand San Diego’s Convention Center at its current site on the waterfront has never had a worse season.

Its most prominent backers are falling off, one by one. The city of San Diego no longer even controls the land it would need. (The people who do control it are rapidly advancing a plan to build a hotel on it.)

In court, the plan faces a passionate foe, who not long ago helped kill off a financing plan for the project that took years to put together. Were it to survive all this, it would need the support of two-thirds of voters. Yet two initiatives on the ballot right now would erase that hope.

The mayor is now openly promoting one of them.

Perhaps least helpful, the project’s newfound critics are starting to talk about something rarely discussed before: how expensive and disruptive construction of the expansion would be.

The idea to expand the Convention Center at its current location is as dead as the idea to move the airport to Miramar.

Or is it?

Remaining backers are deeply committed. They think they can get the land back — maybe just have the government seize the lease. They think the legal challenge will fizzle, as will the competing initiatives. And the mayor, well, they will note the mayor says he doesn’t really think the competing plan he supports will pass.

And getting two-thirds of voters to support? Were it to reach the ballot, it will mean something of a public affairs miracle has taken place, so they’ll cross that bridge happily when it comes.

Last week, Tourism Authority CEO Joe Terzi told a crowd watching a debate about the stadium plan, Measure C, that one of his main reasons for opposing that measure was it would eliminate any chance to expand the Convention Center on the waterfront.

After all, the convadium would require a major increase in hotel-room taxes. If it succeeded, there would be little room to increase hotel taxes to expand the Convention Center. Thus, it must be stopped.

I asked Terzi how, given all that it faces, he remained so optimistic the old plan could someday be implemented.

“I’m an optimistic person,” he said, before rattling off the other places that are expanding their convention centers.

He has very little to be optimistic about, however.

Start with the land. It’s Port land — public land. But the Port leases out this land and the current lease is held by a company called Fifth Avenue Landing. The city basically purchased Fifth Avenue Landing’s lease and was paying it off only to stop paying and give it back as expansion plans fizzled.

Now, the Port has given Fifth Avenue Landing approval to seek permits for a large hotel right on the plot of land Convention Center and city officials hope to use to build the expansion.

“We are now developing an outstanding hotel and marina on the property. We’re excited about this project and 100 percent committed to seeing it through,” Ray Carpenter, a partner with Fifth Avenue Landing, said in a written statement.

The hotel would be up to 850 rooms and include public plazas and a promenade with retail. It would also kill any remaining chance of expansion.

I asked Bob Nelson, a member of the Port Commission, which acts as a landlord for its valuable waterfront land, whether it was realistic to think a hotel might arise there and kill off the convention center’s push.

“Oh definitely. They brought in an excellent, highly regarded hotel developer,” Nelson said, though he cautioned that the Port’s stamp of approval was just a first step. “It does not remotely suggest we will approve the project.”

If their leaders wanted to make way for an expansion of the convention center, the Port and city would likely have to seize the lease through eminent domain or otherwise persuade Carpenter to sell after years of hardball negotiations.

Nelson said eminent domain is possible.

“The question would be ‘Can a local governmental jurisdiction acquire a leasehold interest for a public use?’ I think the lawyers would say yes to that,” he said.

That’s a thorny path to pursue. Yet it might be the easiest of the challenges to resolve to expand the Convention Center at its current site.

A harder challenge is that political will for the project is dissolving. Take Rep. Scott Peters. Go ahead, try to find someone who was a greater champion of an expansion than Peters, who served on the City Council and Port Commission. He is now a congressman.

Peters recently blasted the concept. The legal case that had thrown out an earlier financing plan had left the idea positively anachronistic, he wrote:

Now there is significant political opposition to ceding more waterfront to development. The $575 million contiguous expansion cost estimate was derived without engineering drawings, is wildly out of date and depends on a $200 million guarantee from the city’s general fund. There has been no accounting for the lost profits the convention center would incur from closing over 200,000 square feet for two years during phased construction or for the increased costs of operating a larger facility; that means that our current annual subsidy of $3.4 million from the city’s general fund will have to increase! (By the way, is it fair that the general fund pays this subsidy instead of the hotels that profit from the public’s investment in the convention center, when those hotels are assessed some of the lowest tourist taxes in the nation?)

It was jaw-dropping to see an advocate become such an eloquent foe.

Yes, there’s more.

Attorney Cory Briggs just filed his opening brief in a legal case to cut off the plan were it to somehow regain traction.

“More specifically, this lawsuit represents an attempt to uphold promises made at nearly every level of government and by the private sector going back to 1996, promises that no more of the South Embarcadero would be “walled off” to sate the appetite of a few greedy, politically connected special interests for prime waterfront real estate – the public’s real estate – to the exclusion of everyone else,” reads the brief’s introduction.

Were it to survive this attack and keep what’s left of its political supporters, the movement to build the Convention Center expansion would also need to advance it to the ballot and then get two-thirds support, most likely in 2018.

That’s very difficult to picture. For one thing, even if the Chargers’ Measure C fails, the team may still fight for hotel-room taxes to support whatever solution they propose next. After all, the mayor is now on the record as supporting that financing mechanism.

The other ballot measure on this topic, Measure D, crafted in part by Briggs, would prohibit the city from spending money on the Convention Center expansion.

If the mayor was unwilling to fight for the waterfront expansion this year, what makes it more likely in two years? The mayor also believes the Chargers won’t leave no matter what happens to Measures C or D. If he’s right, there’s a good chance the football team will stay as a major opponent to the Convention Center expansion.

One guy is keeping this alive.

It’s Steve Cushman, the onetime chairman of the Port Commission, who is on the Convention Center Corp.’s board of directors and has been the mayor’s point man on this issue for a few years.

He wrote me just one sentence when I asked why he kept pushing to expand the Convention Center where it stood in spite of all the obstacles: “After two in-depth studies of our clients we continue to do our best to carry out their overwhelming desires for a contiguous expansion of our convention center.”

Cushman once told me that making deals is what drives him.

For now, it’s hard to picture how he pulls this one off.

Clarification: To quickly summarize the city’s effort to control the land for a possible expansion of the Convention Center, I originally wrote that the city “basically subleased” it from Fifth Avenue Landing. It would have been more accurate to say the city purchased the lease and was forced to give it back after failing to make agreed payments and I changed the text. 

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