Convention Center Plan Facing Higher Hurdle

 

Proponents of a $550 million plan to expand San Diego’s Convention Center have made a major change to how they plan to pay for it.

The change gives the proposal more legal certainty, but requires greater support from the city’s hoteliers, said Steve Cushman, Mayor Jerry Sanders’ point man on the expansion.

It keeps San Diego tourists on the hook to pay increased taxes to raise $28 million to $30 million annually, or about three-quarters of what’s required to finance the expansion. And the expansion still isn’t expected to go before city voters.

But instead of using a financing structure called a tourism marketing district, Convention Center boosters have switched their plans. They’d use a different type of special district, which would require two-thirds of hoteliers to sign off on the room charge instead of 50 percent as was originally contemplated.

And that raises the hurdle for Convention Center boosters to clear.

“It creates a little bit of a new dynamic for me,” Cushman said.

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A key advantage of the new structure is greater legal certainty, he added.

Last November state voters passed Proposition 26, which tightened the levying of charges without a public vote. Convention Center boosters have said the original expansion plan fit into one of Prop. 26′s exemptions, but the concept remains untested.

“The idea of using [a tourism marketing district] in light of Prop. 26 is unproven,” Cushman said. “Obviously my job is to bring certainty to the expansion of the Convention Center.”

Currently, anyone who stays in a San Diego hotel room pays a 10.5 percent tax on their bill. Visitors at most hotels pay an additional 2 percent charge that hoteliers want to extend for another 40 years. But that plan hit a Prop. 26 snag yesterday, too.

The Convention Center expansion would add 1 percent to 3 percent on top of the regular tax and tourism charge. That means the effective hotel-room tax rate would be 15.5 percent in some areas of the city.

Cushman said the expansion’s new financing structure would be similar to what’s known a Mello-Roos district, which levies a special tax on property owners to pay for public improvements and services. The city of San Jose recently used the structure to expand its Convention Center without legal challenge, he said.

A City Council committee will discuss the new plans next Wednesday.

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 liam.dillon@voiceofsandiego.org or 619.550.5663.

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Liam Dillon

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.

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14 comments
susanf
susanf subscribermember

no one except the chargers and the nfl should be paying for a new stadium.

susanf
susanf

no one except the chargers and the nfl should be paying for a new stadium.

Mark Giffin
Mark Giffin subscribermember

Seems that we have recently done that with the cruise industry only to awake to a shrinking market.

mgland
mgland

Seems that we have recently done that with the cruise industry only to awake to a shrinking market.

bruce beyor
bruce beyor subscriber

Taxing a person who is town for buiness or pleasure is fools mission. The Convention Center was a poor design from the beginning. Cieling height to low for major idustry trade shows. Lack of a enough parking. Lack of interior resturants. To ask othes to cover the finacial costs of fixing this wrrong just makes the city look foolish. Organizations that shop convention centers are very cost aware. If one taxes them and their attendies too much,they go where they are wanted. Make it cost effective and they will come.

Grumpy
Grumpy

Taxing a person who is town for buiness or pleasure is fools mission. The Convention Center was a poor design from the beginning. Cieling height to low for major idustry trade shows. Lack of a enough parking. Lack of interior resturants. To ask othes to cover the finacial costs of fixing this wrrong just makes the city look foolish. Organizations that shop convention centers are very cost aware. If one taxes them and their attendies too much,they go where they are wanted. Make it cost effective and they will come.

Vlad Kogan
Vlad Kogan subscriber

Is the san jose tax levied on the tourists or the hotels themselves?

vkogan
vkogan

Is the san jose tax levied on the tourists or the hotels themselves?

michael-leonard
michael-leonard subscriber

Their tax on people who llive elsewhere is wrong no matter how high or low it might be. TOTs are the safest - and the sh**iest! - tax there is because it taxes people who live elsewhere. This is true of TOTs everywhere. And, they should be illegal because it is a perfect example of taxation without representation.

mlcred
mlcred

Their tax on people who llive elsewhere is wrong no matter how high or low it might be. TOTs are the safest - and the sh**iest! - tax there is because it taxes people who live elsewhere. This is true of TOTs everywhere. And, they should be illegal because it is a perfect example of taxation without representation.

Ian Trowbridge
Ian Trowbridge subscribermember

Tammy, you seem to know an awful lot. Do you work directly or indirectly for the hotel industry?

iantrowbridge
iantrowbridge

Tammy, you seem to know an awful lot. Do you work directly or indirectly for the hotel industry?

Tammy Tran
Tammy Tran subscriber

Some resort hotels outside of San Diego even charge 13.75% occupancy tax plus $20.00 per room per night for resort fee.

TammyT
TammyT

Some resort hotels outside of San Diego even charge 13.75% occupancy tax plus $20.00 per room per night for resort fee.