Photo by Sam Hodgson
The San Diego Convention Center
Another big City Council vote on San Diego’s $520 million Convention Center expansion is scheduled for Tuesday afternoon.
In the last few days, the road to an expansion became much more complicated. The biggest interloper was the U-T San Diego. On Sunday, in editorials on the front and opinion pages, the paper argued for a grand vision of an expanded Convention Center, new Chargers stadium, new sports arena, an unnamed “civic icon” and much more on the site of the 10th Avenue Marine Terminal. The terminal is the city’s major industrial port and the paper argues maritime activity could still continue there for a while.
Details are scanty, but the paper said promoting its vision will be, “priority No. 1 for U-T San Diego.”
The U-T’s bumrushing of the existing Convention Center plans is just one of five obstacles that have developed or grown larger recently. All threaten to tear down the project. Here are all five:
1. The Police and Fire Money
Convention Center expansion boosters want $105 million from the city’s day-to-day operating budget, the same pot of money that pays for police and fire services, to help pay for the project.
They have justified the contribution because a city consultant estimated the day-to-day budget would reap about $13 million annually from the expansion, far in excess of the $3.5 million the city is projected to pay each year. Boosters are so confident the city budget wins from the deal that they sometimes pretend the city budget isn’t on the hook for anything.
Now, expansion backers’ margin for error has decreased considerably. The day-to-day budget’s take from the Convention Center expansion could be as low as $5.2 million a year, says a new report from the city’s independent budget analyst.
If the analyst’s estimate is correct, less than $2 million a year will flow directly to the budget to pay for increased police, fire and other general services, once the city pays for the expansion.
Budget analyst Andrea Tevlin said in an interview that she’s confident the day-to-day budget will receive a boost from the expansion. But the wide variance between Tevlin and the consultant’s figures emphasizes a point she’s made before: Estimates for increased tax revenues can be hard to pinpoint.
And as it stands, city taxpayers — not hotel guests or the port — bear the risk if the assumptions don’t come true.
2. The Cap
Expansion backers were supposed to limit some of the risk to the city budget by now. They haven’t.
With the hotel-room tax hike and the port’s contribution becoming more solid with every council vote, it leaves the city budget as potentially the only pot of money boosters can tap if there’s a shortfall. Council members wrung their hands over this at a hearing on the expansion last month. So they voted to require Mayor Jerry Sanders’ office to develop options for capping the budget’s annual payment in time for tomorrow’s vote.
But the city’s chief operating officer, Jay Goldstone, said the city’s borrowing plans for the expansion preclude a cap on the day-to-day budget’s exposure at this point. He said the city expects the $3.5 million projected annual payment from the budget will be the final one when the full financing plan goes before the council this spring.
Told about the council’s request for a cap by this hearing, Goldstone replied, “I understand what they asked for, but there are the realities of the situation.”
It doesn’t appear there will be consequences for the lack of action. The two council members who pushed formally for the cap to be discussed at Tuesday’s meeting, Carl DeMaio and Kevin Faulconer, appeared to back off their timeframe. DeMaio said in a statement he was still waiting to hear from city staff about the feasibility of a cap. Faulconer said he would ensure a cap was in place when the council voted on the full financing plan, not on Tuesday.
3. Hotels vs. Labor
The under-the-radar fight about the Convention Center expansion is over control. Hoteliers want greater control over the Convention Center Corporation’s board because hotel guests will be paying for the majority of the expansion. Organized labor doesn’t want hoteliers to control the board because many unions now operate in the Convention Center.
Sanders has a plan that would radically change the board. The nine member board would have “four hoteliers, two labor representatives, two at-large members and one individual representing a tourist attraction,” the U-T said.
Lorena Gonzalez, the city’s top labor official, said that framework was unacceptable.
“We’re absolutely opposed to the privatization of the Convention Center and that’s what we consider that as,” she said.
Goldstone said the plan the U-T reported is what’s being considered now, but the Mayor’s Office is still negotiating the details.
4. Coastal Commission
While money typically is at the root of San Diego’s big building dramas, there’s more to the Convention Center expansion than just dollars.
The state’s Coastal Commission, a powerful board that regulates waterfront development, has to approve the project. The commission prioritizes public access and environmental concerns. The Chargers have long argued they don’t think the commission will sign off on the expansion, calling the project “a box-like structure impeding public access to the waterfront.” The U-T argued the same point in its editorial series on Sunday. And Gonzalez called coastal approval “a long shot.”
Goldstone declined to discuss the city’s Coastal Commission plans, but took a jab at the U-T.
“I don’t have enough specific information to speak to it,” he said. “But I don’t know if a Marine Terminal plan has any better shot.”
5. The U-T
The U-T appears to want everything both ways.
The editorial said it didn’t intend to mess with the existing expansion plan. But it also counted on the same hotel-tax increase revenue for its grand vision and referred to the existing plans as a “big mistake.”
CEO John Lynch said the U-T’s goal wasn’t to hijack the mayor’s proposal. He said the U-T’s plan could work if the existing expansion fell through. If it happened, he said the Convention Center space at the 10th Avenue Marine Terminal could be used for an additional expansion.
“I don’t think they’re mutually exclusive,” Lynch said. “If the mayor’s plan goes forward, it’s very easy to fold in the rest of our vision with that.”
Lynch confirmed that he met with two council members, DeMaio and Faulconer, last week to discuss the U-T’s plan.
Faulconer said he discussed the plan with Lynch over lunch and a staffer for DeMaio said the councilman met with Lynch on Friday.
“I think it’s certainly a bold plan and it’s worthy of a civic discussion,” Faulconer said.
DeMaio said in a statement that the proposal “has the potential of providing a creative solution.”
But both Faulconer and DeMaio said the meeting didn’t change their minds about the existing expansion proposal. They want to continue moving forward.
“There are too many jobs at stake,” DeMaio said.
Meantime, Sanders’ office dismissed the U-T’s proposal in a brief statement.
“The city is ready to move forward now on a realistic plan to create thousands of jobs, protect our convention business and increase revenues for neighborhood services,” the statement reads. “We have to address these important priorities in a responsible way.”
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 firstname.lastname@example.org or 619.550.5663.
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