Hoteliers Get Their Wish In Convention Center Deal

Hoteliers Get Their Wish In Convention Center Deal

San Diego's Convention Center (file photo).

 

San Diego’s hoteliers got what they wanted from the city on Tuesday. The City Council gave them more control over the Convention Center’s operations. The decision comes on the eve of the hoteliers’ vote on financing the center’s expansion through higher hotel-room taxes.

The hotel owners are trying to squeeze greater influence over the center in exchange for their support of the expansion. By controlling the center’s sales and marketing, they could direct more events to their own hotels and offer better deals to groups wanting to book the center.

They argue fattening their bottom lines also fattens the city’s tax revenues. Organized labor and Convention Center staff contend that giving hotels power over the center’s marketing could hurt existing operations and leave taxpayers liable if sales goals aren’t met.

I’ve covered the specifics of this issue in recent days so I’m instead going to focus on three takeaways from Tuesday’s events. We’ll call them the three R’s: Rush, Rhetoric and Results.

The Rush:

You wouldn’t think that a $3.1 million annual contract would create such a ruckus. But on Tuesday, the council chambers were packed.

Mayor Jerry Sanders stayed through the two-and-a-half hour meeting, as did his current and past chiefs of staff. Other high-level policy advisors buzzed in and out. Suit-wearing business leaders and hoteliers filled the front rows. Orange-shirted union members filled the back.

At stake was the Convention Center’s management. Right now, the Convention Center Corp., a public agency, handles the center’s sales and marketing. Hoteliers, Sanders and expansion boosters wanted to switch that control to the San Diego Convention & Visitors Bureau, or ConVis, a private organization. The proposed marketing contract is for $3.1 million a year.

Before Tuesday’s vote, and even after it, no one estimated the effect on the bottom lines of the hoteliers, the center and city taxpayers. The switch didn’t even appear on the council agenda until Friday. Few details about the plan’s impact surfaced in the meantime.

But the council went forward anyway, voting 7-1 to give the go-ahead for the switch.

And without details on the deal’s financial effects, all that’s clear is the hoteliers won and labor lost.

The council decision came a few hours after the Convention Center’s nonprofit board similarly approved the switch. Its Tuesday meeting was its second in two days. Another sign of the rush: Both of the board’s meetings happened by phone.

Last night, one of the board’s nine members, Mick Musella, submitted his resignation in a one-sentence fax without giving a reason.

Musella is chairman of the ConVis board.

The Rhetoric

The words people used in the council hearing Tuesday spoke to the intensity of feeling on this issue. Union members compared the marketing switch to the Chargers ticket guarantee and previous pension decisions, some of the most infamous deals in the city’s history.

“This could be the worst decision you all make in your entire time here at the City Council,” said Carlos Cota, who heads San Diego’s stagehands union.

On the other side, backers of the switch struggled to make their points consistent with past rhetoric about the Convention Center expansion and the center’s marketing now.

For months, boosters have cast the $520 million expansion as a win for San Diego, guaranteed on its own to attract more conventions. On Tuesday, though, their argument shifted: If the center expands, the city would have to market it better to make sure more conventions come.

Before the expansion was enough. Now backers say they need something more.

“The expansion alone will not guarantee the growth of the (visitor) industry,” Sanders said. “It requires an aggressive approach to sales and marketing. The convention industry is highly competitive and we must be able to outsell other cities.”

Like many other speakers, Joe Terzi, who heads ConVis, tried to walk a line between praising the Convention Center’s management, while emphasizing that his organization could do a better job.

“They have been exceptionally successful in running what I consider to be one of the most well-run and highest-quality centers that I’ve had an opportunity to experience,” Terzi said. “But frankly if you look at the booking patterns and what the center has been able to achieve, the booking patterns have been stagnating over the last number of years.”

The Results

Most of the end of the council meeting focused on procedural issues. The council required all the vital questions about the deal’s effects to be answered at a future committee hearing. It also left the Convention Center in control of booking events less than 18 months away. No council members save David Alvarez, who voted against the deal, questioned the underlying motivations.

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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20 comments
robert lopo
robert lopo subscriber

A poor decision by the Mayor and City Council. Hang your heads in shame.

ibphotos
ibphotos

A poor decision by the Mayor and City Council. Hang your heads in shame.

margaret sohar
margaret sohar subscribermember

Any transfer of contracts that are good for the public would bear a thorough investigation. The fact that this was rushed through makes it extremely suspicious.

mcdonald290
mcdonald290

Any transfer of contracts that are good for the public would bear a thorough investigation. The fact that this was rushed through makes it extremely suspicious.

Les Birdsall
Les Birdsall subscriber

Our mayor, Pothole Sanders, taxpayer associations, the Chamber of Commerce, and all who support managed competition, should set up to the plate on this one.

Les Birdsall
Les Birdsall

Our mayor, Pothole Sanders, taxpayer associations, the Chamber of Commerce, and all who support managed competition, should set up to the plate on this one.

Robert Cohen
Robert Cohen subscriber

When I read that "no council members save David Alvarez. . . questioned the underlying motivations", it really makes you appreciate the work that Donna Frye would put in to issues before the council. I don't know how she would have voted on a measure like this convention center deal, but I do know she would have been out front in having done her homework and asking questions. Citizens rely on their representatives to, you know, represent them. Ms. Frye, whether you may have agreed with her or not, certainly did that. It would be nice to see her back in some governmental capacity.

RobSD
RobSD

When I read that "no council members save David Alvarez. . . questioned the underlying motivations", it really makes you appreciate the work that Donna Frye would put in to issues before the council. I don't know how she would have voted on a measure like this convention center deal, but I do know she would have been out front in having done her homework and asking questions. Citizens rely on their representatives to, you know, represent them. Ms. Frye, whether you may have agreed with her or not, certainly did that. It would be nice to see her back in some governmental capacity.

Bill Bradshaw
Bill Bradshaw subscribermember

This is right out of Alice in Wonderland. I can understand the mayor, but why was the entire council so compliant? Are they that easy to intimidate?

toulon
toulon

This is right out of Alice in Wonderland. I can understand the mayor, but why was the entire council so compliant? Are they that easy to intimidate?

Mark Giffin
Mark Giffin subscribermember

If Don Bauders piece on the inflated numbers is correct looks like history repeating itself will be no mystery either.

mgland
mgland

If Don Bauders piece on the inflated numbers is correct looks like history repeating itself will be no mystery either.

Tammy Tran
Tammy Tran subscriber

Just take notes that Mayor Sanders and the San Diego City Council (except Councilman David Alvarez) had agreed on this deal without citizens' participation.

TammyT
TammyT

Just take notes that Mayor Sanders and the San Diego City Council (except Councilman David Alvarez) had agreed on this deal without citizens' participation.

David Hall
David Hall subscriber

Don, it won't be the last time either. The mayor is hell bent on giving away tens of millions of dollars of information technology work to a few international corporations that have no interest in San Diego other than the profits they can make. The fire sale of transparency and community involvement continues and we have Jerry Sanders and the cowards on the city council to thank.

sdguy
sdguy

Don, it won't be the last time either. The mayor is hell bent on giving away tens of millions of dollars of information technology work to a few international corporations that have no interest in San Diego other than the profits they can make. The fire sale of transparency and community involvement continues and we have Jerry Sanders and the cowards on the city council to thank.

Dale Peterson
Dale Peterson subscribermember

I appreciate the concerns that have been expressed by David Alvarez.

Dale Peterson
Dale Peterson

I appreciate the concerns that have been expressed by David Alvarez.

Don Wood
Don Wood subscriber

This isn't the first time that San Diego politicians have given the store away to private interests in a manner that hurt the city financially. See Qualcomm Stadium upgrade, Petco Park, or just read "Paradise Plundered" to understand the sad history of this crooked little city.

Don Wood
Don Wood

This isn't the first time that San Diego politicians have given the store away to private interests in a manner that hurt the city financially. See Qualcomm Stadium upgrade, Petco Park, or just read "Paradise Plundered" to understand the sad history of this crooked little city.