Opinion

Four False Claims About the Convention Center Expansion

Four False Claims About the Convention Center Expansion

Photo by Sam Hodgson

The San Diego Convention Center.

The upcoming vote of the California Coastal Commission Thursday has thrust the Phase III expansion of the convention center back into the news.  While most of the coverage has been fair and accurate, some has focused on a few erroneous claims made by critics (or skeptics) of the expansion.

fix san diego opinionThe current project has evolved since 2009 when then-Mayor Jerry Sanders created a task force to evaluate the market demand for an expanded facility. The task force assessed the feasibility and financing possibilities while conducting widespread outreach through public meetings in every council district.  Since then, there have been dozens of public meetings on the project with a wide array of community groups, civic organizations, the general public, the port and the city of San Diego. Because of these meetings, the project itself has improved.

Two websites, one for the Mayor’s Citizens Task Force and the other for the current convention center expansion, contain hundreds of public documents available for anybody to access and review.  But regardless of all this public information, questions remain and claims have been made, so I would like to tackle a few of the larger ones that have recently resurfaced.

Claim: The plan underestimates the true cost by more than $35 million, leaving taxpayers on the hook.

When the building opens, it is expected to generate an additional $13 million in tax revenues to the city along with 7,000 permanent new jobs. Even with the $3.5-million contribution from the city of San Diego’s general fund to help pay for the expansion, the city will still receive a minimum of $9.5 million in new tax revenues to fund city services annually. Opponents of the financing plan have made a number of claims that are way off base.

The biggest miss is that the pro forma budget for the expansion doesn’t include the cost of land to be acquired to build the expansion. In fact, the City Council took action in November 2012 clearly showing that land is included in the expansion project budget.

Another claim is that the cost for an expansion kitchen is not included. Actually, a new full kitchen is not included – or necessary – in the expansion. Rather, two “food prep areas” will be added, while we remodel and expand the kitchen that has been operational since the first expansion opened in 2001.  The build-out and remodeling costs are most definitely part of the overall expansion budget.

Claim: The expansion will be a “white elephant” due to a glut of convention space in the country. It either won’t be filled, or conventions will need to be subsidized to come here.

That might be true if this expansion were being contemplated in Omaha or Spokane, which are second-tier cities that market to a different segment of the industry, but it is certainly not true for San Diego.  Make no mistake about it, the convention and meeting industry is highly competitive. Cities all want conventions.  But our clients are not choosing between San Diego and any second-tier city. To the contrary, they are looking at San Francisco, Las Vegas or Vancouver — and San Diego — when deciding where to hold their conventions when they rotate to the West Coast.

San Diego is one of the nation’s top convention locations because we are such a great visitor destination. This is a city people want to come to ­– for business or pleasure. This has always been the case. We’ve been a premier convention venue since the day the convention center first opened in 1989.

Not every city’s convention center is going to be successful because they don’t have the right stuff— whether it’s hotels, a convenient airport or any of the things that have made San Diego so successful. San Diego always has been and always will be a top-tier market.

Claim: Proponents never seriously considered a larger, non-contiguous expansion or alternative sites.

Between 2003 and 2007, nine potential expansion sites were identified and eliminated because of cost, unavailability of the land or larger constraints such as having to build over the bay or a railroad yard.

In 2009, the Mayor’s Citizen Task Force evaluated two additional sites.  The first, identified as the 5th Avenue Landing site, is where the current Phase III expansion is being proposed. The second, the Tailgate Park site, located east of Petco Park along Park Boulevard, is where the Chargers are hoping to build a new stadium. The Tailgate site evaluation – conducted in depth for more than $100,000 – found that an active earthquake fault ran right through it.

Six different concepts were evaluated, however, the site was eliminated as convention center clients indicated the facility would not meet their needs for contiguous space and was located too far from the current facility to be convenient for convention-goers.

Claim: Studies commissioned by the convention center show that non-contiguous space would meet the needs of the vast majority of conventions.

The San Diego Convention Center Corporation released results this week of a recent survey on this very topic that was sent to executives of the leading convention, exhibition and conference producers. Of those responding, 64 were current clients of the San Diego Convention Center and 98 percent of those said it was “extremely important/critical or very important to have contiguous exhibition halls in a single venue when booking their major events.”

But this is no surprise to those of us who have been talking with clients over the past six years as we explored various expansion options. While a non-contiguous expansion would likely be utilized, it won’t be from the client base that uses the current facility.

This is the right project, at the right time, for all the right reasons.

Phil Blair is chairman of the San Diego Convention Center Corporation Board of Directors and executive officer of manpower. Blair’s commentary has been edited for clarity. See anything in there we should fact check? Tell us what to check out here. Want to respond? Submit a commentary.

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39 comments
Ryan Bray
Ryan Bray

There is so much opposition from the public on expanding tax revenue generating proposals like a new stadium and convention center expansion. People are convinced that the Chargers and convention center cost the city money and that developers are going to put us over the barrel... Sure there are up front costs and some rich people are going to get richer. But keep in mind that the costs are easy to quantify, while the benefits are long term and very difficult to nail down. They bring thousands more tourists every year and generate millions in tax revenue. That money could be used to improve our schools, roads, and even help maintain the coastline. I totally agree with the article about location. People around the world are just looking for an excuse to come to San Diego, enjoy our weather (the best of the west coast destination cities) and spend money. I think San Diegans are just so jaded these days towards the rich (i.e. developers and politicans) because of past transgressions (Quallcom "upgrade", Petco backdoor investing, financial meltdown etc..) that they refuse the see any of the good in these proposals. It's too bad the public is blind to the fact that this is a good thing for the city in the long run.

Ryan Bray
Ryan Bray subscriber

There is so much opposition from the public on expanding tax revenue generating proposals like a new stadium and convention center expansion. People are convinced that the Chargers and convention center cost the city money and that developers are going to put us over the barrel... Sure there are up front costs and some rich people are going to get richer. But keep in mind that the costs are easy to quantify, while the benefits are long term and very difficult to nail down. They bring thousands more tourists every year and generate millions in tax revenue. That money could be used to improve our schools, roads, and even help maintain the coastline. I totally agree with the article about location. People around the world are just looking for an excuse to come to San Diego, enjoy our weather (the best of the west coast destination cities) and spend money. I think San Diegans are just so jaded these days towards the rich (i.e. developers and politicans) because of past transgressions (Quallcom "upgrade", Petco backdoor investing, financial meltdown etc..) that they refuse the see any of the good in these proposals. It's too bad the public is blind to the fact that this is a good thing for the city in the long run.

Patrick Flynn
Patrick Flynn

"7,000 permanent new jobs" Could you please flesh out this statement? What are these jobs and how was this number calculated? Thank you.

Patrick Flynn
Patrick Flynn subscriber

"7,000 permanent new jobs" Could you please flesh out this statement? What are these jobs and how was this number calculated? Thank you.

Chris Brewster
Chris Brewster

Is this this convention center expansion game never ending? There are always those who will insist that ever larger means more income to the city. As others have noted, the risk is to the taxpayer. The primary potential benefit is to the owners of hotels, restaurants, and the hospitality industry generally who seem to have no risk whatsoever in this effort. This economic sector provides mostly very low paying jobs that leave workers below the poverty line. There are obviously no guarantees that the city will receive $9.5 million in benefits, and those purported benefits translate to less than 2% of the purported cost of the facility annually.

Chris Brewster
Chris Brewster subscribermember

Is this this convention center expansion game never ending? There are always those who will insist that ever larger means more income to the city. As others have noted, the risk is to the taxpayer. The primary potential benefit is to the owners of hotels, restaurants, and the hospitality industry generally who seem to have no risk whatsoever in this effort. This economic sector provides mostly very low paying jobs that leave workers below the poverty line. There are obviously no guarantees that the city will receive $9.5 million in benefits, and those purported benefits translate to less than 2% of the purported cost of the facility annually.

Don Wood
Don Wood

The coastal commissioners were appointed to uphold and enforce the California Coastal Act. The commission's own staff and the California State Attorney General’s office have carefully examined this proposal and found that it violates both the coastal act and the California Environmental Quality Act (since the project EIR did not assess viable alternatives that could have expanded the facility off public tidelands). Nothing Mr. Blair says can change that fact. The Coastal Act is very clear. Legally the commission must reject this proposed project, it cannot try to modify it or add new conditions to a coastal development permit after the project was formally submitted. Based on the recommendations of it's own staff and the state AG's office, it has no option but to reject this project. The Port can come back if it develops a new proposal that complies with the law.

Don Wood
Don Wood subscriber

The coastal commissioners were appointed to uphold and enforce the California Coastal Act. The commission's own staff and the California State Attorney General’s office have carefully examined this proposal and found that it violates both the coastal act and the California Environmental Quality Act (since the project EIR did not assess viable alternatives that could have expanded the facility off public tidelands). Nothing Mr. Blair says can change that fact. The Coastal Act is very clear. Legally the commission must reject this proposed project, it cannot try to modify it or add new conditions to a coastal development permit after the project was formally submitted. Based on the recommendations of it's own staff and the state AG's office, it has no option but to reject this project. The Port can come back if it develops a new proposal that complies with the law.

Mark Giffin
Mark Giffin

Appears the expansion, Just like the pension scheme. has only one group with any risk if revenues are short and that's the taxpayer. Remember, when excuses were being made about the ballooning pension costs when they came to light and the rational was "well the public wanted a ball park and a revitalization of downtown". History repeating itself here with yet another liability dumped on the taxpayer? Appears so to me.

Mark Giffin
Mark Giffin subscribermember

Appears the expansion, Just like the pension scheme. has only one group with any risk if revenues are short and that's the taxpayer. Remember, when excuses were being made about the ballooning pension costs when they came to light and the rational was "well the public wanted a ball park and a revitalization of downtown". History repeating itself here with yet another liability dumped on the taxpayer? Appears so to me.

Mark Giffin
Mark Giffin

Don Bauders piece on this subject. http://www.sandiegoreader.com/news/2013/aug/14/citylights1-convention-center-glutemshhhem/San Diego builds into convention center gluthttp://www.sandiegoreader.com/news/2013/aug/14/citylights1-convention-center-glutemshhhem/This proposed convention-center expansion is being discussed, despite a global surplus in convention space and falling rents. Late last year, the Port of San Diego put out a so-called fact sheet touting the proposed $520 million expansion of the conv...

Mark Giffin
Mark Giffin subscribermember

Don Bauders piece on this subject. http://www.sandiegoreader.com/news/2013/aug/14/citylights1-convention-center-glutemshhhem/San Diego builds into convention center gluthttp://www.sandiegoreader.com/news/2013/aug/14/citylights1-convention-center-glutemshhhem/This proposed convention-center expansion is being discussed, despite a global surplus in convention space and falling rents. Late last year, the Port of San Diego put out a so-called fact sheet touting the proposed $520 million expansion of the conv...

La Playa Heritage
La Playa Heritage

www.tinyurl.com/20130926 No alternative site locations were brought forward by the public were analyzed for the Draft EIR. The Chargers preferred site is at the MTS Bus Maintenance Yard between 14th and 16th Street. Only the Tailgate site between 12th and 14th Street was analyzed, and discarded due to the active fault along 13th Street. Alternative proposed sites never analyzed including our proposed alternative Contiguous 15-acre site on the Waterfront, Contiguous East expansion on Harbor Boulevard and above the train tracks, the 10th Avenue Marine Terminal, and the Chargers preferred site between 14th and 16th Street. Also the funding scheme requires that the State acknowledge that Hotel Lessee of State Tidelands have ownership of our public lands. Mello-Roos taxes, such as the up to 3% Special Tax, can only be voted on by landowner on private lands, not public State Tidelands under Trust.

La Playa Heritage
La Playa Heritage subscribermember

www.tinyurl.com/20130926 No alternative site locations were brought forward by the public were analyzed for the Draft EIR. The Chargers preferred site is at the MTS Bus Maintenance Yard between 14th and 16th Street. Only the Tailgate site between 12th and 14th Street was analyzed, and discarded due to the active fault along 13th Street. Alternative proposed sites never analyzed including our proposed alternative Contiguous 15-acre site on the Waterfront, Contiguous East expansion on Harbor Boulevard and above the train tracks, the 10th Avenue Marine Terminal, and the Chargers preferred site between 14th and 16th Street. Also the funding scheme requires that the State acknowledge that Hotel Lessee of State Tidelands have ownership of our public lands. Mello-Roos taxes, such as the up to 3% Special Tax, can only be voted on by landowner on private lands, not public State Tidelands under Trust.

Jim Jones
Jim Jones

The claim that the convention center expansion will make money because we are not Omaha is dubious. It remains very questionable that we can bring in any additional bookings at a profit, when we are in direct competition with vegas and LA. Also left out of this is the claim that taxpayers pay for over budget costs when the expansion does go over budget. A convention center expansion is a huge gamble, not worth taking in these economic times.

Jim Jones
Jim Jones subscriber

The claim that the convention center expansion will make money because we are not Omaha is dubious. It remains very questionable that we can bring in any additional bookings at a profit, when we are in direct competition with vegas and LA. Also left out of this is the claim that taxpayers pay for over budget costs when the expansion does go over budget. A convention center expansion is a huge gamble, not worth taking in these economic times.

Augmented Ballot
Augmented Ballot

Phil, my claim is that other contiguous designs are possible which better serve San Diegans and downtown businesses. Is that a false or insubstantial claim? In the task force documents, I don't see that other contiguous designs were considered. Were any? I welcome your comments.

Augmented Ballot
Augmented Ballot subscriber

Phil, my claim is that other contiguous designs are possible which better serve San Diegans and downtown businesses. Is that a false or insubstantial claim? In the task force documents, I don't see that other contiguous designs were considered. Were any? I welcome your comments.

Robert Cohen
Robert Cohen

I see the Chargers are on the attack. According to today's UT website edition Mark Fabiani called Bob Nelson, a port representative who criticized the stadium proposal "one of the most anti-Charger public officials in town," (along with Steve Cushman and Mike Aguirre). Fabiani also said that "just because Mr. Nelson failed to listen (to warnings that the expansion would have a difficult time with the Coastal Commission) doesn't give him the right to criticize the Chargers - an organization that has spent more than a decade and well in excess of $10 million trying to find a stadium solution here in San Diego." It's really getting nasty and I guess the Chargers are immune from criticism.

Robert Cohen
Robert Cohen subscriber

I see the Chargers are on the attack. According to today's UT website edition Mark Fabiani called Bob Nelson, a port representative who criticized the stadium proposal "one of the most anti-Charger public officials in town," (along with Steve Cushman and Mike Aguirre). Fabiani also said that "just because Mr. Nelson failed to listen (to warnings that the expansion would have a difficult time with the Coastal Commission) doesn't give him the right to criticize the Chargers - an organization that has spent more than a decade and well in excess of $10 million trying to find a stadium solution here in San Diego." It's really getting nasty and I guess the Chargers are immune from criticism.

stephenwade
stephenwade

Hopefully, this expansion will lead to San Diego becoming THE premier West coast destination for conventions! :-)

Cory Briggs
Cory Briggs

Phil: Shows the public the documents. Saying it in print doesn't make it so. My claim about the property-acquisition cost is not that the city hasn't budgeted the money. The claim's that the city left that out of the $520 million cost estimate. It's pretty hard to include a cost accepted by the city in October 2012 in a cost budget issued in February 2012. If you have docs to the contrary, cough 'em up. As for the "recent survey," you should share that one too. Seems odd that you'd wait until a couple days before the big hear to prove the key premise in a years-old argument.

Cory Briggs
Cory Briggs subscribermember

Phil: Shows the public the documents. Saying it in print doesn't make it so. My claim about the property-acquisition cost is not that the city hasn't budgeted the money. The claim's that the city left that out of the $520 million cost estimate. It's pretty hard to include a cost accepted by the city in October 2012 in a cost budget issued in February 2012. If you have docs to the contrary, cough 'em up. As for the "recent survey," you should share that one too. Seems odd that you'd wait until a couple days before the big hear to prove the key premise in a years-old argument.

Sandiego72h
Sandiego72h

Mr. Jones you are wrong about the convention center barely running in the black. It's troubling how people like you seem to just make things up and pass them off as facts. Do some homework next time. The city gets tens of millions in the tax's visitors pay to come to these conventions. The hotels do make a lot of money, you are right there, but they also employee thousands of people to work these hotels. Don't forget they pay taxs to the city on that income too. The convention center employees hundreds of people and the expansion would create hundreds more jobs. The restaurants downtown also make money from the convention center visitors which in turn San Diego makes more tax income. This is all Business 101 stuff. San Diego is the 9th largest city in America and the 2nd largest city in California, it's time to step up to the plate and not only be a destination for people from all over the country but people from all over the world. The large amount of income coming from the events that book the convention center is easy money for our city. I don't know much about what goes on at Comic con that is here every year but I do know it brings over $100 million into our city. I again ask you, do some homework and you'll see the benefits.

David Benz
David Benz

The stadium expansion has cost the city $100s of millions, We lose over $10 million a year operating the Q and that doesn't include the long term deferred maintenance. We would be much better off if we just ran the welfare queen Spanos family out of San Diego.

Jim Jones
Jim Jones

Hey Ryan, give me $100k and I promise you'll be better off in the long run! Don't be blind to the benefit of me spending it for my own self interest! The convention center gets millions every year in taxpayer money, it barely stays in the black. How many years will it take to get half a billion back on the convention center based on increased business? Infinity and beyond. The only real beneficiary is the hotel owners and other businesses, for the average citizen it's just a hole in our pocket that money falls out of..

David Benz
David Benz subscriber

The stadium expansion has cost the city $100s of millions, We lose over $10 million a year operating the Q and that doesn't include the long term deferred maintenance. We would be much better off if we just ran the welfare queen Spanos family out of San Diego.

Jim Jones
Jim Jones subscriber

Hey Ryan, give me $100k and I promise you'll be better off in the long run! Don't be blind to the benefit of me spending it for my own self interest! The convention center gets millions every year in taxpayer money, it barely stays in the black. How many years will it take to get half a billion back on the convention center based on increased business? Infinity and beyond. The only real beneficiary is the hotel owners and other businesses, for the average citizen it's just a hole in our pocket that money falls out of..

David Crossley
David Crossley

LaPlayaHeritage--What will happen should the Coastal Commission approve the convention center expansion tomorrow? More lawsuits, to go along with the ones already out there?

David Crossley
David Crossley subscriber

LaPlayaHeritage--What will happen should the Coastal Commission approve the convention center expansion tomorrow? More lawsuits, to go along with the ones already out there?

Sandiego72h
Sandiego72h

The economy has nothing to do with it. The convention center is always busy. L.A. isn't even in the top 10. Las Vegas is better than our center (Currently) but our city is a better back drop than a city that is in constant gridlock and our center is across the street from bars, clubs, restaurants, the bay, shopping and hotels. The first place conventioneers head to. Most organizers put that in account when booking their conventions. Common sense stuff.

La Playa Heritage
La Playa Heritage

On official documents, no other contiguous sites were analyzed. However, the first contiguous site for the expansion was to be bayward of the original Convention Center and subsurface two story parking structure that leaks. A Fault Investigation at this first contiguous location west into the Marina would have confirmed or denied the active fault identified by Caltrans under the original Convention Center that leaks. Instead the site was moved from the North End of the existing Convention Center to the South End by the Hilton. No analysis has ever been done for a contiguous expansion to the east along Harbor Drive and over the train tracks.

La Playa Heritage
La Playa Heritage subscribermember

On official documents, no other contiguous sites were analyzed. However, the first contiguous site for the expansion was to be bayward of the original Convention Center and subsurface two story parking structure that leaks. A Fault Investigation at this first contiguous location west into the Marina would have confirmed or denied the active fault identified by Caltrans under the original Convention Center that leaks. Instead the site was moved from the North End of the existing Convention Center to the South End by the Hilton. No analysis has ever been done for a contiguous expansion to the east along Harbor Drive and over the train tracks.

David Benz
David Benz

Mark Fabiani and the Spanos family are the most anti-San Diego moochers in town. They'd happily bankrupt San Diego if allowed.

David Benz
David Benz subscriber

Mark Fabiani and the Spanos family are the most anti-San Diego moochers in town. They'd happily bankrupt San Diego if allowed.

Cory Briggs
Cory Briggs

Steve: Your "survey" gives the answers but doesn't tell us the questions. There is no way to tell whether it was a push poll. And who is proposing a six-block space difference? I am talking about across the street, a distance shorter than the length of the existing conv. center.

sandiegosteven
sandiegosteven

Cory, Why don't you produce your documentation that you use to make the assertions? Our info is online. The latest study that shows 98% of clients want a contiguous expansion is here. http://visitsandiego.com/pressroom/details.cfm/newsid/227San Diego Convention Center: Press Room - news releases, email updates, corporate publicationshttp://visitsandiego.com/pressroom/details.cfm/newsid/227In a recent survey conducted by Red 7 Media Research and Consulting, meeting planners demonstrated just how important a contiguous exhibit hall is for the San Diego Convention Center (SDCC) Expansion project. Of the 129 convention, exhibition and con...

Cory Briggs
Cory Briggs subscribermember

Steve: Your "survey" gives the answers but doesn't tell us the questions. There is no way to tell whether it was a push poll. And who is proposing a six-block space difference? I am talking about across the street, a distance shorter than the length of the existing conv. center.

sandiegosteven
sandiegosteven

Cory, the full study is online, questions and all. I'll leave it to the readers and you to decide if the questions were in anyway biased. We used six blocks as that is the distance from the center of the building to the Tailgate site that is proposed by the Chargers. The site above the rail yard you are proposing is not feasible given security issues following 9/11 and the costs of building an elevated exhibit hall over an active rail yard.