Six Years and $10 Million Gone, the Convention Center Expansion Is Dead

Six Years and $10 Million Gone, the Convention Center Expansion Is Dead

Photo Illustration by Sam Hodgson

Deal with this Convention Center!

One of the biggest ironies of the Convention Center expansion’s demise is that this path — the one that has taken six years, cost $10 million and ended in nothing — was considered the least risky.

And yet, with one 7-0 vote Tuesday, the San Diego City Council abandoned the effort. The $520 million plan to expand the facility — the biggest construction project on the city’s docket — is now dead. It won’t have to fight off the last environmental litigation from attorney Cory Briggs, who engineered this collapse. It will not pass go.

It is one of the biggest, gnarliest and most embarrassing legal failures the city has ever seen. Never mind the countless hours of hearings, meetings and public pronouncements, the Convention Center Corporation has already spent $7 million on “due diligence, land acquisition costs, entitlement and design,” Steven Johnson, the Convention Center spokesman, told me Tuesday.

The agency also got a $3 million loan from the now defunct Centre City Development Corp. — that all is lost too.

Again, though, this was the safe route. Years ago, as they started to march toward an expansion of the facility — considered vital for competing with cities like Las Vegas and Anaheim — boosters decided several crucial things. All of these decisions led to the ultimate failure.

• The hotels that would benefit most from the expansion would not pay for it themselves.

• A tax increase was needed. And it was best that the tax be on hotel rooms, paid by the visitors.

• This would effectively be an increase to the hotel room tax, otherwise known as the Transient Occupancy Tax.

• Normally, to increase the tax, they would need voters to approve it by a more than two-thirds majority (which they couldn’t get when they tried a decade earlier).

So they had to come up with something creative. It had to have the effect of raising the tax without actually being considered a tax increase.

Here was Mike McDowell, a hotel industry lobbyist and one of the masters of the project, to us in 2011. He was still feeling the sting of a 2004 attempt to raise the hotel-room tax that failed. And he wanted to explain why they had to come up with a special way to describe the new tax that would not make it, you know, a tax.

Why the emphasis on trying to craft it into an exception? Why not just let it go to a vote and don’t even worry about it?

You asked me very early on what I learned from the 2004 election. And that is that a two-thirds vote threshold is too risky. Having learned that lesson and going down that road, would you come back and call me stupid?

Not stupid, but the decision cost the Convention Center millions. And now, the Convention Center is falling apart from disrepair.

So now what happens?

At least some of the momentum seems to have shifted to an idea the Chargers have been trying to get some traction behind for years. Look, they say, just build us a stadium nearby, put a little retractable roof on top of it and your big conventions can spill over to that facility.

This was anathema to city leaders for years. It was just simply not worth talking about. So important was contiguity to a Convention Center project that these other ideas would solve nothing, save giving the Chargers a new stadium. Here’s how Convention Center Corp. Chairman Phil Blair put it in an op-ed to us:

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.

That’s not going to help a campaign for a non-contiguous facility.

Mayor Kevin Faulconer, for the first time that I have seen, now is open to the idea of a non-contiguous Convention Center/Stadium. And he said he’s been meeting with developers about the idea. City Councilman David Alvarez also touted it.

But the faulty myths were still trying to survive this onslaught of debunking Tuesday. Council President Todd Gloria told KPBS that hotels were only willing to fund a contiguous facility.

Let’s be clear: They weren’t willing to fund anything. If the hoteliers wanted to put up $500 million to fund the Convention Center expansion, they could do it tomorrow. They could each write a check for whatever they think they should put in.

The problem is, they don’t trust one another. They want to pass the cost on to their visitors’ bills. But they want all their competitors to have to do that too — in the same amount.

The government offers a way to do that, through taxation. But anti-tax forces in California long ago made it clear that to increase taxes, you have to get a vote of the people.

The Chargers now face that same obstacle. They can build a new stadium with their own money. But to satisfy the Convention Center’s needs and their own, they’re going to need hundreds of millions more than the team is willing to put up.

It will be interesting to see what they come up with that could possibly win over San Diego voters, let alone two-thirds of them.

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Scott Lewis

Scott Lewis

I'm Scott Lewis, the CEO of Voice of San Diego. Please contact me if you'd like at scott.lewis@voiceofsandiego.org or 619.325.0527 and follow me on Twitter (it's a blast!): @vosdscott.

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125 comments
Otto Bosse
Otto Bosse subscriber

What never ceases to amaze me is this seemingly never-ending supply of clowns from out-of-town that the SD High Priests always seem to be tripping over themselves trying to accommodate. Why? Money? Not according to Jerry Sanders, it's "civic pride". And stuff. John Moores, Alex Spanos, Comic Con International. The two constant themes are "not from around here" and "only want to profit" from everything San Diego. Not one possess an iota of actual interest in the city's well being. When was the last time the Comic Con egg-heads donated to the city's pothole fund? After he was given "rights" to a billion dollars in downtown SD real estate, when exactly did John Moores pack it all up in Texas and come west? Well, um, he never really did. The Padres are perpetually in what place again? 

Even former "Male Model of the Year" Alex Spanos said (in so many ways and words) he hated San Diego. Hated it. Yet he lived in Stockton, of all places. His hatred wasn't his fault though. His ego required him to own an NFL football team. He just never could completely reconcile being "stuck" in small market San Diego. An otherwise flawless location for pretty much everything known to mankind except, apparently, a professional football team that can't become "really good" until they get bigger "sky-boxes". It has something to do with the angle of the sun on the glass of the "sky-boxes" and the wire face masks on the helmets combined with the linear motion of the ocean on Sundays and other complexities. It's apparently been proven as scientific fact by some guy in Stockton. Of all places. And ya just can't argue with science. 

The truth is, when you actually care about something and are committed to its well being, certainly more than just how many "dollars" you can squeeze out of it (c'mon priests, wrap your little brains around that concept), you don't regularly threaten to blow it to smithereens every time your selfish, capricious or unreasonable "needs" and demands aren't met. "What's that you say, you don't want our half million dollar rent once a year for your billion dollar CC expansion? Why the nerve! Anaheim will give us anything we want including relocating Catalina Island 15 miles further south. Yes, they will do that for us." That's a type of manipulation called many things including extortion, coercion, "good business", etc., but it's ultimately and simply just dishonest. In it's pure form it's actually called blaming the victim. That is, you can't actually pull it off without a "victim". So please note that if you learn nothing else about him, Jerry Sanders is a Certified Master of Willingness to Victimhood. And $10 million is part of your proof. 

The actual tragicomedy comes when the manipulators end up having to portray the real "folks with a conscience" as the bad guys. And then make sure their PR firms (e.g. the UT, Pravda, etc.) continuously pretend it's true. That's a clear instance of an alternate reality game for fun and profit. They did it successfully with Bruce Henderson over Petco because he didn't have a billion dollars. I know he was the only person in the whole story who's conscience was always clear. Ask disgraced Dick Murphy about his conscience. They've dogged Aguierre similarly, but he is pretty resilient. And they will inevitably come harder and faster for Corey Briggs as long as he keeps up this pesky "Accountability and Conscientiousness" campaign. I can only say good luck.

l2adical
l2adical

@s_e_gordon sadly I've grown to like it in SD, can't really see how the LA venue or Anaheim one will work out

Richard Ross
Richard Ross subscribermember

A few simple facts:

1. The existing convention center is suffering from the same problem as the rest of this pothole city....deferred maintenance.

2. There are ComicCons in many cities across the country. They are smaller but this one could be replaced.

3. Recently revealed is that marathons and similar events attract more tourists than any of the ComicCons and don't require an expansion of any buildings.

4. Other convention center events that have been turned away could replace ComicCon.

5. By backing off.... We taxpayers wouldn't be on the hook defending an unneeded structure which only benefits politicians who get campaign donations from developers and owners of football, baseball teams and downtown hotels and restaurants.

.........one could go and on.

La Playa Heritage
La Playa Heritage subscribermember

Our financing plan for a 5% TOT increase for a contiguous waterfront multi-purpose NFL Stadium and Convention Center Phase III Expansion came before the City Council's Economic Development and Intergovernmental Relations Committee on June 11, 2014, and was not forwarded by the City Council to the IBA and City Attorney for analysis for the November 4, 2014 election.  All proposals were dismissed by multiple City Council's without analysis. 


http://tinyurl.com/20140531a


For June 5, 2012 election.

http://tinyurl.com/20120103b


For November 8, 2011 election.

http://tinyurl.com/20110124a 


For November 2, 2010 election.

http://tinyurl.com/20100123


2009 Proposal for non-contiguous East Village site with Affordable Housing at Qualcomm Stadium for SDSU student and returning Veterans. 

http://tinyurl.com/20091130a


traciinaz
traciinaz

@Rush1031 Sad! \U0001f61e You don't think they'll actually move it do you?

Cindy Conger
Cindy Conger subscriber

Oh, just noted Todd Gloria's 'untrue statement', again, so much like the one he told me, outside City Council after its vote 'to waste more City money on the neurotoxin of 'Fluoridation'...added to our water, saying, "It's Only for TWO Years."  Guess he's not really someone who can be trusted?  It's now been THREE Years...and consistently, No Response in Public Requests for Where the 'continuing funding' to Pay for Fluoridation is coming from....

Bill Bradshaw
Bill Bradshaw subscribermember

I think “falling apart” is a bit of hyperbole, but there’s no question the building needs some work.  So, how do they pay for that, with “profits” from past conventions?  They ought to have some sort of maintenance fund; if not, the whole management should be cleaned out.

Somehow, I suspect this Phoenix will rise from the ashes.  Do convention centers always need to be publicly financed?  If there's big profit potential, someone will step up, but not until it's clear the taxpayers aren't going to be on the hook for something benefiting primarily the hotels and restaurants. 
 

Anthony Wagner
Anthony Wagner subscribermember

Hell, this is one of the first times I believe the comment section has rivaled the story itself!

Mike Delahunt
Mike Delahunt subscriber

Have the hotels, or more accurately their guests, been paying this unconstitutional tax for the last two years? If so, how and when will their money be returned?

The arrogance of these city council clowns is amazing!

This city can't even run a golf course without absolutely screwing itself and the people it's supposed to serve.

Dale Peterson
Dale Peterson subscribermember

The San Diego way.  Concoct a scheme that is a tax and call it something else.  Thereby, hoping to avoid a public vote.  Now, many of these same people are demanding a public vote on the minimum wage.  America's most hypocritical city.  Also, I agree with many other VOSD readers---Jerry Sanders frequently seems to be in the middle of most of this.


For the last twenty years majority of this city's elected leaders have walked a crooked line to achieve results for their connected money constituents:

Under fund pensions with a scheme.

Declare blight where it doesn't exist scheme.

Finance a convention center expansion with a tax, not a tax, scheme.

Build a new city hall to "save money" scheme.


Pretty simple.  If you want and support these sort of public expenditures, then make your case.  Make your case in an honest, straight-shooting way.  Go to the public and demonstrate why you and yours believe this is in the best interest of the city's constituents.  What ever you want, call it what it is.  If you have to make it sound like something it isn't, then you have got it wrong.  And, you are wrong.  






amy roth
amy roth subscribermember

Why are you saying the expansion is dead? It's only dead as originally conceived and paid for. There are plenty of alternatives to give us more convention space.

 But yes, Cory Briggs will spend the rest of his life trying to assure that no progresss is ever made in San Diego. He killed the Balboa Park plan, now possibly this. And yet he's not universally called out for what he's done! Is there are large group of San Diegans who are as destructive as he?

Kevin_LaF
Kevin_LaF

@InsideTheMagic well, now LA & Anaheim get to legitimately convince CCI to make SDCC a thing of the past. Hate seeing this.

paparatti
paparatti

@zompus I feel like there are a lot of con artists in San Diego. Lots of money goes into that city and there's hardly anything to show.

Craig Carter
Craig Carter subscriber

Does this mean the 400,000 spent to put together a bid for the Olympics will be wasted?

Scott Lewis
Scott Lewis moderator administrator

@Mike Delahunt No, the tax was on hold while these lawsuits went forward. Recall, the city attorney always thought the tax was questionable. So he essentially invited people to sue the city to validate it before letting it go forward. Two parties did.

Cheryl Meril
Cheryl Meril subscriber

@Dale Peterson What else would one expect from these ungodly greedy perpetrators?

Richard Ross
Richard Ross subscribermember

Cory Briggs didn't kill the Jacobs/Sanders Balboa Park Plan it was opposed by those who opposed its historically destructive bypass bridge and it's I'll funded parking garage ...the latter as pointed out by the IBA. That being said hooray for Cory Briggs he consistantly represents the best interests of the public.

Scott Lewis
Scott Lewis moderator administrator

@amy roth Briggs didn't kill the Balboa Park plan. That would be the Save Our Heritage Organisation. Recall, the city attorney always thought the tax was questionable. So he essentially invited people to sue the city to validate it before letting it go forward. Two parties did, not just Briggs. 

-P
-P subscriber

@amy roth The Balboa Park plan was destructive, not progress.

InsideTheMagic
InsideTheMagic

@Kevin_LaF I can see it happen too. I'm sure all those Hollywood stars would much rather just stay within LA than make the San Diego trip.

zompus
zompus

@paparatti If they were going to give away $10 million to not have a convention center they might as well have given it to me.

zompus
zompus

@paparatti I can't see anything in San Diego looking different 20 years from now. Maybe an apartment building or two downtown.

Scott Lewis
Scott Lewis moderator administrator

@Craig Carter Not sure of the connection to the Olympics. But that bid failed too.

CosplayMidwest
CosplayMidwest

@cosplayamerica I noticed this ... Which is u fortunate for those new comers trying to attend.. Since prior attendees get first dibs

Judith Swink
Judith Swink subscriber

@Richard Ross You didn't include mention that the ill-funded parking garage was to be paid for by a "revenue bond" which would be repaid by parking fees in the garage or, if the fees were insufficient, by the always insufficient-for-basic-services General Fund. 

Furthermore, our City Council was planning to build it for about 30% of the cost for San Francisco to build an 800-space (8 spaces more than proposed for Balboa Park) underground parking garage in Golden Gate Park which opened in 2008. Admittedly, there were factors that added to that cost but, still, it was in the range of $63-64 million.

 

 In Feb. 2012, the SF Parks Commission was asked to approve increases in the substantially higher fees than were proposed for the Balboa Park garage because revenue from parking fees was insufficient to cover operations and maintenance. Info is from "Minutes Feb. 16, 2012  pp. 5-8 Re: Golden Gate Park Concourse Parking Garage". As with the Convention Center "tax", I brought this to the Council's attention a number of times but the info was ignored as an "inconvenient truth" - so typical of San Diego....


And I know you recall the cost overruns for the expansion of Jack Murphy Stadium which ended up being paid for by Irwin Jacobs in return for a stadium-rename as Qualcomm Stadium.

amy roth
amy roth subscribermember

@-P @amy roth All public polls at the time supported it by wide margins. 

Kevin_LaF
Kevin_LaF

@InsideTheMagic since the event is so show biz now, logistically a move up I-5 would make sense. But dammit, I love my yearly SD trips.

Craig Carter
Craig Carter subscriber

@Scott Lewis

Well I think most people kind of knew that was a waste of money from day one.  I was being sarcastic and do believe Comic Con will leave even with an expansion. I think the focus should be on improving the visitors experience and not forgetting that some of us choose to live here so we too can enjoy this great city. Seems residents are forgotten in the mix.  

Richard Ross
Richard Ross subscribermember

In my attempt at brevity there is a great deal I left out. Thank you Judith for filling some of it in.

-P
-P subscriber

@amy roth History is filled with things that were exceedingly popular which, with hindsight, people thought "WTF were we thinking?"

spoonman
spoonman subscriber

@Craig Carter @Scott Lewis Agree. As much as Comicon is good for the city, the city needs to turn to better alternatives for growth. We need to spend money on the Port, the rail lines, connections with Mexico, and the Airport. For once our geography is a good thing, as we can be a major link between the US, Mexico, and China for things like LPG import/export, and product developiment (US) and manufacturing (Mexico).

Judith Swink
Judith Swink subscriber

@cosplayamerica @CosplayMidwest This is what Antiques Roadshow finally went to after years of complaints because, online or by telephone, people couldn't get in. AR also made the tickets non-transferable - don't know how they enforce that since no one checked my tickets - but the first time I went here in SD, my sister sprang for the substantial "resale" tickets. I "won" the lottery the last time they were here in SD and the tickets weren't sent to me until couple of  weeks before the event.

amy roth
amy roth subscribermember

@-P @amy roth The comments and "likes" here explain why San Diego will always be the cute little ranchero in the cul-de-sac by the border while LA, San Francisco, New York, Boston, Baltimore, Pittsburgh et al. -- with or without good weather! --bring themselves constantly to life in exciting new ways! Our new Library is nothing short of a miracle -- the nay-sayers almost killed that one too, and seemed unhappy when it proved such a success. There are still people here who nay-say creation of the Gaslamp out of the red-light district it replaced!! I do cry for San Diego. But I seem to be outnumbered. Sigh


Cindy Conger
Cindy Conger subscriber

@spoonman @Craig Carter @Scott Lewis Yep, you have to make it 'easy, convenient and affordable' for people (from all over the world) to attend...not just comic-con, but any event...to create their fond memories here, spending enjoyably their hard earned monies and then to leave.  We can't even get our state's other lawmakers to spend much time here...what does that tell you about our 'state's priority as finest?'  


Take it from other cities (most that are over 1 million citizens), the REVENUES from aircraft landings, just Cargo Alone can and will fund Amazing Transportation paid for by the FEDS, as well as Many Other Public Facilities...also used (and abused) by tourists now.  If you want to 'bring tourists in', to 'enjoy' San Diego's charms, its weather, etc., show your intentions to the public, who's been 'paying for everything'..with their taxes, with only a couple of major industries 'benefitting'. Built a Real Airport, with Real ability to 'service' its citizens and visitors. Have San Diego become the ENVY of all metro areas in CA with a Real Transportation System, that 'connects.'  Seriously, if the 'hi-tech industry' was so 'important' to San Diego, wouldn't they jump at the chance to show how they could help 'connect' it via 'connecting' its own communities and our metro community to other areas...and people?  What? A challenge? You bet. Need help? Ask me.

CosplayMidwest
CosplayMidwest

@cosplayamerica good call sir :P Well I would like to see more people get a chance to experience it... Lots of disappointed fans