Sorry for the delay from the last post (on the internet, a week is an eternity, I know).
Plenary Session Part IV
Again, I'm very impressed by the level of discussion in the lastthreeposts. This is a true convening.
The first three posts have been about that basic philosophical question about the future of our city: Is spending $750 million -- the most expensive construction effort ever in San Diego -- on an expanded Convention Center really the highest priority right now when we consider the infrastructure we need to have the most robust economy possible?
I'm going to review this question at least one more time because, again, the response to the last post was as impressive as before.
The most interesting comment, I think, came from Kevin Carroll, the regional director for TechAmerica (formerly the American Electronics Association and the Information Technology Association of America). I say it's the most interesting comment not just because I think I'm rapidly coming to the same conclusions he is but because it confirms what I suspected was a feeling of disenfranchisement in the tech community.
Here was his post (emphasis mine), in case you missed it in this discussion:
Yet another example of how little respect the true economic engine of this region gets in City Hall. Technology companies have a payroll, not fuzzy multipliers, but a true payroll of almost $10 Billion ... with a B. Stack that against ANY regional economic interest -- be it sports, tourism or anything else -- and you start to see how regional decisions are made without thinking how this cluster can be encouraged. Legislators talk about how much they support tech in the region, however actions speak louder than words. One needs only to look at the lack of transit options for the tech clusters as evidence of this. It is time we begin to look past entrenched special interests and ask the core question "How can we help this cluster" I can guarantee you none of them are going to suggest spending $750M on a Convention Center Expansion.
I don't think you can get it more clearly. The city is moving forward with this massive project out of a sense of urgency and using arguments that it is vital to the local economy. But if you talk to truly bright prospects of our local economy, they would have much different priorities and they're simply being paid lip service.
It's at this point, that the argument becomes not about economy but about reality. With boosters arguing that this is the only thing we could do to support our economy, not the best. Witness Bob Nelson's post in that same discussion.
Nelson, of course, is a proponent of the expansion of the Convention Center and a member of the mayor's task force.
Based on 20 years of performance data, several experts predict Convention Center expansion would generate $700 million annually in economic growth, 7,000 permanent jobs, and $17 million in new city general revenue. What alternative development model would generate comparable revenue for the city, jobs, or economic growth? And how will this alternative be financed? In the case of the Convention Center, the most likely potential sources are from a "coalition of the willing" -- hospitality businesses who might agree to new assesments. Is there another source for $50 +/- million annually? Neither the Port nor CCDC can legally fund projects outside their realms. And [Business Improvement Districts] can legally only assess businesses that are benefited by the assesment, so that leaves out a hotel tax for anything other than visitor generating investments. With all respect, the "alterntative" argument is built on false assumptions.
Nelson says there that the only potential source of revenue for any other kind of infrastructure improvement is the hotel tax and, remember, hoteliers demand to see a "nexus" between any more raiding of those funds and their bottom lines or they will kill any hope of an increase there. This, again, is perfectly reasonable.
By the way, is it not ironic that the hoteliers, largely a staunch Republican anti-tax constituency, believe that the largest government investment in a downtown project ever made is what they say their industry needs to compete? Why can't the free market pull this one off? Why do they even need the mayor to do anything more than help them zone the expansion or something?
Obviously, it's because government is going to be asked to do much more. Whether it's the port, CCDC, the city's taxpayers or the city's future taxpayers, this is a massive collectivist effort.
What we're saying, and what Kevin Carroll said quite well, is that if we're going to go about collectivism in support of our future economy, there are a lot of constituencies, a lot of industries, that should be at the table.
Great analysis Scott. The only thing I would add is that for more than a century, globalists and corporatists have been working to fleece the American taxpayer and separate them from their money. They don't care about political parties and have used depressions, recessions, two world wars, Korea, Vietnam, Iraq and countless other minor wars to make the most profit at the expense of the American taxpayer. It should surprise noone that the developers and hoteliers, regardless of political party, are seeking to exploit the San Diego taxpayer to finance the CC expansion. Look at the war in Iraq and the profits seen by Blackwater and Halliburton. Government's military/industrial complex is well documented and so is San Diego's government/developer complex. The fleecers would want us to focus on the politics while they steal our money. Keep the big picture in mind.
Mr. Carroll makes a great case for investing in technology, and with a $10 billion payroll they have lots to work with. Maybe they should create an assessment district to promote the growth of their industry. The goal of Convention Center expansion is both economic growth AND improving city general revenues. This" tech park" would likely have only a relatively small impact on hotel taxes, all of which go to the City general fund. The increase in property taxes paid to the City would be small as these revenues are split with the county, schools, etc. -- if any property tax at all with a publicly financed tech park parrallel to the tax exempt convention center. It is also unclear that this would generate significant sales tax, which is also split many ways with the City getting only a pittance.
Bob, you conveniently miss the point. Who adds more to the city coffers, a conventioneer who spends $1000 over the course of a few days downtown, or an engineer or scientist who moves to the community and makes $100K+ and spends it mostly here, year after year? Tourism is good, but it is far better to attract a well paid employee than to attract a short term guest, taken care of while here by low paid wage earners. I am still impressed with your ability to argue that because San Diego has such an inherent natural advantage in location and weather, that it is in dire need of heavy subsidies to compete against cities that have neither. Sort of like instituting a welfare plan to subsidize the poor people who fall in the bottom quartile of the Covenant.
Permanant well paid employees of bio science and high tech firms bring an additional benefit to San Diego. They demand good schools for their children.
Bob Nelson's ignorance of basic economics is embarrassing. He thinks that an engineer living here and spending a $100,000 annual pay check pays no sales taxes? He considers assessment districts the only way to invest in our future? How did this joker get appointed to this board? San Diego has a sad history of convening these types of phoney boards to give bad ideas the veneer of respectability. Golding did it with the ballpork district, and we're going to be paying that off for decades. Was Bob on that board too? What other stupid ideas has he endorsed?
This should not be an either-or proposition; we should encourage growth for both business sectors. Invective aside, Mr. Williams may want a refresher course in economics himself. The city receives only a small portion of the state sales tax. All sales tax revenues to the city from all sources -- from cars and TVs to the smallest items -- total only about $200 million per year. In contrast, 100% of TOT taxes and TMD assessments go to the city, about $160 million this year. If additional convention activity consumes just 50 new room nights at a hotel it would generate an average of about $875 per year per room sold. 1% of the sales tax goes to local government, so your new high-income employee would need to spend about $87,500 of that $100,000 salary on local taxable transactions to generate similar revenue. A neat trick if you can do it.
link The City's General fund get $220 million from Sales tax and $410 from Property Tax. $90 million comes from TOT. We can debate the remaining $70 million that comes from TOT but which does not go to the general fund and how that should be counted (but note, if you are going to count all of TOT then you should also count the city's share of Sales tax from Transnet that comes back to the City for Local Streets and roads) or state funding from sales tax that is subvented back to the city. But more interesting is to equate economic development with City Tax revenues. It essentially buys into the very broken system of local government finances and says that it should be a principal driver of economic development decisions.
Scott, It is nice to see my old colleague Kevin Carroll back in the mix, however, his comments are only half truths. Government (and I know as I lobbied for HP beside Kevin when it was called AEA) subsidizes his business with multimillion dollar tax breaks both at the local, state and federal levels. There is no doubt that technology is a strong economic sector but to compare the entire payroll of all tech companies against the simple tax revenues generated by the Convention Center alone is absurd math. Look at the ENTIRE tourism and visitor industry revenues, payroll, etc., not just the Convention Center. Those who compare a $1000 visitor spending to a $100k salary are equally at fault. What about comparing the salaries of the restuarant owners, the hotel managers, sales executives, etc. to the salary of the tech employee. THAT is fair.
Bob Nelson better get his facts straight with his cronies. He claims the expansion would yield over $700 million annually. But Carol Wallace claims just ten conventions bring in over $889 BILLION. Of course everyone knows both these numbers are bogus propaganda with no factual basis. VOSD should call them on it, and demand that they produce evidence of these wild claims. Check out Bob's bio here: (http://www.bnassociates.com/pages.asp?id=30). Is this long time corporate/government PR flack a guy anyone can trust to tell the truth?
I'm not sure who is more offensive in their personal attacks, you or Edgar. Both lack the basic social skill of engaging in a policy debate on merits rather than name-calling and personal invective.
Your comment threads speak to my point about your personal attacks and inability to engage in a public policy debate without throwing invective and person broadsides. You, Fred and a few others act like you know what your talking about but never back your claims with facts, only assertions. Don't believe everything you think! Do your homework then ask questions to get answers.
I particularly liked this sentence: " You, Fred and a few others act like you know what your talking about but never back your claims with facts, only assertions." A typical Josef Goebbels tactic. That's exactly what so many people do on this site and that was the basis of my criticism of what Ms. Wallace had to say: only assertions, no proof. But, that was only one instance out of many. Half of the self-anointed experts sharing their thoughts with us here in Comments do the very same thing. If you truly abhor personal attacks, then why do you engage in them?
The attack is on the people of San Diego, my friends. I apologize if I come off as over agressive, but haven't you seen what they've done to our once proud city? Why is the mayor still listening to the same dolts who gave us such crap advice in the past? Bob's business is selling the public. Look at his bio online. He needs to be challenged, and strongly. Some really appreciate what I write, others call me an ***hole. But the difference is I do it for free, instead of using it to advance my business interests.
Mr. Carroll, if you have identified a city-owned asset that you would like to expand or improve that will add jobs and have a measurable impact on the San Diego economy, I suggest that you bring it to the mayor on behalf of the technology industry. I am certain he would be open to any proposal that would improve the economy. Or maybe you'd prefer to spend your time doing target practice at another top industry's proposal?
Well....if the city took $750 million and invested it in instruments that yeilded 6% (or more likely simply USED the $50 million sloted for the financing of the expansion) it could provide THREE THOUSAND $15,000 scholarships in science, technology, engineering, and math each year to San Diego students who attended local universities. Lets even reduce that to 2,500 and use the remainder for setting up robust internship programs and other ways of connecting these students to the region's technology based employers. . I might suggest that this would both generate critical workforce improvements and, given the kind of statement it would be making about the importance that the city was placing on STEM education, transform overnight the interest (or lack therein) of technology companies contemplating investment in the region.
Dear Charger Fan: We are trying to have a serious conversation. I vote a billion for high tech--assess the entire county and create a fund to start businesses all over the region. The stadium for the Charger's needs to be in the City of Industry. You can then watch them on your 83 inch TV and eat, drink, and be merry in your own house or you can go on the train and make a weekend of it. No more spanos welfare. By the way the SDSU folks can go play at the Patrick Henry Football Stadium in San Carlos. I know they will not sell out, but I am sure the student ASB will appreciate the revenue from concession sales. Nacho Torres
I just hope that when the decision is finally made that the city will find the money to get our roads fixed. We still have roads in clairemont that are in dire shape and here we are talking about increasing hotel taxes, spending $750 million dollars as though it was pocket change.
I just hope that when the decision is finally made that the city will find the money to get our roads fixed. We still have roads in clairemont that are in dire shape and here we are talking about increasing hotel taxes, spending $750 million dollars as though it was pocket change.
Tech creates high paid, usually stable jobs. Conventions/tourism create cyclical, low paid jobs. There is by definition no glut of technological innovation, but convention centers nationwide were overbuilt even before the recession,and competing with price cuts. Our tech industry has grown and continues to grow despite the recession. By contrast, our hotel bookings have fallen faster than the national average. Tech attracts private venture capital. Tourism and conventions are continually at the public trough. Finally, two questions: How much remains to be paid off on the previous convention center expansion? If conventions are so lucrative, why isn't ours debt free? Let's not mortgage our future for a comic book convention.
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Scott Lewis on Politics
The Scott Lewis on Politics blog, abbreviated cleverly as SLOP, is a collection of observations, insights and the occasional scoop on public affairs in San Diego. Please feel free to e-mail Scott at scott.lewis@voiceofsandiego.org.
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