Wednesday, May 25, 2005 | Out on their own. To better gain access to financial loans, the San Diego Convention Center Corp.’s management agreement with the city was amended by the City Council Tuesday so that the nonprofit corporation can borrow with a credit rating separate from the city’s.
“They have audited financials, they’ve got what the city’s lacking right now,” said Will Griffith, the city’s real estate assets director. “Under certain parameters they can move forward.”
The city’s credit rating has been suspended because of concerns surrounding errors and omissions found in its public financial disclosures. The city essentially remains frozen out from public finance markets until outside auditors certify long-delayed audits for fiscal years 2003 and 2004.
The new agreement allows the Convention Center to seek public financing for capital projects, like a new cooling system needed for the 525,000-square-foot facility.
Griffith said that the Convention Center Corp., which operates the bayside conference building, has been submitting its requests under the new criteria already. Formally allowing the agency to operate its own budget will provide it the “independence to move forward,” he said.
B.I.D. proposal draws out City Hall’s notorious ways. A representative from the lodging industry presented a plan Tuesday that would discontinue payments to promote tourism with revenue from the city’s hotel tax, drawing praise from several council members along with the objections of City Attorney Mike Aguirre over the presenter’s procedure.
San Diego Lodging Industry Association executive vice president Mike McDowell told the council that an ad hoc committee of local lodging boosters wanted the city to establish a tourism business improvement district, or B.I.D., by which members would pool fees to promote the industry rather than rely on allocations generated by the transient-occupancy tax, or T.O.T.
“The potential of this opportunity is significant, possibly as much as $24 million annually to support tourism promotion and drive the economic engine of tourism,” he said.
In an interview hours later, McDowell said promotions funding through T.O.T. was inconsistent, and that allowing businesses to control how revenue is collected would be more beneficial. He said possible ways a B.I.D. could collect fees included a cut of a hotelier’s gross revenue, a per-employee fee or as a surcharge passed on to customers.
Sacramento, San Jose, Huntington Beach and Laguna Beach are cities with successful tourism B.I.D.’s, he said.
Aguirre preempted McDowell’s presentation by asking Mayor Dick Murphy to table the discussion on the issue until another meeting when it could be placed on the agenda.
“That would be proper procedure under our rules and under the Brown Act,” he said, referring to the state’s open meeting laws.
Aguirre’s request was met with resistance from Murphy, who chairs council meetings, as well as Councilmen Scott Peters and Jim Madaffer.
“Mr. Aguirre, I am tired of you making up lies in front of the public,” Murphy said after Aguirre accused the mayor of discussing the proposal with McDowell prior to Tuesday. “I did not talk to this man about this proposal, and you just made that up.”
“It’s a little Rod Serling to suggest we notice something we haven’t come to yet,” said Peters, referring to the “Twilight Zone” writer.
The packed council chambers applauded and laughed at the reference to Serling, who is described as a “boxer, paratrooper and general angry young man” by the Internet Movie Database. The gallery was overflowing with individuals on hand to hear the final reading of the living wage ordinance, the approval of bonds for the NTC Liberty Station, and discussion of the promotions budget.
McDowell later said he had met with all of the council offices prior to his address Tuesday, and that Aguirre advised him that speaking at public comment was one of the correct options in getting the council’s attention on the issue.
“To the best of my knowledge, the First Amendment allows you to go forward and talk about just about anything on your mind, and that’s what I did today,” he said.
“Welcome to the soap opera that is City Hall,” Murphy said.
Passing the promotions buck. The City Council voted 6-to-3 to tentatively approve the City Manager’s proposal for how hotel tax dollars should be spent on the promotion of arts, tourism, business and other city programs and events.
The plan calls for 10-percent cuts in the operating budgets for the Commission on Arts and Culture; the arts, culture and community festivals fund; and economic development. As a whole, the promotions budget – which is paid for by the 10.5-percent tax on hotel rooms – increased only because of payments to capital projects.
The council heard more than two hours of discussion from the public about proposed cuts: Tourist-trap operators came to speak on behalf of the San Diego Convention and Visitors Bureau, a lymphoma patient spoke in support of the Rock ‘N’ Roll Marathon for benefiting medical research, a dance troupe director lobbied for the arts budget and the business crowd pumped up the San Diego Regional Economic Development Corp.
“There’s a belief among some that because San Diego is the phenomenal place it is, that people will just come,” said Terri Breining, CEO of Concepts Worldwide, a meeting planning company based in Carlsbad. “Most meeting and conference companies, if they’re not reminded that San Diego is a fun place and a great place to do business, will go somewhere else.”
Councilman Tony Young suggested a proposal to cut funding for promotions, excluding any capital improvements, by 3 percent to boost the reduced park and recreation budget by $661,000. The idea failed by a vote of 7-to-2, with only Young and Councilwoman Donna Frye supporting the idea.
“We want people to come to our beaches, but we can’t pay to clean the bathrooms, or empty the trash cans,” Frye said, referring to many council members’ wish to promote travel to area beaches with T.O.T. money. “You don’t invite people into your home if it’s dirty, or maybe you don’t like them and you don’t want them to come back.”
Mayor Dick Murphy said cutting any further from the T.O.T budget might “kill the goose that lays the golden egg” because promoting local events and tourism drive the economy.
Programs ranging from the Commission for Arts and Culture to the Holiday Bowl were cited as being “good returns” on the city’s investment into their promotions. The California State Games estimated a 12,000-percent return for the city because of the event’s economic impact.
“We hear a lot about it, but ladies and gentlemen, I don’t think we’d have a lot of the money we have today (without promotional programs),” Councilman Jim Madaffer said. “We need to have a concerted marketing effort.”
– EVAN McLAUGHLIN, Voice Staff Writer
Please contact Evan McLaughlin directly at