Plenary Session Part III

In case you hadn’t noticed, there’s been a tremendous amount of discussion about the Convention Center expansion underneath my last two posts. We’ve had discussions take off like this before, but I’ve been encouraged by the civility and quality of the insights made.

So, thanks. (If you’re just joining us, go to that first link to catch up).

In this post, let’s continue with the philosophical question of whether the expansion is the top priority of a city ostensibly seeking a bright economic future.

You’ve all done some excellent research on both the economic impacts and cost of the project. And we’ll get to that. But obviously, the question of what we want to be as a community should guide us throughout the whole effort.

With that in mind, I want to stick with that first theme for a bit to highlight some of the best of your comments made.

My favorite comment came from Paul who quoted something that a member of the mayor’s Convention Center expansion task force, Bob Nelson, said to me (quoted from that first post):

“It’s San Diego’s thing, he said. … Given our climate, entertainment and cultural amenities and proven ability to outperform competitor cities, expansion of the convention center is smart and timely.”

The problem is that it is NOT “San Diego’s thing,” it is Bob’s thing (and his backers)! Here is a challenge for Bob: Go to the top economic engines of San Diego: UCSD, SDSU, USD, Qualcomm, SAIC, Northrop, Raytheon, NASSCO, Solar, Jack in the Box, etc, plus the many smaller tech companies fed by our universities) and tell them you have $750 million to spend on a project to spur the economy in San Diego, and ask them for their top five ideas. Let me know how many of them list expanding the Convention Center.

I’d add more businesses to that list but what a fantastic exercise that would be! And it brings up a good question: Isn’t this something the Chamber of Commerce or Economic Development Corporation actually should do? Shouldn’t these entities produce that kind of survey or data for us so that we know what kind of infrastructure priorities the Qualcomms and SAICs and others want?

Alas, we needn’t waste our time waiting for those two organizations to do anything useful like that.

So how else can we find out what their top ideas would be for how to use $750 million? We can call them ourselves. It’s going to take me a while to get to that, but if you represent these types of companies, why not send me your thoughts and we’ll get them up posthaste.

Next comment I found most interesting in this aspect of the discussion came from Erik Bruvold, the president of the National University System Institute for Policy Research.

Unfortunately the task force has not, at least formally, ever addressed the question about “opportunity” costs that your question #1 implies. A question in this vein, for example, would ask whether the region would be better off using the $750 million to seed a mezzanine financing instrument to help technology/biotech companies survive and thrive in the new world of post-venture capital financing. The task force members shouldn’t claim that they have actually started to the clean economic development slate — instead they focused on a narrower question – if the center is expanded, do we think it will increase room nights (and in turn the taxes and economic impact associated with them). Too bad. A city-wide discussion of where we really should be putting significant investment would have been good.

Exactly! How interesting would it have been for the mayor not to convene a new Convention Center task force but a true congress on what the city should do to create the best possible economy locally? What infrastructure is needed? What kind of city do we want to create? What kind of innovative things could San Diego do at this crucial time in history?

This is at the heart of my and others’ frustration. Perhaps a new expanded Convention Center is a crucial piece in what is the long-term puzzle of San Diego’s progress. But we have no idea because the mayor’s putting it forward saying “validate my decision that this is a good thing.”

This is where it got good. Lani Lutar, the CEO of the Taxpayers’ Association responded directly to Bruvold’s point:

Erik – I actually raised the issue of opportunity cost at several task force meetings. I kept asking the question because the answer was not clear. Ultimately, a decision was made to only look at funding sources with a nexus to the convention center which would narrow the opportunity cost. In other words, then you would only compare what else you could’ve invested in from new taxes and fees from hotel/restaurants/(rental) cars/etc. The thought being that the industries would not support, for example, a hotel tax to support the biotech industry. See my other posts in Part I for my additional thoughts on financing and funding sources. I agree with you that the starting point was flawed.

That makes three of us.

Finally, a comment from reader Bob caught my eye for its eloquence:

Three of our four largest business sectors exist here solely because of location, topography and climate; our own natural resources. They are real estate, tourism and the military. The fourth, the now-called innovation industry, is here by choice. The other major sectors: healthcare, retail, education and even government survive on the production of the top four, although, ironically, government also allocates the natural resources needed by the top three. (This is why these sectors are at the heart of every major civic dust-up.) Sure it’s right to expend billions of bytes on who may be behaving badly on this one but to deny expansion of the convention center would be to deny expansion of a natural, and by the way, free, local industry with unlimited worldwide appeal.

I think he puts it well, but I just simply disagree that just because we have a nice place, it’s inherently the only thing we can build on. Cabo San Lucas is a nice place too. But you venture outside the tourist areas and the infrastructure is pretty sad.

If The Dissolving City doesn’t want this to happen here, we simply have to have broader vision.


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