As news emerges of a deal to fund the Convention Center today, watch for a new major pothole that could be in the way of the expansion project: the Convention Center itself.
It appears that a deal is coming together to fund a less expensive expansion than was previously envisioned. To pay for it, the Port of San Diego will consider contributing a small amount, redevelopment will offer a major chunk (the Convention Center, you see, is a blighted area — just don’t tell the visitors that. It’s beautiful, trust us), and finally hotel visitors will be asked to pay even more in addition to the city’s 10.5 percent tax and the hoteliers’ special additional 2 percent levy.
The question we need an answer to is what the hotel owners will want in exchange for this. A new Convention Center may not be enough for them.
Will they, for instance, demand that Convention and Visitors Bureau, or ConVis, take over the sales and marketing of the Convention Center?
Hotel owners control ConVis not only on the board but through the $19 million that ConVis will get this year from that extra 2 percent hotel-room levy. ConVis would basically control the Convention Center if it gained power over its sales and marketing effort. This could be attractive to hotel owners interested in making the facility perform better for their interests and in perhaps taking some of the small meetings the facility hosts.
For his part, ConVis CEO Joe Terzi told me two weeks ago that nothing of the sort was being planned.
He said then that the Convention Center should keep its sales and marketing functions.
“They’re doing a good job and we believe it should stay where it’s at,” Terzi told me.
But he added this about funding the expansion.
“The fact is, they’re looking for two-thirds of the income to come from the industry and I think that the industry will want to make sure that they’re represented appropriately,” Terzi said.
So what does that mean? I asked Terzi.
“There are always discussions about ‘Is there a better way to do things?’ And we’re working on ways to better cooperate,” he said.
The Convention Center Corp. right now is a nonprofit separate from, but overseen by, the city of San Diego. Carol Wallace, its CEO, said she believed hoteliers were already well represented on her board. She pointed out that representatives from the Hotel-Motel Association and ConVis sit on the board.
“That’s appropriate representation. That’s not control. They have a voice at the table,” she said.
So why does this matter? Well, labor is a big part of it. Several unions function in the Convention Center. If control of it moves to hotel owners and ConVis, labor leaders might find themselves negotiating with a much more unfriendly management team.
“Our overriding concern right now is that the Convention Center remains a public asset, not just a facility that subsidizes corporate interests,” said Lorena Gonzalez, the CEO of the San Diego Imperial Counties Labor Council.
Labor might have leverage. Remember the biggest pothole I pointed to in my list of what menaces the route to a new Convention Center expansion is a big one: the legality of this special hotel-room tax.
Prop. 26, which passed in November, basically said that anything that looks like a tax, smells like a tax and quacks like a tax is a tax and it should face a public vote for approval. Remember, the public rejected an increase to the hotel-room tax — twice — in 2004. Hoteliers admitted that their levy raised the “effective” hotel room tax.
I always thought a libertarian type activist would be the one to challenge the legality of this tax. But maybe someone more sympathetic to labor and the current management of the Convention Center would be the one to sue.
Stay tuned.
You can contact me directly at scott.lewis@voiceofsandiego.org or 619.325.0527 and follow me on Twitter (it’s a blast!): twitter.com/vosdscott.