A multi-billion dollar, out-of-state corporation could by itself determine the fate of a $1 billion tax increase on San Diego visitors. But the city won’t release the information to let us know if that’s the case.
The city wants to expand its Convention Center and plans a tax hike to pay for most of the $520 million project. Expansion boosters have decided the city’s hoteliers, not the public, will vote on an increase in hotel-room taxes. And no hotelier is bigger than Host Hotels & Resorts, a publicly traded, Maryland-based company that owns downtown’s two largest hotels and two others in the city.
The hoteliers’ vote won’t be like most elections. They don’t get one vote per hotel. Instead, the closer a hotel is to the Convention Center and the greater its room revenues, the more ballots it gets. There are 27 million votes in play, City Clerk Liz Maland told the council in January. Two-thirds of those votes have to be “yes” for the tax hike to pass.
Host has a lot of votes, likely the most of anyone. Host owns the Manchester Grand Hyatt and the Marriott Marquis & Marina, both of which are next to the Convention Center downtown and have more than 1,300 rooms apiece. It also owns a 1,000-room Sheraton on Harbor Island and a 350-room Marriott in Mission Valley.
I wanted to know if Host could block the expansion by itself.
On Friday, I called the City Clerk’s Office, which is administering the election, to see how many votes Host has. Bonnie Stone, an elections supervisor, told me she was talking to City Attorney Jan Goldsmith’s office about releasing the information. A Goldsmith spokesman referred me to a resolution passed when the council approved the vote.
The resolution says the public cannot know the number of votes each hotel is entitled to receive. The reason? Revealing the number of votes might also reveal proprietary information about the hotel. The resolution says Goldsmith’s office is allowed to release the information.
But if it doesn’t, the public won’t know whether a publicly traded, multi-billion dollar, out-of-state corporation can determine if San Diego hotel guests will pay an estimated $1 billion in increased taxes — because the revelation might also make some information about the hotel company public.
This much is certain: Host stands to benefit from the expansion. Its two hotels next to the Convention Center will see $195 million in increased revenues from the expansion in the first six years without risk that the tax hike will cost them business, according to an economic study from the Unified Port of San Diego.
John Schafer, vice president at the Manchester Grand Hyatt, said he didn’t know if Host could block the vote by itself. He said he hadn’t tallied the votes. Neither had Steve Cushman, Mayor Jerry Sanders’ point man on the expansion. Cushman said he wasn’t allowed access to specific hotel vote information for proprietary reasons.
Despite the expansion’s benefit to Host’s bottom line, there’s a chance the company could say no to the tax hike. This week will be a big test. There’s an intense power struggle between hoteliers like Host and labor over the center’s future. I plan to be blogging about it a lot.
Schafer said the company wants hoteliers to have more control over Convention Center operations by switching the center’s sales and marketing to the city’s private tourism promotion organization. Labor wants it to stay in public hands.
I asked Schafer in a Friday interview whether the failure to make the switch was a deal-breaker for Host.
“Don’t know,” Schafer said. “Don’t know. But it is very important not just to Host but to the entire hotel community.”
Election ballots will be mailed to the city’s hoteliers as soon as March 25. The ballots are due back next month.
Liam Dillon is a news reporter for voiceofsandiego.org. He covers San Diego City Hall, the 2012 mayor’s race and big building projects. What should he write about next?
Please contact him directly at firstname.lastname@example.org or 619.550.5663.
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