San Diego hotels will have another opportunity to vote on a $1 billion fee increase, if the City Council approves an election on Tuesday.
And it appears that the hotel industry could be able to vote in secret, making it impossible for the public to know how much power individual hoteliers have over an election that will force their guests to pay as much as 2 percent more on every hotel stay.
This vote is unlike typical ones used to increase taxes or assessments. The public isn’t voting. Hotel owners are. And they get more than one vote apiece.
The votes are based on the revenue the hotels make off rooms. The more money a hotel earns, the more votes they have. So big hotel companies dominate smaller ones, which in this case includes properties as small as vacation rentals. A similar voting system was used in April when hoteliers approved a $1 billion tax hike to finance the proposed Convention Center expansion.
During that election, we pushed for disclosure of each hotel company’s vote shares because hoteliers were using their leverage over the tax hike to advocate for issues unrelated to the expansion. The city argued that revealing the number of votes would violate laws that keep room revenue information private. After a month of back-and-forth with City Attorney Jan Goldsmith, he released an estimate of each company’s votes.
Goldsmith is staying mum this time. At least for now. His spokesman, Jonathan Heller, said Goldsmith’s office is working on a memo to the council and will address the secrecy of the vote during Tuesday’s meeting.
The council will decide then whether to authorize the hotelier election and have it be secret. Four council members said they wanted greater transparency. Councilman Kevin Faulconer said the city should release estimates similar those revealed in the Convention Center election. Councilwoman Marti Emerald and Councilman David Alvarez said they wanted the votes disclosed.
“I support making that public,” Alvarez said. “Unless I’m warned against it by our attorney, I will continue to support that.”
Councilman Carl DeMaio, who is also running for mayor, said he supports an “open and transparent process” on the vote and that he’d work with other council members and Goldsmith to achieve it.
DeMaio has committed to not holding secret votes like the one currently proposed if he’s elected. DeMaio’s opponent, Bob Filner, also has supported an open election, calling the secret vote “disgraceful.”
Three other council members and Mayor Jerry Sanders either didn’t respond to a request for comment or said they didn’t have enough information to weigh in. Councilman Todd Gloria said he backed a private vote based on Goldsmith’s advice from the expansion election.
If this election does remain secret, the council and mayor will have chosen to make it that way. Nothing in state law forces the city to have an election based on information that’s considered proprietary, said Felix Tinkov, who frequently deals with public records issues as a partner at Lounsbery Ferguson Altona & Peak.
“There is no restriction on what may be published in terms of information about the business owners, the votes, things like that,” Tinkov said.
Hotel owners would be voting on a plan to renew for four decades a 2 percent charge on hotel guests that has been in place since 2008, but that expires at the end of the year. Currently, the charge only is paid by visitors staying at hotels with 70 rooms or more, but this plan extends an extra fee to every guest property in the city.
If approved, visitors staying at hotels with 30 rooms or more will pay an extra 2 percent on their bills, above the city’s 10.5 percent general hotel-room tax. Those staying at smaller properties, including vacation rentals, will pay an extra 0.55 percent.
All the money, about $30 million annually, will go toward marketing the city and helping finance tourist-targeted events, such as college football bowl games and the Rock ‘n’ Roll Marathon. Backers say the investment will fuel San Diego tourism and benefit the city’s bottom line.
But the charge, which is levied by what’s known as the Tourism Marketing District, faces a high legal hurdle since Proposition 26 passed two years ago. That statewide initiative made it more difficult to authorize these kinds of charges without a public vote. Legal challenges, including one from the hotel-workers union, are expected if it passes.
Update: City Attorney Jan Goldsmith has recommended that the city release estimates of hotel owners voting strength in this election, in a memo dated Sept. 24.
This recommendation is the same he gave last April when hoteliers voted on a similar visitor tax increase to finance the Convention Center expansion.
The information would allow the public to know the percentage of votes each hotel or vacation rental property has in the election within a 2 percent range. In this election, the number of votes a hotel has is determined by its room revenue and big hotels dominate the smaller ones.
Liam Dillon is a news reporter for Voice of San Diego. 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 liam.dillon@voiceofsandiego.org or 619.550.5663.
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