San Diego’s City Council on Monday approved the financing plan for the $520 million Convention Center expansion with direction to further protect the city’s day-to-day budget.

The budget is the same pot of money that pays for police, fire and regular city services and is supposed to contribute $3.5 million a year toward the expansion. The money is justified, backers say, because new tourism business is estimated to benefit the city’s overall bottom line.

But the city’s contribution isn’t capped. And the budget’s risk from the expansion runs from $9 million to $13 million a year if revenues from a new special hotel-room tax hike don’t come in as expected, a recent report said.

So the council, led by Councilmen Carl DeMaio and Kevin Faulconer, moved to limit the city’s risk by ensuring the loan backed by the day-to-day budget takes priority for being paid off. They want that debt to be repaid first, instead of other borrowing that’s not legally backed by the budget. The next time Convention Center expansion financing returns to the council, council members said they want this deal in place.

“My colleagues and I, and I believe [Mayor Jerry Sanders] shares in this intent, seek to protect the city of San Diego taxpayers,” said DeMaio, who is also running for mayor.

This isn’t the first time the city has tried to limit the day-to-day budget’s risk.

Last December, the council, again led by DeMaio and Faulconer, said it wanted to do the same thing and cap the budget risk.

When such a cap didn’t materialize, city Chief Operating Officer Jay Goldstone said he couldn’t make that deal happen.

And despite that failure, the council voted to move the expansion plan forward anyway.

There’s risk of the same thing happening this time.

Aside from the loan backed by the city budget, the expansion financing plans calls for two other loans supported by the special hotel-room tax and a contribution from the Unified Port of San Diego.

Goldstone said neither the hoteliers, who approved the special hotel tax, nor the port might like the idea that the city’s loan would take priority. Both groups might push back no matter what the council says.

“That’s what they want,” Goldstone said of the council decision after Monday’s meeting. “Clearly, that’s what I’m going to work towards. But we’ve got three partners in this.”

Goldstone added that the council had recourse if he wasn’t able to make a deal that met its demands.

“Ultimately, if they don’t like what I bring back, they’re not going to approve the bonds,” he said.


DeMaio’s plan to limit the city budget risk from the expansion includes:

• The city auditor and treasurer certify that the special hotel-room tax money is being divvied up correctly.

• The city cut its subsidy to Convention Center operations and use that money to pay back the loan if the city owes more than $3.5 million in a year.

• The city budget-backed loan take priority over those backed by the special hotel-room tax and the port in paying back the debt.

The council voted to approve the financing plan with DeMaio’s additions 7-1 on Monday with Councilman David Alvarez opposed. This should wrap up the major council approvals for the expansion. But it doesn’t guarantee that it will be built. If you want to learn more about what still stands in the Convention Center expansion’s way and more background about the city budget’s contribution, check out my preview story, which ran prior to Monday’s vote.

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 or 619.550.5663.

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Liam Dillon

Liam Dillon was formerly a senior reporter and assistant editor for Voice of San Diego. He led VOSD’s investigations and wrote about how regular people...

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