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Last year, when negotiations to expand the Convention Center were heating up, the hoteliers would not agree to a new deal unless they gained control of the sales and marketing efforts the Convention Center Corporation had managed since 2004. The Convention Center expansion will require an increase in the hotel-room tax. To do this without a public vote, the hotel owners and city concocted a scheme to increase their property taxes and pass this along to visitors.
It’s a plan the city attorney says is legally questionable.
But to pull it off, the city needed the hotel owners to vote for it. And this deal to transfer sales to the Tourism Authority is what that group demanded in exchange.
Now, that agreement is being threatened. It required the City Council and the Convention Center Corporation’s approval, which came during a hasty and awkward meeting last year. Here’s Filner’s take:
I have reviewed the actions taken by the SDCCC Board in March of last year to use nearly $2 million annually of City of San Diego funding to pay a private entity to handle long-term sales and marketing of the facility. I believe the actions were counter to the original intent in establishing the SDCCC to ensure policy and fiscal oversight of the Center, including sales and marketing, by the Mayor and City Council. In fact the action was a politically initiated demand made by local hoteliers as part of the Center’s expansion financing agreement.
It’s not clear what the mayor could pull off himself but his strongly worded letter has tourism authorities worried.
“I have a team of dedicated sales and marketing professionals that are now focused on the wrong thing. Rather that continuing their efforts to book business, they are now polishing up their resumes,” wrote Joe Terzi, CEO of the Tourism Authority, to the board of directors of the Convention Center Corporation, in an email I obtained.
Filner, as a candidate, called the Convention Center expansion a billion-dollar “giveaway.”
Labor unions also decried the financing plan and filed a lawsuit challenging its legality. Some unions were worried that the Tourism Authority would direct food business and other operations to private hotels in competition with the Convention Center.
Union critics backed off after builders working on the expansion OK’d a labor agreement.
Even U-T San Diego opined that this hotel-room tax hike should go to a vote of the people. The newspaper believes such a tax hike should fund its alternative plans for the waterfront, stadium and Convention Center.
Update: I completed a thought about the property tax scheme left cut off in the original version of this post.
I’m Scott Lewis, the CEO of Voice of San Diego. Please contact me if you’d like at email@example.com or 619.325.0527 and follow me on Twitter (it’s a blast!):
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