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The upcoming vote of the California Coastal Commission Thursday has thrust the Phase III expansion of the convention center back into the news. While most of the coverage has been fair and accurate, some has focused on a few erroneous claims made by critics (or skeptics) of the expansion.
The current project has evolved since 2009 when then-Mayor Jerry Sanders created a task force to evaluate the market demand for an expanded facility. The task force assessed the feasibility and financing possibilities while conducting widespread outreach through public meetings in every council district. Since then, there have been dozens of public meetings on the project with a wide array of community groups, civic organizations, the general public, the port and the city of San Diego. Because of these meetings, the project itself has improved.
Two websites, one for the Mayor’s Citizens Task Force and the other for the current convention center expansion, contain hundreds of public documents available for anybody to access and review. But regardless of all this public information, questions remain and claims have been made, so I would like to tackle a few of the larger ones that have recently resurfaced.
Claim: The plan underestimates the true cost by more than $35 million, leaving taxpayers on the hook.
When the building opens, it is expected to generate an additional $13 million in tax revenues to the city along with 7,000 permanent new jobs. Even with the $3.5-million contribution from the city of San Diego’s general fund to help pay for the expansion, the city will still receive a minimum of $9.5 million in new tax revenues to fund city services annually. Opponents of the financing plan have made a number of claims that are way off base.
The biggest miss is that the pro forma budget for the expansion doesn’t include the cost of land to be acquired to build the expansion. In fact, the City Council took action in November 2012 clearly showing that land is included in the expansion project budget.
Another claim is that the cost for an expansion kitchen is not included. Actually, a new full kitchen is not included – or necessary – in the expansion. Rather, two “food prep areas” will be added, while we remodel and expand the kitchen that has been operational since the first expansion opened in 2001. The build-out and remodeling costs are most definitely part of the overall expansion budget.
Claim: The expansion will be a “white elephant” due to a glut of convention space in the country. It either won’t be filled, or conventions will need to be subsidized to come here.
That might be true if this expansion were being contemplated in Omaha or Spokane, which are second-tier cities that market to a different segment of the industry, but it is certainly not true for San Diego. Make no mistake about it, the convention and meeting industry is highly competitive. Cities all want conventions. But our clients are not choosing between San Diego and any second-tier city. To the contrary, they are looking at San Francisco, Las Vegas or Vancouver — and San Diego — when deciding where to hold their conventions when they rotate to the West Coast.
San Diego is one of the nation’s top convention locations because we are such a great visitor destination. This is a city people want to come to – for business or pleasure. This has always been the case. We’ve been a premier convention venue since the day the convention center first opened in 1989.
Not every city’s convention center is going to be successful because they don’t have the right stuff— whether it’s hotels, a convenient airport or any of the things that have made San Diego so successful. San Diego always has been and always will be a top-tier market.
Claim: Proponents never seriously considered a larger, non-contiguous expansion or alternative sites.
Between 2003 and 2007, nine potential expansion sites were identified and eliminated because of cost, unavailability of the land or larger constraints such as having to build over the bay or a railroad yard.
In 2009, the Mayor’s Citizen Task Force evaluated two additional sites. The first, identified as the 5th Avenue Landing site, is where the current Phase III expansion is being proposed. The second, the Tailgate Park site, located east of Petco Park along Park Boulevard, is where the Chargers are hoping to build a new stadium. The Tailgate site evaluation – conducted in depth for more than $100,000 – found that an active earthquake fault ran right through it.
Six different concepts were evaluated, however, the site was eliminated as convention center clients indicated the facility would not meet their needs for contiguous space and was located too far from the current facility to be convenient for convention-goers.
Claim: Studies commissioned by the convention center show that non-contiguous space would meet the needs of the vast majority of conventions.
The San Diego Convention Center Corporation released results this week of a recent survey on this very topic that was sent to executives of the leading convention, exhibition and conference producers. Of those responding, 64 were current clients of the San Diego Convention Center and 98 percent of those said it was “extremely important/critical or very important to have contiguous exhibition halls in a single venue when booking their major events.”
But this is no surprise to those of us who have been talking with clients over the past six years as we explored various expansion options. While a non-contiguous expansion would likely be utilized, it won’t be from the client base that uses the current facility.
This is the right project, at the right time, for all the right reasons.
Phil Blair is chairman of the San Diego Convention Center Corporation Board of Directors and executive officer of manpower. Blair’s commentary has been edited for clarity. See anything in there we should fact check? Tell us what to check out here. Want to respond? Submit a commentary.