As San Diegans try to digest why an ambitious effort to celebrate the 100-year anniversary of the 1915 party that transformed San Diego and Balboa Park fell apart, it helps to think of it the way a key player saw it — as a startup.
The city of San Diego partnered with hotel owners to try to turn $2 million into $30 million. They wanted to draw millions of visitors to San Diego for an event of worldwide reach that would have transformed the region.
Unlike most startups, however, this one didn’t actually begin with a product or an idea. All it had was a goal: Raise a lot of money to do something gigantic.
As the organization scrambled to meet expectations, management turnover disrupted it, political leaders mismanaged it, costly vendors failed to deliver and now little time remains to put on an event of lasting significance.
We wanted to understand what happened. Here’s what we found.
It’s Hard to Raise Taxes in San Diego
To understand what happened to Balboa Park Celebration Inc., the nonprofit group created to throw a giant party marking the centennial of the 1915 Panama-California Exposition, you have to understand where it got its money.
From the beginning, insiders believed three main sources of money would launch the effort. The city and foundations would contribute and another good chunk would come from the Tourism Marketing District, or TMD. About $900,000 of the $3 million invested in the effort came from the TMD. But the TMD had a major impact on planning.
It was a TMD committee that set the expectations and framework for the organization that would eventually be created to run the effort. It was the TMD that decided the celebration would bring in millions of out-of-town visitors.
And that was crucial: TMD funds can only be used to lure visitors to San Diego with marketing.
The mastermind behind the TMD was Mike McDowell. This is him, second from the left. To the right are former Mayor Jerry Sanders and Irwin Jacobs, the founder of Qualcomm. In this 2012 photo, they’re waiting for word on the City Council’s decision to accept Jacobs’ plan to remodel Balboa Park.
McDowell is very influential. In 2004, he was the top deputy of C. Terry Brown, owner of the Town and Country Resort.
That year, McDowell formed an alliance of hotel owners, public employee unions and arts and culture groups to raise the city’s hotel room tax with a ballot measure. The City Council put it on the ballot, outlining where the revenues would go. Everyone in the coalition stood to gain.
McDowell feared the city would someday stop funding the Convention and Visitor’s Bureau and other programs he believed helped his industry.
So he figured out a way to raise the tax without voters. By 2007, he had persuaded the city to help hotel owners create a special district of hotels — the TMD. They would effectively raise the hotel room tax but as a fee levied by this special district. Only the hotels — not voters — would have to approve it.
And the money could only be used to lure visitors to San Diego. It was just like the tax increase proposed years earlier but without the obligation to fund other city programs.
This was McDowell’s innovation. The concept has since spread to dozens of cities in California. In spite of legal challenges, San Diego renewed the TMD right before former Mayor Bob Filner took office.
Crucially, however, the operating agreement for that renewal was not signed by Filner’s predecessor.
The TMD’s board of directors gets to decide where its money goes. That board is made up of hotel representatives and is led by McDowell’s boss, Brown.
In 2010, McDowell persuaded the TMD to match a $300,000 investment from local foundations and $400,000 from the city to give seed money to the nascent effort to celebrate the 100th anniversary of the 1915 Panama-California Exposition. And it was McDowell who crafted the new organization’s Memorandum of Understanding with the city of San Diego.
The organization grew out of this document from the TMD. It set the framework for the organization going forward. “We will produce an extraordinary visitor experience,” it promises.
The Balboa Park Celebration Inc., or BPCI, would be a 501(c)3 nonprofit. It would have a board of directors — a “host committee.” And that group would hire an executive director. In an interview, McDowell said he saw the effort to celebrate the anniversary as an entrepreneurial startup.
“We have to find the seed money. We have to find the angel investors. And then we have to find the venture capitalists. If we look at this as a product from that economic perspective, maybe we’ll get lucky and maybe we can make this happen,” he said.
They didn’t, however, put an entrepreneur in charge of the effort. They decided the volunteer board would be led by prominent husband-and-wife lobbying duo Ben and Nikki Clay.
When Clay, McDowell and the rest of the board chose the executive director, they went with Mark Germyn.
Germyn was also not an entrepreneur. He had coordinated the United States’ presence at the 2010 Shanghai Expo, which Foreign Policy magazine called “the largest and most expensive world’s fair in history.” The magazine also called the U.S. pavilion a “sorry spectacle.” Germyn is now general manager of Malaysia’s Legoland Resort.
We could not reach him.
One of Germyn’s tasks was to raise money to pay for his own role. He did not succeed. And soon enough, 2011 became a lost year. Germyn left, citing family problems.
“He turned out not to be the entrepreneur,” McDowell said.
This was the first crisis in what would be a parade of them for the group.
Nikki Clay asked McDowell to take the job. He initially refused. Then his boss, Brown, encouraged him to take it. Brown would pay half McDowell’s salary, the celebration committee would pay the other half.
That’s how the man who had created the Tourism Marketing District became the man who made sure that it funded the Balboa Park 2015 celebration. The same man who wrote the nonprofit’s operating agreement with the city was suddenly its chief executive.
McDowell is entrenched in the city’s business community and its conservative political coalition. He was a major supporter of Sanders and backed Carl DeMaio over Filner in the 2012 mayor’s race. He was one of many close ties BPCI had to Sanders’ administration.
In short, McDowell was as far from Filner politically as possible. They didn’t get along when Filner won. In fact, things got quite tense.
‘We Have to Do Something Magnificent’
Plans for a year-long party in Balboa Park lacked many things. Not ambition.
City leaders had discussed the idea for years. Councilman Todd Gloria famously said the Panama-California Exposition’s centennial shouldn’t be confused with a birthday party.
“For an event that literally put San Diego on the map, and the concept that a town of 40,000 in 1915 putting on what amounted to a world’s fair, it’s a pretty audacious thing to do,” he said. “We can’t mark that with a sheet cake; we have to do something magnificent.”
Those expectations are right there in BPCI’s original agreement with the city, the one McDowell wrote more than a year before he’d eventually control the organization: “City intends that the Celebration be an event of significant magnitude to generate positive impacts on the local and regional economies, reverberate in the global media, and attract local, national, and international visitors,” it says.
The City Council was looking at some big numbers when it approved BPCI’s initial funding. A steering committee including McDowell had put together some initial projections for the event.
Ten million people visited Balboa Park in 2010. The park could double that number in 2015 with a great centennial, according to the steering committee, and as many as 75 percent of those 10 million additional attendees could come from out of town.
That was the expectation.
But when BPCI ultimately applied to the TMD for a cut of hotel room tax funding, its projected reach was much smaller.
TMD funding requires a demonstration that it’ll be used to put “heads in beds” of local hotels. TMD keeps tabs on spending to ensure it’s being directed to that goal.
The committee’s application drew from a study by Carl Winston, director of San Diego State University’s hospitality program, that said the events envisioned by the committee could produce 300,000 to 500,000 hotel room stays. That’s the number the TMD relied on when it approved the money. (The Holiday Bowl, for comparison, draws 30,000 room nights each year.)
But Winston himself said his projection was more conservative.
If the committee followed through with its promises, then it was possible to reach those numbers.
“Our perspective was, if you do the things you say, and at a scale that’s comparable to those things, you could do it,” Winston said. “That got taken in interesting ways as a guarantee.”
In January 2013, Filner upped the expectations even more.
Ultimately, the event collapsed under the weight of its otherworldly expectations.
In pursuit of visitors from all over the globe — to say nothing of kings and prime ministers — the event had to be big. When corporate sponsorships that could support a $30 million event didn’t materialize, there was nowhere to go. The expectations had been written into BPCI’s founding document.
Stephen Russell, an architect with Platt/Whitelaw who served on the committee’s board of directors, said the board deserved the blame it was getting but that there were intrinsic problems with the event’s conception.
“The primary problem was the starting premise: that this had to be a national (or international) event on the scale of a Super Bowl. So much of the planning was predicated on this beginning assumption that it became all but impossible to re-format and recalibrate the event to accommodate changing conditions,” he wrote.
Gloria, who found himself as the third mayor overseeing the event after Filner’s resignation, said he didn’t buy the argument.
“In part because it doesn’t matter where the heads come from,” he said. “Whether the heads come from New York, China or San Clemente or Yuma, that’d be fine. They’re agnostic on where they came from.”
But the curse of big promises wasn’t the only problem.
The Filner Disruption
In January 2013, the day before BPCI’s board was set to meet at its normal spot in the Hall of Champions, it learned the new mayor, Filner, would be there.
McDowell, by this point, has set up a whole array of contractors who are laying out their first findings.
McDowell and the board, led by the Clays, had been working with a new fundraiser, David Gillig.
Gillig is the former vice president of Rady Children’s Hospital. He’s a fundraising pro, and helped get Rady’s name on the hospital.
Gillig was now in consulting. McDowell had asked for Gillig’s advice and it had turned into a $2,500 contract to help the group understand what it would take to raise $30 million.
He was to present his advice to the board.
With Filner looking on, Gillig told the group to consider major corporate sponsorships. If they wanted to raise tens of millions of dollars for something that would only last a year (unlike construction of a building, for instance) generous contributions from individuals probably wouldn’t cut it.
But corporations might see a chance to get their own messages out.
“I proposed the idea of seeking a very large corporate sponsor who could serve as the 2015 ‘brought to you by,’” he said.
“David was making his presentation and Filner just yelled at him. Told him he was stupid. Told him he was not going to allow corporatization of the park, with company signs everywhere,” Ben Clay said.
Gillig left the meeting. Clay said he left because of the yelling. Gillig told us he just thought he was supposed to leave.
“I wasn’t really mad. I didn’t like the way I was treated by the mayor but he’s the one who came off looking bad, not me,” Gillig said.
Either way, Gillig was out.
“My head was reeling. I was thinking. OK, we’ve got a problem,” McDowell said. Filner questioned McDowell’s pay. For the year he worked, McDowell received $182,000, which the Town and Country Resort matched.
“It was very uncomfortable, him being there,” McDowell said of the meeting.
Gillig’s departure left the Centennial once again without fundraising guidance. More importantly, Filner’s reason for running him off — that corporate sponsorships weren’t an acceptable funding solution — meant the nonprofit was again confused about how it would raise millions. And expectations were only going up.
Soon, McDowell was out as well. His Republican network didn’t sit well with Filner. McDowell said the two were “like oil and water” and it wasn’t going to work, so he quit.
His replacement, oddly enough, was also close to the local Republican establishment. Julie Dubick, Sanders’ former chief of staff, stepped in as the organization’s third CEO. The thinking was that she’d worked with the various city departments needed to make the event happen, which trumped her complete lack of experience planning a major event.
This is Dubick.
But Filner’s issue wasn’t just about personalities. He also hated the branding the organization had settled on: Edge 2015 — an umbrella meant to position the event as forward-looking, not historical. Filner told the group he wouldn’t help something called “Edge 2015.”
That sent Departure, the advertising firm that had come up with Edge 2015, packing and another firm, Loma Media, that had been retained to build a marketing and media strategy, scrambling to rebrand the entire effort.
Filner’s ultimatum turned out to be a popular decision. When Filner announced he was killing the idea, many in the city nodded in agreement. It was easy to mock as out-of-touch: What could be less edgy than calling yourself edgy?
Gloria said it wasn’t easy to pitch the vision that replaced it — less about the future, more about the past — to the people needed to get the Centennial to a $30 million budget.
“Believe me, I heard plenty of people that didn’t like Edge 2015. But … as I was making phone calls it became clear to me that we probably needed Edge 2015 — because … 1915 and 1935 were very forward-looking events. I think, that’s what Edge 2015 was about, and listen, I’m not a pro at this stuff, but my sense was when you’re calling our high-tech companies about an event that … because of (Filner’s) vision of it became more backward-looking than forward-looking, it was hard for them to see a place for them in this, so their checks got smaller, or nonexistent.”
That was a recurring sentiment: Maybe Edge wasn’t all that hip, but it would’ve worked OK, and changing it set everyone back.
McDowell said he heard from plenty of people who didn’t like Edge (he liked it, he says). But it was a broad concept that would let organizations go their own direction.
“What I wanted, and this is true on multiple levels, was an umbrella that was so esoteric that really almost anything could fit underneath it. You could have some traditional thing that at one time was edgy, and talk about how this was a trend of the day, or whatever.”
Filner did, however, really like one of the contractors: Autonomy, the firm that had been selected to produce the entire show. After seeing Autonomy’s presentation to the board at a retreat later in January 2013, the mayor asked Autonomy to meet with him alone.
“He told us, ‘This is the first time I heard a vision I can get behind,’” said Adam Burke, of Autonomy.
Despite the fact that the organization meant to pull off the project was in disarray, Filner’s vision for how big and bold it could be only expanded.
“He was taking the position that he was the mayor and this was going to be very big,” Burke said. Autonomy partners responded with a proposal to program their vision of a world-class celebration. They wanted $500,000 for it.
“It is positioned to be the largest joint celebration of park space, museums and other institutions that the western United States has ever seen,” Burke and his partner wrote to Filner.
A year later, Filner was under house arrest and no longer mayor. Burke and Autonomy had been fired, without explanation, they say. And Balboa Park Celebration Inc. was being disbanded, the celebration handed over to the city with virtually nothing to show for the effort.
So, What Exactly Were They Organizing?
One month stands out more than any in this story: January 2013. Those who blame Filner for the demise say things were finally gaining momentum when he first showed up at their board meeting. He forced McDowell out. He took over Autonomy. He demanded a rebranding. He began a months-long fight with the TMD by refusing to sign the operating agreement for its renewal.
McDowell says a tremendous amount of work had been done since Germyn left the year before.
“We built a nonprofit organization from the ground up,” McDowell said.
Even if all of that is true, and even if Filner disrupted it all, a fundamental question still hadn’t been answered: What exactly were they organizing?
The confusion over the answer went right up to the top.
In January 2013, Roger Showley, a writer for U-T San Diego shot this video of Ben and Nikki Clay trying to explain one part of what they were envisioning.
One year later, the videos got remarkably better but the message was still incomprehensible. Here’s a video from Loma Media featuring the two candidates vying to replace Filner, and Gloria, the interim mayor holding his office in the meantime.
Like everything before it, the video articulates big expectations but no clarity on what actually would happen. And when the video was released, there was only a year to go.
We asked almost everyone we interviewed what the event was going to be. None of them could describe it very simply. Phrases like innovation, lights, San Diego Alive, Celebration Forum, thought-leadership speakers series are all over the place. Not once was someone able to clearly state what they were organizing.
But money was going out the door. What were the major contractors doing with it?
What Two Costly Contractors Did
Total Received: $467,000
Task: Media, promotion
Loma Media shot the video above from December, featuring Gloria and the mayoral candidates. The firm also made this video. Loma is well known in town, and produces the parody videos every year for the San Diego County Taxpayers’ Association annual Golden Fleece awards.
Loma was also asked to rebrand Edge 2015, the product of a company called Departure, which received $65,000. Edge 2015 didn’t highlight Balboa Park. It didn’t highlight the 100-year anniversary of the 1915 celebration.
So Loma turned the focus away from the future and to the past.
There was some surprise when BPCI’s financials revealed Loma had gotten $37,000 a month.
John Debello, Loma’s principal and creative director, said he took issue with that figure. The total Loma had been paid came over 24 months, he said, so it was more like $19,000 a month. And he said the firm used that to pay multiple subcontractors.
He said his firm had rebranded the event and produced multiple videos, and he repeatedly talked about the 55,000 fans of the robust Facebook page he had created.
“People are interested in the celebration and it’s not an accident,” DeBello said. He said his fee was more than acceptable. After all, he said, this was supposed to be a $30 million event. He was setting the groundwork for a marketing budget that would suffice.
Total Received: $467,189
While McDowell ran the effort, he said he took meeting after meeting as people presented ideas about what the celebration should be.
“We had a lot of people in those meetings who were all hat and no cattle. They had lots of ideas but they were waiting for someone else to pay for it and do it,” he said.
That comes from this Summer 2013 presentation. Yes, those are people bouncing above a big river. We don’t know which one. Or whether they signed their life away before partaking.
Autonomy partner Burke denied that Filner became the de facto manager of everything Autonomy did but acknowledged the firm began working closely with him. Ben Clay and McDowell said that the mayor regarded the company as his own contractor.
On Jan. 30, 2013, Burke and his partner sent a letter to Filner. It was in response to his request for a budget and organizational chart, as though everything were starting from scratch.
Autonomy outlined four things that would characterize the event.
• Programming zones
• Park-wide programming
• Regional events
A spectacle, for instance, would be “Massive public events taking place at iconic locations at the park and around the region,” the letter to Filner said. There would be one per quarter, and they might include a cross-border concert.
“Our goal was to push past the usual narrative about the weather, the beach and the theme parks and commercial developments,” Burke told us.
After Filner resigned, Autonomy was dismissed in November 2013.
“We were brought into a room, handed a piece of paper and we walked out,” he said. “The company that was meant to be raising the money had worked their way into our shoes.”
BPCI brought in a new company, Utopia, in November 2013 and they got a new contract in February 2013. It has so far received $65,000 from the organization.
A Failure in Slow Motion
In the promotional video above, Gloria says this: “The Balboa Park centennial celebration will be the No. 1 reason people visit San Diego in 2015.”
But he didn’t say what he was really thinking.
Soon after he took the mayor’s office, he said, he learned BPCI was in trouble.
He said he considered pulling the plug then, but couldn’t bring himself to do it for two reasons. One was competing priorities.
“The second one is more emotional,” he said. “I’ll be really honest: This is something I’ve been involved with for some time, I understood where we were trying to go with it. The fact that we weren’t meeting the mark, I … I didn’t want to give up on it.”
He started going on fundraising calls to see if they could get the money they needed.
“People just weren’t responding to what we were offering,” he said. “By the new year is when I started becoming much more direct with them in terms of saying, ‘I need to see results, in measurable progress.’”
The lack of measurable progress had also started to concerning the people who oversaw the TMD. It was trying to keep track of the state of its investment, and answers were scarce.
Some TMD board members grew skeptical that Dubick and BPCI had any of the major sponsorship agreements or partnerships they had included in their request for additional funding.
The TMD called a meeting for Jan. 21 to discuss the discrepancy. There, board members made clear they wanted to hear about planned events with actual dollars attached to sponsorship agreements.
“Red flags went up when they came to that board meeting and couldn’t answer simple questions about sponsorship,” said Lorin Stewart, executive director of the TMD.
Dubick, in an email, told us that political turmoil hampered her fundraising.
“We were told ‘no’ on several occasions but more often told the company needed more time and we believed enough would step up to support a big community celebration. Simultaneously we began to scale back the scope of the events while trying to comply with our mission to produce a spectacular celebration worthy of our community,” she said.
She declined to answer any further questions.
Her explanations weren’t working. The TMD’s chair, Brown, spelled the TMD’s concerns in a Jan. 28 letter to Dubick: It was time for the committee to put up or shut up with major sponsorships attached to actual events if it wanted any more TMD money.
A little more than two weeks later, Dubick resigned. She went to work for one of BPCI’s board members, Yehudi Gaffen, who runs the construction company Gafcon.
Less than a month after that, BPCI announced it was closing up shop and all its remaining money would go back to the city.
Stewart said his first inclination that things weren’t going well came months earlier at a public presentation in the park. Audience members asked Dubick if there was a calendar of events they could see.
“The answer was, it was a work in progress and they’d have it shortly,” Stewart said.
Gloria, likewise, said he first started to get concerned when he began hearing from constituents trying to volunteer who were being rebuffed.
“That was the earliest inkling I had that maybe something wasn’t working well, because this is a situation where … if you want to put on an event at the size and scale that it was discussed … you would need that army of volunteers to make it so,” he said, describing a dynamic described this week by KPBS.
Despite the lethal combination of an ambitious idea with a dysfunctional planning process, those most familiar with the politics of the park nonetheless thought something could be salvaged from the initial idea.
Vicki Granowitz used to be the chair of the city’s Balboa Park Committee and a member of the Balboa Park Conservancy board.
The Centennial, Granowitz said, lost its best chance at success when McDowell stepped down as CEO.
“Mike was the only one who could have made it work,” she said. “He is a very upstanding guy, he is kind even though he has a rough exterior, and he cares about the park. He knows all about ‘heads in beds,’ but he also knew how to make that work together with everything else.”
But the effort took another hit, she said, years earlier, before BPCI was founded or Filner was even elected.
Why Did it Fail?
If the whole thing was a startup, as 2014 began it was coming to the end of its runway of funding. Without a concrete idea of what, exactly, it was organizing, residents and journalists began to realize it was a mess.
It may have been doomed from the beginning.
Zack Nielsen, who runs Sezio, a local event-planning and marketing organization, was part of some of the initial brainstorming meetings in 2010 as the Clays tried to settle on a vision.
He said the heart of the confusion was the obsession with attracting out-of-town visitors.
“No one outside of San Diego is ever going to care unless the people in San Diego care,” Nielsen said. “Nobody is going to start a company just with a claim about how much money they’re going to make. They start with an idea that people are attracted to and it snowballs into success. The only idea I ever saw was that they were going to project lights onto buildings.”
That idea became this image, from a promotional release last year.
But the disruption that really hurt the effort, Granowitz said, was when it lost Bill Evans.
This is Evans.
His family have been San Diego hotel owners for a long long time. They run the Torrey Pines Lodge. The Bahia. Evans fought the hotel room tax McDowell tried to increase in 2004. He was difficult to please when they wanted to renew the TMD that replaced it.
His family has memorabilia from the 1915 celebration and he was involved early in the discussion about how to mark the centennial.
Granowitz said McDowell and Evans reached out to her to help understand the park’s hundred-some institutions, volunteers and enthusiasts who all wanted to be heard.
But Evans withdrew and stayed involved only to the extent that the TMD made funding decisions for BPCI. When the organization started to fall apart, he pounced and demanded accountability.
“He was a force of nature,” Granowitz said. “But if he was wrong, you could disagree with him and he would be OK. When you lost Bill Evans, that was a huge, huge problem.”
(Granowitz’s praise of Evans and McDowell surprised us. “Please don’t make me look like a Republican,” she said, after singing their virtues.)
Evans’ early vision was for the TMD itself to plan the event, so it could be run by tourism professionals.
Gerry Braun, who left his job as special projects director under Sanders to become BPCI’s spokesman, said Evans twice told him about a pitch along those lines he had made to the Sanders administration, before Braun worked for Sanders.
Evans told Braun he presented to Sanders’ office his plan to give TMD control over the Centennial, along with a larger upfront financial commitment.
Sanders rejected it.
Stewart and McDowell acknowledged there were early discussions with Sanders’ administration along those lines, but said there was never a formal offer.
The discussed TMD funding package could have been for as much as $1 million a year for five years, giving it a $5 million budget to plan the type of spectacle that would attract corporate sponsorship.
But it’s hard to make the case that BPCI’s problems stemmed from a lack of funding, Stewart said. After all, it had spent $246,000 less than had been budgeted to it from the TMD.
“They have received more money than they had given us receipts for,” Stewart said. “So, from our perspective, they’re not lacking funds. Clearly, something happened with the fundraising.”
Gloria made a similar case. Given the money spent and the complete lack of an event to show for it, it’s hard to say there wasn’t enough money.
“This event didn’t want for money or contracts,” Gloria said. “This event wants for sponsorships. There was always people saying, ‘I’m going to do this,’ ‘I’m going to rally my friends,’ ‘I’m going to donate,’ and it just never came through. I think that’s in part because what was being laid out to them as a vision for the event wasn’t resonating.”
Ultimately, BPCI ended up being dominated by its board chairs, the Clays, who as lobbyists were more experienced with City Hall deal-making than planning a large-scale event.
And McDowell was replaced by Dubick, who, likewise, had a resume full of experience in politics, but not event planning.
Evans gave a cryptic but unsparing take on what went wrong with the centennial planning.
“Not that hard to drive a Greyhound bus over a steep mountain road as long as you have a driver with experience,” Evans wrote in an email.
“If you let someone that has never done it before give it a try, you shouldn’t be too surprised when it goes over the edge in a big ball of fire. Political strength should not be confused with business acumen. The hospitality/event business is a real bitch to pull off. The margin of error between being a hero or a bum is very small.”
We asked Ben Clay for his reaction to people who say he and his wife were not well-suited to put on a giant spectacle or to raise millions of dollars.
“They’re absolutely correct. Nikki and I haven’t done anything like this. But that’s why we put a board of directors and outside committee together. We had connections and people we could talk to to make this happen,” he said. “It’s what you do for San Diego — what you do for your community.”
Correction: An earlier version of this post misidentified Vicki Granowitz as a board member of the Balboa Park Conservancy. She is a former board member.