Appeals Court Just Gave San Diego a Major Boost by Upholding Measure C

On Friday, an appeals court upheld a lower court’s ruling that voters did approve a hotel-room tax five years ago.  

Measure C is a 2020 ballot measure that called for an increase to the city of San Diego’s transient occupancy tax, or TOT, to fund upgrades to the San Diego Convention Center and pay for homeless services and street repairs.  

The tax on hotel rooms would apply to all visitors, but hotels closest to the Convention Center would see the largest increase, at 3.25 percent or 13.75 cents per dollar.  

Measure C passed in March 2020 with 65 percent of the public vote, but it didn’t meet the two-thirds majority necessary to pass special taxes – sparking years-long court fights on the measure. 

After a lot of back and forth, the Fourth District Court of Appeal agreed that Measure C passed. 

“This ruling is a win for San Diego — and for the voters who overwhelmingly said yes to this back in 2020,” Mayor Todd Gloria said in a statement. “This decision clears the way for progress that benefits everyone — our workers, our businesses, and our city’s future.” 

Now that the measure is locked in, the City Council will have to draft an ordinance to lay out updated timelines for implementation.  

The city can immediately begin going to the bond market to get funding for Convention Center upgrades. However, a settlement with Fifth Avenue Landing LLC makes things tricky. The company sued the city back in 2017 for halting their plans to build a hotel in land adjacent to the convention center. The city cannot pursue any expansion of that area until the company’s lease is up in 2026.  

The funding would first go to the Convention Center and homeless services. After the first five years, the city would use some money for road repairs. A representative from the Mayor’s Office said they began collecting the tax in May but weren’t spending it.  

According to fiscal year 2026 projections, more than $47 million generated in transient occupancy tax, along with the Measure C increase, will go toward convention center upgrades. Another $32 million will go toward homelessness services.  

A representative for the Mayor’s Office also shared a breakdown regarding how the revenue from Measure C will be divided for fiscal year 2026.  

Fifty-nine percent will go to the convention center and forty-one percent will go to homeless services.  

After the first five years, fifty-nine percent will continue to go to the convention center, thirty-one percent to homeless services, and ten percent to street repairs.