Is a Convention Center Expansion Worth It?
Tuesday, June 30, 2009
Credit: Mayor's Citizen Task Force
San Diego is a popular destination for conventions. But some say the convention center here is too small. There’s talk of spending up to $1 billion to expand the facility. But critics say it’s the wrong kind of growth for San Diego. It will cost too much and will only create low paying jobs.
SAN DIEGO San Diego is a popular destination for conventions. But some say the convention center here is too small. There’s talk of spending up to $1 billion to expand the facility. But critics say it’s the wrong kind of growth for San Diego. It will cost too much and will only create low paying jobs.
The Tin Fish restaurant in the Gaslamp District sits directly across Harbor Drive from the convention center. On a recent sunny afternoon only a few tables are occupied. There aren’t any conventions going on at the moment and the Padres are out of town so business is slow. But when there is an event at the convention center Manager Jamin Toombs says things get a lot busier. He says about 80 percent of his business comes from conventions.
Since we do rely so much on the business from the convention center it would definitely help us a lot, a lot. The bigger the better most likely, even if you doubled the size of the convention center it’d probably double our business,” he says.
The expansion wouldn’t double the convention center, but it would create an additional 400,000 square feet of exhibit space. The project may also include a 500 room hotel on the bay. A task force is studying the possibility of an expansion. Given the current gloomy economy a billion-dollar price tag seems daunting. But Co-Chair Stephen Cushman says the recession makes it the perfect time to move forward.
“You look at things when you’re in difficult times. That doesn’t mean that it’s going to happen tomorrow. You have to understand, a project like this will take five to eight years to see maturity,” Cushman says.
And expansion proponents say conventions are booking centers now for events that will take place in five years. Cushman says the region would also benefit from an expansion. Last year the convention center generated $30 million in tax revenue for San Diego. Cushman says the convention center is an economic engine for the region. Marney Cox agrees. He’s the Chief Economist at the San Diego Association of Governments. But he has doubts. He says leaders should ask themselves some questions before moving forward.
“Do we already have enough visitor, hospitality types of jobs in the region today, and do we need to diversify our economy?” he says.
Expansion proponents say the convention center generates about 12,000 jobs. But Cox says many of those are low paying. He says instead of focusing on a project that will create more of those, San Diego should concentrate on fixing its water and energy supply problems. By doing that, Cox says, other industries would feel more comfortable locating in the region.
“If we build a different type of infrastructure, water supply or energy, than the bio-tech industry or the telecommunications industry or the software industry something like that can utilize that infrastructure. Create the jobs that are more high paying and more diversified and our region’s economy and its wage rate status here is much better off,” Cox says.
There’s also the question of how to pay for an expansion. At its last meeting the task force heard about a variety of options. The primary potential founding sources are taxes and fees. But one member of the task force says he doubts San Diegans would approve any of the proposed plans. Mayor Jerry Sanders admits the plans need some revision. But he says it wouldn’t be city residents who would be paying.
“Probably a lot of those fees or taxes would be collected from tourists. If the convention center bringing a lot of people, which it does, to hotels and there’s another $1 or one percent on their hotel bill than that’s going directly to the tourists,” Sanders says.
Still, the city already pays about $4 million a year from its general fund to subsidize the convention center's current operations. If the expansion moves forward, San Diego is looking at payments of more than $50 million a year for the next 30 years just to cover the cost of construction. The task force is expected to make a recommendation in August. And if tax hikes are needed, city residents will get a chance to vote on the project.
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