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How Will San Diego Pay For A $700 Million Convention Center Expansion?

Audio

Aired 11/12/10

Will a rooftop park be key to raising the necessary funding to pay for a proposed $700 million expansion of the San Diego Convention Center? We discuss the details of architect Curtis Fentress' plan to make the convention center the largest on the West Coast. Plus, we give an update on the latest plans to cut the city's budget deficit. Why is the city moving forward with several costly downtown-development projects when it is facing a $70 million deficit?

Will a rooftop park be key to raising the necessary funding to pay for a proposed $700 million expansion of the San Diego Convention Center? We discuss the details of architect Curtis Fentress' plan to make the convention center the largest on the West Coast. Plus, we give an update on the latest plans to cut the city's budget deficit. Why is the city moving forward with several costly downtown-development projects when it is facing a $70 million deficit?

Guests

Scott Lewis, chief executive officer of voiceofsandiego.org.

Tony Perry, San Diego Bureau Chief for the Los Angeles Times.

Teresa Connors, regional news editor for the North County Times.

Read Transcript

This is a rush transcript created by a contractor for KPBS to improve accessibility for the deaf and hard-of-hearing. Please refer to the media file as the formal record of this interview. Opinions expressed by guests during interviews reflect the guest’s individual views and do not necessarily represent those of KPBS staff, members or its sponsors.

In the case of San Diego's downtown convention center, an architect is already on the job to grow out the building even before a financing plan is put together to fund that $700-million project. So Scott, there's an architect, there are drawings, there's an unfetterred enthusiasm.

SCOTT LEWIS: Unfetterred!

GLORIA PENNER: You like that? On the part of mayor Sanders. But there's no financing plan. How can all of this movement happen without knowing where the money is coming from?

SCOTT LEWIS: Money's never held us back here, Gloria. Come on! We can build whatever we want. It's a fascinating, fascinating situation. Here we have just two weeks ago a vote on whether to raise the sales tax in the City of San Diego, because if we don't we would face certain danger and jeopardy in the face of loss of police officers and firefighters, your individual safety was at jeopardy, your kids and your children's safety at jeopardy, your rec centers, gone, your libraries, gone, your palm tree maintenance, gone. Anything that you care about in the city, in fact, was 13ed.

GLORIA PENNER: The only thing that wouldn't be gone are our pot holes.

SCOTT LEWIS: Right. And unless we passed this tax, it was all going to be gone. And then we didn't pass the tax, and the first announcement is not how bad it's going to be, the first major announcement is how we're going to build a gigantic convention center, and it's beautiful because it has grass on top. It's the schizophrenia of San Diego. It's come to San Diego, bring your convention center here, just don't get stabbed on your way out or a cop will not come. Of it's the situation we're in. Look, Kevin Faulkner, the city councilman who represents downtown, on his Facebook page said the downtown convention center is the definition of the return on investment. And it returns, the current convention center returns $21 million in sales tax and hotel tax. And the mayor says that if we expand it, it'll bring in $17 million more in sales and hotel tax. That ad-As up to what is it, Tony? $13 million of --

TONY PERRY: I'm working my abacus.

GLORIA PENNER: Wait, wait. I just want to say, listen to this, if it costs $700 million, and it brings in $17 million extra.

SCOTT LEWIS: You're gonna steal my thought.

GLORIA PENNER: It would take more than 40 years to pay for the debt.

SCOTT LEWIS: This is the thing, and that's only if it costs seven hundred million. There were estimates it would be much higher. The debt's gonna be between 50 and $60 million a year. Here we are not even covering that. Let's not even remember that we don't even have the bonds paid from the previous expansion.

GLORIA PENNER: Okay. Scott, I know you'd like to talk for 20 more minutes on this.

SCOTT LEWIS: I could go on and on.

GLORIA PENNER: But I think it's really interesting that the North County times was, we heard from Paul, that North County times is favoring expansion. And we aren't absolutely sure it's total expansion. But here we're hearing from the CEO of voice of San Diego who doesn't sound as though he's favoring the expansion of the convention center at this time.

SCOTT LEWIS: I am just concerned that we have a city that is dissolving, that is deteriorating, that is falling apart in every known measurement as far as pot holes to the 30000 palm trees that cause any number of problems for neighbors and dangers with the fronds falling to the libraries being closed, to rec centers being closed, yet we can somehow live in a city, it's very obvious, is built now to support downtown 61 instruction and the visitor industry.

GLORIA PENNER: You've heard all the passion from Scott. I don't mean to cut him off, but I really think unless I go over there and --

SCOTT LEWIS: I'm done, go ahead.

GLORIA PENNER: -- and gag him, he's not gonna stop. So let me ask our callers, do you share Scott's passion about this subject? Do you feel that it's simply inappropriate to be talking about expanding the convention from and maybe other major downtown public projects at a time when the city obviously is trying to figure out ways to contract? Our number is 1-888-895-5727. All right, Tony, you've been sitting there patiently, amazingly. The mayor said that extra tax revenues that we were just talking about, that $17 million of the expanded convention center, would help pay for police and fire services.

TONY PERRY: We can hope.

GLORIA PENNER: But by the time those revenues are generated, won't we have something else figured out to support public safety?

TONY PERRY: No, probably not. This is San Diego where the political spectrum goes from way far right to moderate right. We certainly saw that in Prop D. What we have here is the San Diego version of the larger national debate. When you're in the middle of really, really tough times do you retrench and just hold on, or do you expand and spend? In other words, do you build the golden gate bridge in the depths of the depression or not? I don't agree with Scott, respectfully, on any of that. I think San Diego is headed for some tough times as it decides whether it will actually pay its bills or somehow cop out of them or lay it off on the city employees. In terms of the convention center, gentlemen, start your economists, and whether that trickle down idea in supporting one industry and whether it broadens out, or whether it's really aimed at the hoteliers and the restauranteurs, and a select group, in other words, what do they call it? Disbursed costs and concentrated profits? Is that what we have? And I'll defer to people with great degrees' comments.

GLORIA PENNER: You've been reading Arthur Laffer recently haven't you?

TONY PERRY: Oh, and all sorts of other. That's a classic debate. I do like the idea of expanding the convention center because I have a name for it. It's going to be called the house that Comicon built.

GLORIA PENNER: That's Tony Perry. He is the bureau chief for the LA times. And let's pick up just one brief question for Teresa. Expand the convention center, that assumes that there will be an expansion of conventions. But I'm wondering if these times now of video conferencing where businesses are not willing to spend a great deal of money to send people out to conventions, whether maybe conventions are becoming passe.

TERESA CONNORS: Oh, I don't think so. And I think actually this gives the City of San Diego a wonderful opportunity to help out North County. They could send all of that business that they can't accommodate downtown to the California center for the arts in Escondido, which has had a real hard time filling all of its rooms, then we'd have all that wealth spread around.

GLORIA PENNER: Could that be the canary in the cole mine? Escondido, the problems it's having filling --

TERESA CONNORS: Absolutely could. That center has been unable to maintain itself financially, and the City of Escondido has had to continually subsidize its operation.

TONY PERRY: Does it have an ocean view and an entertainment center connected to it?

TERESA CONNORS: It has a wonderful view of downtown Escondido.

TONY PERRY: I'm on my way.

GLORIA PENNER: That's enough territoriality here. Our phone lines are filling up, but I'm not gonna start taking the calls until after the break. Let me just ask one more thing. Scott if you can answer this briefly.

SCOTT LEWIS: Of course.

GLORIA PENNER: The projects are coming fast and furiously, there's a north Embarcadero park, there's a downtown library, a proposed city hall, a Chargers stadium. What do you make up this.

SCOTT LEWIS: We have a city of government that is set up to funnel money to construction downtown. And I don't think anybody makes apologies for it. You have Balboa park, the mayor stood in the middle of it and said we couldn't afford to give Balboa park what it needs. On the other hand, you have the convention center, the stadium all on the table and being pushed through the process of that's the way city government is.

GLORIA PENNER: What we're gonna do now and we're taking our break, when we come back, I'm gonna take as many of your calls as I possibly can. And get ready, callers and make your comments pretty brief. This is the Editors' Roundtable. I'm Gloria Penner.

This is the Editors' Roundtable, I'm Gloria Penner, our number is 1-888-895-5727. I throw out the number because we're gonna take a lot of phone calls from our listeners right now as we talk about expanding the convention center. Is that where the city's energy, finances, focus should be these days? Again our number, 1-888-895-5727. I'm here with Teresa Connors from the North County times, Scott Lewis from voice of San Diego.org, and Tony Perry from the Los Angeles times. Okay, Tony. You with us?

TONY PERRY: I'm awake!

GLORIA PENNER: Okay, good, I'm glad. Let's hear from Mel in Hillcrest. You're on with the editors and I remind our callers to make their comments brief so we can get so many on the air. Go ahead Mel.

NEW SPEAKER: Thank you. This really should be on the ballot, but the mayor has already said he doesn't want it on the ballot. I guess he saw what happened with Prop D, and that's when the people get the vote, they tell you what they really think, that's the last thing in the world that the council and the mayor want to know. This proposal to expand the convention center is just to create construction jobs so that the unions will continue to support a certain number of council members.

GLORIA PENNER: Okay. Thank you, Mel. Scott what do you think of Mel's reasoning? Support construction jobs that gives loyalty from the unions and the unions will give campaign funds to the construction workers, and it really belongs on the ballot because I guess public funds will be used in some fashion.

SCOTT LEWIS: Well, we are in a situation in San Diego where capitalism and entrepreneurialism is often defined on who gets the government contract. Look, to pay for the convention center, there are a number of different options: You could pass a special tax on rental cars, for example. You could do a business improvement district for the businesses actually in downtown that would benefit from it. Or you could just use the redevelopment money this would be redirected from property taxes and just kept downtown. If you pass -- if you try to pass a special tax, you'll have to put that on the ballot. I would venture to say that's why they won't try to pass a special tax. Because I think a lot of people will wonder why we're going to pass a tax for the visitor industry and not very, say, our recreation centers, our parks and our streets. On the other hand, the redevelopment money will clearly flow into it, and the question will be whether the port district contributes to it or not. And whether a business improvement district is formed in order to contribute to it, and that'll be all something everybody needs to watch for.

GLORIA PENNER: We have time for one more time. I urge Darryl and Jesse and, I guess, Darryl and Jesse to please go to KPBS.org/Editors' Roundtable because we're gonna take Daniel from Clairemont. You're on with the editors.

NEW SPEAKER: Once again, you know, Manchester and a lot of the hoteliers and businessmen can do this on their own. They could get bonds their own, the city could approve it, and they could build it on their own. They don't have to put the owners -- again, I'm a taxpayer. And I think this would be a good win for them. They could control downtown and do their own thing. But once again, they want to put all this on us to build their own businesses rather than cleaning up our streets, cleaning up our parks, putting good lighting, getting rid of the bad stuff that we have? Because guess what? We are I city and we need to function.

GLORIA PENNER: Thank you very much, Daniel. Let's spend just a moment talking about what Daniel had to say. Tony, Steve Cushman, the official who's working on the finance plan was told by the mayor not to use public money. That's what Cushman says. Where would $700 million in private money come from? Would it come from somebody like Poppadak Manchester? PapaDoug.

TONY PERRY: Poppadak. I think he was in the Caribbean. It could. The caller raises a good point. How much private industry money is out there as opposed to public money? On the issue though of voting, and I'm torn, like votes on this that and the other gives me something to write about. On the other hand, look at the landscape, no, Chicago, San Francisco, Los Angeles, to a certain degree, the great cities of America. How many of them were build by projects approved by the voters right down to the Nth degree? Great cities are built or sustained oft times by people with vision, whether you like it or not. Robert Moses in no, or our much smaller folks here, peat Wilson and such. The idea that it's all done to provide union jobs I think is nonsense. What it has done though, because it fits a certain mind set which has always controlled San Diego which is downtown centric, and convention thinking centric.

GLORIA PENNER: Teresa I want to get your North County perspective on this. You heard what Tony said am are we downtown centric, are the great visions coming from the builders? Build and you shall have vision?

TERESA CONNORS: I don't know that I can speak to the visionaries. But is San Diego downtown centric? Absolutely, always has been. And that's -- some people may say that's okay. It even makes it a thriving downtown.

GLORIA PENNER: But obviously North County is thriving too, 'cause that's where the freeway is gonna be expanded maybe!

TERESA CONNORS: Absolutely.

GLORIA PENNER: Okay, well, I think we didn't get anything definitive from you on that.

[LAUGHING]

GLORIA PENNER: Scott, last word.

SCOTT LEWIS: Well, you know, I am not antispending money in a down economy. What frustrates me is that it's the visitor industry and the downtown buildings that we are spending all the money on. You look at what the tech industry wants, they say we need public transportation and modern infrastructure. We need a real true public transportation system that can get people to Serrano Valley and other places. To why not invest in roads in San Diego? The roads are the seventh or eighth worst in the country of let's build things like that. Things that the residents benefit from. The only thing that residents benefit from in the convention center is a piece of grass on top of it.

GLORIA PENNER: Okay.

SCOTT LEWIS: I'm not sure that kiddies want to go down to the convention center park when there's one near their house or a beach they could probably --

GLORIA PENNER: It'd be a great dog beach, wouldn't it?

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