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Judge Signs Off On San Diego Convention Center Financing Plan

A San Diego Superior Court judge gave his final blessing today to the city of San Diego's plan to finance an upcoming $520 million expansion of the downtown convention center.

Roof of the Convention Center decorated with sails.
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Above: Roof of the Convention Center decorated with sails.

Judge Ronald Prager upheld his tentative ruling, issued Monday, that says a special district formed for hotel land owners to tax themselves was "properly formed.'' The judge listened to about two hours of oral arguments Wednesday from lawyers who support and oppose the funding mechanism.

The go-ahead is one of the last hurdles the city needs to clear before the start of construction. The expansion plan still needs to go before the California Coastal Commission.

Once construction begins, work should take about 33 months, according to the city.

"I welcomed this decision. It was well-reasoned and based upon the law,'' City Attorney Jan Goldsmith said. "Should convention center opponents choose to appeal, we are confident the decision will be upheld.''

Hotels in downtown San Diego, which would benefit the most from a larger meeting facility, will charge themselves 3 percent of their room rates to help pay off debt service from construction bonds. Hotels in Mission Valley and Mission Bay will be assessed 2 percent. Outlying hotels will pay 1 percent.

The levy is expected to raise about $30 million a year. The city plans to kick in $3.5 million annually, and the Port of San Diego will add $3 million a year.

The city filed the validation lawsuit to seek clarity in what was an untested area of the law.

A group called San Diegans for Open Government and civic activist Mel Shapiro opposed the funding plan, calling it a tax that required a public election. The plan was approved in a vote of hoteliers that was weighted toward those with the most rooms.

Prager said the hotel land owners were the appropriate voters. He rejected most of the arguments of SDOG and Shapiro during Wednesday's court hearing.

The center would grow to 2.75 million square feet of floor space, with the most contiguous floor space on the West Coast at 750,000 square feet, project manager Charles Black told the City Council last year.

The city can expect an extra 25 major trade shows per year, bringing 250,000 visitors and their wallets to San Diego, Black said.

He said the annual economic impact of expansion on the region would be $689 million, including a direct bump of $76 million in spending at restaurants and retail outlets. The city will receive an additional $13.5 million in tax revenues, he said.

Area tourism officials say organizers of the biggest trade shows have been bypassing San Diego because the local facility is not big enough. Comic-Con International, which originated in San Diego, had been courted by other cities but chose to remain when an expansion was promised.

Comments

Avatar for user 'DonWood'

DonWood | March 14, 2013 at 6:26 p.m. ― 1 year, 1 month ago

If this ruling is upheld, Ronald Prager will become known as the judge that repealed elements of Props 13 and 26 requiring a citywide vote before new municipal taxes can be increased. Watch as other special interest groups hold closed "elections" to raise
taxes on their customers and renters, then get local politicians, who love new taxes, to bless their actions.

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Avatar for user 'edwardtlp'

edwardtlp | March 15, 2013 at 8:55 p.m. ― 1 year, 1 month ago

One test for the determination of whether this a tourist tax or a hoteliers tax is who is ultimately responsible for it. What happens here if, suppose, there aren't enough hotel guests to pay the convention center expansion? Are the hoteliers required to pay the tax even if no one comes to town? Or is the period of time extended until the tenants pony up enough money? If the latter then it is a special tax and the electorate should have voted on it.

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Avatar for user 'Mmikey'

Mmikey | March 16, 2013 at 4:23 p.m. ― 1 year, 1 month ago

Eventually it will land on the san diego tax payers backs.

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