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San Diego Convention Center Runs Up $31 Million Maintenance Backlog

The San Diego Convention Center Corp. is developing plans to deal with a $31.1 million backlog of capital maintenance and equipment needs, CEO Carol Wallace told the City Council today.

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The waterfront 760,000-square-foot San Diego Convention Center opened in 1989 and cost $165 million.

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Wallace said recommendations could be ready in about one month and will be presented at a City Council meeting scheduled for July 30.

Her remarks came during a City Council review of the center's proposed $33.2 million budget for the fiscal year that begins July 1. Just a couple of days ago, the city's Independent Budget Analyst revealed the size of the backlog and disclosed that the corporation's financial reserves have been depleted for two years.

The center needs around $11.3 million to repair the rooftop sails that give the building its unique appearance, $6.1 million to make sure the existing structure conforms to a planned expansion project and around $10 million of miscellaneous work, the report says.

"In the earlier years of the center we were able to fund maintenance and capital through our operating budget,'' Wallace said. "But now the building is over 20 years old, and we're now looking at more extensive maintenance that's needed than we can fund just through operations.''

The convention center is snarled in a bureaucratic tangle, as it sits on land owned by the Port of San Diego but is managed by the City of San Diego.

The city contracts with the San Diego Convention Center Corp. to run the facility, while sales of large trade shows scheduled more than 18 months in the future are the purview of the recently renamed San Diego Tourism Authority.

On top of that, major projects like the planned expansion need the approval of the California Coastal Commission.

It was unclear at the City Council meeting which entity was most responsible for major maintenance projects at the center, though most fingers pointed at the city. The City Attorney's Office promised to clarify the issue in the near-future.

The issue is further complicated by a lack of monetary reserves, which have hovered near zero for the past couple of years, according to SDCCC financial staff.

The IBA reported that the administration of ex-Mayor Jerry Sanders ordered convention center staff to use $6.1 million from the reserve account to prepare for a planned expansion of the facility.

The money was spent on acquiring rights to purchase land for the expansion, a feasibility analysis on the project, entitlement and design consultants and other preliminary activities, the report says.

The San Diego Convention Center Corp. historically maintained a healthy reserve, which reached a high of $8 million in 2008, according to the IBA.

Expansion supporters say the city is losing out on major trade shows because of the convention center's current size and that a larger site will result in fuller hotel coffers and extra tax revenue.

The IBA recommends that the corporation begin to rebuild its savings account, but recognizes that doing so will compete for funding with whittling down the list of major capital issues.

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Avatar image for user 'DonWood'

DonWood | May 13, 2013 at 5:36 p.m. ― 11 months, 1 week ago

So the city couldn't pay its share of the costs of the first convention center expansion, so it dumped that debt on CCDC, until the state passed a law and the courts eliminated redevelopment agencies like CCDC. So that debt has landed back in the city's lap. Not it turns out that the convention center has been deferring maintenance costs and is now more than $30 million in the hole, which it now doubt will ask the city to fund. Remind me again why the city council is supporting a nearly $1 billion expansion of city TOT taxes to fund new bonds to fund a second expansion of the convention center, when it can't afford the existing convention center?

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