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San Diego Convention Center Expansion Deal That Was At Risk Now ‘Moving Forward’

San Diego Mayor Kevin Faulconer announces a proposed ballot measure to raise ...

Photo by Christopher Maue

Above: San Diego Mayor Kevin Faulconer announces a proposed ballot measure to raise the city's hotel room tax by up to 3 percent to fund a Convention Center expansion and pay for road repairs and homeless services, April 3, 2017, San Diego, Calif.

The convention center land deal centers around a leasehold controlled by Fifth Avenue Landing. In June the city of San Diego agreed to put a $5-million down payment on that leasehold — contingent on a citizens' initiative passing this year.

That initiative, Yes For A Better San Diego, would raise the hotel tax to expand the existing convention center and provide money to address homelessness and road repairs — but it did not have enough signatures to automatically qualify for this November's ballot. That triggered a lengthy review which meant it was not going to voters this November.

Right before the deadline for the San Diego City Council to approve ballot measures for this year, San Diego Mayor Kevin Faulconer requested a similar proposal go to voters, but it also failed to gain approval.

RELATED: San Diego’s Deal To Secure Land For Convention Center Expansion Still Alive, $5 Million Payment Delayed

With nothing going to San Diego voters this year there was a question — is the city on the hook for that $5-million down payment? At the time it appeared so, but all parties then agreed to push deadlines back to September to see if the original citizens' initiative would end up qualifying for a ballot. It recently did, and the deal that was once in jeopardy is now back on.

A spokesman for San Diego Mayor Kevin Faulconer said, "All parties are moving forward with executing the agreement, and are taking the necessary steps to acknowledge the requirements related to the ballot qualification have been met."

The deal stipulates that the Port of San Diego will make the down payment on behalf of the city. A statement from Port of San Diego Chairman Rafael Castellanos said, "The Board of Port Commissioners will take action at its October 23 meeting to acknowledge that requirements related to the purchase and sale agreement have been met."

The deadline to make the $5-million down payment was supposed to be Tuesday. From the port’s statement, it would appear that deadline would need to be pushed back to sometime in late October or beyond.

RELATED: Mayor Faulconer Weighs Options For Future San Diego Convention Center Expansion

There are still a couple of unanswered questions. The original citizens' initiative is currently slated to go to voters in 2020, but there is a chance Mayor Faulconer could ask for a special election next year. He has said that is an option, but it would need council approval.

Under the original deal’s terms, the city would lose its $5-million down payment if an initiative did not pass. It is unclear if that same clause is in this updated contract.

The original deal signed in June said the city would buy the leasehold from the Port with an 18-year extension through 2042 for $28 million, paid for with money from the citizens' initiative.

The city of San Diego said it is executing a deal to acquire land for a convention center expansion. This comes after the agreement nearly fell apart, which could have cost the city millions.

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