By Doug Porter
Oh, those boys and their big shiny toys. Having failed in past years to gain approval for a waterfront expansion of the San Diego Convention Center, the City is about to throw its weight behind a $90,000 study promising “huuuge” (ala Trump) returns.
The Union-Tribune says Mayor Faulconer finds the report so persuasive that he’s prepared to back a ballot measure increasing hotel taxes for 2016. Since those taxes are dedicated revenues, two thirds voter approval will be required.
Today we’ll take a look at the spotty record of the outfit hired to do this report, along with various options along the way to getting a super-majority to go the polls and vote for this expansion.
A Report With Only One Possible Conclusion
Let me start with an underlying premise: The Convention Center is a good thing for San Diego.
I mean, who wouldn’t want to hold a convention here? We have a beautiful city with great weather, an airport close to downtown, and plenty of hospitality options.
Meetings and conventions produce serious tax revenues, support employment opportunities and are a great platform to show off local attributes generating future leisure-based tourism.
My questions are about process and future performance.
There are three options for the San Diego Convention Center…
Do Nothing
“Everybody knows” there’s a demand for more space than the half million or so square feet currently available. At one point early on in the process news accounts mentioned bookings for a much larger space had already been made for later in the decade.
The elephant in the room with the do-nothing option is that funding for ongoing repairs and maintenance has been spent on selling the idea of expansion.
From the Union-Tribune:
In a presentation Wednesday before the San Diego City Council’s Budget and Government Efficiency Committee, convention center officials underscored the coming repair bills and their efforts to raise revenues from naming rights sponsors, which could bring in as much as $22.5 million over a 20-year period.
Lining up sponsors, though, could take as long as two years, the corporation said. In the meantime, it will not have enough money to finance all the fixes, given that it currently gets no more than $3.4 million a year in city funds, of which nearly $2 million goes toward pursuing future convention bookings. The income it receives from conventions and trade shows helps support the general operation of the center and its personnel costs.
So, no matter what happens, somebody is going to have to cough up some cash to fix the place up. If an an expansion was to be approved, much of the needed funding could be nestled into whatever financing was obtained.
The Campus Approach
Proposals to expand the convention facility by adding a nearby annex have been floating around for years. Early on they included the possibility of including some of those facilities in a new stadium complex for the Chargers.
Lately a separate, stand-alone facility has been suggested for tailgate park, a ten minute walk from the current facility. That city-own property just happens to be adjacent to lots owned by JMI Realty, the folks associated with the construction of the Padres’ PETCO Park.
One proposal for a non-contiguous facility included the possibility of a JMI financed bridge to the new location, via a JMI proposed hotel.
The city claimed this most recent “study” was to be jointly financed by JMI, until JMI said they weren’t going to be players in this deal, citing a potential conflict-of-interest.
I think that announcement cinched the deal for the proposal the mayor is so enthusiastically supporting. (After all, what’s a little conflict-of-interest between friends in business friendly San Diego?)
JMI is prepared to go ahead with development including constructing condos, meaning there would be no Plan B, if the proposal for a contiguous expansion flops.
The Contiguous Approach
Expanding the convention center on property adjacent to its current location has been the preferred (by local hoteliers/tourism officials) option all along.
From the Union-Tribune:
“The study clearly shows that having a contiguous convention center expansion is a huge economic benefit, has the most immediate impact and provides the best return on investment,” said Faulconer, who had been awaiting the report’s outcome before deciding how to proceed. “It’s always been clear visitors have to pay for an expanded convention center. There’s strong community support for expanding our tourism economy because that paves our roads and keeps our libraries open so a strong, expanded convention center means more dollars we can spend on infrastructure in San Diego neighborhoods.”
He acknowledges that the timing, though, will depend on the outcome of still pending litigation challenging the California Coastal Commission’s approval of an earlier expansion proposal that fell through last year after a judge ruled that a hotelier-approved room tax to finance the bulk of the $520 million project was unlawful. The mayor’s office believes that the current litigation may well be resolved within the next six months.
The man who filed the lawsuit stopping that room tax, Attorney Cory Briggs predicts the current litigation will take as long as five years to resolve, according to the UT account.
A Predictable Result
The results of this study were likely preordained, given that it was prepared by Convention Sports & Leisure International. Studies cheer-leading expansions is what they do.
It doesn’t matter that there are industry generated figures suggesting convention facilities around the nation have been overbuilt for many years.
The Reader’s Don Bauder has been warning about this problem for years:
In 2012, the chairman of the Center for Exhibition Industry Research, another arm of the industry, warned, “In the current buyer’s market, unrealistic concessions are being made to book business.” Referring to the “current excess supply” of convention space, the chairman said that cities “can no longer keep investing in a facility if they cannot market it at a fair price.” Some centers would have to close, he warned.
Bauder’s opinions are informed by research from Heywood Sanders, author of a study on convention centers published by the Brooking Institution back in 2005. Last year Haywood authored Convention Center Follies: Politics, Power, and Public Investment in American Cities, a heavily footnoted, 514-page book examining consultants’ forecasts in more than 50 cities.
Lest you think perhaps Bauder and Heywood have a personal axe to grind with Convention Sports & Leisure International, consider the study done locally by National University.
In 2010, at the behest of the the San Diego Regional Economic Development Corporation, those same Dallas-based consultants touted the creation of 19,220 jobs associated with the development of PETCO Park.
A National University Report authored by Erik Bruvold, using U.S. Bureau of Labor Statistics, put the number of jobs at…29.
That’s twenty-nine….On to other matters….
Don’t Worry, Be Happy
Bud Kearns Memorial Pool, a Morley Field landmark since 1933, has been closed since April, awaiting often-delayed repairs. Budget limitations were to blame.
Youth swimming and water polo teams, beginners’ lessons and senior fitness programs have all been cancelled or relocated for the summer.
Following calls from NBC7 News, a city spokesman now says the repairs will finally get started on Tuesday and should take three weeks. Then county health oficials will have to approve the water quality.
In the interim, the city “found” a couple of million bucks to pay for and cranked out an extremely complex environmental report on Qualcomm Stadium in near-record time.
Priorities, people. Priorities.
SDPD on Video: Say What?
An amended complaint filed by an attorney representing an unarmed man with a history of mental illness shot and killed by an SDPD officer, says the officer was allowed to view a video tape of the incident prior to questioning.
From the Union-Tribune:
The family of the man, Fridoon Rawshan Nehad, alleges the department conducted a “sham” investigation to cover up the actions of Officer Neal Browder, who shot Nehad once around midnight in an alley off Hancock Street on April 30.
The officer’s body cam was not activated, but the SDPD obtained a video tape from a business adjacent to the shooting site. An employee of that business, who has viewed the tape several times says it depicts actions differing from the official account.
Several news organizations have unsuccessfully filed requests for the tape to be released.
If the assertion made by the attorney turns out to be true, heads need to roll at the SDPD.
Stopping Wage Theft
Hundreds of people packed an auditorium at St. Paul’s Episcopal Church for a town hall on a steamy Saturday in support of pending legislation (SB 588) improving the ability of the Labor Commissioner to collect unpaid wages.
Four brave souls appeared before the crowd to share their stories. They spoke of long shifts with no breaks, unpaid over-time, shorted paychecks and the near impossible task of trying to collect monies owed, even after winning hearings.
Assembly Speaker Toni Atkins and California Labor Commissioner Julie Su were on hand to peak to the audience and hear testimony.
The forum was organized following a joint study by San Diego State University and the Center on Policy Initiatives found persuasive evidence of wage theft throughout San Diego’s food industry, with more than three-quarters (77%) of workers reporting having been victims of wage theft during the past year and a third saying theft from their paychecks occurs regularly.
Stopping Toni Atkins?
Speaker Toni Atkins at the Fair Pay Town Hall
The Los Angeles Times reports Assemblywoman Toni Atkins may lose her position as Speaker as part of the struggle to pass legislation addressing global warming.
Also in the Assembly, and more significant, moderate Democrats are rebelling against Gov. Jerry Brown, Senate leader Kevin de León (D-Los Angeles) and the ambitious climate-change bill they’re pushing.
Moderate Democrats are linking their opposition to the global warming legislation with Atkins’ survival as speaker. Some are urging her to take a gasoline-reduction mandate out of the bill and subtly threatening to support a successor who would.
Atkins, who is termed out at the end of 2016, last week sent a letter to fellow Democrats asking them to hold off replacing her until the Legislature reconvenes in January, “for the stability of the house.”
On This Day: 1950 – Gil Hodges of the Brooklyn Dodgers hit four home runs in a single game off of four different pitchers. 1974 – In federal court, John Lennon testified the Nixon administration tried to have him deported because of his involvement with the anti-war demonstrations at the 1972 Republican convention in Miami. 1980 – Poland’s Solidarity labor movement was born with an agreement signed in Gdansk that ended a 17-day strike.
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Doug Porter
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“In the meantime, it will not have enough money to finance all the fixes, given that it currently gets no more than $3.4 million a year in city funds, of which nearly $2 million goes toward pursuing future convention bookings. The income it receives from conventions and trade shows helps support the general operation of the center and its personnel costs.”
You mean the convention center does not make a profit but relies on $3.4 million a year in city funds? That’s taxpayer money going to support the convention center? It should be the other way around. Profits from the convention center should go to the city reducing taxes. Otherwise, what good is the convention center if it’s just a drain on taxpayer funds? Maybe it should be bulldozed.
Yes, John, but let’s remember that the Union-Tribune has quoted our Smilin’ Mayor Falconer thusly:
“There’s strong community support for expanding our tourism economy because that paves our roads and keeps our libraries open so a strong, expanded convention center means more dollars we can spend on infrastructure in San Diego neighborhoods.”
It must be true, if He said it and the U-T reported it, don’t you think?
And, remember also that Smilin’ Faulconer did not mention in his scenario that the principal pool of Balboa Park lacks a drain (and the Park’s sewers flood its museums and theaters), so he can’t be accused of lying about infrastructure paid for by tourism. Will tourism pay for a new Chargers stadium? Ask Pinocchio.
Wow, that about covers it! I love the fact that the Convention Center Expansion just won’t die. There’s no market to support it so it would have to be us. Yikes.