By Doug Porter
San Diego’s big hotel barons have suffered a significant defeat as their two percent self-assessment/fee/not-a-tax surcharge is headed for its day of reckoning in the courts. Superior Court Judge Joel R.Wohlfeil handed down a ruling late Friday afternoon allowing attorney Cory Briggs and his clients to proceed with a lawsuit challenging the basis on which hotels are allowed to collect this fee.
This self-assessment/fee/not-a-tax was an attempt to make an end-run around the requirement of two-thirds voter approval on taxes dedicated for a specific use. The city and the Tourism Marketing District tried and failed to derail a lawsuit challenging its legality by arguing only hoteliers had standing to challenge it in court.
Monies collected under this scheme have been set aside for a single purpose, namely financing advertising and promotional materials for the local tourism industry. The city’s politicians bowed down to the wishes of the corporate tourism industry, agreeing on–as Briggs puts it: “a ‘management plan’ that allows the ‘self-assessment’ to be added to a guest’s bill as long as it is ‘separately stated from the amount of rent charged and any applicable taxes’—as if separating it on the bill means that the guest is not paying it.”
Now that the case is moving to trial, taxpayers could be asked to refund millions of dollars deemed to have been illegally collected from tourists. Funding for local tourism promotions and advertising will dry up, affecting media campaigns and underwriting for events like the Rock and Roll marathon. (And, trust me, the city’s big hoteliers won’t pay a dime.)
As Briggs pointed out in the San Diego Free Press Who Runs San Diego series:
The hoteliers wrote into the law a provision that gives the private non-profit corporation they formed the exclusive right to administer all the money that comes in each year if the City elects to outsource marketing functions to it. (San Diego Mun. Code § 61.2522.) Not surprisingly the City has done just that, and now the San Diego Tourism Marketing District Corporation doles out the TMD tax revenues as its board sees fit.
Of course, the board is comprised exclusively of hoteliers including Terry Brown from the Town and County Resort (Atlas Hotels) and Bill Evans from the Bahia Hotel (Evans Hotels), whose online bookings charge a “tax” instead of a “self-assessment.” Only hoteliers can vote for board members or run for a seat on the board. (San Diego Mun. Code § 61.2521(e).)
What’s worse, the City Council may change the private corporation’s spending plan for the coming year, but it has no legal authority to go after the corporation or its directors if malfeasance is discovered, and no authority to do anything that would impair the flow of money toward a marketing contract that has already been made. ( San Diego Mun. Code § 61.2521(c).)
The ruling is a blow to the city and the marketing district. Both had hoped the judge would dismiss the lawsuit against the hotel assessment, which has been collected without interruption since the renewal was approved and is expected to generate more than $1 billion over 40 years.
San Diegans for Open Government filed its lawsuit in late 2012. The nonprofit argued that the fee, which can be passed along to hotel guests, was invalid because it was approved by hoteliers — not by voters.
Parallel to the arguments made against Briggs in the courts, a local non-profit news outfit published a series of articles alleging (among other things) he was using nonprofit entities/clients to sue agencies and collect attorney fees.
The articles went nowhere and now the courts have agreed that the lawsuit is legit. This effort to discredit Briggs was part of a strategy to crush the lawsuit in large part because the city and it’s partners (or should I say overlords?) in the corporate tourism industry have good reason to fear the self-assessment/fee/not-a-tax will be defeated at trial.
Not surprisingly, Brigg’s is promoting an alternative financing mechanism via the “The Citizens’ Plan for the Responsible Management of Major Tourism and Entertainment Resources” initiative, aiming for the November 2016 ballot.
From another story at KPBS:
The 77-page initiative was written by environmental attorney Cory Briggs and former San Diego City Councilwoman Donna Frye. It would make several changes, including:
- Raising hotel room taxes from 10.5 percent to 15.5 percent for hotels with more than 30 rooms. The tax would be 14 percent for hotels with fewer than 30 rooms.
- Eliminating the city’s Tourism Marketing District and a 2 percent fee the district charges on hotel room stays. The Tourism Marketing District says those fees are not taxes, but Briggs is challenging that claim in court.
- Changing the city’s municipal code so that 4 percent of hotel room taxes are not set aside for tourism purposes. Instead, that money would be available for general fund spending.
- Allowing hotel owners to collect a fee from themselves, which they could use on tourism marketing. If they choose to collect this fee, they would get an economic incentive of up to 2 percent of their room rents.
- Allowing hotel owners to collect a fee from themselves to build a San Diego Convention Center expansion. If they choose to collect this fee, they would get another economic incentive of up to 2 percent of their room rents.
(For a critique of this proposal, see Bill Adams’ article here. Briggs has promised to respond to that critique in the near future.)
The very idea of the city’s big hoteliers not having tight control over tourism marketing and (gasp) co-mingling hospitality tax revenue with the general fund is something they’re going to be apoplectic over.
Trial dates for this case will be set at a court conference in March.
Kevin Faulconer: The Million Dollar Mayor
San Diego Mayor Kevin Faulconer, who until last week didn’t have a challenger for his 2016 re-election effort, collected over a million dollars in campaign donations in 2015.
From the Times of San Diego:
According to online filings for the second half of 2015, the Republican mayor reported close to 170 donors who gave the maximum $1,050 per election, including Pete Wilson, the former San Diego mayor, governor and U.S. senator…
…Faulconer’s 195-page Form 460 filed Jan. 21 shows he spent $272,000 last year and had a year-ending cash balance of $770,000.
If he takes more than 50 percent of the vote in the June 7 primary, defeating new entry Lori Saldaña, he’ll win his first four-year mayoral term. Faulconer won the February 2014 mayoral election in the wake of Bob Filner’s resignation.
Bug Driving Maniac Pleading for Contributions (Really!)
Nearly a million people have viewed a YouTube video called Urban Assault: San Diego Shark Attack, purporting to show a wild and crazy driver doing stunts around town.
From the Union-Tribune:
It shows the driver of a souped-up, big-tired, super modified Baja bug speeding down city streets, driving up the sides of freeway embankments, jumping curbs, running over vegetation, and screaming up and over hills where the car (?) flies several feet into the air. At one point the vehicle is seen flying up a hill through a stand of trees before landing in a parking lot. Other clips appear to show the VW skidding onto Interstate 5, careening through streets downtown and through Ocean Beach – all in broad daylight on public and private property inside and outside San Diego.
There’s a whole lot of tire squealing, skid making, engine revving, doughnuts-doing going on. At one point the driver is shown driving through a Rally’s Burger where he orders a waffle cone and peels out while holding the ice cream out the window.
San Diego police Capt. Joe Ramos who heads up the department’s traffic division, said police received several messages from concerned citizens who witnessed the driving. Complaints also came into Mayor Kevin Faulconer’s office, he said.
The case has now been assigned to a traffic detective to see if the car was street legal and if the driver could be charged with reckless driving or vandalism. The case is also being looked at by the city attorney, Ramos said.
Well, it seems as though the long arm of the law has (or is about to) caught up with this fellow, because he’s started a fund-raising page soliciting $5000 to pay fines and legal fees.
To all friends & family of Blake Wilkey let’s join together & help Wilkey out with some of the charges made against him. Lets show our support to our dearest & craziest friend when he needs help most.
Friends & Family, as you all have guessed our dearest friend, Blake Wilkey, has gotten himself into trouble. Even though he could have choosen to not post it & avoid the hassle, as always he decided to share the fun with us all! Let’s show him our gratitude, not just for the video but for being such an amazing genuine friend & kind hearted person. He inspires people on a daily bases to live life to the fullest. So now it’s our turn to encourage him to keep living his life to the fullest & not get discouraged by these charges, but to live & learn see what he come sup with next.
Although we can not fight the charges, we can help him pay for it. A little goes a long way.
I’m not posting the link for his page. I kinda hope somebody puts sugar in his gas tank.
Kinda Cozy, Huh?
The San Diego Chamber of Commerce threw itself a little birthday bash last week at the Manchester Grand Hyatt.
Under former Mayor Jerry Sanders they’re evolved from being a relatively benign pro-business group to being an actively reactionary political force.
Hey, they’re entitled to a point of view, even if I can’t stand it.
I do question just how chummy the local media gets with them. I know that the Tweet below was all about fun and games. I also know that a significant part of the San Diego workforce is struggling extra hard to pay their bills, thanks to the Chamber’s not very sub rosa campaign to derail a minimum wage hike. Ect., Ect.
— San Diego Chamber (@SDChamber) January 29, 2016
That’s Jerry Sanders at the front, with Scott Lewis (VOSD), Itica Melanes (KGTV), Edi Carlos Gonzales (Univision), Mark Mathis (KUSI meteorologist), Sully Sullivan (syndicated radio) and others…
I would argue this familiarity between the Chamber & the media has an impact on the way things are covered in San Diego.
You won’t see pictures of local editors and reporters in celebratory poses with people from the Labor Council or the Center on Policy Initiatives.
I invite readers to take their best shot at what a caption should be for this picture in the comments below. I’ll run it again next Monday with the one I like the best.
On This Day: 1864 – Led by 23-year-old Kate Mullaney, the Collar Laundry Union forms in Troy, N.Y., and raises earnings for female laundry workers from $2 to $14 a week 1951 – The first telecast of an atomic explosion took place. 1960 – Four black college students began a sit-in protest at a lunch counter in Greensboro, NC. They had been refused service.
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