Does $53 million X 30 years = Keeping Comic Con in San Diego?

An artists rendering of an expanded San Diego Convention Center on the bay side. (Tucker Sadler Architects)

An artist's rendering of an expanded San Diego Convention Center on the bay side. (Tucker Sadler Architects)

Today is a comic book themed day. Just saw this on twitter from my good friend Liza. That’s a whole lot of money, especially considering the financial crisis we’re in. But there is the potential to recover the money spent from the revenue brought in from large conventions, tourism, etc. San Diego is already an attractive place because of the weather. Plus, I’m sort of biased because I want Comic-Con to stay at home. Since I’m not a current resident, it’s tough to say. Especially since I’m still trying to find classes to add in our severely underfunded CSU-system. What do you think? (VOTE IN THE POLL AT THE BOTTOM)

The $53 million question

The yearly price to expand San Diego’s convention center is revealed and has city and tourism officials asking . . .

http://www3.signonsandiego.com/stories/2009/jun/16/1n16center002234-53-million-question/?metro&zIndex=117325

Union-Tribune Staff Writer

2:00 a.m. June 16, 2009

A San Diego Convention Center expansion being championed by Mayor Jerry Sanders and the tourism industry got a price tag yesterday – at least $52.5 million a year in new taxes or fees over three decades.

Options being discussed include a $1 to $2 surcharge on San Diego Zoo and SeaWorld San Diego admissions, a 1 percent to 3 percent tax on food and drink sales and an increase in the city’s hotel tax from 10.5 percent to as high as 15.5 percent.

Convention center officials want to add 400,000 square feet to the bayfront facility, saying they stand to lose large, lucrative trade shows to cities with bigger exhibit halls.

The poster child for flight risk is Comic-Con International, the San Diego-born pop-culture extravaganza.

Members of the city task force looking at the issue expressed concern that the cost of an expansion is a major obstacle in today’s dismal economic climate. At the minimum, raising the city’s hotel tax would require a public vote.

“It’s my opinion that the emperor has no clothes,” said Bill Evans, owner of the Lodge at Torrey Pines, the Bahia and Catamaran hotels. “It’s not whether it’s a valid project, it’s can we afford this? . . . I don’t see anything here today that shows me there’s a realistic chance of funding even half of this.”

Hotelier Richard Bartell, whose company owns Humphrey’s Half Moon Inn & Suites and other properties, said it is questionable whether hotel companies would be willing to tax themselves again after creating a 2 percent room price assessment for tourism marketing in 2007.

“I don’t know if there are enough votes there in order to fund this,” Bartell said, referring to approval that would be required from large hotels.

Officials at SeaWorld San Diego and the San Diego Zoo said they had not seen any concrete proposals and declined to comment.

The $52.5 million price tag is only accurate if the city also builds a 500-room bayfront hotel. Without the annual $3.7 million projected from the hotel, the city’s cost jumps to $56.2 million.

Also, the city might need to raise more than that – as much as $78.7 million a year – to get the best ratings on bonds that would be issued upfront for construction.

But for the city, the new expenses would be partially covered by a projected $17 million rise in hotel and sales taxes, according to one estimate.

The bigger prize for those who support the proposal is the projected $372 million a year in new direct spending, which means the money conventioneers lay out for hotel rooms, meals, transportation and souvenirs.

Elected city officials weren’t immediately cowed by the cost of expanding the center, which currently measures 814,000 square feet, including about 616,000 square feet of exhibit space.

But Councilman Carl DeMaio said he’s against residents bearing the burden.

“My rule of thumb here is, the people who directly benefit from the convention center should be the ones helping to finance its expansion,” DeMaio said. “If they are not willing to support it, it’s probably not a good idea to proceed.”

The likely candidates, according to DeMaio, are hotels and the San Diego port district, which collects revenue from the convention center’s parking garage.

Councilman Kevin Faulconer, whose district includes downtown, said he wants to look at options other than fees and taxes.

“Just because other cities have used some of these mechanisms doesn’t make them the right one for San Diego,” Faulconer said.

Cities coast to coast are using similar tactics to fund expansions in what has been a multiyear building boom for convention centers.

The list of new fees and taxes being considered in San Diego includes a $2 taxi drop-off or pickup surcharge and an additional $5 to $10 in rental car fees.

A food and drink tax – a first for San Diego – would be the hardest to pass because it affects residents, said Michael Hughes, vice president of research and consulting for Tradeshow Week, an industry publication.

But the trick to marketing any of these ideas is to lean heavily on downtown interests, Hughes said. The key issues, he said, are the size of the fees and the zones in which they are charged.

“The more downtown-centric these maps are drawn, the more successful these will be politically, as the Gaslamp-area hotel and restaurants benefit so directly from the San Diego Convention Center,” Hughes said.

Heywood Sanders, the nation’s foremost critic of the convention center boom, said San Diego, by its own projections, would be paying $375 for each nightly hotel room stay sparked by the expansion.

“Of course, there’s no guarantee they’ll actually come year after year,” said Sanders, a University of Texas professor of public administration who has questioned whether San Diego’s convention expansion, and others, will reap the promised benefits.

The cost figures, released yesterday at a task force meeting, came from Piper Jaffray and Convention Sports & Leisure, two consulting companies hired by the city’s convention center corporation.

The task force made no decisions yesterday; a meeting on financing options is scheduled for July 6.


Jeanette Steele: (619) 293-1030; jen.steele@uniontrib.com

 

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