Judge Rules on Hotel Surcharge to Fund Convention Center Expansion

By R. Stickney and Gene Cubbison
|  Monday, Mar 11, 2013  |  Updated 5:26 PM PDT
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Convention Center Expansion Gets Council's Blessing

NBC 7 San Diego

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Convention Center Financing Could Impact Chargers

A judge's ruling on the financing scheme to expand the Convention Center could have major implications for the Chargers' dreams of a new stadium.

Convention Center Expansion Gets Council's Blessing

The San Diego City Council has approved a plan to expand the Convention Center, but the plan's future in the courts and with a state permit process may have the final say.
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A San Diego judge issued a tentative ruling Monday in support of hotel room-rate surcharges as a way to finance about 75 percent of the proposed expansion of San Diego's convention center -- some $520 million, according to projections.

In December 2011, the San Diego City Council approved a plan to have San Diego hotels bankroll the bulk of another convention center expansion.

It is a tri-level approach under which downtown hotels pay 3 percent of room revenues and outlying hotels pay 2 and 1 percent.

Proponents claim the expansion is needed to hang on to groups and events that are already using San Diego but have outgrown the venue.

Comic-Con, which annually brings thousands of visitors to San Diego from around the U.S., has already outgrown the space and has placed some events in nearby hotels and businesses in the Gaslamp.

Opponents including San Diego Mayor Bob Filner, San Diegans for Open Government (SDOG) and the San Diego Chargers argue the tax was illegal.

SDOG sued the City of San Diego. The San Diego Chargers want the city to pursue a stadium with a roof that could double as a convention center.

On Monday, Superior Court Judge Ronald Prager released a tentative ruling in which he sided with the City. Read the ruling

The special tax is legal the Mello-Roos Community Facilities Act Prager wrote.

City Council President Todd Gloria said, "The judge’s validation confirms that the hotel room surcharge agreed to by local hoteliers is a legal and viable way to improve our Convention Center and further strengthen San Diego’s economy.”

Prager is giving the lawyers a courtroom hearing Wednesday on his tentative ruling before issuing a final decision.

Chargers special counsel Mark Fabiani, while pointing out that the project would need Coastal Commission approval before it proceeds, says the rulling -- should it withstand appeals -- could have broad implications beyond San Diego.

"If this holds up, it really would open up the floodgates for special assessments that benefit the public at large," Fabiani told NBC 7. "Very interesting stuff."

Adds Voice of San Diego columnist Scott Lewis: "I think that car dealers could get together and pass a sales tax on car sales and build a new road with that. Bike sellers could do the same. Maybe a bunch of bar owners -- sports bar owners, for example -- want to build a stadium and pass a tax on beer to build a stadium."

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