A plan to have San Diego hotels bankroll the bulk of another Convention Center expansion took a big step forward Tuesday on a 6 to 2 vote of the City Council.
The project's cost is pegged at $520 million dollars, with 224 hotels that have 30 rooms or more assuming about 75 percent of the bond payments -- $37 million a year.
The bottom line payoff, boosters say, will run into the billions of dollars over the life of the bonds, along with 4,000 construction jobs and 7,000 permanent new jobs.
"If we had more space, we could go after some of the nation's largest conventions," Mayor Jerry Sanders told the Council at the start of a two-hour hearing on one of his top-priority projects for his final year in office. "Right now we just don't have enough room to accommodate them."
Under a 'taxation district' approach, downtown hotels would be assessed up to 3 percent of room revenues, costs presumably to be passed on to guests.
Owners of hotels in Mission Bay, Mission Valley and more outlying areas would pay 2 and 1 percent, respectively.
But they say the expanded center wouldn't generate commensurate business for them -- and that hotels in Coronado, which attract convention attendees, won't pay a dime.
"Basically we think (Sanders) should redraw the map -- or at least he should talk about it," said Bill Evans, owner of the Lodge at Torrey Pines. "I think the next 30 days is a great period of time to go back and try to get the people, some of the people who have not necessarily been involved in a meaningful way."
The hotels' funding formula is one of several sticking points that remain to be resolved.
Whatever the outcome, industry leaders say time is of the essence for super-sizing San Diego's Convention Center into the biggest under one roof on the West Coast.
The need to hang on to Comic-Con is Exhibit A in this argument.
"By not expanding, we're going to lose groups that are already using San Diego, but have outgrown us," says Jim Durbin, president of the San Diego County Hotel-Motel Assn. "So it's very vital that it get done."
In addition to potential legal, labor and environmental issues, the project still faces funding gaps.
Councilman Carl DeMaio wants the Port District to contribute more than the $60 million over 20 years that commissioners have offered -- in principle.
"They're benefiting from the Convention Center in terms of the parking revenues underneath the Convention Center," DeMaio says. "And, the hotel revenues on their leaseholds for all the hotels in the Port areas of our city."
There's talk of assessing other business interests in the Gaslamp Quarter and East Village.
"As we have a larger Convention Center, many of these industries are going to benefit," says Council President Tony Young. "We have to recognize that, and they should recognize it. It should be a great opportunity."
Expansion backers insist there are reasonable answers to all the question.
"We need to figure out a way to go forward and resolve our differences, and compromise our positions." says project manager Charles Black. "This is a time where we need to reflect on that."
The plan moves to a second Council hearing January 24th, and requires a so-called 'weighted' vote of two-thirds of the hotels that cast ballots.
Left unaddressed, for the moment, is the Chargers' proposal for a nearby stadium that includes convention facilities.