San Diego

Tourism Industry Backs Tax Hikes For Expanded Convention Center

Four years ago, the price tag for enlarging the Convention Center was $520 million. Now it's been projected as high as $685 million

San Diego civic boosters have officially endorsed Mayor Kevin Faulconer's push for a bigger Convention Center.

Included in the proposed November special election measure is money for roads and homeless programs.

The funding mechanism is hotel room tax hikes -- which city voters have rejected three times since 2004.

The expansion project's cost estimate has gone way up, and the city doesn't control the land needed for it.

Four years ago, the price tag for enlarging the Convention Center was $520 million.

Now it's been projected as high as $685 million.

“It soon may be too costly for our tourism dollars to fund, if we don’t act now,” Faulconer said at a Monday news conference in Embarcadero Marina Park South, with the Convention Center in the background.

“And the condition of our roads and the homeless crisis we face,” Faulconer added, “means we cannot wait.”

Citing the prospect of thousands of construction and permanent jobs, tourism executives also see expanding the facility as essential.

Their bedrock goal is to insure that the 28-year-old center can host super-sized conventions such as Comic-Con, staged in San Diego for nearly five decades.

But there's a hangup to the scenario -- a $300 million hotel is planned on the underlying property, leased by developers who claim in a lawsuit that the city's efforts are getting in their way.

To pay for the expansion, hotel room taxes would be increased at least 1 cent on the dollar citywide and up to 3 cents downtown.

Of course, hoteliers worry that higher taxes might steer prospective guests and conventions to other cities.

In this case, they're supporting the hikes.

"It's not something we normally do,” said Joe Terzi, CEO of the San Diego Tourism Authority. “But I think the industry has come to the conclusion that the economic value of an expanded center far outweighs the cost to the customer that's coming to San Diego."

In fact, the hoteliers voted in 2012 to assess themselves a higher tax-rate schedule for a bigger convention center.

A state appeal court later overturned it on grounds that tax measures need two-thirds approval by the voting public.

In a statement released Monday, the San Diego County Taxpayers Association said it "looks forward" to details of the proposal.

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