San Diego Business Journal

Hotels Asked to Kick in for Convention Center Work

Friday, May 13, 2011

Local hotels would contribute up to $30 million annually to help finance a planned expansion of the San Diego Convention Center, under a proposal announced May 12 by Mayor Jerry Sanders.

The plan includes forming a convention center assessment district, in which downtown hotels near the center would be assessed 3 percent on each room night. Hotels immediately outside of downtown, in areas such as Mission Bay and Mission Valley, would be assessed 2 percent.

Those located further out would see a 1 percent assessment. A board of directors, to include hospitality industry members, would oversee the assessment district.

Officials said the hospitality industry’s annual contribution to the debt service for the expansion would be between $28 million and $30 million. The funding plan was developed by Sanders, civic leader Stephen Cushman, the convention center’s executive board and hospitality industry representatives.

“As I have said from the very beginning, the expansion of our convention center should be paid for by those who will benefit from it,” Sanders said. “Given that the hospitality industry stands to gain substantially, it’s only logical that they should fund a significant portion of this.”

San Diego City Council will receive an update on the project and the funding plan at its May 17 meeting. The plan also will eventually be voted on by area hotel owners, and is not expected to require a public vote.

Financing for the center expansion has not been finalized, but city and convention center officials now estimate that the work will cost around $550 million, down from a previous estimate of $711 million. Officials said the project has been redesigned to achieve greater efficiency and improve public spaces.

— Lou Hirsh