San Diego Business Journal

Judge Upholds Convention Center Funding Plan in Preliminary Ruling

Thursday, March 14, 2013

A Superior Court judge has issued a preliminary ruling upholding the funding mechanism for a planned $520 million expansion of San Diego Convention Center.

Judge Ronald Prager ruled that a funding district approved last year by hoteliers, calling for hotels to collect a 1 to 3 percent surcharge on room bills, was properly formed and conformed to applicable constitutional provisions and ordinances.

The City of San Diego had filed a request with the court to validate the funding structure. Opponents contend the surcharge is a tax subject to a vote by the general public.

Prager will be issuing a final ruling after hearing oral arguments from attorneys for the city and opponents of the funding plan, including San Diegans for Open Government.

Depending on whether the ruling is appealed, convention center officials have projected a late 2016 or early 2017 completion for the expansion, which would add more than 400,000 square feet of interior space plus new outdoor amenities to the existing center.

Hotels within the city would finance the bulk of the project’s cost through the room surcharge, which is on top of the existing transient occupancy tax. The financing district plan calls for downtown hotels to collect a 3 percent surcharge, with 2 percent added to room bills at hotels in Mission Valley, Mission Bay and Harbor Island, and 1 percent at all others.

— SDBJ Staff Report