San Diego Business Journal

Mayor Reiterates Push to Expand Convention Center in Talk to Tourism Leaders

By Lou Hirsh Thursday, May 11, 2017
   

Mayor Kevin Faulconer and tourism officials reiterated the need to expand the San Diego Convention Center, while addressing growing problems with homelessness, during the annual meeting of the San Diego Tourism Authority.

Speaking May 10 to about 800 tourism industry attendees, Faulconer said his proposed increase of up to 3 percent in the city’s transient occupancy tax (TOT) – likely heading for a November special election ballot – would help address long-pressing issues. Those include keeping the convention center competitive for large conventions like Comic-Con International, while also dealing with chronic homelessness, road repairs and other civic needs.

“I will not stop until we modernize and expand our San Diego Convention Center,” Faulconer told the auditorium crowd at SeaWorld San Diego.

Guests in San Diego hotels currently pay a 10.5 percent TOT on room bills that goes to the city’s general fund, along with a 2 percent assessment that funds a tourism marketing district. The proposed TOT hike, which would require two-thirds approval from voters, would be configured in a tiered 3-2-1 structure based on city hotels’ proximity to the convention center, with downtown hotels raising the hotel tax by 3 percent.

Proponents said the ballot measure would help finance a convention center expansion that is now expected to cost between $630 million and $685 million while adding 400,000 square feet of rentable exhibit, ballroom and meeting space.

City officials have not finalized ballot language, but a portion of new TOT collections are expected to create an annual funding stream of about $10 million for reducing homelessness, and a separate similar stream for street repairs. Those sums could rise over time as hotel tax revenue increases with expected new convention center business.

Tourism authority leaders said the city in coming years faces the prospect of rising competition for convention and other hotel-related business from Anaheim, Los Angeles and other Western U.S. cities. Officials said dealing with the worsening homelessness issue, especially in the downtown area, is important for maintaining the city’s long-burnished reputation as a clean and safe place to visit.

“We now have customers and media wondering what is happening in San Diego,” said Ted Molter, chairman of the San Diego Tourism Authority’s board of directors, referencing the homelessness problem. “We are very supportive of the mayor’s efforts and the TOT solution that helps address this issue.”

Following its recent annual charity golf tournament, the tourism authority presented representatives of Alpha Project, a local homeless services organization, with a check for $20,000 during the Mission Bay gathering.

Tourism officials said San Diego in 2016 hosted a record 34.9 million visitors, who spent $10.4 billion in the region. The tourism industry currently supports about 183,000 local jobs.