The top executive of a major entertainment entity looking to build a massive hotel and convention center on Chula Vista’s waterfront says he’s confident that such a project will boost tourism in the county.
Colin Reed, chairman and chief executive officer of Gaylord Entertainment, which recently made the cut to negotiate exclusively with the San Diego Unified Port District to build a self-contained complex with a 400,000-square-foot convention center, a hotel that could have as many as 2,000 rooms, retail shops and restaurants on Chula Vista’s bay front also countered the notion some have that it will create unfair competition for the San Diego Convention Center.
Reed said that fears voiced by the San Diego Convention Center Corp. and San Diego City Councilwoman and mayoral candidate Donna Frye echo those expressed by officials in Dallas before the Gaylord Texan , a convention center and hotel complex in nearby Grapevine, Texas , was built.
“Those were the same fears expressed in Dallas per the Grapevine (complex),” Reed said. “Now fast forward to the present and occupancy rates at hotels in Dallas are up as is the revenue per available rooms. We brought new customers to that market. We did not dilute it.”
Revenue per available rooms is term that refers to the money hoteliers bring in from the number of rooms they rented in any given period.
“What we do is build world-class convention centers to bring customers who by far and long have not been to those communities,” he said. “We create economic development and add value to communities we go to.”
San Diego Unified Port District commissioners, who voted on Nov. 1 to enter into talks with Nashville, Tenn.-based Gaylord instead of JMI Realty and the partnership of Manchester Resorts and Foxworthy Inc. , all of which are based San Diego , whose proposals for a hotel and convention center were smaller in scope, agrees.
Aside from the Gaylord Texan, Gaylord Entertainment, which developed Opryland in its hometown, currently operates a convention center and hotel complex in Orlando, Fla., and has one under construction near Washington, D.C. The firm’s stock is traded on the New York Stock Exchange under the symbol GET.
Gaylord’s executives have said their desire to build a facility in San Diego County responds to clients’ requests for a West Coast location. That client base, they contend, consists mostly of smaller associations and corporations that don’t or wouldn’t hold events in the San Diego Convention Center.
Seeking Relief From The Pressure
But April Boling disagrees. A certified public account who is chairwoman of the San Diego Convention Center Corp.’s nine-member board of directors, Boling said she thinks a Gaylord facility in Chula Vista will compete for some of the business that that 2.6 million-square-foot facility in Downtown goes after.
Fred Sainz, the Convention Center’s vice president of public affairs, said the agency has hired PricewaterhouseCoopers to perform an economic impact study to gauge whether business would be lost, and if so, to what extent.
“It is our opinion that we can stem the tide of any business that leaves the city of San Diego if additional marketing funds are made available to us,” Sainz said.
Boling said such funds would be needed to discount rates to lure more large citywide conventions. That in turn would stabilize the stream of hotel room tax revenue collected by the city of San Diego on properties within its boundaries.
Boling thinks San Diego should tap the Port District to “make up the difference” for a projected loss of business at the Convention Center by augmenting its funds for discounts. In her opinion, the Port District should feel obligated to the City of San Diego if its room tax revenues drop “because of actions taken by the port.”
“It’s not the Convention Center’s budget that would suffer, but that of the city of San Diego if TOT (transient occupancy tax) revenue is depleted,” Boling said.
The Convention Center Corp. teamed with JMI Realty to be the operator of the convention center it had proposed on Chula Vista’s waterfront.
Port Commission Chairman William Hall said Boling and Carol Wallace, the Convention Center’s president and chief executive officer, had already approached him on the possibility of offering money to help with buy-downs in the event that a Gaylord facility became a reality.
Hall said he wasn’t speaking for all the commissioners, but he doesn’t think that’s a good idea. He said he also thinks the Convention Center Corp. could do a better job of marketing without additional funding for buy-downs.
However, the Port District plans to conduct its own study on how the proposed Gaylord facility will affect tourism and hotel business within the county.
According to Sainz, the $3.3 million subsidy the Convention Center received from San Diego for rate buy-downs in the current fiscal year is the lowest among its competitive set.
Plans Haven’t Been Finalized
Gaylord’s Reed would not put a price tag on building the Chula Vista convention center complex, nor would he say how much money would be sought from the Port District or Chula Vista to help fund the project.
“What we have to do is have these conversations with the community and the port authority and lay out how much capital we bring to the table and what we’re prepared to do,” Reed said. “We also need to lay out the economic impact, and then talk about the assistance needed in financing.
“But I can tell you that any assistance needed in financing is dramatically less than the economic benefit this will bring to the community.”
Reed declined to discuss Gaylord’s contacts with other West Coast cities regarding convention center proposals.
“There are other opportunities to build hotels across the country,” he said. “At this stage we have stopped those conversations in Southern California and we will not continue them until we have exhausted this particular opportunity.”
Chula Vista officials, including Mayor Stephen Padilla, currently count the 142-room La Quinta Inn on Bonita Road as the city’s largest hotel, and complain that residents and businesses have to go to San Diego to find facilities large enough for events and receptions.
They happily greeted Gaylord’s scouts when they came calling several months ago. And they were just as happy when two local firms later expressed interest in the city’s bay front site, which has long been home to a patch of weeds and abandoned buildings.