San Diego Business Journal

San Diego City Council has delayed a vote on an agreement paving the way for funds to be distributed in support of a Tourism Marketing District, while officials work out further revisions.

Mayor Bob Filner said an agreement that was set to be voted on this week by the City Council did not sufficiently indemnify the city, in the event that the TMD funding mechanism is invalidated by any of three currently pending private lawsuits regarding the district.

City hotels in January began collecting a 2 percent surcharge on room bills to support the TMD, after hoteliers and City Council approved renewal of the district in late 2012. Distribution of funding was put on hold after Filner refused to sign the renewal agreement, which is intended to raise approximately $30 million annually for local tourism promotion.

The TMD provides 80 percent of the budget of the San Diego Tourism Authority, which has already canceled more than $5 million in regional advertising programs and announced pending layoffs if the dispute is not resolved soon.

Responding to City Council’s move to continue the TMD review to a future meeting, possibly on April 15, TMD Chairman Terry Brown said the agency was “disappointed” that a full agreement has not yet been reached, but will work with city officials to resolve differences.

“Even though adoption was delayed, immediate action is absolutely critical to prevent any further impact to the economy and the jobs associated with tourism,” Brown said in a statement.

— SDBJ Staff Report