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Saturday, Jun 15, 2024

Marketing District Consultants Cite Problems with Stadium Proposal

The San Diego Chargers’ proposed $1.8 billion downtown stadium-convention facility does not address event planners’ needs, and its funding mechanism puts local tourism promotion at risk, according to findings in a consultants’ report commissioned by the San Diego Tourism Marketing District.

In a report released Aug. 10 by the hotelier-led marketing district, HVS Convention, Sports & Entertainment Facilities Consulting said the distance between the current convention center and the East Village site eyed by the Chargers is “too great” for a single large gathering to make use of both facilities.

Based on surveys of event organizers, including those who plan conventions too large to fit into the current convention center, consultants said users “will not use the existing facility in combination with the Stadium-Convention Center.”

Consultants said those who plan conventions that might fit into the proposed new facility would prefer to use the existing convention center “due to its superior location and proximity to supporting hotel supply.” The report said event planners “also expressed concern that use of the proposed football field as exhibition space would be unacceptable to their exhibitors.”

Consultants said the NFL’s previously announced agreement to preserve dates during football seasons to allow for convention bookings is not feasible. The report said conventions generating a significant number of hotel room nights in San Diego require an average of nine continuous days of building occupancy, and most of the time blocks offered by the NFL are less than nine days.

“We estimate that the proposed schedule would meet the needs for continuous blocks of event days during only 43 percent of the football season days,” the report said.

Consultants said the proposed East Village facility would primarily compete with the current convention center and the nearby Marriott Marquis San Diego Marina hotel, which was recently expanded, for short-term business and reduce the occupancy of the convention center. The report said the lack of a headquarters hotel or potential adjacent hotel development in the Chargers’ plan “presents challenges to event planners.”

The marketing district’s consultants estimated that the Chargers’ project would generate approximately 69,000 net new hotel room nights per year and $2.3 million annually in lodging tax revenue, compared with a proposed $67 million annual expenditure, including public investment for construction and operations.

“This revenue does not justify the combined investment and annual operating expenses of the Stadium-Convention Center,” consultants said. The report said there could also be problems in forming a joint-powers authority called for in the Chargers’ plan, due to potential conflicts of interest between representatives of the lodging industry and the Chargers.

The Chargers and the team’s advisors have recently said that the project, to be decided by voters in November, would meet the size and scheduling needs of most conventions now being held in San Diego, and that a joint powers board will address issues including maintaining tourism marketing funds at current levels. The Chargers and their supporters are seeking to raise current hotel taxes by 4 percent – to a total of 16.5 percent – while eliminating a current 2 percent assessment on hotel bills that supports the Tourism Marketing District.

Preliminary findings of a pending Chargers-commissioned study projected that the dual-purpose facility could boost revenue for downtown hotels by $60 million a year, producing demand supporting construction of 800 new hotel rooms and drawing an estimated 200,000 new visitors annually for conventions.


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