Tourism: Study Says Expansion Delays Cost San Diego Millions
A local activist whose lawsuit stalled the expansion of the San Diego Convention Center is criticizing a recent study done by the center’s management.
In the study released last week, the San Diego Convention Center Corp. reports net figures of convention and trade shows canceled and re-booked and said the expansion’s delay will have “painful” effects on the regional economy.
Richard Rider, head of the San Diego Libertarian Party, said his organization’s goal was never to halt the expansion, he said. It was to get the project’s bond financing plan approved by voters.
“The City Council could have done that, as we begged them in March of 1996, but they chose a court battle instead,” he said.
Rider lost the suit, but the issue had been put on the ballot before the August 1998 decision, when voters approved an alternative financing plan. The center reverted to the original financing strategy.
Fred Sainz, spokesman for the Convention Center Corp., said that the lawsuit held up the project for “almost four years.”
The convention center expansion is scheduled to open in 2001.
The report took into account the events that had been re-booked. It said that because of the delay, 49 conventions or trade shows were lost from 1999 through 2002, which included 14 this year.
TOT, Hotel Revenues Lost
The study said there would be a loss of $12.3 million in hotel taxes in the same ’99-’02 period. It also said $117 million in revenue would be lost for hotels, at an average convention rate of $154.10 per day.
It also said $288 million in direct, delegate spending would be lost from the ’99-’02 period because of the litigation-caused delays.
Rider said the report is a face-saving gesture by the Convention Center Corp., because the expansion is taking longer than expected.
“Of course, they didn’t have it in their announcement, but they basically are trying to cover that up,” he said.
According to Sainz, the Convention Center’s board of directors wanted to “make sure people knew this year that when you see less people walk through Downtown, or you see less money being spent that these were the very painful impacts of litigation delays.”
Once the expansion was in limbo, many large events had to pull out of their bookings at the center, Sainz said. They were “full-facility users” and would have needed the expanded building, he said.
“So, we lost out on the advantage of space, really,” Sainz said.
Filled With Smaller Groups
The lost conventions and trade shows were often filled with smaller groups that generate less money, he said.
Sainz said the industry standard of larger trade shows and conventions booking five to seven years in advance.
“It is going to impact the most immediate years in a very significant way,” he said. “Once we get past the end of 2002, and into 2003 and 2004, the situation becomes much better.”
The expansion controversy affected the convention center’s reputation in the industry, but it’s quickly recovering from it, he said.
Another likely boost to the center’s future was announced last week. For the second year in a row, the Convention Center was named one of the top three convention centers in the world by Meetings & Incentives Magazine.
According to the center’s announcement, it was the only United States facility to win. Other winners were the Hong Kong Convention & Exhibition Centre and Paris’ C.I.D. Deauville Convention Center, both of which won last year as well.