San Diego Business Journal

Hoteliers Approve Convention Center Financing Plan

By Lou Hirsh Wednesday, April 25, 2012

San Diego hoteliers have approved an assessment district intended to provide the bulk of funding for a planned expansion of San Diego Convention Center, city officials announced April 24.

The district, which applies only to hotels in the city, was approved with approximately 92 percent of votes cast in favor of it, according to a representative of the San Diego Hotel Motel Association, a local trade group.

San Diego City Council will vote in early May to certify the election results and also ask the courts to conduct a validation hearing to determine the legality of the funding plan.

“This vote is not only good news for our hotel and visitor industries, it’s good news for our greater economy,” Mayor Jerry Sanders said in a statement. “Not only will this expansion help us keep the conventions we have now from leaving for other cities with larger centers, it will help us attract the next, larger tier of conventions.”

The majority of hotel operators favored creating an assessment district that would generate $35.7 million a year over 30 years, contributing most of the funding for the proposed $520 million expansion. The city would provide $3.5 million annually, with the Port of San Diego providing $3 million annually toward the expansion.

“The lodging community understood that this vote was about more than a convention center, which is why it passed overwhelmingly,” said Mike McDowell, CEO of the San Diego Lodging Industry Association, in the city’s statement.

The district plan calls for city hotels with at least 30 rooms to assess an additional tax of 1 to 3 percent on the price of hotel rooms, with the larger percentage to be charged by hotels nearest the downtown convention center.

The city has projected that an expansion of the center will create 11,000 jobs, generate $12.7 million in hotel tax revenue for city services, and pump nearly $700 million a year into the local economy.