San Diego Business Journal

City Won’t Appeal Court Ruling on Convention Center Finance Plan

By Lou Hirsh Wednesday, August 27, 2014

San Diego City Council recently voted 7-0 not to appeal a court ruling that invalidated the funding mechanism for a planned $520 million expansion of the San Diego Convention Center.

Officials will next decide whether to place a funding measure before voters – which would require two-thirds approval because it involves raising taxes – or consider other development-related methods to boost convention center space.

Previously proposed alternatives include building a downtown facility combining non-contiguous convention space with a new stadium for the San Diego Chargers. Mayor Kevin Faulconer in recent weeks has been meeting with hotel and convention industry officials, as well as representatives of the Chargers and developer JMI Realty, to discuss proposals on the table.

The mayor said in a statement that he is open to all options. “I continue to believe that any proposed Chargers stadium project should be brought before voters,” Faulconer said.

The Chargers last year proposed an East Village project that would combine a stadium with convention and event space. JMI Realty, which was founded by former San Diego Padres owner John Moores and developed Petco Park, recently put forward four downtown concept options with various configurations of stadium and convention facilities.

California’s Fourth District Court of Appeals overturned the convention center expansion financing mechanism, ruling that a proposed tax on hotel bills is unconstitutional because it was not approved by voters.

In 2012, city council and local hoteliers approved a financing district to fund the bulk of the project, in which San Diego hotels with at least 30 rooms would apply a tax of 1 to 3 percent to guests’ room bills.