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San Diego Convention Center Expansion

September 21, 2018 8:45 AM | Russell Kice (Administrator)

Initiative to expand convention center has enough signatures to qualify for ballot — but not in 2018

Convention Center

K.C. Alfred / San Diego Union-Tribune

An initiative that would raise San Diego's hotel tax to underwrite an expansion of San Diego's Convention Center has enough signatures to make it onto a future ballot.

An initiative that would raise San Diego's hotel tax to underwrite an expansion of San Diego's Convention Center has enough signatures to make it onto a future ballot. (K.C. Alfred / San Diego Union-Tribune)

Lori WeisbergLori WeisbergContact Reporter

An initiative to bankroll a long planned expansion of San Diego’s convention center has new life after the county Registrar determined Thursday that the measure has enough signatures to qualify for the ballot — just not in 2018.

The news comes more than a month after backers of the well-financed initiative effort learned that the measure failed a random count of the more than 114,000 signatures collected by the campaign. That triggered a full verification of all signatures by the county Registrar of Voters, but the time-consuming process would come too late to make it in time for this November’s ballot.



Just how soon San Diegans will have a chance to vote on the measure remains unclear. Although the next regular election is not until 2020, Mayor Kevin Faulconer, who has made the convention center expansion a top priority, has previously said he would consider pushing for a special election next year if need be.

The ballot measure, backed by a high-powered coalition of tourism and business leaders, organized labor and homeless advocates, calls for raising the city’s room tax to as much as 15.75 percent to not only fund an enlarged center but also underwrite housing and services for the homeless and pay for road repairs.

While Faulconer would not say Thursday whether he will be seeking a special election, it’s likely he will given his longstanding desire to see the center expanded. The continued homelessness crisis is also likely to fuel a push for an earlier election.

“This initiative is an incredible opportunity to shape the future of our city for the better by tackling our biggest challenges and it can’t happen soon enough,” Faulconer said in a statement he posted on Twitter. “With one vote, San Diegans will be able to house the homeless, fix our streets, and grow our economy — and the best part is it will all be paid for by visitors staying at our hotels. I look forward to working with our diverse coalition of supporters to finally get this across the finish line.”

Backers of the measure are also likely to push for an election earlier than 2020.

“The broad-based coalition supporting this measure strongly believes these are critical issues that need to be addressed as soon as possible,” said Chris Wahl, manager of the Yes! for a Better San Diego campaign. “Now that it is certain an election will happen, we plan to work with local stakeholders and the City Council to determine which ballot makes sense.”

Under the initiative, the greatest share of revenues from the proposed tax increase — nearly $3.5 billion over 42 years — would go for the convention center project, including continued upkeep and marketing. More than $1.8 billion is to be set aside for addressing homelessness, and $551 million is targeted for road repairs.

Still a looming question is whether the city will be able to regain control of the bayfront site where the convention center expansion would be built. Longtime Port of San Diego tenants Ray Carpenter and Art Engel currently have a leasehold on the 5-acre parcel where they have plans for a $300 million hotel development.

Earlier this year, the city and port finalized a deal to pay Carpenter and Engel up to $33.2 million, including an up-front payment of $5 million, to secure control of their Fifth Avenue Landing leasehold, as it is known.

Given the uncertainty surrounding the fate of the ballot measure as everyone awaited the Registrar’s full verification, the three parties last month agreed to extend the timeline for payments until Tuesday.

Carpenter said Thursday he was not surprised by the news, but noted that his development team has not stopped processing its plans for the hotel project. He added that he does not know of any new talks scheduled with the city now that the measure has qualified.

“The city now has a lot on their plate, so we will take it day by day and go from there,” he said.

Matt Awbrey, chief of civic and external affairs for Faulconer’s office, said he expects the port, the city and Fifth Avenue Landing to reconvene “as soon as possible to revisit the payment schedule in the agreement based on the fact that this measure is moving forward.”

What remains unknown, though, is whether Fifth Avenue Landing will be pressing the parties for additional money now that it will be asked to hold off on its project for a longer period of time. Under the terms of the original agreement, which assumed a vote this November, Fifth Avenue Landing was entitled to keep the $5 million up-front payment if the initiative failed at the ballot box. It could then resume pursuing its hotel development.

The campaign to qualify the initiative was a costly one, with backers spending more than $1.4 million through the first half of this year. Major companies, including Sempra Energy, and large hotels were among the contributors.

In the waning days of the petition drive, as it appeared that the number of valid signatures were falling short of expectations, supporters began sending out appeals to the business community for help in circulating petitions. But the effort apparently was not enough to overcome issues with the validity of some signatures that were collected.

Although the campaign turned in a sizable number of signatures in August, a random check showed that they still fell short of the required 71,646 signatures of registered voters in the city of San Diego.

Backers announced shortly thereafter that they planned to sue their signature-gathering firm for breach of contract, but no suit has yet been filed.

“The committee plans to aggressively recoup the money it is owed,” Wahl said Thursday. “How this will be done is still being determined.”

The firm, Arno Petition Consultants, could not be reached for comment Thursday. A phone number on its website connects callers to a “bookings group.”

Meanwhile, tourism leaders are growing increasingly anxious about lost convention business the longer an expansion is delayed. They argue that many of the larger, more lucrative meetings will bypass San Diego in favor of cities that have centers with much more exhibit space.

Tourism Authority CEO Joe Terzi said he received a letter just last week from the American Association for Cancer Research saying it was officially canceling its booking to come to San Diego in 2023. The group said the center is no longer large enough to accommodate its continued attendance growth since the annual meeting was last held in San Diego in 2014.

“Without expansion of the Convention Center, we cannot hold our 2023 meeting in your facilities,” wrote Michael Stewart, the association’s chief financial officer. “Based on current space requirements and growth projections, the AACR will need a minimum of 600,000 square feet of exhibit space and approximately 300,000 square feet of space for the plenary hall to accommodate our annual meeting in 2023. Both of these requirements exceed the Convention Center’s capacity.”

Although the growing supply of convention space across the country is outstripping demand, popular destinations like San Diego are facing increasing competition. Anaheim recently finished enlarging its center, San Francisco's Moscone Center is in the midst of construction on its project, and the operator of the Los Angeles center has proposed a $1.2 billion expansion that would include an 850-room hotel tower.


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