Hotel tax plan for convention center expansion advances - San Diego, California News Station - KFMB Channel 8 - cbs8.com

Hotel tax plan for convention center expansion advances

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SAN DIEGO (CNS) - The City Council Tuesday approved what city officials called the "legal framework" for a special tax district that would finance the proposed $520 million expansion of the San Diego Convention Center.

The plan envisions a surcharge on room rates for the owners of hotel properties on a sliding scale, depending on the distance from the center. The concept is that the downtown hotels would benefit the most from the project, which would increase the size of the building by 961,187 square feet, to more than 2.75 million square feet.

Downtown hoteliers would be charged a maximum of 3 percent of their rates under the plan. Those in Mission Valley, around Mission Bay and La Jolla would be charged no more than 2 percent. Outlying facilities would pay up to 1 percent.

The 6-2 council vote, with David Alvarez and Sherri Lightner dissenting, also set the geographical boundaries for the scale. The plan still needs to be approved by a vote of the affected hoteliers, which is scheduled for early next year.

City and convention officials say 111 conventions have bypassed San Diego as a destination in recent years, despite interest in coming, because other towns offer more space. The confab with the biggest impact on San Diego, Comic-Con International, was nearly moved to Anaheim or Los Angeles because of space limitations.

Having more room could attract an extra 25 major annual events to the center, worth $121 million annually in additional hotel room night income, according to a consultant's study.

Councilman Carl DeMaio called the expansion "an important economic strategy that will pay dividends back into the general fund" in the future.

But he conceded that the financing plan for the project, which will be approved separately next year, had "major problems."

Opponents were concerned that the so-called "3-2-1 Plan" for charging hotel owners was not equitable.

Bill Evans, a former Convention Center Corp. chairman, noted that hotels in Rancho Bernardo would have to pay into the project while much-closer competitors in Coronado -- a separate city just across San Diego Bay -- would not be charged.

Lightner said conventions will not purchase blocks of hotel rooms at the smaller coastal hotels in her district, and attendees won't be compensated enough by their employers to stay at higher-end facilities such as La Valencia.

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