SAN DIEGO (CNS) - The City Council voted 7-1 today to make official the results of an election in which hotel land owners signed off on a plan to charge an additional room tax to raise money for expansion of the San Diego Convention Center.
The money raised by the levy is projected to pay for "the lion's share" of the more than $500 million cost of making the facility bigger, according to Mayor Jerry Sanders, who pushed the plan that hotel owners approved by an overwhelming margin.
He said expansion will create jobs and millions of dollars of new tax revenues that will pay for paving streets, keeping libraries and recreation centers open longer and hiring more police officers and firefighters.
The need for more floor space arose a couple of years ago when Comic-Con International, annually the largest event at the San Diego Convention Center, was wooed by other cities with larger facilities. Comic-Con officials agreed to stay for a short time while the expansion was planned.
"Not only will this expansion help us keep the conventions we have now from leaving (for) other cities -- for larger centers -- it will help us attract the next larger tier of conventions," Sanders said. "When this project is completed, it will have more contiguous exhibit space than any convention center on the West Coast."
Speaking in opposition to the financing plan, Rep. Bob Filner, D-San Diego, called it "the most blatant giveaway" of public money for private use he has seen in his "many decades" of following the City Council.
"What you have done is you have allowed a public tax to be levied by private people, and most of those voters, I will bet, did not come from the city of San Diego; they came from multi-national hoteliers," said Filner, who hopes to succeed Sanders as mayor.
He said he questioned whether the hotel owners had San Diego's best interests at heart.
Labor groups have opposed the financing plan from its inception, though they say they support the concept of expanding the convention center.
Council members also directed the City Attorney's Office to have the law firm of Orrick, Herrington & Sutcliffe LLP file what is called a "validation lawsuit." The city would seek a judge's determination on whether the funding plan is legal.
According to City Attorney Jan Goldsmith, the plan's legal foundation rests "in a gray area." In California, the funding mechanism has only been used in San Jose, and that plan had some differences, he said.
State law calls for two-thirds approval of residents in the affected area -- in an election -- before a tax increase can be enacted. The city would argue that the hoteliers were the affected parties in this case, and 92 percent voted "yes."
Under the plan, the room tax assessment would increase by 3 percent for downtown hotels -- the ones most likely to benefit from expansion of the convention center. Mission Bay and Mission Valley hotels would see a 2 percent increase, and more outlying facilities would have theirs go up by 1 percent.
The tax would not be levied until the plan is validated, either late this year or early next year, Chief Operating Officer Jay Goldstone said. If the plan is invalidated, city officials would have to regroup and come up with another way to finance the project, he said.
Councilman David Alvarez cast the dissenting vote.