San Diego City Council completes Convention Center giveaway

by on March 23, 2012 · 1 comment

in Economy, San Diego

by Lucas O’Connor / Two Cathedrals / March 22, 2012

As expected, the City Council earlier this week gave away control of the Convention Center to the private consortium ConVis, “approving a contract that is basically blank” as Councilman Alvarez put it. In the course of a meeting, councilmembers openly negotiated a contract with representatives of ConVis to outsource control of a public asset without any competitive bidding or even any data that would suggest the move would save or make money (for the city at least). We know it’ll be great for the private profits of hotels though, and it’ll come at the expense of the Convention Center. In fact, we have a great deal of data to demonstrate exactly that.

ConVis already had this specific responsibility until 2004. It was taken away because they got “boozy schmoozy” chasing potential clients for hotels and didn’t get around to actually booking the Convention Center. That’s specifically why the Convention Center Corporation was given the job:

Because the corporation, wholly owned by the city, derives 90 percent of its funding from events at the convention center, the move focuses responsibility for raising revenue and, as important, accounting for it.

ConVis’ lack of accountability and wasteful spending of tax dollars played no small part in City Manager Lamont Ewell’s recommendation to make this shift.

So we know exactly what they do with this power, because there’s still no accountability. Nowhere in the private sector, or even in the realm of still-functioning government, would you find a contractor being hired without terms, without multiple bids, or after having the job, failing catastrophically, and being successfully replaced.

But for the most part, the council didn’t care about any of this. As Liam Dillon pointed out, “No council members save David Alvarez, who voted against the deal, questioned the underlying motivations.”

That should be stunning all on its own, because that either means their support was negotiated in advance or that they’re incredibly negligent. But there’s also the remarkable two faces of ConVis president Joe Terzi. Here’s Terzi less than a year ago:

For his part, ConVis CEO Joe Terzi told me two weeks ago that nothing of the sort was being planned.

He said then that the Convention Center should keep its sales and marketing functions.

“They’re doing a good job and we believe it should stay where it’s at,” Terzi told me.

And here was Terzi this week at council:

But frankly if you look at the booking patterns and what the center has been able to achieve, the booking patterns have been stagnating over the last number of years.

In both cases, Terzi is talking about performance over the same period of time. So either he was lying then or he’s lying now, but no matter which it is maybe somebody on the council should have asked? But it didn’t really matter what Terzi or anyone else said; the council was already set to throw taxpayers under the bus.

Why? The Mayor, hoteliers, and downtown developer interests drew their line in the sand on the Convention Center expansion here, and the council had to decide whether to give away the convention center or face retribution. It’s why, in the months leading up to this vote, so few councilmembers were ever willing to say that control of the Convention Center was actually a dealbreaker issue for them. It was just important to put up a nominal fight in the interest of plausible deniability when constituents come asking.

And to accomplish this, they used the most basic tactic of rationalization and dodging responsibility. Even though the fix is in, implement it in small enough bites that no one is singularly definitive but all are inevitable. The vote yesterday was a rubber stamp on hotel owners controlling the Convention Center. It gives them not only the power, but nearly the responsibility to hollow out Convention Center booking for their own profit. Heck, they didn’t even hide it from the council.

By the time the terms are negotiated and the IBA has a chance to examine the impact, it will be a couple years before ConVis has done enough booking for performance metrics to kick in. By then, hotels will be taxing the public without a public vote and the city will be on the hook for an unlimited liability in the Convention Center Expansion. And wouldn’t you know? Because of the expansion it’s going to take another decade to really know whether ConVis is doing a good or bad job because the expansion totally changes the performance metrics.

And at that point? Well gosh, ConVis is the only organization that’s ever dealt with the shiny, new, expanded Convention Center. They’re the ones with the institutional knowledge, and the hotels and ancillary private businesses have so tightly woven their business models into the ConVis booking model for the Convention Center… It’s too big to fail.

By then, all the folks who delivered us will be long gone from here, so they don’t care. And in the meantime, they’ve feathered their beds in hotelier pockets with tax dollars, so they’ll stay comfortable.

{ 1 comment… read it below or add one }

avatar Larry Boatman March 26, 2012 at 9:23 am

One wonders whether with the demise of Tammany Hall, all proponents (albeit with a Republican cast) moved out here to San Diego and re-established the long held New York City tradition of graft and political corruption in city politics.

We’ve currently got “Grand Sachem” or “Boss” Sanders arm and arm with seven of the eight “ward bosses” or “ward heelers” (euphemistically named city council members) in a three day exposition of quid-pro-quo for the San Diego hotel industry (the “burgeoning constituency” [the “Four Hundred”? {hopefully not the “uppertens”}] in this scenario) vs. Convention Center expansion project – casting a completely blind eye to the ten questions raised by the Office of the Independent Budget Analyst office (perhaps working for the “demimonde” [sadly now, the San Diego tax payers]).

Even sadder is that in the future we may have “Grand Sachem” or “Boss” DeMaio arm and arm with the “ward heelers”!

So, the question becomes who is going to be our Eleanor Roosevelt?

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