Stop the Folly of San Diego Convention Center Expansion ‘Re-Vote’

by on April 12, 2021 · 11 comments

in San Diego

San Diego’s “Stop the Steal” Should be Named “Stop the Folly”

By Colleen O’Connor and Don Bauder

What was the Council thinking by trying to overturn a legitimate election result?

It wasn’t thinking. It was showing that it is utterly incapable of reading economic tea leaves.

First, the politics: The Council recently voted to overturn a legitimate election result, similar to what Donald Trump has been trying to do. It wants a Trumpian recalculation. The defeat – and it was a defeat – of Measure C to authorize a special tax to expand the convention center did not meet the then-required threshold of a 2/3 affirmative vote to pass.

But, in an effort to overturn that result (as required by law and twice enumerated in the official ballot language), the Council decided not to certify the result, and instead directed the City Attorney, Mara Elliott, to be complicit.

Inevitable and costly court challenges will result. An end run to justify easier taxation is illegal.

In City Hall, nobody is minding the store. And nobody is doing the math either. An unholy trinity of politicians, lobbyist/ consultants, hoteliers and developers has overridden the public interest.

Here is the math: Prior to the pandemic, convention centers nationwide were so overbuilt that centers, including San Diego’s, were cutting prices 50 percent and uniformly losing money.

Then came the pandemic. The convention center business plunged even more, along with business travel.

Look at the post-pandemic forecasts within the industry: The American Hotel & Lodging Association forecasts that “business travel, which comprises the largest source of hotel revenue,” and is now “almost non-existent,” will plummet 85 percent through April of this year, and “then only begin ticking up slightly.”

In fact, business travel “is not expected to return to 2019 levels until at least 2023 or 2024,” the trade group says in its annual report.

And that is optimistic, says Heywood Sanders, author of the 2014 seminal book, Convention Center Follies. In an interview, Sanders said the convention center business may never come back to prior levels.

What happened to convention attendance last year? “COVID evaporated it,” says Sanders, the scholar who has written for several years that center overbuilding and technological change would clobber the industry. “In my heart of hearts, I don’t know if it will ever come back.”

Prof. Sanders implores San Diego to “Do the math.”

The downtown establishment recently republished earlier predictions that hotel tax revenue could go up $6.8 billion with a convention center expansion.

That is a very outdated, pre-COVID projection. If business travel plunged 85 percent through April of this year and won’t return to 2019 levels until 2023 or 2024, how in the world could an expansion generate $6.8 billion in additional tax revenues?

That obsolete $6.8 billion figure should never have been republished and smacks of blatant disregard for facts.

San Diego’s convention attendance has yet to recover from the 2008 recession, says Sanders. Through the years, he has been contemptuous of forecasts made by so-called consultants hired by the local establishment and  has been wary of reporting by major San Diego media, which historically have joined in the push for expansion.

Sanders points that our neighboring competitor, Los Angeles, was forecast to have 20 citywide events and 240,000 attendees this year. But the current schedule has already shrunk to only 9 citywide events and 65,000 attendees. Also, Los Angeles is also now offering $1 million discounts until the end of 2024.

Sanders’s book exposes the obvious. The establishment pays consultants to forecast many more conventions and greater attendance numbers if a center is built or expanded. But, it seldom happens.

In today’s conditions, it may never happen.

A post-pandemic, remote learning ZOOM and AI world has not only dimmed the need for crowd-filled meetings, work spaces, and gathering places, but has already slashed anticipated convention center revenues.

The economic downturn, already masked by massive federal and state stimulus bills, could accelerate at a pace incompatible with municipal finances, pension funds, street maintenance, libraries, schools, parks, bridges, and the like.

Prof. Sanders sums it up bluntly: “We’re in a very different world now.”

{ 11 comments… read them below or add one }

Avatar Geoff Page April 12, 2021 at 11:42 am

Right on Colleen, exactly right.

To read more information about the folly of expanding the conventions, Google for Don Bauder and convention center. Don is a respected long time journalist who just recently retired as a columnist for the San Diego Reader; before that he wrote for the Union Tribune. The only reason to expand the center is to satisfy the building community because they will make the only money an expansion ever will.

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Avatar Don Bauder April 12, 2021 at 5:03 pm

Geoff: Corporate welfare is the raison d’etre for the downtown establishment. Both hotels and restaurants feast at taxpayers’ expense in convention center capers. But the business is now so depressed that it’s sheer fatuity to keep subsidizing centers.

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Avatar Geoff Page April 12, 2021 at 5:53 pm

Don, it’s great to see you join in, I’ve followed your work on the convention center all along. And thanks for adding that information about the hotels and restaurants and their reasons for backing the expansion. What amazed me is that so many people did vote for it.

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Frank Gormlie Frank Gormlie April 12, 2021 at 6:09 pm

Word. Or, I’ll ditto that.

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Avatar Don Wood April 12, 2021 at 4:05 pm

The council members who voted to claim that Measure C “technically” passed have all taken substantial campaign contribution from the big hotel owners PAC. Their vote reflected the fact that they feel more allegiance to the hotel owners than the gullible voters to put them in office. Voters need to remember this when those council members run for reelection.

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Avatar Don Bauder April 12, 2021 at 5:05 pm

Absolutely. The recipients of corporate welfare pay off the politicians.

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Avatar Frank J April 12, 2021 at 5:47 pm

San Diego, Georgia

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Avatar Geoff Page April 12, 2021 at 5:54 pm

I Googled for a San Diego in Georgia but didn’t find anything. Was this a typo or are you trying to say something no one gets?

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Avatar Judy Swink April 12, 2021 at 6:46 pm

Geoff – I think the comment is in reference to the new Georgia voter suppression law which includes the ability to take certification of election results from the Secretary of State and give it to the State legislature. Pure Trump….

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Avatar Geoff Page April 12, 2021 at 9:24 pm

Judy, I believe you are correct. I was just trying to get the commenter to clarify it. I’m not fond of cryptic comments where you have to guess what someone meant. It doesn’t add much to the discussion.

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Avatar Judy Swink April 12, 2021 at 6:52 pm

A variation on Enron by the Sea.

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