NO ‘PLAN B’ FOR CONVENTION CENTER
With likely defeat of Measure C, city may have run out of options to pay for the long-planned expansion
The apparent defeat of Measure C, which would have raised San Diego’s hotel tax to bankroll a convention center expansion, has likely killed any near-term prospects for enlarging the bayfront venue, a civic priority for the last decade.
While backers of the initiative are holding out hope that thousands of uncounted votes could significantly boost the number of yes votes, the possibility of a win is a long shot. As of Wednesday, unofficial results showed that the measure had garnered 63.55 percent support, but it needed a supermajority of nearly 67 percent to prevail. Countywide, there are still 350,000 mail and provisional ballots that remain uncounted, although the San Diego Registrar of Voters Office was unable to say how many of those are within the city of San Diego.
“With a third of the ballots still uncounted, the results remain uncertain,” the pro-measure C campaign said in a statement Wednesday. “What’s very clear is that a large majority of San Diegans support priorities in Measure C. In the coming days, the coalition will discuss our options for how to move forward if the measure ultimately falls short of the two-thirds threshold.”
In addition to raising billions of dollars for a much-enlarged convention center, Measure C would have also generated about $2 billion for homeless initiatives over more than four decades, plus $650 million for road repairs.
A meeting of Measure C coalition members, including representatives from the tourism industry, business community and organized labor, could happen as early as Friday to discuss how to regroup. San Diego Tourism Authority CEO Joe Terzi on Wednesday was unwilling to disclose all the possible options under consideration but acknowledged there is no clear-cut strategy for potentially resurrecting the expansion project.
“No matter what we do, the way forward is not nearly as clear as what it was before,” said Terzi, who has long argued, as have others, that the bayfront center is losing out on many lucrative conventions that are going to rival cities with larger venues. “We’ll consult attorneys, talk to the (hotelier-run) Tourism Marketing District, the industry and the committee. We planned for getting a two-thirds majority and didn’t have a Plan B, so the (campaign) committee will sit down for a few minutes and think about what our next steps are, if any.”
One possible avenue likely to be broached is going to court in hopes of securing a favorable ruling on the much-debated question of whether a simple majority is sufficient to pass a tax increase measure that’s put on the ballot via a citizens’ initiative. A 2017 California Supreme Court decision suggested that the two-thirds approval requirement for local tax increases might not apply, thereby easing the path for voter approval of such measures.
Echoes of that ruling later emerged in a decision last year by a San Francisco Superior Court judge who concluded that two San Francisco tax measures that did not capture two-thirds majority support were valid because the higher threshold only applied to measures placed on the ballot by lawmakers. Not long after that, though, a Fresno judge muddied the waters, ruling that a 2018 initiative raising sales taxes to improve Fresno’s city parks failed because it needed a supermajority but only received a little over 52 percent.
Should Measure C’s stakeholders, which include representatives from a number of the city’s larger hotels, decide to pursue a legal battle, money would have to be raised to cover legal costs.
“I’m hoping out of this upcoming meeting that we’ll come out with something other than just attacking this two-thirds threshold,” Terzi said.
While a loss at the ballot box wipes out any practical source of funding for a convention center expansion potentially costing up to $850 million, there are still other pots of money that could eventually be tapped for helping the homeless, local advocates agree.
Gov. Gavin Newsom signed an executive order in January establishing the $750 million California Access to Housing and Services Fund, which will consist of tax dollars and private-sector donations to pay for affordable housing, rental and operating subsidies and other related costs. Already in the budget is $650 million for the state’s new Homeless Housing, Assistance
and Prevention grant program that will provide one-time funding to support homeless programs.
The state’s 44 continuums of care, including the San Diego Regional Task Force on the Homeless, will share $190 million of the money. San Diego also is included in 13 large cities that will share $275 million of the money, while San Diego County is among 58 counties that will share $175 million.
Locally, a $900 million bond backed by the San Diego Housing Federation may be on the November ballot to fund affordable housing in the city. The San Diego City Council voted to proceed with the bond in January and has until August
to submit ballot language to the Registrar of Voters Office.
Homeless advocate John Brady, director of advocacy and operations with the homeless choir Voices of Our City, sees the bond measure as more important than Measure C.
“I told people that if you want a convention center, great, support the measure,” he said. “But if you’re doing it for homeless services, support the Housing Federation bond issue.”
The only organized opposition to Measure C came from homeless advocate Michael Mcconnell, who spent more than $370,000 to defeat the measure. While he discouraged people from voting for a measure that he saw as flawed and filled with loopholes, he also saw something encouraging in the many who did support it.
“I think it did show that people are really interested in doing something on the homeless crisis, and that’s why it was able to get as high as it did,” he said.
Still an open question as Measure C backers await a final, official verdict on the vote count is the fate of the bayfront site where the convention center expansion would have been built. Longtime port tenants Ray Carpenter and Art Engel, who control what is known as the Fifth Avenue Landing property, still have plans to build a $300 million hotel complex there, although they had consented a couple of years ago to back away from their project and turn over their leasehold in return for a multi-milliondollar payment should voters approve the hotel tax increase.
The project could come before San Diego port commissioners in May or early summer, Port of San Diego spokeswoman Brianne Page said Wednesday. Carpenter and Engel, she said, have submitted the information required by the port, and its staff is reviewing that.
While Tuesday marked the first time the electorate has had a chance to weigh in on a tax increase to finance the convention center expansion, it was not the first time a tax hike for the project was voted on. In 2012, San Diego hoteliers approved a citywide tax increase to finance the project, but a court ruling two years later found that the tax hike was unconstitutional because it was not put to a citywide public vote.
lori.weisberg@sduniontribune.com gary.warth@sduniontribune.com