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Heywood Sanders, professor at the University of Texas at San Antonio, and the ranking national authority on convention centers, has read the draft report by the mayor's task force purportedly studying convention center expansion, and concludes is it full of dubious statements based on distorted statistics. He says that the heralded growth of convention center business is based almost entirely on the growth of Comic-Con. In fact, the Rock and Roll Marathon and Comic-Con account for one-fourth of attendance, he says. San Diego may dump money into a convention center expansion just to keep Comic-Con. But the decision on where Comic-Con will go is up to Comic-Con, not San Diego, Sanders points out.

Here's how San Diego cooks its books: it takes a primary event such as Comic-Con or the Rock and Roll Marathon "and simply asserts that all of [attendees] are from out of town," and are spending, say, $1462 and staying in a hotel for at least four days. But any member of the task force could ask San Diego relatives, friends, neighbors if they attended Comic-Con or the Rock and Roll Marathon, and learn that many, many attendees are local residents who spend no extra money and do not spend any nights in local hotels. The convention center claims that it has had an economic impact of $17 billion since 1989, but because the center's own numbers are so slanted, there is no way to know. The draft report asserts that if an expansion is built, "there will be a specific volume of business," says Sanders. "These conclusions do not seem warranted in San Diego's case." Says Sanders, "A consultant study they rely on suggests that a 40% increase in exhibit space will yield a 40% increase in attendance." But Sanders has studied many convention centers. The answer is that the space increase will likely not result in a symmetrical increase in business. San Diego claims it is one of the few cities that is competitive: "The most competitive cities that have doubled the size of convention centers in recent years haven't gotten anything approaching what San Diego's consultants say they are going to get," says Sanders.

In the report, San Diego claims that it is "unique." Sanders has studied hundreds of cities, and they all say they are unique, he says. Convention centers are grossly overbuilt nationally, and as a result, centers have to slash prices. San Diego's "financial reports show that in 2007 the City gave $3.8 million in rental discounts and in 2008 gave $2.5 million in discounts. Is San Diego the unique place that doesn't have to give discounts? The answer is no," says Sanders.

The proposed center expansion (now smaller than originally suggested) would cost more than $50 million a year in debt service. If San Diego builds it and people come, there is still a question: would the money have been better spent elsewhere? And if it's built and the people don't come, "then that money has been essentially thrown away," says Sanders.

The draft document simply misquotes Sanders in places. It says in one place that Sanders says that San Diego is the exception to the rule: that it can thrive despite the glut. "I certainly don't believe San Diego is the exception," he says. In another place, the report attributes a number of statements to Sanders, such as that the center loses business most frequently because of a lack of available dates or space. But Sanders did NOT say these things. He believes that statements made by another person were wrongly attributed to him.

Sanders points out that San Diego has gotten national attention for cooking the pension books, juggling the numbers so a ballpark could be built -- "the shenanigans in San Diego reached a point of overt fraud. You don't often see that among local officials." Still, the task force gathers misleading and distorted arguments and says to the local populace, "Trust us."

Don't be surprised if they do.

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Comments

SurfPuppy619 Aug. 30, 2009 @ 6:19 p.m.

Thanls forp that follow up report Don. Good stuff.

I loved this;

"the shenanigans in San Diego reached a point of overt fraud. You don't often see that among local officials."

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Don Bauder Aug. 30, 2009 @ 6:56 p.m.

Response to post #1: Nonetheless, as Heywood Sanders points out, the convention center task force is putting out blatantly erroneous information and saying to San Diego, "Trust us." Best, Don Bauder

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Visduh Aug. 30, 2009 @ 8:27 p.m.

Professorial types like this one generally don't issue comments described as the "point of overt fraud." Those comments could be called defamatory, reckless, or malicious. He must think he's on solid ground to make these comments. He could be sued by some heavy-hitting law firms with big local developer bucks behind them.

One can only conclude that he is on very solid ground in this matter and also may be spoiling for a fight. (How many other cities have misquoted him or used old comments? Plenty, I'd guess.)

It will be SO interesting to see if the local fishwrap (aka U-T) reports this at all. And if it does not, any pretensions they are making about being "investigative" will be down the drain. Of course, the rag has failed so many times that it is down the drain anyway. In more ways than one.

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Don Bauder Aug. 30, 2009 @ 8:38 p.m.

Response to post #3: When Heywood Sanders was referring to overt fraud, he was talking about the pension situation, in which there have been numerous fraud charges, and a criminal suit against former government employees is still pending. He wasn't saying that the convention center task force committed overt fraud by misstating what he said to them and by using phony statistics. However, when you see what he has uncovered in convention center distortions, you have to wonder what might be found if an honest auditor looked into the center's claims. Best, Don Bauder

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SurfPuppy619 Aug. 30, 2009 @ 9:18 p.m.

I don't think it matters if Mr. Heywood Sanders was speaking of the convention center task force with his overt fraud comment, because this is a public issue with public figures-all of them.

The standard for a public figure to sue under defamation is so high that it is pretty much impossible to meet.

He is safe stating his opinion about overt fraud on the pensions or the convention center.

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Don Bauder Aug. 31, 2009 @ 6:16 a.m.

Response to post #5: Yes, it's pretty hard to defame a politician when referring to issues of polemics. Thank goodness, political discourse is still protected in this country. I must stress that it is urgently necessary for citizens to demand that the representations by San Diego's public institutions such as the convention center be subject to an objective audit. This particularly applies to pension accounting. San Diegans deserve to know how they are being lied to. Best, Don Bauder

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panchy Aug. 31, 2009 @ 11:35 a.m.

If San Diego's consultants on this fraud are willing to state "..that a 40% increase in exhibit space will yield a 40% increase in attendance." Would they be willing to make up the $$ difference if this 40% increase in exhibit space yielded less than their projected 40% in attendance? I think not! This boondoggle doesn't need to be built. Only the rich will get richer and us poor folks will be lining their pockets. Thanks Heywood Sanders for your insight.

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JustWondering Aug. 31, 2009 @ 11:37 a.m.

The taxpayers will pay millions for a structure that will only benefit the rich downtown hotels and restaurants. This in turn siphons off resources needed for other city services like public safety.

Hey taxpayers wake-up to our lunatic mayor whose real desire is to line the pockets of his rich downtown supporters with your tax dollars.

It’s time you fight the idiots at City Hall! They are only serving themselves, and Sanders is the worst.

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SurfPuppy619 Aug. 31, 2009 @ 12:04 p.m.

The taxpayers will pay millions for a structure that will only benefit the rich downtown hotels and restaurants. This in turn siphons off resources needed for other city services like public safety.

Hey taxpayers wake-up to our lunatic mayor whose real desire is to line the pockets of his rich downtown supporters with your tax dollars.

It’s time you fight the idiots at City Hall! They are only serving themselves, and Sanders is the worst.

By JustWondering

This fleecing has been going on forever. Go back to 1998 with the Murph renovation, then the DT Ballpark, and now the convention center-and tomorrow it will be some other useless black hole that enriches the few at the expense of the many.

Sanders should not been elected-and have never been re elected.

In a way the citizens deserve this for re electing Sanders (well not really, but it was stupid to re elect him Mayor).

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Don Bauder Aug. 31, 2009 @ 12:12 p.m.

Response to post #7: One thing Heywood Sanders regularly focuses on is that consultants give the same answer to every city: build. The consultants pull out the same reasons: the people will come, your city doesn't want to lag competitors, etc. etc. Consultants are paid to give answers that the folks paying their bills want. The same is true of ballparks and stadiums. The same consultants tell the same cities that they must shell out hundreds of millions of dollars to billionaire sports team owners, lest the city fall behind other cities. You make an excellent point: the convention center task force doesn't give a hoot about the facts or whether the project will succeed: it's the taxpayers' money. These folks aren't shelling out their own money.

Another important point: if the project fails economically, San Diegans won't learn about it, because the convention center cooks its books and mainstream media will not look into the matter. Best, Don Bauder

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Don Bauder Aug. 31, 2009 @ 12:17 p.m.

Response to post #8: Yes, the fleecing has been going on for years. Remember when the local government subsidized the America's Cup races? This is a rich person's sport that only a few wealthy spectators can enjoy. How about all the shopping centers that are subsidized? And the hotels that grab public money? And the people that plunder taxpayers' pockets are the same ones who lead cheers for free market capitalism. It's hilarious. Best, Don Bauder

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Don Bauder Aug. 31, 2009 @ 12:23 p.m.

Response to post #9: The real estate development moguls and their lobbyists who feast off of corporate welfare are the same ones who put Golding, Murphy and Sanders into office. And the same ones who orchestrated the smears of reformers such as Peter Navarro, Donna Frye and Mike Aguirre. Best, Don Bauder

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rrauch Aug. 31, 2009 @ 8:26 p.m.

While I have a high regard for Don Bauder, Heywood Sanders is a shoe-in for a negative comment on any convention center. He has expressed negative opinions about convention centers for years...never has he fully analyzed a market. San Diego, with it's convention center, downtown, attractions, arts, beaches, climate, hotels, restaurants, gaming, golf, spas, shopping and wineries is truly unique...just ask the meeting planners. The San Diego Convention Center Corporation (SDCCC) is completely legitimate and Mayor Sanders deserves better remarks than the backhanded comments made on these posts. He is energetic, honest and a great steward of San Diego's assets, including the SDCCC. Moreover, assertions that Comic-Con is the reason that the SDCCC wants expansion is ridiculous! It is but one important piece of business! Robert Rauch, Hotelier, Professor, Hospitality Industry Professional at www.hotelguru.com

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SurfPuppy619 Aug. 31, 2009 @ 8:52 p.m.

Mayor Sanders deserves better remarks than the backhanded comments made on these posts. He is energetic, honest and a great steward of San Diego's assets, including the SDCCC.

By rrauch

KFC Sanders-if you want to toot your horn with whoppers like this please do it under your real name.

(LOL, the notion that Sanders is "energetic, honest and a great steward of San Diego's assets" is worthy of a prime time stand up routine!).

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Don Bauder Aug. 31, 2009 @ 9:15 p.m.

Response to post #13: As Heywood Sanders says, every city thinks it is "unique" when it goes ahead and builds or expands convention centers into the well-documented glut. As he points out, San Diego has granted substantial discounts in the last two measured years -- just one reason why it is not "unique." The big picture is that San Diego is on the brink of insolvency; it has no business spending money on such a project -- or on the library, a civic center, or another subsidized sports palace. San Diego has to get its house in order. I respect your opinion as one whom I frequently quote, but I think you are wrong on this one. Best, Don Bauder

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Don Bauder Aug. 31, 2009 @ 9:18 p.m.

Response to post #14: Mayor Jerry Sanders is neither honest nor energetic. Period. If he were either, he would show some leadership on the financial questions plaguing the city. Best, Don Bauder

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Fred Williams Sept. 2, 2009 @ 4:25 a.m.

Robert A. Rauch specializes in consulting, management and marketing for the hospitality industry. He's recently been named CEO of sandiego.com, a promotional web site.

I don't think anyone needs to take his opinions too seriously, considering the obvious bias he brings to the discussion.

On the other hand, Heywood Sanders is an independent academic who has been telling the same story for years, and backing it up with numbers.

Rauch himself says on his site hotelguru that the hotel industry is facing hard times...but goes on to claim that San Diego is somehow different.

That's the crux of the problem. Those insiders in San Diego who simply don't understand that lovely though our fair city may be, it's not so unique as we like to think. We are susceptible to the same economic trends as the rest of the world.

Heywood Sanders has real data on his side. The hotel industry, begging for government handouts, is basing their arguments on wishful thinking.

When that doesn't work, they attack people like the professor who have the audacity, and facts, to disagree.

If San Diego accepts this task force's report at face value, we're simply retarded and deserved to be fleeced once again by the same wolves in sheep's clothing that run this town and serve on such task forces.

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Don Bauder Sept. 2, 2009 @ 9:01 a.m.

Response to post #17: Good analysis, Fred. The task force made only one minor change in its draft report, correcting (sort of) a misinterpretation of what Heywood Sanders said. But the convention center will never look at one of his major criticisms: that the center's own statistics are faulty -- basically, deliberately slanted to make the center look good. Therefore, using the worthless stats, the downtown corporate welfare crowd can try to con the taxpayers for more money. I certainly hope San Diegans wake up on tis issue. What the task force wants willl be coming out of their pockets. Best, Don Bauder

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paul Sept. 4, 2009 @ 7:20 p.m.

Response to #13 "While I have a high regard for Don Bauder, Heywood Sanders is a shoe-in for a negative comment on any convention center."

Just because he comments negatively, doesn't make him wrong. His conclusions shouldn't be discarded because they are inconvenient, they should be discarded only if they can be shown to be false. The task force chose to misquote him, mischaracterize his opinions and to call him a "whack job" rather than address his issues. That does not instill confidence in their conclusion.

You state that: "San Diego, with it's convention center, downtown, attractions, arts, beaches, climate, hotels, restaurants, gaming, golf, spas, shopping and wineries is truly unique". The funny thing to me, is that those are all (saving the cc itself) arguments why our tourism industry does not need the government subsidy and does not need the convention center to draw tourists. If the convention center disappeared tomorrow, what would be the economic impact? Outside of the specific hotels and restaurants that immediately cater to the convention center, my guess is that the impact would not be anywhere near enough to justify what we have spent to date, let alone what they are planning.

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Don Bauder Sept. 4, 2009 @ 10:41 p.m.

Response to post #19: Very good argument. If San Diego is truly unique -- with assets that can't be matched anywhere -- then why are all these tourism subsidies necessary? Why can't private sector tourism support itself? Answer: as long as it can get taxpayer money, why should it take risks with its own money? It's called socialization of the risk and privatization of the gain. It's omnipresent in San Diego. Best, Don Bauder

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