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Proponents of San Diego's Tourism Marketing District spoke out in favor of the two percent assessment on hotel rooms at a February 25 council hearing. Some warned city councilmembers about the impact that withholding the revenue would have on the City's General Fund, and the hit that staffers at the San Diego Tourism Authority would take if the assessment was rescinded.

The warnings are not new. In a February 22 legal document, lawyers for the Tourism Marketing District Corporation expressed those same concerns.

"The uncertainty created by Mayor Filner’s unilateral and obstinate objection to policy decisions made before he took office has led ConVis to cancel a multi-million-dollar spring marketing campaign ahead of the busy summer tourism season. It threatens to prevent the TMD Corp. from funding many other summer activities that bring visitors to the City for the benefit of the lodging industry and the larger economy. Specifically, if this stand-off is not resolved by March 31, 2013, ConVis will likely lay off most of its remaining staff."

The lawyers are correct, San Diego Tourism Authority, the non-profit marketing organization that receives the majority of cash from the assessment, would take a major hit. It most certainly will not be able to pay its 70 full-time and 15 part-time employees the millions of dollars it pays each year to market San Diego to outsiders.

According to previous years tax forms, in 2008, San Diego Tourism Authority, also called ConVis, received $23,294,003 in assessments from the Tourism Marketing District. In 2009 that amount was $17,401,486. And, in 2010, the non-profit collected $17,282,885.

For Fiscal Year 2013, ConVis plans to cash a $8,059,191 check from the Tourism Marketing District. According to a "Base Integrated Scope of Work," much of that wil be spent on salaries for its employees.

In 2013 ConVis will spend $1,874,314 on sales. Approximately 83 percent of that will go towards paying salaries for its staff. The document shows $1,187,113 to be paid in wages, $108,657 for "commissions and incentives", and $255,325 on taxes & benefits.

Other projected sales expenses include $259,137 for "events, travel, and entertainment", and $48,250 on professional fees and services.

As for the marketing operation, the non-profit's main objective, ConVis set aside $3,713,148 for that task. Of that $790,074 will go to salaries, taxes and benefits for marketing employees. The remainder pays for advertising costs -- $1,966,067, research -- $346,254, events, travel and entertainment --$91,596, printing & distribution -- $5,871, and dues & subscriptions --$5,228

Lastly, there's the $2,471,729 to run the non-profit. Nearly 50 percent, or $1,221,334 is set aside for salaries, taxes, and benefits for ConVis employees. In addition to salaries, the organization plans to spend $460,395 for professional fees and services. The rest of the cash, $32,423, for travel and events, $290,868 on software and equipment support and licenses, $44,106 for "dues and subscriptions", $72,749 for office supplies, $294,435 on rent, and Software/Equip support and licenses $290,868, and $55,419 for telecommunications.

The City Council will meet behind closed doors today to discuss the tourism tax.

Here's the Integrated Scope of Work:

http://www.sandiegoreader.com/documents/2013/feb/26/convis-integrated-scope-work-2013/

Correction: An earlier version reported that ConVis has already spent the $8 million so far this Fiscal Year. The story has since been revised to reflect projected expenses. I apologize for the error.

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Comments

HonestGovernment Feb. 27, 2013 @ 5:04 p.m.

"Nearly 50 percent, or $1,221,334 is set aside for salaries, taxes, and benefits for ConVis employees"

The FY2010 ConVis nonprofit IRS filing shows the top five employees were paid $1,140,047. That included the total compensation of $435,121 to Joe Terzi, ConVis President/CEO. He's probably making more now. No wonder he showed up at the council meeting to demand that Filner release the TMD surcharges collected, because most of it goes to his nonprofit.

All of the money being passed from one nonprofit to another! My head spins. The three main nonprofits that are involved in marketing tourism while fighting the living wage:

San Diego Tourism Marketing District (SDTMD): http://www.sdtmd.org/board-of-directors/ The newest nonprofit, formed in 2007/8 for 5 years. Renewed in 2012 for 40 years, to force hundreds of hotels/room rentals throughout San Diego to charge their customers a surcharge. All surcharges are turned over to the city's Economic Development Department, which then issues the money directly to the SDTMD's account (minus a $305,000 cut for the Economic Development Department). SDTMD currently pays an executive director, Lorin Stewart, ~$160K. Gives most of the surcharge to another nonprofit, San Diego Convention and Visitors Bureau,

San Diego Convention and Visitors Bureau ("ConVis," = San Diego Tourism Authority): http://www.sandiego.org/sdta-members.aspx A nonprofit formed to market the convention center (the convention center operates as yet another nonprofit, the San Diego Convention Center Corporation). ConVis has always collected about $1.4 million/year indues from hospitality industry members, and now is granted most of the surcharge by the TMD nonprofit. Before the TMD surcharge started rolling its way, ConVis still had plenty of millions for marketing. In 2004, President/CEO Reint Reinders earned $312,000/year. In 2010, President/CEO Joe Terzi earned $435,121.

San Diego Convention Center Corporation (SDCCC): http://visitsandiego.com/aboutus/financials.cfm The nonprofit set up to market and operate the Convention Center. Operates on about $30-40 million in convention-related revenue; includes about $3,400,000 from City for operations. In 2008, President/CEO Carol Wallace earned $334,208, out of a total $1,315,768 paid to seven employees.

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nostalgic Feb. 27, 2013 @ 6:35 p.m.

Has anybody looked at what this recent vote (where 10% of the eligible voters got the win)? Ballots used to be on file at the City Clerk's office for these Assessment Districts. You can go in, see who voted YES an who voted NO. They're all on file there. No Registrar of Voters required. No secret ballot. You can also see what the ballot actually says. Interesting in itself. I haven't been in a while; maybe something has changed. The city may have figured out that too much information was available.

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Dorian Hargrove Feb. 27, 2013 @ 6:44 p.m.

That's a great idea. I have to go to City Hall tomorrow or Friday and I will stop by and get a copy of the ballot! Thanks! ~dh

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HonestGovernment Feb. 28, 2013 @ 12:11 p.m.

You wrote a previous article, which said "out of the 1,379 ballots sent out, only 355 were returned. Of those 355, 127 approved the two percent assessment on hotel guests while 218 voted against it."

Makes me wonder how many of the ballots mailed out actually reached the business owners who fall into the Muni Code category of operating a "hotel."

The original 2007 TMD plan listed about 170 hotels (those citywide with over 70 rooms), with addresses given, that were targeted to assess. The 2012 TMD renewal plan includes 1379 overnight room vendors, but provides no addresses for any of them. Some are just LLC names, or personal names; many of their addresses are probably out of town/state. In any case, not even the original ~170 big hotels voted yes.

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