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City Council and Centre City Redevelopment Reach Compromise Over Convention Center Debt

During a council meeting last February, city councilmembers acting as the Redevelopment Agency requested that Centre City Development Corporation (CCDC) return in March to discuss a plan that the corporation take over the $228 million in debt owed on a previous expansion of the convention center.

At a March 29 city council meeting, CCDC vice president Frank Alessi said the $9.2 million annual payments, increasing to $13.7 million in 2013, would clean out CCDC's coffers.

"We reviewed the financial capability of the agency and determined that if the agency were to pay the full debt service on the convention center...there will be no money available for projects after fiscal year 2013."

According to Alessi, assuming the $9.2 million annual payments would leave the downtown development corporation with only $3.8 million to spend on projects, city services, and CCDC administration.

So, Alessi suggested a compromise, that CCDC be put on a "stepped-up" payment plan, paying $2 million in 2012 and increasing each following year by $500,000 until the debt is paid off in 2043. Even on this payment plan, Alessi said CCDC would be forced to cut $3.25 million in public-art projects for five years and spend $7 million less on land acquisitions through 2014.

City council liked Alessi's plan.

"Cutting off redevelopment and shutting down these projects would be extremely shortsighted," said councilmember Kevin Faulconer. "To turn that off would be the wrong place to go."

"We could shift priorities around at CCDC and we could make the full payment, [but] I'm going to accept compromise. This compromise will help the city, and it's not going to bankrupt CCDC," said councilmember David Alvarez.

Faulconer presented a motion supporting the "stepped-up" payment alternative. That motion passed seven-to-one, with Sherri Lightner opposed.

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During a council meeting last February, city councilmembers acting as the Redevelopment Agency requested that Centre City Development Corporation (CCDC) return in March to discuss a plan that the corporation take over the $228 million in debt owed on a previous expansion of the convention center.

At a March 29 city council meeting, CCDC vice president Frank Alessi said the $9.2 million annual payments, increasing to $13.7 million in 2013, would clean out CCDC's coffers.

"We reviewed the financial capability of the agency and determined that if the agency were to pay the full debt service on the convention center...there will be no money available for projects after fiscal year 2013."

According to Alessi, assuming the $9.2 million annual payments would leave the downtown development corporation with only $3.8 million to spend on projects, city services, and CCDC administration.

So, Alessi suggested a compromise, that CCDC be put on a "stepped-up" payment plan, paying $2 million in 2012 and increasing each following year by $500,000 until the debt is paid off in 2043. Even on this payment plan, Alessi said CCDC would be forced to cut $3.25 million in public-art projects for five years and spend $7 million less on land acquisitions through 2014.

City council liked Alessi's plan.

"Cutting off redevelopment and shutting down these projects would be extremely shortsighted," said councilmember Kevin Faulconer. "To turn that off would be the wrong place to go."

"We could shift priorities around at CCDC and we could make the full payment, [but] I'm going to accept compromise. This compromise will help the city, and it's not going to bankrupt CCDC," said councilmember David Alvarez.

Faulconer presented a motion supporting the "stepped-up" payment alternative. That motion passed seven-to-one, with Sherri Lightner opposed.

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Comments
3

Does this mean that the CCDC has to make the stepped up payment, that they have to actually pay the $2 Million more than they were going to if the City Council hadn't passed this? Or does it mean that the City has told them that they would like for them to do this. Is there like a bill, like your water bill to the CDC? And when do they have to pay?

March 31, 2011

Nostalgic: CCDC will begin making the payments next fiscal year. And, CCDC would not have had to pay the debt if council/redevelopment agency had not brought the proposal forward.

Thanks!

April 2, 2011

The next step is for the CCDC to try to figure out how to wiggle out of paying the $2 MILLION they were told to pay. It will be interesting to see when that first payment is made, the first check written. That would be the real start of a new San Diego.

April 3, 2011

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4S Ranch Allied Gardens Alpine Baja Balboa Park Bankers Hill Barrio Logan Bay Ho Bay Park Black Mountain Ranch Blossom Valley Bonita Bonsall Borrego Springs Boulevard Campo Cardiff-by-the-Sea Carlsbad Carmel Mountain Carmel Valley Chollas View Chula Vista City College City Heights Clairemont College Area Coronado CSU San Marcos Cuyamaca College Del Cerro Del Mar Descanso Downtown San Diego Eastlake East Village El Cajon Emerald Hills Encanto Encinitas Escondido Fallbrook Fletcher Hills Golden Hill Grant Hill Grantville Grossmont College Guatay Harbor Island Hillcrest Imperial Beach Imperial Valley Jacumba Jamacha-Lomita Jamul Julian Kearny Mesa Kensington La Jolla Lakeside La Mesa Lemon Grove Leucadia Liberty Station Lincoln Acres Lincoln Park Linda Vista Little Italy Logan Heights Mesa College Midway District MiraCosta College Miramar Miramar College Mira Mesa Mission Beach Mission Hills Mission Valley Mountain View Mount Hope Mount Laguna National City Nestor Normal Heights North Park Oak Park Ocean Beach Oceanside Old Town Otay Mesa Pacific Beach Pala Palomar College Palomar Mountain Paradise Hills Pauma Valley Pine Valley Point Loma Point Loma Nazarene Potrero Poway Rainbow Ramona Rancho Bernardo Rancho Penasquitos Rancho San Diego Rancho Santa Fe Rolando San Carlos San Marcos San Onofre Santa Ysabel Santee San Ysidro Scripps Ranch SDSU Serra Mesa Shelltown Shelter Island Sherman Heights Skyline Solana Beach Sorrento Valley Southcrest South Park Southwestern College Spring Valley Stockton Talmadge Temecula Tierrasanta Tijuana UCSD University City University Heights USD Valencia Park Valley Center Vista Warner Springs
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