Indications of wear and tear on the convention center’s sails
  • Indications of wear and tear on the convention center’s sails
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On May 7, city-council members wailed that they had been knifed from behind. They claimed to be finding out for the first time that the San Diego Convention Center had defaulted on an agreement to keep its mitts on a six-acre parcel that would be essential for construction of a contiguous expansion.

Jeff Kawar

Jeff Kawar

The center’s management had decided to default on a balloon payment of more than $13 million. The property owners are playing hardball. “I have seen a demand letter,” says Jeff Kawar, deputy director of the Office of the Independent Budget Analyst. The owners’ lawyers “are threatening to foreclose.”

Councilmembers warned that there may never be a contiguous expansion. So did the media, even though center management says a deal can still be made. Former councilmember Carl DeMaio sounded the alarm on his radio show, penned an op-ed, and sent it to his mailing list, saying, “This is a big deal and is critical for our local economy.”

Actually, an expansion, contiguous or noncontiguous, is not critical to the local economy. That’s because there is no credible evidence that a bigger facility would bring in more attendance. On May 5, two days before the traumatizing council meeting, the Office of the Independent Budget Analyst issued a report showing that the center is suffering from both physical and financial shabbiness and lacks the means to fix the physical deterioration. Indeed, Kawar’s reports over the last three years have shown how the center’s finances were looking ever more ragged.

The budget analyst report probed the center’s 2016 budget. Among the many things that stood out was this: next year, the gross building rent is expected to be $14.4 million. Subtract $5.6 million of that sum as “rent credits,” or price cuts to convention customers, and the total is $8.8 million. The center plans to discount its prices by almost 40 percent next year.

Heywood Sanders

Heywood Sanders

“Everybody in the industry is discounting — including some down to zero,” says Heywood Sanders, the ranking expert on convention centers. The University of Texas at San Antonio professor warned of a convention-center glut in a seminal 2005 paper for the Brookings Institution. Last year, his book Convention Center Follies: Politics, Power, and Public Investment in American Cities told the story of the goofy industry arms race. Even industry leaders are warning that the price cuts are splashing red ink all over centers’ books.

Attendance is growing at only 1 to 2 percent a year, but new centers continue to be built or existing centers expanded. Thus, there is vicious price-cutting in a highly competitive market. “If you have to give the place away, what is the likelihood you will be able to get any real and continuing increase from an expansion?” Sanders asks.

Kawar was responsible for the budget analyst study. He notes another factor: next year, the center projects that gross rent will rise $527,000 and the rental credits, or discounts, will increase $516,000. “Yes, rents increase, but they increase about the same amount as rent discounts. I thought that was interesting,” says Kawar.

Just as interesting is “the lack of a plan to address the growing backlog of capital needs at the Convention Center,” the report notes. This has been happening at the same time as operating reserves have been depleted.

In 2008, the reserve fund peaked at $8 million. But the center’s staff gobbled that up planning for an expansion; the money went for rights to purchase the expansion site, feasibility analyses, and payments to design consultants. Kawar says, however, that reserves were increased last year, and there are plans to boost them this year and next year. The dilemma: “You need to restore healthy reserves, but you also have to [take care of] capital needs.” No funds have been budgeted to address the $3.9 million in capital needs next year.

Some say San Diego’s convention center needs to be made bigger to compete, even while maintenance suffers

Some say San Diego’s convention center needs to be made bigger to compete, even while maintenance suffers

The center has $32 million in long-term capital needs over five years, such as fixing the rips and stains in the sails in the rooftop sails pavilion.

Steve Cushman

Steve Cushman

“What is not addressed is the $32 million and how to fund that,” says Kawar, and even Steve Cushman, chairman of the center, admits that the convention center doesn’t generate enough capital to pay for deferred maintenance.

The center normally gets $3.4 million from the city. Now it wants that boosted to more than $7 million. Kawar, for one, questions whether the gift will be forthcoming. The center’s management is also discussing whether it could wangle money from the California Infrastructure and Economic Development Bank, called the “IBank.” The bank, located within the governor’s office, provides financing to state institutions through such methods as issuing tax-exempt and taxable revenue bonds.

The center’s dismal financial condition is greatly a function of the price slashes caused by the industry glut. Will an expansion attract more business? Says Sanders, “The dilemma is, if you are expanding in an environment in which the business is growing slowly, and it is clearly oversupplied, and you know other [cities] are expanding, the likelihood of getting new business is slim to none, particularly when Anaheim, San Francisco, Los Angeles, and Seattle are expanding.”

Vlad Kogan

Vlad Kogan

As usual, the convention center did not answer the questions I submitted. But Vlad Kogan, who got his PhD in political science at the University of California San Diego and is now an assistant professor at Ohio State, still follows San Diego and can see the center’s point of view.

The convention center is “in a situation in which you have to run faster just to stay where you are. [Other centers] are expanding, upgrading amenities like installing better Wi-Fi. If you don’t expand, you may lose market share,” says Kogan. But on the other hand, he says, the fact that the convention center is “not bringing in enough revenue to keep it up undermines the argument that this is a great business for the city.”

The center wants to bring in more revenue by selling naming rights. How would you like the alliterative Coca-Cola Convention Center Corporation, home of Comic-Con? The county grand jury correctly says the center needs more oversight from city officials and has to be more transparent about its finances. The grand jury report cites ways in which the center has juggled its books.

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Visduh June 10, 2015 @ 7:49 a.m.

These woes should be no surprise to anyone, in that the City of San Diego seems incapable of running anything well or running it efficiently. Then letting the operation basically operate free of effective oversight was a recipe for disaster. DeMaio is one of those locals who still thinks that tourism is the end-all for the local economy. In fact, in some ways it is a drag on the city and county, in that more of the high-paying jobs that can make for a middle-class lifestyle are not always welcomed. Rather the tourism cabal and those who want ever more military "billets" assigned to the county often go to the head of the line for consideration.


Don Bauder June 10, 2015 @ 8:02 a.m.

Visduh: Tourism is a big San Diego industry, but there are very definitely problems. As you mention, it is a low-paying industry. Also, so many of the hotels and motels -- particularly large hotels downtown -- are owned out of town. The profits go elsewhere.

The convention center is in bad shape financially and physically, and lacks both funds and management acuity to do something about it. The idea of expanding the convention center into a national glut is folly. The reason convention centers in San Diego and throughout the country are slashing prices is the existence of that very glut.

The industry is vastly overbuilt. Why expand into such a situation? Fix the insides of the existing center first. Don't consider expansion until the glut recedes. But that is not going to happen soon at the rate current centers are expanding. Best, Don Bauder


MURPHYJUNK June 10, 2015 @ 7:58 a.m.

default on the loan, let the property owners take over the center, they probably would do a better job of management than the stumble bum city does.


Don Bauder June 10, 2015 @ 8:08 a.m.

Murphyjunk: Your suggestion would be one way of privatizing the center. I think privatization would lead to entirely new problems, and might not lead to better management. I doubt it could be accomplished legally. Best, Don Bauder


MURPHYJUNK June 12, 2015 @ 8:40 a.m.

since when did "accomplished legally" actually figure into the way things work in San Diego?


Don Bauder June 13, 2015 @ 2:26 p.m.

Murphyjunk: Excellent point. Look at the most recent attempt to put an addition on the convention center. Mercifully, it was shot down by the court. Then look at the task force's idea for financing a subsidized stadium -- also set up to avoid a vote of taxpayers. Best, Don Bauder


aardvark June 10, 2015 @ 9:22 a.m.

So if ComicCon ends up staying, will they be paying any rent at all? After all, they are paying about half the rent they did a few years ago. I would imaging their rent would be dropped again if they decided to stay.


Don Bauder June 10, 2015 @ 10:55 a.m.

aardvark: It is almost certain that if Comic-Con decides to stay in San Diego,, it will get a fat discount -- maybe even a fatter one than the roughly 50% cut it has been getting.

Comic-Con would probably prefer Hollywood propinquity. That would mean L.A. or Orange County. Both are big discounters. Not long ago I wrote about a group in L.A. that got a discount of more than 100% -- that is, the convention was paid to put its gathering in L.A. Best, Don Bauder


Bob_Hudson June 11, 2015 @ 9:58 a.m.

"Comic-Con would probably prefer Hollywood propinquity. That would mean L.A. or Orange County."

I think the "industry" crowd loves that Comic Con gives them an excuse to go hang out for a weekend on the San Diego waterfront. Have you been to a large trade show in Anaheim? Outside the confines of the convention center, that area is hot and ugly. The Hollywood actors, producers, writers and professionals who come to Comic Con (from all over the world) for fun and work are not pushing for a weekend in central Orange County, not when they can drive another hour south and be on the water in San Diego.


Don Bauder June 11, 2015 @ 11:03 a.m.

Bob_Hudson: Will the fact that Orange County is expanding their center make any difference? Best, Don Bauder


AlexClarke June 10, 2015 @ 12:33 p.m.

"back in the day" when I worked on the convention center those way above my pay grade that knew what they were doing said that the convention center was too small and that the "sails" were not cost effective and would be high maintenance. They were right about the Center being too small (San Diego has always thought small) as it was expanded (too little too late) and the Pavilion with it's sails is rarely nice enough to have a decent gathering. It is either too cold, too hot or too windy. Now that every city seems to have a convention center San Diego Convention Center gurus need to focus on niche market conventioneer's. Maybe a new Charger Stadium will bring more conventions to San Diego.


Don Bauder June 10, 2015 @ 1:10 p.m.

AlexClarke: A new football stadium will not bring more conventions to San Diego. Hardly any, if any, people come to conventions to go to a local football game. Same with Padres: few if any people come to a convention in San Diego to go to a baseball game. Best, Don Bauder


AlexClarke June 10, 2015 @ 3:27 p.m.

Sorry Don I guess I didn't make it clear that my last line was tongue-in-cheek. Even with a new stadium the Padres are not having a good year. Oh well . . . . . .


Don Bauder June 10, 2015 @ 8:19 p.m.

AlexClarke: I was too dense to realize that last line was tongue-in-cheek. My stupidity. Best, Don Bauder


AlexClarke June 11, 2015 @ 6:51 a.m.

Don you are anything but stupid you are my financial hero!


Don Bauder June 11, 2015 @ 12:59 p.m.

AlexClarke: But the descent from hero to bum can be rapid -- especially for someone stupid! Best,Don Bauder


Don Bauder June 10, 2015 @ 1:16 p.m.

Naraka Jay: It would not make sense to tear the convention center down. It should be fixed up. Ditto Qualcomm Stadium. It should be given a facelift if the Chargers give up their L.A. quest for lack of funds and want to return to San Diego.

And if the Chargers can't make a deal in L.A., when they return to San Diego, hat in hand, the city is in the driver's seat, not the team. San Diego should draw up a new lease beginning in 2020 that commands the team to pay realistically higher rent. The team has a ridiculously favorable lease now; that should be removed if they stay in San Diego. Best, Don Bauder


MichaelValentine June 11, 2015 @ 10:40 a.m.

Now wouldn't that be something ..... from your lips Don.


Don Bauder June 11, 2015 @ 11:08 a.m.

MichaelValentine: I do believe that if the Chargers don't have the bucks or clout to pull off a move to L.A., they will probably return, wagging their tails behind them. They will have other options: St. Louis if the Rams leave, San Antonio, Las Vegas if the league would approve.

I don't think Dean Spanos wants to be far from Vegas. But he has a fiduciary duty to the rest of the family. Best, Don Bauder


danfogel June 11, 2015 @ 11:25 a.m.

don bauder I find it highly unlikely that the NFL would allow the Chargers to move anywhere other than Los Angeles. More or less, they have put all of their eggs in the Los Angeles basket. If, for some as yet unforeseen reason, the move to Los Angeles is nixed, I doubt the league would react favorably to the Chargers when they come pleading to move someplace, anyplace, just don't make us stay in San Diego. And as you said above, and I said several weeks ago, San Diego will be in charge, holding them by their footballs, as it were. And that would be the time for the city to grow a pair of their own and right all the wrongs the Chargers have perpetrated on San Diego for the last 25+ yrs. Wait. What am I thinking. It's San Diego. History is destined to repeat itself. The city will bend over for the Chargers...again.

Just my opinion.

Opinions vary.


Don Bauder June 11, 2015 @ 1:03 p.m.

danfogel: Unfortunately, I suspect your opinion is right on. If the Chargers can't swing a deal to L.A., they will return and get another ridiculously good deal. I doubt that it will be a stadium, though, but I could be wrong on that. Best, Don Bauder


Twister June 11, 2015 @ 5:31 p.m.

Amen, brothers--y'all spake the truth!


Don Bauder June 12, 2015 @ 7:02 a.m.

Twister: And we hope we are not speaking the truth. If the Chargers return and demand a huge subsidy, it will be time for the people of San Diego -- sick of the delays on fixing infrastructure and the pension system -- tell the downtown corporate welfare crowd to go directly to hell and thumb down a subsidized stadium. Best, Don Bauder


danfogel June 12, 2015 @ 9:21 a.m.

don bauder You'll find that many of the truths we cling to depend greatly on our own point of view.


Don Bauder June 12, 2015 @ 12:39 p.m.

danfogel: No kidding. Best, Don Bauder


Visduh June 12, 2015 @ 9:22 a.m.


If this ballot proposal goes forward and passes, that will not mean that a new stadium will be built. Even the Light News admits that there will be legal challenges, and that they could delay it by many years. This contrived brinksmanship about needing to get a new stadium up within, say, three years also requires a firm resolution.

It also seems unlikely that, even if the voters are hoodwinked again, it will guarantee that the financing package can be put together. Remember the terrible deal the city got on placing the Petco Park bonds, with the scandalously high interest rate? I'd think that this time it would be even more difficult to find a buyer for the bonds. If any financing institution looked at the dismal financial condition of the city, they would refuse to hand over their money. The danger of a default would be too high for even junk-bond status.


Don Bauder June 12, 2015 @ 12:51 p.m.

Visduh: I believe you are right: getting a firm to peddle the bonds could be harder this time than it was for Petco. The initial Petco bonds went out a stunning 7.66 percent. When they were refinanced, the rate dropped.

This time, the investing public is more aware of the city's (and county's) financial woes. With short term rates effectively at zero percent now, I doubt the rate would be 7.66 percent. But the spread between short rates and the football stadium rate could be even wider. Best, Don Bauder


Ponzi June 10, 2015 @ 4:54 p.m.

This is funny about the canvas "sails" deteriorating on the convention center. Mariners going back centuries before the Mayflower know you should stow sails when not underway. Canvas is ruined by sun (ultraviolet light) and exposure. Why funny? Because the design of the proposed new Charger stadium is also employing "sails" in the design.

If you don't have a budget for the maintenance - or rather, periodic replacement, another material or design should be used. Perhaps transparent solar panels or hexagonal skylights.

If they do put the sails on Charger stadium, I hope they put wheels on it too. That way when we figure out they screwed us, we can sail them up I-5 to L.A.


Don Bauder June 10, 2015 @ 8:27 p.m.

Ponzi: Those sails on the new Chargers stadium in Carson will be made of paper. That's because, in my opinion, that new stadium is a phony meant to frighten San Diego and Oakland fans, and also Stan Kroenke, who is quite likely to move the Rams to his new stadium in Inglewood, and might share it with either the Chargers or Raiders.

Those sails will remain on paper. Who is going to finance that Carson stadium? Best, Don Bauder


Don Bauder June 11, 2015 @ 6:10 a.m.

ImJustABill: Yes, I do not believe that Goldman Sachs will finance a new stadium in Carson. I think Goldman Sachs may agree to help FINDING some private sector enterprise to put money in the pot. That story is from back in March. Best, Don Bauder


corybriggs June 10, 2015 @ 8:19 p.m.

Don: Please help your readers avoid underestimating just how badly the hoteliers are screwing up things with the convention center and Chargers; the hoteliers are masters of disaster. No matter how people feel about the CC or the stadium, the reality is that the hoteliers have manipulated the politicians into a terrible negotiating position. I wrote about that today for Voice of San Diego, which you can read here:

Thanks for always shining the light on downtown.


Ponzi June 10, 2015 @ 8:23 p.m.

Doug Manchester. You will never find a more wretched hive of scum and villainy. We must be cautious.


Don Bauder June 11, 2015 @ 6:12 a.m.

Ponzi: Ah, scum and villainy. It is always in abundant evidence when a billionaire wants taxpayers to pay 70 to 80 percent of a stadium. Best, Don Bauder


danfogel June 12, 2015 @ 9:15 a.m.

don bauder, Who's the more foolish, the fool or the fool who follows him?


Don Bauder June 12, 2015 @ 12:57 p.m.

danfogel: You are touching on one of Wall Street's most poignant descriptions. It's the greater fool theory. Basically, you know that the asset you have purchased isn't worth half the money you paid for it, but you figure that a greater fool will come along and buy it from you at a higher price. Trouble is, if the music stops while you are holding the asset, you might get wiped out. Best, Don Bauder


ImJustABill June 11, 2015 @ 5:57 p.m.

He is our "Papa". Search your feelings. You know it to be true.


Don Bauder June 12, 2015 @ 7:05 a.m.

ImJustABill: My Papa was an honest man and has been dead 37 years. Best, Don Bauder


ImJustABill June 12, 2015 @ 7:36 a.m.

I was continuing with the Star Wars theme from Ponzi's quote (which references Obi-Wan Kenobi's comments to Luke Skywalker entering Mos Eisley spaceport). My quote compared Papa to Darth Vader

I do find it very odd that someone in real life wants to be referred to as "Papa" by the community in general. Seems like something out of a comic book or an old gangster movie.


Ponzi June 12, 2015 @ 9:49 a.m.

It's why, when I comment on Manchester, I use a quote from James Bond, Star Wars or some other fictional source. I don't call him papa. I don't care much for him at all.


Don Bauder June 12, 2015 @ 1:02 p.m.

ImJustABill: The story I hear, and it might be apocryphal, is that Doug Manchester was making out a golf score card, or something of that nature, and had to distinguish between himself and his younger son,also named Doug. So he used Papa Doug for himself and then liked it so much that he wanted it to stick, and told those who worked for him to refer to him always as "Papa Doug."

If anybody has heard a better explanation, please step forward and give it. I repeat that I am making no claims for the accuracy of the one I gave. Best, Don Bauder


ImJustABill June 13, 2015 @ 4:54 p.m.

Coming up with a title for ones' self and insisting that others refer to you by that title seems a bit egotistical to me.


Don Bauder June 13, 2015 @ 8:31 p.m.

ImJustABill: "a BIT egotistical?" Best, Don Bauder


danfogel June 13, 2015 @ 10 p.m.

Yeah, I think narcissistic would be a much better description.


Don Bauder June 12, 2015 @ 9:35 p.m.

ImJustABill: In my typical ignorance, I didn't recognize the Star Wars quote or the names of any characters. But I did take my sons to the movie once. Best, Don Bauder


Don Bauder June 10, 2015 @ 8:36 p.m.

corybriggs: I have already read your piece, but thanks for sending. You make excellent points. The hoteliers want to hog every dollar for themselves. But most of that money goes to a company that is based out of town. So it doesn't help the San Diego economy much. Best, Don Bauder


swell June 10, 2015 @ 11:27 p.m.

Don said: "most of that money goes to a company that is based out of town" In civic matters, that is the key. Where does the money come from and where does it go. We want outside money coming in to San Diego.

In private business, we don't care. We want money coming to us. The hoteliers, the Chargers, the Padres, and Doug Manchester fall into this camp. They are not civic minded San Diegans, they are profit minded exploiters.

Most civic minded San Diegans generally want to keep what money we can and bring in outside money when possible. ComicCon and tourism does that, but it only provides jobs for minimum wage workers. The Chargers & Padres do not bring in outside money.

I would suggest that the big winner for civic San Diego is---industry. Qualcomm, NASSCO and biotech industries bring outside money to San Diego and provide a living wage. UCSD and similar public facilities help to populate these industries. Our waterfront is capable of handling more import/export/industrial activity. We still have some military contractors and personnel. We have an excellent biotech hub that can grow with proper civic attention. We still have a chance to be a center for creativity in software, electronics, alternative energy, water conservation technology and robotics. Perhaps not as emotionally appealing as the hotel/cruise ship/tourist or commercial sports industry; these are the areas of investment that can secure a good future for San Diego. They bring in more money than they cost our city.


Don Bauder June 11, 2015 @ 6:16 a.m.

swell: Agreed. It's private sector industry that brings money to San Diego. That money should be spent on infrastructure -- roads, sewers, storm drains, etc. Best, Don Bauder


Don Bauder June 11, 2015 @ 8:41 a.m.

Scott Dreher: Is the city deliberately permitting its structures (convention center, presumably Qualcomm) deteriorate so new structures can be built? That would be a Machiavellian ploy meriting termination of the bureaucrats. Best, Don Bauder


Twister June 11, 2015 @ 5:43 p.m.

". . . a Machiavellian ploy meriting termination of the bureaucrats. Best, Don Bauder"

Again, SOP. It might merit terminations, but the opposite will happen.

The "benign" neglect is far from benign--it is standard procedure. The crack in the streets have not been filled for years. Why? So the streets will deteriorate faster, and relatively simple slurry coats that might further extend pavement life are also avoided. Then you need a major re-pavement contract--times "x." That supports re-election campaigns, costing only a paltry few millions from those feeding at the trough.

Hear that "Giant Suckin' Sound?"


Don Bauder June 11, 2015 @ 9:43 p.m.

Twister: True. The ploy might merit terminations but will probably lead to promotions. How long can San Diego put up with this horrible infrastructure? It's a sure bet that a subsidized stadium and/or a convention center expansion would delay any infrastructure work once again. Best, Don Bauder


MURPHYJUNK June 13, 2015 @ 8:34 a.m.

maybe its all a plan to get more money out of the city, and those on both sides will get a cut in one way or another.


Don Bauder June 13, 2015 @ 2:35 p.m.

Murphyjunk: The recent history of San Diego is largely a tale of the corporate welfare crowd trying to filch more money from the city. Wouldn't it be great if San Diego's business community believed in capitalism instead of corporate socialism? Best, Don Bauder


Dennis June 13, 2015 @ 10:52 a.m.

". . . a Machiavellian ploy meriting termination of the bureaucrats. Best, Don Bauder" Perhaps we should quit using the term bureaucrats and replace it with politicians. The public tends to think of the bureaucrats as being rank and file employees of the City/County. The politicians make these decisions not the employees who are then tasked with implementation.


Don Bauder June 13, 2015 @ 2:39 p.m.

Dennis: Good point. One example: bureaucrats told the grand jury that they were pushed to juggle the numbers so it would look like the subsidized ballpark was self-financing. (It wasn't: the ballpark is still a drag on city finances.) As a result of this prestidigitation, the ballpark vote was fraudulent. Best, Don Bauder


laplayaheritage June 13, 2015 @ 1:06 p.m.

The issue of Defaulting on the the Fifth Avenue Landing (FAL) LLC Leasehold Option will be heard as Item 1 at the City Council's Budget and Government Efficiency (BGE-1) Committee next Wednesday June 17, 2015 at 9 am.

FAL is claiming they are owed $14,219,381 including $13,805,514 in Principal and Interest, Plus $413,867 for Late Charges, or they will Foreclose on the public State Tidelands. The lease option was predicated on securing Convention Center Phase III Expansion financing through a private hotel vote, which was ruled illegal.

The April 6, 2010 Lease included Paragraph 21 Hold Harmless on Page 139 of 333.


Don Bauder June 13, 2015 @ 2:41 p.m.

laplayaheritage: What, in your opinion, will happen if the center defaults? Best, Don Bauder


laplayaheritage June 13, 2015 @ 4:19 p.m.

Nothing. Hopefully the Gravy Train is over for FAL.

Fifth Avenue Landing (FAL) LLC was never guaranteed anything in the Agreements and MOU. They have no case. Plus the California Coastal Commission erased all FAL Conrad Spinnaker Hotel claims at the June 10, 2015 Newport Beach hearing.

These generous Gifts of Public funds to the private FAL should be investigated by State Controller Chiang, to see if there was a 2003 Sweetheart Lease Agreement for private benefit, or if the Lease was reasonable for our public State Tidelands.

Fifth Avenue Landing failed to build a 500 room Conrad Spinnaker Hotel since Port approval in 2003. Therefore, FAL could, in theory, have to pay back the 10.5% Transient Occupancy Tax (TOT) lost by failure to develop the 500-room Spinnaker Hotel over the last 12 years.

The incredible high negotiated $13.5 million Lease Option Agreement price including 6% Interest was done behind Closed Session Doors with SDCCC Director Steve Cushman leading the negotiations, without public input.

See Page 330 At the October 7, 2003 SDUPD hearing, "Perry Dealy, representing Manchester Resorts, addressed the Board and stated that complex projects such as this one can be built without rent concessions or financial assistance. Mr. Dealy stated that it would not be fair for the District to grant rent concession for the Conrad Spinnaker Hotel project."

Since 2008, the Port could have not renewed the 2003 Giveaway and let the Lease Option Agreement lapse. Especially when FAL notified the Port that their project did not make financial sense in 2008. The Port was working for the benefit of private development, instead of the public and sold out for $60,000 a year to Extend the Option agreement after the already 5 year delay.

In 2010, the annual Lease rent for the FAL Leaseholds was only $114,000. Instead of Standard Percentage Rates. Which seems extremely low for a prime leasehold. Also $8.1 million was to be spent for Extraordinary Leasehold improvements including a new Public Restrooms, Public Park, and Waterfront Promenade. If FAL paid for these improvements they should get money back.

If the SDCCC and City of San Diego ever wanted to acquired the FAL Leasehold for the public in the future, local regional Government SANDAG can Eminent Domain the FAL Leasehold and pay FAL reasonable costs to make them whole. And move their Yacht and Water Transportation Center (WTC) somewhere in downtown at no costs to FAL.

"In addition to the hotel... must build a plaza, a 1-acre park, a transportation center for water taxis and a pedestrian bridge to the convention center... Port commissioners unanimously approved a repayment plan that would pay the developers, known as Fifth Avenue Landing, $8 million at 8 percent interest, over the hotel’s first 10 years of operation."


Don Bauder June 13, 2015 @ 8:38 p.m.

laplayaheritage: Maybe taking the FAL leasehold by public domain is a possibility. Best, Don Bauder


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