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Hotel barons circle convention-center board vacancy

Hepatitis politics and real estate battle loom over ill member replacement

Candace Carroll vacated her seat on the convention-center board in September.
Candace Carroll vacated her seat on the convention-center board in September.

Could one of San Diego's wealthy "hoteliers" make it to the board of the city-subsidized convention-center corporation?

That is city hall's question of the hour as the controversy-prone administration of Republican mayor Kevin Faulconer continues its dark deliberations over filling the board seat that downtown attorney and prolific political giver Candace Carroll vacated quietly in early September.

"The Ethics Ordinance does not preclude a hotelier from serving on the Board, but such an appointment would raise conflict of interest concerns," notes an August 21 "informal advice letter" from San Diego ethics commission staffer Stephen Ross to Faulconer deputy chief of staff Felipe Monroig.

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"For purposes of this letter, a ‘hotelier' is someone who is currently an officer, director, or employee of a hotel. It does not refer to a person who has retired from the lodging industry, nor does it refer to any person whose financial relationship with a hotel is based solely on owning shares of stock in the hotel; such persons are subject to a different analysis.”

According to the letter, "A hotelier has an economic interest in his or her hotel, and would therefore be precluded from participating in any [board] decisions that have a realistic possibility of financially impacting the hotel. Moreover, under certain circumstances, the Board itself would be unable to enter contracts, even with the hotelier’s recusal, if the hotelier has a prohibited financial interest in that contract by virtue of his or her employment with the hotel."

Voting on a juicy new contract for the San Diego Tourism Authority would be particularly problematic, the opinion holds.

"The Tourism Authority provides marketing services for the Convention Center through a Sales Contract. In order for the Tourism Authority to provide marketing services beyond the current terms of the contract, the Board will have to approve a new or extended contract."

That could bring a torrent of conflicts and recusals.

"If a hotelier has a financial interest in the Sales Contract stemming from the Tourism Authority’s marketing efforts and related hotel bookings, he or she would [be] unable to serve on the Board while contract negotiations regarding the Sales Contract are underway. On the other hand, a hotelier with only a 'remote interest' in the Sales Contract may serve on the Board during contract negotiations but would have to be recused from Board discussions and decisions concerning the contract."

There is at least one possible loophole, according to the letter.

"If a Board member is a hotelier employed by a hotel operating in Rancho Bernardo that does not provide rooms in connection with Convention Center events, then the hotelier will not have a financial interest in the Sales Contract; he or she may lawfully participate in the Board’s decision to amend or renegotiate the Sales Contract."

Carroll, tendered her resignation September 5 for health reasons, according to board minutes. She had been reappointed to a new term and confirmed by the city council in March, according to a council docket. Her departure was revealed to the public via a September 7 notice of vacancy posted online by the city clerk's office.

Currently operating with just six members, the board's latest meeting was held in the form of a November 13 "board retreat."

A host of hot-button political issues — including coming up with sufficient public money to deal with downtown's homeless hepatitis epidemic and a nasty legal battle with would-be hotel developer Fifth Avenue Landing — awaits a full board.

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Candace Carroll vacated her seat on the convention-center board in September.
Candace Carroll vacated her seat on the convention-center board in September.

Could one of San Diego's wealthy "hoteliers" make it to the board of the city-subsidized convention-center corporation?

That is city hall's question of the hour as the controversy-prone administration of Republican mayor Kevin Faulconer continues its dark deliberations over filling the board seat that downtown attorney and prolific political giver Candace Carroll vacated quietly in early September.

"The Ethics Ordinance does not preclude a hotelier from serving on the Board, but such an appointment would raise conflict of interest concerns," notes an August 21 "informal advice letter" from San Diego ethics commission staffer Stephen Ross to Faulconer deputy chief of staff Felipe Monroig.

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"For purposes of this letter, a ‘hotelier' is someone who is currently an officer, director, or employee of a hotel. It does not refer to a person who has retired from the lodging industry, nor does it refer to any person whose financial relationship with a hotel is based solely on owning shares of stock in the hotel; such persons are subject to a different analysis.”

According to the letter, "A hotelier has an economic interest in his or her hotel, and would therefore be precluded from participating in any [board] decisions that have a realistic possibility of financially impacting the hotel. Moreover, under certain circumstances, the Board itself would be unable to enter contracts, even with the hotelier’s recusal, if the hotelier has a prohibited financial interest in that contract by virtue of his or her employment with the hotel."

Voting on a juicy new contract for the San Diego Tourism Authority would be particularly problematic, the opinion holds.

"The Tourism Authority provides marketing services for the Convention Center through a Sales Contract. In order for the Tourism Authority to provide marketing services beyond the current terms of the contract, the Board will have to approve a new or extended contract."

That could bring a torrent of conflicts and recusals.

"If a hotelier has a financial interest in the Sales Contract stemming from the Tourism Authority’s marketing efforts and related hotel bookings, he or she would [be] unable to serve on the Board while contract negotiations regarding the Sales Contract are underway. On the other hand, a hotelier with only a 'remote interest' in the Sales Contract may serve on the Board during contract negotiations but would have to be recused from Board discussions and decisions concerning the contract."

There is at least one possible loophole, according to the letter.

"If a Board member is a hotelier employed by a hotel operating in Rancho Bernardo that does not provide rooms in connection with Convention Center events, then the hotelier will not have a financial interest in the Sales Contract; he or she may lawfully participate in the Board’s decision to amend or renegotiate the Sales Contract."

Carroll, tendered her resignation September 5 for health reasons, according to board minutes. She had been reappointed to a new term and confirmed by the city council in March, according to a council docket. Her departure was revealed to the public via a September 7 notice of vacancy posted online by the city clerk's office.

Currently operating with just six members, the board's latest meeting was held in the form of a November 13 "board retreat."

A host of hot-button political issues — including coming up with sufficient public money to deal with downtown's homeless hepatitis epidemic and a nasty legal battle with would-be hotel developer Fifth Avenue Landing — awaits a full board.

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Comments
2

That is a big loophole. So could they pick someone from a Radisson or a Marriott in Rancho Bernardo and claim there's no connection to any of their properties here? Or the group that owns Town & Country also owns L'Auberge Del Mar—could they have someone from the latter property serve on the board?

There's just no way to let any hotelier make decisions about the convention center without creating an inherent conflict of interest.

Nov. 14, 2017

Sounds like the fox guarding the hen house. The City is rife with boards and commissions filled with self dealing political hacks and corrupt business people looking to get an edge on competitors.

Nov. 16, 2017

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