In face of Covid, San Diego city council dreams of bigger conventions

The San Diego hotel lobby has long used other peoples' money in the form of an ever-growing tax on transient room occupants to underwrite its developments and finance its powerful sway over city hall.

Most recently, closed-door lobbying by termed-out Republican mayor Kevin Faulconer, who benefits from his wife's convention-related party booking business, resulted in a council vote to avoid declaring the tax-raising Measure C dead due to the initiative’s failure to muster a legally-required two-thirds vote.

The council's move dovetails neatly with the strategy of the hotel lobby, as well as the San Diego Regional Chamber of Commerce and construction unions, which hope that the state supreme court throws out retroactively the super-majority vote currently required to impose tax increases.

Pushback against the council’s move to ignore a vote of the electorate came in the form of opposition by Democratic councilwoman Barbara Bry, running for mayor against Assembly Democrat Todd Gloria.

He is endorsed by the Chamber of Commerce, California Restaurant Association, and the San Diego Hotel-Motel Association, as well as being a beneficiary of six-figure campaign cash from lodging interests, including Evans Hotels, whose growth is dependent on an expanded convention center financed with new tax dollars.

Councilwomen Vivian Moreno and Monica Montgomery joined Bry in opposing the council's failure to declare Measure C dead.

Alliance San Diego, a non-profit advocacy group opposed to the initiative, contended in a statement that the council had "undermined our democracy' in "voting to 'certify' the March primary election results. "As Council President Pro Tem Barbara Bry stated in rejecting the move, this is a break in faith with voters."

Enter the worldwide catastrophe called the COVID-19 pandemic, which has shut down the convention business everywhere, and which some predict could mark the ultimate end of the costly gatherings, forcing most such activities online.

Depending on the unpredictable course of the epidemic, the lucrative national meeting business could virtually evaporate, say skeptics, with many convention venues, financed by public debt, destroying the balance sheets of their municipal sponsors.

Such could be the case in the city of New Orleans, hard hit by COVID-19, where a financial watchdog has just released an April 9 report questioning the wisdom of paying $767 million in public subsidies for a mammoth Omni Hotel next to the city's convention center.

"In a matter of weeks, the coronavirus pandemic has dealt a significant economic blow to New Orleans, hitting the tourism and convention industries particularly hard," says the grim analysis by the non-profit Bureau of Government Research.

"Despite the extraordinary new circumstances, Convention Center officials are pressing forward to finalize a deal to build a 1,200-room hotel attached to the center.

The report goes on to highlight "the risks of moving forward with the project absent an informed analysis of the pandemic's longer-term impacts on tourism and conventions," a project which neither Faulconer nor the council has yet set out to accomplish in San Diego

"The report recommends that the Convention Center and its board refrain from entering into any agreements concerning the hotel project while the pandemic is ongoing," concludes a summary.

"It further recommends that they commission a new or updated hotel feasibility study once the pandemic subsides, taking into account anticipated longer-term impacts from the pandemic on convention activity."

Meanwhile, convention sponsors are contemplating moves to online meetings, reducing the justification for physical expansions like the one planned in San Diego.

“Venues and planners can work together to find digital/virtual solutions to reduce some of the spatial needs for the event,” Gary Shapiro, president and CEO of the Consumer Technology Association told a March 26 meeting industry blog.

"Virtual events are changing the way we meet, and could greatly reduce the spatial requirements for a meeting. As the meetings industry embarks on the road to recovery following coronavirus, hybrid events could greatly assist in financial balancing while we slowly incorporate the return of face-to-face interactions.”