Aug. 10–A divided San Diego City Council said no Thursday to putting a measure on the ballot to expand the city's bayfront convention center, rebuffing Mayor Kevin Faulconer's pleas to do so.
The council had been asked to move the measure forward after a citizens' initiative that would have boosted the hotel tax to finance the expansion project failed to secure enough valid signatures to make it onto the ballot. The measure would have also funded homeless initiatives and road repairs.
The vote was 4-4, with four of the council's Democratic members — Barbara Bry, Georgette Gomez, David Alvarez and Myrtle Cole — rejecting the mayor's request to deviate from the council's own policies in order to place the measure on the ballot. Absent was Councilman Chris Ward.
Said Faulconer following the meeting's conclusion, "Four members of the City Council put politics over progress. We hear all the time about the need for homeless services, the need to repair our roads and the need to expand our convention center. The council had the ability to put that on the ballot — to let San Diegans decide — and unfortunately four members said no."
In a formal statement posted on Twitter, the mayor was even more blunt, saying "The City Council talks a big game about making our city better, but when the time came for action all we heard were excuses."
Countered Alvarez on Twitter, "Stop projecting your failure onto us. Today, the City Council showed courage and stood up for the people and for transparency."
The council decision represents a remarkable rejection of one of Faulconer's top priorities ever since he took office in 2014. He had tried, unsuccessfully, to persuade the council just last year to hold a special election in November 2017 for a slightly different hotel tax hike measure for the expansion and was banking on the citizens' initiative to gain favor with voters.
The action came one day after the county Registrar of Voters revealed that a citizens' initiative that would have raised the city's hotel room tax to bankroll the expansion fell short of the required signatures needed to qualify it for the ballot. A full verification of the signatures, which could take up to 30 business days to complete, is now required, putting the initiative well past this Friday's deadline for placing anything on the November ballot.
Like the initiative, the ballot measure sought by the mayor would have asked voters to raise the city's effective room tax of 12.5 percent to as much as much as 15.75 percent to not only bankroll the expansion project, but also provide considerable funding for housing and services for the homeless, as well as for road repairs.
The city estimated that the ballot measure would have generated an estimated $5.9 billion in revenues over a period of 42 years.
The greatest share of revenues from the tax increase — nearly $3.5 billion — would have gone for the convention center project, including continued upkeep and marketing. More than $1.8 billion would have been set aside for addressing homelessness, and $551 million would have gone for road repairs.
A coalition of business and organized labor interests launched a signature-gathering effort earlier this year in hopes of getting the measure before voters this November. As a citizens' initiative, there was a possibility that it would have only required a simple majority of the voters to prevail, based on a court ruling last year.
With hopes now dashed for a near-term decision on a long-sought expansion of the center, supporters say they are banking on the citizens' initiative having enough valid signatures to qualify for a future ballot. A full verification is currently underway. The next general election would not be until 2020.
The Yes! For a Better San Diego campaign behind the initiative said as much in a statement following the afternoon hearing, which drew several people both in support of and opposed to placing a measure on the ballot.
"Our citizens' coalition is disappointed that our initiative was not able to qualify for the November 2018 ballot," spokeswoman Laura Fink said. "We remain optimistic that our measure will qualify for a future ballot, and the will of the 114,000 San Diegans who signed our petition will be heard. We are proud of the work of our bi-partisan coalition of business and labor, homeless advocates and community leaders to alleviate homelessness, create jobs and repair our neighborhood streets."
The coalition also announced earlier in the day that it plans on suing the signature-gathering firm it hired, alleging fraud and breach of contract.
With no immediate plan,though, for an expansion of the center, the council vote could clear the way for a $300 million hotel project known as Fifth Avenue Landing, which is planned for the same site as the convention center project.
In anticipation of the initiative moving forward, the city had approved a $33 million payout to longtime port tenants Ray Carpenter and Art Engel in order to gain control of their leasehold. But the full payment was contingent on the success of the initiative.
Some of the longtime supporters of an expanded center appeared sullen following the vote. San Diego Tourism Authority CEO Joe Terzi, who has long said a much larger center was needed to remain competitive with the city's biggest rivals that are also expanding their centers, called the council action a "sad day for San Diego."
San Diego residents, he said, will be the ones who lose as a result of the decision because there will not be enough funding to address homelessness and bolster the San Diego economy with more convention business.
"Frankly, I've been here 23 years and to me, this is the worst decision in my 23 years," Terzi said.
Deacon Jim Vargas, CEO of Father Joe's Villages, had pushed the council to move forward because of the critical need for homelessness funding.
"Without this funding, we run the risk of falling behind other California cities making major investments in homeless services," he said.
The council, though, heard from a number of people who urged members to not place the measure on the ballot with so little time for the public to weigh in. No matter what suggestions the public might have made Thursday, the council was advised by the City Attorney's office it could not make substantive changes to the ballot measure language.
"The public process was the big winner today, and I commend those council members for supporting the public," said former Councilwoman Donna Frye, long a strong advocate for public transparency. "For me, my primary focus today was open government and the public's right to participate and to not have to digest hundreds of pages of documents in 24 hours."
Councilwoman Barbara Bry, who said she remains a strong supporter of a convention center expansion, said she could not say yes to advancing the ballot measure because she did not want to start making exceptions to the city's own policies.
"I'm very disappointed there is no revenue measure to address our homeless crisis on the ballot and no convention center expansion," she said following the meeting. "The expansion is a driver for our economy. I am like almost in tears today."
Thursday's vote comes two weeks after supporters of a separate $900 million housing bond decided to postpone their effort until 2020 in response to pressure from backers of the convention center measure.
That pressure was based on concerns that two tax increase measures related to housing and homelessness on the same ballot could prompt San Diego voters to reject both.
But now neither measure will be on the November ballot.
Backers of the initiative had spent more than $1.4 million through the first half of this year on the initiative effort, including more than $824,000 alone on signature gathering. The campaign relied on large contributions from hotel operators, as well as major companies, including Sempra Energy.
"We will know soon whether the citizen's initiative goes on the 2020 ballot," said Tom Lemmon, business manager for the San Diego County Building and Construction Trades Council, which backed the initiative. "I hope the coalition can stick together for two more years. I know for the folks I represent, the finish line is building an (expanded) convention center."
Staff writer David Garrick also contributed to this report.