City reviews $3.1M backlog of capital maintenance, equipment needs for San Diego Convention Center

Convention center operating without reserves

SAN DIEGO - The San Diego Convention Center, designed to be a major economic engine for the city, has been operating without financial reserves for the past two years and has run up a $31.1 million backlog of capital maintenance and equipment needs, according to a new report.

The report by the city's Independent Budget Analyst -- to be delivered to the City Council Thursday afternoon -- says the administration of ex-Mayor Jerry Sanders ordered convention center staff to exhaust the reserve account to prepare for a planned expansion of the facility.

The San Diego Convention Center Corp. historically maintained a healthy reserve, which reached a high of $8 million in 2008, according to the IBA.

The account was spent on acquiring rights to purchase land for the expansion, a feasibility analysis on the project, entitlement and design consultants and other preliminary activities, the report says.

Expansion supporters say the city is losing out on major trade shows because of its current size, and that a larger site will result in fuller hotel coffers and extra tax revenue.

The report will be delivered as the City Council reviews the SDCCC's proposed $33.2 million budget for the upcoming fiscal year. The spending plan does not include reserves.

The IBA recommends that the corporation begin to rebuild its savings account, but recognizes that doing so will compete for funding with whittling down the list of major capital issues.

The center needs around $11.3 million to repair the rooftop sails that give the building its unique appearance, $6.1 million to make sure the existing structure conforms to the expansion, and a host of other things, the report says.

The Convention Center Corp. has a rolling five-year budget plan to address the issues, but it has been underfunded, according to the IBA.

"SDCCC's mission statement identifies the convention center as a world class facility that generates significant economic benefits for the greater San Diego region by hosting international and national conventions and trade shows," the IBA report states. "It is critical that SDCCC works with the city to ensure the facility is properly maintained in order to achieve their mission."

The IBA recommends that the City Council have center officials develop a financial plan that will address the backlog.

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