City: Delaying hotel tax vote would cost San Diego taxpayers $75 million

Posted at 1:09 PM, Jun 02, 2017
and last updated 2017-06-02 16:14:00-04

SAN DIEGO (KGTV) - Mayor Kevin Faulconer's office continued its push to approve a November special election vote on a proposed hotel tax increase.

The City said Friday that a year-long delay in voting on the proposed transient occupancy tax (TOT) hike would cost taxpayers $75 million.

"The numbers clearly show that we can’t afford to kick the can down the road,” Faulconer said. “With each month that goes by we’re losing jobs and revenue, we need to fix our roads and address the homeless crisis on our streets. 

"The City Council’s choice is clear: they can take action to solve these problems or they can put their heads in the sand and let these problems get worse."


The measure would raise the TOT about 3 percent to fund an expansion of the San Diego Convention Center and put any extra funds toward addressing the city's homeless crisis and street repair. 

City leaders say the expansion of the convention center would create 7,000 jobs and help San Diego attract and retain conventions, such as Comic-Con International.

The expected loss in revenue, determined in an analysis by San Diego's Chief Financial Officer Mary Lewis, estimates a delay in construction on the center beyond the expected completion date of March 2023 would cost $3.6 million a month.

Lewis wrote in a memorandum that a delay in voting "could jeopardize the full funding of the Convention Center expansion." She estimated an annual revenue loss from a one-year delay to cost:

  • $8 million loss for General Fund
  • $5 million loss for TOT Fund
  • $10 million loss for homeless programs
  • $10 million loss for street repairs
  • $43 million cost increase for the Convention Center expansion

Fifth Avenue Landing, which owns the property the city is eyeing to expand the center, is currently suing the convention center over claims officials are undermining the developer's plans for a four-star hotel.

San Diego officials have said that pursuing the needed funding for an expansion plays an important role while they work toward a resolution on the property.

The mayor's office has said the expansion would add 400,000 square feet of convention space and generate an additional $15 million annually in hotel room tax revenue for the city.