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San Diego Mayor Kevin Faulconer proposes hotel tax hike to help fund convention center expansion

Extra revenue to help homeless issue, road repairs
Posted at 11:22 AM, Apr 03, 2017

SAN DIEGO (CNS) - Mayor Kevin Faulconer Monday touted a proposed ballot measure that he said would raise hotel room taxes to pay for an expansion of the San Diego Convention Center and produce funding streams for road repairs and homelessness programs.

The plan, which needs voter approval because of the tax hike, is scheduled to be submitted to the City Council's Rules Committee on Wednesday. The full City Council will later have to decide whether to call a special election, likely for November.

"This ballot measure will create jobs, fix streets and help reduce homelessness in our city," Faulconer told reporters.

"Our convention center must be modernized and expanded to keep up with other cities that are taking away from our tourism business," Faulconer said. "I'm not asking San Diego taxpayers, who are being taxed enough already, to shoulder this burden."

The levy -- known officially as the Transient Occupancy Tax -- is paid by hotel guests. The Chargers attempted a similar funding mechanism in their stadium measure last November, but it failed to gain the support of even a majority of voters. Two-thirds voter support is required to raise taxes.

Tourism boosters contend the bayside convention center is losing out on the biggest trade shows because other cities can offer facilities with more room. Competing convention centers have for years been trying to lure away Comic-Con International, the annual celebration of the popular arts that began in San Diego and is the area's largest annual event.

The mayor's office said expansion would add 400,000 square feet of convention space, which could attract an additional 50 events to downtown. Supporters projected that would generate an additional $15 million annually in room tax revenue for the city from more than 380,000 new hotel room nights.

The extra dollars would help pay for municipal services such as public safety, parks and libraries, according to the mayor's office.

The proposal also estimates an additional $10 million each for programs for the homeless and road repairs every year, with the income growing as tourism increases. That money can back bonds that would bring in additional funding for projects.

Political consultant John Dadian told 10News he thinks that will get the average voter to vote "yes" on the initiative.

"I think for issues such as road repairs and homelessness, people will probably tend to vote for it because it's not impacting them directly. The only time maybe that'll affect them is if they have relatives from out of town or if they want to do a staycation," said Dadian.

If approved by voters, the hotel room tax increase would take effect in 2018. Construction on the convention center expansion would begin in summer 2019 and take 44 months.