California is open again, but San Diego economy could take years to catch up

San Diego tourism key to city's rebirth
Portside Pier
San Diego Bay
Michael Zucchet/Port of San Diego
Posted at 2:50 PM, Jun 16, 2021
and last updated 2021-06-16 20:19:10-04

SAN DIEGO (KGTV) - California is now fully reopened for the first time in 15 months. And, for a city like San Diego that relies on tourism, especially in the summer months, the timing couldn’t be better.

But while things will feel normal along our waterways, it will take a bit longer until we’re back to normal financially.

"You can do a lot on Zoom. Very convenient, but you can't do everything, and people just want to see each other again," says Jerry Sanders.

There is hope, but before we look forward, we have to take a closer look at the financial hole we're in now.

"Well, it got real bad," adds Sanders.

Sanders has seen a lot of ups and downs for this city. As a former San Diego Chief of Police, Mayor, and now President and CEO of the San Diego Regional Chamber of Commerce.

"When you talk to the tourism authority, they say it will take five years to get back to where they were," says Sanders. "They wiped out 20 years of gains in just the pandemic."

So, how do we dig out of this financial hole?

"Well, I think we're starting to see tourism start to dig out of it already," adds Sanders.

In his conversations with hotel managers, Sanders says they're already seeing an uptick on weekends. But most of those visitors are San Diegans or people who can drive here from L.A. and Orange Counties, as well as Arizona. In fact, he says San Diego's Tourism Authority is spending $8 million in ads for those specific regions knowing most people across the country are still not ready to fly.

"The second someone gets back on an airplane and sees that it's safe, then they're going to be willing to start traveling," says Sanders reassuringly. "By the end of the summer, we're going to see a lot of people here."

But tourism is just one piece of the puzzle. The other is thousands of jobs supported by a little-known government agency called the Port of San Diego. Its pre-pandemic numbers were a staggering portion of our economy.

"About $10 billion of economic activity and 70,000 jobs created just by the Port of San Diego," says the Port of San Diego's Michael Zucchet.

The Port of San Diego governs everything along the coast for 34 miles from Shelter Island to the border. It's responsible for the Convention Center, the cruise terminal, Seaport Village and the Embarcadero, the new BRIC at Broadway and Pacific Highway, the Chula Vista Bayfront project, and more. It doesn't tax you, instead, it collects revenue from those businesses along the bay to fund major projects to enhance the region.

"So when those tenants are suffering the Port suffers," adds Zucchet. "We estimate that we lost about $100 million in revenue over the last 16 months and that's not coming back."

The Port itself survived this once-in-a-lifetime pandemic with the help of about $30 million in a rainy day fund. That helped to continue the completion of projects such as the new Rady Shell at Jacobs Park and the Portside Pier featuring the Brigantine which opened in July of 2020 as the pandemic was surging.

"We're sitting in a beautiful representation of one of those that opened up in the middle of the pandemic," adds Zucchet admiring the Portside Pier. "It has been doing great even during the pandemic because a lot of it is open-air dining."

But what's to come, is what will allow the Port and San Diego to truly get back to normal. Zucchet says the hotel and convention center at the Chula Vista Bayfront will break ground early next year, as well as a significant new hotel project that's on the brink of approval for East Harbor Island that would generate millions more in tourism and create hundreds of jobs.

"There is something about viewing all of this from the bay and you see the shipyards and the ship repair and the cargo terminal and way beyond some nice restaurants and a few hotels. It's a maritime operation," says Zucchet. "It's a very significant operation on San Diego Bay. And the Port of San Diego and our 800 tenants are generating a lot of economic activity and jobs."

On May 26, 2021, the Port of San Diego announced its first major project following the state's reopening would be the "Big Bay Boom" fireworks show on July 4th. Every year the celebration pumps about $10 million into the San Diego economy.