SAN DIEGO -- The City Council Tuesday created a special district to finance the proposed $520 million expansion of the San Diego Convention Center but labor leaders promised to fight the project.
The council's 6-2 vote clears the way for owners of hotel properties to vote on whether to implement a surcharge to room rates, on a sliding scale based on relative proximity to downtown. The mail-in balloting is due to be completed in April.
If the hotel owners approve the levy, it would generate $35.7 million annually that could be put toward construction bonds. The Port of San Diego will kick-in $3 million annually, and the city will provide $3.5 million -- derived from an increase in its own room tax income after the expansion is completed.
City officials promised to bring a final financing plan to the City Council next month. Mayor Jerry Sanders said he hoped to break ground by the end of this year on the project, which will bring the total floor space of the Convention Center to more than 2.75 million square feet.
"This expansion will pump nearly $700 million into our economy, produce 7,000 permanent jobs and 4,000 construction jobs -- and generate millions of dollars in neighborhood services like police, fire, parks and libraries,'' Sanders said.
Supporters say expansion is necessary because San Diego is losing large conventions to other cities. The biggest local event, Comic-Con International, nearly left town a couple of years ago because it is outgrowing the bayfront facility.
Union leaders and representatives of labor-affiliated community groups expressed opposition to the expansion because it won't generate quality jobs.
Lorena Gonzalez, secretary-treasurer of the San Diego and Imperial Counties Labor Council, protested that the city was going to subsidize powerful downtown hoteliers without holding discussions on the types of jobs that would be created.
"We will continue to fight this expansion because it is bad for San Diegans and bad for workers,'' Gonzalez said.
She said the plan is on a "collision course'' with "immense litigation.''
Tom Lemmon, the business manager of the San Diego Building & Trades Council, said the financing plan for the expansion will benefit a few at the expense of many.
But Mayor Sanders said the weak economy made it imperative to keep the project on track.
"Thousands of San Diegans are currently out of work, our local construction industry has been decimated, and our hotels, restaurants and attractions have suffered greatly because of the economic downturn,'' Sanders said. "We need to put San Diegans to work now, we need to lift those industries now, our economy needs a shot in the arm now.''
Additional floor space could attract an extra 25 major annual events to the Convention Center, worth $121 million annually in additional hotel room night income, according to a consultant's study.
Council members David Alvarez and Marti Emerald cast the dissenting votes.