Hotel taxes in San Diego could be going up to more than 15 percent in some parts of the city. The increased revenue would go toward a Convention Center expansion.
San Diego hoteliers voted today to increase their room taxes to help fund a majority of the Convention Center expansion cost. The increase was backed by 92.03 percent of hotel owners, City Clerk Elizabeth Maland said.
The Convention Center project is slated to cost about $520 million. Room taxes would increase between 1 and 3 percent depending on how close a hotel is to the Convention Center, with those closer hotels charging more. Taxes at downtown hotels could rise to more that 15 percent. However, San Diego City Attorney Jan Goldsmith plans to ask a court whether the funding scheme is valid.
Darren Pudgil, spokesman for the San Diego Mayor’s office, said the timeline for the court case is unclear.
"We’re not sure exactly when the courts will rule on this. But we’d like a decision on this because we want to get moving," he said.
Goldsmith has told KPBS the validation process could take up to a year. He said he believes the legality of the method for initiating the room tax hike is uncertain, so he intends to ask a judge whether the plan meets legal muster by filing a validation lawsuit. Under California law, tax increases require a public vote, but the jump in the hotel room tax was only weighed by the affected property owners. Project supporters hope to break ground by the end of 2012.
Labor unions have criticized a recent move to switch marketing duties for the Convention Center from a public agency to the private Convention & Visitors Bureau, which serves many area hotels. Labor calls the move a giveaway to entice hoteliers to approve the tax increase because it will give them more control over what happens at the Convention Center. Project proponents say the move will streamline marketing operations.
The tax increase would generate $35.7 million annually to pay off construction bonds. The city of San Diego is set to contribute $3.5 million annually of its room tax income and the Port of San Diego is set to contribute $3 million per year.
