Delivering a crippling blow to the planned $520 million expansion of the San Diego Convention Center, a California appeals court ruled Friday that the hotel tax devised to fund most of the project is unconstitutional.
Although hoteliers and city council approved the room surcharge two years ago, U-T San Diego reports the three-judge panel unanimously found that the tax had to be put to a citywide vote. Several groups, including San Diegans for Open Government, opposed the funding scheme, arguing that the arrangement amounted to privatizing the city’s taxing authority. A Superior Court judge sided with the city in March 2013, but opponents appealed the ruling.
In its Friday decision, the appeals court wrote, "while we understand the ity would like to expand the convention center, we are duty bound to uphold the provisions of the California Constitution and the City Charter that require that the city’s registered voters approve the special tax at issue in this case."
Viewed as critical to keeping Comic-Con International in San Diego beyond 2016, the expansion would add 740,000 square feet of convention space, a five-acre rooftop park, a waterfront promenade with retail shops and restaurants, and a second, 500-room tower to the adjacent Hilton San Diego Bayfront Hotel.
"We knew, as early as 2006, that we would run out of space at the current facility," said Comic-Con spokesman David Glanzer told the newspaper. "Since that time the mayor, city officials, hoteliers and the convention center staff have worked to help us address our space concerns. We trust those entities will continue to work with us in welcoming thousands of people to San Diego."
The hotel surcharge would have tacked on another 1 cent to 3 cents per dollar to room taxes of 224 hotels, with those closer to the convention center paying more.It's now left to the city to decide whether to appeal to the state Supreme Court or to come up with another financing plan.