Hoteliers study Chargers stadium-convention proposal

If voters are asked to raise the hotel room tax to pay for a downtown stadium and convention center, San Diego hoteliers want to know if their properties will see any return on that investment.

Toward that end, the hotelier-run Tourism Marketing District on Monday agreed to spend $30,000 on a study that will attempt to analyze what benefits, if any, accrue from a multipurpose complex that has been proposed by the Chargers. The study is expected to be completed by the end of this month or early July.

The Chargers, which recently submitted more than 110,000 signatures to the city in hopes of qualifying their downtown stadium plan for the ballot, have proposed raising the hotel tax from 12.5 percent to 16.5 percent to help fund the bulk of the $1.8 billion project.

San Diego’s hotel and tourism industry has been pushing for an expansion of the convention center on the waterfront, but that project has been stalled since a judge ruled that the plan to finance it with a hotel tax is illegal because it was not approved by the voters. Hoteliers, though, still argue that convention goers prefer a contiguous expansion of the center over a convention annex.

“The question is simple: If we build a non-contiguous center, how much TOT (transient occupancy tax) will you make with a stadium and without a stadium,” said Bill Evans, who chairs the Tourism Marketing District board. The district oversees revenues collected from a 2 percent surcharge on hotel room bills for tourism marketing.

“This shouldn’t be about contiguous vs. non-contiguous. We want to know how much benefit will there be by adding a stadium to the center, and as the TMD, we’re very focused on return on investment.”

The hotel industry has yet to take a formal position on the Chargers’ proposed initiative.

In all, the team’s proposed tax hike would support $1.15 billion of the Chargers project cost, with $350 million going toward building a football stadium near Petco Park, $600 million for an adjoining convention center, and $200 million to buy land.

The move by the marketing district to study the project’s impact from a hotel revenue perspective comes on the heels of a $90,000 study last year that analyzed a contiguous expansion vs. a separate convention center annex. That study was funded by the city and the Convention Center Corp.

The analysis found that additional convention space, no matter where it was located, would deliver an economic return but the financial rewards were greater with an enlarged center on the current bayfront site than a campus-like facility several blocks to the northeast.

HVS, a Chicago-based convention, sports and entertainment facilities consulting firm hired by the TMD, stated in its proposal that a joint stadium convention complex could potentially have a “unique impact on the ability to attract conventions and trade shows.”

HVS Managing Director Thomas Hazinski said his firm would look at three cities — Atlanta, St. Louis and Indianapolis — where stadiums are adjacent to or connected to convention centers. He acknowledged, though, there is “nothing quite like” what the Chargers are proposing.

As part of the analysis, HVS said it will use the case studies to identify strengths and weaknesses of a multi-purpose complex while exploring possible booking issues associated with having to coordinate with an NFL team. Among the many factors it will analyze is the potential demand for a standalone convention center compared with a combined stadium and convention complex and the related hotel room nights generated by the two scenarios.

Chargers stadium point man Fred Maas said Monday that he thinks it’s important for studies like the TMD’s to look beyond just the potential for added hotel room revenues.

“We’re looking forward to what the TMD study shows and also maintaining a dialog with the hoteliers,” Maas said. “But you also need to look at what hotels could be built as a result of this, not just the existing base.”