Convention Center Fanfare Can't Hide Looming Problems

Times Staff Writer

The Madison High School marching band will perform and so will the band from the Marine Corps Recruit Depot. A ceremonial unit from the Ballast Point submarine base, dressed up in 1850s naval garb, will salute the occasion with a cannon blast. About eight public officials, including San Diego Mayor Roger Hedgecock and Rep. Bill Lowery (R-San Diego), are expected to talk.

Then--finally--a shovel will be poked into the ground, starting a hole that is costing the San Diego Unified Port District $4.8 million. From that hole will gradually rise San Diego's long-awaited convention center, now estimated to cost a total of $125 million and scheduled to open in late 1987.

Civic boosters, mindful that efforts to build a major convention center in San Diego have been virtually continuous since the 1940s, see Wednesday's ground-breaking ceremony as a historic occasion, befitting all the pomp and circumstance and years of talk, talk, talk.

But amid the celebration is a sense of nervousness. Officials still voice confidence that the convention center will be an economic boon to the region. But they acknowledge that the facility and surrounding hotel development are not coming together the way the officials originally had it planned.

"At times it's looked as if the port has lost control of this project," said Ben Cohen, who recently completed his term as a port commissioner. Cohen had served on the panel's convention center ad hoc committee.

"It's been frustrating," Cohen said. "We had 29 meetings on that ad hoc committee. So many times, we left those meeting with everything tied in a neat package--only to find one week later that everything had become completely unraveled."

When San Diego voters solidly approved the convention center advisory measure in November, 1983, the plan seemed clear: The wealthy port district would spend $95 million to build the convention center; developer Doug Manchester would build a twin to his existing InterContinental and then a Hyatt Regency, for a total of 2,200 hotel rooms, providing rents that would enable the port to recoup its $95 million within 10 years.

This was the proposal pitched to voters in forum after forum by Hedgecock, Chamber of Commerce president Lee Grissom and other center boosters--although the advisory measure itself never specified a price or financing scheme. "It's good for all of us" was the convention center campaign slogan, and a television commercial talked of how the center would generate extra tax revenues from tourists, enabling the city to hire more police and create more parks.

But since then, the estimated cost of the center has climbed to $125 million, meaning it will take many more years for the port to recoup its investment.

Meanwhile, as costs go up, the port and the city, which will operate the facility, are facing the prospect of smaller returns.

Manchester has run into trouble financing his second tower, prompting port officials to grant him delays. Port commissioners openly express expectations that Manchester won't secure financing by his Oct. 1 deadline, forcing them to turn to other developers. The likelihood, it seems, is that there will be two hotel towers instead of three. That would add several years to the time for the the port district to get back its $125 million.

Moreover, Manchester's problems raise the specter of a shortage of downtown hotel rooms. ConVis officials say a shortage would create marketing problems for the center, adding to the expected deficit of the city-run facility.

"The hotel situation is something we don't have any control over," said Al Reese, ConVis spokesman. "We know the interest, the potential is there. We're confident we can sell conventions if we have all the rest of the elements."

And if hotels to serve the convention center aren't built in time, Reese added, there won't be many conventioneers shopping and dining in Horton Plaza and the Gaslamp Quarter.

"Six months from now, they'll have to face the reality, 'Oh my God, we have this convention center and no place to put the people,' " said former City Councilman Fred Schnaubelt, leader of the convention center opposition in the 1983 campaign.

"It's like we've got our own Mount St. Helens that's beginning to rumble. Some people hear rumbling and act. Some hear rumblings and just sit, like at Vesuvius."

But that is the gloomy view. While port commissioners are pessimistic about Manchester's chances of gaining financing, most say they are optimistic that the Hyatt site--which Manchester would lose if he fails to build his second tower--would be quickly financed and built within a few months of the opening of the convention center. An 800-room hotel is planned for that 2.5 acre site now, but it could go up to 1,000 or 1,200 rooms to better serve the convention center.

"We're not too panicky about getting 2,200 rooms eventually," said William Rick, chairman of the port commission. "The only magic is getting enough for when the center opens."

Commissioner Louis Wolfsheimer argued that the port would be better off by not extending Manchester's deadline and instead moving forward on the Hyatt site.

"I suppose we could have been bloody and lopped him (Manchester) off at June 1 (the former deadline)," Rick said. "But that wouldn't get us the second tower. Now we still have some maneuvering room."

Wolfsheimer argued that the port would eventually get the second tower anyway. "If Manchester is unable to build the second tower now, I think he'll build it sometime in the future and it will be a bonanza," he said.

Christopher Neils, attorney for Manchester, said the ground breaking should make it easier to find a lender for the second tower.

Rick said that, despite the many changes, the convention center plan is still "a fine deal. It's not perfection . . . But we'll be doing fine."

Rick said that the port's $40-million annual budget, generated through rents on state tidelands, provides an ample cushion and should enable the port to proceed with other major projects.

Cohen, however, predicted that some projects may be delayed. He suggests that, in retrospect, the port commission made mistakes along the way.

For example, the original $95-million estimate for the convention center was developed by the port staff and architects and builders who worked with Manchester. After the voters approved the advisory measure, the port hired a consultant to study the convention center--and the consultant quickly predicted that the $95-million center would really cost $112 million. A number of additions to ensure a "first-class" center bumped the estimate to $125 million.

Looking back, Cohen said he believes the port district should have hired the consultant before the public vote. But at the time, the commission "didn't want to seem to be jumping the gun."

Cohen said he's not sure whether the port would have approved the project in the first place if the original estimate had been $125 million.

There also remains the possibility that construction bids could push the cost above $125 million. However, commissioners point out that the $4.8-million excavation bid was more than $1 million less than estimated. "An encouraging sign," Cohen said.

Despite his worries, Cohen, like most almost every official associated with the project, predicts that the convention center "will be successful and most of the people in San Diego will be pleased with it."

Later, he added: "If the port is to be condemned at all, it's because this was our first major project of this type and we were somewhat naive."

Schnaubelt suggests naivete doesn't go far enough. The former councilman says that the politicians and boosters who pushed the convention center project, in effect, lied to the public by not holding to the $95 million price.

"Everything was supposed to be coordinated. Now it's not," he said. "And who's going to pick up the tab? Well, who always picks up the tab when the government screws up? The taxpayers."

Schnaubelt said he plans be there Wednesday, amid the pomp and circumstance at the ground breaking.

"I want to see if they apologize," he said. "I think this would be an appropriate time."

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