Convention Center Cost Will Be Bargain

My friends were rather blunt. “Why’s the convention center costing so much?” They were even a bit belligerent. “I remember you originally told us it was only going to cost $95 million. What went wrong?”

From my point of view, I thought it was more like what went right. Attempting to provide a simple answer in a way that would gain their support turned out to be quite a challenge.

I was set upon by my friends at a backyard barbecue in Solana Beach. Sitting at a picnic table in North County reminded me that this issue transcends city boundaries. My friends know that the construction of a convention center will have a significant effect on my life style. Because I work for a convention decorating contractor, groups and associations will be needing my services to stage their exhibits in the new facility. This center will change forever the tourism industry, convention business and my company, one of many that will do business there.

I wanted to explain to them the increased costs in terms of the increased value to the city. I wanted them to realize that the benefits extend beyond my vocation and the tourism industry.

The whole region will get something positive out of this, some businesses directly and many more indirectly. The center will create jobs, perhaps eventually 50 at my company alone. Hundreds of millions of dollars will be pumped into the economy and will change hands several times. Several seedy streets will be transformed into popular pedestrian pathways. But first I had to explain the cost issue because that is the important question.

By doing everything right, we seem to have actually done something wrong in getting the convention center built. We in tourism got the message about costs in 1981 after getting hit in the head by the voters of San Diego when they turned down financing a convention center for the fifth time since 1939. A majority voted for the center, but not the two-thirds needed to approve the bonds.

When Roger Hedgecock became mayor, he made getting a convention center a top priority of his Administration. A task force was commissioned to see what could be done about getting the center built downtown. The task force had a few givens: It had to be big enough to attract the major meetings, it had to be attractive (not a big box), and it was going to need something besides tax revenue to pay for it.

Many options were considered, but one emerged that seemed too good to be true. Eleven acres of bayside land lying adjacent to the redevelopment area and suitable for a large center would be made available by the San Diego Unified Port District. The Port District would then be willing to build the center, using its earned reserves to pay for it. Port commissioners had learned over the years that the tourism business is as profitable to the port as it is good to the community. Hotels, the airport, restaurants and shops make money while contributing to an attractive and interesting waterfront.

The port would build the center on the condition that the city operated it. Although it only required the approval of the City Council to enter into a management agreement, Hedgecock felt that such a major project as the center should be validated by an advisory vote of the people.

A small but vocal opposition wanted to see a price tag for the center. This wasn’t easy because there wasn’t a proposed design. Given three basic requirements--100,000 square feet of meeting space, 250,000 square feet of exhibit space and parking for 2,000 cars--one firm came up with $95 million. That guess was widely publicized by the media and became accepted as a hard figure.

The center was approved at the polls by nearly 60% of the voters, and the first piece of business was booked minutes after the 11 o’clock news broadcast the results.

What happened next could be used as a primer of good government planning. Experts from the national meeting industry were asked their opinions about what elements were needed to make a first-class center. Leading architects were asked to enter a design competition that would produce a world-class piece of architecture for the San Diego skyline. Suppliers like myself were asked for advice regarding the functional needs.

The Convention & Visitors Bureau (ConVis) began marketing the center immediately. Because groups select meeting sites several years in advance, we wanted to open our doors to business and not have to wait for it to catch up. In no time at all, numerous groups had signed letters of intent.

The design competition took on a certain civic spirit. The five finalists included renowned architects who teamed with local talent in order to keep a San Diego signature on the project. The port selected a plan that was close to the $95-million estimate and had a bonus of an extra 100,000 square feet of exhibit space.

ConVis brought a bevy of the top meeting planners and meeting industry writers to participate in the ground breaking. Business was good, as more and more commitments were being made. As ideas from convention and trade show experts were assessed and either discarded or incorporated into the design, costs began to rise.

Quite a debate broke out when the architect reported an estimated price tag of $125 million, a gain of $30 million over the original estimate. Although some expressed displeasure at the increase, many more were pleased with the stature the center was attaining nationally.

For instance, one major decision that affected the cost was the placement and number of pillars. We opted for fewer pillars because that would create a better exhibition hall by improving sight lines and removing obstacles. It also drives the price up. We were designing ourselves a center competitive with other major centers around the country. The taxpayer still had the best deal of all. Port financial reserves were quite adequate to cover the increased cost.

It was a big disappointment when the bids were opened and they all came in at more than $125 million. Had we tried to please too many people by incorporating too much? Apparently not. Because of the caliber of the center’s design, ConVis had succeeded in attracting more than $341 million in definite bookings. Obviously we had succeeded in designing a center that professionals wanted to use. ConVis had done its job getting the word out and in getting commitments.

But instead of celebrating the design of a noteworthy facility and the hundreds of millions of dollars of business already booked to use it, we were back checking the price tag and kicking the tires. Instead of beginning construction, the Port District decided to refuse the bids and review the design to see if a few million dollars could be saved. A construction manager was hired to examine the plans and make recommendations.

All of this has set the opening date back for at least a year. That doesn’t seem long, but the cost to us will be a lot more than just the time or the savings realized by scrimping on the plans. The delay is costing us all money and credibility. We’ll eventually get the credibility back, but not the lost business.

Fifty-one organizations that had booked our new center were told that it would not be ready in time to hold their meetings. They were surprisingly nice about it. They just took their business elsewhere for 1988-89. They departed with $88 million of potential income for San Diego.

Let’s not be penny wise and pound foolish. Witness our current City Hall and convention center.

Too often in the past, San Diego has elected to build it cheap instead of building it right.

We must build a convention center that in every respect can take its rightful place with Horton Plaza, the cruise ship terminal and the Gaslamp Quarter as another keystone attraction in our exciting new downtown.

So let’s get on with it soon, before we lose another $88 million.