Business-Boosting Groups Aim to Head Off Cuts at City Hall

Business leaders will make last-ditch appeals before the San Diego City Council today in an effort to avert dramatic funding cuts of the quasi-public agencies set up to promote local economic growth.

Top officials and supporters of the San Diego Convention & Visitors Bureau (ConVis), the Economic Development Corp., the San Diego Motion Picture & Television Bureau and the Greater San Diego Chamber of Commerce will make their eleventh-hour pleas at a council session beginning at 2 p.m.

The officials will argue that the budget cuts, which would result in the closing of the movie-TV bureau and drastic cutbacks at the other agencies, are being proposed at a time when the city needs more than ever to market itself.

The council may vote as early as today on the full budget for the fiscal year that starts July 1. It tentatively approved the cuts by a 5-4 vote at a workshop earlier this month as part of broad belt-tightening measures to make up for a $40-million shortfall in the budget. The cuts to the four agencies would save the city about $2.5 million.

The budget cuts basically are cancellations of allocations dished out to the agencies by the city from the 9% transient occupancy tax collected by San Diego hotels and paid to the city. The agencies represented at today’s meeting will ask that those cuts be reinstated.

The San Diego Motion Picture & Television Bureau would be hit the hardest by the budget cuts because it faces extinction. Under the proposed cuts, the bureau stands to lose its entire $362,000 budget; it will shut its doors Friday if the cuts go through, Vice President Wally Schlotter said Monday .

The movie-TV bureau acts as a liaison between movie and TV producers and local officials to smooth the way for on-site filming. More than a quarter of the bureau’s budget is spent on advertising in entertainment trade publications, Schlotter said.

The four-employee bureau, formed in 1976, takes credit for having helped attract productions that last year pumped $14.1 million into the local economy, generated the sale of 31,000 hotel room nights and created 4,000 temporary jobs. Although the bureau relies on city funding, it operates as a division of the Greater San Diego Chamber of Commerce, from which it receives “in kind” funding such as office space and clerical support.

City Hall critics, some of whom would like the bureau moved to the mayor’s office, say it should receive more support than it does from a principal beneficiary, the local hotel industry. Also, critics say other local municipalities should make contributions to the bureau’s budget, since TV shows and movies are filmed in several locales in the county.

Schlotter said the budget cutting violates the spirit of the transient occupancy tax, which, on its passage in the early 1960s, was meant partly as a way of financing the promotion of San Diego as a tourist and business destination.

Losing the most if the proposed budget cuts hold up is the San Diego Convention & Visitors Bureau. The City Council has proposed slashing ConVis funding to $5 million, which is $1.6 million less than last year and $2.8 million less than ConVis requested. The city’s allocation last year made up about 80% of ConVis’ total budget.

ConVis, whose main function is to market San Diego regionally and nationally as a visitor destination and convention site, operates a large research, publications and marketing operation and database. Vice President Al Reese said ConVis will have to significantly scale back its activities and lay off an unspecified number of its 75 employees if the cuts go through.

Perhaps ConVis’ most visible marketing function is attracting conventions, trade and consumer shows to the San Diego Convention Center 18 months or more in advance. The center’s staff handles earlier bookings, most of which are trade shows that typically have a shorter lead time.

In justifying the budget cuts, some proponents have suggested moving all of the Convention Center’s bookings within the purview of the center’s in-house sales and marketing staff and helping it set up its own data.

But ConVis’ Reese said having the Convention Center handle all its own marketing would go against most cities’ practice of dividing up the long-range marketing and operations function. For one thing, Reese said, there would be a duplication of efforts, since ConVis would still be responsible for booking conventions and meetings into the dozens of other county venues.

Convention centers that do their own bookings also tend to book more consumer shows, Reese said, which generate more revenue for the center but which are not as beneficial to the local economy because the people who attend are typically day visitors less prone to become hotel and restaurant guests.

Reint Reinders, general manager of the La Jolla Marriott and president of the San Diego Hotel Motel Assn., said the city’s tourism industry needs a strong marketing arm such as ConVis, particularly in light of declining occupancy rates in San Diego and the tougher hotel market nationwide. Reinders is one of the speakers scheduled to appear before the council today.

The Economic Development Corp., the quasi-public agency charged with attracting businesses to San Diego, would lose nearly half its $930,000 budget and all of the $457,000 allocated by the city last year if the proposed budget cuts are approved. President Dan Pegg said layoffs of some of the EDC’s eight employees would result, but he would not specify how many.

Although the EDC claims to have played a key role in major relocations to San Diego, including trophies such as Casio, its success rate in attracting outside companies has come under increased scrutiny in recent years. Pegg has acknowledged that San Diego’s high housing costs have made it difficult to compete with other U.S. areas for corporate relocations and that the agency’s primary focus is now more to keep, rather than attract, companies here.

Still, that function requires that there be a disinterested source of economic information for local companies, which the EDC provides, Pegg said. Those services include human resources information such as labor pool and wage data. The EDC has also published maquiladora directories and stressed to local businesses the importance of plugging into the maquiladora phenomenon.

Observers have said that the EDC may be suffering in its budget battle for having taken stands on political issues--including the airport and growth control--that have been at odds with the views of some City Council members.

Times staff writer Greg Johnson contributed to this story.