4 Business-Promotion Groups Back in Favor : Economics: Recession helped change the City Council’s mind about enterprises that lure dollars.

Recessions don’t usually generate much good news, but the continuing slowdown has helped to forge a healthier relationship between the San Diego City Council and four organizations that are charged with luring tourists and new business to San Diego County.

During a June, 1990 budget hearing, disgruntled council members threatened to eliminate or severely cut city funding for the San Diego Economic Development Corp. (EDC), the San Diego Convention & Visitors Bureau (ConVis), the San Diego Motion Picture and Television Bureau and the Greater San Diego Chamber of Commerce’s Economic Research Bureau.

During a rancorous hearing, council members subsequently reversed the planned $2.5-million cut--but only after warning the economic development organizations that they faced cuts in the future.

A year later, however, City Councilman Wes Pratt, who helped lead the assault on economic development funding, sees things in a different light. Pratt on Monday joined a council majority that voted to increase funding for the four quasi-public organizations.

For fiscal 1992, which began Monday, the EDC will receive $470,750, ConVis will get $6.8 million, the Motion Picture Bureau, which is housed in the Chamber of Commerce, will receive $373,118, and the chamber’s Economic Research Bureau will receive $54,075. Each of the four organizations won slight increases for the new fiscal year.

Pratt linked his change in heart to the “economic recession . . . we need to marshal all the mechanisms and resources that we have to deal with the economic situation.”

“Even if I have a difference of opinion on the philosophical thrust and direction of the EDC, I’m concerned enough about the overall economic health of San Diego to know that we’ve got to work together,” Pratt said.

The council vote left economic development officials understandably pleased.

EDC “went from a (fiscal 1991 proposed budget) that almost put us out of business to a planned 10% reduction during each year for the five years to a 3% increase,” said EDC President Dan Pegg, who was publicly berated last year by some council members during one heated budget session.

Pegg, like Pratt, linked the reversal to the economic downturn.

“It was an evolution that took place as the recession started to impact San Diego, and there was the realization that the economy doesn’t just go on forever in good health,” Pegg said.

But Pegg also credited the budget increases to an improved relationship between the City Council and organizations charged with economic development. “We’ve taken to heart many of the suggestions and comments made by council people. . . . We’ve made appropriate adjustments,” Pegg said

“While there weren’t any specific allegations or concerns with EDC, the whole (budget) process brought into focus some things that we could do to improve our act,” Pegg said.

Pratt linked the improved relationship with the city’s civic booster organizations to a dialogue. “We’ve had a year to talk with some of these people,” Pratt said. “We’ve developed a better working relationship, and they are more responsive, more interested in serving all of the citizens of San Diego.”

Pratt credited the EDC with “working with some issues that were of great concern” in the 4th Council District, which he represents. The EDC and other economic development groups have taken steps to ensure that their programs target minority-owned businesses, Pratt said.

The EDC has, for example, been working to qualify minority-owned businesses as suppliers for larger San Diego-based corporations, Pegg said. The EDC also has begun searching out corporate sponsors for nonprofit ventures in Southeast San Diego, Pratt said.

“These people have more of an appreciation of the fact that there’s more to economic development than just (tending to) the traditional businesses downtown or in the Golden Triangle,” Pratt said.

The council’s fear that the EDC had strayed from its economic development goal was allayed by a major accounting firm’s management audit, which gave the organization generally high marks for management of its resources.

ConVis, which also stood to lose funding last year, will receive a slight increase during the new fiscal year. ConVis officials now believe that the city “is strongly supportive of the need to promote tourism,” said ConVis spokesman Al Reese. “They know that, if the transient occupancy tax is to remain healthy, you’ve got to promote tourism.”

Last year, the council voted to cut $2.5 million in funding for the four organizations. The cuts, had they not been reversed, would have put the Motion Picture and Television Bureau and the EDC out of business. However, council members reversed field during 1990 and agreed to fund the organizations.

Funding for Economic Development Agencies San Diego Economic Development Corp. Fiscal 1991: $456,750 Fiscal 1992: $470,453 S.D. Convention & Visitors Bureau Fiscal 1991: $6,358, 835 Fiscal 1992: $6,790,371 Motion Picture & Television Bureau Fiscal 1991: $362,250 Fiscal 1992: $373,118 Bureau of Economic Research Fiscal 1991: $53,500 Fiscal 1992: $54,075 Source: San Diego municipal budget