Two years ago, when a plan to expand the San Diego Convention Center ground to a halt, the center's top administrator, Carol Wallace, found herself facing a domino effect of disastrous consequences. Dozens of major conventions had been booked long in advance for a $216-million expansion project that was to double the waterfront structure's exhibit space. The expansion was supposed to be finished in time for last January's Super Bowl. The media was going to shine a national spotlight on the new, improved San Diego Convention Center. But at kickoff time for the big game, ground had not even been broken for the expansion. It still hasn't.

    That is because in 1996 — after convention center marketing studies had been done, after the City Council had selected a design-build team and a design for the expansion, after a project manager had been hired, after the city and the San Diego Unified Port District worked out a financing plan and after the California Coastal Commission had taken the final step of approving an environmental impact report — Libertarian activists stepped in and filed a lawsuit.
    Wallace recalls taking a wait-and-see approach at first, especially since the challengers, who questioned the way the project would be financed, lost in two lower courts. All that changed in April 1997 when the California Supreme Court agreed to review the case. "We were devastated," says Wallace, the center's president and chief operating officer. "We knew then we were in for a long-term situation. We started canceling."
    Wallace says her staff did its best to hang on to the already-booked conventions and by "squeezing and juggling," 18 of them were retained. Others were either too big for the existing San Diego center or had trouble rescheduling. One by one, they became casualties of the expansion delay. The National Business Aircraft Association, for instance, moved its 16,000-delegate convention and 25,600 hotel room nights to Anaheim this year.

Above is an artist's rendering of how the San Diego Convention Center will look when expanded.

    Similarly, the Golf Course Superintendents of America canceled its 25,000-delegate convention in San Diego for the year 2001, reluctantly moving the event to Dallas. However, the group is scheduling its convention in San Diego for the year 2004, hoping that an expanded center will be available. The group is considered a prime convention client because its delegates bring their families to vacation, usually spend about six days at their hotels and spend about $25 million in the convention city. Robert Shively, the association's senior director of corporate marketing, conferences and shows, says not just any city will do. He notes that delegates were dissatisfied with this year’s convention city, Anaheim. The group has designated San Diego and Orlando as its primary convention destinations, scheduling each once every three years. But at this stage, San Diego’s center is too small to accommodate the group. "We’re disappointed and frustrated that San Diego has had so much difficulty in getting its expansion built," says Shively.

Meanwhile, the losses in convention revenue escalate. The 75 conventions canceled as of late April would have pumped an estimated $697 million in direct delegate spending into the local economy, more than triple the estimated price of the proposed convention center expansion.     Reint Reinders, president and CEO of the San Diego Convention and Visitors Bureau, says that on top of the actual bookings, San Diego is losing hundreds of millions because planners for large conventions do not know when the expanded center will actually be available. "We’ve been in limbo so long, they are not even putting us on the radar screen," Reinders says. In this category is the American Society of Anesthesiologists, which barely managed to fit its 17,700 delegates into the existing center last October. William Marinko, the society's assistant executive director, says the group, which spent about $17.2 million during its convention, would like to return to San Diego. Because the number of delegates is growing, the society will not set a firm date until there is evidence the convention center will be expanded. "We can’t book a place that we need until construction has started, or at least until we see a hole in the ground," says Marinko.     Loss of convention business was not the only fallout.

Reint Reinders, president and CEO of the San Diego Convention and Visitors Bureau.

Labor unions complained that expansion delays put 700 construction jobs on hold. Another 4,000 permanent jobs would have been generated by the completed project.
    Hoping to end a long wait for the pending Supreme Court ruling, the city came up with a different financing plan late last year. But former City Councilman Bruce Henderson, who's running again for a council seat, led a successful petition drive to place the matter on the June 2 ballot. He is campaigning to defeat the referendum. If, however, Proposition A is approved by more than a 50 percent margin, the city can jump start the stalled project. City officials believe they would not have to wait for the Supreme Court's ruling on the city's previous, legally challenged financing mechanism, which involved issuing lease-revenue bonds without a public vote.
    Prop. A has garnered a broad range of supporters. Rallying for its passage are more than 16 civic, business and professional organizations, from the San Diego Taxpayers Association to labor unions and police and fire fighters' groups as well as the hospitality industry.
    One of the goals is to convince voters that the convention center is an important economic engine for the region.
    "The biggest problem is that people confuse the convention center with a stadium or a ballpark," says David Cohn, president of Cohn Restaurant Group and vice president of the San Diego Restaurant Association. "They are totally separate. A ballpark or a stadium is an amenity, and the community has to decide whether it wants that amenity. A convention center is an investment in the community's infrastructure."
    With so much at stake, expansion proponents are hoping voters will come through, as they did in 1983, when the ballot measure authorizing the original convention center was approved. At that time, voters endorsed a mere concept of a project. This time around, convention center backers are pointing to the better-than-predicted performance of the existing center, and they argue that expansion will boost the benefits.
    "It has been a tremendous success," says Wallace. Since opening in 1989, the San Diego landmark has drawn more than 2 million convention delegates, who each spent an average of $1,100 per stay. According to convention officials, the current economic impact is $580 million a year, a figure that would grow to $900 million once the expansion increases exhibit space from 249,338 square feet to 525,791 square feet, big enough for up to three conventions at a time. An employment generator, the center spins off 7,500 jobs throughout the region, even without the expansion.
    Meanwhile, proponents say local governments also reap tax benefits from the thriving convention and visitor industry. The convention center is credited with helping to fuel the rapid growth in the city's transient occupancy tax (TOT) imposed on hotel and motel rooms. The city of San Diego’s TOT revenues rose from $39 million in 1991 to an expected $85 million for the fiscal year ending June 30. The four hotels directly serving the convention center — the San Diego Marriott Hotel & Marina, the Hyatt Regency, Embassy Suites and the Clarion — generate a total of about $13 million in annual TOT revenues, convention officials report.

Prop. A opponent Bruce Henderson

Besides filling local hotel rooms and providing customers for convention-related businesses, supporters say the convention center has become an asset for the entire city. Its car and boat shows and other popular events attract thousands of San Diegans, and the center's proximity to the historic Gaslamp Quarter helped convert that district into a lively restaurant and entertainment mecca.     But Henderson, who emerged as one of the major Proposition A opponents along with James Holman, owner, publisher and editor of the weekly publication the Reader, remains unpersuaded by arguments favoring the ballot measure. Henderson says he supports the convention center but doesn’t like the city's involvement in financing the expansion, characterizing it as a potential liability for taxpayers. He wants the private sector to build the center's expansion and laments that his review of 14 city manager's reports contained "not a word about private financing." He complains that the $204 million spent on the original convention center was way over budget and predicts the same will happen with the expansion. He notes that the convention center operates at a loss. "The question is: Do we continue corporate welfare as usual or do we say to the visitor industry that you've got to pay your own way?"     The argument rankles expansion proponents, who reply that the visitor industry will pay for the expansion through its TOT room taxes. Four years ago, the hospitality industry agreed to let the city raise the

TOT 1.5 cents on the dollar to 10.5 cents, earmarking a penny of the increase for the convention center expansion. The city plans to issue $210 million in certificates of participation to pay for construction. The city's annual payment on the debt would be $10.5 million a year, coming from a portion of the TOT the city collects. The port, the city's partner in the expansion, will contribute $4.5 million annually.
Even if the cost of construction rises above current estimates, convention center advocates say there will be plenty of hotel room revenues — taxes paid by visitors — to cover the payments, with millions left over for the city to use on public services, the arts or other programs. One key source of extra hotel room tax revenues, estimated at between $12 million and $15 million a year, will come from up to 3,000 new hotel rooms that will be clustered near the expanded center.
    "Of all the projects to come through the city, this is as close to a no-brainer as you can get," says Scott Barnett, executive director of the San Diego Taxpayers' Association, which supports the expanded center. "It is a good investment, and it will reap a positive return for taxpayers."
    Convention officials say the debate goes beyond the fiscal soundness of the proposed expansion to the role the $5 billion-a-year visitor industry plays in the city's economy.

"If you ask anybody what they want for the community, they are not going to say heavy manufacturing or other polluting industries," ConVis President Reinders observes. "They are going to say high tech or tourism, where people leave their dollars here and go home. You have to invest in what you believe in."     One of the center's biggest economic selling points is its capacity to generate thousands of jobs, although critics contend that employment in the visitor industry tends to be low-paying.     David Cohn, president of the Cohn Restaurant Group, which has five of its seven establishments near the convention center, says the idea that workers in convention-related jobs and services have to earn the minimum is largely a myth. "We have some servers who earn between $30,000 and $60,000 a year," he notes.

David Cohn, president of the Cohn Restaurant Group.

    Meanwhile, Jerry Butkiewicz, secretary-treasurer of the San Diego-Imperial Counties Labor Council, says his group is supporting Proposition A not only because it will create new jobs but because it offers an opportunity to improve some of the existing ones at the center. In the current center, he notes, workers are forced to work part-time, remaining idle on days when conventions are being set up or dismantled. With the expanded center, one event can be operating while another is being readied or removed. Part-time workers may be able to work full time, he says, and start to receive health and other benefits.
    Wallace says the growing visitor industry, with the help of the convention center, provides a broad range of jobs and salaries, from unskilled entry level positions to executive posts. "Almost everyone in this business starts at the entry level because you need the contact with customers," she says.
    Her own career illustrates the possibilities the industry offers to those with motivation and skills. She started at $11,000 a year as a convention center events manager. At 49, she earns $140,000 as the top executive at San Diego’s convention center.
    After graduating from Ohio State University and going to work as a fund-raiser for the Ohio Lung Association, she got her first break in the convention business during a trip to Texas. She went to work at the Dallas Convention Center in 1976, winning promotions that took her to the No. 2 administrative position. She was hired to manage the San Diego Convention Center in 1991, the same year serious planning began for the expansion project.
    Now she faces the challenge of her career: preparing for an enlarged center despite the uncertainties over its future.
    Wallace finds it ironic that the center's opponents are protesting its expansion even though the San Diego facility is widely admired by competitors in other cities. The center has won accolades for its service, its waterfront setting and its gourmet dining. Other centers have begun to imitate its design, she says. Honolulu's expanded center has incorporated an outdoor space, just as San Diego’s center features an outdoor area under its tent-like sails.
    "We have defined what a premier convention center should be," she says. She finds it frustrating to watch as San Diego, the largest convention center on the West Coast when it opened, has slipped to fourth largest in the state. Three other California centers — Anaheim, Los Angeles and San Francisco — have expanded and passed San Diego in size.
    But convention center officials have not given up hope. At the direction of the center's board last month, Wallace and her staff will prepare to launch a renewed sales and advertising campaign for the expansion project, although it will take about 30 months to build. The marketing initiative is slated to start June 3, the day after the election.