More San Diego Convention Center Lies

Heywood Sanders, an expert on convention centers, told city officials their numbers were “seriously inflated.”
  • Heywood Sanders, an expert on convention centers, told city officials their numbers were “seriously inflated.”

Downtown San Diego has a smoke-filled back room where the boys play liar’s poker. Their chips are provided gratis by naive taxpayers who have been deliberately lied to for years. “In San Diego, by the time the public finds out about something, it’s been on the planning board for five or ten years,” says former councilwoman Donna Frye.

Donna Frye says projects are planned for years before the public ever hears about it.

Donna Frye says projects are planned for years before the public ever hears about it.

That cogently describes the planned convention center expansion. From the beginning, it has depended upon a conspiracy of misinformation cooked up by downtown boosters, political leaders, so-called consultants, the construction and tourism industries, the mainstream media, and others who have favored the project for a long time but pretend to be gathering facts before making a decision.

Heywood Sanders, a professor at the University of Texas at San Antonio, is a Phi Beta Kappa from Johns Hopkins with a PhD from Harvard. He has written numerous scholarly articles on overbuilding in the convention center industry, including an influential 2005 piece for the Brookings Institution, now being updated.

Typically for San Diego, Mayor Jerry Sanders, in wangling for the convention center expansion, appointed a “stacked-deck committee — the conclusion was foregone,” says Steve Erie, political scientist at the University of California San Diego. “They had decided to expand but just needed the numbers to justify it.” Amazingly, one member of that committee said taxpayers might be suspicious of any statistics it would generate. So in 2009, San Diego uncharacteristically invited a scholar to address the committee whom Erie identifies as “the ranking expert in the field”: Heywood Sanders.

Steve Erie, political scientist at UCSD, called the Convention Center committee “a stacked deck…it’s conclusion was forgone.”

Steve Erie, political scientist at UCSD, called the Convention Center committee “a stacked deck…it’s conclusion was forgone.”

That expert immediately told two officials of the convention center that its statistics were “seriously inflated,” recalls Erie, who overheard the conversation. Heywood Sanders pointed out to the Reader how the convention center was cooking the books: one method was claiming that substantially all attendees at Comic-Con and the Rock ’n’ Roll Marathon were out-of-towners spending at least four days in local hotels — obviously false. The downtown boosters permitted Heywood Sanders to talk for a brief period. One committee member sneeringly asked if the professor had ever been inside a convention center. Steve Johnson, the public relations director for the center, called Heywood Sanders “a whack job.”

It’s no surprise that one of San Diego’s most prominent financial experts, when asked to characterize his adopted city, responds with one word, “Mayberry.” That’s the rural Southern hamlet of television fame.

A consultant named AECOM provided the committee with what it wanted: statistics and rhetoric purporting to show that the convention center would be a financial boon to San Diego. AECOM used numbers generated by the convention center.

Mayor Jerry Sanders came out with an eyebrow-arching (even for him) statement: the convention center expansion would produce $121 million in new hotel-room revenue each year and create a whopping $16 million in hotel-tax revenues. Andrea Tevlin, independent budget analyst, peered into the mayor’s stunning forecast. She said that estimated new room revenue would be $50 million, and the additional hotel-tax revenue would be $5.2 million to $9.7 million. Her figures were a long way from Mayor Sanders’s. She informed councilmembers, the mayor’s office, hotel-industry representatives, and the public of this vast discrepancy.

Last December, Heywood Sanders found even more examples of the San Diego Convention Center cooking its books. Studying a sample of events, the professor noted that the center would estimate attendance at a future convention and the number of hotel room nights that would result. The actual attendance would often be much lower than forecast. But the convention center would keep the room nights the same as it had previously estimated. Thus, it was systematically overstating hotel room nights and, also, therefore, hotel-tax receipts, attendee spending, and the center’s impact on the local economy. The Reader reported this convention-center disingenuousness December 14. The center had no comment — before or after the column appeared.

Civic activist Mel Shapiro sent the column to the city auditor’s fraud hotline, complaining that the convention center has been misstating the number of hotel room accommodations to justify the planned $550 million expansion.

City Auditor Eduardo Luna reported August 21 that Shapiro’s and Heywood Sanders’s allegations were true. “The San Diego Convention Center Corporation misstated hotel room-night statistics in its annual reports and AECOM report,” reported Luna. “Any discrepancy in published figures for attendance and/or hotel room-nights casts doubt on the veracity of all statistics reported.” In short, as Heywood Sanders says, a bloated room-night figure distorts other claims by the center, such as impact on the local economy.

Luna says the statistical misstatements have not been made intentionally. But it’s well known that Luna is in the mayor’s doghouse for being honest. Erie and I have both followed the City much longer than Luna. I agree with Erie when he says that in San Diego, “Cooking the books is an art form. Everything here is cooked.”

Says Heywood Sanders, “This is one of the sad things about San Diego: an obvious history of misrepresentation.”

Tevlin says the mayor’s numbers are “overstated,” but she still believes the center expansion “will produce economic benefits for the City and region through increases in the number and size of conventions and related visitor spending.”

But will that turn out to be true? Heywood Sanders estimates that convention center space expanded by 33.7 percent nationally between 2000 and 2010 while attendance was dropping slightly. The Wall Street Journal says space has gone up somewhat less while attendance was dropping very sharply. In any case, San Diego would be expanding into a glut.

San Diego’s mainstream media play along by publishing boosters’ propaganda without analysis and ignoring news that might upset the apple cart.

By contrast, consider Charlotte, North Carolina. Citizens there are now learning that visitor spending and employment from conventions are about half what the local convention center has been claiming. The major newspaper, the Charlotte Observer, made these revelations. Would the U-T ever expose the convention center’s phony numbers? ■

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The expansion of convention centers while attendance is declining has parallels. Retail space is in a glut with malls being closed and razed for other uses. At our own Plaza Camino Real in Carlsbad they have the former May Co (later Robinsons-May) store at the east end and it has no tenants. The owner plans to just tear it down so that it will no longer just stand their empty and bereft. In Escondido, Westfield managed to avoid that plight by bringing in Target, and putting it right in the center of the mall. Internet retailing is growing, and bricks-and-mortar retailing is fading fast. Yet we see more new retail space being built all the time. Walmart managed to pull off the impossible, getting a location in Encinitas when it took over the former Expo Design Center location in Leucadia without needing to get special approval. Then there's Best Buy, laughingly called the Amazon showroom, that is on the ropes. Folks are just staying home like never before, and can meet their needs with the internet, social media, email. Big conventions are going the way of the Dodo bird, and so will big-box retailing.

Good points. Local governments subsidize shopping centers, hoping to grab tax receipts from a nearby town. But as you point out, shopping centers are in trouble. Classic example: Horton Plaza. It was highly subsidized and its success lasted a very short time. Finally, the owner decided to tear down a big portion. But who is picking up the tab for the teardown? Guess. The City of San Diego. Supposedly the owner of the center will then create a park. But it is a lousy trade. The City is losing on this one. Now get this: promoters of private-public sector subsidy deals, such as the Union-Tribune, point to Horton Plaza as a success. Gawd! But the promoters may be getting away with it with the public. Best, Don Bauder

Horton Plaza was supposed to be a nucleus for the rebirth of downtown San Diego as something more than an office park. For the first several years, stores within a block of the shopping center were closed on Saturday (Saturday?) because they were patronized only by office workers. There was no mixing of shoppers, office workers, and who-knows-what-else. A few years ago the nature of Horton Plaza went from the "island of activity within a sea of indifference" to something more closely aligned with the original intent. But that lasted as long as prosperity did, and now the island is doing nothing. Success? Hardly! Not now, and not for a long time, and it didn't last long either.

Not long after its birth, the big retailers began leaving Horton Plaza. In the 1980s and 1990s, it was clearly a loser. Yet the corporate welfare crowd is still touting it as a great example of public-private partnerships. Unfortunately, it IS a very good example of such partnerships. Taxpayers get fleeced, subsidized developers get rich. Best, Don Bauder

I wouldn't hold my breath waiting for the UT to expose anything the big dogs are up to in this town, Don.

The culture here, which I think has been largely influenced by the military presence and the mentality that exists within it, produces an atmosphere where palms are greased and mum's the word and taxpayer money is there for the taking. Unlimited defense budgets, and fat military contracts all contribute to a line of thinking that has nothing to do with democracy, and everything to do with a select few living large. Regardless of what everyone thinks we are fighting for, here, there, and everywhere, the fact is that 1% still believe they are entitled to what they want and they sure as hell don't need any pesky reporters or members of the public spoiling things. Whether it's convention centers or modification of a major public park, the "entitled ones" usually have their way in good ol' San Diego.
Something really stinks in this town and it is not the smell of fish wafting up from TJ.

"The culture here, which I think has been largely influenced by the military presence and the mentality that exists within it, produces an atmosphere where palms are greased and mum's the word and taxpayer money is there for the taking."

This is a city where labor unions and developers control city hall: the military has nothing to do with it. Heck, Chicago's been the master of palm-greasing and I think their military presence could hardly fill a recruiting office.

Your thesis is so far off-base as to be laughable, were it not so sad.

The golden rule applies in all communities and cultures: them that has the gold makes the rules.

Bob, I think the military has more influence than you are saying. The military accounts for 20% of the San Diego metro area economy. Politicians and the downtown overlords know it. So the military often gets its way and has great power in San Diego. Best, Don Bauder

Well said, JavaJoe. This has been going on in San Diego for decades. The money is steered downtown for subsidized projects that should be financed 100% by the private sector. Meanwhile, the neighborhoods and the infrastructure rot. But the people don't seem to care. Best, Don Bauder


Well, it could have been worse. He didn't do No. 2 on the bus bench seat! Maybe the Downtown San Diego Partnership's Clean & Safe Program will someday buy the "Portland Loo" public toilets that are catching on.

It was decades ago when facilities for the mentally ill were closed. The result was the homeless problem. Best, Don Bauder

There should be more public toilets downtown, mainly for use of the homeless. Best, Don Bauder

I wish labor unions did control City Hall. We have one helluva better city.

Anyone who cannot see the military influence on the politics and culture of San Diego must have their head in their duffle bag. The military gets everything it wants in this town and work in partnership with the corporate overlords who get the contracts because that is who the ex-military are going to get their second pensions from once they finish milking the DOD for their first one.

These guys all do the "tax dollar rip-off dozy-doe" and always have a chair for their good ol' buddies when the music stops playing. In the meantime, the public get ripped off because the public funds going toward one of the big dogs special projects instead of going into infrastructure and improving the neighborhoods.

I don't know why they continue to get away with it either, Don. I think the major media here does what it can to convince the locals that they would be wasting their time fighting city hall. The stories that make the front pages just show the big dogs getting all the red meat; everyone else gets the scraps and acts grateful. I believe it is going to change. I certainly hope so. How it has gone on for this long is amazing.

Somebody could write a PhD dissertation on why San Diegans do not figure out how they are getting fleeced -- how the downtown developers get fat subsidies while the rest of the city rots. I think the bias of the mainstream media has much to do with it: people simply do not hear what is going on, because the major media are part of the scam. Best, Don Bauder

"I wish labor unions did control City Hall. We have one helluva better city."

Sorry but that is a ridiculous comment. The labor unions should not control city hall. Bankers should not control city hall. Developers should not control city hall.

The people of San Diego should control city hall and the representatives in city hall should be acting on behalf of the overall best interests of ALL San Diegans - not just whatever special interest group is controlling them.

Yes, the people -- taxpayers, voters -- should control City Hall. But will that happen in San Diego? Best, Don Bauder

Where is the feisty Donna Frye, when we need her again?

Donna was termed out. She couldn't run for the council and decided not to run for mayor again. The last time she ran for mayor, the election was stolen from her. I agree that she was by far the best on the council...best in a very long time. Best, Don Bauder

Also, Donna understood the unions represented the best opportunity for raising the local populations standard of living, and in doing so, improving the city's economy overall. I only said I wish the unions had control of City Hall because I think some balance needs to be restored. I know the unions would run amok, but at least the running would be in the other direction for a change.

For me, the unions carry some baggage. They generally favor the corporate welfare projects, because of jobs that will theoretically be created, particularly in construction. But that is shortsighted. Also, pressure from public unions was instrumental in pushing pensions to absurd heights, and cementing excessively early retirements into the system. But your point is well taken: unions running City Hall would not be as bad as the current crop of corporate welfare mendicants that run it. Best, Don Bauder

Public unions and "unions" are two very different animals. PUBLIC unions lower the standard of living for the poor and middle class. Public unions do not in any way raise the standard of living for local populations or anyone else besides the connected few who have those jobs, at the expense of the many.

You are right in some cases, SP, but very wrong in others. One example: school teachers are public union members who raise the standard of living and qualify of life for the poor, the middle class, and also the upper class. Best, Don Bauder

We will never agree on this Don. For the record, the CTA has spent MORE special interest money in CA than any other entity- $400 million in the last 10 years- they do not raise the standard of livng for the poor or the middle class but bring it down.... thru excessive taxes.

Yes, we will never agree on the subject of school teachers, SP. Best, Don Bauder

Im with SurfPuppy. Public employee unions help exactly one class: The class of public employees.

They hurt EVERYONE outside that class.

Again: this simply cannot be said about school teachers. Best, Don Bauder

Don, how on earth can you make that comment when the California Teachers Association is the LARGEST SPECIAL INTEREST group in this state???????????? Do you think the CTA gave away $400 million to elected officials for the children???????? Do you think the CTA killed legislation to fire teachers accused of misconduct for the children, or the public??? http://www.city-journal.org/2012/22_2_california-teachers-association.html

The teachers may or may not be the largest special interest group in the state, but they do their jobs, and most do it well. Best, Don Bauder

I think there's difference between teachers per se vs. the teachers union.

I think the vast majority of the thousands of CA public teachers are very hard working, intelligent, and dedicated, and these teachers greatly help a lot of people.

I think the teacher's union doesn't help anyone except teachers. And at that, the union hurts the best teachers by insisting on the typical union rules that turn many of us against unions: seniority-based rather than merit-based pay and layoff priority systems, near impossibility of firing bad employees, etc.

If the vast majority of public teachers are intelligent and dedicated (and I agree that they are), they need a union, because they are not getting paid what they are worth. Best, Don Bauder

The city of San Diego is entering the Golden Age of debt shooting from both barrels. The feds have no plan in place to reduce the deficit as does the city of San Diego.. I agree with the philosophy of it you can get the funding build it. The advantage is that being one of the first cities to default the city council will remain fully staffed and funded despite bankruptcy. Years from now when the city #100 goes belly-up the city council will be abolished and a single city manager will be brought in (like Michigan).

Michigan's governor has brought in dictators to run a number of the sickest cities. Democracy has gone out the window in those cities. California has many of the same problems as Michigan -- look at the city bankruptcies in California. So will the Michigan system result? Possible. Best, Don Bauder

Deception is self-reinforcing. The longer one gets away with it, the bolder one gets. The wealthy will have to watch their "help" more closely and lock up their kitchen scraps. They will eat the rest of us, then each other.

We are frogs, and the heat is on.

I hope we don't all jump out of the pot at the same time. Best, Don Bauder

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