Wednesday, September 2, 2015
A contiguous expansion of the San Diego Convention Center is preferred by the center’s clients and stakeholders and also provides the greatest return on investment for the City of San Diego, according to a new study by Conventions, Sports and Leisure International (CSL).
The study analyzed the financial and economic value of expanding the convention center with contiguous exhibit space as well as an expansion several blocks from the current facility characterized as non-contiguous or a “campus” option.
While the contiguous expansion was deemed superior, the study found that the City would also benefit from additional meeting and exhibit space from a non-contiguous expansion. “From an impact return perspective, the City should continue to pursue the contiguous option as opposed to a significant investment in a publicly-owned convention center located several blocks from the existing SDCC,” said John Kaatz, the study author.
In addition to pursuing the contiguous expansion of the current SDCC, Kaatz said the City should consider some type of support for a development of a largely privately-led hotel and convention project on or near the site currently identified for the campus option. “The strength of the San Diego market for mid-sized conventions, as well as the importance of securing additional headquarter hotel inventory, suggests that multiple projects designed to maintain and enhance the competitive position of the San Diego market could be pursued.”
“Expanding the convention center will create new jobs for San Diegans and provide a huge economic benefit to our region. This study reaffirms that the contiguous expansion is the ideal approach for the most immediate impact, and provides the best return on investment,” said Mayor Kevin L. Faulconer. “It’s time to expand the convention center. My administration will begin talks with the tourism industry, City Council and other stakeholders to lay the groundwork for moving forward with the contiguous project in 2016 if the City prevails in court. The campus expansion and accompanying hotel would also bring economic benefits for the city that we will continue to explore.”
An ongoing legal challenge to the Coastal Commission’s approval of the contiguous expansion project may be resolved in the next six months.
Three Options Studied:
The study analyzed the current state of the convention and meetings industry and San Diego’s market position within the industry as well as the various expansion options, including:
The study included event planner focus group sessions in Chicago and Washington, D.C., and phone and email surveys of 200 current, past and potential SDCCC customers. In addition, meetings with key stakeholders from the hospitality industry, the Port of San Diego, elected officials and others were held in San Diego.
“San Diego continues to be a top meeting and convention destination and the one thing this study has shown us again is that if we build it, they will come,” said Stephen Cushman, special assistant to Mayor Kevin Faulconer and Chair of the San Diego Convention Center Board. “The demand for exhibit and meeting space in San Diego remains strong and the only way we capture more attendees, hotel room nights, and economic impact is if we build more meeting and convention space.”
SDCC Occupancy/Market Demand Remain High:
Other Key Findings:
“The confirmation that a contiguous expansion of the San Diego Convention Center will ensure the facility’s long term viability is good news. As I have in the past, I support the contiguous expansion as a means of attracting large-scale conventions to our city and generating jobs and economic benefit for our neighborhoods,” said Councilmember Todd Gloria. “I look forward to the resolution of financial and legal questions so San Diego’s most critical civic project can be completed.”
The last comprehensive market study relating to a proposed expansion was completed in 2009 for then-Mayor Jerry Sanders’ Task Force. A $520 million contiguous expansion of the SDCC was approved by the California Coastal Commission in October 2013, but the project stalled after the financing mechanism was ruled unconstitutional in August 2014. The CSL study was commissioned by the SDCC and the City of San Diego to update the 2009 market and demand analysis for a proposed expansion.