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After more than 18 months of study, review and evaluation of a feasibility of venue expansion, the San Diego Convention Center finally has gotten the land it requires to increase its size by about a third. The Unified Port of San Diego has authorized the transfer of six acres of land from the nearby, Super-Yacht marina, Fifth Avenue Landing, to San Diego Convention Center Corporation (SDCCC).

The multi-year process to get the land to expand began in 2008 (covered in Hot News here), when the SDCCC made their initial effort to acquire a lease on the land—essentially the right to the buy the property—then proceeded to study the feasibility of the expansion.  In September, the Mayor’s Citizens Task Force on the Convention Center Project identified the six acres that were transferred in April as the recommended site for a proposed expansion. Even though the intensive examination of the expansion took place during a slow economy and a downswing in the convention market, the task force found that growing the San Diego Convention Center was necessary for the destination to remain competitive.

 According to market research data presented to the Mayor’s Citizen Task Force, expansion of the Convention Center was expected to generate $698 million of economic activity annually – in addition to the $1.3 billion a year the Convention Center already believes to generate. Expansion would also create 6,885 new fulltime jobs to the estimated 12,500 jobs already supported by the Convention Center.

“As the Mayor’s Citizen Task Force found last year, an expansion of the Convention Center is necessary to generate more economic impact for the city and to create new jobs,” said Carol Wallace, President & CEO of SDCCC.  “Our current size is limiting our ability on many levels because we lack enough meeting space to meet market demand.”

Plans for the expansion, analyzed in public sessions during 11 meetings of  The Mayor’s Citizen Task Force met 11 times in 2009, eventually deciding to add 200,000 square feet of exhibit space, 100,000 square feet of meetings rooms and 80,000 square feet of multi-purpose ballrooms. With service and support space – as well as planned for retail space –  the overall gross square footage of the expansion totals 1,266,719 square feet.
 
The expansion cost, including a proposed pedestrian bridge linking the convention center to the waterfront, was estimated at $752.7 million, according to the Mayor’s Citizen Task Force. But, as Wallace pointed out, the venue without the expansion has meant business lost. “We have lost or turned away 381 events in recent years because of lack of space or available dates,” said Wallace. “An expansion would allow us to accommodate 89 percent of that lost business.”

“As our recent efforts to secure future bookings of Comic-Con International demonstrates, we need more space to keep our most valued clients and ensure San Diego remains a top choice for conventions into the next several decades,” said Bob Nelson, Chairman of the Board of Directors, San Diego Convention Center Corporation. “This is a major milestone in our efforts to expand this regional economic engine which has transformed San Diego into a world-class meeting and convention destination.”

SDCCC will pay $1 million from reserves at the closing of the agreement and issue a promissory note for the remaining $12.5 million to be secured by the six acres. There will be an annual principal payment of $500,000 per year.  The balance of the principal and interest will be paid by the Corporation at the end of the five-year financing period. With the land transfer complete, SDCCC will begin working in partnership with the Port to complete the necessary environmental and permitting steps.

“I want to particularly applaud Mayor Jerry Sanders for his strong leadership,” added Nelson.  “His appointment of a task force last year was an important part of getting us to this important step.  Today is a good day for all San Diegans as it helps move us closer to generating new jobs, new tax revenues to fund essential city services and new opportunities to enhance the waterfront for not only visitors, but for residents as well.”

In its 20-year history, the San Diego Convention Center has generated $18 billion in regional economic benefits and $360 million in tax dollars for the city of San Diego. Although this California city is still far from deadline announcements or ground breaking ceremonies, there is a tangible feeling of accomplishment that one of the final preliminary steps was now taken with city-wide approval. “As our recent efforts to secure future bookings of Comic-Con International demonstrates, we need more space to keep our most valued clients and ensure San Diego remains a top choice for conventions into the next several decades,” said Bob Nelson, Chairman of the Board of Directors, San Diego Convention Center Corporation. “This is a major milestone in our efforts to expand this regional economic engine which has transformed San Diego into a world-class meeting and convention destination.”

“I applaud the Port Commissioners for approving this agreement and recognizing the importance of expanding our Convention Center," said Jerry Sanders, Mayor of San Diego. “While there is more work to be done before we can break ground, today's action is a critical step forward."