San Diego approves P3 for $1B convention center complex

Dive Brief:

The City of Chula Vista, California announced that it and the Board of Port Commissioners (BPC) for the Port of San Diego have approved a public-private partnership (P3) agreement with RIDA Chula Vista for the development of a $1 billion convention center and hotel complex along San Diego Bay.
The Disposition and Development Agreement (DDA) authorizes RIDA to take the next steps toward financing and construction and also establishes a revenue-sharing agreement between the Chula Vista City Council and the BPC. Gaylord Hotels, a brand of Marriott International, will operate the 1,600-room hotel and 275,000 square feet of convention space. Hotel and convention center amenities will include restaurants, lounges, retail and recreational facilities.
Work on the infrastructure necessary for construction could start in 2019. The project is expected to have a $1.3 billion regional economic impact and generate 2,300 direct and indirect jobs during construction. After completion, it is projected that the convention center complex will create 7,800 permanent jobs and inject $475 million annually into the regional economy.

Dive Insight:

According to Hotel Online, the finance side of the agreement will see RIDA contribute $785 million. Chula Vista and the Port of San Diego will pay $240 million toward the hotel and convention center and $103 million for infrastructure and parking upgrades via both taxable and tax-exempt bonds, which will be funded with general fund revenue and taxes – expected to be $23 million annually – generated by the project once operational. The Port of San Diego will also waive ground lease revenue for 38 years, which will result in an additional financial benefit of $245 million.

Chula Vista and the Port of San Diego are no doubt looking to cash in on the lucrative convention and trade show business, much the same as other cities across the country. In fact, Chula Vista could be in store for a little friendly competition from San Diego as long as city voters are on board, The San Diego Union-Tribune reported. If backers can amass the 71,600 signatures necessary, San Diego residents will vote on whether to authorize an increase in the city's transit occupancy tax to fund an expansion of the San Diego Convention Center. As a testament to how much of a moneymaker conventions can be, area hotels have contributed hundreds of thousands of dollars to the effort, which could raise almost $4 billion for an expansion.