San Diego ED&IR Committee Meeting: Tourism, Convention Center, Federal Affairs, and Biocom – September 9, 2020

The San Diego City Council's Economic Development and Intergovernmental Relations (ED&IR) Committee met on September 9, 2020, via teleconference to receive updates on the tourism economy's COVID-19 impacts, the San Diego Convention Center Corporation, federal affairs, and Biocom's annual economic impact report. The committee heard public testimony and discussed key industry challenges.

Consent Calendar

• The committee approved the actions from the July 15, 2020 meeting by a 4-0 vote.

Public Comments & Testimony

Non-Agenda Public Comments:

• Martha Welch expressed criticism of the city's financial management, alleging stolen checks and improper use of funds.
• Rebecca Rapp (mother and youth group mentor) and Kelly McCormick (public health educator and parent) spoke against marijuana businesses, citing safety incidents, increased crime, and economic burdens.

Item 1 (Tourism Economy):

• Namara Mercer (Executive Director, San Diego County Lodging Association) urged the city to proactively assist the tourism sector, including expedited permits and fee waivers, and criticized the timing of the presentation relative to recent city decisions.
• Martha Welch reiterated concerns about budget and tax revenue declines.

Item 2 (Convention Center Corporation):

• Namara Mercer requested that the city defer rent repayments for tourism-related leaseholds until after a full summer of business and rescind rent increases that occurred during 2020.
• Martha Welch praised the homeless shelter operation at the convention center but criticized lack of housing solutions.

Item 3 (Federal Affairs):

• Martha Welch commented on federal issues, referencing whistleblower claims.

Item 4 (Biocom):

• Christina Wright (homeless individual at the convention center) reported being threatened with eviction for distributing food from Father Joe's outside the convention center.

Discussion Items

Item 1: Tourism Economy and COVID-19 Impacts

• Colleen Anderson (San Diego Tourism Marketing District), Julie Coker, and Carrie Capich (San Diego Tourism Authority) presented:
  • TMD assessment projections decreased for the fifth consecutive month, from $24M forecasted to $16M best-case.
  • TOT collections: $249M in FY19, estimated $176M in FY20, and at best $100M in FY21 – a loss of $150M in two years.
  • Hotel occupancy in July 2020 was under 50%, down 43% from last year; July TOT collections were ~$7M vs. $29M last year.
  • 50,000 jobs lost in the visitor industry; 70% of visitor spending occurs outside hotels.
  • Recovery is not expected until 2023; group and convention business is crucial but currently unavailable.
• Committee members (Montgomery, Ward, Kirsey) discussed the need for safe reopening plans, advocacy to the state, and potential city actions such as 'do no harm' policies and supporting convention center marketing.

Item 2: San Diego Convention Center Corporation Update

• Rip Rapattoni (President/CEO) and Martin Maddox (CFO) reported:
  • Since March 2020, the convention center lost over 100 events, 628,000 attendees, 671,000 hotel nights, $707M direct spending, $24.5M in city tax revenue, and $1.2B total regional impact.
  • The facility is currently operating a homeless shelter (Operation Shelter Home) with over 1,000 residents; CARES Act funding runs through October 31.
  • The center earned Global BioRisk Advisory Council STAR certification for infection control.
  • An amended budget will be presented to the board on September 22; another phase of layoffs will reduce workforce by 85%.
  • A financial shortfall is expected beginning in February 2021, requiring city support.
• In response to questions, Rapattoni said the center needs 21 days to transition from shelter to convention use, and decisions on first-quarter 2021 shows must be made by October/November.

Item 3: 2020 Federal Affairs Update

• Adrian Granda (Government Affairs Director) and Pamela Welsh (Squire Patton Boggs) presented:
  • The city has received nearly $300M in direct CARES Act funding, including $248M from the Coronavirus Relief Fund.
  • Status of additional stimulus remains uncertain; disagreements between parties over size and state/local aid.
  • Updates on CDC eviction moratorium (through Dec 31), USMCA implementation (including $300M for Tijuana River Valley), immigration policies (DACA, public charge, border restrictions), and environmental issues (PFAS, WOTUS).
  • The Census Bureau will adhere to a December 31 deadline; no multiplier for low response rates.
• Committee members asked about Community Reinvestment Act rule changes and postal service concerns.

Item 4: Biocom's 2020 California Economic Impact Report

• Joe Panetta (President and CEO) presented:
  • San Diego is home to 600+ life science establishments supporting 84,000 jobs with an average salary of $142,000.
  • In 2019, the industry brought $995M in NIH funding and contributed $19.6B to the city's economy.
  • Many local companies are active in COVID-19 testing, vaccines, and therapeutics (e.g., Pfizer, Moderna, Illumina, Thermo Fisher).
  • Biocom advocates for utility access, land use incentives, streamlined permitting, and transportation/housing policies.
• Committee members discussed opportunities for diversity, workforce development, and retaining the industry's competitive edge.

Key Outcomes

• All items were informational; no formal votes or actions were taken on agenda items.
• The committee scheduled its next meeting for October 7, 2020, at 2:00 p.m.
• Several members expressed intent to continue advocacy for safe reopening of tourism and convention facilities, and to support the life science cluster through policy and partnership.