The expansion of the McEnery Convention Center has long been the crown jewel of the San Jose Redevelopment Agency’s list of projects. Then came the budget crisis—city and state—which clobbered potential funding for the project, and caused the proposal to be scaled down by more than half, from $300 million to $140 million.
Local hotels, which were expected to put up $70 million for the expansion, decided to impose a special transit occupancy tax on their guests, but as they soon learned, that is not a good idea during a recession, and the entire local hospitality industry took a major hit.
So now Mayor Chuck Reed is asking the most fundamental question of all: Can we really afford to go ahead with the expansion?
The reasoning is purely economic. The state is poised to take $75 million of the Redevelopment Agency’s funds, the city owes the county about $72 million, which must be paid off over the next three years, and the Municipality is now faced with another budget deficit, this time projected to be $96 million. Of course, the city has already spent $17 million on expanding the Center, with nothing to show for it. According to Reed, it can’t afford to spend much more.
The mayor has the support of Councilmember Sam Liccardo, who believes that the expansion project will threaten the solvency of the RDA itself.
“I’m not willing to do anything that puts the RDA’s future viability in peril,” Liccardo says. But Dan Fenton, CEO of Team San Jose, which operates the Convention Center, is fighting back. He argues that the expansion project could add 650 new construction jobs to the local economy, as well as 200 permanent jobs once it is completed. He adds that this is the ideal time to build because construction costs are so low.
Meanwhile, the Mayor had some sharp words for Fenton, who has only allowed local San Jose-based Teamsters to do the required set-up for events at the Convention Center.
“Team San Jose has created a terrible industry perception of the changes in the operation of the facility that has caused people to cancel events. People in the industry are advising their clients to go elsewhere,” he says.
Read More at the Business Journal.
I agree that the project should be postponed until better economic times, and when that happens the project should be re-designed. Why tear down a perfectly good [if ugly] building on San Carlos street when they could do away with that tent in the rear parking lot and expand to the south.
I say give the expansion the axe. Maybe one day, when the economy is booming again, we could revisit the expansion. But for now, shelve it!
If anything, the city should put its redevelopment focus on the Diridon Development; privately-financed (i.e. we won’t pay for it!) MLB ballpark and high-speed rail station. This will be the true “Crown Jewel” of downtowns development and generate greater economic activity than a convention center expansion would.
Despite the mayor’s criticism of Team San Jose’s operations, he and the council voted to extend its contract and reduce the benchmarks they had previously set. Politics as usual.
These politicians piss and moan, but they don’t actually DO anything.
Piss and moan and do nothing? I guess folks commenting on this blog are experts at recognizing that behavior.
If it is not going to be done right then it should not be done at all.
Project should definitely be postponed. There is no guarantee that any of these mythical events that Team SJ touts will actually come to SJ even with an expanded convention center. Not only that, the proposed expansion would destroy a perfectly usable building in the old MLK library. The construction jobs would be temporary but that won’t stop labor from pushing for the expansion—they don’t care if it will bankrupt the RDA as long it provides jobs for a little while.
I don’t agree with Reed on everything but he is correct to stop this folly before it starts.
JMoC does raise a valid point though—why complain about Team SJ’s performance and then extend their contract and lower their performance benchmarks. Makes no sense.
A major component of being a green city is reuse of existing buildings. Refit the old MLK library and move the SJ Museum of Art into it. The existing Museum of Art can then become the SCC/SJ History museum. The city of SF got $130MM in Federal ARRA funds to fix up its old 50 UN Plaza building under the guise of “blight” certainly San Jose can do the same and we add a needed museum to downtown. The old museum building would be substantially improved with a restored clock tower as well.
As for expanding the convention center, here’s an option. Joint market with the Santa Clara Convention Center to draw large events, with high tech communications and a light rail line (using the old trollys with hotels strung between them) the two sites could offer a unique convention experience.
All of this could be done for a fraction of the cost of tearing down, building an addition and offer much more to the community and visitors.
According to Team San Jose’s out-of-date sanjose.org website (Cindy Chavez has replaced Phaedra Ellis-Lamkins as co-chair, at minimum) the board is comprised of hoteliers, arts group executives and union people apparently interested furthering their own economic interests (hotel room sales, performing arts tickets and union wage contracts) rather than making money from the citizens’ investment in public buildings.
Does anyone on this list look like they have resumé to provide oversight to a complex cluster of convention halls and large theaters?
Fenton himself was a hotel manager with no credentials in this kind of business before becoming the CVB’s exec.
From Team San Jose’s web site:
Team San Jose Executive Committee
* Phaedra Ellis-Lamkins, Co-Chair; Executive Director, South Bay AFL-CIO Labor Council
* John Southwell, Co-Chair; General Manager, San Jose Hilton and Towers
* Clifton Clark, Secretary; General Manager, San Jose Marriott
* Michael Miller, M2 Consulting
* Marc Casto, President & COO, Casto Travel
Team San Jose Board Members
* Alison Hartman, General Manager, Hotel De Anza
* Andrew Bales, Executive Director, Symphony Silicon Valley
* Angelina Herrera, Vice President, Office Services Western Operations, Xerox Global Services
* Ann Hurst, Managing Director, Children’s Musical Theatre of San Jose
* Bill Fairweather, Business Agent, IATSE Local 134
* Bill Pope, Business Representative, Operating Engineers Local 3
* Bob Blanchet, Business Agent/Organizer, Teamsters Local 287
* Cathy Kimball, Executive Director, San Jose Institute of Contemporary Art
* Cedric Fasbender, General Manager, Dolce Hayes Mansion
* Clifton Clark, General Manager, San Jose Marriott
* Chuck Bond, CFO, DiNapoli Capital Partners
* Cyril Isnard, General Manager, Fairmont Hotel
* Dennis Nahat, Artistic Director, Ballet San Jose
* Enrique Fernandez, Business Manager, UNITE HERE Local 19
* Erik Larsen, Business Agent, AFSCME Council 57
* Gary Hageman, General Manager, Wyndham Hotel
* Irene Dalis, General Director, Opera San Jose
* Josh Ende, Field Representative, Painters & Allied Trades District Council 36
* John Southwell, Co-Chair; General Manager, San Jose Hilton and Towers
* Lisa Riedel, General Manager, Hotel Sainte Claire
* Marc Casto, President & COO, Casto Travel
* Michael Miller, M2 Consulting
* Michael Mulcahy, Managing Partner, SDS NexGen
* Mike Fox, Jr., Goodwill Industries
* Phaedra Ellis-Lamkins, Co-Chair; Executive Director, South Bay AFL-CIO Labor Council
* Pete Constant, City Council Liaison, City Council, District 1
* Rob Balmer, General Manager, DoubleTree San Jose
We should wait until we can afford to expand to a size that actually draws more events. If we’re just adding a few more table to an existing craft show, it hardly seems worth it.
And I agree about the tent. Build there first.
When the boom times were on, SJ Convention Center was losing shows to Moscone because it was too small. Now that the boom is over, shows are smaller because exhibitors are cutting back. The last few trade shows I went to at SJ had plenty of unused space.
There is an argument, though, that now is the time to make SJ more competitive for when the economy picks up again.
I agree with the other commenters that the obvious solution is to expand down where the tent is. The ex-library is pretty ugly, but tearing it down doesn’t seem like the most cost-effective approach.
There is a lot of talk about federal stimulus money to improve infrastructure. If so, here’s a good case to send some people to Washington with their hands out.
The Civic Auditorium was built with federal stimulus funds in the 1930s, and I think that is something that has proved to be a valuable asset over the years.
I say tear down the SJ Convention Center and build a bigger one in South San Jose or at the Santa Clara County Fairgrounds. The idea is to attract larger conventions and events to San Jose. Building a convention center that can accommodate an event like the International Consumer Electronics Show, instead of it going to Las Vegas would be a start.
where would the conventioneers eat and sleep under your novel plan?
Plenty of hotel rooms downtown, and in the immediate region. Have to start somewhere…..if San Jose calls itself the Capital of Silicon Valley, hosting huge “tech,” instead of San Francisco or Las Vegas, conventions would be a nice start.
One of the best things about going to a convention is the opportunity to network with others at the end of the day at a local restaurant, lounge, bar, or entertainment establishement. That’s why convention centers are always located in a downtown location, within walking distance to dining and entertainment.
If the convention center is moved to the Fairground, as the area is currently lacking dining and entertainment establishments, we would probably lose more convention business than we are currently.
http://www.mercurynews.com/breaking-news/ci_13951579
Think you are being represented by our City Council? Just listen to today’s discussion by the Council. Some councilmembers actually get it and think Team SJ should be accountable and responsive, while those who are carrying Labor’s water don’t and they don’t even try to hide the fact that they are representing Labor and not the citizens of SJ.
Very disappointing and insulting to listen to this discussion today. Under the guise of keeping jobs local, which nobody disagrees with, the Labor reps on the Council are trying to deflect the argument and avoid dealing with the real issue.
It is time for a change on the Council.
Team San Jose won the contract based upon benchmarks they were expected to make. They missed the benchmarks. Our labor-dominated city council’s response—extend the contract and LOWER the benchmarks. GREAT!
Remmeber this stuff come election time, people.
Team San Jose has missed all of it’s agreed benchmarks with the City of San Jose. The reasons you may ask? The leadership of this so called non-profit is very greedy. They lie about everything, watch the City Council meetings from this November forward. Dan Fenton is trying to hide that Team San Jose is hemorrhaging money weekly. The fact that they violate local,state, federal laws continuously without regard to the thought of what the end result is for the workers or the city. As someone who knows what happens on a daily basis, I can tell you that people fear for their jobs all the time. Team San Jose management is horrible they are very shady,I’d rather work for Tony Soprano. They cut corners anywhere they can making an unsafe working environment. Don’t let the Mayor or the other fast talkers fool you. Alot of the shows are leaving because of the labor issues, the failure to supply what is promised in the contract, over charging clients instead of comping for TSJ screw up’s… Team San Jose is a failing venture and is an embarrassment to the City of San Jose and a burden to the taxpayers in general. Do Not listen to the Mayor or ANY Council member that is for Team San Jose or an expansion of the Convention Center. We need REAL management the knows how to treat staff and clients and not waste money. All in all, Team San Jose is a joke, a waste of time, a serious waste of Taxpayers money.
When the economy changes, I will be looking for a reputable job. Team San Jose has shown me what it’s like to be the worst car salesman in history at the worst car dealership. Thanks for listening.