LOS ANGELES -- A Superior Court judge has upheld in a tentative ruling a hotel room tax to finance San Diego’s $520 million plans to expand its convention center.
The main issue in the case is whether it was legal for hotel owners – and not the entire electorate – to vote on the tax.
Superior Court Judge Ronald Prager ruled Monday that the room tax approved last year by the city’s hotel owners was a legal means of raising funds to pay for the expansion.
In his tentative ruling, Prager writes “the action was properly brought under Code of Civil Procedure section 860, that the CCFD [Convention Center Facilities District] was properly formed, and that the election regarding the special tax at issue in this action conformed with all applicable constitutional provisions, statues, and ordinances.”
City Attorney Jan Goldsmith filed a validation suit in May seeking a judge’s ruling that it was okay to limit the vote for the tax on the special district to hotel owners. Hoteliers approved the tax in a 92% vote on May 7.
San Diegans for Open Government and civic activist Mel Shapiro also filed separate lawsuits challenging the legality of the tax.
Prager wrote in his tentative ruling that the law allows two-thirds of the landowners in special districts to vote on a tax, as opposed to registered voters in certain circumstances.
He added that not even all landowners within the special district must get a vote — only those whose property would be subject to the tax are eligible to vote, which is how the convention center facilities district was structured.
The court ruling and environmental approval from the California Coastal Commission are the remaining hurdles to the project moving forward.
Prager will hear oral arguments on Wednesday from the city’s attorneys and opposing counsel before issuing a final ruling on hotel tax.
The hotel room tax, expected to raise nearly $35 million annually, would repay the bulk of $549.5 million in bonds proposed in a 30-year financial plan that was approved in late September 2012 to fund construction.
Additional funding would come from the city and the San Diego Unified Port District, who would provide $3.5 million and $3 million a year, respectively.