Appeals are likely after a Superior Court judge ruled last week that a San Diego hotel room tax to finance the $520 million planned expansion of San Diego's convention center is legal, according to a report in UT San Diego.
Superior Court Judge Ronald Prager reaffirmed his earlier tentative ruling in which he concluded that under state and local laws, the tax could be approved through a vote by hotel owners and did not have to be voted on by the entire electorate.
The city formed a citywide community facilities district last year. Hotel owners within city limits then voted to enact a special property tax that would be passed onto hotel guests in the form of a 1% to 3% room surcharge. 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 by 92% on May 7.
San Diegans for Open Government and civic activist Mel Shapiro also filed separate lawsuits challenging the legality of the tax.
The hotel tax is expected to generate roughly $35 million a year over 30 years to finance the bulk of the expansion project. The court ruling and environmental approval from the California Coastal Commission are the remaining hurdles to the project moving forward.
The hotel room tax, expected to raise nearly $35 million annually, would repay the bulk of $549.5 million in bonds to fund construction.
Attorney Cory Briggs, who represents San Diegans for Open Government, vowed to appeal, which attorneys on both sides agree could delay the expansion project for a year or more, according to the UT newspaper.