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Faulconer proposes hotel tax hike for convention center expansion, homeless programs

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Mayor Kevin Faulconer proposed a hotel tax hike to pay for a convention center expansion, more homeless programs and increased spending on road repair during his annual State of the City address on Thursday night.

Speaking to an overflow crowd at downtown’s Balboa Theatre, Faulconer also promised to spur construction of affordable housing, revitalize Balboa Park and boost the city’s technology industry so it might rival Northern California’s Silicon Valley.

The mayor also briefly addressed the Chargers decision on Thursday to leave San Diego for Los Angeles by criticizing the team’s owner.

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“At the end of the day, Dean Spanos was never willing to work with us on a stadium solution and demanded a lot more money than we could have agreed to,” Faulconer said. “We live in a great city and we will move forward.’

The lion’s share of the new money from the proposed hotel tax hike would be devoted to the convention center expansion, with the remainder split between homelessness programs and street repair.

Faulconer said in an interview Thursday afternoon with the San Diego Union-Tribune editorial board that he likely would propose increasing the tax from 12.5 percent to 16 percent, but that the size of the hike wasn’t set in stone.

The mayor said he’s confident a ballot measure focused on multiple initiatives that poll well with voters can get the two-thirds support necessary for approval. A hike of that size would raise roughly $60 million to $70 million per year.

The convention center expansion would be along the waterfront and would probably be a bit smaller than a previously approved 740,000-square foot expansion that was blocked in court in 2014, he said.

“This is the only legitimate plan that guarantees we can move forward with this critical project,” the mayor told the crowd at the Balboa Theatre.

Faulconer said the expansion would help the city keep Comic-Con, make it possible to attract new and larger conventions, and create thousands of jobs and millions in new tax revenue.

Joe Terzi, chief executive of the San Diego Tourism Authority, praised the mayor’s proposal after the speech.

“”We are absolutely ecstatic about the mayor’s commitment,” Terzi said. “Now that the Chargers issues is off the table the mayor has an opportunity to make sure there is an opportunity for us to expand the center. It’s one of the only centers in the country that can expand itself and be full the next day.”

Attorney Cory Briggs, who has fought the expansion on financial and environmental grounds, criticized the proposal on Twitter, contending the project won’t happen.

“...that’s a waste of time,” he tweeted Thursday night. “Pursue that folly on the private dime, not the public’s dime.”

Faulconer said the ballot measure would also finally give San Diego a dedicated revenue stream to tackle homelessness and more than triple the $2.1 million per year the city now spends on the problem.

But because the ballot measure wouldn’t go before voters until 2018, Faulconer laid out in his speech several more immediate efforts to reduce homelessness.

They include increasing the number of emergency shelter beds available from 350 to 650, launching a hotline with information on exactly where open beds are each night, and creating a central assessment center for people living on the street.

The mayor will also activate a regional database to spur greater coordination, transparency and accountability among social service agencies.

In addition, the county has agreed to increase the size of the psychiatric outreach team dedicated to the city from 17 to 27 psychologists.

“This homeless crisis did not start overnight and it will not be solved overnight,” Faulconer said. “But there is more that our region can do — and will do. This is an unprecedented problem that demands an unprecedented level of cooperation.”

Councilman Chris Ward, whose district includes the convention center and the neighborhoods most affected by homelessness, said he’s eager to work with the mayor in some details.

“He hit the right notes certainly on priorities,” Ward said. “I really look forward to working with him on more specifics to create an implementation plan to really deliver on these services, and as we try to craft a revenue proposal like he talked about to make sure our industries are protected.”

Local homeless advocate Michael McConnell said it could be two years before money from the ballot initiative would help reduce homelessness. He also noted that other cities are addressing the problem with bond measures that directly address it, instead of combining homelessness with other issues such as a convention center.

Deacon Jim Vargas, head of Father Joe’s Villages, said he was encouraged by Faulconer’s address.

“As a service provider, Father Joe’s looks forward to being a part of it,” he said about Faulconer’s call for the community to work together.

Rick Gentry, chief executive of the San Diego Housing Commission, also said he was encouraged. “It’s good to see a recognition of a need for additional resources,” he said.

A key element of San Diego’s problem with homelessness is a severe shortage of affordable housing for people of low and middle incomes, Faulconer said.

So the mayor is proposing a package of new incentives to spur developers to build more housing for people in those income brackets, especially along transit lines where new projects will be less likely to worsen congestion and pollution.

“It simply costs too much and takes too long to build homes in California,” he said. “We’re going to slash permitting times and allow more market-rate units to be built when homebuilders also construct entry-level homes in transit-friendly areas. This will be a first comprehensive program to offer market-rate development incentives in exchange for middle-class homes.”

Faulconer also wants to expand the city’s density bonus, which provides incentives to developers who build projects with more units, and to streamline approvals so proposed projects can be approved in months instead of years.

While the mayor has already sharply increased funding for roads since taking office three years ago, he said the additional money would allow the city to catch up with a huge repair deficit created by neglect during the Great Recession.

“San Diego, let’s once and for all reverse the disgraceful decline of San Diego’s streets,” he said.

On Balboa Park, the mayor touted the Plaza de Panama project, which aims to remove cars and parking from the center of the park, and a ballot measure voters approved in November that will boost funding for building renovations.

“Balboa Park is going to get a lot of love this year,” Faulconer said.

On the technology industry, the mayor said he will bolster efforts to help local companies get out-of-town funding and aggressively tout the city’s strengths.

“San Diego has the lifestyle, San Diego has the talent — watch out Silicon Valley,” he said. “We’re coming for your money.”

Faulconer also said he plans to lobby federal officials to designate San Diego as a “pilot region” for self-driving cars.

The speech also covered the mayor’s accomplishments since taking office and expressed optimism that the diverse city is becoming more unified.

He said that was particularly crucial with the nation divided.

“America’s political, racial and economic divides threaten to separate neighbor from neighbor,” he said. “But we can’t let that happen here. We won’t.”

As he has done during his previous “State of the City” addresses, the mayor spoke several sentences of the speech in Spanish and received applause for doing so.

Previous accomplishments he highlighted include hiring more 9-1-1 dispatchers, forging new labor deals with unions that don’t worsen the city’s pension debt, and expanding hours at libraries and recreation centers.

Staff writer Gary Warth contributed to this story.

david.garrick@sduniontribune.com (619) 269-8906 Twitter:@UTDavidGarrick

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