Comic Con
Thousands of Comic-Con attendees flood halls at the San Diego Convention Center in 2016. Photo by Chris Stone

A proposed hotel tax increase that supporters said would fund an expansion of the San Diego Convention Center, road improvements and homelessness projects fell about 3 points short of the needed two-thirds approval early Wednesday.

With all precincts reporting, the measure was favored by 63.5% with 36.5% rejecting the package.

Backers of Measure C said the proposal was driven by three major factors they think are diminishing San Diego as a world-class tourist destination — a homelessness crisis, city streets riddled with potholes and inadequate convention and tourist facilities.

Measure C would have boosted overnight lodging taxes by 1.25% to 3.25% depending on the lodging’s proximity to the Convention Center. With the measure failing, the current hotel tax of 10.5% remains intact.

Over the course of its 42-year life, the measure was projected to raise $3.8 billion to expand the convention center, $2 billion for homeless services and $600 million for road repairs. The actual money raised would initially have been split between the convention center and homeless efforts, 59% to 41%. In fiscal 2025, the split would have changed to 59% for the center, 31% to homelessness and street repairs getting 10%.

Proponents of the measure said it would have been an easy way to raise revenue without burdening San Diego’s residents. They said the measure would generate $147 million over the first five years for homeless services, allow the city to repair more than 150 miles of streets on average every year and create 7,000 jobs by modernizing and expanding the convention center.

The text of the measure stressed that homelessness was the biggest issue it hoped to address, citing the 2016 Hepatitis A outbreak — among other items — as a reason homelessness needs to be a focus.

“San Diego’s homeless crisis is certainly a humanitarian crisis,” the text of the measure reads. “But it is also a public health threat, a public safety issue, and an economic issue all of which detrimentally effects our status as a world class destination city.”

Homelessness organizations such as PATH, Serving Seniors and Father Joe’s Villages all supported the measure.

Opponents of the measure cited the vague language of the text as not having any specific fixes. Taxpayer advocates and some homelessness groups opposed the open-ended measure.

Activist Michael McConnell wrote in an op-ed for The San Diego Union Tribune that the entire direction of the measure was misguided.

“It is simply an attempt to use the moral imperative of the homelessness crisis to create an expensive bait-and-switch tax measure with absolutely no guarantee the money will be spent in the way voters are being led to believe,” he wrote. “It is clear Measure C is full of loopholes and uncertainty, offering no guarantee the money will be spent as intended and potentially leaving taxpayers on the hook for billions of dollars in bonds.”

He said the convention center was the real crux of the measure, with vague notions of solving homelessness tacked on to garner sympathetic voter support.

The measure called for a citizens overview panel and a yearly audit to make sure money is appropriated correctly.

Updated at 4:25 a.m. March 4, 2020

— City News Service contributed to this report.