State Eyes McEnery Convention Center Redevelopment Money

For local hotels and other downtown businesses, the $300 million McEnery Convention Center renovation project is vital for San Jose to remain competitive with nearby towns such as Santa Clara and San Mateo. Last year hotel owners even attempted to raise $150 million in private funds in order to keep the project on track. But with California’s budget crisis forcing state legislators to find new sources of money to close the gaping budget deficit, redevelopment projects such as this are an easy target.

Past attempts to go after the Convention Center’s redevelopment funds have proved unsuccessful, but that is no assurance that the state won’t try again. Bill Ekern of the San Jose Redevelopment Agency compares it to a “sword of Damocles” hanging over the city. “We just live on a day-by-day basis, watching the state struggle with its budget. … Recognizing the precarious state of everybody’s finances, what are the priorities?” he asks.

The Convention Center has seen a 21 percent decline in business over the past year. It is hoped that the project would draw back business, much of which has outgrown the current facility.

Dan Fenton of San Jose’s Convention & Visitors Bureau is optimistic. Not only is this the city’s number 1 funded public project priority, but it is already underway, he says, which means that “the state is far less likely to go after its funding source.” Others, such as Scott Knies of the San Jose Downtown Association are less optimistic that more funding will be available, and suggest that the project may have to find creative ways to stretch whatever funding is already there. Read More at the Business Journal.

8 Comments

  1. Why can the state go after redevelopment money?  Are redevelopment agencies and money from those agencies considered creatures of the state regulated by state law?  I truly do not know the answer and think a serious discussion of this would be helpful for us to understand this issue.  Thank You.

  2. Perhaps the State is smarter than the City? Perhaps they think demolishing an in-use historic building already housing 200+ city employees is not such a good idea? Maybe they see the folly in expanding the convention center to attract a diminishing pool of conventions? Or maybe they think the current size of the convention center is just fine to house the type of conventions that San Jose is destined to attract? Perhaps.

  3. James, my understanding is that it’s not clear California can take RDA funds.  California is currently fighting lawsuits related to taking redevelopment funds during the 08/09 budget.  Those existing lawsuits should determine whether such raids are constitutional – the lawsuits also mean it’s unlikely (although not out of the realm of possibility) that CA would try to use redevelopment funds again for this budget.

  4. Sorry I know this is of topic, but I read other local blogs and saw this morning that the Mission City Lantern is running a poll to figure out who is author of the anonymous San Jose Revealed.  I know this site has run stories in the past so I thought your readers would like to be aware.  Thank you.

    Will B. Soon

  5. The recent AOPA (Aircraft Owners and Pilots Association) 3 day fun fest at the convention center was a farce.  One three hour Shark game brings more attendees downtown than this thing did over 3 days.  Of course, we can expect the usual propaganda BS from the city about how vital this once every 10 years event was to our economy.

    However, expanding the Convention Center to attract better attended events is certainly worthwhile.  But, redevlopment money should be spent actually redeveloping something that needs it.  Lets pour billions into East San Jose like we did downtown.  Hopefully, we can clean it up, relocate the riff-raff to parts unknown, and attract more residents who will try to improve the neighborhood.  There is no denying ESJ is a great, convenient location for commuters, and it would be better for everyone if people started moving there instead of Pleasanton, Gilroy, etc.

  6. This category of project should be put on hold and the money allocated to a higher priority. The State is doing the right thing. Projects like this Convention center expansion in San Jose, or the $500M people mover project in Oakland should be flat-out stopped until other higher priority areas are adequately funded. Proponents will argue that investment now will pay off in the future. But, for example, you can make the same argument for the currently under-funded and desperate state of education funding in California. Talk about investing in the future! If $300M could be diverted from the Convention Center project to SJSU/CSU then maybe they’d be able to avoid the plan to curtail spring enrollment. This one is a no-brainer for me – look at the big picture and allocate or divert funds to critical priorities until the economy turns around.

  7. James #1-  There is a state law that allows redevelopment agencies to form and extend their lives.  The state could, at any time, repeal that law.  Certainly that would keep any new RDAs from forming. 

    I presume they could also simply terminate all existing RDAs, though I don’t know whether RDAs were covered under 1A.  If the state is taking their funds, I’m guessing no.

    They could also modify it, as they did some years back when they added an affordable housing requirement on RDA expenditures.

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