Following a judge’s ruling last week that SDOG has standing to challenge the San Diego Tourism Marketing District tax’s illegality in court, several people observed that the years-long strategy of the hoteliers’ lawyer, Mike Colantuono, in making personal attacks against SDOG and our attorney, Cory Briggs, appeared to be even worse than what people see in the movies. Those people asked SDOG whether we have any idea why Mr. Colantuono would behave in such a way.
As SDOG argued to the judge before he made his ruling, the hoteliers have more than one billion reasons to fight dirty and lie (the TMD tax will generate well over $1 billion over 39.5 years) and Mr. Colantuono has had more than two million reasons to be dirty and dishonest (his firm has been paid more than $2 million so far by the taxpayers). The top hotelier represented by Mr. Colantuono essentially confirmed this when he said that they “have pursued every legal avenue available to keep this case from going to trial.”
What many people do not realize is that, at the exact same time Mr. Colantuono was developing his scorched-earth strategy to go after SDOG and its attorney in a court of law and in the court of public opinion with lies and personal attacks, he was representing another San Diego client and writing nice things about SDOG.
In 2013 and 2014, Mr. Colantuono was representing the Downtown San Diego Partnership in a lawsuit filed by SDOG to challenge the legality of what is known as the Downtown Property and Business Improvement District. That lawsuit was settled in October 2014 with the help of a mediator. The settlement included a joint public statement in which DSDP was very complimentary of the work that SDOG does in the community. DSDP wrote: “We saw this as an opportunity to take advantage of San Diegans for Open Government’s expertise and its years of experience in advocating for San Diego residents on good-governance and public-finance issues.”
Guess who signed off on that statement? Mr. Colantuono did. You can see his signature and read the full statement here: SDOG-DSDP_Statement.
SDOG has no idea why Mr. Colantuono would be praising SDOG at the same time he was in the middle of an ad hominem attack campaign against SDOG and our attorney. It should make one wonder whether he told the hoteliers that he was taking a contrary position for another client right here in San Diego. Did the hoteliers know their lawyer would waste more than three years and over $2 million from taxpayers to tell a story he didn’t even believe?
Here’s how VoiceofSanDiego.org’s Liam Dillon described the San Diego hoteliers’ efforts to prevent San Diegans for Open Government from challenging the illegality of the 2% Tourism Marketing District tax that was put before hoteliers rather than voters in 2012:
“San Diego Superior Court Judge Joel Wohlfeil made a big decision in recent days over the fate of more than $1 billion in projected tax dollars.
“For more than three years, activist attorney Cory Briggs has been challenging the Tourism Marketing District, which charges a 2 percent fee on visitors’ hotel bills on top of the city’s regular hotel-room tax. Briggs says the district’s fee is exactly the same as a tax and therefore should have been voted on by the public, not the hotel industry. He and other lawyers won a similar argument to throw out the financing plan for the Convention Center expansion.
“The hotel industry, however, argued that Briggs shouldn’t even be allowed to challenge the tourism district. They said that his clients, nonprofit San Diegans for Open Government, were a sham and simply an alter ego of Briggs.
“Wohlfeil rejected that argument, saying that San Diegans for Open Government passed the ‘microscopic’ examination by the hotel industry. The case will now move to a trial on whether the 2 percent fee is a tax later this year.
“If you want to understand why this is all so significant, check out the statement given to inewsource by tourism district chairman and hotelier Bill Evans after the ruling: ‘This case is vital to our industry and to our city,’ he wrote. ‘As a result, we have pursued every legal avenue available to keep this case from going to trial.’
“Translation: This money is so important to the hoteliers that they did everything they could to destroy their opponent before they actually had to argue it was legal.”
To friends, he’s an environmental crusader and taxpayer advocate taking on the big dogs. To enemies, he’s a profit-fueled litigator and agitator. And this year featured some of the sharpest attacks on his motivations and practice yet.
Whatever your feelings about attorney Cory Briggs, the man has played a major role in shaping — and halting — big San Diego development projects in recent years while racking up some serious legal fees for everyone involved.
This year was no different. His lawsuit challenging the legality of a 2 percent levy on hotel room bills has made it to trial and the prospect of losing tens of millions of dollars to promote the city as a tourist destination has some in the visitor industry nervous. That, combined with another legal threat to the mayor’s preferred Convention Center expansion plan has led San Diego’s most disruptive lawyer to add another title to his repertoire: ballot initiative author.
Briggs has written new city legislation that, if approved, would overhaul and increase San Diego’s hotel tax while paving a way for hoteliers to finance a new Convention Center expansion downtown away from the coast with or without an adjoining sports facility. It would also create a new, legal path marketing San Diego with hotel tax dollars.
The wide-reaching initiative — known as the Citizen’s Plan for San Diego — aims to be a sort of grand compromise that benefits taxpayers, environmentalists, hoteliers, sports fans, convention-goers and higher-ed while bringing transparency and voter approval to the hotel tax.
In short, the hotel tax would increase to 15.5 percent, but allow hotel owners to funnel 2 percent toward marketing efforts and another 2 percent toward the construction of a convention center expansion off the water, which they would then own and operate. Hoteliers could also take over operation of the existing center if the City Council votes to transfer ownership.
The initiative exempts a new downtown football stadium — or a Qualcomm stadium renovation — from much of the California Environmental Quality Act and prevents any more public funds from being spent on a coastal expansion (a project Briggs is still fighting in court but dealt a near-fatal blow to in 2014 when all funding was lost).
By offering potential solutions to the city’s stadium and convention center woes, Briggs is poised to enter the city’s decision-making arena and succeed in two areas Mayor Kevin Faulconer has struggled to make headway all year. Ironically, questions about the measure’s legality and ability to survive a lawsuit have arisen as its main drawback.
The push marks a public shift for Briggs from reactive complainer to proactive fixer, that is, if enough voters understand and support the initiative to make it happen.
Visit the Voice of San Diego.
The “Citizens’ Plan for the Responsible Management of Major Tourism and Entertainment Resources” was released today as a precursor to submitting the initiative to the San Diego City Clerk and beginning to collect signatures, as required by law. The initiative was published last week as the “Pay Their Own Way” initiative by proponents Pedro Quiroz, Jr., Richard Lawrence, and former City Councilmember Donna Frye. Since that time, proponents received input from stakeholders and community members and have refined details of the initiative.
“We appreciate the feedback we received from hundreds of interested residents, and have incorporated many of their suggestions in the revised draft,” said initiative proponent Reverend Richard Lawrence. “It’s clear from the responses we’ve received that the public is frustrated by the city’s failure to more effectively address the management of these resources and appreciates that there is finally a path for resolving them through a public vote,” he said.
“The focus of the initiative is to reform management of our city’s tourism- and entertainment-related resources,” said initiative proponent Donna Frye. “The Pacific Ocean, its bays, its beaches, its rivers and tributaries are irreplaceable natural resources that define the quality of life for city residents and attract tourists who help fuel our local economy,” she said. “The initiative allows the public to vote on creating a more rational, transparent and fair process for management, enhancement and protection of these resources,” she added. “To do this properly we must manage all of these resources as a single, connected ecosystem. This is true both from an environmental perspective and from an economic perspective,” Frye continued. “Visitors and residents share a common value in protecting public access to the Pacific Ocean and all of its resources.”
Currently, the City of San Diego charges hotel guests a 10.5% transient occupancy tax (TOT) on hotel bills. That ranks 101st among cities in the nation. San Diego lags far behind its tourism rivals when it comes to their combined lodging taxes, such as Anaheim (17%), San Francisco (16.25%), and Los Angeles (15.5%). The Citizens’ Plan will raise San Diego’s TOT to 15.5% for large hotels and 14% for small lodging businesses, generating approximately $90 million annually for the city’s General Fund. The new unencumbered revenues can be used for general public services such as street and sidewalk repair, libraries, parks, beaches, and public safety.
“The initiative provides incentives for hotel owners to assess themselves to pay for the promotion of tourism in San Diego and to invest in facilities that support tourism,” said Rev. Lawrence. “Those who benefit most from tourist-related promotion and facilities ought to pay their fair share,” he said.
Compared to the previously published “Pay Their Own Way” initiative, the revised “Citizens’ Plan” ensures the hotel industry’s surcharge on hotel guests (above the current 10.5% TOT) is permanently eliminated, and the city’s current proposal for the Qualcomm Stadium site receives an exemption from the California Environmental Quality Act to avoid litigation delays if the city decides to follow through on this proposal. The revised Citizens’ Plan also provides an expanded introductory explanation about the need for the initiative, so persons signing the initiative can understand the substantial benefits the city and the public will receive if the initiative is approved.
You can read the Citizens’ Plan here: Notice_of_Intent_TFID_Revised_FINAL_ALL.
As Board members of San Diegans for Open Government, we have been proponents and advocates of moral and transparent government and try to keep alive a bold vision of open, responsible and creative uses of public resources.
While working on those basic ideas, we have had to learn about how the City of San Diego’s tourism industry works, how its infrastructure money is collected and spent, and who pays and who benefits. The whole system appears to us to be redundant, fractured and unbalanced.
Local taxpayers continue to be the people paying, while the politically connected continue to be the ones benefiting from that money. There are so many conflicting regulations that the city is going in all directions, while the residents have been left out of the decision-making process.
It is just wrong.
We shared our concerns and frustrations with our attorney, Cory Briggs. We explained that we wanted to set out a ballot initiative that gave voters a chance to have their say on these matters, that rid the public of the redundancies and wasteful spending and dealt with the complex issues of tourism in a coherent way. In other words, we wanted to create a comprehensive plan for how the city could move forward, improve our tourism industry, provide more income for city services, stop wasteful spending, and give real options for a convention center and football stadium — with the only tax increase being on tourists while keeping us competitive with other cities — and let the voters of San Diego make the final decision for themselves.
Mr. Briggs agreed to help us navigate through the process and he worked tirelessly to create something that met all the goals we set out.
Over time, we continued to meet, think, debate and enlarge our concern by trying to find the best comprehensive solution.
We are thankful that Mr. Briggs was not only able to work with everyone who would have to put this plan into action, but was also able to get their assurances this plan could work.
We at SanDOG have tried to say again and again that we are extraordinarily grateful to have the good fortune to work with such a creative, brilliant and persistent lawyer as Mr. Briggs.
We hope that people will take the time to understand what this initiative would do for our city. We continue to hope that our work will inspire others to look for solutions that continue to make our city a better place for everyone.
Pedro Quiroz, Jr., and Rev. Richard Lawrence
Read the October 22, 2015 Media Advisory here: 2015-10-22_Media_Advisory.
Read the “Pay Their Own Way” Initiative here: Notice_of_Intent_TFID_FINAL_ADVANCE_RELEASE.
SDOG is disappointed by yesterday’s ruling on the motions filed against it in its lawsuit to protect taxpayers from subsidizing a San Diego State University instructor’s private business. The ruling essentially prohibits watchdog organizations like SDOG from suing to invalidate a subsidy illegally given to a public employee just because the subsidy is used to support a private news business. The ruling fails to distinguish between lawsuits challenging the subsidized activity, which SDOG’s suit did not do, and lawsuits challenging how the illegal subsidy came to exist in the first place. The result is that any public employee who abuses his or her position to secretly obtain taxpayer support for his or her private business will be immune from suits just because the business activity involves arts, politics, or the news. The ruling will be appealed; you can read it here: 2015-09-08_Anti-SLAPP_Ruling.
SDOG sued when it learned that SDSU lecturer Lorie Hearn had negotiated a sweetheart deal for her private business to operate out of the KPBS studios at SDSU and was using the SDSU/KPBS logos to promote her business, all for about $1 per year. SDOG was not concerned with the nature of her business — she claims that it’s a news organization — but was concerned that, as a teacher at a public university, she had abused her position to get for herself what nobody else could get, to take advantage of an opportunity that nobody else knew about. If KPBS wanted to buy news content from Hearn’s private business and let her use the SDSU/KPBS facilities and logos to promote her business, state law and SDSU rules first required a public, competitive-bidding process; the payment of fair-market value to SDSU/KPBS; arms-length negotiations; and approval by the SDSU president personally. None of that happened.
Hearn claimed that the lawsuit was retaliatory because of certain “reporting” done by her business. However, one day before the court hearing on the motions, Hearn herself sent out a press release from a local journalism organization claiming that the lawsuit had nothing to do with any news reporting by Hearn’s business. SDOG agrees: The lawsuit is about the illegal conduct that preceded Hearn’s business getting a secret taxpayer subsidy.
SDOG believes strongly in transparency for public employees and institutions, and is equally supportive of good journalism. SDOG has enjoyed a very good relationship with reputable members of the San Diego journalism profession — sometimes giving information, sometimes receiving information, but always sharing it with an eye toward ensuring accuracy and accountability.
SDOG was never concerned about the “reporting” done by Hearn’s business. The inaccuracies, bias, and hypocrisy were obvious to almost everyone, as the overwhelmingly negative comments to the reports make clear. SDOG’s lawsuit was directed at Hearn’s abuse of her position as a lecturer at SDSU, not at the work product of her private business. The rightful judges of that work product are Hearn’s readers and listeners, and they have delivered their verdict.
SDOG is concerned that this ruling paves the way for any public employee to use his or her position to get secret, special treatment at taxpayer expense and escape being held accountable in court just because the employee’s private business is in a field protected by the First Amendment. For example, a political science professor with a consulting firm on the side could make his business a “think tank” within the university and use public resources to promote partisan politics, but then escape being held accountable because “politics” is protected by the First Amendment. Or a journalism instructor with a public-relations firm on the side could masquerade her business as a “news outlet” within the university and use public resources to reach an otherwise unreachable audience with “reporting” paid for by her clients, again without being held accountable because the First Amendment protects “the news.”
The same way common sense dictates that the First Amendment does not protect people from yelling “fire” in a theatre, it dictates that public employees not escape accountability when they use their positions to get special treatment for themselves — regardless of whether they’re engaged in an arts, news, or political business. The problem is not the business itself but the way in which the business came to be secretly subsidized in the first place by the public institution and taxpayers.