Supervisors approve Moscone Expansion business improvement district and move ahead with $507.88 million financing plan

The San Francisco Board of Supervisors voted unanimously Tuesday to establish the Moscone Expansion Business Improvement District and to proceed with first-reading approval of financing measures tied to a planned expansion of the Moscone Convention Center.

The board adopted a resolution creating the Moscone Expansion District after city election officials reported $14.36 million in weighted “yes” votes — 79.2 percent of the proposed assessments for the district’s first year — and a combined weighted ballot participation representing 82.1 percent of the proposed assessments. "Total weighted yes votes were $14.36 million, or 79.2 percent of the total proposed assessments in the district," the clerk reported during the meeting.

The district will levy assessments on defined hotel businesses in a roughly South of Market area to help fund a package of improvements tied to a Moscone expansion. The board also gave first-read approval to ordinances to appropriate up to $507,880,000 in certificates of participation (COPs) for the expansion and to authorize the issuance of COPs and assessment notes that will be secured in part by the Moscone district assessments.

Why it matters: Backers say the expansion will make San Francisco more competitive for large national conferences, boost hotel demand across neighborhoods and generate construction and permanent jobs. Supervisor Jane Kim, whose district includes the Moscone complex, said the project could create thousands of construction jobs and increase permanent employment. The fiscal feasibility materials cited estimates of about 3,000 construction jobs during the project and up to 945 permanent jobs by 2021.

What the board decided and next steps: With no majority protest and with the required weighted supermajority in the ballots cast, the board passed the district formation resolution and took first-reading action on the COP appropriation and related authorizations. Supervisor Kim successfully moved a non-substantive amendment clarifying that board approval of the financing ordinances did not itself constitute project approval under environmental law; the city will complete CEQA review and retain discretion to modify, mitigate, reject or approve the project after environmental review.

District finances and city impact: The clerk reported that the district’s proposed assessments for the first year were approximately $18.1 million; weighted yes votes amounted to about $14.36 million and weighted no votes about $537,000. City fiscal materials presented to the board forecast increased general-fund revenue from the additional convention business — roughly $5.8 million by 2017 and $7.6 million by 2021 in the boardmember’s summary — though those projections are tied to future operating results and the timing of the project.

Public comment and labor support: Dozens of speakers, including hotel managers and labor representatives, testified during the public hearing. The Hotel Council, the Travel Association and construction trades unions urged approval, saying the expansion would sustain convention-related hotel demand across the city and provide local construction opportunities and apprenticeship pathways.

Votes at the meeting: The board recorded an 11-0 roll-call vote to adopt the district resolution. The ordinances (items 10 and 11) passed their first reading on the same day; item 11 was passed as amended to clarify environmental review did not occur with the first-reading vote.

Implementation and contingencies: The COP financing and assessment-backed notes are dependent on final project approvals and the outcome of future environmental review. The board’s amendment makes clear that the city retains discretion to require mitigation, select alternatives, reject the project, or approve it only upon a finding that benefits outweigh unavoidable impacts.

The board recessed to allow election officials to tabulate ballots and reconvened to act on the items after the clerk announced the tabulation results.