The project is crucial to building convention business at the newly expanded San Diego Convention Center. Port officials say the tax perks are necessary to get the 1,100- to 1,200-room hotel project under way quickly.
Hotel developer Douglas Manchester of Manchester Resorts and other port tenants say the project, located at the former Campbell Shipyard site, is unfair to other hotel operators because the Hilton would be able to charge lower rates than competitors that don't have access to tax breaks.
The commission voted unanimously to enter into an agreement with Hilton San Diego Convention Center LLC. The hotel could open in 2006.
The hotel would be operated on a 66-year lease that could generate $7 million in room-tax revenue in its first year, as well as sales and property tax revenue.
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