If you’ve driven past the Moscone Center lately, you might have noticed something missing — the big hall that hosted the 1984 Democratic National Convention. It’s now a giant hole in the ground, soon to be the site of an even bigger hall.

In the meantime, however, it’s also a hole in the local economy.

Cratering the convention hall is part of a $500 million, 3½-year makeover of the Moscone Center. When it’s done, the city will be able to host as many as a dozen more conventions annually than it did with the old building.

But it comes at a short-term cost: Convention bookings at Moscone have dropped from 61 two years ago — before the construction began — to 38 this fiscal year, which ends next month.

“We have definitely seen the hotel tax cooling off in the city in the current year, driven almost entirely from room rates coming down,” said City Controller Ben Rosenfield. Hotel tax revenue has fallen $16 million from last year and looks to remain flat next year, he said.

The controller’s office is also bracing for a sales tax slump from restaurants and stores that cater to conventioneers.

Still, San Francisco remains second only to New York in hotel occupancy, said Joe D’Alessandro, head of the convention and visitors bureau San Francisco Travel. He said 86 percent of rooms in the city have been filled so far this year, only a slight drop from 2016.

Back to Gallery Moscone Center: Bigger will be better, but first comes... 3 1 of 3 Photo: Paul Chinn, The Chronicle 2 of 3 Photo: Paul Chinn, The Chronicle 3 of 3 Photo: Paul Chinn, The Chronicle





Room prices are down, but not by a lot, D’Alessandro said — to an average of $221 a night so far in 2017, compared with $229 a year ago.

D’Alessandro said convention planners were able to blunt the impact of the Moscone rebuild by booking smaller events that could be hosted in hotel conference rooms rather than at a convention hall.

The project broke ground in May 2015, but the real effects weren’t felt until both Moscone South and North were closed in April. Portions of the new complex will open this fall — in time to host the big Salesforce and Oracle conventions — but the last dab of paint won’t be applied until December 2018.

Still, D’Alessandro insists the disruption will pay off big. Moscone South and North will be better connected, and the corridors beneath the street will include 500,000 square feet of contiguous meeting space. The two buildings will also be linked by a pair of new pedestrian bridges over Howard Street, one of which will be enclosed.

Once completed, Moscone will have a total of 1.5 million square feet of space — still less than convention centers in places like Las Vegas and Orlando, but enough to keep tourism San Francisco’s No. 1 industry.

No sale: A plan to open BART stations to everything from Dunkin’ Donuts to Ghirardelli Chocolate outlets has gone off the rails, with the firm that was behind the idea now suing the transit agency for alleged breach of contract and claiming tens of millions of dollars in damages.

“The lawsuit clearly demonstrates that BART was an unreliable partner and did not participate in good faith, nor did it make its internal decisions in a timely manner,” said Evette Davis, spokeswoman for TransMart, the company that promised to attract a range of franchise outlets for BART’s 43 stations.

BART has a different view: “Our position is that TransMart failed to comply with its contractual obligations,” said agency spokesman Jim Allison.

It all started back in 2008, when BART received an unsolicited bid from San Francisco housing developer Alexis Wong, whose political connections had landed her appointments to various state boards and commissions over the years. She told BART she could fill the stations with businesses, creating boatloads of cash for the agency.

TransMart, the company Wong formed to undertake the effort, landed the deal on an 8-1 vote of the BART Board of Directors in 2011. Three years later, about the only thing the firm had to show for its efforts were a couple of pop-up Blinq stores at Embarcadero and Montgomery stations. The stores — intended mostly to promote Wong’s online business, selling everything from clothing to electronics — have since closed.

BART eventually let TransMart’s contract expire, saying the firm had failed to meet a deadline to deliver at least nine retail stores to stations by August 2016.

“It was in everyone’s best interest, we felt, to end the relationship,” Allison said.

Now TransMart has sued in Alameda County Superior Court, saying BART failed to act in good faith on a deal that Wong’s lawyers say was worth as much as $95 million to the company.

The suit alleges that BART held up the firm’s store designs, “drastically cut” the amount of space it was promised, and acted “inappropriately” in rejecting TransMart’s financial plans.

“These guys dragged their feet,” Darius Ogloza, an attorney for TransMart, told us. “Or, alternatively, they lost interest and just decided to kill this thing.”

San Francisco Chronicle columnists Phillip Matier and Andrew Ross appear Sundays, Mondays and Wednesdays. Matier can be seen on the KPIX TV morning and evening news. He can also be heard on KCBS radio Monday through Friday at 7:50 a.m. and 5:50 p.m. Got a tip? Call (415) 777-8815, or email matierandross@sfchronicle.com. Twitter: @matierandross