SACRAMENTO (CBS13) – The Sacramento city council is faced with a nearly $400 million decision: how to proceed with improvements to the convention and theater district.

The proposal to overhaul the aging Sacramento Convention Center, Community Center Theater, and Memorial Auditorium is seen as a sign of progress to some, but a money mistake to others.

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A new report from a watchdog group suggest now may not be the time for expansion and renovations.

“Sacramento is a great city and deserves great arts,” said Scott Klier.

Klier is with the California Musical Theater. He says the Community Center Theater facilities are falling behind and are in desperate need of an upgrade.

“There really isn’t any element of the building that won’t go untouched,” said Klier.

A proposed renovation project would keep the theater in place, improve acoustics, bathrooms and seating.

“We all see a 10-15 percent increase on any show day,” said Henry De Vere White.

Local restauranteurs like De Vere White are in favor of a growing nightlife scene.

“It’s a huge, huge part of our business plan,” said De Vere White.

But the theater is only part of a grander plan.

“One of the things we’ve talked about is building a convention theater district,” said Mike Testa, the Chief Operations Officer with Visit Sacramento.

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The council is looking at three projects. The main one: an expansion of the convention center at a cost of $290 million.

Other projects include renovating the decades-old Community Center Theater for $83 million, and making improvements to Memorial Auditorium for $16 million dollars.

“It shows the growth in the city,” said Testa, “that’s attractive to people who are looking not only to invest, but to visit.”

Not everyone is on board.

“There is no justification for an expansion at this time,” said Craig Powell, “there is no market demand for an expansion at this time.”

Powell runs a taxpayer watchdog group called Eye on Sacramento. He says his reports show the convention center, specifically, is hemorrhaging money and an expansion would make things worse.

According to their numbers, the convention center is set to lose $19 million this year.

“This crazy project could cost the city tax payers close to a half a billion dollars, just this piece, the convention center,” said Powell.

But proponents say the total economic impact, which was $43 million last year, is worth the investment.

“If you’re judging the convention center simply on the financial of that building, you’re not seeing the full picture,” said Testa.

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The council vote will take place at Tuesday’s meeting.