By Doug Porter
There are two items on the ballot for City of San Diego voters related in some fashion to the construction of a place for the local NFL franchise to play.
Measure C, backed by the San Diego Chargers ownership, is an effort to get a stadium/convention center built. The group’s committee is a cash machine, taking in tens of thousands of dollars (nearly) daily, all from the same source.
Measure D is primarily backed by interests with investments in nearby properties, namely the Moores family. For monetary reasons, it’s just about dead in the water. D is on the ballot, but the money spigot was turned off May 3.
Tomorrow’s column will discuss the intricacies of Measure D, which considers the possibility but does not directly lead to a football/convention facility.
What Measure C Does
What seems like a simple two-step process along the road to building a stadium, is much, much more.
The Chargers would like voters to believe a vote for Measure C:
- Establishes a funding mechanism for a downtown stadium and convention center expansion. That funding includes money from the Chargers, the NFL and an increase in the TOT (hotel room tax). There is no call for the expenditure of General Funds.
- Creates the Joint Powers Authority, a city-appointed board, that will be responsible for the design, construction, operation and maintenance of the facility.
And, here’s the pitch….
It is the beginning of the process of building a state-of-the-art convention center expansion and stadium. The Joint Powers Authority established in the proposition will be responsible for bringing the project to fruition. That means working with local communities to address concerns such as parking, traffic and gentrification. That means developing and approving the actual design for the integrated convention and stadium. That means eventually overseeing the facilities operations and management.
Ultimately, if the proposition is successful it will be much more than a football stadium. It will be a world class events center, a completion of the Sports and Entertainment District and an invigoration to downtown.
In Trumpian terms, it’s going to be yuuuge.
Not So Fast
These two steps would have consequences.
The Chargers organization, along with owner Dean Spanos, are making lots of promises taking into account those consequences. None of these promises are legally binding.
While the measure doesn’t “call” for tapping into the city treasury’s General Funds, it also doesn’t prohibit it. If hotel tax revenues fall short, the city could be left with the choice of shorting payments on the bonds financing the deal and getting dinged on its credit rating OR dipping into the general fund.
Measure C also doesn’t include a way to pay to replace the one thousand plus parking spots lost in the process of building this complex.
Nor does it address the roughly $50 million in remaining debt from the 1997 renovation of Qualcomm Stadium for the Chargers. Or the mechanism for paying the costs of traffic-related improvements. Or gentrification. Or moving the bus terminal, which will require extensive environmental restoration.
One only needs to look at the trail of broken promises made in the wake of PETCO Park, along with the city’s history of scandals, including the Chargers ticket guarantee and corruption in the Centre City Development Corporation (CCDC), to feel reluctant to enter another ‘deal’ with so many loose ends.
Money for Free
Here’s another Spanos promise:
The city will own and operate the facility and events there will generate new tax revenue for the city. The Chargers will use the facility for 10 games per year and contribute $15 million towards its operations.
Notice he doesn’t say anything about rent. That’s because there is no rent. The team is obligated to pay the City is for public safety costs for games and operations and maintenance, less any revenue generated by renting out the facility for non-football events, like concerts, for example. Sweet deal, huh?
Also off the radar is the simple fact that the city is subsidizing it’s existing convention center facilities to the tune of $3.5 million annually. Is there any chance the expansion built into this complex will change this situation for the better? I think not.
Welfare for the Rich
It is all but guaranteed that the City of San Diego will lose money by virtue of its association with the Chargers football team. The only question is how and when.
If the team leaves, the team’s buyout payment won’t cover the existing bonds on Qualcomm. And since we’ve all been told about what a dungeon that facility is, the only choice taxpayers will have is to tear it down. Maybe the government can lease it out to Al Qaeda for practice bombings, but it’s more likely we’ll all be looking at making do with less in the way of public services.
Still, I would count these as short-term costs.
If the teams stays, there is an almost-certain possibility it will be an ongoing drag on revenues for 30 years or more. Outside of studies funded by franchises using pie-in-the-sky projections to promise fame and fortune, there is no actual evidence of cities benefitting from a team.
In fact, the opposite is true.
From The Atlantic’s City Lab:
The overwhelming conclusion of decades of economic research on the subject is that using public funds to subsidize wealthy sports franchises makes zero economic sense and is a giant waste of taxpayer money. A wide array of studies have shown that professional teams add virtually no income to local economies. In fact, some of them find that large subsidies actually have a negative effect, taking money out of the local economy. Aside from the jobs generated by actually building the stadium, most jobs inside the stadium—selling food and beer or working at team concessions—are low-paying temp jobs. It’s even worse for football stadiums, which are used for games at most a dozen times a year, and maybe a few more times for concerts or large events. Public economic development dollars can be put to much better use on things besides subsidizing sports teams and their wealthy owners.
The Chargers contention that city taxpayers won’t pay a dime is simply bullshit. Those tourists will be paying paying hotel tax money into (what should be) OUR treasury. The nickel and diming of specific taxes and fees into special purpose funds is already a widespread drag on government’s ability to deliver services, especially to underserved communities.
Let Them Eat Cake
The recent news about the Chargers increase in value raised some eyebrows.
From the Union-Tribune:
The Chargers need a new stadium to keep pace with their competition in many areas, but apparently they only need the possibility of a new stadium in order to be worth a lot more.
Forbes on Wednesday released its annual valuations of NFL teams and valued the Chargers at $2.08 billion. That’s a 36 percent increase over last year, almost double the 19 percent growth in the average value of the 32 NFL franchises.
Then there was the team representative’s let-them-eat-cake response a few paragraphs later:
“The last time I checked, there were no poor football team owners,” said Fred Maas, the point man in the Chargers’ stadium campaign. “If people want to focus on that, they can ride the train to (see) the Chargers in L.A., where football owners get really rich.”
A Clash of Titans
The group formally opposing the Chargers Measure C, called No Downtown Stadium, is largely a facade for hotelier interests who don’t want a two-part convention center and those with a vested interest in building a new facility at the Mission Valley location.
My fellow SD Free Press editor, Brent Beltrán, who is involved with grassroots opposition to the stadium in Barrio Logan, says he’s not comfortable being in the same political space with some of the NDtS people who have not been kind to the community in the past.
The No folks are basing their opposition on two premises:
- An increase in the hotel tax will decrease tourism, and
- Taxpayer dollars should be used repairing streets, etc.
Sounds great, huh?
Except higher hotel occupancy taxes aren’t likely to affect travel to a city with all natural advantages like San Diego. And lots of other cities have similar tax rates. I say let’s see some actual evidence because the lower taxes equal more business formula has too many exceptions. (How’s that “trickle down” doin’ for you?)
Then there’s the matter of where tax dollars go. Right now the city’s hoteliers have this quasi-legal deal that says they get to spend a fee-not-a-tax added to visitor’s hotel rooms.
There are now two claims filed against the city government — typically a precursor to a lawsuit — seeking the return of $100 million or more of this dough because it never went before the voters, as required in the state constitution. If consumer fraud statutes are used as the basis for these suits, the city could be on the hook for triple damages.
So their concern about the use/abuse of taxpayer dollars is just plain hypocrisy.
There is also an opposition group funded by Associated Builders and Contractors (ABC). They are upset because the Chargers have cut a deal with some organized labor groups. (Other labor groups oppose the stadium initiative.)
As Tom Lemmon, Business Manager of the San Diego County Building and Construction Trades Council points out:
The efforts of this anti-stadium group are both dishonest and baseless and these contractors have a history of creating bad jobs and cheating their workers. The Associated Builders and Contractors (ABC) represent 0.3% of licensed contractors in California but have the dubious distinction of having incurred 24% of labor violations in the state.
How High is the Bar?
The good news here as far as I am concerned is that Measure C requires a supermajority of voters (66%+) to win. There is polling out there suggesting the approval rate for a new stadium measure is as low as 25%. A UT/10News poll at the end of August put support at 39% (and growing).
The bad news is that the Chargers continue to pour money into the campaign. My back-of-the-envelope addition puts September’s take for Yes on C at roughly $1,250,000.
The possibility of a court ruling saying that citizen-initiated tax increases only need a simple majority to win would appear to be driving this cash flow. The test case for this approach is currently in the appeals courts.
There are also a bunch of stories being circulated suggesting the Chargers have given up their quest for a home in San Diego. I’ll believe that when I see the money stop flowing.
For More Information
Ballot Language – DOWNTOWN STADIUM INITIATIVE. Should the measure be adopted to: increase San Diego’s hotel occupancy tax by 6% to build a City-owned downtown professional football stadium and convention center project, and fund tourism marketing; effect the project financing, design, construction, use, management, and maintenance, including a $650,000,000 contribution and 30-year commitment by a professional football entity; end Tourism Marketing District assessments; adopt a development ordinance, and related land use, sign, and zoning laws?
A YES vote would: approve the plan. Negotiations would begin to set up a joint powers authority overseeing the project. Should the negotiations fail, the increase in the occupancy tax would be cut to 3%.
A NO vote would: reject it. The team either comes up with a different plan or exercises their option to move to Los Angeles, where fans can pay $200 for parking.
For information on the November 2016 General Election, see our San Diego 2016 Progressive Voter Guide
Other San Diego Free Press coverage of the 2016 general election.
Tomorrow: Measure D. It ain’t what you think. We’ll be writing about various state and local contests Monday-Friday for the next few weeks.
On This Day: 1893 – Frank Duryea took what is believed to be the first gasoline- powered automobile for a test drive. The “horseless carriage” was designed by Frank and Charles Duryea. 1982 – National Football League Players Association members began what is to become a 57-day strike, their first regular-season walkout ever. 2001 – “America: A Tribute to Heroes” was shown on 35 separate broadcast and cable networks simultaneously. The telethon raised $150 million in pledges to benefit families of the World Trade Center and Pentagon attacks that occurred on September 11, 2001.
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