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    It’s the most common rallying cry against a new Chargers stadium: San Diego taxpayers shouldn’t subsidize a football team.

    And yet, they already do. Last year, the city spent a whopping $12 million to operate the Chargers’ current home at Qualcomm Stadium. It’s a tale of shoddy contract negotiations, lawsuits and the city’s inability to attract many high-paying events to the stadium other than the Chargers.

    This is how it all happens. Let’s start with the Chargers.

    File photo by Sam Hodgson
    File photo by Sam Hodgson
    Chargers quarterback Philip Rivers

    The team is supposed to pay the city $3 million a year in rent. But the team’s lease with the city allows it to count parking revenues, a percentage of beer, popcorn and other concessions and the city’s suite at Qualcomm all against its rent. Factor in a settlement to a lawsuit over disabled access at the stadium, which requires the city to pay the team roughly $1.3 million a year, and the city actually owes the Chargers money at the end of every season. Last year, the city ended up paying the Chargers $800,000.


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    The city doesn’t do much better with its other tenants.

    Images via Shutterstock and Ernie Anderson/SDSU Media Relations
    Images via Shutterstock and Ernie Anderson/SDSU Media Relations

    San Diego State University plays football at Qualcomm. Two college football bowl games are there every year. Besides football, monster truck shows, soccer games and swap meets take residence in the stadium and its massive parking lot.

    None of those is a cash cow, either.

    SDSU, for instance, pays no rent to the city. The school only pays expenses for hosting games. The city does get a $1 per ticket fee from Aztecs games. The city makes roughly $100,000 a year from the Aztecs.

    SDSU’s lease with the city, last updated in 2008, came at a low point for the team, said stadium manager Mike McSweeney. The city gave the school a break.

    “It was designed to let SDSU ‘get healthy’ as the football program improved,” McSweeney said.

    Besides the two football teams, other major events, such as the bowl games and soccer games featuring the U.S. or Mexican national teams, only happen a few times a year at most. There’s no way the city can recoup its personnel, security, janitorial and other expenses at the stadium, McSweeney said.

    “In order to bridge that gap, we’d have to have the Mexican national team here every week of the year, and that still wouldn’t be enough,” McSweeney said.

    All together the city made $3.1 million off its non-Chargers and Aztecs events at Qualcomm last year. Personnel costs alone last year were $3.4 million, so the city doesn’t even make enough off events to pay the people who work there every day.

    There’s more bad news.

    police-fire
    Images via Shutterstock

    Police officers and firefighters patrol Qualcomm during Chargers game days. The city picks up most of the tab, which is funded out of separate accounts than the stadium budget.

    Last year, city taxpayers paid $1.1 million in public safety costs at Qualcomm.

    There’s also the bill from the last time the city tried to fix the stadium.

    Photo by Dustin Michelson
    Photo by Dustin Michelson

    In 1997, the city borrowed $68 million to renovate Qualcomm and build the Chargers a new practice facility. (The electronics giant Qualcomm kicked in an additional $18 million, hence the name of the stadium.) Taxpayers are still paying for their share. Last year, the debt was almost $4.8 million, an amount due until the loan is finally paid off a decade from now. This money has to be paid regardless of whether a new stadium is built.

    Photo by Dustin Michelson
    Photo by Dustin Michelson

    Qualcomm is almost 50 years old. Things are outdated and broken. The most recent estimate put the backlog of needed fixes at almost $80 million. The city’s not making big changes at the stadium. But it does budget $750,000 annually to make repairs. That adds to the total bill.

    So let’s do the math for the city’s spending on the stadium in 2014:

    $10.2 million to subsidize the stadium’s balance sheet because the Chargers and other events don’t provide enough revenue (this includes the $4.8 million needed for the loan for the last Qualcomm renovation almost 20 years ago)

    $1.1 million for police and fire services at Chargers games

    $750,000 for repairs

    Combined, the city lost $12 million on Qualcomm Stadium last year.

      This article relates to: Chargers Stadium, Land Use, Must Reads, Quest

      Written by Liam Dillon

      Liam Dillon is senior reporter and assistant editor for Voice of San Diego. He leads VOSD’s investigations and writes about how regular people interact with local government. What should he write about next? Please contact him directly at liam.dillon@voiceofsandiego.org or 619.550.5663.

      28 comments
      FrontPorch
      FrontPorch subscriber

      Perhaps we need to examine the source of financing for the campaigns and future political ambitions of the Mayor and other politicians who keep trying to force this stadium deal down our throats.  Even State Assembly Member Toni Atkins, who never used to forget her working class roots, has offered to make it easier to escape requirements of state environmental quality laws so the Chargers can have their stadium.  There is no support for this stadium deal in simple math or in simple ethics.  It is robbery of the precious assets we need for a healthier, better maintained city.

      Mark L
      Mark L

      The fact that the City of San Diego pays the Chargers $1.3 million / year rather than receiving $3 million in rent was bad negotiating on behalf of the city.  That's classic.  While there is little profit to hosting an NFL team, it does add to the lure of the city for both new businesses & residents.  Overall, it can be a good thing for the city if expectations are honest.  But when the city pays the team to stay, then we've crossed the line & need to refocus.  The Chargers are using the option of leaving town to encourage the city to do more, but the reality is, where is there fan base ?  A move to Carson is not likely to replace their San Diego regular fan base & few locals would travel up to LA to see them play there is my guess.  We have more options that we realize.

      Richard Fletcher
      Richard Fletcher subscriber

      Why has the city allowed the owners to dictate or play cities against each other, only to enrich billionaires. As the following article indicates, public financing of private sports stadiums is seldom a good deal for the city, and usually ends up costing a lot of money, as the Charger situation has. It's not good for small businesses either, the source of 7 of 10 jobs, according to federal sources. Read some of the comments of this article, which name some sports facilities which have been built totally with private funds, http://bit.ly/1DJe44Z

      Phillip Franklin
      Phillip Franklin subscriber

      I agree with those who realize the city would be in a much better financial position if the Chargers up and left.  But I hate to be the bearer of bad news.  The Spanos leeches are not going anywhere.  They are like a bad guest in one's home.  They eat all your food and drink all your beer.  And when you run out of food you think ok they will now leave but they don't.  They just whine and cry because you won't go to the store for more.  As long as there is blood to suck out of San Diego they will stay here and suck this city dry while the so called city leaders keep feeding them more and more of the city's assets.  If they truly wanted to leave or pay their own way they would have left years ago.  But as Liam writes the city is paying them a fortune to stay. And what would the San Diego bail bondsmen do on those Sundays with no Charger drunks to bail out?  As much as many would like to see Spanos and his greedy family leave San Diego for good I'm afraid it won't be so easy to get those greedy leeches out of here.  

      Richard Fletcher
      Richard Fletcher subscriber

      @Phillip Franklin 

      Why has the city allowed the owners to dictate or play cities against each other, only to enrich billionaires. As the following article indicates, public financing of private sports stadiums is seldom a good deal for the city, and usually ends up costing a lot of money, as the Charger situation has. It's not good for small businesses either, the source of 7 of 10 jobs, according to federal sources. Read some of the comments of this article, which name some sports facilities which have been built totally with private funds, http://bit.ly/1DJe44Z .

      Don Wood
      Don Wood subscriber

      Local hotel owners don't want the Chargers to ask voters to increase local Transient Oriented Taxes to pay for a new stadium because they want the city to raise those taxes to fund a $1 billion + convention center expansion instead. It is likely they will be going to the voters to ask for new taxes before or after the Chargers leave town. Perhaps we should give voters a choice. A ballot measure asking voters whether they want to raise local taxes by $ 1 billion + to fund a convention center expansion, or to raise those taxes by about $600 million to fund a new sports stadium complex for the Chargers and other users. Maybe make it a two step process, first a yes or no vote on raising taxes, then a subsequent measure indicating what they want those taxes spent on, fixing local city infrastructure, building a new stadium complex or building a convention center expansion. Let the hotel owners and the Chargers spend all their money campaigning for themselves, then let the voters decide.

      Mark L
      Mark L

      @Don Wood


      The convention center expansion is not being funded by local tax payers.  Raising the TOT, Transient Occupancy Tax, does not affect local tax payers because that tax is paid by people visiting San Diego & staying in local hotels.  Raising the TOT marginally can pay for the costs of expanding the convention center which will bring in more groups & larger groups which benefits local businesses & increases tax revenues for the city.  Using an increase in the TOT to fund a sports stadium would not have the same benefits since the Chargers do not attract travelers to the city & could persuade groups to select another city for their meeting to avoid a high TOT cost.

      George in BayHo
      George in BayHo subscriber

      $80 Million because things are broken or outdated?

      This needs some clarification.  "Broken" things should be repaired via the annual maintenance budget.  "Outdated" things may be financed as new capital.   My point is that "Failure to Maintain" is a violation of the taxpayers' trust.


      A common tactic is to cover-up the management failure by attempting to finance repairs with capital improvement dollars.  Examples of this fuzzy accounting for deferred repairs are easy to find in San Diego:   Budget for the Convention Center expansion includes tens of $Milions for neglected repairs;  The $Billion school bond was largely justified with a "leaky roof" argument; etc.



      George in BayHo
      George in BayHo subscriber

      @Liam Dillon @George in BayHo Liam thanks for the links and additional discussion.

      I’ve gone through the consultant’s detailed report that adds up to $80 million.


      (1) $14 million is categorized as “Maintenance”.   With a budget of only $750,000 per year?  Seems like maintenance has been underfunded for a long time!  We can assume that a new stadium would be equally mis-managed.  It would take true leadership at the highest level to fix the city’s budget and accounting methods.


      (2) $1.5 Million to replace lawnmowers, tractors, and utility vehicles — New equipment would undoubtedly also be part of a new facility.


      (3) $17+ million for parking lots?  This begs the question, “Why isn’t this paid for by parking fees?”


      It’s easy to nitpick;  I am sure that the detailed shortcomings are real and need to be funded somehow.  But I’d love to see some accountability for the already misdirected maintenance funds that should have been used to protect the taxpayers' assets.



      So, if we’re on the hook for $80 million, let’s round it up to an even $100 million.  Go beyond a new coat of paint, create some visible modernization.  Qualcomm Stadium is already in a great location.  With a little bit of effort we can reimagine this as an attractive big-league facility, then find an APPRECIATIVE TENANT for Qualcomm.   

      Put up the “For Rent” sign, say good-bye to Spanos and his ilk.

      Edward Moretti
      Edward Moretti

      @George in BayHo @Liam Dillon Yes, because if the Spanos family left it would be so easy to attract another "appreciative tenant", right? Just ask Los Angeles how that has worked out for them.


      The Spanos family has bent over backwards for 13+ years when other owners would have already left long ago. If you were renting an apartment and the landlord failed to keep up the maintenance the way the City has on the Q, wouldn't you be calling the landlord a slumlord. We seem to forget that we need a new stadium to attract the events that will keep the Q full. Nobody wants to come here in it's present state. No amount of renovations will make it Super Bowl-friendly either. Everybody points to Arrowhead in Kansas City as a great re-model. They're right. Cost $375 million. However, despite the renovations the NFL already said no to even attempting a Super Bowl bid. 

      The Q has a much longer list of problems than Arrowhead ever did. 


      Let's not renovate the Q. You can put lipstick on a pig but it's still a pig. 

      George in BayHo
      George in BayHo subscriber

      @Edward Moretti @George in BayHo @Liam Dillon

      Not renovate Qualcomm stadium?  I'm OK with that.  Sounds like no matter what we do we'll get a raw deal from the NFL anyway.  Since we've proven that we are not capable of maintaining our public assets, stadium ownership presents itself as a malignant tumor that needs to be surgically removed from taxpayers' responsibility.

      How's this sound:  Demolish the stadium and redevelop the property.  But the city itself retains the keys as "master developer".  Have our urban planning geniuses create a commercial/residential hub that matches their vision for a "city of villages".  Taxpayers are rewarded with annual rent for the land, plus other royalties, property & sales taxes.  Financial return for this sort of development can be calculated in real dollars, unlike the intangible self-serving projections of a football tourism consultant.  

      Richard Fletcher
      Richard Fletcher subscriber

      @George in BayHo @Edward Moretti @Liam Dillon I love

      this plan. Let's go further in saving money for the city privatize many services that provided now by city employees, for example trash collection should be privatized with a massive either burn or conversion, which would reduce the total weight of the trash by 85%  as a minimum.

      Keith Hartz
      Keith Hartz subscriber

      Geezus Liam - I love you guys who wail that we're losing $12M a year on Qualcomm.  

      $12M a year is way less than funding $750 million for a new stadium

      Liam Dillon
      Liam Dillon memberadministrator

      @Keith Hartz Losing $12m a year on Qualcomm sucks, especially since that includes money we pay the Chargers to play here. You could also service a lot of debt off $12m a year. That's more than the annual bond payment on Petco...

      Keith Hartz
      Keith Hartz subscriber

      @Liam Dillon @Keith Hartz I agree that $12M is a lot. But, uh, you still haven't addressed my issue that ANY payment on a new stadium will be (way) higher than the current $12M

      Liam Dillon
      Liam Dillon memberadministrator

      @Keith Hartz Yes, you're right. My point is the people who are philosophically opposed to subsidizing a new football stadium should realize that they are subsidizing football to the tune of $12m a year. To get rid of the subsidy entirely, then just knock down the stadium and build a bajillion condos on it.

      Keith Hartz
      Keith Hartz subscriber

      @Liam Dillon @Keith Hartz You know, I think that scares me more than the Chargers leaving - that the "brilliant" power trust of this city will add more condos on that spot

      David Benz
      David Benz subscriber

      @Liam Dillon @Keith Hartz People want to live here so there is a demand for condos. 

      I don't enjoy drunk idiots so I avoid PB and the gaslamp areas at night.  Avoid the area if you can't stand the traffic.

      Our political leaders are incapable of negotiating a favorable lease.  The best possible outcome for San Diego is for the Chargers to move to Carson and then we sell the land at FMV to developers.

      Ever heard of "cutting your loses" or "stop throwing good money after bad"?

      Sean M
      Sean M subscriber

      Does this include the cost of the 29 year no bid security contract recently signed with Elite? Apparently that cost might go up because elite is paying less than the living wage.

      Liam Dillon
      Liam Dillon memberadministrator

      @Sean M Hi Sean. This includes all the costs at the stadium, including outside contracts.

      David Benz
      David Benz subscriber

      The renegotiated lease in 2004 was criminal, not surprising from Murphy, Zucchet, Lewis, Inzunza, and the rest.

      The ticket guarantee was about to expire in three years and instead our Mayor and CC threw away $70 mil.  At least the Chargers have to pay the city $16 mil to leave next year.  Good riddance.

      "The existing lease would require the team to pay more than $70 million above the city's rent proposal through 2020, with annual rent escalating from $7.2 million this year to $9.9 million in 2020."

      http://www.utsandiego.com/uniontrib/20040427/news_1n27chargers.html

      Liam Dillon
      Liam Dillon memberadministrator

      @David Benz Hi David- Wanted to add some context here. The 2004 renegotiation, while certainly not leaving the city with anything resembling a good contract, did do away with the "state of the art" clause as well. This had required the city to maintain Qualcomm as "state of the art," something it isn't. The Rams have a similar clause in their deal in St. Louis and it allowed them to exit early. Not trying to be an apologist for the 2004 deal, but the city did get out of that onerous clause.

      David Benz
      David Benz subscriber

      @Liam Dillon  Thanks Liam, but I'd want to see what the actual requirements were, the Chargers aren't a believable source.

      Either way we gave up $70 million in rent to save $50 million in expenses.

      The original lease was a nightmare.  We have to say NO to any new stadium plan or we will get screwed again.  Our mayor and city council are all either incompetent or crooks.

      Derek Hofmann
      Derek Hofmann subscribermember

      Qualcomm Stadium sits on 166 acres of land. How much tax revenue does the City of San Diego receive from Qualcomm Stadium, and how much would it receive if those 166 acres were under shopping centers, condos, and office buildings? I think $12 million is only part, maybe even only a fraction of what the city lost on Qualcomm Stadium last year.