The Chargers Are Readying Their Own Convadium Tax Hike — But the Mayor's Not on Board
• The Chargers have spent the week furiously trying to put together an initiative that would raise the hotel-room tax to fund construction of a new convention center and stadium, replace the Tourism Marketing District and clear the way for permitting of the new East Village facilities.
• The mayor and hotel industry leaders along with supporters of the so-called Citizens Plan are not yet on board with the Chargers plan.
• A new appellate court ruling may mean tax hikes like this would not require the approval of two-thirds of voters.
The Chargers asked Mayor Kevin Faulconer and hotel industry leaders over the past week to support a new ballot measure that would significantly raise the hotel room tax and pave the way for a campus-style convention center and stadium in the East Village.
Two sources close to the talks provided the outlines of the deal and said the mayor and industry leaders balked at supporting the measure but have not officially decided to oppose it.
They want to see it first, and if the Chargers hope to get it on the ballot, they’ll have to publish it in its entirety in the Union-Tribune within the next few days. The mayor’s office did not immediately respond to a request for comment.
The Chargers’ plan is different from the so-called Citizens’ Plan put together by attorney Cory Briggs, former City Councilwoman Donna Frye and JMI Realty.
But the sources said that the Chargers communicated to the mayor and his allies that if they don’t support the new plan, the team would not pay to collect signatures for it. Instead the team is prepared to throw its full support behind the Citizens’ Plan.
Even that got more complicated Tuesday when a bombshell appellate court decision was published that implies special taxes enacted by ballot measure do not need to receive a two-thirds vote to become law. If the Chargers somehow determine they don’t need a two-thirds vote to enact a tax increase for the combined stadium-convention center, then they might pursue it without the mayor’s help.
The Chargers have apparently decided that the best route to a new stadium is a straight increase to the hotel-room tax that would both support the construction of an adjacent convention center and replace the controversial Tourism Marketing District, the 2 percent levy on hotel rooms on top of the city’s tax that Briggs is currently challenging in court.
The Chargers’ ballot measure would:
• increase the city’s 10.5 percent hotel room tax to 16.5 percent
• eliminate the 2 percent tourism marketing levy on top of that
• set aside 1 percent for a tourism marketing trust fund instead
• set aside 5 percent for a joint convention center and stadium
• it’s anticipated not all of that would be needed so another 1 percent would go to the tourism marketing fund – equaling the 2 percent existing allocation
But it’s much much more than that.
The measure would also clear environmental-permitting hassles for the new buildings, including a 65,000-seat stadium with a 225,000 square-foot convention center with 80,000 square feet of ballroom space and 80,000 square feet of meeting space.
Under the plan, the new facility would be fully owned by the city of San Diego.
The money for the facility would not be released by the city until the Chargers cut a $650 million check to the city and agree to a 30-year lease and non-relocation agreement.
Finally, if no stadium was built, the tax hike would go down to 3 percent, with 2 percent going to the tourism marketing system and 1 percent to the city’s general fund.
As a straight tax hike to pay for the facility, the Chargers accepted that they’d need a two-thirds vote and lobbied the mayor and hotel industry leaders to support it, knowing that such a threshold is impossible against any sort of organized opposition.
But now, a new ruling by the Fourth District Court of Appeal appears to throw out the idea that citizen initiatives that impose special taxes require two-thirds voter approval to pass.
In a dispute between the California Cannabis Coalition and the city of Upland, the court ruled that a ballot initiative was not subject to Article 13C of the California Constitution.
That amendment requires two-thirds voter approval for new taxes and two-thirds voter approval if the taxes are meant for a specific purpose – like a stadium.
“No local government may impose, extend, or increase any special tax unless and until that tax is submitted to the electorate and approved by a two-thirds vote. A special tax shall not be deemed to have been increased if it is imposed at a rate not higher than the maximum rate so approved,” the constitutional amendment says.
The court now says that doesn’t apply to citizen initiatives.
“We need not reach the issue of whether the fee is a tax under Article 13C because, regardless, Article 13, section 2 does not apply to the Initiative. This is because Article 13C, section 2 is limited to taxes imposed by local government and is silent as to imposing a tax by initiative,” the ruling reads.
If the ruling holds up, it would have major implications statewide.
And major implications for San Diego’s never-ending discussions about a new expansion of the Convention Center and stadium.
Regardless, the Chargers’ new plan hasn’t gotten the mayor’s support nor the support of the alliance the Chargers said they were working with: the group working to pass the Citizens’ Plan.
Frye said if the Chargers’ plan did not decide the future of the the current site of Qualcomm Stadium in Mission Valley, she could not support it.
“Absent assurances there would be parkland, I would not support it,” Frye said.
If the Chargers somehow get away with not needing two-thirds support, they may not need Frye or the hotel industry’s support either.
But if they do, they’ll need the backing of everyone who matters and more. They’ll have to wait 21 days after publishing their petition in the newspaper before they can start collecting signatures. So that’s three weeks to try to win them over.