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.
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A hotel room tax to fund a stadium and convention hall is a huge subsidy. The decision to raise taxes is independent of the decision of how to spend these revenues. Once these revenues are earmarked for debt repayment for stadium and convention center bonds, they will no longer be available for more important uses. That's called opportunity cost. This year's San Diego budget earmarked $258 million for retirement benefits which will be increasing in the years ahead. In 1999 the benefit cost was $43 million. The 2016 budget also noted that a study in Feb. 2012 estimated deferred capital needs at $898 million. A large 2012 bond issue covered only a small portion.
Here's the issue.. The hotel tax may be needed for pensions, health costs, and infrastructure obligations and to deal with the next recession. Earmarking the funds to subsidize a ball field and convention center is simply irresponsible. It only took a few years for a financially solvent San Diego to become the national embarrassment called "Enron by the Sea." Public employees and others should read about what happened to city employees in Detroit, MI and Vallejo, CA. If they do, they will fight against this fiscal travesty.
So, if the Mayor backs the Charger's Plan, and that plan proceeds to become a ballot measure, will Briggs & Co. still proceed with their ballot initiative? If so, what is the likelihood that 2 such measures on the same ballot would kill each other?
The Briggs plan sounds like throwing downtown to the wolves to try to rejuvinate Mission Valley. I get the sneaking suspicion that the rainbows and lollipops version of the park friendly riverfront site is somehow going to get the rug pulled out from under it after the downtown stadium deal has been made though. It just feels like that site is bait to get the non-Chargers fans/Whole Foods contigency on board with that plan. It's an intriguing proposal and it's probably the sole reason why Frye is supporting it as well.
“Absent assurances there would be parkland, I would not support it,” Frye said.
That's a pretty clear agenda. But I have sympathy for Frye. She probably saw the writing on the wall before us common folk figured out the reality of the situation, and tried to make the best of it that she could.
I get the general feeling that a downtown stadium is like an asteroid screaming towards Earth that's gonna collide with the east village no matter what. All signs are pointing in the direction that no matter how much hate, anger and bitterness is generated in opposition to the "convadium" (the spork of event center and stadium marriages) it's still gonna happen. Like if only one person votes to support either deal a stadiumvention center will still somehow end up downtown. The NFL wants it, the politicians want it, developers want it, hell and high water are gonna be moved to make sure this happens, and that is that. It kinda feels like the build-up before the Iraq War. You just know it's gonna happen no matter what because the forces pushing for its approval are unstoppable by mere mortals.
On a side note, raising hotel taxes may be a more treacherous slope than people think. I think it was a recent article on here that highlighted how Comic-Con's main concern is cheaper blocked rooms for their attendees, as opposed to expanded floor space in the convention center. Comic-Con is a gigantic event comprised primarily of non high-rollers. Attendees are looking for (and likely often need) good deals to make the trip. Not saying this would guarantee Comic-Con's exit from SD, but it's probably not gonna do much to secure it's location in this town either. Locals that regularly shoot down half a penny sales tax hikes probably think that tourists who would complain about a 5% hotel tax increase are just being cheap. I can see why the hoteliers in this town have opposed the tax increases, they have seen how inviting the locals have been to potential tax increases of their own.
The hoteliers should create a "citizens initiative" that pays for the contiguous convention center expansion from a smaller TOT increase. Isn't the 2/3rds requirement what stopped that plan?
This so called "plan" it's so absurd.
Imagine the hoteliers floating an initiative to impose a tax on all NFL games (minus those played in San Diego) for the purpose of funding a convention center expansion on the waterfront.
This way NFL "outsiders" could pay for the convention center expansion without burdening local fans.
This is what Spanos and the NFL say they want to do in reverse.
So now a FOOTBALL TEAM gets to determine what's best for our convention center issues? This seems absurd. Have the Chargers consulted with convention center experts on this plan? Do they have urban planners who contributed to this initiative of theirs? It makes no sense. If the Chargers wanted their new palace where the airport is located, could they write an initiative that combines building a new stadium with moving the airport without any input or consultation from the city or the FAA?? If they decided Balboa Park was the best spot for their new palace, could they write an initiative to re-locate the zoo and split it up into two parts - one for mammals and one for other animals - that would need shuttle service to go between? They wouldn't need to consult the city and could raise the price of zoo tickets by 300% to pay for their new palace? Maybe combine certain zoo exhibits with their new palace and call it a Stadiazoo? I mean come on, this initiative they are talking about goes way beyond just a football stadium. It involves relocation of a rail yard, settling our convention center expansion debate without input from our elected officials, and deciding the future trajectory of a major neighborhood downtown - again with no input from city officials or local residents and businesses impacted. This all goes well beyond football. This is a huge overreach. Not to mention, it introduces extreme bias. Obviously an initiative written by a FOOTBALL TEAM who has one major personal interest in ONE part of this will not be able to construct an objective initiative. The convention center part of the plan will be an after-thought. I can't believe our city would be stupid enough to let something as overtly ridiculous even be allowed on the ballot. This needs to be fought in court if not before it's voted on then after. This could set precedence nationwide of allowing football teams to inject themselves into and overtake important infrastructure decisions they have no business being involved with in a greedy attempt to get their stadium built
@ZachW This is San Diego. It has the moniker of San Diego, Enron by the Bay. It is as corrupt a city as it has ever been. This is business as usual here. So believe it. Apathy and ignorance abide here as the norm. If the Chargers were to want to build the stadium in the middle of Balboa Park there would be plenty of politicians and business people and idiots to go along. Nothing new here. Sorry but it's a fact. Fortunately there are a few voices of reason (mostly here on VOSD) that agree with your sentiment. But overall the powers of this city will do whatever they want. They have for years. It would be rare if they don't get there way. Watch how the U-T and local TV stations eat up this Charger plan like it were the second coming and the best plan for San Diego no matter what it costs, because the powers will all have their hand in the public money going into this fiasco. Keep in mind this is still Enron by the Sea. Nothing has changed.
Just more smoke and mirrors to confuse the very feeble minded citizens of San Diego. Just tell stupid gullible people what they want to hear and take their money. That has been the mantra of this city for some time. It is also the basic reason why right now the working poor are becoming even more poor while the very wealthy are becoming even more wealthy.
You see if you buy house at a price you can't afford, it is no problem because you can simply borrow the money with no down payment. You can't afford to go to outrageous over priced crappy college? No problem just borrow the money, and don't worry everything will just be fine. The billionaire NFL owners need a new billion dollar plus stadium, but they don't want to pay for it ... no problem just tax the suckers who come to visit. They will gladly pay what ever hotel tax you ask. The stadium will not only pay for it self in a couple of years, it will offer good jobs to peanut vendors who will pay even more taxes from their 8 day a year minimum wage part time jobs with no benefits. You see it's a win win for everyone as long as you are a sleazy low life blood sucking billionaire who has already sucked tens of millions of dollars from this city and only wants more. To him Greed has been Good.
Oh and if the TOT taxes can't service the billions of new debt caused by this fiasco no problem ... the government will pick up the tab. Don't worry about the infrastructure needs the city can't handle ... the government will pick up that cost too. Look they bailed out Wall Street on the housing fiasco. Those Wall Street bankers did very well from that ... they are not complaining. They only got even more rich from it. So will the city of San Diego. Look Susan Golding told us that the $75 million bonds to improve the current stadium would be paid off in a very short period of time because of all of the new hotel taxes collected. And the Charger ticket guarantee would only create more jobs and benefit the bottom line of the city. Don't worry that the city still owes over $55 million of that original bond and together with the interest it has cost the city many times that figure. And don't worry that the current stadium and the convention center can't even come close to breaking even. That is all history.
This new 1.8 billion dollar fiasco (designed to completely destroy the East Village community) will erase all of that debt and create so many new high paying jobs it will make your head spin (and Donald Trump's head will spin too). It's all guaranteed to work. Guaranteed! I tell you! It won't cost tax payers one thin dime because if something goes wrong the "Government" will pay ... not the taxpayers. Silly people don't you know the government will pay and not the tax payers. Don't worry your pretty little heads on this business you can't understand. Just trust the good Mr. Spanos. He is only looking out for your best interest! Really!
One more thing worth mentioning ... the war in Iraq will too be a huge big Win Win situation. The oil we take from Iraq will pay for that war many times over ... plus it will create peace and harmony in the Middle East. Question Nothing. Accept everything because powerful people are only looking out for your best interest. Stay Classy and Stupid San Diego ... love all of the love coming from the good Mr. Spanos. He has your back. He decided to bring the Chargers back here for one more year because he loves the love. Can't you feel it?
Don't get too excited about the Chargers alleged $650 million. When you look at the details I'm confident you'll find a lot of stuff that translates to requiring little, if any, CASH from the team (or the league). E.g., the league "contribution" will no doubt be in the form of a loan, terms undetermined at this point; the team will get all "naming rights" and all revenue from PSLs, luxury seats, etc. They'll contribute a set amount to defray maintenance and security, and guess what? The city gets to own and maintain the facility, and attempt to find events for the 355 days a year there's no football and hope it doesn't hurt Petco Park's revenue. And of course, with this arrangement, the place can be declared "obsolete" by the team at some future date and we start the drill over with, no doubt, unpaid debt still hanging over the facility, as we still have at Qualcomm.
Since we're talking about a "Convadium", you also have the issue of just who is responsible for what in any part of the facility that's not clearly stadium or convention hall. And, of course, there's the disposition of the current Qualcomm site, which is going to be VERY complex and controversial (See, e.g., Donna Frye's ultimatim on a park). The only certainty is that the debt hanging over the place from the previous expansion doesn't go away; it must be paid off somehow.
If you can't justify a convention center expansion on it's own merits, the whole deal is a sham. Personally, I think that's where we are, and if we're not careful, the taxpayers will be on the hook for massive bond payments for 20 or more years. More cops? Forget it. New fire stations? Not in the budget. Fix the roads, water pipes, storm drains......good luck!
Better take a very long look at the proposed ballot initiative, folks. And consider whether the city assumes all the risk if the TOT revenue isn't sufficient to meet the bond payments. The county may be getting a free ride here, where they had supposedly agreed to a big slug of cash up front. Do we really need a pro football team, particularly THIS one?
@Bill Bradshaw The terms of the NFL's G4 loans have been established by the league. See http://www.fieldofschemes.com/news/archives/2011/12/4761_nfl_establishes.html
Ultimately that money is repaid by ticket revenue that is shared with the other teams.
The city of Glendale AZ thought they had it all figured out with raising the rental car tax to pay for its new football stadium. Later, the tax increase was challenged in court and overturned. The city had to pay back the money collected and they became liable to cover the costs the tax was intended to cover.
Well, the devil is in the details but it seems to me that if the Chargers can provide $650 million, then the Briggs Initiative is the way to go. The hoteliers aren't likely to be receptive to a TOT that is higher than their primary California competition.
@Kathleen Van Buren Agreed that the high hotel tax is a problem. If that can be reduced a bit, the Charger plan would be more palatable. The big difference in the new plan is that the city will own the stadium and a new convention expansion, an expansion that is needed independent of the stadium issue. The fact that the Chargers and the NFL actually add $650 million to the pot and are responsible for cost overruns on a facility that the city/county will own is not small.
@r elmasian, owning the stadium isn't a good thing (see Bill Bradshaw's post above for starters.) If the stadium was an asset, the Chargers would want to own it. And if this article is correct, the Chargers are only responsible for cost overruns on the stadium portion of the construction. It's not just a matter of defining the dividing line between the convention center space and the stadium space; you have to trust their estimate of the cost of land acquisition.
@Kathleen Van Buren Voting no on any stadium plan is the way to go. This is a big waste of money.
This is much better than earlier proposals. The city, county, their citizens, and the Chargers all have a chance to win if things are done well. The appellate ruling also makes a gigantic difference.
@r elmasian If Spanos is willing to wait 5-7 years for a stadium so be it. The city would have to find another location for the MTS yard and that wont be easy. Besides they would have to remove all the contaminated soil from the site. Since it was a parking/fueling/and maintenance yard, do you have any idea how big and deep that they have to dig and remove the soil which is hazmat material and truck it to AZ?
It'll be interesting to see how much of this proves to be true and how much of this is spin from City Hall. While I heartily approve of the Chargers putting up $650 million themselves and a tax, paid by out-of-towners, that would pay for the rest of the stadium costs and the much needed expansion on of the convention center it'll be a hard sell. Our conservative electorate believes in its heart and soul that money for a project like this should just appear out of thin air and that the only way to raise money and the economy is by cutting taxes on businesses and the rich. Just ask Kansas and Louisiana how well that has worked out for them. And, of course, our own Mayor will wait until he sees whether the latest polls support this initiative before deciding to back this himself.
@Edward Moretti You say you are OK with out-of-towners paying the rest of the stadium bill but that money is supposed to go to the city to be used to benefit all San Diegans. That argument is just as idiotic as the idea of selling off land around Qualcom to raise money. The implication is that this is found money we can use for a stadium when the City;s infrastructure and fleet of vehicles are falling apart. ANY money we can generate from ANY source should go to services for all San Diegans NOT for a stadium.
And, the convention center does not need expansion. There was a recent article about all of the bookings the convention has but when you did the math, it amounted to about 6,800 people per convention on the average. The current center is fine but it NEEDS maintenance, NOT expansion.