Tuesday, May 26, 2015

San Diego is about to get hosed by the Chargers and the NFL

A high-pressure sales tactic means taxpayers will foot most of the bill for a new stadium

                        Citizens Stadium Advisory Group               
Here's what a waste of $1.1 billion looks like.




San Diego, please don’t be as dumb as this Chargers stadium plan is making you look.
Your tax-free stadium is going to end up with public money one way or another.
Years of griping about Qualcomm Stadium from the Spanos family of owners and some screw-turning from the NFL, which refused to award San Diego another Super Bowl until the Chargers updated their 1967-vintage facility, had previously yielded only chuckles from San Diego. A string of mayors and city councils refused to pay a dime of public money toward a new facility while a family with 10 figures of net worth held its hand out.
However, the Spanos clan did the unthinkable and partnered with the Chargers’ AFC West rival Oakland Raiders on a proposed $1.7 billion facility in Carson, Calif., that was approved in April. That’s when San Diego began losing its nerve. Rushed by St. Louis Rams owner Stan Kroenke’s own Los Angeles stadium proposal and pressured by NFL representatives to get an offer on the table, San Diego Mayor Kevin Faulconer and his stadium planning committee announced plans for a $1.1 billion stadium that “won’t raise taxes.” San Diego, please read the fine print on this plan.
While the Los Angeles Times pulled out the pom-poms and swiped some choreography from Bring It On for its enthusiastic A-N-N-O-U-N-C-E-M-E-N-T of the new stadium plan, it glossed over the fact that the Chargers and the NFL would be responsible for only $500 million of those costs. Oh, and the Chargers still feel they’re “being asked to contribute far more than other NFL teams have been required to pay when their stadiums were built.” Meanwhile, the project requires $173 million in bonds, $121 million from San Diego, $121 million from San Diego County, an estimated $100 million from ticket surcharges and seat licenses, and the city’s $225 million sale of the Qualcomm Stadium site to a developer.
Though the proposed plan asks the Chargers to pay $1 million per game in rent ($8 million per year, more during playoff years), the “won’t raise taxes” portion of this deal is very much in doubt. Just ask the good people of Indianapolis and Indiana. They forked over 86% of the $720 million cost of the Colts’ Lucas Oil Stadium before it opened in 2008 and borrowed money from Goldman Sachs GS, +1.39%  for a bond sale to cover the cost and minimize the tax burden. However, as Bloomberg discovered, the group in charge of those bonds just paid Goldman $71 million to get out of that bond deal after an interest-rate-swap scheme went sour. As a result, hotel, restaurant and rental-car taxes that were already being used to pay stadium costs had to be increased.
NFL stadiums have soaked up an average of $250 million in public funding apiece since the mid-1990s. Harvard University urban planning professor Judith Grant Long notes that municipal or state land, lost property taxes from that land, infrastructure and annual maintenance all tack on about 25% to the cost of an NFL facility. The least the NFL can do is offer the public a say in that spending, but the NFL has rammed Los Angeles stadiums through local government without a vote and is squeezing politicians in St. Louis, Oakland and San Diego to avoid a public vote on tax money for stadiums, citing expediency.
There is no way San Diego should let this go down without a vote. Faulconer has promised one for November and a two-thirds vote would be required for approval. The NFL, knowing it doesn’t have the votes for this and that few taxpayers would agree to such a lopsided deal, sent Executive VP Eric Grubman to San Diego to declare the vote “risky.”
Take that risk. It’s your tax money and your city, San Diego. While folks in Seattle know that a public vote doesn’t always mean public money won’t go into a stadium, they also know it’s about the best tool the taxpayer has to negotiate terms. If the fourth estate would rather play cheerleader than look out for your interest, look out for you own and force a vote. If the NFL and the Spanos clan don’t like it, they know where I-5 is. Good luck getting to L.A. before the Rams and Raiders, though.


  1. LOL.

    The Broncos owner threatened to move the team is the taxpayers didn't belly up to the bar and pay for a new stadium. He got his new stadium. In addition he also received exclusive rights to rent the stadium for use in the off season, revenue from all concessions, parking, etc. In return he pays for maintenance on a brand new stadium.
    The suburbs got nothing, the city gets a 3 dollar seat tax and revenue from the naming rights on the stadium, the owner had the value of the team double on signing.

    Most people cannot afford or get access to a seat in the new stadium however they can see it on occasion on TV.

    You have to love government in action.

  2. another small point of agreement louman. But how many times do we vote on and agree to bonds, taxes etc for a place to play ( not you) but then we bitch about the cost of facilities and infrastructure that only makes our country better and stronger. Mixed up values. This whole thread leads back to your VA hospital piece. It is what it is but obviously the VA is stretched to the limit across much of the nation caring for those who fight our wars. We don't have to agree with the reasons for the fight or the mission stated. But our young men and women do their duty, a duty they are ordered to do whether even they agree with the premises that took them to war. We OWE them the best we can give them for their care. Even if it costs a billion dollars to build those facilities. Now I know that you and others here believe that the private sector could care for our soldiers better. I disagree. The private sector would introduce profit into taking care of our soldiers and profit should not be made caring for those who have given so much. We owe them they don't owe us.ur country and it's leaders sent them to a place wherever it has been in which they came back less then whole. Our country now has to assume the responsibilities especially the financial ones to try to put these young lives back together again. There was a time that the VA was the most efficient hospital system in the world. It is presently overwhelmed. We need to fix it whatever the cost.