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.

By

JasonNotte

Columnist

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.