San Diego Mayor Kevin Faulconer finally took a stand on the Charger stadium proposition, but his support could prove  to be a final death blow to Proposition C.
After months of stalling on his decision to either support or oppose Proposition C, Faulconer this week declared his support for the measure that would approve a downtown stadium for the Chargers. Faulconer explained that he only agreed to support the ballot propositon after he negotiated several concessions from the Chargers that would ostensibly protect taxpayers.
But the concessions Faulconer claims to have extracted from the Chargers not only amount to an unenforceable commitment, but could now expose Proposition C to legal challenge if it does pass on November 8th.
Firstm, the concessions were in the form of a letter from Dean Spanos as the Chairman of the Board of the San Diego Chargers. It’s not a legally binding contract, it carries no financial security or collateral, and does nothing more than add Dean Spanos’ name to the list of supporters of the ballot measure. The letter simply states that Dean Spanos will “acknowledge and agree to the items” listed in the letter.
Among the eight “concessions” in the letter, the most substantial ones seem to protect taxpayers, but the language is vague, at best.
In referring to the City’s operating budget, the letter states that “Chargers’ agree that General Fund will not be used to fund construction or operating costs”. That does not ensure that, if hotel taxes are not sufficient to cover bond debt payments, the City’s general fund would not be tapped to make the payments. The statement does not say the Chargers would reimburse the City for those costs, or that the Chargers would be legally bound to pay millions of dollars a year. It’s just a statement that carries no financial protections at all.
Also, the letter purports to establish a cap on project costs but, again, that statement is vague and non-binding. The letter states that “the project would not move forward if costs funded by (hotel taxes) exceed amount allocated in Chargers’ estimate”. At best, the statement implies that the project would not start if the estimated budget is too high, but the statement does not protect taxpayers from construction cost overruns, change orders, or unforeseen project cost increases. The statement is nothing more than an agreement to agree on a budget before initiating construction.
The real issue raised by the Chargers’ letter and by Faulconer’s announcement of his endorsement is that they constitute an admission that Proposition C was written specifically for the benefit of the Chargers.
Well, of course it was, you say. What’s the problem with that?
The California Constitution prohibits any “initiative that names any individual to hold any office, or names or identifies any private corporation to perform any
function or to have any power or duty”.
And the Chargers know that because their 105-page proposition does not specifically mention them; instead, Prop C only references “a football team” when talking about the downtown stadium.
If Proposition C was not written for the Chargers, then why would the Mayor negotiate concessions from the team to plug financial holes in the measure. And why would a company called Chargers Football Company LLC be the major funder of over $4 million already spent on the Yes on C campaign?
The combination of the vague references in Prop C to “a football team” combined with the unenforceable financial concession letter show that the ballot initiative is a shady attempt to fool voters into giving a billionaire family a sweetheart deal for a new stadium at the expense, literally, of San Diego taxpayers.
Even if these issues were not enough to turn off voters, the concept of raising over $1 billion in hotel taxes and directing them into a football stadium should be of concern.
The Chargers argue that locals will not pay these new taxes because they are only on hotel rooms used almost exclusively by tourists. That may be true of the hotel taxes themselves, but the City’s general fund would still be the financial back stop for the bond debt issued for the stadium. If, for any reason (like another recession or natural disaster, for example) hotel tax revenues were to fall below the amount needed to pay the bond debt, the City’s operating budget would have to be used to make the payments. Those tax dollars would be diverted from funding parks, libraries, streets, and police and fire services.
There are several economic studies that prove little to no economic benefit to cities that invest in professional sports stadiums. Some argue that stadiums encourage surrounding development activity, but, for the most part, city subsidies are very difficult to justify financially.
We should all remember that the Chargers ignored overtures to negotiate with the City during the past two years as their sights were set on a deal in Los Angeles. After they tried for that deal but were rejected by the NFL, they came back to San Diego in search of Plan B. But instead of negotiating with city leaders, the Chargers forced a ballot initiative directly to voters to circumvent the process.
Now they are spending millions of dollars to secure their own deal, even if they can’t legally say that’s what they’re doing, and they threw in a few concessions to sweeten the pie.
San Diegans should be leery of the stranger bearing gifts, even if he’s wearing the jersey of one of our favorite players.
Proposition C is a bad idea made worse by false promises of financial protections.