Has PETCO Park Been A Good Investment?
Tuesday, January 26, 2010
In the near future, the eastern edge of downtown San Diego might be transformed with a brand new Chargers stadium. The City of San Diego has already built one stadium downtown and is considering building another. But has PETCO Park been a good investment?
SAN DIEGO In the near future, the eastern edge of downtown San Diego might be transformed by a brand new Chargers stadium. The City of San Diego has already built one stadium downtown and is considering building another. But has PETCO Park been a good investment?
It’s a Friday afternoon and the Tivoli Bar on the corner of Sixth and Island avenues downtown, is beginning to fill up. Behind the bar a woman makes sure the refrigerator is full of beer for the coming night. On the patio, owner Robert Romero reflects on the changes the bar has gone through in the more than 40 years his family has owned it. He says PETCO Park provided a big initial boost to the business.
“With the opening of the ballpark, our revenue increased tremendously. It’s been that way for some time, although, since the ballpark came into being, every year our revenue has come down a little bit,” he says.
Romero says the recession and the poor performance of the Padres don’t help. But, he says, overall, the area’s seen a vast improvement since before San Diego paid $206 million for PETCO. The city’s Redevelopment Agency contributed another $95 million and the Padres put in $153 million.
Fred Maas is board chair of the Centre City Development Corporation which helps finance downtown redevelopment projects. He says PETCO's impact is clear.
“I think anybody that has experienced downtown and experiences downtown today can absolutely see the restoration and renaissance that has happened to the East Village,” he says. “I don’t think it was just a success. I think it was a smashing success.”
Maas compares PETCO Park to the development of the Horton Plaza shopping mall which he says spurred the growth of the Gaslamp Quarter.
“I think it’s so patently obvious what the benefits of Horton were,” he says. “And I think the same is true for PETCO Park. To say that somehow the East Village would have developed without it, I think defies both logic and history.”
Maas says more than $1 billion worth of development has taken place around PETCO Park and that all of downtown is now assessed at $13 billion. That’s more than three times its value before PETCO Park.
Even though a lot of development has taken place, the city still owes about $154 million on ballpark bonds, and the recession has hotels seeing less business. That means the city has seen a drop-off in the taxes it receives whenever someone books a room. Those taxes were supposed to help pay off the stadium.
In this struggling economy, UCSD Political Science Professor Steve Erie says it’s evident San Diego could have made a better deal with the Padres.
“Should there have been more public benefit built in to the initial agreement? And more of a spread of the initial risk, because all of the public risk is on the front end,” Erie says.
Now San Diego is facing multi-million-dollar deficits and is making cuts to police, fire and other public services. Erie wonders whether it’s the right time for the city to be thinking about building a Chargers stadium.
“What are the civic priorities of San Diego? And have we handed the keys over to professional sports teams because that’s our marker of major league status?” he asks.
Erie says the renovation of the East Village neighborhood was one of the biggest public-private partnerships in the country, encompassing 26 blocks. He says the project became too big to fail, meaning San Diego had to give up a lot of control and let the Padres take the lead.
Marney Cox says the outcome of the project has been mixed. He’s the Chief Economist at the San Diego Association of Governments. He says if you look around and see the new condos and businesses that have been developed and all the people on the streets, it would appear PETCO was a success, but he says all that development might not translate into a lot of revenue for the city.
“It’s pretty good evidence out there from studies that have been done that show that large investments in those entertainment kind of parks are almost a wash for local areas, if not slightly negative,” he says.
But for Robert Romero and the Tivoli bar, the benefits are obvious. The bar’s been expanded and revenues are up since before PETCO was built. Asked whether he’d like to see a Chargers stadium built downtown, Romero said absolutely.