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Roundtable: San Diego's Budget, SoccerCity, Convention Center

Roundtable: San Diego’s Budget, SoccerCity, Convention Center

CORRECTION: During the discussion, reporter Andrew Keatts said the SoccerCity initiative becomes void if San Diego is not awarded a MLS team. That was inaccurate. The property would revert back to the city if the developers do not build a stadium within seven years, according to a city attorney memo on the initiative.

Roundtable: San Diego's Budget, SoccerCity, Convention Center
San Diego's Big Budget WeekPANEL:Erik Anderson, KPBS News Andrew Bowen, KPBS News Andrew Keatts, Voice of San Diego

MS: It's been a big weak. City Council passed a budget without funds on the convention center and SoccerCity. The convention center initiative may not resonate with voters. I am Mark Sauer. The KPBS roundtable starts right now. MS: Welcome to our discussion. Joining me at the roundtable today is Erik Anderson and Andrew Keatts and Andrew Bowen. They involve billions of dollars in huge land-use challenges and crucial quality-of-life issues like homelessness and public safety. These issues are wrapped up in two initiatives supported by the mayor, the SoccerCity project. Mayor: It takes decades to make meaningful progress on just one of those needs. This year we have a chance to move forward with all of them. What happens with this property is bigger than any one entity. This is about the future of our entire city. MS: This week the controversies came to the floor on Monday and they pass a budget without funding for a special election affecting SoccerCity and the convention center expansion. The mayor vowed to veto the budget decision. Now everyone's figuring out what this means and what to do. That is a lot on the set up and it shows how confusing this is. What happened at that meeting? AK: There's one of the thing we learned is that the mayor can do whatever he wants with his budget, which is maybe the backstop for this whole thing. They voted for a budget that did not include money for a special election and then we learned at the end of the vote, it didn't matter because the mayor had it within his authority to veto a specific decision to put money back into the budget and have a special election and then it became clear that that might not matter because you still need to get the votes to actually schedule the special election even if it is funded. So that is kind of where we stand now is that Monday will have this vote whether or not to put his increase for convention center on a ballot and it's not clear right now that he has the votes that he needs even though he will have them to override -- to maintain his veto and put the money back in for special election if it were the case that they want to hold that special election. MS: Will try to sort this out. The clock is ticking on that veto. AK: So something to look for while that clock ticks is what money he takes on the budget to put $5 million back into hold the special election and potentially that could be some of the leverage he has to try to get people on board for the special election. He has not said these things publicly but you can imagine him saying nice bird cleanup in La Jolla you have there. So that's the type of leverage we are looking at. MS: Is it safe to say that while the clock is ticking there's a lot of arm-twisting and back and forth going on pressure. AB: Sure. I think that there's a lot of lopping going on at City Hall and for an issue this important I think it's safe to say yes, there are a lot of conversations happening between all the staff members trying to get a deal worked out. MS: Why is Amir set on a special election this November? AB: We can go all the way back to January of last year when the mayor announced that he was going to put an initiative on the ballot to expand the convention center that year. That did not happen for a number of reasons. The Chargers had an initiative that would also increase the occupancy tax and could expand the convention center off-site. There were other tax measures. He was going for reelection. So fast forward to now the convention center is getting more and more expensive and the mayor's office says the longer we wait were also missing out on these opportunity costs and if we expanded now then we will have all the extra revenue of bigger conventions coming into San Diego. The arguments to having the special election are -- first of all, it's a very big decision. We know there's not going to be a high turnout so we should schedule it at a time more people are going to be voting and there could be self interest in scheduling it for 2018 because regular elections typically have a more progressive and tax friendly voter base. So if you were to wait until 2018, he may have better chances of giving it just getting it pass. AK: See that is interesting. Is as we do much better in 2018 then pushing for it to happen immediately and we can't really separate this from the prospect of a special election for soccer city. Those things are separate issues but certainly it makes the argument for holding a special election for anyone of them easier if you combine that because then we are voting on two things. EA: We should understand where the vote was. The vote on Monday was a vote for the city budget and the councilmembers voted against the special funding but it is a boat that they had political cover for. They knew it was not going to be the final word so it's easy to vote no if you know you're going to get a second chance. For the veto that the mayor wants on the Council he needs four votes in if all the Republicans vote with them, that is the four votes to sustain the veto. On the special election vote, he needs five votes. He needs to turn one Democrat to his side and if for some reason this particular special election vote fails and they try again at a later time, he would need six votes so there's a lot of maneuvering around those vote totals in the lot of lobbying. I was in the City Hall two days ago waiting to talk to a couple of councilmembers and here walks Elliott and he was there to meet with Chris Ward. They have a huge stake in the decision. If it makes a ballot, it makes it tougher for them to have a say in what the project is going to do so they are probably in their lobbying for their position which would be to delay the boat. MS: I want to get to the appraisal but while you are on that theme, if they don't have the special election regarding the soccer city site of these two initiatives does not blow out the SoccerCity plan? Do they say that we cannot get the soccer team and our plan is dead? EA: Yes, it does. The measurable effect SoccerCity but not the trench when I proposal. That it an effort that the Council has to consider in the early have two choices. They could approve it or put on the ballot November 2018. That is what soccer city folks are saying. They want to have a decision on the idea by the end of this year that is why they are pushing for the vote. If they don't have that major-league soccer will not award San Diego the franchise. AB: Let's say the voters approve soccer city and they decide they will pass anyway what happens to their plan? They're not going to build the stadium. So everyone will have vote on something that doesn't matter. EA: There's still the problem of what to do with the site so the city will move toward a process that invites other developers to come to the table with an idea with the plan the mayor has said this a number times that that site and what's currently there is costing the city around $12 million a year just to maintain it. It’s what San Diego State University is looking for. They think if there is a open process with some more time added that they can get the kind of project that they will be more [Indiscernible] to. There's a lot of push to push it off but they are saying from their point of view they don't have a chance to have a say in November of this year and they decide not to award a team then not project is done. MS: Let's talk about the appraisal. EA: $660,000 an acre roughly. Is that a lot of money for prime real estate? I think a reasonable person could look at that number and see may be this is high. The thing about an appraisal is it's not written in stone. I think it is a negotiating point. You probably end up somewhere in the middle in terms of how much the city when make. MS: We should explain their paying a percentage each year. That brings us to something we have here. We have $11 million a year sitting on the table and here's the councilmember and see what he has to say. Councilmember: This is a potential revenue source for the city where we need dollars to pay for a number of -- whether it is infrastructure or police officers. This revenue source I think that the Council should know about and hear about when we have this item before us. MS: So you did that interview what other points was he making? EA: He has not taken a public position on whether he supports it or not but he has listened to a lot of the arguments on both sides. About it was interesting and a little bit humorous he was saying that some people don't like the project for the density and other people like it because it's a dense project. I think what that highlights is that there are a lot of different opinions all over the map on this and everybody brings their own idea. MS: You saw a lot of that. We had 100 people at the meeting and also at the people and they were not shy about expressing their viewpoints on these issues, right? AK: The one thing that we haven't mentioned is the idea that back in November we passed a measure that stipulated that when you have these big issues you should only vote on them on regular scheduled elections. To me the biggest thing that the appraisal does is change the conversation materially. As we said at the beginning, to have a special election he needed to change one vote. It's pretty hard to change a vote when you're just going back into the room with the same set of circumstances that you have been arguing with. Something needed to change whether that was on the convention center side that would be something like an agreement for project labor agreement for the construction or this. It is a new piece of information that can't be ignored by city Council that just made cuts that they didn't want to make an they will how did the same next year that he can start think $11 million into the general fund would be pretty nice. EA: He talked about the measure being the reason for that. Chris on the other hand said there's a provision that says you can put a measure on an off year November ballot. It also says that you can put a measure on a June primary ballot if you decide to do so. It doesn't restrict anything and if it's used as an excuse that I think it's not. That is an interesting point. MS: Such as 20 an interesting point. Such as 2018 we do have a primary coming up. AK: It is interesting because it was left completely possible. So the question becomes what is a standard? I've heard everything from for emergency circumstances. Of the Mayor has to resign then we need to have a new mayor. But when that person's emergency is another person’s luxury. MS: Erik, you mentioned your interview with David Alvarez. Let's hear what he has to say. Councilmember: First and foremost I am very disappointed that this group of individuals has disregarded San Diego State University as a partner in this development. It is critically important to me that that component be part of this. I am hopeful that if time progresses and we don't have a special election, they will realize that. They need to play nice with other individuals especially an institution that's very highly regarded. MS: As we said before San Diego State is not crazy about this plan but there's a leadership transition going on now with him leaving. EA: Sally will take over and maybe it was the case with making introductions where they were arguing their point in front of cash were. They are not waiting to see what happens. They are actively pressing their case with city officials and I think a lot of the opponents both see this Monday vote coming up as a key point for them to kind of turn the tide away from the SoccerCity proposal. AB: I don't know if you can answer this question but how much was based on sports and academics question mark they want a stadium that is big enough to host the Aztecs but they also want expanded classroom space or research facilities. They had this big goal of becoming a major research university. How much of it was a stadium was too small and how much of it is this space that we want for our expanded campus is too expensive or not big enough? EA: I don't want to speak for the University and I cannot speak for them. I sense just by looking at everything that has transpired if this were only a football issue, it would be solved. I think the University has eyes on getting control of a big chunk of that property. I asked the athletic director and he said they wanted to do a research campus. He also said something interesting that what they want to do is get control of the land now and build structures, rent them out and create a revenue stream for the University and then down the road transfer to the educational mission. For the soccer city developers, they want to get control of the land, build structures, rent the facilities out, and create that revenue stream for themselves. Then they said they are willing at some point to transfer a portion of the property to the University at that market rate down the road when it is needed. I think that that's where the difference between those two lie. AK: It's not actually about San Diego State’s immediate needs as much as their long-term ambitions. That is true both on the academic side and the stadium site. The stadium that they are saying is not sufficient is but it wouldn't be big enough or send you a state football today it's that it would be big enough for San Diego State football with their hopes and dreams of one to becoming a big conference. It's this future goal that they don't want to have that door closed for them. Likewise, they said publicly and then backtrack shortly thereafter that they don't have any immediate needs for the academic land. That is a 30 or 40-year goal, which is fine. They don't have any immediate pressing needs. It is not like there busting out of the seams right now and really need another 50 acres. EA: I think they are keen of the idea and using the property to generate revenue, which later they could use to develop the rest of it. MS: A lot of other questions and will have other cracks at this at other shows. The tax how much money we are talking about there in the convention center expansion. Andrew, give us the big picture of that. AB: They are proposing an increase of the transit occupancy tax based on where hotel is located. Most of that funding would go to expanding the convention center on site on the waterfront. It would be about 64% of the revenue and that would total over the lifespan of the entire tax increase, which is 42 years that would be $3.3 billion. Smaller shares of the revenue will go to road repair and programs to reduce homelessness. Those would get 18%, which is about $950 million over 42 years. MS: Another big deal. AB: Absolutely. The city would be able to bond based on that tax revenue so they could get the money up front and spend it on expanding that convention center or paving roads and then pay that off over time. MS: You've yoked all these issues together. Will the mayor do better if they had homelessness infrastructure separately from a convention center? How does a vote on this work? AB: I wish I knew. We did see another pole come out this week that was by a private citizen. That found that a tax measure exclusively focused on ending homelessness would actually have more support than what the mayor is proposing. I think for a lot of people the convention center expansion is very abstract. It's about expanding our economy and it is a good investment but not a lot of us go to the convention center or looking at those numbers of how much revenue is coming to the city because we are bringing in new conventions are not bringing in new conventions. Every one of us sees homeless people on the street. I think every single person in San Diego understands the seriousness of that problem in we also drive on our roads and see how poor our infrastructure is. I think for a lot of people they might understand that the convention center expansion is an investment but fixing our roads and ending homelessness our investments also and creating a safe and livable and welcoming city. AK: I think another thing you are seeing is these two things are the immediate concern. Once we get past these and it starts to be about what goes on the 2018 ballot, you will see a flood of people talking about different things that should be on the table. I talk to a group of labor progressive environmental activists last week who said that there already having discussions and they are in their planning phases to do about measure that would raise taxes and just spend it on affordable housing programs and homeless services. That is what the homeless advocate pulled on. Those two ideas could at some point come together. They could be separate. So I think one I thing that you are seeing is that San Diego has a lower hotel tax rate than most of the cities with which it competes and as long as that is a case, that is the low hanging fruit. There's a feeding frenzy going on about who gets that. Each of them because they wanted to have a vested interest in the other side. MS: A few seconds left. The mayor is in the middle of all of this. AB: He is one year into a second term so I think that he has plenty of time to-- figure out other issues and other problems that he wants to solve. I would say this is a big deal in if he is successful, it might be his legacy. If not, he has time to figure it other things on. MS: We will see how all of that goes. That does wrap up another week of stories at the KPBS roundtable. I would like to think my guest Eric Anderson and Andrew Keatts and Andrew Bowen. A reminder all of the stories that we discussed today are available on our website and if you miss any of today's roundtable they are available wherever you get your podcast. I am Mark Sauer. Thank you for joining us today on the roundtable.

SOCCERCITY & CONVENTION CENTER: SAN DIEGO'S BIG BUDGET WEEK

The Story

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The passage of the 2017-2018 budget by the San Diego City Council on Monday was not simply a matter of voting on next year's expenses and revenues.

There was more at stake.

The City Council did approve the mayor’s budget 8-1, but it did not include the $5 million in funding needed to hold a special election in November. That election was to include two measures: the SoccerCity development on the Qualcomm stadium site and a hike in the tourism tax to expand the convention center, mitigate homelessness and repair roads and other infrastructure.

The mayor said he would veto this decision, causing some to ask whether it is possible to veto something that is not there. The council will need six votes to override the veto of the non-existent clause.

On Tuesday, an independent assessor hired by the city pegged the value of the Qualcomm site and Chargers Park at $110 million, including demolition. This was a surprise, as an earlier assessment put its value at between negative $25 million and $50 million.

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The Discussion

—Will the new appraisal change the calculus for council members who voted no on the special election when the value was thought to be much lower?

—Will FS Investors back out with their SoccerCity project because of the increased valuation of the land?

—Might SDSU return to negotiations on the stadium and other land issues?

—Why does San Diego have such a difficult time getting big projects approved?

—Has the mayor done all that he could to sell these developments to the City Council and the public?

Related: San Diego City Council Kills Funding For SoccerCity, Convention Center Expansion Special Election

Related: Bombshell Appraisal Puts Qualcomm Stadium Land at $110 Million as Is