Chargers Stadium Measure Faces Opposition
August 23, 2016 1:24 p.m.
Chargers Stadium Measure Faces Opposition
Erik Anderson, reporter, KPBS News
Related Story: Chargers Stadium Measure Faces Opposition
Our top story, San Diego's independent budget analyst is out with an examination of the Chargers stadium ballot measure. It is the same analysis that voters will be seeing in their sample ballot describing Measure C, The Chargers proposal to build a $1.8 billion football stadium and convention center expansion in Downtown San Diego. The analysis is one of three recent examinations of the stadium financing plan and it is the most favorable. It is still finding flaws and unanswered questions in the measure. Joining me is Erik Anderson.
The centerpiece of the Chargers plan is to raise San Diego's Hotel tax 12.5% to 16.5% to generate enough money for bond offerings to raise capital. What does the independent budget analyst say about that?
The independent budget analyst did say that that was likely enough revenue. They could project enough revenue to sell the amount of bonds that they would need to start construction of that project. They think they could probably generate somewhere in the neighborhood of one point of $1.3 billion depending on how they figure in what the cost of those bonds going to be.
The IBA says the costs assumed in the Chargers plan may be too low. Which costs are those?
When they say they have enough to sell the bonds to raise the initial capital, they are not saying that they have enough to repay those bonds because those are some of the questions that are out there. They are not sure exactly what the cost of the stadium project is. They are not sure what the rate of return on those bonds are going to be or what the cost is going to be. Thereby how much the city will have to pay back on a year-to-year basis. They are not sure exactly what the economy is going to do and how that might effect the city's ability to raise the money they need to pay back the bonds from the hotel taxes. It is not clear to the budget analyst in their analysis of the situation where that money comes from if there is a shortfall.
We were talking about costs not included perhaps in this measure and costs of how to clear parking spaces, on how to do environmental impact reports on the various ancillary spots around this proposed stadium. That is not really factored into. That is something the IBA talks about in this analysis as well.
It says that the Chargers have set aside $200 million to buy the land necessary but there is no guarantee that that is what the cost of that land will be. Remediation they talk about is the fact that it is an industrial area. There may be chemicals that have bleached -- leeched into the ground that need to be removed at a much higher cost if there are hazardous chemicals. It is not clear whether that is going to be an added cost. Preserving the parking for the Padres, they would eliminate a lot of parking spaces that the Padres currently rely on. That might require them to build a parking structure nearby and the cost for that is not outlined. I think the question that the independent budget analyst raises, and they are relatively short, is that they have a lot of questions that are unanswered and it could impact the finances.
It is relatively short cause this is what voters will be seeing in their sample ballot when they look for an analysis of the costs and the impacts of this particular proposal. For all its weariness, the IBA analysis is more upbeat than one issued this week by the San Diego taxpayers Association work can you give us their major findings about the Chargers stadium plan?
They thought it was not going to be a positive thing for the city. They had questions about the finances. The Chargers said members of the taxpayers Association board members of this note to the downtown stadium group. They have an agenda. They haven't asked to grind. They disputed the numbers and they said that the conclusions were rubbish. That is the word that Fred Maas used. It is a third grade arithmetic homework assignment. They were not very pleased with the findings.
There was also an earlier analysis done by the city's tourist industry. With their concerns?
What they did, was commissioned by the various people who will be affected mostly, the tourism marketing district like hotel owners in San Diego. They asked a consultant in Chicago who had a chance to speak with to look at how this new convention space might impact the existing convention center and how it might work and whether it will generate the hotel rooms at the Chargers are saying. Their conclusion was that hotel planners would probably see the new convention space inside the stadium as a competing venue for the downtown convention center that is currently existing, not in addition. It would not generate nearly the extra room nights at the Chargers are promising. If they could not justify spending $67 million a year in bond repayment when it is only going to raise an additional $2.5 million a year in revenue tax increases. That was their concern. Again, The Chargers were upset with that analysis. They don't think it was fair because it was commissioned by the folks who are going to be directly affected by the hotel tax increase.
Three analyses and the voters will decide on November 8. I have been speaking with Erik Anderson. Thank you.