Last-Minute Budget Deal Opens Door For Chargers Stadium Downtown

The Chargers are getting closer to their goal of building a new stadium downtown. A bill removing the cap on downtown redevelopment spending was added to the state budget by local Assemblyman Nathan Fletcher. We discuss why this action removes the need for a public vote on a Chargers stadium. And, we talk about the additional hurdles the team faces in its efforts to get the downtown stadium proposal off the ground.

Guests

Scott Lewis, chief executive officer of voiceofsandiego.org.

Ricky Young, watchdog editor for the San Diego Union-Tribune.

JW August, managing editor for 10 News.

Read Transcript

GLORIA PENNER: I'm Gloria Penner, coming up on the Editors' Roundtable, does this secret legislative maneuver deprive voter was a say in building a new publicly funded stadium and the San Diego city's school district is under pressure from critics, is spending out of line and do we need a restructured school board? Plus, can prop 19 and legalized marijuana reduce Mexican drug cartel violence? All that's next on the Editors' Roundtable, first the news.

I'm Gloria Penner, and I'm joined guy the editors at the Roundtable these days in San Diego. Today, we'll look into how a downtown Chargers stadium could be built with public money because of the surprise last minute action by state law makers on City San Diego business, and we'll examine criticisms of the San Diego school board, and whether big changes are needed there. Plus, if marijuana is legalized in California, will drug cartel power and violence decrease in Mexico? The editors with me today are Scott Lewis, CEO of voice of San Diego.org. Scott, it's good to have you here, and I love seeing pictures of your new baby.

SCOTT LEWIS: You love getting taken in those photos, I guess.

[LAUGHING]

GLORIA PENNER: Ricky young is with us watchdog editor for the UT, it's good to see you again, Ricky, it's been a while.

LEF3: Good morning, Gloria. It's nice to be here.

GLORIA PENNER: Good. And JW August, managing editor for 10 News. Always a pleasure to have you, sitting across the roundtable from you.

JW AUGUST: Top of the morning, and Gloria, I never inhaled.

GLORIA PENNER: I'm glad to hear that because we're gonna hear with the show.

We're taking callers at 1-888-895-5727. The state was three months late on passing a budget, and the delay caused headaches and worry as the state ran out of money, but somehow, state law make ares managed to squeeze in a bill in those last moments before adjourning that had little or nothing to do with the State of California, and lots to do with a chargers stadium proposed for the east village downtown. So Scott, first of all, what was in that bail?

SCOTT LEWIS: Well, it basically relieves the cap on redevelopment downtown, in downtown San Diego, and you have to understand redevelopment quickly to happened what happened. What redevelopment -- if you get a property tax bill as many did this month in the bail, there accompanies it, a chart of where all your property tax goes. And it's, you know, $38 billion or something, and ten percent of it, 10.8 percent or 11 percent goes to redevelopment efforts in the county. And obviously, the biggest one but certainly not the only one is in downtown San Diego, and what this basically means, when you pay your property taxes, there's a formula of where that all goes, from the state to the county to the school districts. And this is it a redirection of where that goes, temporarily, supposedly, in order to enrich a neighborhood, and they do that by ticking that money and literally giving it to developers to help them build hotels and condos and all kinds of things, and the idea being that that then creates so much economic growth that it spins off taxes for etch else to benefit from.

GLORIA PENNER: I gotta stop you there. Everyone else to benefit from? Would we all benefit from the extra taxes that are spun off if there's redevelopment.

SCOTT LEWIS: That's an investment, that's the case for the investment, that it creates a sales tax revenue from the hotels and the shopping centers and everything. The hotel tax revenue that comes out of it. It's the do you happen town money tree as I call it. It spreads, it blossoms everywhere. What happened on the dead of night on Thursday last week was the limit on downtown. This was scheduled to end for downtown, it was schooled to be done. And that was blown apart, and largely because Nathan Fletcher, a Republican, had some leverage.

GLORIA PENNER: Assembly member.

SCOTT LEWIS: Right. They needed his votes to pass the California budget, he says, what can I get for this vote and got the bill done.

GLORIA PENNER: And that was it. What was his motivation for doing this.

SCOTT LEWIS: Well, he calls it a gift to San Diego.

[LAUGHING]

SCOTT LEWIS: The building industry calls it a gift to San Diego, the mayor calls it a gift to San Diego, and they even say this is a gift of other people property taxes to San Diego, and which San Diego can then invest in those things but I think a lot of red debts of San Diego are wondering how it's possible to have a system where you're begging for money to protect bake services in the rest of the 73, but yet can shower development and investment on downtown.

GLORIA PENNER: Let me just ask one more question, then we already have a caller or we did. Lori Saldaña called in, and there she is. Lori, hold on for a second. I just want to go around the table for the editors. Now, JW, it was understood that the people of San Diego would get to vote on a downtown stadium, and just leaping ahead from what Scott said, there are those who believe that lifting the cap on downtown redevelopment moneys would open the doors for a chargers stadium. So the question is, has that vote now been preempted by what the state legislatures did approximate.

JW AUGUST: Well, the mayor says it didn't. But after the mayor and whoever else concocted up this little scheme, I feel like a miner in Chile, under ground, like the city of San Diego might as well joint us miners of they kept us in the dark about this deal. The good old white boys downtown in the chamber building decided what's best for the citizens. Don't let the citizens know about this. They're not smart enough to figure it out. We'll take care of business. It stinks.

GLORIA PENNER: Scott said dead of nit, and you're talking about secret deals and our number is 1-888-895-5727. Is it as sinister as it sounds Ricky young?

JW AUGUST: Thank you for asking, Gloria. I don't take position on things but I do tend to want things to be fair and balanced when you talk with the news. And there's a couple of things I think it's important to say for context, first of all, the discussion here has been how there's this giant give away to developers or the chargers or whatever. The idea of a tax increment is that the development you're spurring creates additional taxes, and that's the money that goes to the development. So it's sort of a synergy thing that's supposed to go on. Just to explain that. You're not taking tax -- you're supposedly not taking taxes that would be there anyway and giving it to this development. You are taking the taxes that this development spurs and using that toward the development. It's sort of a --

GLORIA PENNER: One at a time. We'll start with JW.

JW AUGUST: Wait, wait. If I could just -- I know you guys want to jump in and call it sinister. But I just wanted to explain that about the taxes and how they work. And supposedly, you know, we can say it's horrible and it's in the dead of night and blah blah blah, but the fact is, it was very efficient. And I remember the voice of San Diego criticizing the fact that they were spending $500,000 in 18 months doing a study to say that downtown was blighted, which is a required finding before you can extend the cap. And here we save $500,000, or I guess -- they've spent some of it, but I guess you could say this is government actually working efficiently. We criticize the state when they're a hundred days overdue passing the budget, and it takes a long time, and here's something that happened fast.

GLORIA PENNER: Let me ask you a little bit about that, Ricky, before we let others in on this. $500,000 was supposed to be spent on an expert that was going to analyze downtown to find out not, I guess, whether it's blighted. But how much blight is there; is that correct?

RICKY YOUNG: Right and Andrew Donahue from the voice of San Diego said he could walk around downtown and tell you in five minutes. So that was a total waste of $500,000.

GLORIA PENNER: Well the question is then, so the declaration that Downtown was blighted and the cap had to be lifted now was the decision of one person, Nathan Fletcher.

PLAINTIFF: No, it was a decision of the legislature.

GLORIA PENNER: Oh, the legislature decided the city of San Diego.

RICKY YOUNG: No, they decided to loose the cap.

JW AUGUST: Why would a Republican who has nothing to do with downtown do this? What about the city councilman who represents that district? Wasn't he in this?

RICKY YOUNG: I don't know why he at any time think it, you tell me.

JW AUGUST: I don't think he thought about it.

GLORIA PENNER: You're talking about Kevin foster.

JW AUGUST: I think Nathan was fed this.

RICKY YOUNG: According to the mayor's office, Nathan approached them.

JW AUGUST: I can't believe the mayor anymore. Sorry. Not after this deal.

GLORIA PENNER: Mayor Jerry Sanders has never hid his enthusiasm for getting a stadium built for downtown. How involved was he in this, Scott in.

SCOTT LEWIS: Well, first of all, Ricky's right, the point is, though, this was scheduled to stop and start. The downtown money tree blossoms were supposed to be spreading around the rest of the government agencies that benefit from property tax revenue, what this does is continue what he described, so I think that's an important bit of cop text. And I'm glad Ricky doesn't take stances on things.

GLORIA PENNER: Well, I have to say, this is an opinion show.

SCOTT LEWIS: No, right.

GLORIA PENNER: And the three of you were brought on for your opinions.

SCOTT LEWIS: Well, never mind, that's fine. The stadium to me is a bit of a red herring. It's, yes, this could make it possible for a stadium, but as the building lobbyists that were in front of City Council imploring them not to scream too loudly them getting steam rolled in this process, they made a point, there's a lot of things that are going to happen because of these dollars that don't have to do with the stadium. And it has to do with continuing the type of construction that downtown has been doing. On the one hand, there's all kinds of public projects like the library and others, but on the other hand, it is -- it is a subsidy to develop condos and hotels to make it worth their bottom line to invest in these projects. And so that was what it was about. That's why everybody's so enthusiastic about it.

GLORIA PENNER: Let's bring Lori Saldaña in. Lori of course is an assembly member, and she was also part of what went on in Sacramento last week. So let's get her take on it. Lori Saldaña thank you for joining us. Go ahead, please.

NEW SPEAKER: Good morning, well, I wanted to point out that this bill was never analyzed by the committee that I have chaired, housing and community development committee. We never had a policy analysis done, and I want San Diegans to know, as a result of this stand alone bill, San Diegans just lost ten percent of the tax increment, that current law should go in a redevelopment law to affordable housing solutions. San Diego is required to pay 20 percent of house increment to affordable housing based on this new law, other communities pay 30 percent. So at a time, the counsel can't even provide a homeless shelter, we now have a law that will be signed soon, I predict, that will lose ten percent based on current redevelopment programs around the state. And one more point that's very important, we also will not pay for schools downtown, because it can only go to existing schools, we have more condos, more homes, more families, and those redevelopment funds that only go to schools can only go to schools in a restricted area, and we only have one school left downtown. Washington Elementary. So schools lose out as well on this plan.

GLORIA PENNER: Is there any recourse from those in the assembly or even the state senate who are concerned about this part?

NEW SPEAKER: The bill is done. Session is over. It is on the Governor's desk. Of the only recourse that anyone has to restore funding to equal values to other communities for affordable housing and services and for our schools is to challenge this. And it also fails the single subject test. There were two other -- there was the Wilson act which deals with protecting farmlands and rural communities and another city, Richmond has its redevelopment changes rolled into this bill, so it fails the single subject requirement. That's why I didn't vote on this. I'm asking for a post facto analysis and I believe it can be challenged in the Courts.

GLORIA PENNER: Thank you very much, Lori Saldaña. Scott?

SCOTT LEWIS: I think that brings up an interesting point, the city was in negotiations about this whole thing, this was a process that was scheduled to take over a year long. One that city councilman Kevin Falkner said was needed to be done, and they were negotiating with the county, and this deal happens without the county's knowledge, and I mean, imagine that. Imagine if you're in negotiations with somebody, and you find out that the very thing you're talking about has been taken care of by a group you didn't even know could take care of it or would take care of it, in the middle of the night, and week up to the news. I think there are a lot -- not the at least of which are the City Council, and leaders of the county.

GLORIA PENNER: We'll pick up on that issue and we'll take your calls as soon as we come back. We are talking about state action that has -- if the governor signs it, that has lifted a cap on downtown property taxes, the amount that can be spent on redevelopment funds. Of and what this means to the city of San Diego. And to the possibility of a new chargers stadium downtown. We'd like to hear from you. 1-888-895-5727. We'll be back right after this break, this is the Editors' Roundtable I'm Gloria Penner.

This is the Editors' Roundtable, I'm Gloria Penner, and we're talking about downtown San Diego, we're talking about the State of California, getting involve would in city of San Diego business. We heard from Lori Saldaña, assembly person from the San Diego area who basically said that this bill was never analyzed and that there might be some regress, I guess, she's implying that, anyway, about this bill, and that's what we're talking about, and we're gonna take your calls at 1-888-895-5727. At the round table, today is J0W August from ten news, and Scott Lewis from Voice of San Diego, and Ricky Young from the UT. And you, of course. Let's start right out with a phone call, and this one is from Marcy in San Diego. Marcy you're on with the editors, welcome. Hello, Marcy.

NEW SPEAKER: Can you hear me?

GLORIA PENNER: Now I do. Go ahead.

NEW SPEAKER: Okay, there's another problem with the extension of this redevelopment agency, and that is the city's general fund is about one-third composed of property taxes. But a redevelopment area, none of their property taxes go back to the state. They all -- or to the general fund. They all go just to the redevelopment area. So downtown is using city services and infrastructure but none of their property taxes are going into our general fund to pay for that and I don't like that.

GLORIA PENNER: Thank you Marcy. With all the public concern, Ricky, about not having enough money to pay for police and firefighters, and you heard Marcy saying that none of that money's gonna be added to the general fund, what -- how does one respond to the people of San Diego when you say, well, this money is gonna end up possibly footing some of the cost of a downtown stadium, but city services are not going to be helped by it?

RICKY YOUNG: Well, this is a study that, by the city's independent budget analyst, that indicated some $300 million will be taken out of the city's general fund by lifting the cap. At the same time, I think she indicated an unspecified amount of money would be brought in by economic development that might more than wash that away. So you know, there's two sides to it.

JW AUGUST:

SCOTT LEWIS: That's the nature of an investment. Of it is an investment. And how does it pay off? And I think, you know, when you talk about projects down town like the convention center or the library, or even the stadium, they're gonna say things like, well, this money can't be used for city services it can only be used to build things. It can only be used to build this thing in particular, because this is part of our plan. This is the point at which that decision with what that money can only be used for is made. And that's why this is so consequential. You'll have city official going around downtown saying this isn't a wig deal. But this is largely being taken out of our hands right now, and we were supposed to have a year to supposedly decide whether that's what we wanted to do.

GLORIA PENNER: Before I turn back to you, Ricky, so does this mean that the voters will not have a say on building a stadium or using public money?

SCOTT LEWIS: From what we can tell, it's not required that they have a say. I think it would be very difficult for them to politically pull off building a stadium with $500 million of taxpayer funds without the voters weighing in. But it's not guaranteed.

GLORIA PENNER: All right. But legally, because the state has lifted the cap, I mean, the voters really don't have a say.

SCOTT LEWIS: It's just -- it is unclear but it looks like it's not guaranteed.

GLORIA PENNER: Okay. Ricky.

RICKY YOUNG: Well, there is -- I don't believe that's an election required for this if you're using if only redevelopment money. That's why, for instance, the library which is using a bunch of redevelopment money did not require a vote of the people. But the mayor has said that there would be an election. I did want to clarify one thing as we go on talking about this. We have framed this entirely as a discussion of the -- you know, a Chargers stadium, because, of course, that's the most newsworthy thing. So we're appropriately talking about it. But this rifts the cap for all kinds of downtown projects. And there's the residents who live downtown want some of these fire stations and traffic lights and things to be built. So they're supportive of this. And there's to the a mention in the bill of a chargers stadium. Now, that may be hiding the ball or whatever, but what they say it's about is down up to projects and jobs. They don't -- the bill does not specify that this will be a chargers stadium.

GLORIA PENNER: What about Lori Saldaña? She said a lot of downtown residents are seniors or would like to be seniors, seniors want to move downtown, but it's a question of affordable housing, and she said she's worried it's gonna cut the public subsidy for affordable housing by ten percent.

RICKY YOUNG: I think when they did is count the sky boxes as affordable housing.

GLORIA PENNER: You've gotta be kidding.

RICKY YOUNG: Ding, ding, ding.

GLORIA PENNER: JW.

JW AUGUST: They're waving the flag of more jobs. Which they love to do. Let me see, what projects are going to -- the library. Let's see. Oh, that's already paid for, okay. And there will be jobs, but we don't need this for the library of oh, wait a minute, the convention center expansion? How about that one, maybe that's the one. What other jobs is it gonna give? I mean they're selling us pie in the sky. And as Ricky said, they don't mention the charmers stadium, but this is all about the Chargers stadium.

GLORIA PENNER: Well, the word jobs is the key word these days.

JW AUGUST: Oh, of course.

GLORIA PENNER: We have so many callers and before we end this segment, let's hear from a few of them am we'll start with frank in San Diego. Frank, I'm sorry to keep you witting. Go ahead, please.

NEW SPEAKER: Hi, what I wanted to bring up, we talk about blighted areas we all know even a blighted area years ago was set up with the city of Coronado to get $0.60 on a dollar. We're talking about blighted downtown when you've got all these condos being built and they're half empty. So I guess my question is, the city development corporation currently owes the city nearly $300 million, so now that we're all arguing about Proposition D, a hundred million a year would potentially be brought into the city. Maybe now that they've got the cap lifted maybe the center city development corporation will not ask the city to extinguish and forgive the 300 million but actually begin paying the city back so that we can start continuing to run these vital services that are needed. The downtown gets a lot of services but they pay for none it. Like you said they can build fire stations and police stations and all these other things but they don't pay for the personnel in them so consequently they can get built, and they'll be somewhat like a library, they'll never be able to put anything inside them. Thank you.

GLORIA PENNER: Frank, that was really a very interesting point that you're making that the center city development corporation really does owe money to the city of San Diego. Donna fry's within after that money for years, now if the cap's lifted, maybe they're gonna have some bucks they can throw in the direction of the city of San Diego, Scott any chance of that.

SCOTT LEWIS: I don't believe so. The power brokers that support this would -- they want that money invested in building downtown, in building projects and subsidizing the project. There was a strong possibility that was Frank Declerck from the firefighters' union who's been agitated about this, and I think it shows a break in the labor ranks and he's part of the labor council. And the labor council supports this because of the investment in construction jobs and in the jobs that this produces. And I really do think it does produce those jobs but it really funny is TO WATCH republicans like Nate sanders like Nathan Fletcher be talking about this when their national party is revolted by this, and that's why Fletcher saw so much reaction to his bill from conservative assembly members, part of his party.

GLORIA PENNER: We have gone way over time on this, and we do have two more segments, Arturo called in, Reggie called in, those are some of the names I remember from my call screen. And I suggest you go to kpbs.org/news/editors-roundtable. We'll be taking a look at it, and I'm sure you will get some response. And let's move on.