San Diego stadium task force proposes throwing $647m at Chargers to see if that’ll make them stay

Saving the best, or at least the most complex, for last this morning: The San Diego Citizens Stadium Advisory Group, which is accurately named so long as your definition of “citizens” is “CEOs,” announced its Chargers stadium funding plan yesterday. And it looks like this:

CFT2Dn7VEAAyI4DOh, sorry, that’s not the financial plan — that’s the rendering of what the stadium would look like, as lit by an unearthly glow and permanent fireworks. What you wanted to see was this:

CFUHu8OUkAAZP7xThat’s slightly less misleading than the stadium rendering, but it still has some problems. First off, the math-inclined will note that the numbers on the left only add up to $1.24 billion, while the bar on the right claims $1.4 billion in funding. Let’s look at the actual plan, shall we, and try to figure this out?

The actual breakdown, according to the chart on page 12:

  • Cash from Chargers owners: $300m
  • NFL G-4 fund: $200m
  • Present value of $7m in annual payments from city: $121m
  • Present value of $7m in annual payments from county: $121m
  • Half of proceeds from personal seat licenses (the Chargers would get the other half): $60m
  • Present value of $10m in annual rent payments from Chargers: $173m
  • Present value of $1.25m in annual rent payments from SDSU: $21.6m
  • Present value of $1.25m in annual rent payments from bowl games: $21.6m
  • Proceeds from sale of 75 acres of city land: $225m
  • Present value of $4.75m in annual ticket taxes: $84.7m
  • Present value of $1.5m in annual parking fees: $26m
  • “Additional funding sources stadium is expected to generate”: $50m

In addition, the city of San Diego would kick in $180 million worth of free city-owned land for the stadium itself.

So what does this add up to in actual public cost? The $242 million in cash from the city’s and county’s general funds, obviously, which no one is saying how they’d be repaid. (The group’s report oddly states that the plan “does not include any new City general fund dollars,” but I think that just means “it does not require any new taxes to feed the general fund, since those would require a public vote, so we’ll just find $7 million a year of something else to cut.”) Plus the $405 million worth of public land that would be thrown into the pot, part of it sold off with all the proceeds given to the Chargers, part of just handed over for free for the stadium.

That puts us at a whopping $647 million worth of subsidies that San Diego’s business leaders are proposing to keep Chargers owner Dean Spanos from heading up the road to Carson — and that’s before we even get into the question of whether the new San Diego stadium would be exempt from property taxes, something that isn’t discussed in the report. (No, the city-owned land doesn’t pay property taxes now, but if the city sold it to a private developer, it very well could in the future.) That’s an awful lot of money to spend when you don’t even know if the other option on the table is a bluff, and makes one wonder if San Diego might do better by letting the Chargers leave, developing the current stadium land and keeping the proceeds for its general fund, and maybe even setting aside a hundred million dollars or so for gas vouchers so Chargers fans don’t mind driving a couple of hours each way on Sundays to see their team play.

U-T San Diego, naturally, says the CSAG report “scores” because a stadium “appears doable now.” And all it took was $647 million. See, some problems can be solved by throwing money at them!

21 comments on “San Diego stadium task force proposes throwing $647m at Chargers to see if that’ll make them stay

  1. Oof. This group is playin hardball with the Chargers. This proposal probably has juuuuust enough public $ to make the Chargers hate it and the other 31 NFL owners support it. I’d imagine that Chargers’ stadium guy Mark Fabiani is furiously preparing a rebuttal saying that this plan sucks.

  2. A few things:

    1. The Chargers said they would only put in 200 million.
    2. The Chargers currently pay no rent (in fact the city pays them to play here!), but would pay 1 million per game (home games I assume) under this agreement.
    3. SDSU pays no rent now (from voice of san diego), and the city gets 1 dollar per ticket sold (100,000 dollar value last year).
    4. 75 Acres was chosen to avoid a public vote, which would be required if they were selling of 80 acres or more.
    5. There will a Chargers surcharge of 5 dollars per ticket, and I think 2 dollars for parking. Neither of these exist today.
    6. I believe I heard on local radio that the Chargers are responsible for paying back the 200 million to the NFL.

    The Chargers current sweetheart deal includes them paying “rent” by using ticket revenue + parking revenue + concessions revenue against the rent, which is why the city ends up owing them.

    The city pays something like 14+ million a year for Qualcomm – 3 of it due to a disabled access lawsuit, 4 due to payback for renovations done in the 90’s (oh which by the way they still pay for another 10 years or so, regardless of what stadium is in Mission Valley). The disabled access lawsuit payout won’t go away if Qualcomm is continued to be used if the Chargers leave. Oh and I don’t see that renovation bill above. 4 million dollars… no big deal.

    Instead of the City paying the bill as they do now they split it up between the county and the city. It’s a ploy though, because the first thing everyone got attracted to was “OH THE CITY PAYS LESS WITH A NEW STADIUM THAN WITH QUALCOMM!”. Wrong.

    The city’s general fund (as well as the county’s) is propped up by… the taxpayer. So while no new taxes are required they have to find a way to make up this money. Substitution effect tells us that stadium “profits” aren’t going to pay for it.

  3. Matt Calkins in the UT – he has a reasonable summary that shows the points that could blow this thing up:

  4. The Chargers would pay rent under the new agreement, but that would go toward stadium costs, so it’s still not a benefit to the city.

    And G-4 money has to be “repaid,” yes, but a lot of that is with money that teams would normally have to pay to the NFL via revenue sharing anyway, so it’s really more a grant than a loan.

  5. One of the biggest pieces missing from the plan is a way to pay for the O&M of the stadium once you take the football rents off the top (the slide for some reason doesn’t highlight the rent from the Aztecs and the Bowlgames). Right now the current facility operates at approximately an annual 10 million deficit (at least as best as can be figured out). The CSAG plan has $200 million over what they need. So it suggests a deficit of about $100 million for O&M. Supporters will claim they will make profits of birthday parties, stadium tours and monster truck rallies. hmmm.. A full analysis coming out late Tuesday from NUSIPR on it.

  6. @Neil

    Dean Spanos… I mean his kids, who are taking over control of the team (according to a report) will certainly hate the rent and the up front cost they have to kick in.

    We got to see our first display of pseudo-truths in the no new taxes idea. I hope people here are smart enough to realize that the 7 million for the county and city doesn’t arrive purely by magic. Reading the comments in the UT article are funny – these people are so blinded by “no new taxes”.

  7. @ Neil

    You want me to post it it’s entirety? I clicked on a link from voice of san diego and it opened right up.

  8. CSAG has no legal standing and this proposal is a joke. The claims of “no new taxes” and “no public vote required” literally made me LOL.

    Our convention center expansion group claimed their plan didn’t require a vote and it was easily killed in court. CTE must be contagious because these Chargers fans are brain dead.

  9. SD: No, no need to repost. (I respect their copyright, even if paywalling current articles is a pain.) I can find it, thanks.

    And agreed that the Spanoses might well dislike this deal. It has all the makings of a lose-lose.

  10. I don’t see any mention of naming rights? Which is probably good for $100m, at least. Is the assumption that naming rights counts towards team’s contribution? Seems to be me that should be a neutral revenue source, neither team or jurisdiction should be able to claim that.

  11. “It has all the makings of a lose-lose.”

    Not if it means the Chargers leave SD. Medium and long term the total utility in SD sans Chargers could easily be >> the total utility in SD avec Chargers.

  12. Sasha, naming rights are going to the Chargers under this plan. Whether they apply that to their portion of the plan is up to them.

  13. Chargers and Raiders closed escrow on the Carson land and Dean Spanos is retiring. Carson is looking legitimate.

  14. Dean isn’t retiring. He’s still president of the board and will be focusing on the stadium hunt exclusively. The sons are just running the day to day of football and business ops. And the Chargers and Raiders closed escrow on 11 acres in Carson, if I’m not mistaken. It’s the city of Carson that gained control of the bulk 157 acres.

  15. @ Dan

    Dean is retiring from day to day operations and he is chairman of the board, not president. A COTB is an irrelevant position in a privately held company like the Chargers. He is an owner now, that’s it.

  16. @Dan

    The Chargers and Raiders purchased the entire 168 acres and then transferred ownership and all liability of the 157 former land fill acres to the JPA created by the city of Carson.

  17. Todd: Chargers get the naming rights:

    “The advisory group estimates the team could make $135 million to $165 million in naming rights over 20 years, plus other revenue totaling $25 million a year.”

  18. Voice of San Diego put the cost actually at close to $1 billion instead of just $674 million

  19. No cars!! Sometimes the drawers have a few cars, but this one has none.