Yesterday I got a lot of questions from newspaper and radio reporters (including one who introduced himself as from the “San Diego Union-Tribune” — I congratulated him profusely on the restoration of their rightful name) about the new $647 million Chargers stadium subsidy plan and whether there were any hidden risks for the city. I mostly replied that $647 million is a plenty big risk in itself, but now the Voice of San Diego thinks it’s found as much as another $352 million in additional subsidies:
- $217 million to $327 million in future operations and maintenance costs, based on estimates that running Qualcomm Stadium costs the city between $7.2 million and $10.9 million a year. “It’s a significant issue,” Erik Bruvold of the National University System Institute for Policy Research told VoSD. “That’s another general fund subsidy.”
- $20 million to $25 million for a new park on the stadium site, which would be paid for with “potentially state and federal funding,” according to Citizens Stadium Advisory Group member Mary Lydon.
Now, there’s no doubt that maintenance and operations costs are a huge hidden cost of stadiums — and new ones, with more moving parts that can break, typically run even more to maintain. The question now is, is this something the city would really be on the hook for, on top of that initial $647 million in cash and land? Let’s look at the proposal itself:
To pay for the proposed stadium, parking, stadium-related infrastructure and operations and maintenance, CSAG’s financing plan includes 60 acres of land from the City of San Diego valued at $180 million, and more than a dozen funding sources that exceed $1.4 billion
So the implication there is that future operations and maintenance costs would be covered by the initial $1.4 billion, which includes the $647 million from the city and the rest from the team (assuming you count things like NFL funding and naming-rights revenue as “from the team”).
The City, County and Chargers should share the costs of operations and maintenance. These costs will rise over time so payments should be indexed to inflation.
Now, “share” is an incredibly nebulous word — 90% team and 10% city is a share, and so is 10% team and 90% city. What appears to be going on is that the task force has estimated $1.154 billion as the cost of a stadium plus related infrastructure, coming up with $1.4 billion in revenues, and hoping that the difference will be enough to fund future operations and maintenance costs. (Here “share” would mean “paid for out of the big pot of money that both the Chargers and the city are throwing cash into.”) That’s certainly conceivable — the remainder would be $246 million, which is toward the low end of VoSD’s estimates — but it’s more than a bit worrisome that the task force report never actually spells out how much it’s actually budgeting for maintenance and operations, not to mention that elsewhere it proposes using a chunk of this excess money to pay off Qualcomm’s remaining $52 million in debt.
Plus, under the heading of “creating revenue streams to help the City and County recoup capital costs and pay for operations and maintenance,” there are additional subsidies not mentioned in the first $657 million, including $116 million for an “Enhanced Infrastructure Financing District (a TIF by any other name) and $40 million in hotel taxes from a potential new hotel. And again, the task force appears to be double-dipping here, as elsewhere this money is designated for infrastructure for the hotel and other development, not for stadium operations.
So depending on what exactly the plan means — and it’s worth noting that the whole maintenance and operations piece is listed under “Recommended terms for negotiations with the Chargers,” which makes it even less set in stone than the rest of the proposal — we could be looking at anywhere from $647 million to $1.155 billion in public subsidies for this deal. That’s an awfully wide range, and no doubt one reason why NFL commissioner Roger Goodell responded with a “let me get back to you on that” when asked what he thought of the proposal. Though he could also have realistically gone with “Somewhere between $600 million and over a billion dollars in free taxpayer money? Mmm, yeah, that’s why I got into this business.”