Chargers owner on $650m+ stadium subsidy offer: “Haven’t read it yet, is it good?”

If you’ve read the San Diego Citizens’ Stadium Advisory Group’s proposal for a new Chargers stadium, that puts you one up on Chargers owner Dean Spanos, who apparently hasn’t had time to actually read about how much money the task force is offering to throw at him, because it’s 42 pages and he’s busy, guys:

“I have not seen the actual report,” Chargers chairman Dean Spanos said Wednesday before departing the league’s two-day owners meetings here. “I’m going back today, and I’m going to look at it this afternoon.”…

“I think they submitted some sort of framework of a potential financing plan,” Spanos said of CSAG. “That’s what we’re going to take a look at this week … I’ve always said, and I maintain the fact we want to stay in San Diego. We’re committed to keep trying to see if there is a viable solution. It has now come down to a financing plan, so I am anxious to see what the city puts forth.”

Now, there are several possible explanations here. One is that Spanos was just so busy with the NFL owners meetings (new extra point rules, everybody!) that he didn’t have time to read anything. Another is that he’s read it and still has too many questions — about all those details “to be negotiated,” perhaps — that he doesn’t want to comment just yet. Or he’s waiting to talk to financial people who can tell him exactly how much money he’d get out of the deal. Or he’s sick of this whole thing and wants his sons to be the ones to answer questions from now on.

Whichever it is, it’s slightly weird for the owner of an NFL team isn’t responding to an offer of possibly close to a billion dollars in subsidies that he’s been waiting on for months. But not any weirder than an NFL owner not picking up the phone to listen to stadium subsidy offers. This whole L.A. move threat game is all a complex stew of gamesmanship and personal idiosyncrasies, so it’s probably best not to read too much into anything, at least not until Spanos has decided whether the in-flight movie is more interesting than the stadium proposal that could determine the fate of his team and his bank balance.

San Diego stadium plan could include half billion dollars in hidden subsidies, depending on fine print

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”).

Anything else?

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.”

Chargers and Raiders buy Carson land, NFL presses San Diego to hurry up with its stadium offer

NFL VP for stadium extortion Eric Grubman hasn’t read the whole Citizens Stadium Advisory Group proposal for a San Diego Chargers stadium yet — it’s 42 pages! and there’s good stuff on TV on Tuesdays! — but he knows what he doesn’t like about it:

“I don’t think they made a specific proposal that includes all the key elements of how they get entitled and so forth and so on. So first of all, I haven’t dug into it. And second of all, I don’t know what the timing of that proposal could be.”

What Grubman seems to be saying is “Nice $647 million in land and cash you’re offering, but hurry up and tell us that you can get it all done by next January, or else we could let the team move to Carson, you know.” Not that the NFL would necessarily do that, but threatening to do that they would totally do.

And speaking of Carson, the Chargers and Oakland Raiders owners and the city’s joint powers authority closed on buying the land for a proposed stadium there yesterday, for an undisclosed sum, setting off a round of “Omigod they’re really building a stadium in Carson!” Which this doesn’t necessarily indicate — the city of Carson gets most of the land, and would keep it for some other development if the stadium doesn’t happen — but it does indicate the teams are serious enough to spend a few million dollars in hopes of advancing the three-city stadium game of chicken a bit further.

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!

One San Diego news outlet not asking hard questions about Chargers deal, guess which one!

You want to know the difference between a news site that’s trying to do good hard reporting on a stadium proposal, and one that’s just trying to find ways to get a deal done? Here’s the Voice of San Diego on the imminent San Diego city plan for a new Chargers stadium:

These are 10 big questions we’ll be looking for the task force’s plan to answer… How much public money? … Where’s the public money coming from? … What kind of public money is it? … What’s the city budget on the hook for? … How much development? … Where’s the private money coming from and who’s getting it? … Who’s responsible for the stadium’s upkeep and who gets the money from its events? …What’s in the fine print? … Are we having a vote? When? … What are we giving up by building a stadium?

All excellent questions, and the VoSD piece goes into detail about how they should be answered. Now, what’s the story over at the still-not-yet-rebranded U-T San Diego?

It’s hard to imagine any viable plan that doesn’t involve public money, so it’s a good time to review how taxpayers might be involved.

The UTSD goes on to propose three different funding schemes — hotel and rental car taxes, a broad tax hike on San Diego residents, or kicking back money from property and sales taxes from new development adjacent to a stadium site — without ever once estimating how much any of this would cost or whether it would be worth it to taxpayers. Clearly somebody needs to be reading the Voice of San Diego more.

Bored reporters now just making up own San Diego stadium deals for Chargers

There hasn’t been much public talk in San Diego about building a new Chargers stadium since a local city councilmember threw everything he could think of at the wall to see what would stick, though the mayor’s task force is supposed to announce the “outlines” of a financing plan on May 20. Some reporters, though, can’t wait that long, and so are trying to spin stadium news out of … well, follow the bouncing ball:

Now, it’s possible that Moores’ plan meant the increase in taxes from added hotel stays, not an unconstitutional-without-a-vote increase in hotel tax rates, though there’s no way that that would generate anything close to $1.4 billion. And anyway, it turns out that Moores didn’t actually figure out how to pay for his stadium proposal: U-T San Diego reported last year that “JMI did not ask its consultants for a financing plan, leaving that crucial detail to the city to work out.”

So, San Diego’s convention center expansion funding may be in trouble thanks to a court ruling handed down last year, so that could open the door open (sorry, just can’t stop typing that) for a new Chargers stadium to be funded by some means nobody has figured out yet. I don’t know what the mayor’s task force is going to come out with in eight days, but it’s gotta be more newsworthy than this.

U-T San Diego sold to LA Times, may actually be allowed to do real reporting on Chargers stadium again

Doug Manchester, the hotel baron who bought the San Diego Union-Tribune in 2011 and turned it into UT San Diego, along the way declaring that newspapers “need to be a cheerleader for what’s right and good for the country, such as promoting the new stadium,” has apparently decided to lead cheers in a different way, as he’s selling the paper to the owners of the L.A. Times for a bargain $85 million. (Manchester paid $110 million for the paper when he bought it.)

Clearly, this could have a huge impact on the Chargers stadium debates, if the U-T (which the Times may allow to have its old, non-stupid name back) now does some actual reporting on stadium plans, as the Times has been doing and doing well, instead of whatever the hell has been going on over at Manchester’s paper. Meanwhile, does this mean Tim Sullivan can have his old job back?

Carson mayor says city to shoulder site cleanup costs, admits whole Raiders/Chargers move could be bluff

Hey, check it out, it’s some actual news about the proposed San Diego Chargers/Oakland Raiders stadium in Carson! Carson Mayor Albert Robles sat down with a local TV sports anchor on a local AM radio station, which was written up on the web, and … where was I? Oh, right, how that Carson stadium land deal is actually going to work. First off, the site is perfect for a stadium, says Robles, because it’s totally contaminated!

“Most of that site was a former landfill. It’s contaminated land,” said Robles. “There is a strip, about 11 acres, that was never a landfill.”

And that’s good because nobody was going to use it for anything else, I guess?

“We were on schedule to build a massive retail mixed-use commercial project on that site. That was already planned, whether the NFL was coming or not. That still is our backup plan.”

Okay, no, not that, then.

Anyway, the teams have bought, or are buying, or will buy as soon as it’s clear that they’re not going to get new stadiums in San Diego and Oakland, the land for about $20 million. Then, because buyers of contaminated land are responsible for cleanup costs under California law, they’ll transfer the land to a new Joint Powers Authority, which will pass it along to the Carson Remediation Authority. So the teams would get the land, but the city would get the responsibility for any cleanup — the CRA has reportedly already set aside funds for this, and would be doing it for the commercial project anyway, but it would still be nice to know exactly how much is being spent by the public to clean up private land being bought from private owners for a private project. [UPDATE: The L.A. Times has it: $120 million, of which $50 million in final bonds are expected to be approved by the Carson city council today.]

Robles also gives some hints about the possibility that the whole Carson thing is just a bluff to extract stadium subsidies from Oakland and San Diego, noting that one condition of the stadium deal was that “there would be no stadium built unless the city of Oakland and the city of San Diego were unable to build them a new stadium.” And asked if the whole thing is just a bluff, he answered:

“There is a shred of possibility to what you’re saying is true, we’ll leave it at that,” he said.


Goodell on L.A. stadium plans: Two enter, only one shall leave

For some reason this took a day to filter over to my news feed, but on CBS Morning News on Tuesday, NFL commissioner Roger Goodell said for the first time that only one of the two L.A. stadium plans can succeed:

“We have two proposed, but we have to pick one or the other. It’s not likely we’ll pick both stadiums.”

This isn’t really any surprise — it’s hard enough to picture that there’s enough money from naming rights, personal seat licenses, etc., to get one nearly-$2-billion stadium built, so two would be downright inconceivable. Not to mention that one of the stadiums, the one in Carson, is supposed to be home to two teams (the San Diego Chargers and Oakland Raiders), and there’s no way the NFL is going to let three teams move to L.A. all at once.

This whole L.A. battle, really, is turning into a multi-sided mess, where the various team owners are trying to pit Inglewood and Carson against officials in St. Louis and San Diego and Oakland in competition for who can offer the most lucrative incentives; and where they’re simultaneously all fighting for their fellow owners’ blessing as the team(s) that should get to take over the L.A. market and leave their old ones behind. If any team ends up getting to do that. Or wanting to.

Basically, remember that sports leagues aren’t secret cabals filled with supervillains working in lockstep; they’re more like the Evil League of Evil, simultaneously teaming up and competing with each other. I have no idea who’s going to win this battle right now, but suffice to say that none of the rich guys involved are going to be any less rich at the end of it.

Carson stadium may not have funding, but does have 20-story lightning bolts and Al Davis flame

New Carson stadium porn! And man, is it porny — check this out:

A signature element of the design is a 115- to 120-foot tower that rises through and extends above the main concourse. It would serve as a pedestal for a cauldron that would change depending on the team. When the Chargers play, simulated lightning bolts would swirl behind glass encasing the tower and, if the team were to score a touchdown, a bolt would shoot out of the top. For Raiders games, a flame would burn in the cauldron in honor of legendary team owner Al Davis.

Having trouble picturing this? Well, wonder no more:

The architect who designed this craziness also said he “wanted the building to be iconic and sleek, like a luxury sports car,” then showed it by releasing a rendering of the new stadium with a Porsche sitting in front of it. Presumably because when people picture sparks shooting out of their car, they don’t usually think of it as a good thing?

Anyway, NFL commissioner called the Carson project (and the St. Louis Rams‘ proposed Inglewood project) “viable” with a “great deal of potential to be successful” on Friday, and then his paid employee Dan Hanzus of said this gave the L.A. plans “momentum,” so job well done, crazy lightning renderers! Another day that the media doesn’t spend discussing how exactly anyone is going to pay for these buildings is a happy day for Goodell.