Carson council approves NFL stadium rezoning without public vote, because it can

Yeah, the Carson city council went and done did it:

A local City Council on Tuesday night unanimously voted to clear the path for a proposed $1.7 billion stadium near Los Angeles that could become the shared home to the NFL’s San Diego Chargers and the Oakland Raiders…

Council members could have opted to put the issue before Carson voters, but instead chose to approve it outright themselves as state law allows.

As covered here yesterday, most of the project details still fall into the “reply hazy, ask again later” category; what the Carson council approved yesterday was the ballot language approved earlier in a petition drive, which voters now won’tget to  vote on because the council did it on their behalf. From the looks of it — it’s 309 pages, which makes you wonder how many petitioners actually read the whole thing, let alone city council members — it mostly approves a bunch of rezoning of land targeted for the stadium, plus some “stadiums are cool” language to make clear the intent of the initiative. Everything else will get worked out later, though it’s been promised that the city will only be on the hook for police and traffic costs, which the teams (the San Diego Chargers and Oakland Raiders, under the current plan) would reimburse them for.

There is one cost that isn’t being mentioned, and that’s foregone property taxes: Under the plan, the entire 157-acre site that would be home to the stadium — and parking, and presumably some other development, since a stadium don’t need no 157 acres — would be transferred to a public authority, which pretty much always means exempting it from property taxes. As we’ve seen before, property tax exemptions can add up to a whole lot of money, so it’s worth asking questions about how much this would amount to for Carson — in fact, that would have been a good question to ask before voting to move ahead with this deal, but meh, there’s always time to figure stuff out later, right?

Carson could approve Chargers, Raiders stadium plan tonight despite not knowing how it would work

The Carson city council is meeting tonight, and could be about to follow the lead of its neighbors in Inglewood and approve a stadium funding plan without a public referendum, via the mechanism of having petitions signed for a referendum, then voting to waive the whole “residents actually voting” thing. And if that doesn’t sound like the greatest idea, the L.A. Times’ Tim Logan and Nathan Fenno today report just how many things will get swept under the rug by the hurry-up approval scheme:

The 26-page initiative petition proposing the stadium says little about how it would be paid for, other than a promise that city tax dollars won’t be used. Leases need to be worked out. Personal seat licenses — which developers say could fund nearly half the project — must be sold. And there’s no mention of the three-way land swap, creation of a new city agency or 10-figure investment led by Goldman Sachs that are all key to the deal.

Also, if Carson can’t get two NFL teams to move in, there might be a huge shortfall in tax revenue to pay the city’s share of costs, the city could lose $1.4 million a year in federal housing aid if it can’t find a new site for the 1,500 housing units that were originally planned for the stadium site, and nobody has figured out where to put 16,000 off-site parking spaces.

This is why one traditionally holds stadium negotiations before voting on the plan — and, for that matter, why California law normally requires environmental impact studies and a long public process before approving these kinds of deals, which is what Carson officials could be voting to skip over tonight. Instead, everyone will have to hope that Carson’s mayor and city council can hash out a funding plan behind closed doors with the teams involved. And surely nothing could go wrong with that, right?

SD columnist says Chargers deal needs Hail Mary off flea flicker [metaphor overflow, please retry]

Last week we had the perfect example of an “assuming the premise that funding a new arena is the public’s problem” article, and this week it’s the archetypal “using sports metaphors to paint building a stadium as victory” piece, courtesy of “star” UT San Diego sports columnist Kevin Acee. I mean, this guy really emptied the sports metaphor bowl:

[Citizens’ Stadium Advisory Group] Adam Day is the Doug Flutie in this stadium game.

He and his team were handed the ball in the fourth quarter and told to win with a Hail Mary off a flea flicker.

But how much time is left in the fourth quarter, Kevin?

As the seconds trickle off the clock, with no timeouts remaining, San Diego’s only hope is a delay of game being called and eventually getting to overtime.

This metaphor is getting confusing. Who would call a delay of game, exactly?

For the Chargers to not make that request [to relocate for 2016], they are going to need to get their way. They are the clock operator, the referee and quarterback.

I’m … pretty sure that’s against the rules? Also, wasn’t Doug Flutie the quarterback? Help!

Anyway, the guy that UT San Diego kept as sports columnist over the guy who actually asked questions wants you to know that San Diego has to meet the Chargers’ demands, and soon, or else, and is going to use every football reference in his arsenal to drive this home. It’s still not quite the time Connecticut approved funding a new stadium to lure the New England Patriots and the Hartford Courant reported on this by splashing “Touchdown!” across their front page, but it’s a valiant attempt nonetheless.

NFL VP delivers a master class in San Diego on shaking down cities for stadium cash

Hey, Rob Manfred, you want some pointers in how to shake down cities for stadium deals? You might want to talk to NFL VP Eric Grubman, because he has this stuff down:

“It’s obvious that no proposal has gained the support and enthusiasm of the Chargers — that’s obvious,” Grubman said in [a] press conference with reporters after the meeting [of the San Diego mayor’s citizens’ stadium advisory group]. “So you don’t need me to tell you that.”…

“If you start out with the key parties that have to support these things on different pages, it’s certainly a recipe for delay,” Grubman said. “It’s probably a recipe for failure.”…

“At this point of time, I think it’s more likely that we would move it up than leave it the same or delay it, unless something happens to knock one or more of the projects off of its pace,” he said. … “To wait until the end of next year to get the vote it seems to me to be very risky.”

Vague threats about “failure” and “risky” behavior, a message that no deal is a deal until the local team owners have been made happy, the general tone of a scolding dad — now that’s why they pay commissioners, and their henchmen, the big bucks. Not that this solves any of the problems that San Diego is having in finding a way to fund a new Chargers stadium that makes the team owners happy (key to this being “somebody who is not us paying for a large chunk of it”), but it turns up the perceived heat on city officials, and that’s all that league officials are expected to do, really.

NFL says no vote on L.A. moves for Rams, Chargers, Raiders until end of year, “at the soonest”

I’ve been saying for a while now that the Los Angeles NFL relocation melodrama is likely to drag on most of the year, and now it’s official:

NFL Executive Vice President Eric Grubman, the league’s point man on L.A., dismissed conjecture that a vote of owners is imminent, saying “that’s based on the fact there’s been an awful lot of progress made on the two sites in Los Angeles, and it’s beginning to be tangible.”

“But the fact is we’re not planning for a vote in May or any time soon,” Grubman said. “We have a process. It’s deliberate. There are steps that need to be taken, and I think that’s much more likely to be later in this calendar year at the soonest.”

That all makes sense, as right now the game that the owner of the St. Louis Rams, San Diego Chargers, and Oakland Raiders are all playing is to play their home cities off against L.A. to see where they can get the most lucrative deal, and setting an early deadline would only cut off the bidding war prematurely. Still, that “at the soonest” is an indication that the NFL may be ready to let the L.A. war go on into early 2016 — or beyond? — so be ready for a long, long stadium shakedown season before we find out what’s a bluff or whose is going to be called.

 

L.A. business types say Carson stadium could generate $500m a year, keep straight face while doing so

Yesterday it was stadium consultant John Moag saying that a new Chargers stadium in San Diego would generate $600 million a year in new economic activity — a figure that, as one FoS commenter noted, would require every fan in attendance to spend $1,200 per game. Today, it’s the Los Angeles Economic Development Corporation, a local business-dominated non-profit, asserting that a new stadium in Carson for the Chargers and Oakland Raiders would generate $500 million a year in new spending:

“An NFL franchise has very, very little net economic impact on L.A.’s economy,” said Victor Matheson, an economist who studies sports at College of the Holy Cross in Worcester, Mass.

Oh, sorry, I skipped right to the economist pointing out that no stadium in history has ever shown that kind of economic impact after the fact. My bad!

I’ve explained in detail before why these kinds of “economic impact” numbers are garbage, so I won’t go over that again. Suffice to say that LAEDC projects the actual amount of new tax revenue for Carson to be far lower — about $8 million a year — and since that’s all in property and sales taxes, there’s no way to tell how that would compare with using the site for another project that would be active more than ten days or so a year, let alone with what additional traffic, police, fire, etc., costs a new stadium would accrue. It’s entirely possible that the total would be above zero — assuming Carson isn’t asked to kick in anything, which still isn’t a sure thing — but nine-figure headlines are still just clickbait.

SD councilmember says build Chargers stadium and cash will fall from heavens, just you see

San Diego city councilmember Scott Sherman has an idea for how to pay for a new Chargers stadium, and it sounds too good to be true, generating as much as $1.8 billion to pay off a $1.2 billion stadium, with hundreds of millions of dollars left over for other stuff. What could be wrong with that?

You knew that wasn’t just a rhetorical question, didn’t you? The answer, as you probably expected, is plenty:

  • Sherman’s plan would collect $965 million from the NFL, the Chargers, sale of naming rights and personal seat licenses, and “investors and sponsorships,” whatever that means. The NFL’s G-4 fund is capped at $200 million, naming rights in San Diego might generate $150 million if you’re real lucky, PSLs could maybe bring in another $150 million, which leaves only $465 million dollars to be covered by the Chargers owners and other “investors,” with no naming-rights or PSL money available to pay themselves back out of. Not completely impossible, but not anything Dean Spanos is going to get too excited about, either.
  • On top of that, the Sherman initiative would bring in $594 million from selling or leasing public land under and around the stadium site, plus $266.2 million from city and county property taxes on development of the site. The former would clearly be a public gift — if the city sells the land it then can’t use it for anything else (or sell it to someone who won’t demand the proceeds get immediately kicked back to pay construction costs) — and the latter is effectively a TIF, with all the usual problems of how you then pay for services that property tax revenue is usually counted on to pay, let alone what happens if tax revenues don’t actually go up as projected.
  • That $1.2 billion cost estimate is actually on the cheap side for stadium construction costs these days, especially if the Chargers want something with enough bells and whistles to provide them with tons of new revenue streams (ad boards, steakhouses) to pay off a half-billion-dollar out-of-pocket investment.

In short, Sherman seems to have packaged together as many ways as he can of identifying money that can be used for a stadium but that wouldn’t trigger a public vote, which would be presumed to be the kiss of death for this project. It also means, though, that he may well have come up with a lose-lose plan, where the Chargers would end up saddled with so much of the cost (more than they’re looking at for half of a Carson stadium, in fact) that they couldn’t make money on the deal, while the city would give up both valuable land and future tax revenue and get nothing in return. An A for effort, then, but Sherman still hasn’t solved the basic conundrum of billion-dollar-plus football stadiums: It’s really, really hard to make them pay off.

TV reporter gets jump on April Fools, says losing Chargers will turn San Diego into Baltimore

In need of a laugh this morning, and not in the mood for tiresome selfie-related hoaxes? Allow NBC San Diego’s Derek Togerson to come to your rescue with his essay on how if San Diego loses the Chargers, it’ll end up just like Baltimore:

[Baltimore Stadium Authority Chairman John] Moag is a friend of former Padres owner John Moores and was loosely involved in the construction of Petco Park, so he has seen how things work in both places.

“Baltimore is a big small town, not unlike San Diego in that respect,” he said when asked to compare the situations. Then he offered another sobering observation.

“It was an enormous, enormous blow to our culture.”

If you want to hear a lot more from Moag, the guy who as much as anyone was behind Maryland spending $300 million in taxpayer money on new stadiums for the Orioles and Ravens — he says bringing in the Ravens has created $600 million a year in economic impact, and nobody (in this article, anyway) is going to tell him otherwise! — by all means, click through. If the mere notion of San Diego being one NFL team away from being Baltimore (they both have large Navy presences!) is enough to tickle your funny bone, time to go play some Google Pac-Man.

Pro-Chargers stadium newspaper lashes out at Chargers for not being pro-stadium enough

Well, this is interesting. U-T San Diego, the newspaper run by a crazed millionaire who thinks journalists should be “cheerleaders” for stadiums, published an editorial yesterday afternoon that tears into the Chargers ownership for its position on a stadium. It tears into them for not being eager enough to commit to one in San Diego, mind you, but still, that’s definitely breaking with the program:

Mark Fabiani, the team’s special counsel for stadium issues … has continued to undermine the task force effort by pushing for a downtown stadium that would be more costly, would require two-thirds voter approval of a tax increase, would take much longer to develop and which includes a bus company yard that would definitely require significant environmental cleanup. And meanwhile, of course, the team has continued to push forward with a fly-by-night joint proposal with the Oakland Raiders to win approval for a new stadium in the Los Angeles suburb of Carson.

Clearly, something has shifted here, whether it’s Fabiani pissing off the U-T editorial board somehow, or the board being tighter with San Diego city officials than with Chargers execs, or just annoyance that they’ve carried water for a San Diego stadium for this long and now Chargers owner Dean Spanos seems more interested in playing footsie with Carson. But this stuff matters, and it’s certainly significant that for whatever reason, the Chargers ownership seems to have alienated one of its most powerful friends. It’s a reminder that in playing cities off against each other, sports team owners risk burning bridges — though I guarantee that if the Chargers do choose to remain in San Diego, all will be forgiven, and the U-T editorial page will be full of talk about how Spanos needs to be rewarded for his loyalty.

NFL finally officially admits that, yes, some teams are threatening to move to L.A.

Don’t look now, but NFL VP for Stadium Extortion Eric Grubman has actually said the R-word with regard to the St. Louis Rams:

A National Football League executive briefed team owners Monday, for the first time as a group, on competing stadium proposals that could send the St. Louis Rams to Los Angeles, including key steps “between now and any eventual relocation.”…

“This is the first time with membership that we’ve been able to be relatively open and transparent as to what was going on,” Grubman said after he presented at the NFL’s annual owners meeting at the historic Arizona Biltmore resort in Phoenix.

Outstanding! So now for NFL owners who are unable to read the papers, Grubman has spelled out that it’s Rams owner Stan Kroenke who’s threatening to go to Inglewood, and San Diego Chargers owner Dean Spanos and Oakland Raiders owner Mark Davis who are threatening to go to Carson.

What the rest of us would no doubt hope the NFL would be more “open and transparent” about is whether these planned L.A.-area stadiums are serious or just bluffs, or serious bluffs intended to shake loose stadium deals from their hometowns but which they’re willing to go through with, maybe, if left with no better alternatives. And Grubman at least hinted at number three, sorta kinda maybe in part:

Grubman emphasized that home markets would have a chance to pitch their own proposals before a decision is made to move any team to Los Angeles.

“The last thing I’d want is for a relocation proposal to come forward, and a home market to say, ‘Wait. You told us we had another few months,’” Grubman said. “I don’t want to do that.”

For all of these owners, there are two major hurdles to clear if they really want to move: finding the money to build new stadiums in L.A. without losing their shirts, and getting approval from the NFL’s other owners to do so. Both are going to be difficult, in different ways: Even in a big market like L.A., coming up with enough revenue to pay off close to $2 billion in stadium debt is a tough nut, and getting 24 of 32 NFL owners to agree on anything, especially when you know that the teams you’d be shutting out of moving to L.A. in your stead will vote no, takes a lot of tricky campaigning. With the next window for relocations coming up next winter, expect most of this year to be taken up with behind-the-scenes work lobbying for support among NFL owners, while waiting to see what San Diego, Oakland, and St. Louis propose as alternatives. There is much, much haggling yet to be done, in other words, so it’s pointless even to read tea leaves now.