Chargers stadium measure is going to lose, question is only by how much

To win $1.15 billion in public money for a new stadium and convention center expansion, San Diego Chargers owner Dean Spanos needs to have more than two-thirds of ballots cast on election day be in favor of his funding measure — unless he somehow gets an appeals court to not just overturn this summer’s ruling that it will take a supermajority to approve the measure, but make it retroactive that a simple majority will do. Not that it matters, because it doesn’t look likely that the measure is even going to get 50%, let alone 67%:

The survey shows 41 percent of likely voters say they are certain to vote against Measure C and 36 percent say they are certain to vote for it. The remaining 23 percent describe themselves as “not certain.”…

“If there’s some blockbuster development that could alter the course of history, maybe the support group rallies,” said [SurveyUSA president Jay] Leve, whose company conducted the poll. “But even if it does rally, it would be unprecedented and historic in the annals of polling for something that’s trailing 30 days before the election to come back and get a super majority of 67 percent.”

And to add insult to injury, a sizable portion of voters say they’d be considering voting for the measure if the team didn’t suck:

More than half of likely voters said the team’s performance had no effect on their support for Measure C, but 34 percent said it made them less likely to support the measure and only 10 percent said it made them more likely to support it.

There’s still a few weeks to go, but it’s safe to say that we can not only call this vote, but the aftermath: The stadium measure is going to fall far short of a two-thirds majority, Spanos and Mayor Kevin Faulconer will scramble to come up with a way to say that the people who did vote for it represent a mandate to develop a new deal that doesn’t require two-thirds voter approval, and then everyone will stare at their feet a whole lot as they realize that nobody knows how to make $1.15 billion appear out of thin air without raising taxes in some way (and thus requiring a public vote), which is why they were in this mess to begin with.

It’s tough to see any end game at this point that doesn’t involve the Chargers moving to Inglewood, unless maybe Spanos decides he’d rather be top dog in San Diego than second fiddle in L.A. and decides to put more of his own money into a new (or renovated?) stadium, or just decides to stick around and wait things out until maybe his team starts winning games and voters decide this is a reason to throw more money at him. I wouldn’t bet big money on it, but stranger things have happened.

Chargers “study” finds that spending money causes money to be spent, calls this success

The San Diego Chargers announced yesterday that a study by two local economists found that construction of their “convadium” plan, which would cost $1.15 billion in public money, would “increase regional output by a total of $2.1 billion, increase labor income by more than $800 million, and will have a value-added impact of $1.2 billion.” The study was paid for by the Chargers, but its authors insist (according to the Chargers) that they had “complete freedom to do our research over the summer months and to come to whatever conclusions we believed were warranted.”

Okay, so with at least one eyebrow raised, let’s click on that “Read a complete copy of the economic impact study” link, and we find … oh, look it’s a whole 13 pages of report! Two of which are renderings of the convadium, and the rest of which are, from what I can tell, just the result of plugging the cost of building the convadium into the Commerce Department’s RIMS II formula, and reading the numbers that were spit out. Nice work if you can get it!

A bit of explanation: RIMS II is mostly a set of multipliers, which take a certain kind of spending — construction, in this case, then operations of a football stadium after that — and tell you how much of an effect that’s ultimately likely to have as the money filters out into the local economy. So it could tell you that if a company spent another $1 million on hiring, that would increase to, say, $1.5 million worth of impact as those new hires went out and spent their paychecks at local stores, which would hire new employees in turn, etc.

What RIMS doesn’t tell you is what would happen if you didn’t spend the money. In this case, the city would still have a 4% lower hotel tax rate, which would presumably boost hotel stays somewhat by making San Diego more competitive against other places to go on vacation — or, if you want to look at it another way, the city would have the option of raising hotel taxes 4% to spend on something else that could then be plugged into the RIMS model. RIMS also can’t tell you what would happen to Chargers fan spending if the team were to leave (would they all drive up the coast to see them in L.A.? buy more Padres tickets instead? spend it on big-screen TVs?), so you’re comparing apples to a box of oranges that you haven’t even opened to count yet.

In short: Studies like these are almost entirely worthless for telling you whether a project is worth doing. Developers love RIMS II and its ilk, though, because if you put big enough numbers into them, they’ll spit out even bigger numbers, and big numbers look good! In the end, though, all it says is that if the public spends a billion dollars on a new football stadium and convention center expansion, that’s a billion dollars that somebody else will earn. You don’t need an advanced degree in economics to figure that out — though it sure helps when you’re trying to get hired to write a 13-page report that a sports developer can tout on its website.

SD mayor endorses Chargers stadium measure that’s bound to lose, maybe so he can say it won?

San Diego Mayor Kevin Faulconer finally made up his mind about the Chargers‘ $1.15 billion stadium subsidy demand, and he’s for it, endorsing Measure C yesterday after getting team owner Dean Spanos to agree to what he calls a list of eight concessions:

  1. Covering any cost overruns for construction or land costs.
  2. Guaranteeing that city general fund money won’t be used.
  3. Promising the stadium project won’t impact tourism marketing spending.
  4. Letting the city collect all revenue from non-NFL events at the stadium.
  5. Promising to stay in San Diego until the initial debt is paid off.
  6. Reimbursing the city for any preliminary costs if the Chargers leave town anyway before construction begins.
  7. Replace parking that the Padres would lose on the stadium site.
  8. Address “quality of life” concerns from local residents.

A lot of these range from the vaguely defined (8) to the hard to enforce (2 and 3, and maybe 5 depending on how the lease is written); the most significant one is probably getting non-NFL revenue, though even that would be a tiny drop in the bucket on a $1.15 billion expense. Mostly, this is a pile of stuff that won’t cost Spanos a ton, but lets Faulconer show that he didn’t sell his endorsement of the stadium measure for nothing, but at least got a hefty pile of magic beans.

As for what Faulconer’s endorsement means for the actual vote, still nobody seems to think it has a shot of getting the required two-thirds majority, but there’s renewed talk that if it gets a slim majority but not the supermajority required by California law, Faulconer could step in afterwards and negotiated a new deal based on this “mandate.” That would be awfully tricky — the whole reason this plan requires a two-thirds vote is because nobody was able to find a way to subsidize a stadium that didn’t require raising taxes, which triggers the supermajority provision — not to mention a strange notion of mandate, when a public vote can lose but be used to justify a separately negotiated deal that may not require any vote at all. It’s hard to tell at the moment whether this is a serious backup plan or just grasping at straws, but at least Faulconer has a whole lot of straws to wave around this morning.

Chargers stadium vote to be determined by penalty flags, wallpaper

One of the drawbacks to sports team owners of having to go through a public vote on stadium subsidies is that public opinion depends on, you know, the public’s opinion. When the San Diego Padres did this for their stadium initiative in 1998, it was perfect timing, because the team was headed for the World Series for only the second time in history. For the San Diego Chargers, it’s not working out quite so well, as the team blew a 21-point lead on Sunday and lost in overtime, leading to responses like this:

This makes no sense, of course — by the time a new stadium was built, there would be entirely different players on the Chargers anyway, given the trajectories of modern NFL careers — but this is undeniably how at least some voters think, and Chargers owner Dean Spanos needs every vote he can get.

As a preemptive countermove, the Chargers unveiled a new postgame press conference backdrop:

Democracy, man.

San Diego reportedly planning how to build Chargers stadium even after losing November vote

The public vote on the San Diego Chargers owners’ $1.15 billion stadium subsidy request is about two months away, and the prognosis remains “good luck with that“: A court has ruled that the measure needs a near-impossible two-thirds majority to pass, a hotel industry study projected that the city would only get three cents of revenue for every public dollar spent, and last week a group of local business leaders wrote an open letter to Mayor Kevin Faulconer urging him to oppose the measure. If Kevin Delaney and Rick Eckstein’s Public Dollars, Private Stadiums can be summed up in one phrase, it’s “stadiums happen when the business classes are unified in support of them,” so yeah, this seems extra-doomed.

But in an article mostly focused on what position Faulconer will take, the San Diego Union-Tribune’s Michael Smolens notes that there could be a long game at play here:

There’s some thinking, as laid out in a column this past week by the Union-Tribune’s Nick Canepa, that a Faulconer endorsement would help facilitate new stadium negotiations after the November election. Yes, even some notable Measure C backers don’t think it stands a chance to gain the two-thirds majority needed for approval.

Sounds like they’re planning the post-war world. Or seeking to get Measure C over the 50 percent mark in hopes that a case pending before the state Supreme Court could be decided in a way that would lower the threshold to a majority.

Even after reading that Canepa article (which is pretty hilarious, coming down to, “Hey, Mr. Mayor, just endorse the stadium, it won’t cost you your job, probably”), I’m not entirely clear on what that “post-war world” is supposed to look like — Chargers owner Dean Spanos needs to pull the trigger on a move to Los Angeles by January 15, so that doesn’t leave a lot of time to negotiation an alternate deal after November, especially since any tax increase would require another public vote. Maybe they’d get a state Supreme Court ruling overturning the two-thirds requirement by January, but that seems like a longshot.

All of which makes me think one thing: Man, Nevada really should be holding off on that $950 million Oakland Raiders subsidy request, since there’s a pretty good chance that by January, Raiders owner Mark Davis will no longer have moving to L.A. as an option, increasing Las Vegas’s leverage in cutting a better deal, if that’s what they want. I’d argue that no stadium deal in Vegas will work for Davis and partner Sheldon Adelson unless it’s a disaster for taxpayers, but as those guys know, can’t get if you don’t ask, right?

San Diego analyst: Hotel tax should cover Chargers stadium costs, unless it doesn’t

This is a bad headline:

Stadium measure would generate enough money if costs are right

This is the less-bad headline that the San Diego Union-Tribune later changed it to:

Chargers measure fiscally sound — if estimates are accurate

This is the actual story:

San Diego’s independent budget analyst says the Chargers proposed hotel tax hike would generate enough money to cover the team’s projected price tag for a combined stadium and convention center annex, but that the proposal may be underestimating those costs.

And this is what’s downplayed in the actual story: Whether the estimates are correct only determines whether the four-percentage-point hotel tax hike would generate enough money to cover the San Diego Chargers ownership’s requested costs. Either way, the city would be on the hook for $1.15 billion, it’s just a question of whether it would have to find more revenue on top of the hotel tax money.

Kids, always read the articles, not just the Facebook headlines, okay?

Old football team launches stadium campaign, yells at cloud

The San Diego Chargers owners yesterday launched their “Vote Yes on C” campaign to try to get two-thirds of San Diego voters to approve spending $1.15 billion on a football stadium/convention center expansion, which, good luck with that. They also unveiled what’s likely to be their main arguments for the plan:

“A yes vote on C will allow for the creation of a new facility that could host world-class events and conventions such as Super Bowls, NCAA Final Fours, NCAA title games, professional soccer, concerts, the X Games and a host of other high-profile events.  And no general funds will be used to build this new venue as it will be paid for by the Chargers and the NFL as well as tourists and business travelers staying in San Diego hotels.”

That’s all technically true — the money would all come from a whopping four percentage-point hike in hotel tax rates — but it’s also extremely misleading to make it sound like raising hotel taxes and giving the money to the Chargers doesn’t cost San Diegans anything. First off, as NBC Sports’ Mike Florio notes, “plenty of hotel and motel rooms are surely bought and paid for by San Diego residents.” More to the point, though, raising hotel taxes comes with both an opportunity cost — once you give the money to the Chargers, you can’t then raise hotel taxes for other spending purposes — and an economic cost — tourists may love San Diego, but some could learn to love other cities once they see how expensive their hotel bills are after all the taxes are added in. Think about it: If this weren’t the case, every city on earth should be raising hotel taxes as much as possible, and giving the cash to its citizens, because hey, free money!

The other interesting bit here is that by the happy coincidence of the Chargers stadium vote being Ballot Measure C, team execs get to use the same slogan the Padres owners successfully used back in 1998 to get their own stadium, which maybe will bring back happy memories of Tony Gwynn or something? Again, good luck with that.

Meanwhile, one of the first actions of the Yes on C campaign appears, weirdly, to be trying to get voters not to pull the lever for their ballot measure, but to oppose a city councilmember who’s been critical of the stadium plan but who isn’t even up for re-election for another two years:

The team … has come out swinging against a local political opponent, City Councilman Chris Cate, who says the team’s proposal to build a new stadium is a bad deal for taxpayers.

The team’s campaign committee recently has circulated paid advertisements on Facebook that sic the dogs on him.

“Why does Chris Cate want the Chargers to leave San Diego?” the ad says. “Please call and ask him.”

It then publishes his office phone number.

This is kind of a weird strategy, needless to say. San Diego State political science professor Brian Adams (don’t start) tells USA Today that this could be a warning shot to other elected officials not to oppose the stadium campaign, which is entirely possible. It’s also a way to tell voters “The Chargers will leave San Diego if you don’t vote for this” without actually coming out and saying it, in the hopes that no voters will realize that it’s Chargers owner Dean Spanos himself ultimately making this threat, getting mad at him, and thinking, “Go to West Virginia already.” Good luck with that.

Report: Chargers stadium would create 3 cents of new revenue for every public dollar spent

Who hates the San Diego Chargers$1.15 billion stadium-convention center public subsidy demand? Not only most San Diegans, it turns out, but the hotel industry that would have to shoulder increased room taxes in exchange for all the new tourists who would be expected to come to town as a result, but it turns out, wouldn’t really:

The Chargers’ plan for a downtown stadium-convention center will not generate enough meeting business to justify an increase in the hotel tax, concludes a new study funded by the tourism industry…

The proposed center, the study says, holds only limited appeal to meeting planners and would generate just $2.3 million more a year in additional hotel tax revenue, compared to what it estimates are the $67 million in annual public costs for both construction and operation of the project.

Okay, sure, economic impact studies, which can be made to say pretty much whatever you want them to. Still, $2.3 million a year in return on $67 million a year in new costs is pretty horrible even as a worst-case scenario. And the report correctly points out that other NFL-convention center joint projects have worked out pretty terribly as lures for new convention business, though as I’m sure Heywood Sanders would point out if he were awake at this hour, that’s true of lots of standalone convention center expansions as well.

Anyway, the upshot is that Chargers owner Dean Spanos’s uphill battle to convince two-thirds of San Diego voters to approve this thing in November just got even steeper. I’d never say never, especially before all the campaign spending is spent, but if you’re looking to place bets on how the stadium vote will go, take the under.

Chargers $1.15B stadium subsidy headed to November ballot, no one knows that that will mean

The San Diego Chargers have gotten enough signatures to put their $1.15 billion stadium-plus-convention-center-expansion plan on the November ballot — though they still don’t know how many votes they’ll need to pass it, and won’t until a judge rules on that matter, probably not until well after November — but for the moment I want to focus on how this was covered in the local media. The San Diego Union-Tribune:

If approved, the proposal could keep the team from moving to the Los Angeles area, where they’ve been approved by NFL ownership to join the Rams in a new stadium being built in Inglewood.

The Los Angeles Times:

If successful, the franchise would stay in San Diego, as opposed to exercising its option to relocate to Los Angeles as a tenant to Rams owner Stan Kroenke at the stadium he has under construction on the former site of Hollywood Park racetrack in Inglewood.

Is this really accurate, though? Sure, Chargers owner Dean Spanos says he has an agreement in principle to move to Inglewood if the San Diego stadium proposal fails, but he hasn’t provided any details, and for all we know this is just posturing to try to scare San Diegans into approving his stadium subsidy demands. I mean, probably not — Spanos would presumably rather be a renter in a new stadium in L.A. than top dog in his old one in San Diego — but that all depends on how much Rams owner Stan Kroenke is demanding in tribute to play in his stadium.

Either way, it seems a bit much to make “this will keep the team from moving to L.A.” the lede, as opposed to, say, mentioning that $1.15 billion public price tag, which doesn’t appear until the 5th paragraph in the L.A. Times article, and the 7th paragraph in the U-T article. (Both papers share ownership.) Spanos may be a long, long way from winning the vote, but he’s doing a great job winning the battle to frame the story being told in the papers.

CA court rules tax hikes need two-thirds vote for now, Chargers stadium plan totally hosed, man

Sorry for neglecting this yesterday, because it’s big news, or at least small news that will make a big impact: The California Supreme Court has agreed to review an appellate court ruling that had lowered the threshold for citizen tax-increase initiatives from two-thirds to a simple majority. That’s just review, not overturn — but since it’ll take months if not years for a new ruling, that means the San Diego Chargers‘ plans for a stadium vote this November are hosed, since there’s no way they’re going to win a two-thirds majority. Why, just check out the headline on chief Chargers stadium cheerleader Kevin Acee’s San Diego Union Tribune column today:

Chargers’ stadium hopes take punch to gut

HOPES GOT GUTS! But do continue, Kevin:

California’s two-thirds requirement for tax hikes is a political Mount Everest. Here, given the current climate of some 60 percent of potential voters being opposed to public funds being used for a stadium, it is more like climbing to the moon on a stairway of pixie dust.

So what happens next? The Chargers owners continue their initiative campaign, no doubt (they’ve already submitted petition signatures), and then they lose in November, and then they decide by January whether to avail themselves of their NFL-granted option to bunk with the Los Angeles Rams in their new Inglewood stadium or stick around in San Diego while waiting out the Supreme Court ruling (and hoping the Oakland Raiders don’t then move to L.A. instead). It’s still entirely possible that team owner Dean Spanos doesn’t care, and has a secret plan to lose in November, say, “Hey, I tried,” and then move to L.A. without getting his existing San Diego fan base to come after him with pitchforks and torches, but we’ll find out in January, I guess.