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.

 

SD councilman proposes “Fan-Lord” owners as Chargers stadium solution, is probably trolling us

Speaking of announcements that weren’t all they were cracked up to be, San Diego city councilmember Carl DeMaio declared yesterday that he has a plan to raise $1.4 billion or more to build a Chargers stadium with no public money required. And how would that work, exactly?

Private developers, the Chargers, and individual fans would all receive ownership shares in the facility based on their initial investment levels. Instead of Personal Seat Licenses, fans can invest in Fan-Lord Ownership Shares in the facility.

He’s trolling us, right? The idea that you can somehow raise $1.4 billion in private capital by dividing up ownership of a stadium pie that is going to be worth way, way less than $1.4 billion in future revenues is amusing enough, but Fan-Lord Ownership Shares? That isn’t even good Game of Thrones fanfic, let alone an NFL stadium finance plan.

You can read the Powerpoint of DeMaio’s proposal here, but the main idea seems to be to turn regular PSLs into these super-PSLs that would include a share of stadium revenues, of which there won’t be any because all stadium revenues are going to be rolled into a laundry list of rounded-off payments, none large enough that they seem totally unreasonable, but at the same time none actually justified by any included market analysis:

Screen Shot 2016-06-24 at 9.30.02 AMLook, I think everyone would be thrilled if it turned out that the Chargers owners could raise private capital from fans and investors (and fan-investors, which I guess is what “Fan-Lords” would be) to pay for a new stadium and still have money left over to increase their profits over what they’re getting at their current stadium. All evidence, though, is that the numbers don’t come close to adding up to do that. If DeMaio’s plan turns out to be a proof of concept that a Chargers stadium is a money-loser and what the Spanos family wants isn’t so much a new stadium as the subsidies that come with one, that will be a useful addition to the public discourse, sure. But don’t be shocked when this turns out to have all the financial sense of a plan developed by underpants gnomes.

NFL gives three Super Bowls to cities with new stadiums, implies, “Keep ’em coming”

The NFL awarded the 2019, 2020, and 2021 Super Bowls to Atlanta, Miami, and Los Angeles yesterday, continuing its policy of using the big game as a reward to cities and teams with new or significantly renovated stadiums. Or as Rams owner Stan Kroenke said following the decision, “I think they are telling the communities and the owners who stick their necks out that it’s worthwhile.”

The most important target of the announcement, then, isn’t the three cities that will now get the questionable benefit of hosting the NFL’s annual week-long road show, but those that are being wooed with that dubious carrot. Right now most of the reporting is on how New Orleans and Tampa Bay were snubbed because their stadiums aren’t as shiny as the cities that got the nod, but it’ll be interesting to see how this plays into future coverage of stadium campaigns — already, San Diego Union Tribune chief Chargers stadium cheerleader Kevin Acee has written that the possibility of getting a Super Bowl shouldn’t be the reason to vote for a new stadium, but really he means that you should vote for a new stadium regardless, so all remains right with the world.

Interestingly, there’s no reporting yet that I can see out of Las Vegas on the Super Bowl decision, but that may be because they’re too busy covering yesterday’s conflicting comments on a potential Oakland Raiders move from owner Mark Davis (“This is the real deal. If Las Vegas can come through, we’re going to be there”) and NFL commissioner Roger Goodell (“It’s very premature at this point. Until we have more information, it’s pure speculation”). This could be just everyone playing their role — in terms of using Vegas as leverage in hopes of drumming up stadium subsidies from Oakland, Davis is bad cop, Goodell is good cop — or it could be a sign of deeper rifts among league owners over whether Davis should get to bolt from a bigger market to a smaller one in exchange for a lucrative (to him) stadium deal, and on what terms. We won’t know for sure until the next ESPN postmortem, I expect.

NFL commissioner waves around well-worn Super Bowl promise to boost Chargers petition drive

NFL commissioner Roger Goodell did what commissioners do on Saturday, promising San Diego a Super Bowl if it approves a new stadium for the Chargers. Well, not promising exactly:

“I’m confident that if they can get a stadium built here, the owners will want to support it with a Super Bowl,” Goodell said. “I think that’s what this community deserves, and we’re all going to work to try and find a solution.”

Yeah, you can totally take that promise to the bank. Not that San Diego wouldn’t get a Super Bowl with a new stadium — they hold them every year, after all, and it wouldn’t be too hard to work San Diego into the rotation at least once — but Goodell’s appearance was far less “announcement” than “media event,” designed to help kick off the Chargers’ petition campaign for $1.15 billion in city spending on a new stadium and convention center annex. A Super Bowl also wouldn’t much help in paying that off, as innumerable economists have found, but at least it might be a pleasant distraction, maybe?

Chargers renderings of proposed stadium show off state-of-the-art Photoshop lens flare

San Diego Chargers vaportecture porn, everybody!

Screen Shot 2016-04-22 at 2.37.48 PMLow_Corner_from_Northwest_credit_MANICA_t1200x62016th_Street_Ground_Level_credit_MANICA_t1200x620chargers4_t1200x620Screen Shot 2016-04-22 at 2.37.10 PM Screen Shot 2016-04-22 at 2.37.21 PM Architect David Manica called the building “soft, friendly, of San Diego,” “like a natural evolution of the downtown architecture.” To this end, it will be surrounded by fluffy clouds, and have beams of light streaming up from the field, either because of a state-of-the-art lighting system or because once the stadium is complete, Jesus will return to perform the Super Bowl halftime show.

There’s also a park that’s described by the San Diego Union-Tribune as “over an earthquake fault,” presumably to get around that pesky “don’t build stadiums on top of earthquake faults” law. That building that appears to be embedded in the stadium wall is the “historic Wonderbread building” currently on the site, which “would be preserved and integrated into the 16th street facade of the project and would be home to local restaurants, cafes, or other active retail components,” addressing the don’t tear down a historic 1894 factory building concerns. Plus a semi-retractable roof, so the boats don’t get wet from all the San Diego rain!

The architects were quick to describe these drawings as “conceptual,” which means “don’t think the actual stadium is necessarily going to look like this” as well as “I can make it longer if you like the style.” It looks fine enough as stadiums go, though I expect that roof will be the first thing to go if costs need to be trimmed. That’s if San Diego voters agree to give it $1.15 billion in bonds in the first place, of course, which remains a longshot, though maybe “old building embedded in outer wall, plus fireworks!!1!” will be enough to win a few more votes.

Proposed Chargers stadium could sit atop an earthquake zone

What was the one missing element that the San Diego Chargers stadium mess needed? I’m going to go with earthquakes:

“One thing I haven’t heard anything about (unless I’ve just missed it) is the fact that the proposed downtown stadium site is in the middle of a California Earthquake Fault Special Studies Zone (aka Alquist-Priolo Zone). …In general California law prohibits building structures meant for human occupancy within 50 feet of an active fault. Has any consideration been given to this in the downtown stadium design?”…

A major strand of the Rose Canyon fault runs through East Village, [three San Diego geologists] remind. … The proposed convadium footprint is “literally, right in the center of the (Rose Canyon) fault zone” as determined by a 25-year-old California Geological Survey, [geologist Diane] Murbach told me.

I would quote more, but these are pretty much the only sentences in San Diego Union-Tribune news columnist Logan Jenkins’ column that don’t include terrible “our fault” or “shaky ground” puns, so I’ll spare you those. It’s entirely possible that this isn’t a huge deal, as the Chargers insist, or it could end up being a striped bass-sized controversy that scuttles the whole plan. If the plan doesn’t fall apart of its own weight before November, that is. It’s increasingly difficult to tell whether this “convadium” business is an idea so crazy it could never happen, or just crazy enough to work.

Chargers stadium plan hits snags, sportswriter loses mind

Big things are happening with the San Diego Chargers‘ stadium push, and chief Chargers fan Kevin Acee of the San Diego Union-Tribune is freaking out, man:

I’m fighting the urge to simply stop writing. This is insane floating on ludicrous lost in a sea of nonsense.

One could argue that that second sentence alone should be argument that Acee stop writing, but anyway, WTF exactly is going on? Here’s WTF:

That’s all a big mess, and the only thing 100% clear is that the Briggs-Chargers coalition, which seemed like a bit of a crazy idea to begin with, is already starting to fall apart, with Acee, at least, now openly advocating that the Chargers throw Briggs under the bus and proceed with their own convadium initiative. Which would probably require a two-thirds supermajority (since it would allocate hotel taxes directly to the Chargers project), which means it would almost certainly never pass, which means…

If you’re prone to conspiracy theories that Spanos is just creating a disaster so he can throw up his hands and move to Los Angeles at the end of the year, today’s a day for you. On the other hand, dueling political interests can easily create disasters all by themselves, so maybe no special plotting was required. I just hope that this all ends with the Chargers opposing their own ballot measure, because we haven’t had one of those in a while.

Chargers owner wants $1.15b in city bonds for stadium, convention center, pony

The San Diego Chargers owners have let drop some more details about their proposal for a downtown stadium, in a briefing for reporters yesterday. As revealed last week, the Spanos family wants a whopping 4% hotel tax hike, which would help fund a new $1 billion stadium, to open by the year 2022, like so:

  • The city would take the proceeds from the hotel tax hike and use it to sell $1.15 billion in bonds, $350 million of which would be used for stadium construction, and another $200 million of which would be used to buy land for the stadium/convention center complex.
  • The Chargers owners would put in $350 million of their own money, presumably with the help of selling naming rights. (Sports team owners always get to call naming rights money their contribution, even if the stadium is partly paid for by other parties and if they don’t themselves own it. This is usually termed “standard business practice,” which is a euphemism for “all the other kids’ moms let them do it.”)
  • The NFL would kick in $200 million in G-4 money, plus the $100 million in consolation prize money it agreed to give the Chargers and Oakland Raiders out of the Los Angeles Rams‘ relocation fee.
  • The Chargers would pay for cost overruns. No word yet that I’ve found on who’d pay for operating costs or property taxes.

The other $600 million in bonds would go to pay for construction of a convention center annex. Chargers execs say there would also be money left over from the tax hike for the general fund and other uses, though they didn’t provide details, presumably because they have no friggin’ clue how much money the tax hike would eventually produce.

This would be somewhat worse for San Diego taxpayers than the already-not-great plan that Mayor Kevin Faulconer proposed last summer: That one would have been limited to $350 million from the public (part from the city, part from the county), whereas this one also includes land costs, though part of those would go for the extra convention center space. (Which San Diego also probably doesn’t need, but I’ll leave that for Heywood Sanders to go into.) The main takeaway here, in fact, looks to be that Dean Spanos intends to take the $100 million the NFL gave him from L.A. relocation fees and pocket it, using it to reduce his stadium costs rather than the city’s, which is to be expected, I guess, given that he’s the one writing this proposal.

Actually, the real main takeaway is that Spanos is trying to go with an “everything but the kitchen sink” plan: It’s not just a stadium, it’s a convention center! And money for tourism promotion! And for the general fund! And to get Agent Carter back on the air! The hope here — in addition to getting backers of a convention center expansion on board their stadium campaign — is to so muddy the waters in advance of any public vote that people feel there’s something for everyone, and maybe it squeaks through to a majority.

It’s still not clear whether the stadium bid needs a majority or a supermajority of voters in November, incidentally, and may not even be worked out by the courts before the vote. Plus, there’s a mayoral election in November, though it may be skipped if someone is a clear winner in the June non-partisan primary. This is all a big flaming ball of uncertainty, in other words, so it’s probably appropriate that the funding plan is, too.

Chargers owner wants 4% hotel tax hike to raise $950m for new stadium and convention center

Remember that rumor that San Diego Chargers owner Dean Spanos was going to find a way to build a new downtown stadium with “100% private funding“? Hope you didn’t take that too seriously, because the actual funding plan has now been leaked, and it’s a doozy:

The Chargers will ask San Diego voters in November to raise taxes on hotel stays to 16.5 percent from today’s 12.5 percent rate to help build a $1.8 billion hybrid stadium and convention center next to Petco Park downtown, said sources close to the team’s negotiations with lawyers, bankers and the hotel industry…

Under the financing plan taking shape, the Chargers would deposit $650 million —including $300 million from the National Football League and $350 million from the team — into a trust fund toward the stadium portion’s projected cost of $1 billion.

A new, city-controlled agency would contribute $350 million, using sales of tax-exempt bonds backed by the increase in hotel taxes. The Chargers would be responsible for any cost overruns for the stadium piece of the project beyond $1 billion, the sources said.

As for the convention center, hotel taxes would back its $600 million construction cost, along with $200 million for land acquisition.

That’s a total of $950 million to be generated by new hotel taxes, if you’re scoring at home. Which, yes, would be paid entirely by hotel visitors, not general taxpayers, but there would still be many costs to San Diego as a whole, opportunity and otherwise: If a 4% hotel-tax hike takes a bite out of hotel stays as some tourists seek out cheaper destinations, then that’s a cost to the city’s baseline hotel tax collection (and its economy); and if it doesn’t take a bite out of hotel stays, then it’s a 4% hike that could have been used to pay for something else other than a “convadium.”

According to the San Diego Union-Tribune’s report, the Chargers would pay operating costs for the stadium, would keep all NFL-related revenues (including naming rights), but let a city stadium authority get any revenue from the convention center and from non-NFL events at the stadium. Neither of which seems likely to amount to a ton compared to the football money, but it does make it harder to calculate whether this should be called a “$950 million public subsidy” (not that it’s going to stop me from doing so, until it’s proven otherwise).

This whole mess will be voted on by San Diego residents in November, though whether it will require a simple majority (maybe possible) or a two-thirds supermajority (you must be high) is likely to come down to a court to decide. So no odds on whether this thing is actually going to happen, but I guess Spanos deserves credit for going big.