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July 22, 2011

Oilers, Chargers funding gaps remain unfilled

Another week, another batch of stadium and arena projects that lack nothing except for somebody willing to spend hundreds of millions of dollars to build them:

  • The Edmonton city council held another hearing about the proposed $400 million Oilers arena on Wednesday, and came to the same conclusion as last time: It's $100 million short, and nobody knows who'll pay for it. (The city has asked the province for the money, and Alberta premier Ed Stelmach has said no way.) Also, Northlands, which owns the Oilers' current Rexall Place arena, is (unsurprisingly) refusing to sign a non-compete clause with any new arena. "We basically have two parties here that are refusing to cooperate and we are stuck here in the middle," councillor Kim Krushell told reporters. "All I can say is everything seems to be a bit of a gong show." Which either means Krushell watched a lot of TV in the 1970s, or perky Canada has its own metaphors.
  • The San Diego Union Tribune ran an interview with San Diego Chargers stadium campaigner Mark Fabiani yesterday, in which Fabiani revealed that the team needs a new funding plan now that the state is forcing the city to hand over tax money that was otherwise redirected to regional development authorities. Fabiani said that "[we] need to find a way to bridge the financing gap between now and 2024 -- possibly with the help of other government agencies in the region that may see long-term benefits from this kind of multi-faceted downtown project." Which sounds a heckuva lot like "we have no idea."


Neil, it's always good to know that you are paying attention to what's going on out here in San Diego! Your post, however, ignores several other parts of my "what's next" answer to the San Diego Union Tribune. So, in the interests of completeness, here goes:
(1) Various cities around California have asked the California Supreme Court to invalidate as unconstitutional the recent state redevelopment law changes. If the Supreme Court of California decides to take the case, we could get a final decision relatively quickly (at least as court decisions go).
(2) We are actively working with the City of San Diego to determine whether a Sports, Entertainment and Convention District could be created downtown, around the site of the proposed new NFL stadium (a site which is quite near the existing Convention Center, host to this week's Comi-Con International convention). If this idea moves forward, we could potentially have access to new revenue sources that would not ordinarily be available for a stand-alone stadium.
(3) We have revenue sources here in San Diego that most cities do not have: the 250 or so taxpayer-owned acres that are now consumed by Qualcomm Stadium and the San Diego Sports Arena. Freeing up this property for sale or lease, and then for tax-generating development, is a very viable funding idea when the economy finally improves here.
Thanks for giving me the chance to add to your post. Best wishes, Mark Fabiani

Posted by Mark Fabiani on July 22, 2011 03:58 PM

Having lived in San Diego 10 years ago I am still laughing at Spanos. Moores got himself a new ballpark. That pretty much eats up the current "sports budget".

Keep in mind that Jack Murphy/Qualcomm stadium was shared for years and that a bunch of improvements costing millions was done about 15 years ago. They even got a deal where San Diego (read: the taxpayers) had to buy all unsold Chargers tickets. That was costly.

Spanos has been threatening to move the Chargers for all of that time and still nothing to show for it. The problem is there's almost no place to build it downtown or north of there since the land is too expensive.

It's still all about the skyboxes. Having worked for one of Moores' companies, I used to get skybox tickets once a year for the Padres. The boxes are nice and were better than the ones at Texas stadium. I'm sure they're not as good as Cowboys stadium but I'm sure they are a bit cheaper. (Moores had ones behind home plate.)
That said, there's few places for that new stadium where there's public transportation, freeways and enough flat land in the city of San Diego. Maybe if Miramar MCAS or the San Diego Sports Arena is torn down or are vacated and SD doesn't use one of them for a new airport but SD has a lot more important things to get squared away than a new playpen for the Chargers to play 8 or 9 real games a year.
Of course they'll want and get a sweetheart deal on everything, especially tax abatements and concessions.
Maybe the best idea is to drag games from the college stadiums to use it more frequently. There's very little need for a new stadium for other sports there.

Posted by Cujo on July 22, 2011 04:08 PM

If expensive land is one of the issues, then they could build a floating stadium on the water like the original Seattle dome - (tongue in cheek)

This stadium game is just as ridiculous as the last. The jig is up.

Posted by Mark on July 23, 2011 01:37 PM

A question or two for Mr. Fabiani, should he choose to respond:

The Chargers have said that "freeing up" the existing taxpayer owned site for sale or redevelopment would produce revenues that could be used to fund a new facility.

While it is true that, should the land be sold, a significant amount of capital that could (if the city chose) be funnelled into a new sports facility would be realized. However, I fail to see why net new tax generation from redevelopment of the Jack Murphy Stadium site should be considered "revenue streams" associated with the new facility?

First and foremost, those taxes will be needed to address infrastructure and services for the new developments themselves (in brief, taxes are not "profit" for a municipality). Unless the club proposes that a special levy be added to development on that site to fund a new facility, it seems we are talking about two entirely different things. The team is, after all, not 'giving' that land to the city for redevelopment. The city already owns it.

Secondly, the reason those taxes are "net new" is because the present site is city owned. This means that the Chargers do not pay property taxes on the present facility, of course (I am sure the Chargers make other payments that might be considered taxes in lieu, but I am also certain that these amounts are nowhere near what the actual lost tax revenue would be if the facility which the Chargers control was on the tax role)... which means that that economic burden is paid by city tax payers across the board.

As an NFL fan, I'd like to see the Chargers stay in San Diego. But like everything else, that perk/amenity has a price at which it is reasonable and one at which it is not. Just ask the good people of Cincinatti...

Posted by John Bladen on July 23, 2011 04:00 PM

The entire article is very revealing. When you hear stuff like 2024 without the threat of LA mentioned, you know that deep down, the Chargers expect to be playing at Qualcomm for the next decade. I have said it before and I will say it again, the only team that has a chance to get a new or even renovated facility past 2013, is the New York Islanders.

Posted by David Brown on July 24, 2011 11:56 AM

Mr. Bladen, thanks very much for your questions. I will do my best to answer:

Building a new stadium, with a retractable fabric roof in downtown San Diego, could lead to the demolition of the existing Qualcomm Stadium and the existing Sports Arena. This would generate brand new revenue for the taxpayers of San Diego in three ways:

(1) The current City of San Diego contributions to keep Qualcomm Stadium up-and-running range between $12 and $17 million a year, depending on which estimates you believe. And a City-funded study just showed north of $70 million in deferred maintenance that must be funded at some point to keep Qualcomm functional. If the new stadium downtown is managed privately, then City taxpayers would save the $12-17 million a year that they currently spend, as well as the deferred maintenance dollars that would never have to be spent. Allocating even a portion of this money to a stadium bond for 15 years would get us a long way toward a successful financing plan.

(2) The Qualcomm and Sports Arena sites consume roughly 250 acres of taxpayer-owned land. This land now generates virtually no money for taxpayers every year and, as noted above, actually costs taxpayers substantial sums. If the economy improves -- a big if, but still something we are all hopeful about -- this land could be sold or leased at a substantial profit for taxpayers. Under these circumstances, wouldn't it make sense to devote at lease some of these profits to the new stadium effort -- the effort which allowed the Qualcomm and Sports Arena parcels to be vacated in the first place?

(3) The newly-developed Qualcomm and Sports Arena sites would generate other tax revenue, as you note, Mr. Bladen, including property tax and sales tax revenue, along with perhaps hotel taxes. Even if none of this money is devoted to the new stadium, we believe that these brand-new tax revenues will be an important feature of our financing plan that will attract support from voters -- even if those voters could care less about NFL football.

I hope I've addressed your questions, Mr. Bladen. Thanks for taking the time to write.
Best wishes, Mark Fabiani.

Posted by Mark Fabiani on July 26, 2011 07:25 PM

Mark Fabiani,

I know a good amount about real estate, and by doing some simple math that land can be entitled to extensive value. Land has become more scarce in San Diego County and increased density, FAR, etc on the site will propel value to pay for the stadium downtown. Have there been such discussions with the city. Essentially, city council has the power to determine land value based on zoning. Let me know what you think.


Posted by Kyle on August 10, 2011 01:05 AM


This was a real proposal.

"A Floating Stadium for San Diego"

Posted by JohninSD on January 22, 2012 09:17 PM

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