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.