August 15, 2016 (San Diego) Come November, the ballot will have two competing initiatives on the ballot. Both intend to deal with the Chargers and the Convention Center, and both make lofty claims.
We are giving you links to both the Chargers plan and the Citizens’s Plan. The first is 119 pages, the second a more modest 77 pages. Getting ahead of the curve on these two is a good idea, since they are complex and convoluted. While we are giving you the links and our modest views on this, we are neither endorsing or not endorsing either of them. Though we will point out that neither of them is doing well in polling at the current time. We might be reaching an end for the public willingness to fund stadia.
Both initiatives promise that no public funds will be involved in these projects, whatsoever. Yet both intend to raise the Transient Occupancy Tax (TOT) to around 16 percent. Now, perhaps we are too cynical, but aren’t taxes public money? So to a greater or lesser extent, both initiatives are contemplating the use of public money to help finance these projects.
This is where the similarities end though. The Chargers intend to do far more than just use public money to finance this. They intend to raise the TOT tax to 16.5 percent. While 2 percentage points will permanently be assigned to the promotion of the city, this will not be something downtown hoteliers are going to get behind. It also reduces the amount we effectively spend in promoting the city.
The team is proposing to contribute $350 million and expects the rest of the funds to come from a public subsidy disguised as an increase in TOT taxes. And yes the National Football League (NFL) will provide another $300 million. This means that that the team will not even contribute anything close even half of what this facility is expected to cost. This is the kind of arrangement that sports teams love, and in this case they are trying to sell it by also combining this with an expansion to the Convention Center, which quite frankly has reached it’s limits with at least Comicon. Did we mention that Comicon produces more in TOT taxes in that week alone, than all sports teams combined in a year?
The plan, as presented, also will force the move of the Metropolitan Transit System (MTS) bus yard. This move will be costly as finding a similar facility near where this one is will not be cheap. It is not just zoning, is property taxes. MTS needs this facility since it is centrally located to serve all it’s central San Diego routes.
The plan is also quite clear in not capping the contributions from the citizens of San Diego and has some aspects that remind this writer of the remodeling of the Q in the late 1990s that lead to a real economic crisis for the city. We were left holding the bag over filling the stadium with fans, since those fans were not there. So the city paid for that with the guarantee. Oh and the initiative is silent on the rest the team will pay to the city. Nor does it do a thing about the outstanding debt payments for the Q, It is a very nice initiative for the team.
So how about the Citizens Initiative? This is what some have called the Briggs Initiative, since it’s principal author is Cory Briggs. That one has issues as well. Since we have had a few issues with expanding the convention center and other initiatives have ended in court, it purports to leave the convention center where it is. There will be no expansion. It ignores that the reason those previous initiatives ended up in court, is precisely because of that increase in the TOT tax. Hoteliers downtown are simply put opposed to it. Though I admit that it was nice from the proponents to tell us that they will defend this in court. That was a nice detail in there.
More troublesome though is the transfer of the convention center management to a private public partnership. The management company that should take this upon themselves, will be subject to the Brown Act, but where do those profits go to? The city does rely on some of those funds to take care of things like fire and police staffing during events.
Insofar as the stadium, it is silent as to it’s location downtown. still hoping I suppose for the Mission Valley site. Though it does consider the possibility of the NFL leaving San Diego. In that case it does consider the possibility of transferring that city land to either of the three public university systems in town, and making that partly a park. It also considers a new stadium for college games capped at 40,000 seats. We also found it curious that it does consider the creation of a research facility to keep an eye on the San Diego River, as well as creating something for Eco-tourism on that property. This is because the river has never been that high of a priority for the city.