Council Questions Downtown Redevelopment Boost

Downtown San Diego wants more money. Before that happens, a City Council discussion Tuesday showed that every other neighborhood wants its own share.

The council met to discuss a $500,000 study that could lead to increasing the tax revenue the city’s downtown redevelopment agency could collect. Council members ended up delaying a decision on the study, instead pointing to all the needs in their own neighborhoods.

Downtown’s case for a larger slice of the city’s tax revenue is this: An increase could allow the city to pay for lots of projects downtown it otherwise couldn’t, like a potential new football stadium for the Chargers. But an increase for downtown could mean less for everyone else.

Tuesday’s message from council members that represent districts other than downtown? We want some, too.

Or as Councilwoman Marti Emerald put it: “The horse trading has begun.”

After 90 minutes, the council voted unanimously to postpone the issue to June, presumably to allow for some of that horse trading to occur.

The key issue was how much extra money downtown would receive at the expense of the rest of the city if the increase is approved. State law caps the amount of money the city’s downtown redevelopment agency — the Centre City Development Corp. — can collect in its lifespan. Unless the cap is raised, the agency will run out of money before it can pay for all the projects it wants to build. The agency expects to be tapped out by 2024, except for outstanding bond debt.

But a report from the city’s Office of the Independent Budget Analyst said the city’s day-to-day operating budget — used to fund parks, libraries and public safety — would lose $300 million if the cap is raised. The report also noted the day-to-day budget would have to pay for improvements planned for downtown that redevelopment dollars otherwise could handle.

The budget analyst’s report left out key assumptions, said Phil Rath, the mayor’s deputy director of policy: $535 million of them.

In a presentation, Rath and Frank Alessi, CCDC’s vice president, argued the city’s day-to-day operating budget actually would receive a $235 million boost if the cap were lifted. That money would come from additional hotel room and sales taxes, as well as CCDC repaying debt that otherwise would be a general city obligation.

Rath and Alessi made sure to bring up matters some council members were sure to like.

For Councilman Carl DeMaio, they discussed the downtown redevelopment agency, not the city’s day-to-day budget, paying $215 million in outstanding debt for Petco Park. For Councilwoman Donna Frye, they discussed accelerating a repayment to the city for outstanding federal housing loans. For Councilman Todd Gloria, they discussed further money for homeless services. Also, Rath and Alessi prominently mention an additional $1.2 billion for affordable housing.

The promises weren’t nearly enough.

Council members took turns asking why downtown should receive more funding when services in their neighborhoods were cut or never provided in the first place. Take parks.

In her district, Councilwoman Sherri Lightner said promised parks can’t be built because the city’s day-to-day budget can’t pay to operate them.

“I’m very interested in finding out if not having parks is considered blight,” Lightner said.

Council President Ben Hueso gave a six-minute monologue on the need for equitable services citywide.

“We talked about funding neighborhood parks in downtown, but what about funding neighborhood parks in other parts of the city?” Hueso said. “I think we largely heard from advocates who want to see downtown continue to grow. I want to see downtown continue to grow. But I also want us to make a proportionate reinvestment in other parts of the city.”

Hueso and the city attorney also stamped out questions, primarily from Frye, related to the proposed Chargers stadium because they said that matter wasn’t publicly noticed. The football team has said it considers lifting the downtown redevelopment cap essential to its chances for a facility downtown. Downtown redevelopment officials have said any report from the city’s stadium finance consultant will come after direction on the cap is given.

Rath said the Mayor’s Office was “totally fine” with the postponement until June so that council members could feel comfortable taking action on the downtown cap. He realized that everyone, from individual council districts to San Diego County, wanted to carve up their slice of any increases to the city’s pie.

“There’s definitely a pie,” Rath said. “How big the pie is is a matter of dispute and opinion. And how big one’s slice should be is a matter of dispute and opinion. We will have to continue to all work together to see if we can arrive at a mutually agreeable apportionment. That’s what government does.”

Please contact Liam Dillon directly at liam.dillon@voiceofsandiego.org and follow him on Twitter: twitter.com/dillonliam.