Last week, the San Diego County Grand Jury released a report that estimated city taxpayers would lose $11.8 million this year operating Qualcomm Stadium.
That number didn’t appear in any of the news stories on the Grand Jury report, nor in statements from a Chargers representative. Instead, the media and the team used a different figure, one that indicated taxpayers would lose $17.1 million this year.
“The Grand Jury report today said $17 million a year, every year, (goes) from taxpayers into the Qualcomm site,” Chargers special counsel Mark Fabiani said at a town hall meeting with stadium boosters last week.
What gives and why is it important?
In its report, the Grand Jury estimated the city would lose at least $17.1 million this year operating the facility, but included a caveat. That number excluded money the city might make at Qualcomm from events other than Chargers games, such as college football bowl games and monster truck rallies.
It based that number, Grand Jury members told me, on a city auditor report and the city’s budget. The Grand Jury also examined contracts between the team and the city, the report said.
But that doesn’t mean the city loses $17.1 million operating Qualcomm Stadium every year.
Also in the report, the Grand Jury estimated the city would spend $11.8 million from hotel-room taxes to subsidize stadium operations. That represents extra tax money the city needs to backfill the cost of operating Qualcomm.
And that’s the Grand Jury’s estimate of taxpayers’ subsidy to the stadium this year, members said.
“The overall loss to taxpayers is the $11.8 million,” said juror Robert McNamara.
The report included the higher, $17.1 million figure, McNamara said, “to sort of highlight the fact that if the stadium was operating for the Chargers alone that would be the loss.”
These numbers mean more than the annual hit to taxpayers’ wallets.
The city’s losses to operate Qualcomm are a central part of the debate for a publicly financed new stadium. The argument goes that city taxpayers would make a better use of their money investing in a new stadium than continuing to subsidize an old one.
The Chargers have estimated the annual operating loss to be $15.5 million. This estimate contributed to the team’s assertion that taxpayers would lose more than $300 million between now and when the team’s lease expired in 2020. We called that figure inflated and misleading in a series of stories and blog posts earlier this year. We estimated the annual loss at $12.2 million.
Stories on the Grand Jury report used the $17 million figure, and only some included the caveat that the number excluded stadium revenue other than the Chargers.
Fabiani, citing the Grand Jury, called Qualcomm’s annual losses $17 million at least three times during a town hall session with stadium boosters last week.
After the meeting, I asked him about the number and the Grand Jury’s assumptions.
“You have to talk to the Grand Jury about that,” Fabiani said. “I read the news reports today, and that’s what I’m saying.”
Of course, no estimate is perfect. When the Chargers have home playoff games, the city makes money. A planned bond refinancing also is expected to reduce stadium costs.
But the city loses more money if it’s required to make repairs — like potentially installing guardrails in stadium boxes — or if there are fewer revenue-generating events. A city auditor’s report also said the city isn’t maintaining the stadium at levels it should.
The Mayor’s Office has said it will make an assessment of the annual costs to operate Qualcomm as part of talks for a new stadium.
— LIAM DILLON