Lots of people have ideas for how to spend downtown redevelopment money.

Pay off debt for downtown projects like a previous Convention Center expansion and Petco Park. Increase affordable housing subsidies.

Last week, Mayor Jerry Sanders’ office formally put the brakes on studying how to finance a new Chargers stadium. A new stadium would need some of the same downtown money and Sanders is concerned there won’t be enough cash to pay for it and everyone else’s pet projects.

The mayor’s decision fuels a debate that already was beginning to form. The city can’t use downtown money for everything so it has to choose what it wants to do.

The most pressing issue is the Convention Center debt. Currently, the city’s day-to-day budget pays $9.2 million of the annual bond payment, money that otherwise could pay for services like police and fire. Some council members, touting a legal opinion from City Attorney Jan Goldsmith, want the city’s downtown redevelopment agency to pay that amount.

Sanders, at least for now, is against that idea, telling the Union-Tribune it was shortsighted to transfer debt from one government agency to another.

In an email interview, Sanders’ spokeswoman Rachel Laing, said the mayor isn’t a “solid no” on the idea, but has “serious reservations” about it. The city must determine that the expanded center benefits redevelopment activities downtown and likely also say that there’s no other way to pay for it. It’s a harder legal argument to make since the city has been paying for the expansion without downtown dollars.

“Of particular concern to the mayor is whether it’s proper for the city to retroactively make findings regarding the purpose of the Convention Center’s expansion,” Laing said.

The mayor has supported having the downtown agency, the Centre City Development Corp., taking over some responsibilities of the day-to-day operating budget. When pitching the council on lifting downtown redevelopment’s revenue limits last spring, a mayoral aide said the city could pick up future bond payments at Petco.

As it stands, the downtown agency makes that $11.3 million annual bond payment, but that’s scheduled to revert back to the day-to-day budget in 2014.

Laing said the mayor had no problem with CCDC paying the future Petco debt — if that decision came out of public meetings on downtown redevelopment’s future.

Sanders, state Assemblyman Nathan Fletcher and others hastily scheduled those meetings after the outcry over a last-minute deal brokered by Fletcher eliminated CCDC’s dollar limits, circumventing the public process that was already underway.

The meetings, Laing said, “will influence any position the mayor takes on spending proposals.”

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Part of the difficulty in divvying up the downtown redevelopment pie is that no one knows exactly how much money downtown will have. Here’s how I explained the situation in my Chargers stadium story this week:

CCDC’s revenues depend on development. The more development there is, the more property tax revenue the agency can collect.

The most recent projections show that there will be $386 million available for downtown redevelopment projects over the next 14 years….

Still, the $386 million figure is no more than an estimate of the agency’s share of downtown tax revenues. CCDC could have more money if developers decide to build more quickly now that the state legislation effectively extended CCDC’s lifespan, giving it more opportunity to entice construction. Presumably city leaders also will argue that building a stadium downtown will stimulate growth and lead to greater returns as well.

On the other hand, CCDC could have less money if the economy continues to stall and fewer people build.

The state legislation eliminated any limits on how much money CCDC could collect, but the agency remains restrained. It must stop collecting taxes in 2043, and there’s only so much development that could happen by then. CCDC has estimated that about $6 billion in additional property taxes would be generated.

But CCDC only gets a share of that money. Once San Diego County, the school district, affordable housing, overhead and everything else gets its portion of downtown tax dollars, the agency has estimated it will have about $1.8 billion available.

CCDC spokesman Derek Danziger said there’s a fundamental misunderstanding when he talks to people about the legislation that lifted the agency’s revenue cap.

“They think we just got a $6 billion check and we have $6 billion that we’re just kind of going, ‘Let’s see where we’re going to spend this,’” Danziger said. “We keep trying to explain that we don’t have a penny more than we had the day before the cap was lifted. It all is contingent upon new private development taking place downtown.”

More detailed studies are on the way, but the discussion shows that even downtown redevelopment without limits still has some.

Please contact Liam Dillon directly at liam.dillon@voiceofsandiego.org or 619.550.5663 and follow him on Twitter: twitter.com/dillonliam.

Liam Dillon

Liam Dillon was formerly a senior reporter and assistant editor for Voice of San Diego. He led VOSD’s investigations and wrote about how regular people...

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