Score the first battle of the downtown debt wars in favor of the San Diego City Council.
The council decided yesterday to transfer permanently more than $200 million in expected bond payments for Petco Park to its downtown redevelopment agency. That’s an $11.3 million annual bill picked up by downtown project funds rather than the city’s day-to-day operating budget, which covers police, fire and library services.
This fight was the first in what is expected to be an ongoing war between the day-to-day budget and downtown. Most notably, the council plans to consider next having downtown redevelopment takeover what will eventually be a $13.7 million annual bond payment for a previous Convention Center expansion. Among other concerns, shifting that debt would be legally dicey.
The downtown redevelopment agency, the Centre City Development Corp., has protested that it won’t be able to fund much of anything if it’s forced to pick up these debts. After all, there’s only so much money.
Our partners at NBC San Diego covered the story yesterday, and I make a cameo talking about tradeoffs.
View more videos at: http://www.nbcsandiego.com.
One point in the Petco debate hasn’t been made yet but is important. In April, Mayor Jerry Sanders’ office and CCDC offered to have the agency pick up the Petco debt as a sweetener to the council should it agree to study lifting a limit on the property taxes CCDC could collect.
The point was that downtown redevelopment money would be there if CCDC’s tax cap were lifted — something the state legislature did suddenly as part of passing its budget in October. Cash poor protests from CCDC aside, the agency assuming Petco debt was supposed to be part of the deal.