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Analysis: People behind a plan to remake Balboa Park’s western entrance with a new bypass bridge and parking structure have a plan to pay for it. Qualcomm co-founder Irwin Jacobs’ committee has pledged to raise at least $26 million in private donations for the project. The city would pitch in $14 million for the parking structure. The City Council is scheduled to vote on the plan next Monday.
Until Thursday, anyone visiting the plan’s frequently asked questions page for more information about the project’s funding would’ve seen:
The project will be paid for by private donations raised by the Plaza de Panama Committee and a self-supporting bond. No taxpayer funds will be required. The bond will be repaid with revenue generated from parking charges for use of the garage. The revenue from parking charges will also pay for operation and maintenance of the garage and free tram service. The Plaza de Panama Committee has agreed to cover all cost overruns to ensure that there is no risk to taxpayer funds.
The last sentence means that even if construction delays increase the project’s timeline and total cost to complete, the committee has pledged to cover that.
But to pay for part of the parking structure, the city would borrow that money and have to pay it back over 30 years. The plan’s proponents say the parking fees will be more than enough to cover those payments without having to use money from the city’s day-to-day budget. They say enough people would pay to park there that the revenue could also cover the operation and maintenance of the structure and a planned tram.
(We’ve written this week about a couple of other safety measures proponents say could protect the city from any shortfalls in revenue.)
But ultimately, the city is on the hook for the borrowed money. If the parking revenues fall short, the city would have to dip into its day-to-day operating money to make the ongoing payment.
The original FAQ wording claimed “there is no risk to taxpayer funds” and “no taxpayer funds will be required.” Until Thursday, similar wording on a “Myths vs. Facts” page reiterated the cost overrun pledge and said “taxpayer funds would not be at risk.”
But there is a risk to taxpayer funds, and it wasn’t clear from the wording that the city’s general fund is the backstop for the parking structure debt.
While the plan’s backers commit to covering cost overruns in construction, they aren’t making the same blanket promise about the future operating costs and debt payments for the parking structure. Their statements exaggerated the guarantee, leaving the deceptive impression that no part of the project would risk taxpayer funds. Because of that, we’ve rated the statement Misleading.
When we inquired about the wording for this Fact Check, the plan’s backers changed it on both pages to clarify the way the funding plan works.
“The information you cite should have been written more clearly, and has been revised,” wrote Gerry Braun, the mayor’s director of special projects, in a statement. “All bonds of this kind are ultimately backed by the General Fund, and no one has claimed otherwise. Our revenue projections are conservative, and we are taking strong measures to buffer against fluctuations. Taxpayers can sleep well. Have a nice day.”
The new wording on the FAQ page clarifies the committee’s pledge and adds several mentions to the connection to the city’s general fund. I’ve added emphasis below:
The Plaza de Panama Committee has agreed to cover all cost overruns, ensuring that taxpayer funds would not be at risk for project construction. As with all lease-revenue bonds issued by the City, this bond would be backed by the City’s General Fund. The parking revenue study indicates that revenues would be more than ample to cover the annual debt service on the bond. In addition, the City will take several steps to insulate the General Fund …
Project backers also updated the wording on the Myths vs. Facts page on Thursday.
If you disagree with our determination or analysis, please express your thoughts in the comments section of this blog post. Explain your reasoning.
Disclosure: Irwin Jacobs is a major supporter of Voice of San Diego.
I’m Kelly Bennett, reporter for Voice of San Diego. You can reach me directly at email@example.com or 619.325.0531.
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