The Morning Report
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Taxpayers could end up investing nearly $1 billion in the new Chargers stadium under the plan released this week by the mayor’s stadium task force, a Voice of San Diego analysis of the plan shows.
The analysis includes all the public money the task force said would need to go toward the stadium, plus the money to prepare the Mission Valley site for development and some costs the task force neglected. Most notably, the task force did not factor in the price tag to operate and maintain the facility every year – something that costs the city about $11 million a year at the current site.
Let’s break down the figures.
This is how much public money the task force says it will cost to build the actual stadium, and where it would come from.
• Day-to-day budget of the city and the county: $242 million
The day-to-day budget is the part of city coffers that pays for police, fire, libraries and other front-line services. Under the task force plan, $242 million would go to the stadium over the next three decades; in other words, $242 million less in the day-to-day budget for these services. And this cost would add to the $57 million we still owe from the general fund to pay off the existing stadium debt.
• Sale of part of current Qualcomm Stadium land to a developer: $225 million
The task force believes that 75 acres fully entitled for condo and hotel development – something much easier said than done – would fetch this amount.
• San Diego State University rent: $21.6 million
The state-run university currently plays at Qualcomm. Under the new plan, the task force anticipates the school will up its rent to $1.25 million a year.
This is how much public money the task force says it will cost to build what’s needed around the stadium.
• Special district to pay for infrastructure: $116 million
A new state program allows local governments to bank new tax revenues from development to pay for infrastructure projects. The task force is counting on this money to upgrade parking and transit around the site. This is essential to the plan. Without these improvements, the head of the local building industry association says, the city won’t get top dollar for selling the Qualcomm land.
• Hotel-room taxes: $40 million
This is what the task force expects a new hotel on the site would generate in room taxes. This money has to go toward improvements, too. Remember, since this money is financing the stadium project, the city’s day-to-day budget won’t see the benefits of this increased tax revenue.
This is how much public money the task force isn’t telling you about.
• Operating and maintaining the stadium: $217 million to $327 million
This is one of the biggest gaps in the task force’s plan. The stadium won’t run for free each year. Right now, the stadium runs at a $7.2 million deficit once you take away the cost of the existing stadium bond debt. An analysis by the National University System Institute for Policy Research put the annual loss even higher at $10.9 million.
“It’s a significant issue,” said Erik Bruvold, who runs the institute. “That’s another general fund subsidy.”
For that number to go down, the city will have to make a lot of money from events at the stadium. Few stadiums around the country make substantial cash and the task force is using the Chargers’ rent at the new stadium to pay for the facility. That makes it even more likely stadium operations will be a major loss.
• The river park: $20 million to $25 million
The pretty designs for the new stadium include a big park on the stadium site next to the San Diego River. The task force, though, didn’t provide money to pay for it in the plan. “There is potentially state and federal funding to cover the cost,” said task force member Mary Lydon. So that’s taxpayer money, too. A park advocate estimated the project would cost between $20 million to $25 million.
Some of these figures could get lower. The task force identified about $250 million in revenue above its projected costs for the stadium, so more private dollars could lower taxpayer contributions. But the taxpayer contribution could get higher, too. The task force recommends the Chargers be responsible for all cost overruns on stadium construction and the team has made no indication that it will accept that. Indeed, many of the initial reactions to the task force’s plan include worry that it isn’t generous enough to the team.
So putting all the taxpayer dollars together, we’re talking potentially a public investment of between $881 million and $997 million in a new stadium.