Thursday, March 31, 2016

No Problem: It's Free!

The Chargers have finally announced their $1.8 billion stadium plan, and it won’t cost us a dime. Not a penny. We get it free for nothing. Yea, let’s vote for it. Does it include a pasture for the unicorns?

The plan does include an addition to the downtown convention center, but not in the location that the convention center wants the expansion to be built. The expansion is across the railroad tracks and several blocks away from the existing center, while the center (quite understandably) wants the expansion to be an extension of the existing building; something which is entirely feasible.

Let’s start with the first fiction in the plan; that hotel visitors would pay for it by raising the hotel tax from 12.5% to 16.5% and devoting that money to the stadium. Well, no, the tax is not presently 12.5% because it was raised to that rate illegally and the court reduced it back down to its present rate of 10.5%. So in actuality the plan would raise the tax from 10.5% to 16.5%, which is a significantly greater increase than is presented by proponents of the plan. It's not a 30% increase in the hotel tax; it's a 60% increase. Honesty never plays a major role in these things.

Sportswriters and politicians say flatly that such an increase will not reduce tourism, citing no surveys or studies to back that up, but pointing out that Anaheim and San Francisco have similar tax rates. Indeed they do. Anaheim has Disneyworld and San Francisco has, well, San Francisco. We have Indeed. Hotel owners are less certain. They don’t mind the 2% increase, voted in favor of it themselves when the increase was for the purpose of tourism marketing, but the 6% thing worries them a bit.

These hotel taxes would be paying off $1.15 billion in bonds. Those bonds would be spent, according to the San Diego Union Tribune, as follows: $350 toward the football stadium, $600 million for the convention center, and $200 million to buy land. No mention is made as to why they are not saving $200 million by using the vast tract of land the city already owns in Mission Valley, where Qualcomm Stadium is presently located.

The NFL is “paying $300 million” which was a significant contribution back when the stadium plan was $800 million, but seems pretty paltry now that the price tag is $1.8 billion. Not to mention that $200 million of that is actually a loan, and that there is no mention in the plan as to any source of funds with which to repay that loan. Unicorns pooping gold bars, perhaps?

The Chargers are “paying $350 million” which they will recover by selling seat licenses and naming rights. That means, of course that they are not actually paying anything.

It’s unclear whether passing this idiocy will require a simple majority, or if the California law which says that tax increases require two-thirds majority will be in effect. A court recently ruled that special interest purpose taxes only require a simple majority, which to me sort of defeats the whole purpose of the law, but the impact of that ruling on this issue is unclear.

Preliminary polls show that the San Diego public is sufficiently gullible to go for any con job that is sold to them as “something for nothing.”  While just under 30% favored building a new stadium, 54% seem to favor this combination of the expansion that the convention center doesn’t want and the stadium that almost nobody wants. If it’s free we want it.

1 comment:

bruce said...

what's the convention center have to do with anything if the stadium is nowhere near it? Sort of a tag along "upgrade the city center" plan and we'll throw in a stadium too? Everyone else has one! Besides, sounds a lot like the 'CC upgrade' is a whole new one for that price.

And the $200M for land is the CC as well, since they couldn't just say that. Or they need new land to build the new stadium on while they are still using the old one. Then they can sell the old one for a senior housing development or something.

Does seat licenses and naming rights generate that much money? I guess the Chargers have no other money, after paying for player salaries and whatnot. The NFL doesn't give anything away for free, so if that's a loan...

what about the actual team owner ponying up some cash? I guess if he can get someone else to pay for it, he's a good businessman. Maybe we should elect him POTUS. Or mayor. Or something.

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