Saving The Chargers

San Diego has just pulled another fast one on its citizenry, this time with the assistance of the California Legislature and benefiting, among others, the ownership of the San Diego Chargers. It was a pretty nifty move.

At issue is something known as a “redevelopment zone,” in this case downtown San Diego, which was declared a redevelopment zone in order to build a ballpark for the San Diego Padres baseball team. The idea is that such a zone is declared in areas that are “blighted” (which is not to say they are slums) so that they can be developed with tax-free bonds. Property taxes from that “zone,” presumably enhanced by initial development, are then held within an agency and used for further development within the area, such as subsidizing hotels and condominiums.

(If the property taxes are enhanced by the development, they why do they need to be sequestered for subsidizing more development in the area?)

There is, however, a limit on how much of this enhanced property tax money can be held in the agency and used for development. After that cap is reached the zone is “over,” and taxes from the area become just plain property taxes and are turned into the city’s general revenue fund. This is where San Diego’s “slick move” comes in.

The downtown zone, pivoting around Petco Park, was nearing it’s peak of $2.9 billion and the city, seriously strapped for cash and with a budget deficit amounting to 20% of its operating budget, could definitely use the additional revenue of ending that zone. Meanwhile, the San Diego Chargers are making noises about leaving town if they don’t get a new stadium, and all sites other than downtown have pretty well been eliminated. Downtown development agency money is not available, though, because there is not enough room remaining below the cap.

So some enterprising city legislator hies himself up to Sacramento and gets the downtown redevelopment cap eliminated; not raised, eliminated. It turns out that the cap on redevelopment zones is outmoded and the newer zones don’t have caps. So now there is redevelopment zone money available to build a stadium for the Chargers, money that can be claimed not to cost taxpayers anything because it is “redevelopment funds” and not taxes.

Of course, it is taxes, but only on the people who live or have businesses in the redevelopment zone.

It also means the money that would have gone to things like paving streets and paying police and firefighters if the zone were ended will not be made available, but we do have our priorities. We do need to keep our fumbling, unable-to-punt, can’t-beat-the-Raiders, 2-3 Chargers from leaving town.