54.3 F
San Diego
Thursday, Mar 28, 2024
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Measure C Debate – AGAINST

Julie Meier Wright

A business executive making a major investment will always examine all

Phil Blair

facets of the investment — size, risk, investment return and fit. Measure C, the San Diego Chargers’ initiative to raise San Diego’s tourism occupancy tax, would not measure up. Period.

It’s a shame that a handful of elected officials and groups purporting to be business-oriented have endorsed the measure with no legally binding provisions other than the ballot initiative itself. We applaud elected City Council leaders from both parties who see the folly of this measure.

It’s telling that Dean Spanos and his consultants are running an emotional campaign, attempting to turn the vote into a test of our love for the Chargers. They know it is a terrible investment for the City of San Diego and taxpayers.

C and D Get Grade F

Measure D isn’t much better — it also raises taxes to benefit a $2 billion NFL franchise. Both measures fundamentally change downtown and require a remote convention annex Comic-Con is telling us not to build.

If the Chargers’ wildly optimistic estimates of the cost of the stadium, or the huge number of new hotel nights they forecast, do not materialize, the city’s General Fund is at risk. Why? Measure C and Measure D authorize the use of TOT-backed revenue bonds that, in order not to jeopardize its credit rating, the city would pay back before spending money on essential services.

Four independent analyses of the Spanos tax measure reached the same conclusion — costs might exceed revenues and San Diego taxpayers would be on the hook for potentially more than $3 billion for 30 years.

Our Business Analysis

Size: The bond offering would be the largest in the city’s history. A report to the city’s chief financial officer noted “there have not been any billion-dollar TOT-backed revenue bond transactions, and a transaction of this size may well carry a size penalty.” Meaning: the bonds would cost more.

The report said that TOT revenues are considered by bond rating agencies to be a “narrow and relatively volatile revenue stream.” Big red flag.

Risk: Where to start! There are so many risks: inadequate TOT revenues for all committed costs; raising TOT more than 30 percent, making us less competitive for conventions and costlier for employers who host visitors; lost convention business with an off-site annex that meeting planners unequivocally dislike; inadequate bonding capacity for infrastructure like streets and roads; many issues not addressed, like 1,000 parking spaces the city must replace for the Padres, or infrastructure improvements to accommodate 60,000 people sports fans in a dense urban location. Measure C is deeply flawed because it was written in a back room by Dean Spanos, Mark Fabiani and Goldman Sachs. Regardless of what Spanos backers tell you, the only legally binding language is the ballot measure.

Return on Investment: Spanos says the city will prosper from the public investment and it will catalyze downtown development. Too late. The Padres already did it: with 26 blocks redeveloped in downtown, they provided a handsome return on investment: $5.25 for every city dollar spent in a 2010 study. Today East Village is becoming a tech center, with more than 110 small software and tech companies, attracting millennials who don’t want a commute but want the urban “vibe” that a massive stadium would destroy.

Fit: A massive stadium is far too large for the small downtown site, overpowering tech and residential growth. It walls off the Bay-to-Park link long envisioned by our city. It eliminates iconic views of San Diego Bay, San Diego-Coronado Bridge and Central Library.

Mission Valley

It presents traffic and emergency response challenges, displaces historic buildings, and requires relocating a giant bus yard and remediating the site, costs not covered by Measure C or D. Both ballot measures present more risk to taxpayers — and to the Chargers — than a beautiful vision for Mission Valley.

The right place is Mission Valley, as Mayor Kevin Faulconer’s Citizens’ Stadium Advisory Group noted last year. The mayor should have supported its recommendation. CSAG said Mission Valley would be an excellent and cost-effective choice because it includes freeway access and mass transit, it would address the needs of San Diego State University, and it would open up the beautiful river park. 

The business case for the downtown stadium isn’t there for anyone but the person who could afford to pay for it: Dean Spanos. That’s why we recommend NO votes on Measure C and Measure D, and a renewed focus on Mission Valley, where the stadium belongs.

Phil Blair is Executive Officer of Manpower San Diego. Julie Meier Wright is a former CEO of the San Diego Regional EDC and California Secretary of Trade & Commerce.

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