San Diego With red ink splashing all over state and local government budgets, and services being slashed deeply, any California city that would pour a subsidy into a professional sports facility is probably doomed to becoming the laughingstock of the nation -- deserving the name "Rednecksville."
That's especially true if the team puts forward an economically absurd proposal and tries to sell it with blatant lies -- suggesting that the team really wants to insult the city into giving it a pass out of town.
Witness San Diego. On Tuesday, August 19, the city's purported pro football team, the Chargers, released a propaganda TV tape touting a proposal for a new stadium that "would be built by the Chargers without using taxpayer money." Multifarious self-proclaimed civic leaders with an economic interest in pro sports -- a beer distributor, the project's architect, bankers -- praised the measure.
Stephen Weber, president of San Diego State University, gushed, "I would feel very disappointed in the community that I love if we are not capable of this challenge." His numerous critics suspect he frets more about the Aztec football team than the deep cuts in academic spending at his institution, just as the San Diego establishment considers the subsidization of billionaires' sports teams more important than improving education, upgrading the city's rotting infrastructure, rebuilding the inadequate library system, digging out of the $1 billion pension hole, and the like.
The project is premised on several untruths. One is that there is something wrong with the current stadium, Qualcomm. Another is that with a new facility, the Chargers will be a better team; National Football League performance records belie that claim.
The major lie, of course, is one used twice before: the notion that this will be free to taxpayers. Shockingly, TV and radio stations, including public radio, spewed the lie on cue. But on Wednesday, the Chargers released some preliminary details, awash in devils.
Anyone could see there will be huge public costs -- perhaps a billion dollars' worth, according to former councilmember Bruce Henderson, who earlier tried to tell a naïve public that the claims of a "free" makeover of the football stadium in the mid-1990s, and then a "free" downtown baseball facility, were utterly fallacious. After promising to remain until 2020, the Chargers quickly wanted a new stadium. The Padres' ballpark, which was supposed to pay for itself through taxes from surrounding development, will cost $15 million to $18 million a year, mainly for debt service.
For starters, the Chargers want the city to give them 60 acres of land at Qualcomm. Attorney Michael Aguirre estimates this land may be worth $200 million to $300 million. Then the city would issue $175 million of bonds. Since when is bonded debt, which must be serviced with annual interest payments, free? Depending on the level of interest rates and the maturity of those bonds, you can probably double that $175 million as a cost to the city.
Under current lease arrangements for Qualcomm, the Chargers have pledged to pay the city $150 million until 2020. Presumably, there would be no lease payments on a stadium purportedly financed by the team. The city should dodge some maintenance costs, but some of that $150 million would be lost. And it's not clear who would pick up the $60 million-plus debt on the existing Qualcomm.
Also, the city would be responsible for infrastructure costs -- bound to be a huge figure. In a normal housing project, the developer picks up key infrastructure and open-space costs. But if the city is stuck with the infrastructure tab as well as major costs of two parks at the site, "It could be a $500 million windfall" to the Chargers, says Henderson. All told, "The Chargers would use city assets to make the city a billion dollars poorer and the Chargers a billion dollars richer."
Then there is the practicality of it all. The Chargers propose to build 6000 housing units. There are only 4000 in all of Del Mar. The 6000 would all be crammed into that Mission Valley site, along with a shopping center (as if Mission Valley needed another one), hotel, and other commercial structures. "I don't know that Mission Valley can handle that kind of density. Traffic is already a nightmare," says Donna Frye, Sixth District councilmember. The stadium is in her district.
She is also concerned that the development would be on a flood plain and adjacent to a fuel tank that has leaked petroleum into the ground.
The whole plan hinges on the site being declared a redevelopment area. That means it must be considered blighted. "Where's the blight?" asks Frye, taking a page from the ubiquitous "Where's the beef?" TV ad of the mid-1980s. "I don't know what a person could use or say to convince people that Mission Valley is blighted."
One definition of "blight," says the dictionary, is "a person or thing that withers one's hopes or ambitions." In that sense, the Chargers team has certainly been a blight on the community in recent years. Maybe that could be the blight rationale.
The Chargers and their blind followers claim that the project won't cost the taxpayers anything because it won't hit the general fund. But money is money, and it's fungible, or movable. What's in one pot comes out of another. Any city money tossed at the football project will in time impact the general fund directly or indirectly.
Supporters of this proposed boondoggle are even hauling out the old falsehood that the stadium will stimulate surrounding development (as if Mission Valley needed more development). Smith College economist Andrew Zimbalist notes that in economics, there are few points on which independent researchers are virtually unanimous. One of them is that "There is no statistically significant positive correlation between sports-facility construction and economic development." Some economists say there is a negative correlation, and that would be likely in this scheme. Traffic tie-ups would hurt existing businesses, particularly retailers.
This proposal is another example of the Chargers thumbing their noses at the city -- like the moving of practices to pollution-plagued Carson in the Los Angeles area and continuing to raise ticket prices so that the amount raked in under the ticket guarantee escalated as the team's performance plummeted. Under the original contract, the Chargers promised to use their best efforts to sell tickets. The city showed its weakness by not enforcing that clause, says Henderson. The way to get rid of the hated 60,000-seat guarantee is to fill the seats, and that means cutting prices, he says.
The city and Chargers have agreed to keep talking until May of 2004. That suits the city council just fine. City finances are teetering on the brink, and some councilmembers are in deep legal trouble. The council would prefer to let this matter slide. So would the Chargers. Things are at a standstill in L.A., the destination the team obviously desires.
The city must go to court now to find a way to thwart this proposal, "which would be a financial disaster for the city and city treasury," says Aguirre.
Think back to the mid-1990s. San Diego had an excellent stadium that was perfectly located in the county, with the largest parking area in all of pro sports. If this proposal goes through, both teams would be in locations that would be almost inaccessible for many people in the county. Great progress, huh?
With all these negatives, you would think this cockamamie football scheme could be dismissed out of hand, particularly when the Chargers obviously consider it a backup if L.A. doesn't materialize. "I have a lot more faith in the public than to believe they will be sold another 'free' stadium," says Frye.
But as Rodney D. Fort, economist at Washington State University and author of the textbook Sports Economics explains, sports-subsidy beggars are well organized and influential in any community. The team, fans, media, construction, concession industries, and others will pump for it. The mainstream media, with a big economic interest in pro sports, will slant the news.
It has happened twice before in the last decade in San Diego. It could happen again.