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Chargers Ready Taxpayer Fleece-Fest

The city and the Chargers are in secret kiss-and-tell negotiations. True to historical precedent, the city is kissing the Chargers' rear hip pads and not telling anybody. The Chargers, meanwhile, are openly telling people their version of the supposedly secret tête-à-tail.

It's typical San Diego government: professional sports teams get kissed, taxpayers get kicked, and truth gets camouflaged.

The Chargers claim they can put together a deal without tapping public funds. But San Diego has heard that twice before. There was the remake of what is now Qualcomm, with the purportedly wondrous 60,000-seat guarantee, and then the ballpark, which was to be financed by taxes thrown off by commercial structures, particularly hotels, that are nowhere in sight.

The new Chargers proposal will definitely drain city funds; the question is how it will be covered up. Watch for several things: the team will try to wiggle out of $150 million in rent owed for the next 16 years; the team will get the land virtually free from the city; promises will be neither memorialized nor enforced; there will be a promise of a luscious public park; and the city and team will claim the deal doesn't impact the general fund, which will be deceitfully defined.

Another distinct possibility: the Chargers will want to lose a 2006 vote, so they can leave town claiming they were shoved.

With a hide-the-pea government and a perfume-the-polecat mainstream media, discovering the deceptions will be difficult, as in the past.

Examples abound: in May of 1995, then-city manager Jack McGrory assured the city council in a memo that under the agreement with the Chargers, the seats would fill up. The San Diego International Sports Council, one of those charmed institutions that takes government funds so it can turn around and lobby government, promised it would work to "increase home game general admission attendance to a minimum [italics mine] of 60,000 per game."

"They tried," McGrory sighs today. The 60,000-seat guarantee failed "because the team worsened." Yeah, but anybody who tried to say back then that the Chargers wouldn't always be winners was branded an obstructionist.

The astounding part of McGrory's memo dealt with the Padres. According to the Chargers' contract with the city, the Chargers beginning in 1999 would get all the Padres' in-park advertising revenue, even at Padre games, and the Chargers would also determine schedule dates. To anyone who had read the contract, it was clear that it was a pre-plotted ploy: the Padres could say the city had forced them out, and they needed a new facility. But McGrory's May 1995 memo projected that the Padres would continue generating big bucks for the city at what was then Jack Murphy Stadium. Indeed, by 2010, the Padres playing at the Murph would shovel $7.7 million to the city. Ulp!

"Anybody who operated in 1995 on the assumption that the Padres intended to continue playing at Jack Murphy Stadium after 1999 simply had not read the agreement," says former councilmember Bruce Henderson.

In 1997, John Witt, who was city attorney when the Chargers' contract was drawn, said that Mayor Susan Golding was the city's chief negotiator, and the city attorney's office played a limited role. Shortly, Witt did a mea maxima culpa. "I screwed up," he claimed. Golding was not the chief negotiator. Witt suddenly recalled being briefed almost daily on the negotiations. It is amazing how heads clear when a guillotine hangs over them.

Recently, there has been the question of the so-called trigger -- a financial threshold that would permit the Chargers to compel the city to negotiate a new deal. When the Chargers said they could trigger earlier this year, the city relied on the word of a sports consultant who is paid to help pro teams maximize the amount they suck out of city governments. Councilmember Donna Frye hired a nationally known economist who said the Chargers could not trigger. The city ignored the economist and began negotiating with the team without saying whether the Chargers could trigger. "They adopted a policy of negotiating a new contract in secret without determining if they were required to negotiate a contract," says attorney Mike Aguirre.

"From the beginning, I opposed entering into negotiations unless the Chargers proved they could trigger," says Frye. "My position has not changed." She is annoyed by the government-imposed omertá. "The Chargers are allowed to speak about their proposal. Why can't I?" In dealing with the city on sports issues, Frye says, "It is difficult to get straight answers" from bureaucrats.

In the 1995 agreement, the Chargers pledged to use their "best efforts" to fill the stadium. But after several years of lousy attendance and a big drain on city coffers from the seat guarantee, the Chargers raised ticket prices, and city attorney Casey Gwinn didn't exercise the best-efforts clause. He should have done so long ago to force the Chargers to lower prices, says Henderson.

The Padres provide a more nauseating example of government obsequiousness and disingenuousness. Gwinn claimed in the ballot argument that the project would be "revenue neutral" because of the bounteous tax revenue flowing from hotels, office, and retail buildings. When it was obvious the tax receipts would fall far short, a new mayor, Dick Murphy, made wholesale alterations to the deal. The memorandum of understanding, the document authorizing the project, had declared that if there were "material changes," it would have to go back to the voters. Gwinn kicked the matter to the council, which said there were no material changes.

The memorandum of understanding gave the Padres the right to "fine-tune" the mix of real estate in the ballpark district. Former law professor and judge Robert Simmons pointed out in a lawsuit that, for just one example, the requirement for office buildings had been lessened by 66 percent. That was hardly fine-tuning. But the city insisted it was.

" 'Fine-tuning' was a code word for 'We can do whatever we want,' " says Stanley Zubel, Simmons's attorney.

Now the Padres and the city -- and the mainstream press that has an economic interest in pro-sports subsidies -- are crowing that there is a condominium boom in and around the ballpark district. This is laughable. The taxes generated by residential real estate barely pay for the infrastructure and services the homes require. "There are no sales and transient occupancy [hotel] taxes from residences," says Zubel.

"Housing is a drain," says Frye, citing many studies. Transient-occupancy taxes provide the city with juicy revenue, notes Henderson, but there has been little hotel construction in the ballpark district.

Recently, of course, there was the question of the 3.5-acre "park at the park" that, Aguirre points out, the Padres touted in a mass mailing to the citizenry before the 1998 vote. But when the Padres wanted to shrink the park substantially, the city attorney's office said that the memorandum of understanding had deliberately not spelled out the specifics for the park, lest economic conditions change. Indeed, the Padres had shrunk the size back in 1999 by quietly showing another rendering. Also, the ballpark itself is no longer positioned to give the fans great views, as originally advertised. And this is the city attorney's office that is supposed to be prosecuting bait-and-switch schemes.

Overall, "If you look at the contract, there was no penalty clause" for Padres nonperformance, says Henderson. The contract should have read, "If for some reason the promised buildings are not on the tax rolls, you pay the city the shortfall. All the city attorney did was memorialize what the city was going to do, and in vague terms memorialized what the Padres might do if they were so inclined." Great contract.

The city attorney's office wouldn't answer questions about all these matters.

Now, presumably, there will be a new Chargers contract. It will be filled with loopholes that are sure to drain your pocketbook, but your problem will be finding out how.

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The city and the Chargers are in secret kiss-and-tell negotiations. True to historical precedent, the city is kissing the Chargers' rear hip pads and not telling anybody. The Chargers, meanwhile, are openly telling people their version of the supposedly secret tête-à-tail.

It's typical San Diego government: professional sports teams get kissed, taxpayers get kicked, and truth gets camouflaged.

The Chargers claim they can put together a deal without tapping public funds. But San Diego has heard that twice before. There was the remake of what is now Qualcomm, with the purportedly wondrous 60,000-seat guarantee, and then the ballpark, which was to be financed by taxes thrown off by commercial structures, particularly hotels, that are nowhere in sight.

The new Chargers proposal will definitely drain city funds; the question is how it will be covered up. Watch for several things: the team will try to wiggle out of $150 million in rent owed for the next 16 years; the team will get the land virtually free from the city; promises will be neither memorialized nor enforced; there will be a promise of a luscious public park; and the city and team will claim the deal doesn't impact the general fund, which will be deceitfully defined.

Another distinct possibility: the Chargers will want to lose a 2006 vote, so they can leave town claiming they were shoved.

With a hide-the-pea government and a perfume-the-polecat mainstream media, discovering the deceptions will be difficult, as in the past.

Examples abound: in May of 1995, then-city manager Jack McGrory assured the city council in a memo that under the agreement with the Chargers, the seats would fill up. The San Diego International Sports Council, one of those charmed institutions that takes government funds so it can turn around and lobby government, promised it would work to "increase home game general admission attendance to a minimum [italics mine] of 60,000 per game."

"They tried," McGrory sighs today. The 60,000-seat guarantee failed "because the team worsened." Yeah, but anybody who tried to say back then that the Chargers wouldn't always be winners was branded an obstructionist.

The astounding part of McGrory's memo dealt with the Padres. According to the Chargers' contract with the city, the Chargers beginning in 1999 would get all the Padres' in-park advertising revenue, even at Padre games, and the Chargers would also determine schedule dates. To anyone who had read the contract, it was clear that it was a pre-plotted ploy: the Padres could say the city had forced them out, and they needed a new facility. But McGrory's May 1995 memo projected that the Padres would continue generating big bucks for the city at what was then Jack Murphy Stadium. Indeed, by 2010, the Padres playing at the Murph would shovel $7.7 million to the city. Ulp!

"Anybody who operated in 1995 on the assumption that the Padres intended to continue playing at Jack Murphy Stadium after 1999 simply had not read the agreement," says former councilmember Bruce Henderson.

In 1997, John Witt, who was city attorney when the Chargers' contract was drawn, said that Mayor Susan Golding was the city's chief negotiator, and the city attorney's office played a limited role. Shortly, Witt did a mea maxima culpa. "I screwed up," he claimed. Golding was not the chief negotiator. Witt suddenly recalled being briefed almost daily on the negotiations. It is amazing how heads clear when a guillotine hangs over them.

Recently, there has been the question of the so-called trigger -- a financial threshold that would permit the Chargers to compel the city to negotiate a new deal. When the Chargers said they could trigger earlier this year, the city relied on the word of a sports consultant who is paid to help pro teams maximize the amount they suck out of city governments. Councilmember Donna Frye hired a nationally known economist who said the Chargers could not trigger. The city ignored the economist and began negotiating with the team without saying whether the Chargers could trigger. "They adopted a policy of negotiating a new contract in secret without determining if they were required to negotiate a contract," says attorney Mike Aguirre.

"From the beginning, I opposed entering into negotiations unless the Chargers proved they could trigger," says Frye. "My position has not changed." She is annoyed by the government-imposed omertá. "The Chargers are allowed to speak about their proposal. Why can't I?" In dealing with the city on sports issues, Frye says, "It is difficult to get straight answers" from bureaucrats.

In the 1995 agreement, the Chargers pledged to use their "best efforts" to fill the stadium. But after several years of lousy attendance and a big drain on city coffers from the seat guarantee, the Chargers raised ticket prices, and city attorney Casey Gwinn didn't exercise the best-efforts clause. He should have done so long ago to force the Chargers to lower prices, says Henderson.

The Padres provide a more nauseating example of government obsequiousness and disingenuousness. Gwinn claimed in the ballot argument that the project would be "revenue neutral" because of the bounteous tax revenue flowing from hotels, office, and retail buildings. When it was obvious the tax receipts would fall far short, a new mayor, Dick Murphy, made wholesale alterations to the deal. The memorandum of understanding, the document authorizing the project, had declared that if there were "material changes," it would have to go back to the voters. Gwinn kicked the matter to the council, which said there were no material changes.

The memorandum of understanding gave the Padres the right to "fine-tune" the mix of real estate in the ballpark district. Former law professor and judge Robert Simmons pointed out in a lawsuit that, for just one example, the requirement for office buildings had been lessened by 66 percent. That was hardly fine-tuning. But the city insisted it was.

" 'Fine-tuning' was a code word for 'We can do whatever we want,' " says Stanley Zubel, Simmons's attorney.

Now the Padres and the city -- and the mainstream press that has an economic interest in pro-sports subsidies -- are crowing that there is a condominium boom in and around the ballpark district. This is laughable. The taxes generated by residential real estate barely pay for the infrastructure and services the homes require. "There are no sales and transient occupancy [hotel] taxes from residences," says Zubel.

"Housing is a drain," says Frye, citing many studies. Transient-occupancy taxes provide the city with juicy revenue, notes Henderson, but there has been little hotel construction in the ballpark district.

Recently, of course, there was the question of the 3.5-acre "park at the park" that, Aguirre points out, the Padres touted in a mass mailing to the citizenry before the 1998 vote. But when the Padres wanted to shrink the park substantially, the city attorney's office said that the memorandum of understanding had deliberately not spelled out the specifics for the park, lest economic conditions change. Indeed, the Padres had shrunk the size back in 1999 by quietly showing another rendering. Also, the ballpark itself is no longer positioned to give the fans great views, as originally advertised. And this is the city attorney's office that is supposed to be prosecuting bait-and-switch schemes.

Overall, "If you look at the contract, there was no penalty clause" for Padres nonperformance, says Henderson. The contract should have read, "If for some reason the promised buildings are not on the tax rolls, you pay the city the shortfall. All the city attorney did was memorialize what the city was going to do, and in vague terms memorialized what the Padres might do if they were so inclined." Great contract.

The city attorney's office wouldn't answer questions about all these matters.

Now, presumably, there will be a new Chargers contract. It will be filled with loopholes that are sure to drain your pocketbook, but your problem will be finding out how.

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