They’re scrimping in Portugal
Retrenching in Spain
Parsimonious in Italy
In San Diego — insane
Europe talks frugality
Japan’s praising thrift
Even Greece lauds austerity
San Diegans get stiffed
(apologies to the Kingston Trio)
Yes, the frugal horn is blowing around the world — at last. One country after another recognizes that it has been living beyond its means. To be sure, the new respect for prudence is more honored in the breach than the observance. However, although the public may resist in some places, political leadership is enlightened.
In San Diego, it’s the other way around. Political leadership refuses to accept economic reality, but there is more than a faint possibility that the public is becoming enlightened.
Much of the blame lies with the media. On May 19, the San Diego County Grand Jury published an excellent study on Qualcomm Stadium. It revealed that the Chargers in reality pay less than $1 million a year in rent, and that’s one reason the stadium loses $17.1 million a year from Chargers’ usage. The study showed how Tampa gets much higher payments from its team.
There were some gems of wisdom: “The Chargers franchise is quite profitable and needs no subsidies,” said the report. And “Many sports economists now conclude that a municipality does not benefit from the location of a stadium in the urban center.… There is almost no evidence that professional sports franchises and facilities have a positive impact on real per capita income or employment, and may have a negative effect.” (Emphasis mine.)
The study went on to state the obvious: the City got completely fleeced when it negotiated its contracts with the Chargers. (Just think of all those who got publicly smeared for speaking the truth on that topic.)
But if you perused an account of the study in the local media, you might have concluded that the grand jury was touting that new Chargers stadium downtown. The media focused on that $17.1 million loss figure — suggesting that the grand jury bought into the Chargers’ addled argument that it’s better to pay a $600 million to $700 million subsidy for a new stadium than suffer an annual $17.1 million loss. The team claims that the Qualcomm site could be developed and provide the City with income — a ridiculous assertion because there is a plume underneath it that will delay development for a long time, and there will be no market for development for the foreseeable future.
Chargers’ bullhorn Mark Fabiani trumpets the downtown stadium as the “last, best option” for a new stadium — a veiled threat that should not be taken seriously. In this credit-squeezed economy, no new sports stadium is going to get built anytime soon, including in the Los Angeles environs.
But as soon as the grand jury report came out, the media began beating the drums. “Get it built,” blared the Union-Tribune’s editorial board. It is “time for city, Chargers to commit to each other.” The U-T sang the praises of development in the ballpark district — unaware, or unwilling to admit, that the condos and hotels there have very few people occupying them.
“Make the downtown Chargers stadium happen,” exhorted one Lee “Hacksaw” Hamilton, resident scholar of San Diego News Network, which has essentially shut down. The new stadium “might be of tremendous value to the downtown area,” quoth he, contradicting the grand jury’s statement. He even made an economic projection: “The value of land at the Q and the Sports Arena will rise as Wall Street rises.” (Italics mine.) Oh? Are you sure, Hacksaw? Stocks are about where they were in 1999. Real estate values have plummeted.
On May 24, KPBS’s Maureen Cavanaugh, on the program These Days, hosted Fabiani and Liam Dillon of Voice of San Diego. Fabiani put his foot neatly in his own mouth. San Diego “has a very bad deal right now at the Qualcomm site,” he said. Yeah, and with whom did the City make that very bad deal? With the Chargers, who now want another deal. (“Fool me once, shame on…” Oh, you know how that goes.)
At least, Dillon picked up on Fabiani’s blooper. “If the City keeps making bad deals with the Chargers — who’s to say that this time the City is going to make a good deal with the Chargers?” asked Dillon astutely. But later, he seemed to be buying into the Chargers’ fatuous argument. Perhaps by building a new stadium, the City could save in the long run. “Basically, you’re already subsidizing billionaires, here’s a way where you might be able to stop,” said Dillon.
Cavanaugh should have asked him how the City is going to stop subsidizing billionaires if it will throw hundreds of millions at the downtown stadium. She didn’t. And she should have asked the key question: what’s wrong with repairing whatever is wrong with Qualcomm — if anything — since it’s only used a few times a year? She didn’t ask that, either. Encouragingly, those who called in, and most who initially commented on the discussion, realized what a swindle this proposed stadium is.
The media are not discussing the most important variable in this discussion. Late last year, the Citizens’ Fiscal Sustainability Task Force came out with an important study. “The City of San Diego’s current fiscal outlook is very dire,” it said. (It is no better now, and may be worse.) “The City has been ‘living beyond its means’ for a number of years, deferring important expenses and postponing or underfunding a number of obligations that must now be addressed (such as aging infrastructure, underfunded retirement plans, and unfunded retiree medical benefits).… The City raises the least General Fund Revenues per household, measured as a percentage of household income, of any of the ten largest cities in California.”
If it can’t accomplish a number of reforms, “The City would be forced to consider seeking injunctive relief by filing for Chapter 9 Bankruptcy protection,” said the task force, made up of establishment members.
But now the establishment (hopefully not the task force members) wants to hand a massive stadium subsidy to a family worth more than $1 billion.
Maybe San Diego should be renamed Sportugal.