Anchor ads are not supported on this page.

4S Ranch Allied Gardens Alpine Baja Balboa Park Bankers Hill Barrio Logan Bay Ho Bay Park Black Mountain Ranch Blossom Valley Bonita Bonsall Borrego Springs Boulevard Campo Cardiff-by-the-Sea Carlsbad Carmel Mountain Carmel Valley Chollas View Chula Vista City College City Heights Clairemont College Area Coronado CSU San Marcos Cuyamaca College Del Cerro Del Mar Descanso Downtown San Diego Eastlake East Village El Cajon Emerald Hills Encanto Encinitas Escondido Fallbrook Fletcher Hills Golden Hill Grant Hill Grantville Grossmont College Guatay Harbor Island Hillcrest Imperial Beach Imperial Valley Jacumba Jamacha-Lomita Jamul Julian Kearny Mesa Kensington La Jolla Lakeside La Mesa Lemon Grove Leucadia Liberty Station Lincoln Acres Lincoln Park Linda Vista Little Italy Logan Heights Mesa College Midway District MiraCosta College Miramar Miramar College Mira Mesa Mission Beach Mission Hills Mission Valley Mountain View Mount Hope Mount Laguna National City Nestor Normal Heights North Park Oak Park Ocean Beach Oceanside Old Town Otay Mesa Pacific Beach Pala Palomar College Palomar Mountain Paradise Hills Pauma Valley Pine Valley Point Loma Point Loma Nazarene Potrero Poway Rainbow Ramona Rancho Bernardo Rancho Penasquitos Rancho San Diego Rancho Santa Fe Rolando San Carlos San Marcos San Onofre Santa Ysabel Santee San Ysidro Scripps Ranch SDSU Serra Mesa Shelltown Shelter Island Sherman Heights Skyline Solana Beach Sorrento Valley Southcrest South Park Southwestern College Spring Valley Stockton Talmadge Temecula Tierrasanta Tijuana UCSD University City University Heights USD Valencia Park Valley Center Vista Warner Springs

Taxpayers on $271 million Petco hook

With Chargers deal hanging fire, city council privately votes to battle ballpark claw-back

Petco Park
Petco Park

As mayor Kevin Faulconer's task force works on a stadium financing plan to keep the Chargers from leaving town, the San Diego City Council is fighting a court battle to hang on to $271 million in reimbursements for city obligations used to pay for downtown's Petco Park.

If they fail, as some legal observers expect they might, taxpayers here could be forced to make up the considerable ballpark debt, even as the city faces the prospect of coming up with yet more millions for a new professional football stadium.

Susan Golding
Larry Lucchino

The saga dates back to the 1998 origins of the downtown ballpark, when Republican then-mayor Susan Golding along with Union-Tribune publisher Helen Copley, Padres owner John Moores, and his sidekick Larry Lucchino, assured voters that the new Padres venue would come virtually tax-free for the average Joe.

Sponsored
Sponsored

"The financial components of the deal are these," then-U-T reporter Gerry Braun explained in a November 1998 story a week before the public voted on Proposition C, an advisory measure on the project.

"The city and its redevelopment arm, the Centre City Development Corp., will contribute $275 million to the project, largely through the issuance of bonds. The bonds will be paid off with hotel-room taxes and new property taxes created by the project." The latter cash was to be routed through the city-controlled redevelopment agency.

Because so-called general obligation bonds wouldn't be used to finance the deal, there was no requirement for two-thirds voter approval, and the measure, sold as largely a free lunch by its backers, passed with 59.5 percent of the vote.

Thirteen years later came the California budget crisis of 2011 and governor Jerry Brown's successful move to shut down local redevelopment agencies and ship the property-tax money they had been skimming from tax rolls back to the state and other tax recipients, including counties and school districts.

The law signed by Brown set up a settlement process by which the cities behind the former redevelopment agencies could petition to keep their funds under certain conditions. When the state said no to using money to pay off the ballpark bonds, San Diego sued in 2013, and subsequently lost.

"In January 2007, the City passed an ordinance stating that it would issue bonds in an amount not to exceed $172 million, and the City issued the bonds shortly thereafter," according to the December 22, 2014, ruling by judge Shelleyanne W.L. Chang.

In 2009, Chang's order says, the redevelopment agency "agreed to provide additional funds for the [ballpark] Project, and agreed to pay approximately $56.5 million toward the debt service on the 2007 bonds for fiscal years 2009–2013."

Then, five months before the legislature's June 28, 2011, action ending redevelopment, San Diego's agency agreed to pay the city $231,267,162.50 for "additional debt service on the 2007 bonds for fiscal years 2012–2032," according to the document.

In August 2011 the city council used $11.3 million under its agreement with the agency to make a payment on the bonds.

Two years later, California officials sent a notice to the city saying they had "found that this transfer was unauthorized and must be remitted, because transfers pursuant to an agreement between the [redevelopment agency] and its sponsoring entity (here, the City) were not enforceable obligations."

After a variety of arguments made by the city in its quest to force the state to hand over the funds were rejected by Chang, the city council, meeting in closed session on February 2, voted 9-0 to take their case to a higher court. The notice of appeal was filed February 10 in Sacramento.

The appeal action, taken by the council without public presence or debate, will likely postpone the taxpayers' day of reckoning into the indefinite future, perhaps long enough for Faulconer's task force to formulate another subsidy deal for the Chargers.

In the meantime, notes an April 2014 budget review by the office of the city's independent budget analyst, "Debt service on the PETCO Park Bonds was previously paid by the redevelopment Successor Agency in FY 2013 (pursuant to a Cooperation Agreement with the former Redevelopment Agency) but was later determined to be an unenforceable Successor Agency obligation, and the City was required to pay the full debt service beginning in FY 2014 and this continues in the FY 2015 Proposed Budget, with $11.3 million of the $13.8 million going to debt service."

The mayor's 2016 budget proposal is due out this coming April. We have a call in to Matt Awbrey at the mayor's office for details.

The latest copy of the Reader

Please enjoy this clickable Reader flipbook. Linked text and ads are flash-highlighted in blue for your convenience. To enhance your viewing, please open full screen mode by clicking the icon on the far right of the black flipbook toolbar.

Here's something you might be interested in.
Submit a free classified
or view all
Previous article

BattleMage makes EverQuest Corpse Run

Corpse Run is a 6.3% dry-hopped ABV West Coast IPA brewed with Nectaron, Mosaic, and Motueka hops
Next Article

Jakob Nowell takes up his father’s role as Sublime frontman

New lineup will perform at Bayfest on July 20
Petco Park
Petco Park

As mayor Kevin Faulconer's task force works on a stadium financing plan to keep the Chargers from leaving town, the San Diego City Council is fighting a court battle to hang on to $271 million in reimbursements for city obligations used to pay for downtown's Petco Park.

If they fail, as some legal observers expect they might, taxpayers here could be forced to make up the considerable ballpark debt, even as the city faces the prospect of coming up with yet more millions for a new professional football stadium.

Susan Golding
Larry Lucchino

The saga dates back to the 1998 origins of the downtown ballpark, when Republican then-mayor Susan Golding along with Union-Tribune publisher Helen Copley, Padres owner John Moores, and his sidekick Larry Lucchino, assured voters that the new Padres venue would come virtually tax-free for the average Joe.

Sponsored
Sponsored

"The financial components of the deal are these," then-U-T reporter Gerry Braun explained in a November 1998 story a week before the public voted on Proposition C, an advisory measure on the project.

"The city and its redevelopment arm, the Centre City Development Corp., will contribute $275 million to the project, largely through the issuance of bonds. The bonds will be paid off with hotel-room taxes and new property taxes created by the project." The latter cash was to be routed through the city-controlled redevelopment agency.

Because so-called general obligation bonds wouldn't be used to finance the deal, there was no requirement for two-thirds voter approval, and the measure, sold as largely a free lunch by its backers, passed with 59.5 percent of the vote.

Thirteen years later came the California budget crisis of 2011 and governor Jerry Brown's successful move to shut down local redevelopment agencies and ship the property-tax money they had been skimming from tax rolls back to the state and other tax recipients, including counties and school districts.

The law signed by Brown set up a settlement process by which the cities behind the former redevelopment agencies could petition to keep their funds under certain conditions. When the state said no to using money to pay off the ballpark bonds, San Diego sued in 2013, and subsequently lost.

"In January 2007, the City passed an ordinance stating that it would issue bonds in an amount not to exceed $172 million, and the City issued the bonds shortly thereafter," according to the December 22, 2014, ruling by judge Shelleyanne W.L. Chang.

In 2009, Chang's order says, the redevelopment agency "agreed to provide additional funds for the [ballpark] Project, and agreed to pay approximately $56.5 million toward the debt service on the 2007 bonds for fiscal years 2009–2013."

Then, five months before the legislature's June 28, 2011, action ending redevelopment, San Diego's agency agreed to pay the city $231,267,162.50 for "additional debt service on the 2007 bonds for fiscal years 2012–2032," according to the document.

In August 2011 the city council used $11.3 million under its agreement with the agency to make a payment on the bonds.

Two years later, California officials sent a notice to the city saying they had "found that this transfer was unauthorized and must be remitted, because transfers pursuant to an agreement between the [redevelopment agency] and its sponsoring entity (here, the City) were not enforceable obligations."

After a variety of arguments made by the city in its quest to force the state to hand over the funds were rejected by Chang, the city council, meeting in closed session on February 2, voted 9-0 to take their case to a higher court. The notice of appeal was filed February 10 in Sacramento.

The appeal action, taken by the council without public presence or debate, will likely postpone the taxpayers' day of reckoning into the indefinite future, perhaps long enough for Faulconer's task force to formulate another subsidy deal for the Chargers.

In the meantime, notes an April 2014 budget review by the office of the city's independent budget analyst, "Debt service on the PETCO Park Bonds was previously paid by the redevelopment Successor Agency in FY 2013 (pursuant to a Cooperation Agreement with the former Redevelopment Agency) but was later determined to be an unenforceable Successor Agency obligation, and the City was required to pay the full debt service beginning in FY 2014 and this continues in the FY 2015 Proposed Budget, with $11.3 million of the $13.8 million going to debt service."

The mayor's 2016 budget proposal is due out this coming April. We have a call in to Matt Awbrey at the mayor's office for details.

Comments
Sponsored

The latest copy of the Reader

Please enjoy this clickable Reader flipbook. Linked text and ads are flash-highlighted in blue for your convenience. To enhance your viewing, please open full screen mode by clicking the icon on the far right of the black flipbook toolbar.

Here's something you might be interested in.
Submit a free classified
or view all
Previous article

Outstanding yellowtail and halibut action along the Baja coast

Bluefin edging northward toward San Clemente Island
Next Article

Jakob Nowell takes up his father’s role as Sublime frontman

New lineup will perform at Bayfest on July 20
Comments
Ask a Hipster — Advice you didn't know you needed Big Screen — Movie commentary Blurt — Music's inside track Booze News — San Diego spirits Classical Music — Immortal beauty Classifieds — Free and easy Cover Stories — Front-page features Drinks All Around — Bartenders' drink recipes Excerpts — Literary and spiritual excerpts Feast! — Food & drink reviews Feature Stories — Local news & stories Fishing Report — What’s getting hooked from ship and shore From the Archives — Spotlight on the past Golden Dreams — Talk of the town The Gonzo Report — Making the musical scene, or at least reporting from it Letters — Our inbox Movies@Home — Local movie buffs share favorites Movie Reviews — Our critics' picks and pans Musician Interviews — Up close with local artists Neighborhood News from Stringers — Hyperlocal news News Ticker — News & politics Obermeyer — San Diego politics illustrated Outdoors — Weekly changes in flora and fauna Overheard in San Diego — Eavesdropping illustrated Poetry — The old and the new Reader Travel — Travel section built by travelers Reading — The hunt for intellectuals Roam-O-Rama — SoCal's best hiking/biking trails San Diego Beer — Inside San Diego suds SD on the QT — Almost factual news Sheep and Goats — Places of worship Special Issues — The best of Street Style — San Diego streets have style Surf Diego — Real stories from those braving the waves Theater — On stage in San Diego this week Tin Fork — Silver spoon alternative Under the Radar — Matt Potter's undercover work Unforgettable — Long-ago San Diego Unreal Estate — San Diego's priciest pads Your Week — Daily event picks
4S Ranch Allied Gardens Alpine Baja Balboa Park Bankers Hill Barrio Logan Bay Ho Bay Park Black Mountain Ranch Blossom Valley Bonita Bonsall Borrego Springs Boulevard Campo Cardiff-by-the-Sea Carlsbad Carmel Mountain Carmel Valley Chollas View Chula Vista City College City Heights Clairemont College Area Coronado CSU San Marcos Cuyamaca College Del Cerro Del Mar Descanso Downtown San Diego Eastlake East Village El Cajon Emerald Hills Encanto Encinitas Escondido Fallbrook Fletcher Hills Golden Hill Grant Hill Grantville Grossmont College Guatay Harbor Island Hillcrest Imperial Beach Imperial Valley Jacumba Jamacha-Lomita Jamul Julian Kearny Mesa Kensington La Jolla Lakeside La Mesa Lemon Grove Leucadia Liberty Station Lincoln Acres Lincoln Park Linda Vista Little Italy Logan Heights Mesa College Midway District MiraCosta College Miramar Miramar College Mira Mesa Mission Beach Mission Hills Mission Valley Mountain View Mount Hope Mount Laguna National City Nestor Normal Heights North Park Oak Park Ocean Beach Oceanside Old Town Otay Mesa Pacific Beach Pala Palomar College Palomar Mountain Paradise Hills Pauma Valley Pine Valley Point Loma Point Loma Nazarene Potrero Poway Rainbow Ramona Rancho Bernardo Rancho Penasquitos Rancho San Diego Rancho Santa Fe Rolando San Carlos San Marcos San Onofre Santa Ysabel Santee San Ysidro Scripps Ranch SDSU Serra Mesa Shelltown Shelter Island Sherman Heights Skyline Solana Beach Sorrento Valley Southcrest South Park Southwestern College Spring Valley Stockton Talmadge Temecula Tierrasanta Tijuana UCSD University City University Heights USD Valencia Park Valley Center Vista Warner Springs
Close

Anchor ads are not supported on this page.