Chargers or Comic-Con? SD can't get both (and needs neither)

Another aspect of "convadium" conundrum pointed out

Overexpansion of convention centers throughout the nation has led to deep rent discounts.
  • Overexpansion of convention centers throughout the nation has led to deep rent discounts.
  • Image by Chris Woo

Heywood Sanders, the national ranking expert on convention centers, is in San Diego this week, scouting around. Sanders wrote a seminal paper for the Brookings Institution in 2005, predicting a destructive arms race in construction and expansion of convention centers. It has come true. There is such a glut of convention center space that prices are being slashed 50 percent, centers are losing money, and sometimes giving space away — but still creating more space.

Heywood Sanders

Heywood Sanders

Sanders then wrote a book, Convention Center Follies, published in 2014, that gave great detail on how one city after another hasn't come close to attendance projections that politicians and consultants fed to taxpayers.

In San Diego, Sanders notices that the proposed "convadium" (combined football stadium and convention center expansion) is not an expansion of the existing center. Because the two facilities are separated by five or six blocks, "there would be two separate facilities," he says. A different convention would have to be held in each location. One convention or meeting couldn't have activities in both facilities.

The major reason hoteliers and others want an expansion of the convention center is to accommodate Comic-Con. But Comic-Con has already said it only wants a contiguous expansion. If San Diego went ahead with the subsidized convadium, Comic-Con might consider moving, because centers are being expanded in Anaheim, Los Angeles, San Francisco, and Seattle.

"Comic-Con's issues are not just space," says Sanders. It is complaining that "hoteliers are raising rates to astronomical levels" during the Comic-Con period. The costumed attendees do not tend to be big spenders.

Sanders has an eye-opening study. If you take Comic-Con and the Rock 'n' Roll Marathon out of San Diego's numbers, there were 320,000 convention-center attendees in 1999 and only 356,000 last year. "These figures don't leap out and tell me San Diego will have a great increase in business," says Sanders.

He notes that "San Diego voters are not uniformly enthusiastic about tax increases," and possibly they may not be in favor of "marrying the Chargers" when the team so openly flirted with Los Angeles.

Increasingly, San Diegans are realizing that the region does not need a subsidized football stadium, and with the glut of convention-center space, it does not need an expansion — contiguous or non-contiguous. It needs infrastructure and upgrades of rundown neighborhoods, as well as better firefighting and police services.

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Comments

..."I am not against football. If the Chargers want a new stadium they should finance the entire thing themselves, like other companies, without any taxpayer dollars."

Absolutely agree! When will the voters on the upcoming ballot measure(s) educate themselves to the real facts as outlined in this story.

JustWondering: At this point, it appears that the Chargers and the Briggs/Frye group intend to pull a statistical hoax on San Diego. It appears that they will be claiming that the football part of the stadium will be financed by the NFL and the Chargers. This is impossible. A pro stadium cannot be built for less than $1 billion (probably more), and I guarantee you that the league and Chargers will not put that kind of money in a stadium.

Here's how the scam will likely work: since the convention center portion of the convadium will be financed with transient occupancy (hotel) taxes, the costs will be secretly shifted to the convention center portion and taken from the stadium portion.

If this group attempts this statistical sorcery, people should lobby for criminal penalties against those who do the cost-shifting. Best, Don Bauder

Louis Rodolico: As noted in the response to JustWondering above, be prepared for the Briggs/Frye/Spanos/Moores group to CLAIM that the stadium will be privately-financed. They will make that claim because they will dishonestly shift costs from the stadium to the convention center. But it will be phony. The cost shifts will only be on paper. The ACTUAL costs will not be shifted. Best, Don Bauder

I think the real scam in the works ( as far as putting the stadium on a vote) will turn into a choice, vote to put it in mv or down town ( at tax payers expense)

Murphyjunk: The Briggs/Frye/Spanos/Moores initiative is pages and pages and pages long. No voter will read it. If someone tries to read it, he or she will not understand it.

This will be deliberate. The essence of white collar crime is contrived complexity. What better place is there to hide a massive subsidy than inside a recondite proposal? Best, Don Bauder

We need it all. The reason we can't get it and keep it, is because we mismanage and do not maintain what we have here. Here is the equation: #1 Destination + Good Visitor Experience = Sustained Revenue + Continued Growth. Do you see how those things are interconnected? We are dropping the ball on Good Visitor Experience. People come, they see, and they are appalled, if not apathetic about ever coming again.

Clean up the city, manage the homeless people better, and add the pizazz back to San Diego. Downtown is our revenue core. It generates all other revenue and services. Clean the corner of J. Street and Second Ave., a dubious stub of litter and unwelcome that makes anyone new to this city think that he or she has stumbled the wrong way across the street from the convention center.

It won't matter that two centers are blocks apart, if those blocks are integrated into a cohesive and consistent plan. Try putting the street corner signs back up. We go from First to Fifteenth streets, A to J, Fron to the I-5. It's a tiny square compared to most major cities, and we can't afford to let people know which street they are on? Many of them give up and go back to their hotel rooms. You have the downtown partnership which goes out and spot cleans a little piece of sidewalk every now and then. Clean all the sidewalks! The drought is over. We let the trees die due to the drought. A liter of water a week on those trees would have kept them alive, now we have to replace them or watch them rot.

Cut out the middlemen who are robbing us blind. The Mayor, in the strong mayor role, should be able to handle the big picture over all of these projects. It's large, challenging, and daunting yes; but no more difficult than getting a four-year business degree, I'm sure. Negotiate with the Chargers, do not capitulate to them. Slash their figures in half. If they don't budge, sue them for the team rights. Have you read the NFL bylaws? You can drive a truck through them. The Chargers belong to San Diego, period. Want to challenge them? Fly all the NFL players into San Diego, at the Convention Center, and ask them to raise their hands if they think the NFL is just a glorified player's union. Watch Goodell mess himself. We will have a new stadium, tax free, in no time.

If elected Mayor, I promise to roll up my sleeves, look under the hood, and find out exactly why the engine isn't working. Then I will fix it. Vote Marty Gardner for Mayor. Thank you.

You got my vote! #MartyGardnerForMayor

MartyGardner: Your ideas for restoring the infrastructure are excellent. Cleaning up the city is priority number one. You are correct that tourists come to San Diego and are appalled by the infrastructure and the vast number of homeless.

However, I don't think San Diego can have it all. Drop the stadium and convention center expansion ideas and you will hit the mark with voters. Best, Don Bauder

It amazes me that the hotel/restaurant/tourism industry makes billions of dollars yet does not share that wealth with their low wage no/low benefit workers who rely on taxpayer funded welfare to make ends meet. No company paying less than a living wage should get any employee related tax deduction. It is outrageous that a person making $16 an hour still qualifies for HUD housing assistance.

one more way ( once removed) big business gets the tax payers to subsidize them

Murphyjunk: Precisely. By paying starvation wages, forcing employees to rely on transfer payments such as food stamps, those hoteliers, restaurateurs, and retailers such as Wal-Mart are raising your taxes. You are not saving money when you buy cheap Chinese goods at a Walmart store. Your taxes to subsidize underpaid employees make up the difference.

The Walton family, founders of Wal-Mart, are fighting most fiercely for the elimination of estate taxes. They are mult-billionaires, of course. Best, Don Bauder

AlexClarke: You are correct: the hotel/restaurant/tourism industry rakes in billions of dollars while paying starvation wages to employees. Generally speaking, the hotel and restaurant industry nabobs are the ones fighting most vigorously to block an increase in the minimum wage, or the institution of a living wage. So you are paying for these employees' welfare/transfer payments in your taxes.

This is why my wife and I are known as big tippers -- usually more than 20 percent. Best, Don Bauder

Tr3vayne: MartyGardner has a good platform if the subsidized stadium and expanded convention center can be dropped. Best, Don Bauder

David Lundin: Give the credit to Heywood Sanders, the national expert on convention centers, who has made many trips to San Diego, and been distressed by what he observes. Best, Don Bauder

David Elgler: I would not expect an officer of the San Diego Stadium Coalition to agree with me. You say I have an old way of thinking. I do. I believe that governments should provide services that the private sector can't provide. Governments should provide sewers, roads, streets, water, schools, parks, recreation centers, etc. -- basic services.

Government has no business subsidizing billionaire pro sports owners. If they want to build stadiums, they should be welcome to do so. Pro sports should be part of private enterprise. I often wonder if you folks favoring corporate welfare really believe in the free enterprise system.

I will tell you a secret that I will bet you don't know. Billionaire team owners get taxpayers to construct stadiums because stadiums are a lousy investment. Best, Don Bauder

Cow's Grazing and Mooting: Building convention centers is a legitimate function of government. It's not suitable for private enterprise. My problem with expanding the convention center -- contiguous or non-contiguous -- is that convention centers are vastly overbuilt. That is why prices are being cut 50 percent, and in some cases, the space is given away. I would not be opposed to expansion of a convention center if supply and demand were evenly balanced, and I would be enthusiastically in favor of it if there were an undersupply of convention space in the U.S. My objection is strictly that there is such a huge glut of space.

Subsidizing professional football stadiums, ballparks, and the like is entirely different. Team owners get exceedingly rich, particularly in pro football. The owners and the league should pay for 100 percent of stadiums and ballparks. Best, Don Bauder

I suppose "Building convention centers is a legitimate function of government." is true. But I don't think building conventions center is a NEED of government and shouldn't be a high priority. The burden of proof of con ctr proponents should be to prove that money spent on con ctr will quickly show an overwhelming ROI to taxpayers.

ImJustABill: We are in agreement. The construction of a convention center is a government function. But not now -- in San Diego or any other city. There is a massive glut of convention center space that forces centers to cut prices drastically. In San Diego, a convention center expansion is something to think about ten to fifteen years from now, and perhaps not even then. However, I am in favor of fixing the interior right now. Best, Don Bauder

Don, I could not agree with you more. This stadium nonsense is a con-job wrapped in a snow-job. How stupid do they think the people of San Diego are? There are parts of this city that look like a third-world country, and they talk about building football stadiums for millionaires? The mayor seems oblivious to the problems faced by many of the residents. Infrastructure problems go unaddressed. The sidewalks are a mess, the streets are full of potholes, the parks need maintenance, the sewers are inadequate when it rains, and the pipes that supply water are aged and deteriorating. There are so many things in this city that need to be upgraded. I cannot believe the mayor and his cronies refuse to let go of their ridiculous stadium dreams and instead start dealing with the realities of running and maintaining a modern city.

JavaJoe25: You are right on every point but one. Sidewalks, streets, parks, sewers, water pipes need to be fixed. Infrastructure is shot. Faulconer ran on a platform of restoring the infrastructure then went on to cockamamie schemes like building a stadium for the Chargers and expanding the convention center. You are correct in your assessments and priorities.

The only error you made is that the Spanos family has billions of dollars in assets, not merely millions. Best, Don Bauder

"Invite" the Chargers to move to Tijuana or some other city, and use city funds strictly to maintain the city. The condition of the infrastructure should be embarrassing to those elected officials in charge, but for some reason they ignore it in eager anticipation of the arrival of the Wells Fargo wagon

CaptainObvious: Knowledge flows from your quill. Yes, elected officials should be ashamed at the terrible state of the infrastructure and the homeless clogging East Village. But political and business leaders put a subsidized football stadium and expanded convention center in front of the pressing needs, which are driving away tourists. Best, Don Bauder

The key part of the marketing for the TOT tax will be the idea that out-of-town tourists are paying all the taxes, not San Diego residents. So why should San Diego taxpayers be opposed to this?

(Have fun with that one)

ImJustABill: The TOT tax comes from out-of-town tourists. This money should go back to the city. The Chargers will no doubt use the disingenuous argument you cite. The response should be that every cent that goes to subsidizing a billionaire family (which lives out of town) should go to San Diego causes.

It makes no sense to have hotel taxes go to subsidizing pro sports. Pro sports games to not provide much tax money to San Diego. The exceptions are Los Angeles residents coming to San Diego on weekends to watch the Dodgers, and in the last couple of years, fans of out-of-town teams buying tickets to Chargers games that the locals do not want to attend, Best, Don Bauder

Imjustabill,

  1. First and foremost a tax by any other name is still a tax,
  2. Second this prescribing where and how "Public" monies are spent is a travesty when the collectors (Hotel Industry) are also the benefactors of the Tax. (Corporate Welfare once again, These Hotels should be promoting their properties with their own budgets.)

In many cities there is a respectable tourist and activities board or council that using TOT funding, assists in funding events and activities that both bring in tourists and benefit the residents/public. In San Diego this organization is too inbred supporting events such as the Holiday and Poinsettia Bowls, the Golf Tourney, Comic-Con, ( In San Diego emphasis on the CON part as this article does). Have you seen the amount the CEOs of these non-profits pay themselves? (Multiple six figures).

Again while the TOT appears to not effect the general public, it does with the general raising of the costs of visiting our city. If we believe in the free market system, the additional hotel costs (TOT) would be spent on additional Zoo Tickets and Meals at non-hotel business throughout the city and county, etc.

In closure I think the "Fun" is being had by the Hotel Industry, Chargers and additional Non-Profits at all of our expense.

BBQ

An additional thought, if the downtown "Convadium" is built is the County Funding still involved? If we go downtown the county taxpayers and businesses are left holding the bag. No County money for the "Convadium"!!!!! BBQ

bbq: It has not yet been determined whether county money will go into the planned convadium. Don't be surprised if it does. Best, Don Bauder

bbq: The key is your statement, "if we believe in the free market system." The San Diego backers of corporate welfare profess to be free market conservatives, but they are not. They are welfare queens. San Diego's allegedly conservative business community, in general, does not believe in free enterprise. It proves that by backing corporate welfare schemes that steer tax money into private investments. As I say, it is socialization of the costs and privatization of the gains. Best, Don Bauder

bbq and Don,

You guys are sharp and can see through the scam of claiming that SD taxpayers shouldn't care about TOT taxes.

Really, the questions about what the right level for TOT tax rate is and what tax money should be spent on are mostly separate questions. Certainly the question about about how much public money should be spent on an NFL football stadium (zero in my opinion) should be separated from the question about the TOT tax level.

"Bundling" is often used by sellers to obfuscate costs and benefits (buying a car, cable TV / internet, etc). Once a lot of costs and benefits are bundled together it's more difficult for a customer to weigh the deal properly. This proposal has bundled in TOT tax increases, a new stadium, convention center, and goodness knows what else. I think John Moores probably ends up with some sweet development deal out of this too.

The Briggs / Frye proposal is so complicated I can't possibly figure out exactly how much every party wins and loses but I'm pretty sure the NFL, Chargers, and JMI would end up winning and taxpayers would end up losing.

ImJustABill: You have brilliantly analyzed the Briggs/Frye/Spanos/Moores initiative. Nobody will be able to figure out. That is just what backers want. It's like trying to find flea in a pile of straw. It appears they will tell people a blatant lie -- that the stadium will be financed by the NFL and the Chargers. That is not going to happen.

As I have said before, the essence of white collar fraud is contrived complexity. This is exactly what this initiative appears to be. Best, Don Bauder

If there were a simple initiative that proposed raising taxes to help the Chargers build a stadium I would be opposed but at least that would be an honest proposal. I suspect the Chargers, JMI, and other beneficiaries of the Briggs/Frye/Spanos/Moore initiative do not see much chance that an honest and straightforward ballot initiative would pass.

ImJustABill: That's why, it appears, they are favoring a measure that is the reverse of honest and straightforward. Keep remembering these words: "Contrived Complexity." Best, Don Bauder

Dennis Hernandez: I hate to say this, but the people who vote for a subsidized stadium are probably not capable of overthinking things. Best, Don Bauder

Mitch McKnight: Convention centers are overbuilt all around the nation.Convention space is rising sharply while convention attendance is flat. That's why prices are being slashed. However, cities don't care, because they figure that the center may lose money but hotels will fill up. This is quintessential -- and thoroughly repugnant -- corporate welfare.

In the next several years, or decades, I question whether any city will report -- ACCURATELY -- big convention attendance gains.

Of course, numbers can be inflated. In fact, Heywood Sanders caught San Diego's center egregiously inflating its numbers. This ran in the Reader several years ago. Best, Don Bauder

More details are out today on Chargers plan (similar to Briggs/Frye)

  • Increase TOT to 16.5%
  • Taxpayers kick in 1.1B for stadium construction + land acquisition
  • They claim a precedent has been set which invalidates 2/3 vote requirement
  • HOLD ONTO YOUR WALLETS BOYS AND GIRLS!

http://www.boltsfromtheblue.com/2016/3/22/11289244/details-emerge-about-the-chargers-downtown-stadium

http://www.voiceofsandiego.org/topics/politics/the-chargers-are-readying-their-own-convadium-tax-hike/

Just to clarify the 1.1B is actually 1.15B: 350M for stadium construction + 800M for land acquisition + convention center construction.

ImJustABill: Does it say who pays for moving the bus terminal -- and where it will go? And how many years it will take to pull this off? Best, Don Bauder

And to clarify even more the 800M number came from the Bolts from the Blue article - I'm not sure where they got that number.

ImJustABill: I have always believed that the publication you mention is a kept one -- it is written and edited by and for the Chargers. Best, Don Bauder

ImJustABill: A TOT of 16.5 percent puts San Diego right around San Francisco. I think San Diego has to admit that San Francisco is a better tourist destination.I did a quick read this morning and it appears the corporate welfarists won't be claiming that the Chargers and NFL will finance the stadium portion of the convadium. If true, that smacks of honesty -- perhaps.

Again, though, the bottom line is that San Diego does not need a subsidized football stadium for a team owned by a billionaire who preferred L.A., and only came back to San Diego because he did not have the bucks to swing a deal in L.A. Similarly, convention centers around the U.S. are vastly overbuilt. San Diego does not need an expansion now, or probably in the next decade.

Here is something to ponder. When the stadium now known as Qualcomm was refurbished in the late 1990s, the Chargers said they would remain in San Diego until 2020. Within a couple of years, they were demanding a new stadium, and by 2002 were threatening to go to Los Angeles. How do you know the Chargers won't double-cross San Diego again? Best, Don Bauder

One big question is whether or not this will require a 50% vote or a 2/3 vote. Some are claiming that a recent ruling http://www.voiceofsandiego.org/wp-content/uploads/2016/03/twothirdscall.pdf sets a precedent for a big loophole in the 2/3 vote requirement.

ImJustABill: Yes, the corporate welfarists say that a decision in another court may mean that the latest proposal can pass with a 50%+1 vote. Actually, the Briggs/Frye initiative is the same -- an attempt to slip it past voters without the required 2/3rds. These disingenuous, twisted legal interpretations must be watched carefully. Best, Don Bauder

Alex Clarke: San Diego taxpayers will vote for the convadium subsidy. But don't count them voting for education, infrastructure, libraries, or anything essential. Best, Don Bauder

My guess is I do not think 2/3 will vote for this proposal. 50% + 1 might. Especially if this is a special election in 2017 (and not a high turnout 2016 election).

ImJustABill: Few initiatives get 2/3rds of the vote in San Diego. The deal that has been sketched so far-- but not made official -- definitely would require 2/3rds, but the corporate welfare crowd in San Diego will do anything extra-legal to get its way. Best, Don Bauder

Apparently there was a ruling in a case between the city of Upland and a cannabis club which might provide a big loophole in the 2/3 requirement. I'm no lawyer but it sounds like pretty convoluted logic to me, to argue that a citizen initiative can raise taxes with a 50% vote but a city initiative requires 2/3. But at any rate that seems to be the jist of a recent ruling.

Per VOSD, " a bombshell appellate court decision was published that implies special taxes enacted by ballot measure do not need to receive a two-thirds vote to become law."

http://www.voiceofsandiego.org/topics/politics/the-chargers-are-readying-their-own-convadium-tax-hike/

ImJustABill: Yes, an appellate court made that ruling. Now the corporate welfare crowd is doing handsprings, thinking that the convadium could pass with a 50 percent +1 vote. But this will have to be tested by the California Supreme Court. That's a couple of years right there. And moving the bus yard is 5 to 7 years, and expensive, too. Best, Don Bauder

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