San Diego Caves To Chargers, Agrees To Finance New Stadium
San Diego, in a desperate bid to keep the Chargers from relocating to Los Angeles, has offered to provide public funding for a new stadium, but even that may not be enough.
The Citizens Stadium Advisory Group in San Diego unveiled a proposal this week involving at least $600 million in public financing for a new, $1.1 billion-dollar stadium, The San Diego Union-Tribune reports. Yet, even though it is the most generous offer currently on the table, the team has so far demurred, saying it needs time to evaluate the offer against possible alternatives.
According to Market Watch, the Chargers have been under pressure from the NFL for years to update Qualcomm Stadium, which was built nearly 40 years ago. But until now, the team’s requests for taxpayer assistance have always been summarily rejected by city officials. (RELATED: Super Bowl Shines Spotlight on Stadium Subsidies)
The difference in this instance is the very real threat that the Chargers will follow through on plans to build a $1.7 billion stadium in Los Angeles, which would be shared with the rival Oakland Raiders. That proposal received preliminary approval in April, inducing San Diego Mayor Ken Faulconer to break with tradition and offer the team an incentive to stay put.
Faulconer’s plan, which he insists “won’t raise taxes,” calls for $173 million in bonds, $121 million from the city of San Diego, $121 million from San Diego County, and $225 million from the sale of the current Qualcomm site. In addition, the mayor’s committee estimates that another $100 million could be realized from ticket surcharges and the sale of personal seat licenses.
The Chargers, meanwhile, are asked to contribute $300 million towards the cost, with the NFL kicking in another $200 million.
At the conclusion of the league’s annual owners meetings Wednesday, Chargers chairman Dean Spanos told the Union-Tribune that he was aware of the proposal, but that he was not yet familiar with the details and would be reviewing it this week.
“I’ve always said, and I maintain the fact we want to stay in San Diego,” Spanos said, adding. “We’re committed to keep trying to see if there is a viable solution.” (RELATED: Obama Asks Congress to End Stadium Subsidies)
However, despite acknowledging that San Diego is “a great market,” Spanos also indicated that taxpayer subsidies would have to be substantial in order to keep the team from leaving, saying, “This is all going to come down to: Can we find a viable solution from a financing perspective?”
Significantly, San Diego is not in competition with other cities looking to lure the Chargers with their own incentive packages, as is frequently the case. Instead, Spanos seems to be referring to the enormous revenue potential of the Los Angeles market.
In fact, the proposed Los Angeles stadium would be financed entirely with private money, and would likely cost the Chargers about twice as much as they would have to pay under the San Diego plan. (RELATED: Obama’s Plan for Ending Stadium Subsidies Misses the Point)
Nonetheless, sports economist John Vrooman of Vanderbilt University told the Union-Tribune that the Chargers might actually come out ahead by rejecting the subsidies. Over 30 years, Vrooman projects that the team’s value would increase from $1 billion today to about $2.3 billion if they move to Los Angeles, compared to just $1.4 billion if they remain in San Diego.
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