Lifting of redevelopment cap could help bring Chargers stadium downtown

SAN DIEGO (CNS) – A measure that could increase downtown redevelopment funds in San Diego was approved during the waning hours of the legislative session.

The legislative action and possible city lobbying that led to it quickly drew the ire of City Councilman Carl DeMaio, who demanded a report from the Mayor's Office on lobbying to pass the bill, which was sponsored by Assemblyman Nathan Fletcher, R-San Diego.

If signed by Gov. Arnold Schwarzenegger, a $2.9 billion limit on total tax money that can be collected by the Centre City Development Corp. would be eliminated.

The CCDC collects what is called “incremental” tax revenue based on the growth of assessed value in the downtown area and uses it to pay for capital projects.

Derek Danziger of the CCDC said the agency will reach its cap by 2023 or 2024, 10 years earlier than expected, “because downtown redevelopment has been so successful.”

Once the cap is reached, the money would flow into city coffers.

DeMaio said he could support eliminating the cap, but only if there are guarantees to protect the city's general fund. The councilman cited a budget analysis that said removing the cap will cost the city's general fund $300 million.

The measure also goes against plans made by the City Council during the summer, he said.

“I am concerned that this unilateral action at the request of a state legislator completely disregards a public process that the city of San Diego established in June to thoughtfully and methodologically analyze the pros and cons of raising the redevelopment cap,” DeMaio wrote in the memo.

Danziger responded by saying that even if all downtown construction stopped right now, no redevelopment tax money would flow into the city's general fund until 2019, because debt service and other obligations have first dibs.

He said the city otherwise enjoys other benefits of downtown rebuilding, including nearly $60 million annually in sales and hotel tax revenues, a claim backed up by the Independent Budget Analyst's report.

The budget analyst also said the potential loss of $300 million to the general fund covers a time period through 2043.

Discussions for getting rid of the CCDC tax collection cap came up months ago, before the search for a new stadium for the San Diego Chargers football team began to seriously focus on downtown, Danziger said.

The stadium plan is still being studied by the CCDC, and would add greatly to the agency's obligations if it is approved.

Several legislators criticized Fletcher's bill. Assemblyman Chuck DeVore, R-Irvine, said in a Twitter post that the act will allow the use of public money for the NFL.

The CCDC collects tax revenues specifically set aside for redevelopment within its area, and shares it with the San Diego County Office of Education, San Diego Unified School District and San Diego Community College District. The money can legally only be used for capital projects and not for general fund priorities like police and fire services until the redevelopment process ends.

The CCDC has spent millions already on downtown redevelopment since 1992, and has another $1.6 to $2 billion in improvements in the planning stages — even before a football stadium is considered, Danizger said.

Currently, the CCDC has only $386 million on hand to pay for the improvement projects, Danziger said.

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