Stadium Watch: Spanos responds to mayor
SAN DIEGO (KUSI) — Over the weekend, Mayor Kevin Faulconer received assurances from Dean Spanos that taxpayers would not be on the hook for any costs related to the team’s initiative for a new stadium downtown.
This includes land acquisition and cost overruns, but who pays for future renovations or improvements?
To read the full 34 page response, click HERE
The 34 pages of assurances were in response to that mayor’s 15 pages of concerns in a letter two weeks previous.
This involves the largest public bond offering in the city’s history, and Mayor Faulconer is withholding judgment until he and the public know all of the facts that could be the general fund at risk.
This is the mayor’s overriding concern.
Spanos responded, saying the 6 cent increase in the Transit Occupancy Tax, or TOT, will cover the project’s costs.
Money would be deposited in a special fund and would not obligate the city’s general fund to pay for the stadium, the convention annex, operations and maintenance or pre-development expenses.
Additionally, the city would not be responsible for payment of debt service on the bonds.
"We tried to be very conservative in our formulation of the financial plan, that was included, to put in protections for those very circumstances," Fred Maas said.
But not all circumstances.
Five of the 6 cent increase in hotel tax goes to the project, shortchanging the Tourism Marketing District, or TMD, which currently gets 2 percent of the tax.
This concern was also raised by Erik Bruvold of National University.
"If the TOT goes south, if we have a major recession, if there’s some disruption over the next 40 years, earthquake, fire, natural catastrophe or what have you, disrupts the cash flow," Bruvold said.
The initiative said TMD would get an additional one cent, but only if hotel taxes exceed the debt service payment. If not, the initiative doesn’t say how that gap is backfired.
The TOT also covers land acquisition, but relocating the bus yards remains up in the air.
"If it takes longer, if there’s delays, if MTS can’t move that bus yard because of Nimby’s or other neighborhoods say no. Who bears that cost," Bruvold said.
Relocation is subject for further negotiations.
There is still no hard cost for stadium construction, but the team will be responsible for stadium cost overruns.
What hasn’t been determined is the project’s overall cost for either the stadium or the convention annex, or what the team will pay in rent.
Some of these concerns will be answered when the design of the project is finalized and the campaign to sell it to the voters gets underway.