San Diego voters have two opportunities to solve three civic issues that have plagued our city for years. While protecting San Diego taxpayers, Measures C and D both provide a pathway to expand our Convention Center, build a new multi-purpose NFL stadium, and provide a legal funding mechanism for our Tourism and Marketing District (TMD).
Measure C, known as the Chargers initiative, is not just about a new stadium. Measure C would raise the Transient Occupancy Tax (TOT) that tourists pay from and effective 12.5% to 16.55%. Most of the TOT revenue generated by passing C will pay for a much needed 385,000 square foot non-contiguous expansion of the Convention Center.
Additionally, Measure C will legalize the current TMD tax. (Discussed further below)
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There are five critical things to keep in mind regarding Convention Center expansion and the TMD tax when making a decision about both Measures C and D.
First, opponents of the measures represent the same group who promoted a 3% TOT increase for a contiguous expansion. They now balk at increasing the TOT to cover a non-contiguous expansion, and with Measure C, provide funding for the public share of the stadium.
Second, the land needed for a contiguous expansion has been forfeited and is no longer controlled by the city. City representatives recently testified that there are no current plans to expand the Convention Center contiguously because that avenue faces years of lawsuits with very limited chances of success.
Third, C and D both propose a non-contiguous expansion at the exact site identified in the mid-1990s for the next expansion of the Convention Center. Measures C and D embrace that long-term vision of the city.
The recent pursuit of contiguous expansion retracts past promises to protect the public’s access to the bay. Proponents of contiguous expansion claim it is the only feasible way to expand. Yet, with industry-supported studies supporting non-contiguous expansion, their argument no longer holds.
Fourth, all members of the City Council agree that San Diego needs both a new stadium and a Convention Center expansion. The most economical way to accomplish this would be to build them together in the form of a convadium. It is estimated that by combining the two facilities, $200 million in construction costs will be saved, savings that ultimately fall to the taxpayers.
C and D both propose a non-contiguous expansion at the exact site identified in the mid-1990s for the next expansion of the Convention Center.
Fifth, the city will soon likely face a $400 million lawsuit regarding the TMD tax because it is a tax never voted on by the public. The city will likely be responsible for full repayment of the TMD tax since its inception plus a three times penalty. As the current TMD continues to collect money from tourists, it represents an estimated $10 million per month liability. Passing C or D puts an end to the growth of that liability.
With Measure C, construction costs for the stadium with a roof is expected to be $800 million. The addition of a roof is not needed for football purposes, but provides approximately 100,000 sq. ft. of convention space, and creates the opportunity to draw major events like the NCAA Final Four and national political conventions. These types of events provide significant positive financial impact for their host cities.
The project will be paid for with $650 million of private money coming from the Chargers and the NFL, plus $350 million from the TOT (roughly $150 million toward construction costs along with $200 million for land and other expenses). Of the proposed 4% increase in TOT, the public money for the stadium accounts for only 1% of the increase. The TOT represents outside money coming into the San Diego economy.
As part of gaining a new stadium, the city will receive several benefits that are clearly written into Measure C. The city will not have to pay for stadium construction cost overruns nor any maintenance and game day costs. The city may use the stadium on non-game days and keep the revenue it generates from these events.
Measure D would raise the TOT from an effective 12.5% to 15.55%. With two optional 2% tax credits, Measure D provides the opportunity to replace our likely illegal TMD tax and provide funding for a non-contiguous convention expansion. It does not provide any public money for the construction costs of the stadium. However, the construction costs for the stadium without a roof in the convadium concept is estimated to be $680 million, which is less than 5% more from what the Chargers and NFL have already committed to the project.
Opponents to Measures C and D claim they are tax watchdogs looking out for the good of the taxpayers. What really drives them is the pursuit of a contiguous Convention Center expansion. Their actions in the pursuit of contiguous expansion have wasted millions of taxpayer dollars and recently drew fierce criticism from the California Taxpayers Action Network.
To truly benefit taxpayers, build the needed stadium and Convention Center facilities together. Build them now before costs and interest rates rise. Forgo lengthy legal battles with little chance of success. Legalize the TMD tax and stop the increasing liability to the city.
Vote Yes on C and D!
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Rendering of the convadium by MANICA Architecture