Qualcomm Stadium: a Boondoggle from the Get-Go?

by on September 21, 2015 · 3 comments

in Culture, Economy, History, Media, Politics, San Diego

As published by the original San Diego Free Press (circa 1968), we reprint the rundown on the Stadium in Mission Valley. Outside of the names and a few little details, you’ll be surprised how little has changed. Part One of Two…

sdfp stadium 1Original byline “By Jim Knastic

Transcribed by John Lawrence and initially posted at our sister site, the modern San Diego Free Press.

Hi, sports fans. Big Jim here.

Well, fans, there is a big spat brewing in major league San Diego and from this experienced observer’s view the losers in this main event are going to be the city’s middle- and lower-income taxpayers.

This whole new controversy is revolving around that great concrete muskmelon in Mission Valley, the San Diego Stadium.

As the Free Press goes to the printers, the news is out that the City of San Diego is suing the San Diego Chargers for one year’s back rent (more than $200,000). The Chargers apparently have decided that they don’t want to pay rent, at least not for the next seven years.

But that is just one of a long series of rubs – one of the first rubs in how that stadium got there in the first place.

Who Wants It?

The San Diego Stadium holds 50,000 people. The city of San Diego holds nearly 800,000 people. This means that 750,000 people in San Diego couldn’t use the stadium on a day that everyone decided to see a ball game. But that doesn’t mean that these 750,000 squabbling over a knot hole in the stadium’s wall, are not paying for the place.

The stadium and its accoutrements cost $27.75 million, ostensibly. Actually, after interest is paid on the stadium’s bonds, the total cost of it is at least $52.4 million.

The stadium is the brain child of local millionaires, who euphemistically call themselves “sportsmen,” who emphatically pointed out to the public that property taxes would never be used to pay back the principle and interest on a the stadium bonds.

Instead of using property tax, these sports czars explained, the City would pick up the tab with the sales tax it received back from the state, along with some other revenues (which ultimately proved to have originated as sales tax, too).

The local media played the sports czars’ tune with feeling, assuring the public that the stadium would cost little more than a “Yes” vote on the Stadium proposal on the November, 1965, general election ballot. And 100,000 of the 140,000 voters that turned out swallowed the bait.

No economist would argue against the notion that sales taxes are the most regressive form of tax we have. That means that the middle- and lower-income families are the hardest hit and carry the heaviest burden of sales taxes, while the wealthy are hardly scathed.

On the other hand, equitably administered property taxes put the brunt of the cost on the people most capable of bearing it and who ultimately benefit most from projects like sports stadiums – the wealthy.

(Even though equitably administered property taxes only exist in Camelot, they are still less burden on the middle-and lower-income families than are sales taxes. Dubious homeowners should sit down one day and figure how much they pay in sales tax compared to property tax each year.)

But the people have been conditioned to believe (by corporate media and those corporations who exercise control over them through advertising) that property tax is their ultimate bugaboo — and 100,000 of more than 600,000 San Diegans voted “Yes” on the stadium proposal.

So let’s take a look at the old scoreboard and see who’s winning in the final quarter.

Sports Czars Ahead!

sdfp stadium 2This far in the game, the middle- and lower-classes seem to be trailing. About 17 percent of San Diego’s 1965 population committed the people of San Diego to pay $1.44 million annually for the next 35 years. People’s score: minus $52.4 million.

Local and out- of- state contractors, architects and building suppliers hauled in $15.5 million on the stadium’s construction and about another $12.3 million in trimmings. Construction companies’ score: $27.8 million.

Two Chicago bond houses won the stadium bond issue at 3.94126 percent interest. Chicago financiers’ score: $24.7 million of tax-free profit.

Motel and restaurant interests in San Diego anticipated an increased annual take of $24.9 million because of stadium visitors. Motel and restaurant interests score: $24.9 million annually.

The San Diego Chargers, whose annual revenue has risen from $660,000 in 1962 to $2.1 million last year, are demanding that they be allowed the use of the stadium rent tree for the next seven years. If they get away with this, they will augment their already mounting earnings by an estimated $2 million for those years. A great deal of their earning power was directly a result of the stadium. Chargers’ score is difficult to determine but in the neighborhood of $3 million annually.

The San Diego Padres baseball team has worked out a snazzy deal with the City administration. For the next seven years they will pay eight percent of their ticket sales to the City as rent.

The City estimates that this will amount to $500,000 annually. But then the City turns around and pays the Padres (going under the name of the San Diego Stadium Management Company) $306,000 each year to manage the stadium.

This will make the Padres actual rent about $194,000 per year. The Padres score, by the City’s own figures: slightly over $6 million gross.

How does that grab you, sports fans? It looks like San Diego’s “sportsmen” have learned something from San Diego’s defense industries about government subsidy.

Welfare for the Rich

In 1965, when the designs were laid for the San Diego Stadium, the city manager, then Tom Fletcher, admitted that the stadium would not be an earning proposition. He estimated that with just a major league football team the stadium would make about $120,000 annually. If the City were to pick a Major league baseball franchise, the figure might be boosted to $340,000.

This amount, he explained, would go toward retiring the interest and principle on the stadium bonds, about $1.5 million yearly.

What Fletcher forgot to tell us was that the City would lose property tax revenues on the 166 acres on which the stadium stands. In 1965, the land was valued at $4.1 million. At present property tax rates, the City is losing between $100 000 and $120,000 each year. As Mission Valley property values soar in the next decade, these losses will be compounded.

Defenders of the stadium argue that in 35 years the stadium will be all paid off and be a “real moneymaker” for the people of San Diego.

In 35 years- – considering our present rate of architectural and technological growth — the San Diego Stadium will look to us like the Whaley house looks to us now.

There will be groups of “sportsmen” wanting to tear it down and set out on another publicly subsidized project (unless, of course, today’s revolutionary groups haven’t changed all that by then), and there will be groups of monument minders who will want to preserve the structure for historical reasons.

Who Let the White Elephant in?

Why did such a beast ever get by the voters? Because there was no critical media. There was no scrappy little newspaper like the San Diego Free Press. There were only corporate mass media intent on getting a piece of the action.

James Copley, owner-publisher of the San Diego Union-Evening Tribune, certainly wasn’t going to torpedo the stadium. He owns about a million dollars worth of the Chargers.

That’s about all for this issue, sports fans. Next issue Big Jim will really lay some heavy facts on you about who, how and how much on that concrete muskmelon. There should be some really interesting playbacks on the San Diego sport czars.

In the meantime, Big Jim is going to see about opening up a jock strap factory and having the City of San Diego subsidize me, because, after all, “It’s not whether you win or lose that counts; it’s how your capital gains!”

Part Two, wherein we learn that the guy holding the bonds was head of the Stadium Authority, will appear on Thursday.

The original print version of the San Diego Free Press renamed itself the San Diego Street Journal in 1968. The paper’s facilities were destroyed by local vigilantes on more than one occasion, despite the fact that the offices and staff were under constant surveillance by assorted law enforcement agencies. The staff had to drive to Los Angeles to find a printer willing to print the paper.

Printed copies of the original SDFP were recently shown to us by Bud Sonka. Writer John Lawrence scanned and transcribed copies found at the San Diego Public Library.

Modern-day SDFP writers John Lawrence, Frank Gormlie and Doug Porter were associated with the original publication.

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Ed. note: Post updated 9/16/15 to correct typo in the amount San Diego taxpayers were committed to pay annually ($1.44 million, not $144 million).

{ 3 comments… read them below or add one }

Geoff Page September 21, 2015 at 3:38 pm

Amazing, thsi could have been written today. Thanks for reprinting it, I think everyone should forward this around to everyone they can. A perfect example of what happens when one does not follow history to learn from mistakes.


Frank Gormlie September 21, 2015 at 4:08 pm

Part 2 will be posted Tuesday.


l n maggard September 22, 2015 at 10:08 am

or what; the Charger will all hold their breath and stomp their feet ’til they get their “spoiled” ways? Let ’em leave!


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