When the voters of San Diego went to the polls in November, they faced an added ballot issue: Whether to spend $1.2 billion in visitor tax funds building a new stadium for the San Diego Chargers and the billionaire Spanos family that owns the NFL franchise.
It wasn’t even close: Voters rejected the deal by a 57-43% margin. A yes vote would have elevated the hotel-motel tax from 12.5% to 16.5%, enough money to eventually retire more than $1 billion in bonds. Put another way, that’s enough money to meet many other more essential needs in the city.
San Diego voters, without knowing it, sent a message to San Antonio voters, the same message citizens in St. Louis, Oakland, or going back, Cleveland could share had they been asked: It’s not worth it. In the current NFL economy, where billionaire owners ask taxpayers to bear the brunt of billion dollar stadiums that come with the promise of windfall profits, most regional cities can no longer play.
The San Diego Chargers are now the Los Angeles Chargers. Do a web search for the old team and you’ll get the new team, one with such a confused identity its owners changed the team logo three times within 36 hours last week.
Love of the game is not the issue, it’s economics. Cities like San Antonio can’t afford the game and the profits owners expect to make from their operations. NFL officials expect the Los Angeles Chargers to make $100 million a year in profits once they move into a new $2 billion, privately-funded stadium they will share with the Los Angeles Rams in Inglewood, Calif.
We shall see. In a city that loves its University of Southern California Trojans and UCLA Bruins, and where NFL betrayal has been experienced before, it’s easy to imagine the two franchises struggling to establish diehard fan bases equal to those in other markets with stable franchises. Both teams had losing records in the season now ending, and neither came close to being a playoff contender.
I doubt you’ll see much of team president Dean Spanos in San Diego restaurants anymore as he sensibly announced plans to move from nearby La Jolla to L.A. He won’t be as welcome in San Diego or La Jolla anymore, perhaps even unwelcome.
San Diego was home to the Chargers for 56 years, and the Spanos family is now in its second generation of team ownership. Perhaps they could have reached into their own pockets and committed enough dollars to modernize the aging Qualcomm Stadium, which was built in 1967. Perhaps that would have convinced taxpayers to match their investment.
But that didn’t happen. Ownership profit expectations are one problem. Stadiums are another. Most NFL owners can’t abide a facility that doesn’t have all the latest money-making bells and whistles – Think Jerry Jones of the Dallas Cowboys and $75 game day stadium parking. Football fans in smaller markets face the daunting prospect of coughing up money for a new facility every 50 years or so.
Even newer facilities require periodic injections of taxpayer funds to the tune of tens of millions of dollars: witness the current $43.5 million upgrade of the Alamodome, opened in 1993, and the recent $110 million upgrade of the AT&T Center, opened in 2002. Spurs Sports & Entertainment paid for $25 million of the latter improvements.
Both of those projects are arguably justified by the return on investment. Hundreds of events have come to San Antonio over 24 years that would not have come without the Alamodome, and many more will come, including the 2018 NCAA Final Four tournament. Without the AT&T Center, there would be no San Antonio Spurs.
The opportunity cost of such upgrades, however, is significant. While the Alamodome and AT&T Center projects by the City and County, respectively, the public conversation about such expenditures should always include the answer to this question: What do we give up doing if we fund more sports facility spending? Unfortunately, that’s a conversation that never seems to happen in this city, at least not with the public involved.
Cities have their limits, and they have their many needs. I wish San Antonio could afford an NFL franchise. I wish our city was in that league of 32, now, 31, cities. By population, we should be there. By wealth and size of economy, we are not there.
U.S. Census rankings of cities by population in 2015 place San Antonio in the seventh spot with 1.469 million people, while San Diego is ranked eighth with 1.34 million people. We hear that number cited often enough in speeches, a claim that must evoke snickers from San Francisco to Dallas to Boston.
The MSA rankings are a different matter. San Diego-Carlsbad is ranked 17th with 3.3 million people, while San Antonio-New Braunfels is 25th with 2.4 million. Even with the one million new residents we are expecting over the next 25 years, San Antonio is unlikely to outgrow San Diego.
Median household income in San Diego in 2015 was $67,320. It was $55,083 for the San Antonio MSA, which in itself is misleading since taxpayers voting on any stadium deal would be from the city, where poverty levels are far higher than in the MSA. Take out Alamo Heights and Comal County, for example, and you have much lower median family incomes.
Some sports fans and commentators think the NFL’s best days are in the past and that it will be unable to sustain its own growth and profit expectations. Owners like the Spanos family and Mark Davis of the Oakland Raiders, who came to San Antonio to kick the tires a few years ago, clearly have overestimated the willingness of taxpayers to foot the bill for new stadiums that benefit the teams more than the communities.
Some of the same people believe that Major League Soccer will have to adopt a more realistic value for its franchises if it is going to see the growth it projects. San Antonio is in the running for an MLS franchise by 2020 or so, depending on the shifting interests and abilities of other cities ahead of us on the list.
But we are off to a bad start with a city investment in a minor league soccer stadium located, unfortunately, in far northeast San Antonio that would require a major, taxpayer-funded expansion. Spurs Sports & Entertainment would have to pay $150 million or more for the franchise rights, which is about 15 times the cost of an MLS franchise a decade ago. There is nothing in the league’s performance to justify that kind of inflation. That still leaves the stadium as an unfunded liability.
San Antonio voters should make it clear this mayoral election that they did not like the backroom way the failed negotiations for a downtown Triple A ballpark were conducted, with citizens never certain of who would pay for what and where or even why. In the end, the Double AA Missions remain in Wolff Stadium on the Westside.
If San Antonio gets back in the game to pursue another pro sports franchise it should happen out in the open. The alternative is to risk a big loss at the polls. Just ask San Diego.
I am glad to see two things I do not recall ever seeing written in The Rivard Report before:
1. It’s generally NOT city limit population but that of the metropolitan area that is used to reference the greatness of a city. Of course everyone outside San Antonio laughs every time we boast of being being the 7th largest city in the nation!!
2. It was a mistake for the city/county to buy Toyota Field. The evidence was available at the time from the MLS itself which had shown in all their statements and awarding of franchises up to that point in time that they favored cities that would provide downtown stadiums.
No kidding, especially on #2. This blog had the pom-poms out in full force when the soccer deal was being done to give a billionaire an unneeded bailout. Seems the weathervane has now swung back in the other direction. Probably picked up some new sponsors with different priorities. Or maybe this is just the continuation of the billionaire’s agenda – offload the albatross stadium, then redirect public money to the scams and taxpayer fleecings that offer his crowd a higher rate of return.
Beyond our factual report of the Toyota Field deal at the time it occurred, and my column (see below link) with the subhead, “A Bad Soccer Stadium Deal,” I would challenge you to cite the “pom-pom” stories you claim we published. -RR
https://therivardreport.com/mayor-taylors-swing-and-a-miss/
Agree with Mr. Rivard. There is no pompom here just basic journalistic story with the WHO, WHAT, WHEN, WHERE, and WHY that lays out the story with facts.
Dansk:
We have been pretty consistent over time in arguing that it does not serve the city’s interests to call itself the seventh largest city. I went back to 2013 for this column advising Mayor Castro, as he embarked on a trip to India, to stop called San Antonio the seventh largest city:
https://therivardreport.com/dear-mr-mayor-call-san-antonio-the-city-of-opportunity/
Lew Moorman, the co-founder of Tech Bloc, made the case more directly in this posting:
https://therivardreport.com/mr-mayor-please-stop-calling-san-antonio-the-7th-largest-city/
As for Toyota Field, my column with the subhead, “A Bad Soccer Stadium Deal,” ran last year as official interest in a downtown baseball park accelerated:
https://therivardreport.com/mayor-taylors-swing-and-a-miss/
Thanks for reading and for commenting.
–RR
30 cities, since New Jersey has two teams…
We also need to get over the “me too” attitude of council districts. The AT&T Center going on the east side was a total failure to encourage development. You get in your car to go see the spurs and you promptly drive back home, no one stays to hang out in the area. Terrible location decision. They should have put it next to another sports facility. Same with Alamo Dome. It gets a big fat “F” in the “it will spur more development” category. We need to move to a city that has districts. Put more things close together and give people the opportunity to park their car once and see multiple things.
After visiting Orlando and seeing the arena right downtown (across the freeway, like the Alamodome, but easier to access), it really makes me long for a downtown arena. That won’t be possible for a while, given the young age and reinvestment in the AT&T Center. Great arena, terrible location. When TNT shows shots of the Riverwalk, it seems fraudulent. It’s a shame.
If the Google Fiber issue is any indication, San Antonio is comtent to remain a second tier city.
I no longer live in San Antonio and find it harder and harder to justify any reason to move back. As I have a higher interest in urban planning than most, I speak to family and friends in SA about what could/should be done to improve the city; however, I almost always receive a no.
On several occasions I have been told “I don’t know if I want the city to ‘rise'” or “I like the city the way it is.” These coming from people that want me to move back, but don’t want to create a city I want to live in.
*Rising city comments refer to those made by Castro in the past or by Nirenberg’s more recent comment that the city has stopped rising under the leadership of Taylor.
It is important to note that Hotel Occupancy Taxes are:
1. Only paid by non-residents (A resident staying in long term Hotel or Motel accommodations is exempted from the tax)
2. Are restricted use funds that cannot be used for “other essential uses”. They are heavily restricted by the Texas Legislature and they must be used for programs that will put “heads in beds” in local hotels.
That doesn’t mean stadiums are the best way to use these funds – but the idea that the choice is between stadiums and essential repairs, maintenance or general fund needs is false. I think most citizens fail to realize this.
This means the HOT tax is completely separate from the general fund. It is a misconception to say that a city cannot ‘afford’ a project like this if the project is being funded 100% through HOT taxes.
Of course – some projects require additional resources beyond the direct costs and these can potentially be a drain on the general fund… but that is an entirely different argument altogether.
That’s a really good point about the HOT tax. But there are quite a number of valid uses of the HOT tax that could arguably create more value for residents than a stadium, think Mission Reach / Museum Reach / San Pedro Creek river trail expansions, or Brackenridge Park Master Plan, or even a train that services the airport but conveniently also connects the North Side to downtown.