Why I’m Against Measure C

This November, San Diego residents will vote on Measure C, which would raise the Transient Occupancy Tax (TOT or hotel tax for short) from 12.5% to 16.5% in order to partner with the NFL and the Chargers to build a new structure they are calling a “convadium.” (A multi-purpose convention and stadium complex.)

An August 29th poll said that 39% of San Diegans plan to vote for the measure. It needs 67% to pass. So, while it is unlikely to pass I want to share some of the reasons I plan to vote against the measure.

My Top 8 Reasons I’m Against Measure C

1. The public shouldn’t fund private ventures

I’d go into more depth about this point but I think John Oliver pretty much nails it.

I’m actually totally fine with the Chargers getting a new stadium. While I’m not a fan of the team or the NFL I am a football fan. And, as a season ticket holder for the Aztecs at the same stadium, I can affirm that the existing stadium is a dump. They either need to seriously remodel the existing stadium, like gut-rehabbing a 1920s bungalow, or build somewhere else.

I’m not against the Chargers. I’m not against a new stadium. But I am against the public financing it. The 49ers are in a smaller market and mostly funded their stadium in Santa Clara with private money, the Chargers should do the same.

2. This is a countywide issue, not just a city one

Have you ever driven around on game day in San Diego? If you have then you know that the San Diego Chargers fanbase doesn’t just come from the city of San Diego. People come from all over San Diego county to attend games. Trains, trolleys, and freeways are packed getting to Mission Valley.

And yet, this measure taxes hotels in the city of San Diego… not the county of San Diego. In other words, why not raise the TOT (hotel tax) on every hotel room in the county, probably at a lower rate, rather than just the city?

It’s been frustrating to me that many of my friends who are Chargers fans, the people who attend the games, don’t live in a place where they can even vote on Measure C.

3. The Lie, Part 1 – Taxation Without Representation

The line you hear repeated is, “This measure won’t cost city taxpayers a dime unless they stay in a hotel.” Dean Spanos, the owner of the Chargers, likes to riff… “Won’t it be fun to know that our stadium is financed by Raiders fans?

Remember the American Revolution? No taxation without representation? Remember the Declaration of Independence when we rubbed this concept in the nose of the King of England?

Asking voters to levy an increase in tax on tourists to pay for a stadium/convention center that most won’t use is making them pay for something they’ll not benefit in any way.

Think about it like this. The NFL provides 10-12 game days per year. Let’s say the average NFL visitor stays two nights at a San Diego hotel. That’s 20-24 room nights per year generated by the NFL for games… for 30 years.

Over the life of Measure C that’s:

  • 300-360 days where NFL fans pay 4% of their hotel rate towards the stadium (if they stay in a San Diego hotel)
  • 10,590-10,650 days where tourists visiting San Diego will pay 4% of their hotel rate towards a stadium.

I think it’s unfair to tax 100% of tourists visiting our city over the next 30 years for a stadium very few of them will actually benefit from in any way. 3.3% of days over the period of 30 years will be game days, and it’s not like 100% of tourists traveling to San Diego on an NFL weekend are coming to go to a game… realistically we’re talking 3,000-10,000 fans are staying in hotels for NFL games.

That’s a whole lot of non-NFL tourists paying a whole lot of tax for a really, really long time.

4. The Lie, Part 2 – It won’t cost taxpayers a dime

This is true if the new TOT increase covers the burden of loan payments that’ll finance the new construction over the next 30 years.

If there’s a shortfall in the funds generated by the TOT increase the city will either have to default on it’s payment or they’ll have to take the money out of the general fund.

Proponents of Measure C say the increase will generate plenty of money, citing a study the Chargers financed. Opponents of Measure C say the increase likely won’t cover the payments, citing a study they financed.

My problem with this financing scheme is that it’s without assurances that this won’t end up costing the city more money than the TOT increase generates. If the NFL and Chargers are so sure that the TOT increase will generate “plenty of money” than they need to offer taxpayers a guarantee that they’ll cover the balance on any shortfalls.

Why? Because it’s easy to spend this kind of money when the money is rolling in San Diego. But you have to know that in the next 30 years there will be multiple recessions where tourism will suffer.

5. You don’t build a pool when you need a new roof

San Diegans are sick of the state of their infrastructure. Sure, we’ve got a lot of beautiful things for tourists to enjoy. But our roads are terrible and our schools are crumbling.

Like a lot of city residents I am sorry– but the Chargers better get in line. If we’re going to raise all of this money to build a new stadium, let’s do that after we invest in things which will benefit 100% of San Diego residents first.

You can say that’s small town thinking. You can say that we are dumb for letting the Chargers go. And I would say only an idiot puts a new swimming pool on a credit card when he’s got a leaking roof.

6. The hotel tax will be too high

Let’s say you come to San Diego for vacation with your spouse. You stay 5 nights at a hotel that’s $200 per night for a hotel bill of $1000. The difference between this measure passing or failing is your total hotel bill being $1125 and $1165. Now, that $40 might not seem like a big deal to you. Especially, since you know that taking your spouse to Sea World for the day would be over $100 or going to the zoo might be more like $125.

So, it is correct to say that paying an extra $40 wouldn’t impact a persons decision to come to San Diego for vacation.

But let’s say you’re the American Association of Cardiologists and you’re signing a convention contract to stay at the Town & Country, 4 nights and 4,000 rooms around Hotel Circle. Presuming it’s $200/night we’re talking an increase of $128,000 difference in that deal for a “convadium” your event won’t even visit.

See, moving to 16.5% is a big deal for event planners. Especially when you consider the hotel tax rate of other cities who might want your 16,000 room night event in their city.

Consider the hotel tax of other cities by comparison:

  • LA – 14%
  • Orlando – 6%
  • Miami Beach – 14%
  • San Fransisco – 14%
  • Anaheim – 15%
  • Portland – 11.5%
  • State of Hawaii – 13.5%
  • Chicago – 17.4%
  • Indianapolis – 17%
  • Dallas – 15%
  • Phoenix – 12.57%
  • Minneapolis – 13.775%

And, don’t forget, this new 16.5% tax is just for hotels in the city of San Diego. All of a sudden the idea of hosting an event or going on a San Diego county vacation gets cheaper… most of San Diego county would stay at just 10% hotel tax. (Carlsbad, Oceanside, Del Mar, Encinitas, etc)

7. Too many promises and not enough contracts

“But building a new stadium will bring the Super Bowl, NCAA Final Four, and other big events to town.” 

The only promise in that laundry list that you could actually hold anyone to? A Super Bowl. A single Super Bowl.

Is the NCAA going to host the Final Four in an outdoor stadium in the middle of our rainy season? Not a chance. Would a new NFL stadium in downtown San Diego get a lot of new events? Maybe. We just don’t know. A lot of ideas are being floated around but Measure C doesn’t even have a final price tag, much less contracts to bring in events.

8. The Chargers will leave if this doesn’t pass

Maybe. But it’s unlikely the NFL will leave the second largest city in the largest state in the country. San Diego has proven that it’ll support the Chargers through thick and thin. Even when the team is terrible, like last year, attendance was still strong.

I think what’s about to happen is that this measure will fail with 40-45% of the vote in 2016 and the NFL will find a way to make it happen.

I would suggest they consider PSLs or some other financing scheme which puts the burden of a new $1 billion stadium on the individuals who buy tickets and the benefit financially from having the Chargers here.

It also wouldn’t surprise me that if the measure fails that the NFL would seek new ownership for the Chargers. It’s not that the city doesn’t want the team, it’s that the ownership of the team has written a proposal that the voters are rejecting.

The Final Summary

Proponents of Measure C want to increase the tax on hotels in the city of San Diego from a middle-of-the-pack 12.5% to a on-the-high-end of 16.5% for the next 30 years. I believe that an increase in taxes should benefit 100% of the residents of San Diego, not the few who go to Chargers games.

While I’m in favor of the Chargers staying in San Diego, while I’m in favor of building a new stadium for the Chargers in San Diego, I join my neighbors in firmly voting no for Measure C on November 8th.


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