Revised Financing Proposal Puts More
Funding Up Front
San Diego’s City Council will consider a new financing plan for the Padres ballpark at its March 6 meeting, along with revoting on a series of earlier ballpark actions.
Mayor Dick Murphy’s new proposal calls for shifting a greater amount of city spending up front by using redevelopment money, and reducing the overall bond issue.
The plan announced Feb. 23 eliminates relying on hotel room taxes from the Campbell Shipyard hotel. The 1,200-room project that originally was to contribute about a fourth of the revenues toward the city’s annual bond payment for the estimated $452.5 million ballpark.
“Because we’ve reduced the bond amount, we no longer need any money from the Campbell Shipyard hotel,” Murphy said.
The revote on some two dozen ballpark contracts and resolutoins was advised by City Attorney Casey Gwinn in the wake of the resignation of former councilwoman Valerie Stallings.
Stallings pleaded guilty to two misdemeanors in connection with her acceptance of gifts from Padres owner John Moores, not reporting those on financial disclosure statements and not abstaining from voting on ballpark-related issues.
While Murphy’s new finance plan clearly adjusts financial projections contained in the original 1998 plan to finance the city’s share of the ballpark, Gwinn said it is consistent with the memorandum of understanding, the formal agreement between the city and Padres approved by nearly 60 percent of city voters.
‘Not Set In Stone’
“The issue of how (the ballpark) got financed was not set in stone,” Gwinn said. “The decision about whether or not to essentially have Downtown redevelopment dollars pay for more of the project is a policy call of this Mayor and council and that’s in essence what they’re doing.”
The key elements of the new plan are:
– Reducing the gross bond amount, or the total amount of bonds sold to the public, from about $273 million to $225 million. The net proceeds from the issued bonds would be $179 million.
– Because of the lower gross bond amount, the annual debt service is estimated at $16 million, down by some $5 million from the original estimate of about $21 million.
– Cash investment from the city of $30 million, of which $22 million has already been spent; a $6.5 million loan repayment from the city’s Downtown redevelopment agency, the Centre City Development Corp., and $1.5 million allocation in fiscal 2002.
Previously, the city put up no cash into the project.
– An additional CCDC investment of $16 million.
The latter figure would bring the total CCDC investment in the ballpark project to $66 million if simply added to CCDC’s original commitment of $50 million.
Land Costs Increasing
However, because of escalating land costs, CCDC has already spent about $73 million for buying the property needed for the project, said Peter Hall, CCDC’s president. Hall also said the budget for land acquisition will likely climb to about $100 million because of pending court cases where land values have yet to be determined. The original estimate for land acquisition was about $86 million.
While he was critical of the ballpark financing plan during his mayoral campaign, Murphy said his new proposal was “realistic and doable.”
CCDC Chairman Peter Davis said the increased amount of tax increment investment spending on the ballpark and its surrounding commercial buildings is well worth it.
‘A Real Cash Machine’
“This ballpark is going to spin off tremendous financial revenues for the city,” Davis said. “This is a real cash machine and we’re talking about billions of dollars for the city. That’s billions with a ‘b’ at the beginning and ‘s’ at the end.”
Not everyone was so enthusiastic. Former councilman Bruce Henderson, a consistent ballpark opponent, said the fact that Murphy acknowledged revenues from the Campbell Shipyard hotel are not available seems to trigger a provision in the memorandum of understanding that requires another public vote.
If the council puts the issue on the ballot, Henderson said he would not likely file another lawsuit against the project. He has about six cases pending in the courts.
That litigation and several other outstanding cases will prevent the city from actually issuing the bonds until September at the earliest, Murphy said.
Ballpark construction was started last spring and halted in October when the city acknowledged it could not issue the needed bonds because of a federal probe into the Stallings issue, and the outstanding litigation.