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San Diego’s Budget Analyst Concludes Higher Hotel Tax Hike Would Cover Convadium Cost


The Chargers' proposed hotel tax hike would generate enough revenue to cover the projected cost of the Convadium complex, a combined stadium and convention center annex, according to San Diego’s independent budget analyst, Andrea Tevlin. She warned, however, the proposal could be underestimating the actual cost of the project, as the $200M for land costs in the $1.8B project estimate may be too low.

The report on the team’s Nov. 8 ballot measure also found if hotel tax revenue falls short in any year, the city would have to cover the shortfall with public funds that support public safety and other core functions, according to the San Diego Union-Tribune.

The budget analysis estimated the team’s proposal to raise SD’s hotel tax from 12.5% to 16.5% would generate about $120M extra revenue annually. Hotel tax revenue combined with a $650M contribution from the Chargers and NFL would put capital available somewhere between $1.95B and $2.25B, which would provide between $150M and $450M above the Chargers $1.8B estimate.

Trevlin said the city would have to replace 1,300 Padres parking spots on the proposed site of the Chargers project, which would cost about $75M, as well as relocate the Metropolitan Transportation System’s bus yard from the rest of the site. This would require environmental remediation. The project may also require upgrades to trolley lines to accommodate an increase in riders.

Bond-financing costs also could be higher than anticipated if interest rates rise, which would lower the amount that could be borrowed against hotel tax revenue, she said.

The analysis also said the Chargers measure doesn’t provide any benefits for the city. The measure doesn’t mention any revenue sharing with the city, provide an independent oversight panel or offer the city help in covering the remaining debt at Qualcomm Stadium once the team stops playing there. 

A separate analysis by the San Diego County Taxpayers Association projected a $400M shortfall in hotel tax revenue needed to cover the Convadium’s cost. Based on that analysis, the association voted Friday to oppose the tax hike. Chargers spokesman Fred Maas responded by calling the analysis biased and “rubbish.” [SDUT]