The Chargers "will ask San Diego voters in November to raise taxes on hotel stays" to 16.5% from today’s 12.5% rate to help build a $1.8B hybrid stadium and convention center next to Petco Park downtown, according to sources cited in a front-page piece by McSwain & Weisberg of the SAN DIEGO UNION-TRIBUNE. Paying for the project "would fall solely upon" hotel guests, the Chargers and the NFL, "unlike previous proposals that tapped general taxpayer funds for part of the financing." At 16.5%, San Diego’s hotel tax contemplated by the initiative would become "one of the nation’s highest." Among regional competitors, Anaheim adds 17% to room rates, while S.F's tax is as high as 16.25%. Chargers consultants are "pushing to complete initiative language this week so they can start gathering signatures next month." Sources said that as of last night, the team was "proceeding on the assumption that passage would require a two-thirds majority vote." Under the financing plan taking shape, the Chargers "would deposit" $650M -- including $300M from the NFL and $350M from the team -- "into a trust fund toward the stadium portion’s projected cost" of $1B. A new, city-controlled agency would contribute $350M, "using sales of tax-exempt bonds backed by the increase in hotel taxes." Sources said that the Chargers "would be responsible for any cost overruns for the stadium piece of the project beyond" $1B.
CONVENTIONAL WISDOM: As for the convention center, hotel taxes "would back" its $600M construction cost, along with $200M "for land acquisition." The initiative would have the city "retain ownership of the land and 'convadium' structures, and it contemplates that the city may form a joint-powers authority or other entity to finance and operate the project." The city "would maintain the convention center and keep any advertising or other revenues specific to that portion of the project." Instead of traditional rent, the Chargers would pay $15M a year (in '17 dollars) "toward an operating and maintenance fund." Less clear is "how the hybrid convadium would look." The Chargers and their development partner JMI Realty "haven’t decided on a final architectural plan." Sources said that two choices are being contemplated, including a "stadium on top of convention space, or a stadium alongside a convention center" (SAN DIEGO UNION-TRIBUNE, 3/23).
