Funding Bill Charges Ahead

The proposed legislation to create a California commission with authority to issue tax-free revenue bonds to finance theatres to stadiums, if passed, could help the San Diego Chargers NFL team solve its dilemma of funding a new home. Whether it would be in Los Angeles or new digs in San Diego is still anyone’s guess.

Though team officials have insisted all along they intend to stay in the city, speculation has run rampant in recent years that they would like to pull up stakes and move north, thus filling a Los Angeles-area void left when the Raiders and Rams bolted for greener pastures in 1995.

Interested parties in Los Angeles and Orange counties – most notably Anschutz Entertainment Group – have floated stadium proposals over the years with none able to gain much traction because of public funding issues. The passage of California State Sen. Kevin Murray’s Senate Bill 4 could lower those public funding hurdles, if not eliminate them.

The bill has the support of Denver billionaire Philip Anschutz, which has raised eyebrows in San Diego and elsewhere about just whom SB4 would benefit.

Murray, a former William Morris agent, denies playing political football with the proposed bonding authority.

“I can unequivocably say the impetus has nothing to do with empowering any team over the other,” Murray, a Los Angeles Democrat, told the San Diego Union-Tribune. “I don’t want anybody to think that some team is trying to get stolen.”

One could hardly blame San Diegans for their suspicions. Los Angeles has already lured away the former San Diego Clippers, who moved in 1984 and now play in the AEG-owned Staples Center along with the Lakers.

But as much as the legislation could provide a boost to Anschutz’s desire to build a downtown L.A. football stadium, the same holds true for Chargers owner and politically influential San Diego resident Alex Spanos.

SB4 has already cleared California’s State Senate and one Assembly committee. Under its provisions, revenues from leases, taxes, parking and other ancillary income from a stadium and its related development could be used to pay off construction debt. At the same time, the practice of selling pricey “seat licenses” would continue to be allowed for the purposes of paying down debt, the Union-Tribune said.

Because bonds would be tax-exempt, developers would also avoid federal tax on most revenue generated by the project, the savings from which could also be applied against the debt. However, if revenues fall short, developers would be unable to feed at the state general fund trough to cover themselves.

The timing of the bill favors San Diego should it pass. The Chargers just recently unveiled plans for a $450 million state-of-the-art stadium that team officials plan to take directly to the voters – a gamble that could pay off if San Diegans can be convinced they won’t be footing the bill for it.

The plans call for Qualcomm Stadium to be torn down, and the new stadium and adjoining hotel, retail and residential complex to be constructed on the Mission Valley site.

“This could help [San Diego] build a new stadium and keep their team,” Murray told the Union-Tribune.