The San Diego Tourism Marketing District released a new report which is severely critical of the Chargers' Stadium Proposal.
That isn't a surprise.
What is somewhat of a surprise is how little the report finds about the proposal which is worthwhile, even considering that the proposal includes additional convention center space.
The report was completed by HVS Convention, Sports & Entertainment Facilities Consulting, and runs for 62 pages. I'd suggest everyone take the time to review the report, however, for the sake of everyone's sanity, we'll stick to some of the conclusions reached by the report.
What did the Report Find?
Here are some of conclusions the report reached which I think are interesting (from Pages 42 and 43):
- Under the current proposal, the financing plan eliminates the existing 2% Tourism Marketing District assessment and replaces it with a guaranteed 1% and potential additional 1% after the previous year's expenses and operating costs have been satisfied. This could cut the TMD fund in half and hinder the ability to market and promote the city and convention center(s) - note that the legality of the TMD assessment is currently being challenged by attorney Cory Briggs.
- The ownership arrangements and operating agreement between the Chargers and the building owners have not been determined, but they are critical to coordination of the marketing, sales and operating efforts.
- The Chargers proposal suggests that a government entity, such as a joint powers authority, may be formed to own and operate the facility. However, the lodging industry or representatives from the Chargers may not be available to form part of this entity (with the city) due to conflicts of interest in the orientation of the facility operations. This legal complication could introduce further obstacles that prevent the project's progress.
- The Stadium-Convention Center would reduce the level of operations at the SDCC by moving smaller events to the new venue. The financial impact on the SDCC needs to be evaluated.
- A contiguous expansion of the SDCC will be necessary to maintain San Diego's prominent position in the convention center industry. The financing plan for the proposed Stadium-Convention Center needs to demonstrate the ability to fund a contiguous expansion of the SDCC (by the way, this was a crucial point made by the San Diego Chamber of Commerce when they endorsed the plan recently).
- The estimate of potential positive impact on convention activity in San Diego is limited (69,000 room nights per year).
- Event planners who plan large events do not believe that the proposed Stadium-Convention Center will meet their needs (this was the focus of Councilman Scott Sherman's study a few months ago)
- The football season schedule proposed by the Chargers would severely limit the ability to book long-term events that generate significant room nights.
- The proposed Stadium-Convention Center would primarily compete with the SDCC for short-term business and reduce the occupancy of the SDCC.
- The lack of headquarters hotel, adjacent hotels, and the potential for hotel development surrounding the site of the proposed development presents challenges to event planners.
What Do the Chargers Say About It?
It would be an understatement to suggest the Chargers are critical of the reports findings, Here's Chargers' Special Advisor Fred Maas, by way of an email reply in Lori Weisberg's Union Tribune's story about the report:
"The results of this study were pre-determined from the outset by a few highly self-interested hotel owners who have once again wasted taxpayer money on a misbegotten effort to justify a contiguous convention center expansion that has already been struck down by the courts and that is unlikely to be built"
I'm speaking for myself here, but this statement by Maas sounds a little too much like Chargers' Special Counsel Mark Fabiani. In the interests of fostering amity, I would have been a little less aggressive.
I'd also get my own report released. If I were calculating and devious, I might even stop playing pointless hardball with Joey Bosa, get him signed and into camp, and let that positive story overwhelm this one.
Stadium supporters will cavalierly dismiss the findings of the report in a manner similar to that used by Fred Maas.
However, it's the most substantive look at the project since the study released earlier by Councilman Sherman, whose findings it corroborates. It also substantiates the claims of the hotel industry and supporters of a contiguous Convention Center expansion.
The Chargers would be well-advised to release their own study, so that a side-by-side comparison can be undertaken.
Until that time, we only have this report to work with, and therefore this report sets the terms of debate. Those terms are not favorable to the Chargers, or supporters of the project.