After SF rail system hack, concerns remain

Good morning! Lots going on today. Gov. Brown will introduce his budget this morning, while his nominee for attorney general, Rep. Xavier Becerra, D-Los Angeles, receives his first hearing.

But beyond the day’s headlines, six weeks after some 900 computers used by the San Francisco Municipal Railroad were hacked with ransomware, many concerns remain about the incident — especially as coverage of U.S. cyber vulnerabilities has become more extensive than ever.

San Francisco’s light-rail system, known as Muni, faced an emailed demand from an unknown hacker that he be paid about $73,000 in bitcoins if it wanted to regain control of the computers.

Apparently in fear that more computers had been hacked than the ones displaying a message, “You Hacked, ALL Data Encrypted,” the transit agency shut off ticket machines and fare gates at rail stations from the morning of Friday, Nov. 25, through Sunday, Nov. 27, allowing passengers free rides that weekend.

The following Monday, Muni officials announced that not only had they not paid the ransom, they never even considered paying it, confident in their tech prowess. Many targeted companies and organizations feel they have no choice. Last April, the Hollywood Presbyterian Medical Center in Los Angeles paid nearly $17,000 in bitcoins to recover access to data that had been encrypted by hackers.

Federal and state security officials have kept mum about the attack since it happened.

CalWatchdog has more.

In other news:

• “The powerful storms that soaked Northern California over the past week did more than trigger power outages, mudslides and flash floods. They sent roughly 350 billion gallons of water pouring into California’s biggest reservoirs — boosting their storage to levels not seen in years, forcing dam operators to release water to reduce flood risks and all but ending the five-year drought across much of Northern California, even though it remains in the south, experts said Monday.” The San Jose Mercury News has more. 

• “The fate of two of California’s four NFL teams should become much clearer this week. The Chargers have to decide by Sunday, Jan. 15, whether to exercise their option to share a $1.7 billion stadium being built in Inglewood by the Rams or to stay in San Diego despite voters’ sharp rejection of a Nov. 8 ballot measure to use an increase in the hotel room tax to contribute hundreds of millions of public dollars to build a billion-dollar-plus stadium in the city’s lively downtown.” CalWatchdog has more. 

• “President-elect Donald Trump’s plan to build a wall along the border will run into resistance in California, Lt. Gov. Gavin Newsom said in an interview with The Golden State podcast. The state could sue under the California Environmental Quality Act or its federal equivalent, said Newsom, utilizing a common tactic to delay or kill all sorts of development projects around the state.” The Los Angeles Times has more. 

• “Backers of a recent tobacco tax initiative ballot have agreed to pay a $2,500 fine for failing to identify that billionaire Tom Steyer was a major funder of the campaign in a YouTube video that urged voters to support the measure, according to documents released Monday.” The Los Angeles Times has more. 

Legislature:

• Assembly will hold 9 a.m. hearing on the appointment of Rep. Xavier Becerra to state attorney general.

Gov. Brown:

• Unveiling the proposed state budget today at 11 a.m. in Sacramento. 

Tips: matt@calwatchdog.com

Follow us: @calwatchdog @mflemingterp

New follower: @RareCat

After months of relative certainty that the National Football League wanted the Rams in Los Angeles and the Chargers in San Diego, expectations have been gradually upset, turning the other former L.A. team’s relocation back to the City of Angels all but a done deal.

The proximate cause of the shift, always a factor in the team’s fate, was the failure of a new stadium deal to pass muster with San Diego voters in November. In the ensuing weeks, the team has acted swiftly to put an executable plan in place for a timely move to L.A. The first step in making the scheme a reality was locking down a place to play, and “[t]he agreement with the Chargers to lease the as-yet-to-be-built Inglewood stadium has been executed and sources say, soon to be signed,” according to NBC Los Angeles. That deal itself was only possible because the groundwork had been laid back when the first pro team’s return to L.A. was finalized. “The Rams signed an agreement with the NFL before moving to Los Angeles agreeing to lease space to another team,” the network added. 

A need for fans

Still, potential obstacles to an expeditious relocation have captivated the sports press, especially online, where frustration with the Chargers’ recent poor play has been aired as a factor that could complicate the League’s calculus around an L.A. move. “Once again this past week, speculative media reports surfaced outside of San Diego expressing near-certainty that Dean Spanos will move the team to greater Los Angeles in 2017,” U-T San Diego observed.

“Once again, no one was identified as the source of the speculation. (Chargers spokesman Mark Fabiani again said Spanos hasn’t made up his mind.) The League may be overplaying its hand here. L.A. doesn’t want the Bolts.”

Anecdotal evidence of a sour mood among Angelenos has not been overwhelming, but it has been put under a spotlight. Steve Reed, sports writer for the Associated Press, recently quoted one L.A. fan on Twitter who implored the Chargers to “please stay in San Diego. One bad football team in L.A. is enough.”

A cloudy future

Even the risk of over-saturating L.A.’s market could provoke the League to grow more cautious, impose delays or otherwise allow the potential deal to drift. NFL ratings have tanked over the course of 2016, with potential culprits including the politicization of the game by players, the league’s punishment of on-field celebrations, the presidential campaign season and the health risks now more closely associated with players’ concussions. 

Evidence does suggest that the Clinton-Trump matchup put a real damper on fans’ enthusiasm. “Since the election, national NFL games across broadcast and cable are averaging an audience of 18 million viewers,” Fox Business reported, citing Nielsen data. “That’s a nearly 17 percent increase from the period from the start of the season up until the election, when national NFL games drew an average of 15.4 million viewers.”

In an internal memo this October, the network noted, executives Brian Rolapp and Howard Katz downplayed concern that the League faced a fundamentally changed business landscape. “Prime-time windows have clearly been affected the most, while declines during the Sunday afternoon window are more modest. While our partners, like us, would have liked to see higher ratings, they remain confident in the NFL and unconcerned about a long-term issue.”

Nevertheless, the League would suffer a potentially costly and high-profile embarrassment were the Chargers not to connect with L.A. and Orange County fans, who have a broad range of non-football pro teams to support and lack the recent traditions of stalwart support that many other cities with struggling NFL franchises and fewer sports options have nurtured for generations. 

Is another NFL team joining the Rams in Los Angeles? 

Good morning. TGIF. Just because we rarely get the opportunity, today we’ll start with sports. 

The St. Louis Rams may have once again become the Los Angeles Rams, capping off the biggest suspense story in the National Football League, but the controversy over the city’s final lineup of teams has flared up yet again.

In San Diego, where the Chargers have gone down to the wire with city officials on a possible move that once looked like a done deal, the next twist depends on voters. 

Although analysts and fans have cautioned that one NFL team may be plenty for Los Angeles, especially so soon on the heels of the Rams’ return, the stadium deal holding the Chargers’ future in the balance has failed to rally popular support.

CalWatchdog has more. 

In other news:

• “Los Angeles may be the latest opponent of a proposed bullet train route through San Fernando Valley horse country. Councilman Paul Krekorian has filed a motion to oppose an above-ground high-speed rail route fought by residents from Lake View Terrace to Shadow Hills, who say the foothills train would destroy the environment, kill horse-related businesses and put an end to an equestrian way of life. The Los Angeles Daily News has more.

• “A national gun control group that helped write California’s Proposition 63 released a study Thursday indicating that thousands of felons disqualified from owning guns are keeping their firearms in this state and most others because of the lack of an effective enforcement mechanism,” reports the Los Angeles Times.

• “One published media report this month said the campaign to legalize marijuana in California had raised $18 million. Within days, other major news outlets pegged the total at just one-third that amount, while a nonprofit campaign watchdog group said the figure was $11 million. Why the conflicting numbers?” The Orange County Register has more. (We can tell you part of the problem is the Secretary of State’s confusing and redundant website.)

• LA Weekly explains every ballot measure in haiku. Our favorite is for Prop. 66:

  “If you want the state
  To execute more people
  This one is for you”
• And The Weekly Standard writes that U.S. Senate candidate Loretta Sanchez’s strategy to unite Latinos and Republicans could be the playbook for future campaigns.  

Legislature:

• Gone ’til December. 

Gov. Brown:

• Will attend Native American Day celebration at the Capitol in Sacramento. Approximately 11:30 a.m.

Tips: matt@calwatchdog.com

Follow us: @calwatchdog @mflemingterp

New follower: @ethanmcbride031

The St. Louis Rams may have once again become the Los Angeles Rams, capping off the biggest suspense story in the National Football League, but the controversy over the city’s final lineup of teams has flared up yet again.

Chargers ’16

In San Diego, where the Chargers have gone down to the wire with city officials on a possible move that once looked like a done deal, the next twist depends on voters. Although analysts and fans have cautioned that one NFL team may be plenty for Los Angeles, especially so soon on the heels of the Rams’ return, the stadium deal holding the Chargers’ future in the balance has failed to rally popular support. According to a YouGov poll conducted late last month, only “a quarter of San Diego adults strongly or somewhat support the proposal for a new, taxpayer-funded $1.8 billion stadium and convention center downtown,” as USA Today recalled. “The poll showed more than half — 52 percent — strongly or somewhat opposed the measure, with the other 23 percent not stating a preference.” 

“To win the vote, the team needs two-thirds of voters to approve the project because it’s a tax hike for a special purpose in California. If the vote fails, the Chargers have until Jan. 15 to decide whether to move to Los Angeles, where they have an optional deal to share a lucrative new stadium with the Los Angeles Rams.”

If the push to use the ballot to keep the Chargers in San Diego has been a slog, however, city officials’ backup plan has emerged as a potentially dramatic Hail Mary pass — to the judiciary. City Attorney Jan Goldsmith told radio host Darren Smith “he would ask the state’s high court to ‘take jurisdiction’ over the city’s November election as it pertains to two stadium-related ballot initiatives: the Chargers plan to raise the city’s hotel tax to build a stadium and convention center, and the Citizens’ Plan, which would increase the tax to help pay for tourism marketing and an off-the-waterfront convention center,” according to U-T San Diego. Although “no public money could go toward stadium construction,” the city’s inquiry “could come as early as next week, if county officials examining signatures declare that either or both initiatives have qualified for the ballot,” the paper added. 

Vegas or bust?

Oakland’s Raiders, the other California team caught up in the L.A. relocation game, have struggled to strike a deal with their own home town. According to NBC Sports, League Commissioner Roger Goodell appeared to discourage another move to L.A., suggesting “you never want to see a community lose their franchise once, much less twice,” making reference to the Raiders’ ping-ponging over the decades between L.A. and Oakland. “I think there’s a solution there, but it takes the community to help identify it,” he said. In the wake of the Rams deal, and unable to count on the Chargers to come through on the stadium-sharing deal that had briefly given the duo a bettor’s edge against the Rams, the Raiders have shifted their attentions from L.A. to Las Vegas.

“Of course, the NFL has allowed communities to lose franchises twice: St. Louis lost both the Cardinals and the Rams,” NBC Sports noted. “So it wouldn’t be unprecedented for the Raiders to vacate Oakland twice. But Goodell said the recent authorization of a new stadium in Las Vegas isn’t enough to bring the Raiders to town.”

Nevertheless, Las Vegas has thrown its considerable weight behind serious plans to lure the team in. The Southern Nevada Tourism Infrastructure Committee recently cast a unanimous vote “to recommend $750 million in public funding for a $1.9 billion stadium,” ESPN reported, drawn from hotel taxes. That sum would be added to $500 million from owner Mark Davis, “which includes a loan from the NFL for a new stadium, to the project,” the network added. “The family of Sheldon Adelson — chairman of casino and resort outfit Las Vegas Sands Corporation — has pledged another $650 million for the proposed 65,000-seat, domed venue, which would be shared with the UNLV football team.”

charamelody / flickr

The NFL’s ungainly effort to determine the fate of three potential Los Angeles teams will drag on into 2016. A mid-January meeting in Houston will give owners their next opportunity to opt for or against the competing relocation plans, which would shift the St. Louis Rams to Inglewood in the first instance and the San Diego Chargers and Oakland Raiders to a shared Carson stadium in the second. 

The slow-motion scramble for L.A. has arisen because each of the three teams wants newer and better stadium facilities, which would increase team revenues. “According to Forbes 2015 NFL franchise valuations, the median team revenue is $322 million. However, the Chargers ($304 M), Rams ($290 M) and Raiders ($285 M) rank among the league’s bottom third, with the Rams and Raiders among the worst three revenue-earners in the league,” as Patrick Rishe observed at Forbes.

St. Louis reaches

So far, neither plan has mustered adequate support, reported the Los Angeles Times, which added that the city of St. Louis has banked on a counterproposal that depends on a loan package far in excess of what the NFL has been historically willing to provide. “The plan is predicated on the league providing a $300 million loan — $100 million more than has been approved by owners,” according to the Times. “In a recent letter to the task force, NFL Commissioner Roger Goodell said the premise that $300 million will be available is ‘fundamentally inconsistent’ with the league’s program of stadium financing.”

According to Rishe, Rams owner Stan Kroenke has “indicated to the NFL’s relocation committee that he would be willing to take on an equity partner — a reluctant move made when Kroenke concluded he wouldn’t get the necessary 24 votes of support without it. 

Acrimony in San Diego

Wednesday marked the league deadline for the three teams’ current cities to submit proposals that would keep them local. San Diego’s offer, in excess of $1 billion, “outlined a previously released plan that calls for the city and county to contribute $350 million toward a new stadium, contingent on a public vote next year,” the Times reported separately. But the team itself reiterated their opposition to the deal. “The Chargers don’t believe voters will approve the plan based on polling the team conducted in August,” noted the Times. “They also believe an environmental-impact report for the potential stadium was rushed and leaves the concept vulnerable to litigation.”

That calculus was partly reinforced by remarks from League Commissioner Roger Goodell. As ABC News reported, Goodell “said earlier this month that the league wants certainty in proposals from San Diego, Oakland and St. Louis, which means no time for letting cities have voters decide the fate of stadium projects.”

Cash strapped Oakland

The huge sums flying back and forth in San Diego and St. Louis discussions have dwarfed what’s on the table for the Raiders, although the stakes for the NFL — and local fans — remained just as high. In contrast to the two cities’ schemes, “Oakland Mayor Libby Schaaf has no such lavish plan to keep the Raiders in town,” the San Francisco Chronicle reported, “but says she hasn’t given up trying to persuade the team to stay. Schaaf says Oakland needs more time to iron out a deal with the Raiders, negotiations that are made complicated by the Oakland A’s 10-year lease on the Coliseum.”

Although Schaaf’s Tuesday letter to the league offered “no plan for replacing the crumbling, 50-year-old Coliseum,” the Chronicle added, it promised “a new stadium through a lease agreement with the Raiders or from property tax revenue generated by future development around the site.” Ironically, cash-poor Oakland may prevail in its bid to keep the Raiders because the team is on a budget as well. “If the St. Louis Rams and the San Diego Chargers stay put, then Raiders owner Mark Davis could lose his chance to move to a $1.7 billion stadium in the Los Angeles suburb of Carson,” the Chronicle added. “He has planned to share the space and the financing with the Chargers.”

The bonds use money paid to lease the facilities they build to pay off construction and financing costs. The Chargers would presumably be expected to be the main payer of lease fees to the city-county consortium that Mayor Kevin Faulconer and county Supervisor Ron Roberts hope will build the new stadium and keep the team from heading to a stadium proposed for Carson in southwest Los Angeles County.

But the Fourth District Court of Appeal has ruled that using such bonds for a stadium is legal under state law — a ruling the city quickly relayed to the NFL and to other team owners who have been skeptical San Diego has the wherewithal to build a modern football stadium. The ruling upheld the state trial-court’s decision from a year ago.

The Union-Tribune noted that the ruling …

… may alleviate one of several concerns league officials raised in a Nov. 10 letter to the city’s lead stadium negotiator.

 

City negotiators have been working directly with the NFL since June, when the Chargers terminated stadium talks as the NFL considers whether the Chargers, St. Louis Rams or Oakland Raiders can move to Los Angeles next year. ….

 

City officials say they are drafting a response letter to the NFL that will include an explanation of last week’s appellate ruling, which City Attorney Jan Goldsmith called a significant victory.

 

“Whether you like them or not, lease-revenue bonds are a legal way to pay for public infrastructure projects,” Goldsmith said.

 

Critics say lease-revenue bonds, where city buildings and other assets are used as collateral to borrow money, violate the spirit of state law by skirting the two-thirds voter approval that would typically be required to raise such money.

Mayor has repeatedly promised stadium vote

But just because San Diego can issue the bonds with a public vote doesn’t mean city officials are likely to do so.

The Chargers’ popularity in San Diego is at low ebb as another disappointing season plays out. It has become common for fans of visiting teams from across the nation to out-cheer Charger loyalists at Qualcomm Stadium. Meanwhile, Fabiani, a former Clinton White House aide, has emerged as a lightning rod for fan anger over his repeated caustic attacks on Faulconer and other officials who have lobbied the NFL against allowing a money-making team with a loyal fan base to leave for more riches elsewhere.

When Faulconer seeks re-election next year, his handling of stadium negotiations — and his support for using public funds — will be a big issue. The Republican is likely to face a Democrat who is strongly opposed to public funding. He’s also repeatedly said San Diegans “deserve a vote” on a new stadium.

A possible scenario being discussed on sports talk radio was for Faulconer to seek voter blessing of the lease-revenue bonds in a special election with lower turnout. The theory is that using lease-revenue bonds to fund the city’s share of a $1 billion-plus stadium project would be much easier to sell to voters than raising sales taxes, rental-car taxes or hotel taxes, such as other communities have done to help pay for new arenas and stadiums.

A series of unflattering media reports have depicted Raiders owner Mark Davis as clueless and outmatched by his responsibilities, with relatively few financial resources. Even if Davis had the best press in the world, however, he would have huge obstacles to overcome. Unlike the owners of the San Diego Chargers and the St. Louis Rams — the other teams in the L.A. triangle — he has no leverage with his home-town officials. Between their own budget headaches and a long history of scraping with Mark Davis’ late father, previous owner Al Davis, Oakland officials have no interest in offering a subsidy of any kind to the team and appear indifferent to the team departing.

Meanwhile, the Raiders’ and Chargers’ announcement earlier this year that they wanted to build a shared $1.7 billion stadium in Carson in southwest Los Angeles County is far less advanced than Rams owner Stan Kroenke’s planned $1.8 billion Inglewood stadium project. Kroenke has all has necessary environmental OKs to begin construction, and as the league’s second-wealthiest owner, the multibillionaire has no need to hunt for public subsidies or partner with other teams.

If Kroenke is willing to flout league rules and move a team without permission from three-quarters of team owners — as Al Davis did when he moved the Raiders from Oakland to Los Angeles in 1982 — he has clear sailing ahead. But if the league puts up enough obstacles to a unilateral move — say, NFL Commissioner Roger Goodell trying to withhold TV contract money or threatening some other highly punitive action — Kroenke would be forced to reconsider. As the past three years have shown, Goodell is the most unpredictable commissioner of a major U.S. sport in memory.

No team has enough owner support to relocate — yet

Pro Football Talk, generally the best connected of any media covering the NFL, looks at a possible — perhaps likely — scenario. It appears to be what Jacksonville Jaguars owner Shad Khan was talking about last week after owner meetings in New  York City when he referred to a “Plan C.”

With Chargers owner Dean Spanos definitely having the nine votes needed to keep Rams owner Stan Kroenke out of L.A. and Kroenke likely having the nine votes needed to keep Spanos out of L.A., the future of the NFL in Los Angeles could hinge on the ability of Spanos and Kroenke to work something out. …

 

Some owners actively oppose Kroenke’s desire to move the Rams, believing that Spanos has tried long enough to get a new stadium in San Diego, and that St. Louis is on the verge of crafting a viable stadium proposal to keep the Rams. But if at least nine owners feel strongly enough about Kroenke getting the L.A. market to vote against the Chargers, the situation will remain at impasse, with both teams in limbo.

 

A brokered deal would hinge, as many such arrangements do, on money and/or other considerations. With each owner able to block the other from moving, one owner needs to persuade the other owner to drop his opposition. In addition, then, to the relocation fee that would be paid to the league generally, the owner who moves to L.A. may have to make a large, separate payment to the one who doesn’t.

 

Likewise, the arrangement could include other terms. For example, if Spanos accepts that the Chargers will stay in San Diego and the Rams will move to L.A., the league could agree that only one team would be in L.A. …

 

It’s becoming more and more clear that something will happen, sooner than later.

Owners eager to set up team in L.A.

Meanwhile, the eagerness of the other owners to get a team in Los Angeles is difficult to overstate. Last week, Dallas Cowboys owner Jerry Jones, Pittsburgh Steelers owner Art Rooney Jr. and Indianapolis Colts owner Jim Irsay all told reporters in multiple interviews that it was quite possible the NFL would have a team playing in the nation’s second-largest market in 11 months.

It seems unlikely that the league would allow two teams to play in temporary quarters at the Los Angeles Memorial Coliseum or at the Rose Bowl in the same season. So NFL insiders offer this scenario as increasingly plausible: Kroenke gets the necessary support in a January vote to allow him to bring the Rams back to Los Angeles — after he makes a big enough payoff to Chargers owner Dean Spanos to drop his interest in Los Agneles.

The NFL has long liked the idea of teams sharing new stadiums, as the New York Giants and Jets do in the Meadowlands facility in northern New Jersey. So perhaps “Plan C” is for the Chargers to sign on as a secondary tenant in Kroenke’s Inglewood stadium. But that’s an awfully complex negotiation to finish by the January vote at which NFL owners want to take decisive action.

But when it comes to Oakland — home of the third team that’s been subject to years of intense speculation about a possible move — Mayor Libby Schaaf has handed negotiations with the Raiders and the NFL over a new stadium to an assistant city administrator, a low-level official more accustomed to helping neighborhoods get better trash collection or to settling disputes over zoning infractions.

Given that the Raiders have a loyal fan base, an international following and a rich history, how is it that local elected officials could be so blase about losing the team?

The most obvious reason is the city’s weak finances and how they relate to the most pressing local issue. Oakland has had persistent budget gaps and has not benefited from the tech boom remotely as much as San Francisco, Santa Clara or many smaller communities in the Bay Area and Silicon Valley.

Fighting crime the priority, not keeping Raiders

Meanwhile, crime has grown steadily in recent years, to the point where Forbes declared Oakland to be America’s third-most dangerous city. Public safety is Mayor Schaaf’s priority, as this April story about her proposed budget in the San Francisco Business Times story makes clear:

The $2.4 billion two-year budget would increase the Oakland Police Department from 722 to 762 officers in the next year and a half, with a long-term goal of 800 officers by 2018.

 

“Oakland will not grow unless people are confident it is getting safer,” Schaaf wrote in a letter earlier this month to the City Council.

That letter identified three priorities beyond public safety, but never mentioned the Raiders or the NFL and their desire for an upgrade from the battered Oakland-Alameda County Stadium.

From the national media perspective, this indifference is being interpreted as a sign the team’s departure for L.A. is inevitable. The NFL executive overseeing Los Angeles relocation issues this week said no “viable” plan had ever emerged from either the city or the team, and a league committee declined to even talk with a Bay Area real estate developer who wants to build a stadium as a centerpiece to a larger, $4.2 billion mixed-use development, believing the plan to be far-fetched.

“As for Oakland, there is no there, there. The area doesn’t have a stadium offer on the table, and time is running out,” ESPN’s John Clayton wrote on Tuesday.

But that presumes the Raiders’ and Chargers’ proposal to jointly build and then share a $1.75 billion stadium project in Carson — where they already have land and regulatory approvals —  is likely to get the league’s go-ahead.

St. Louis and San Antonio may be team’s future

San Diego officials don’t believe that’s close to inevitable. It’s why their stadium proposal announced this week is actually tougher in its financing terms than a proposal that a task force recommended this spring, as CalWatchdog reported Tuesday. The thinking appears to be that the NFL is far more likely to approve the Rams’ move back to Los Angeles, where its stadium plan is considerably closer to fruition than the Raiders/Chargers proposal. There is believed to be no NFL interest in having three teams in Los Angeles.

Oakland’s mayor and City Council may have a similar take. But unlike San Diego officials, they’re not offering a financing plan, one perceived as “tough” or otherwise, to the Raiders. They appear resigned to having the Raiders eventually leave for a city with a much more lucrative, modern NFL stadium with luxury boxes and more seats.

If the Rams leave town, St. Louis is an obvious option for Raiders owner Marc Davis. This week, Missouri Gov. Jay Nixon expressed confidence that the St. Louis riverfront stadium project that’s now being planned would have an NFL team as a tenant even if the Rams departed for Inglewood.

And the most populous U.S. city to not have an NFL franchise — San Antonio, America’s seventh-largest city, with 1.5 million residents — is also likely to be in the mix. City officials are eager to get a team for football-crazy South Texas. And the Raiders have already had talks with city officials, dating back years.

San Antonio believed it had proven itself as an NFL-ready city in 2005 when the New Orleans Saints got a warm reception after temporarily relocating that season because Hurricane Katrina ravaged the Superdome. But so far it has been unable to attract a team.

This has led to optimism about the prospects of San Diego keeping its NFL team with an inventively financed billion-dollar stadium. Some local CEOs wrote in the U-T San Diego about their confidence the public would help out:

Recent stadium projects in midsized cities such as Atlanta, Detroit, and Minneapolis are being financed with public sources between 35 and 50 percent. The Strategic Roundtable believes that the public funding should not exceed 50 percent of the total project costs, including land and infrastructure improvements. This realistic and pragmatic approach must be embraced by all sides to gain the public’s support.

Some believe that San Diego city or county residents would not be willing to give $50 million to the Chargers, much less $350 million to $500 million. Support for taxpayer subsidies is only 29 percent.

On Saturday, the chair of the stadium task force recognized this reality:

In San Diego, the mayoral committee assigned to find a location and financing plan for a new stadium for the Chargers has decided it will not ask for a tax increase.

Meeting the two-thirds vote of the public needed for a tax increase is not realistic, committee Chairman Adam Day said.

Instead, the committee will look at assembling a financial plan that includes naming rights, personal seat licenses, contributions from the NFL and the Chargers, parking fees, concession fees and profits from any mixed-use development on the 166-acre, city-owned site that includes Qualcomm Stadium.

The committee is set to deliver its financing plan to Mayor Kevin Faulconer by May 20. Faulconer has said that the issue will be presented to voters even if that is not legally necessary.

That is from the L.A. Times. This has the feel of the end game for San Diego and the Chargers. If a realistic financing plan could have been assembled without public subsidies before now, it would have been.

That presumes the Spanos family wants to stay in San Diego, a presumption some folks no longer buy. Even if they were one of two NFL teams in Los Angeles, the Chargers would likely be worth $1 billion more in America’s second-biggest metro area than in San Diego, which is no. 17 on the list of largest U.S. metro areas.

Los Angeles is somewhat unique in that it’s one of the few markets where there is strong resistance to tax subsidies for stadiums. As the Feb. 23 Los Angeles Times reported, another reason the Southland doesn’t have an NFL team “is that while every other city talks about what it will do to either lure an NFL team or keep the one it has, L.A. talks about what it will not do — namely it will not help finance a venue with taxpayer money. The Hollywood Park and Carson plans call for privately financed stadiums.”

The San Diego Chargers and Oakland Raiders are considering combining in a potential new stadium in Carson. The St. Louis Rams are looking at a new stadium in Hollywood Park.

However, the Los Angeles stadium shutout allows the NFL to manipulate other cities. The Times noted the NFL “depends on using the L.A. vacancy as leverage to get stadium deals done in other cities. Since 1995, 27 of the 32 teams have either gotten new stadiums or had at least $400 million in renovations on their existing ones.”

Stadium jobs

Stadium backers cite the jobs created, or retained, when a new stadium is built. For example, the New Minnesota Stadium — its working title until a corporate sponsor is signed up — was advertised as a big jobs creator. The Minneapolis-St. Paul Business Journal reported the pitch in 2009:

“The Metropolitan Sports Facilities Commission says a new Minnesota Vikings stadium would create approximately 13,400 jobs and an estimated economic impact of $1.35 billion.

“Of the 13,400 jobs created, about 8,000 would go to tradespeople during the building process, and $577 million — more than half of the roughly $1 billion in construction costs — would go toward wages and salaries for construction workers and others working on the project, according to the report.

“Once the stadium opens, it would generate annual direct spending of $145 million, including spending by fans, the Vikings organization, players, staff, visiting teams and the NFL in connection with games and operations.

“It also would generate more than $32 million per year in tax revenue. That compares to the roughly $18 million a year currently generate by the Vikings.”

That eased the way in 2012 for the $975 million stadium to receive large subsidies from the state and the city of Minneapolis. Forbes reported:

“Minnesota Governor Mark Dayton signed a bill last week approving the plan that would include a 30-year lease for the Vikings and have the state contribute $348 million, the city of Minneapolis $150 million upfront plus $6 million per year for operating costs, and $1.5 million per year to a capital reserve fund. …”

Economists

Yet economists who study the matter insist there isn’t much return for taxpayers. Roger Noll is perhaps the country’s top expert on stadium financing. He’s a professor of economics at Stanford University. He explained to EconTalk host Russ Roberts:

“Even in the best of circumstances what you’ve created is something that essentially sucks the blood out of a neighborhood. Because it’s so rarely used. And indeed, they create slumps. As opposed to being engines of growth. And cities who put in hundreds of millions of dollars into football stadiums inevitably find themselves with big losses. …

“So, the bottom line to it is: Cities should not subsidize baseball and football stadiums, if the goal is engine of economic growth or financial benefit. Now since I don’t have anything against San Francisco subsidizing the opera, I can’t say: Therefore it follows you shouldn’t pay the money at all. But the decision to pay the money should be based purely on having it in the community because you like it. As opposed to: It’s going to return some great financial bonanza.”

Shifting money

The reason why stadiums don’t generate higher long-term revenue is that they just shift money from other entertainment spending. Fans only have so much money. What they spend on tickets and food for a new sports team is taken away from what they might have spent, or spent in the past, on Disneyland, Universal Studios or a local movie theater. The money is not created, but shifted.

Noll also pointed out stadiums are built differently today than in the past. Stadiums such as Fenway Park in Boston and the old Tiger Stadium in Detroit were built in the middle of neighborhoods. After a game, fans would go to local bars and restaurants to celebrate a victory or rue a loss.

But new stadiums are built with their own shopping complexes and in the middle of vast parking lots. That keeps fans within the facility, spending money to the benefit of team owners and businesses within the complex, but not local businesses on the outside.