Anchor ads are not supported on this page.

4S Ranch Allied Gardens Alpine Baja Balboa Park Bankers Hill Barrio Logan Bay Ho Bay Park Black Mountain Ranch Blossom Valley Bonita Bonsall Borrego Springs Boulevard Campo Cardiff-by-the-Sea Carlsbad Carmel Mountain Carmel Valley Chollas View Chula Vista City College City Heights Clairemont College Area Coronado CSU San Marcos Cuyamaca College Del Cerro Del Mar Descanso Downtown San Diego Eastlake East Village El Cajon Emerald Hills Encanto Encinitas Escondido Fallbrook Fletcher Hills Golden Hill Grant Hill Grantville Grossmont College Guatay Harbor Island Hillcrest Imperial Beach Imperial Valley Jacumba Jamacha-Lomita Jamul Julian Kearny Mesa Kensington La Jolla Lakeside La Mesa Lemon Grove Leucadia Liberty Station Lincoln Acres Lincoln Park Linda Vista Little Italy Logan Heights Mesa College Midway District MiraCosta College Miramar Miramar College Mira Mesa Mission Beach Mission Hills Mission Valley Mountain View Mount Hope Mount Laguna National City Nestor Normal Heights North Park Oak Park Ocean Beach Oceanside Old Town Otay Mesa Pacific Beach Pala Palomar College Palomar Mountain Paradise Hills Pauma Valley Pine Valley Point Loma Point Loma Nazarene Potrero Poway Rainbow Ramona Rancho Bernardo Rancho Penasquitos Rancho San Diego Rancho Santa Fe Rolando San Carlos San Marcos San Onofre Santa Ysabel Santee San Ysidro Scripps Ranch SDSU Serra Mesa Shelltown Shelter Island Sherman Heights Skyline Solana Beach Sorrento Valley Southcrest South Park Southwestern College Spring Valley Stockton Talmadge Temecula Tierrasanta Tijuana UCSD University City University Heights USD Valencia Park Valley Center Vista Warner Springs

Questions Abound in City's Planned Refunding of Stadium Bonds

The city council is being asked Tuesday to approve the refunding of $185 million of lease revenue bonds, including the 1996 Qualcomm Stadium bonds. (The facility was then named Jack Murphy Stadium.) The outstanding principal on those bonds is $54.7 million. They mature in 2027. Should the Chargers depart, they would have to pay some of that sum -- at least, as things stand now. This refunding proposal is extremely dubious. First, it bundles three bond offerings together: the 1996 certificates of participation for Balboa and Mission Bay Parks improvements, and the 2009 lease revenue bonds for various improvements are lumped with the stadium bonds. "Why the bundling?" asks Councilmember Donna Frye. Also, the original stadium bonds were taxable. Now the city claims that "tax counsel" has ruled that they can be refinanced as tax-exempt at a lower interest rate. "Who is that tax counsel?" asks Frye. The document doesn't say.

The thin document that the council is asked to approve has this line: "The leased properties are different from the assets that were financed with the original bonds." Those assets substituted for the stadium include the police headquarters and the Scripps Ranch Library. The document states that the stadium "would be released free and clear from the existing financing encumbrances" upon issuance of the 2010 bond. Former City Attorney Mike Aguirre issued a legal opinion saying a transaction like this is clearly a violation of the debt limit law because the assets that are securing the borrowing were not improved by the borrowed funds, and he says that outside counsel cannot be relied upon to rule on this matter because it makes money if the deal goes through. Essentially, with this maneuver, the city is borrowing against the general fund, says Aguirre, but the city claims that no vote is necessary in this case, although its documents states that the general fund is ultimately responsible for these bonds. "The idea of clearing the debt for Qualcomm is an obvious step in the direction of building a new stadium for the Chargers, and is another reason why there should be a vote of the public," says Aguirre.

Says Frye, "One issue is whether or not this refunding, which would release the stadium as collateral and in its place substitute other city properties -- what effect does that have, if any on the repayment schedule with the Chargers."

Former Councilmember Bruce Henderson observes, "There is no transparency. This document is almost as opaque as it gets. There could be a spectacular problem that is being papered over." Henderson suggests that through this maneuver, the National Football League could get off the hook on a public relations problem. Should the Chargers leave, the city would have to pay off part of the stadium bonds, and that could be a black eye for the league. "So the NFL would like those bonds to go away."

Here's something you might be interested in.
Submit a free classified
or view all

Previous article

Dia de los Muertos Celebration, Love Thy Neighbor(Hood): Food & Art Exploration

Events November 2-November 6, 2024

The city council is being asked Tuesday to approve the refunding of $185 million of lease revenue bonds, including the 1996 Qualcomm Stadium bonds. (The facility was then named Jack Murphy Stadium.) The outstanding principal on those bonds is $54.7 million. They mature in 2027. Should the Chargers depart, they would have to pay some of that sum -- at least, as things stand now. This refunding proposal is extremely dubious. First, it bundles three bond offerings together: the 1996 certificates of participation for Balboa and Mission Bay Parks improvements, and the 2009 lease revenue bonds for various improvements are lumped with the stadium bonds. "Why the bundling?" asks Councilmember Donna Frye. Also, the original stadium bonds were taxable. Now the city claims that "tax counsel" has ruled that they can be refinanced as tax-exempt at a lower interest rate. "Who is that tax counsel?" asks Frye. The document doesn't say.

The thin document that the council is asked to approve has this line: "The leased properties are different from the assets that were financed with the original bonds." Those assets substituted for the stadium include the police headquarters and the Scripps Ranch Library. The document states that the stadium "would be released free and clear from the existing financing encumbrances" upon issuance of the 2010 bond. Former City Attorney Mike Aguirre issued a legal opinion saying a transaction like this is clearly a violation of the debt limit law because the assets that are securing the borrowing were not improved by the borrowed funds, and he says that outside counsel cannot be relied upon to rule on this matter because it makes money if the deal goes through. Essentially, with this maneuver, the city is borrowing against the general fund, says Aguirre, but the city claims that no vote is necessary in this case, although its documents states that the general fund is ultimately responsible for these bonds. "The idea of clearing the debt for Qualcomm is an obvious step in the direction of building a new stadium for the Chargers, and is another reason why there should be a vote of the public," says Aguirre.

Says Frye, "One issue is whether or not this refunding, which would release the stadium as collateral and in its place substitute other city properties -- what effect does that have, if any on the repayment schedule with the Chargers."

Former Councilmember Bruce Henderson observes, "There is no transparency. This document is almost as opaque as it gets. There could be a spectacular problem that is being papered over." Henderson suggests that through this maneuver, the National Football League could get off the hook on a public relations problem. Should the Chargers leave, the city would have to pay off part of the stadium bonds, and that could be a black eye for the league. "So the NFL would like those bonds to go away."

Sponsored
Here's something you might be interested in.
Submit a free classified
or view all
Previous article

The Fantasyland Budget

Next Article

City Auditor Blasts Qualcomm Stadium Management Over Missing Files, Gross Mismanagement, Unverified Revenue

Ask a Hipster — Advice you didn't know you needed Big Screen — Movie commentary Blurt — Music's inside track Booze News — San Diego spirits Classical Music — Immortal beauty Classifieds — Free and easy Cover Stories — Front-page features Drinks All Around — Bartenders' drink recipes Excerpts — Literary and spiritual excerpts Feast! — Food & drink reviews Feature Stories — Local news & stories Fishing Report — What’s getting hooked from ship and shore From the Archives — Spotlight on the past Golden Dreams — Talk of the town The Gonzo Report — Making the musical scene, or at least reporting from it Letters — Our inbox Movies@Home — Local movie buffs share favorites Movie Reviews — Our critics' picks and pans Musician Interviews — Up close with local artists Neighborhood News from Stringers — Hyperlocal news News Ticker — News & politics Obermeyer — San Diego politics illustrated Outdoors — Weekly changes in flora and fauna Overheard in San Diego — Eavesdropping illustrated Poetry — The old and the new Reader Travel — Travel section built by travelers Reading — The hunt for intellectuals Roam-O-Rama — SoCal's best hiking/biking trails San Diego Beer — Inside San Diego suds SD on the QT — Almost factual news Sheep and Goats — Places of worship Special Issues — The best of Street Style — San Diego streets have style Surf Diego — Real stories from those braving the waves Theater — On stage in San Diego this week Tin Fork — Silver spoon alternative Under the Radar — Matt Potter's undercover work Unforgettable — Long-ago San Diego Unreal Estate — San Diego's priciest pads Your Week — Daily event picks
4S Ranch Allied Gardens Alpine Baja Balboa Park Bankers Hill Barrio Logan Bay Ho Bay Park Black Mountain Ranch Blossom Valley Bonita Bonsall Borrego Springs Boulevard Campo Cardiff-by-the-Sea Carlsbad Carmel Mountain Carmel Valley Chollas View Chula Vista City College City Heights Clairemont College Area Coronado CSU San Marcos Cuyamaca College Del Cerro Del Mar Descanso Downtown San Diego Eastlake East Village El Cajon Emerald Hills Encanto Encinitas Escondido Fallbrook Fletcher Hills Golden Hill Grant Hill Grantville Grossmont College Guatay Harbor Island Hillcrest Imperial Beach Imperial Valley Jacumba Jamacha-Lomita Jamul Julian Kearny Mesa Kensington La Jolla Lakeside La Mesa Lemon Grove Leucadia Liberty Station Lincoln Acres Lincoln Park Linda Vista Little Italy Logan Heights Mesa College Midway District MiraCosta College Miramar Miramar College Mira Mesa Mission Beach Mission Hills Mission Valley Mountain View Mount Hope Mount Laguna National City Nestor Normal Heights North Park Oak Park Ocean Beach Oceanside Old Town Otay Mesa Pacific Beach Pala Palomar College Palomar Mountain Paradise Hills Pauma Valley Pine Valley Point Loma Point Loma Nazarene Potrero Poway Rainbow Ramona Rancho Bernardo Rancho Penasquitos Rancho San Diego Rancho Santa Fe Rolando San Carlos San Marcos San Onofre Santa Ysabel Santee San Ysidro Scripps Ranch SDSU Serra Mesa Shelltown Shelter Island Sherman Heights Skyline Solana Beach Sorrento Valley Southcrest South Park Southwestern College Spring Valley Stockton Talmadge Temecula Tierrasanta Tijuana UCSD University City University Heights USD Valencia Park Valley Center Vista Warner Springs
Close

Anchor ads are not supported on this page.

This Week’s Reader This Week’s Reader