The City of San Diego would rather make you pay than put a REAL plan in place to seek Non-Public Funds
My question for the ‘Task Force’ would be ‘Why do you not put in place, the necessary liaison to attract Real and viable private sources of money?” According to the Brown Act, a municipality needs a liaison to stand as the ‘go-between’. If you are truly considering every possible avenue, most importantly one that negates the taxpayer from obligation, then again, Why is there no go-between for negotiations with Private money?
The city of Los Angeles has long been used as a bargaining chip for NFL franchises that want to get better stadium deals in their hometowns. And with two stadium proposals moving forward in both Inglewood and Carson, CA, bidding wars (involving loads of public cash) have erupted in towns like St. Louis to counteract the threat of losing their home team.
San Diego appears to be the latest victim of this tactic. Faced with the threat of the Chargers moving north to Carson, the San Diego city council has released a plan for a $1.3 billion dollar stadium that will mostly be funded with public money.
Here’s the scoop on the proposal from Bloomberg:
On Monday, amid threats by the Chargers to bolt for Los Angeles, a task force commissioned by San Diego mayor Kevin Faulconer released a proposal for financing a new stadium in Mission Valley, the site of the team’s current home, Qualcomm Stadium. The Citizens’ Stadium Advisory Group plan for the $1.3 billion venue will not require a public vote (surprise) but will require tons of public funding.
The plan promises no new taxes to offset the cost, relying instead on financing from the Chargers and the NFL: $300 million from the team and $200 million from the league. But the public cost detailed in the plan isn’t insignificant: $121 million each from the city and county, and city-owned land valued at $180 million. The advisory group also estimates $116 million from a state program to pay for infrastructure improvements, including parking and mass transit around the site. And there’s $40 million in taxes from the proposal’s new, on-site hotel, of which the city won’t see a dime because it will pay for more improvements. That’s already $578 million taxpayer dollars sunk into this project.
While the group claims that only $578 million in public dollars will be used for this project, economist Neil deMause over at Field of Schemes reports that there could be $352 million in additional subsidies hidden within the deal.
Numerous studies have shown that stadiums often fail to live up to their promises of increased economic revenue and jobs. The lack of economic benefit combined with growing budget deficits across the country have soured public support in favor of spending taxpayer dollars to build facilities for privately run sports franchises.
“Sports Stadiums Are Bad Public Investments. So Why Are Cities Still Paying for Them?” was produced by Alexis Garcia and the original release date March 17, 2015. About 5 minutes. Original writeup below.
“Anybody that drives around Southern California can tell you the infrastructure is falling apart,” says Joel Kotkin, a fellow of urban studies at Chapman University and author of the book The New Class Conflict. “And then we’re going to give money so a bunch of corporate executives can watch a football game eight times a year? It’s absurd.”
When the Inglewood City Council voted unanimously to approve a $1.8 billion stadium plan on February 24th, hundreds of football fans in attendance cheered for the prospect of a team finally returning to the Los Angeles area.
On it’s face, the deal for the city of Inglewood is unprecedented—Rams owner Stan Kroenke has agreed to finance construction of the stadium entirely with private funds. The deal makes the stadium one of the most expensive facilities ever built and is an oddity in the sports world, where most stadiums require millions in public dollars to be constructed.
And while the city still waits to hear if it will indeed inherit an NFL team, the progress on the new privately-funded Inglewood stadium has set off a bidding war between other cities that are offering up millions in public subsidies to keep (or attract) pro-sports franchises to their area.
St. Louis has proposed a billion dollar waterfront stadium financed with $400 million in tax money to keep the Rams in Missouri. And the San Diego Chargers and Oakland Raiders have unveiled a plan to turn a former landfill in Carson, California, into a $1.7 billion stadium to keep the Rams from encroaching on their turf. While full details of the plan have yet to be released, it’s been reported that the financing would be similar to the San Francisco 49er’s deal in Santa Clara, which saw the team receive $621 million in construction loans paid for with public money.
Even the fiscally conservative Scott Walker is not immune to the stadium spending craze. The Wisconsin governor wants to allocate $220 million in public bonds to keep the Milwaukee Bucks basketball franchise in the area. Walker has dubbed the financing scheme as the “Pay Their Way” plan, but professional sports teams rarely pay their fair share when it comes to stadiums and instead use public money to generate private revenue.
Pacific Standard magazine has reported that in the last 20 years, the U.S. has opened 101 new sports facilities and stadium finance experts say that almost all of them have received public funding totaling billions of dollars. Politicians generally rationalize this expense by stating that stadiums will generate economic revenue and job opportunities for the city, but Kotkin says those promises are rarely realized.
“I think this is sort of a fanciful approach towards economic development instead of building really good jobs. And except for the construction, the jobs created by stadiums are generally low wage occasional work.”
“The important thing that we’ve forgotten is ‘What is the purpose of a government?'” asks Kotkin. “Cities instead of fixing their schools, fixing their roads or fixing their sewers or fixing their water are putting money into ephemera like stadia. And in the end, what’s more important?”
-Some Content Via Alex Garcia at Hit and Run Blog
SAN DIEGO, Calif. – October 27, 2014 – (RealEstateRama) — Commercial real estate investment banking firm George Smith Partners has successfully arranged $95 million in construction financing for development partners The Robert Green Company and Montage Hotels & Resorts to construct a new 317-room Montage-branded hotel in downtown San Diego’s Gaslamp Quarter, according to George Smith Partners’ Principal Malcolm Davies.
The hotel will mark the launch of Montage Hotels & Resorts’ newest hotel brand, Pendry, and will be called Pendry San Diego.
“This hotel project has been in the works for more than 10 years, with a variety of challenges to overcome,” explained Davies. “George Smith Partners worked extensively with The Robert Green Company and Montage Hotels & Resorts over the past 15 months to finally secure the construction financing they needed. This allowed the work to begin on this $138 million hotel development, which had its ceremonial ground breaking earlier this month.”
According to Davies, the development site originally housed a condemned cigar store and parking lot, and was initially being considered by another developer as the site for a new Marriott Renaissance hotel. During the recession, this interest waned, and an eminent domain issue emerged with the site’s former cigar shop owner. These factors contributed to the complexity of this proposed development, as well as its lengthy pre-development phase.
The Pendry San Diego will be located on 5th and J streets in Downtown San Diego, three blocks from the San Diego Convention Center.
“This development site is one of the final remaining gems in San Diego’s Gaslamp Quarter,” Davies explained. “On the surface it could be assumed that financing a project in such a strong location in today’s market would be seamless. On the contrary, the combination of the economic downturn and the site’s eminent domain issue, coupled with the fact that the development will be part of a private 99-year ground lease, made identifying the right capital providers a challenge that required deep expertise in navigating the capital market.”
Davies noted that the development partners were seeking financing that would provide 70 percent of the proceeds necessary for the construction of this luxury hotel.
“As a former developer, I was fortunate to be able to draw upon my past experiences developing properties in the San Diego region in order to help bring this financing to fruition,” he explained. “Despite so many competing variables that could have distracted lenders from the value of the hotel, I was able to work with our company’s network of lenders to educate, negotiate and ultimately secure our client the financing they needed to get the project into the construction phase.”
Davies notes that this was a highly structured deal, with a capital stack that included both debt and equity.
The secured non-recourse financing closed at a 70 percent loan to cost, with a 36-month term. The structure allows the loan to subordinate to new financing even if that financing does not compensate for the entirety of the construction loan.
Planned for completion in the Summer of 2016, the Pendry San Diego will be a twelve-story, 317-room luxury hotel, including 36 suites. The hotel will also feature several restaurants and bars; an outdoor pool, spa, grill and fitness area on the third floor deck; as well as ballroom and various meeting rooms.
About George Smith Partners
Founded in 1992, George Smith Partners is a leading national real estate investment banking firm that specializes in arranging financing for commercial and multifamily properties, including acquisition, construction, bridge and permanent loans, as well as mezzanine loans, highly leveraged participating loans and joint venture equity. The company has arranged more than $35 billion in financing since its inception. Additional information about George Smith Partners is available at http://www.GSPartners.com.
– See more at: http://www.realestaterama.com/2014/10/27/george-smith-partners-secures-95-million-in-construction-financing-for-new-downtown-san-diego-pendry-by-montage-hotels-resorts-ID025128.html#sthash.BN9Qwvua.dpuf
With more available homes on the market for sale, California’s housing market will see fewer investors and a return to traditional home buyers as home sales rise modestly and prices flatten out in 2015, according to the CALIFORNIA ASSOCIATION OF REALTORS®’ (C.A.R.) “2015 California Housing Market Forecast,” released today.
The C.A.R. forecast sees an increase in existing home sales of 5.8 percent next year to reach 402,500 units, up from the projected 2014 sales figure of 380,500 homes sold. Sales in 2014 will be down 8.2 percent from the 414,300 existing, single-family homes sold in 2013.
“Stringent underwriting guidelines and double-digit home price increases over the past two years have significantly impacted housing affordability in California, forcing some buyers to delay their home purchase,” said C.A.R. President Kevin Brown. “However, next year, home price gains will slow, allowing would-be buyers who have been saving for a down payment to be in a better financial position to make a home purchase.”
“Moreover, prospective buyers should know that it’s a misperception that a 20 percent down payment is always required to buy a home. There are numerous programs available that allow consumers to buy a home with less down payment, including FHA loans, which lets buyers put down as little as 3.5 percent,” continued Brown.
C.A.R.’s forecast projects growth in the U.S. Gross Domestic Product of 3 percent in 2015, after a projected gain of 2.2 percent in 2014. With nonfarm job growth of 2.2 percent in California, the state’s unemployment rate should decrease to 5.8 percent in 2015 from 6.2 percent in 2014 and 7.4 percent in 2013.
The average for 30-year fixed mortgage interest rates will rise only slightly to 4.5 percent but will still remain at historically low levels.
The California median home price is forecast to increase 5.2 percent to $478,700 in 2015, following a projected 11.8 percent increase in 2014 to $455,000. This is the slowest rate of price appreciation in four years.
“With the U.S. economy expected to grow more robustly than it has in the past five years and housing inventory continuing to improve, California housing sales and prices will see a modest upward trend in 2015,” said C.A.R. Vice President and Chief Economist Leslie Appleton-Young. “While the Fed will likely end its quantitative easing program by the end of this year, it has had minimal impact on interest rates, which should only inch up slightly and remain low throughout 2015. This should help moderate the decline in housing affordability we saw occur over the past two years.”
“Additionally, the state will continue to see a bifurcated market, with the San Francisco Bay Area outperforming other regions, thanks to a more vigorous job market and tighter housing supply.”
Appleton-Young will present an expanded forecast Thursday afternoon during CALIFORNIA REALTOR® EXPO 2014, running Oct. 7-9 at the Anaheim Convention Center in Anaheim, Calif. The trade show attracts nearly 8,000 attendees and is the largest state real estate trade show in the nation.
2015 CALIFORNIA HOUSING FORECAST
2011 2012 2013 2014p 2015f
SFH Resales (000s) 422.6 439.8 414.3 380.5 402.5
% Change 1.4% 4.1% -5.8% -8.2% 5.8%
Median Price ($000s) $286.0 $319.3 $407.2 $455.0 $478.7
% Change -6.2% 11.6% 27.5% 11.8% 5.2%
Housing Affordability Index 53% 51% 36% 30% 27%
30-Yr FRM 4.5% 3.7% 4.0% 4.3% 4.5%
p = projected
f = forecast
West Sacramento-based Clark Pacific will keep its engineers busy with two high-profile construction projects in San Diego.
The firm will be doing precast concrete for both a new central courthouse in that city and a parking garage and car-rental building at the San Diego International Airport.
Though the actual concrete work will be done at a Clark Pacific plant in Southern California, some of the 80 engineers based at Clark Pacific’s plant here will be doing the work up front, said Don Clark, the company’s president of business development.
“As a company, we really position ourselves for pre-fabrication,” Clark said, adding the courthouse will be the largest pre-cast concrete project in the city’s history. With the industry seeing a shortage of experienced concrete workers in the field, he said, precast work allows building pieces, including windows and panels, to be assembled beforehand and shipped to the site, where fewer workers are then needed.
“We’ve been marketing toward that, and we’re seeing the fruits of that marketing,” said Clark, who’s also a co-owner in Clark Pacific with his brother Bob Clark.
The $300 million courthouse project will replace the city’s existing 48-year-old courthouse with a 22-story building consolidating criminal, family and civic courts into one building. Completion is scheduled for early 2017.
Under the contract, Clark Pacific will provide limestone-face, prefabricated and precast concrete for the walls, panels and columns on the new 704,000-square-foot courthouse, which will occupy a full city block.
At the airport, a $317 million project calls for Clark Pacific to provide precast concrete for the cladding and stairs on a two-million-square-foot building at the airport, including car rentals and 5,000 parking spaces.
Between the two jobs, Clark Pacific has about 4,500 worker days to meet under its contracts, Clark said. But the company’s found that big jobs lead to more jobs, as the airport contract came from a similar project Clark Pacific did five years ago at San Jose’s airport.
The rise in precast concrete also keeps the company busy with projects in Northern California, including several high-rise residential towers in San Francisco and the new Apple headquarters in Cupertino.
-Ben van der Meer via bizjournals.com
This story is part of the weeklong series, Fits And Starts: Stories Of Recovery In California Cities.
In San Diego, where the recession took a toll on the construction industry, biotech is leading the region’s rebound.
Electrician Dennis Gittens grabbed a beer after getting off his construction job. He’s working on a new hospital being built in San Diego, and his days start early. But as Gittens took a seat on the deck of a popular British pub, he said it’s nice to be needed again.
When he first moved to San Diego in 2012 and signed on with the union, it was three months before he got a job and health insurance. He said being out of work was tough.
“There’s credit card payments that keep coming in. There’s rent, there’s gas, there’s car payments, everything,” he said. “Insurance. Insurance was the biggest deal. I’ve never in my life been without insurance.”
And even once he got a job, things weren’t easy. After working for awhile he got laid off again. And even though the construction industry has started to rebound, Gittens said there’s still an uneasy feeling among his co-workers.
“Over the past five years the trust and the belief that you’re going to be steadily working for life without too much time off has changed,” he said.
Some of those worries might be justified. San Diego’s construction industry was among the region’s hardest hit during the recession.
“We lost a lot of jobs,” said Marney Cox, an economist with the San Diego Association of Governments. “Going into the recession we were one of those areas that had high growth in our construction sector and housing. And so housing was hit dramatically. For example, we peaked at about 96,000 jobs in our construction sector and it dropped all the way down to about 58,000 jobs.”
The industry has added back just a fraction of those construction jobs since the economy improved. Cox said the San Diego region lost more than 100,000 jobs overall, which is disproportionally high given its national economic impact. Housing prices also took a hit. The region’s median home price fell more than 40 percent from a pre-recession high of $535,000.Values have only rebounded by about 25 percent.
Cox said it could have been worse.
“The military and the visitor industry here are stabilizers,” Cox said. “During the recession, for example, the construction industry would have even been worse had it not been for military construction here.”
In recent years San Diego has also become known for biotech companies. Experiments and tests are conducted in labs across the region. A job in the industry drew lab scientist Andrea Clouser Roche and her husband to San Diego in 2007. For three and a half years she had steady work, and then her lab was closed.
Clouser-Roche was unemployed for a year.
“That was pretty painful,” she said. “A lot of people were like, ‘oh, isn’t that great?’ I said, ‘you know, this is probably the crappiest job I’ve ever had.’ It was a lot of work. Always working your resume, looking for positions, calling people. Making those contacts. And I’m a lab scientist. I didn’t get to run any more experiments.”
Cox said the biotech industry did lose some jobs during the recession, and some venture capital funds took a hit. But he said, on the whole, the industry is rebounding. That’s something Clouser-Roche has noticed too. After a year of being unemployed she got a job at another biotech company. About one year after that she got a phone call that led to her current job.
“One of my former colleagues, who is now at Millennium, called up and said, ‘Hey, I know you found something but I think we have a really neat opportunity for you here at Millennium.’ So it’s kind of been that change. Things have loosened up. It’s not everybody fighting for one job now. There are really a lot more opportunities opening up,” she said.
And that may also be true for the region. Employment has grown by 2.5 percent in each of the past two years and San Diego’s on track for a third year as well.
– Katie Orr via KPBS.org
The San Diego City Council voted Tuesday to unanimously approve a plan for more funding for the Horton Plaza Park.
First announced almost four years ago, the proposed expansion of historic Horton Plaza Park on the 300 block of Broadway, east of 3rd Avenue has stalled.
The project was supposed to cost $8 million but because of delays and higher construction costs, the price tag has increased to $18 million.
City Council President Todd Gloria says the state should pay because it got rid of redevelopment.
He says this was an enforceable contract between the city and the redevelopment agency so the state’s on the hook for the additional costs.
Before Tuesday’s vote, he talked about why this project is so important.
“We have a lot of small businesses around that proposed park that are suffering because of the lack of construction, the lack of completion of that project,” Gloria said.
If the state Department of Finance approves the additional costs, the project could be done in a year, Gloria said.
It’s been a year and a half since a couple of major retail and restaurant buildings were demolished to make way for what city officials said in 2010 would be a showcase.
In a best-case scenario, officials say the park could still open in November of next year.
By Heathre Decou, via NBC San Diego.com
Find out about your Neighborhood, ‘Tierrasanta’ at this website: