Mayor Kevin Faulconer is endorsing the Chargers stadium ballot measure after reaching agreement with the team on a series of new financial safeguards and other concessions.

Support from Faulconer, who was easily re-elected in June and has strong ties to the local business community and other powerful interests, could boost the measure’s chances of success on Nov. 8.

And if the measure fails, the working relationship forged between Faulconer and team officials during months of negotiations on the concessions could help the city and the Chargers quickly begin work on finding another stadium solution.

“This is about working toward common goals that will get solutions for the public good,” said Faulconer, whose relationship has been strained with the Chargers since they tried to move to Los Angeles last year and abruptly ended stadium negotiations with him. “We put aside differences to find common ground.”


The Chargers have agreed to eight separate concessions that Faulconer says significantly strengthen the team’s initiative, which will appear on the ballot as Measure C.

The measure would raise San Diego’s hotel taxes from 12.5 percent to 16.5 percent to help pay for a combined downtown stadium and convention center annex next to Petco Park.

The concessions include the team agreeing to cover any escalation in construction or land costs beyond current estimates, guaranteeing that city general fund money will never be used for the project and promising that money for tourism marketing will stay at its current level.

The team also agrees to:


Give the city all revenue from non-NFL events at the new stadium.

Commit to staying in San Diego until the initial debt on the project is fully paid off.

Reimburse the city for all preliminary costs if the team leaves San Diego before construction begins.

Replace parking the Padres would lose in Tailgate Park, which is part of the site where the project would be built.

Address quality of life concerns raised by downtown groups and residents to the mayor’s satisfaction.

RELATED: Chargers owner’s letter to the mayor

Faulconer says the concessions make Measure C, which the Chargers drew up independently without negotiating with the city, more of a compromise between the city and the team.

“This was not my plan, but I saw an opportunity to make it better,” the mayor said. “It’s no secret that I had concerns and it’s also no secret that I thought it was important to get financial protections. These safeguards obviously strengthen this measure and strengthen things moving forward in the future.”

The project won’t be built if the Chargers don’t fulfill each of the eight promises, some of which could require the team to increase its financial contribution.


The mayor said the financial safeguards are the most important of the eight concessions.

“They are all very important, but certainly capping project costs, ensuring no subsidies from the city’s operating budgets and guaranteeing full funding for tourism marketing are incredibly important,” Faulconer said.

While the first two directly prevent city finances from being jeopardized, Faulconer said the third indirectly does that because tourism revenue helps the city pay for things like libraries and firefighters while keeping the local economy thriving.

“Tourism drives our economy here in San Diego and to not only continue to protect these funds but see these funds grow in the future with certainty is very important to our future in neighborhood services and jobs,” he said.


Measure C, which can’t be amended because it’s already on the ballot, says the amount of money for tourism marketing could be cut in half if there are shortfalls in projected revenue from the hotel tax increase.

Faulconer consented to an interview about his endorsement Friday with the agreement that it would not be published until midnight Sunday. The embargo meant others could not immediately comment.

However, late last week when Chargers President and CEO Dean Spanos unveiled some of the concessions to a downtown business group before the Faulconer interview, the proposals were were criticized by opponents of Measure C.

“The only thing that’s legally binding is the ballot measure. If it passes, the Chargers could sue to uphold the measure,” said Tony Manolatos, spokesman for a coalition of community leaders and politicians called “No Downtown Stadium — Jobs and Streets First!”


“There is a reason so many community leaders and organizations oppose Measure C,” Manolatos said. “It would divert more than $1 billion in new taxes to a stadium project and subsidize an NFL franchise worth more than $2 billion. Anyone who says it’s a good deal for San Diego is more interested in politics than good public policy.”

Faulconer said the agreement signed late last week by Spanos is a powerful document.

“This is a public, written commitment to address the issues that I had,” he said. “I intend to hold them accountable to what they’ve agreed.”

Spanos said in a letter to Faulconer that the team is “honored” to have his endorsement.


“We have listened to your concerns and agree in spirit and principle,” Spanos wrote.

His letter also noted that Faulconer’s support for Measure C — with the concessions — will smooth the process of subsequently creating a stadium authority to build the project if the initiative is approved by the required two-thirds of voters.

That’s because Faulconer and the City Council would have to approve design plans and the selling of bonds that would be paid back with revenue from the higher hotel taxes.

“We understand that a victory on Nov. 8, no small task in itself, will be just the beginning of a process that will require your input, consideration and, ultimately, consent,” Spanos wrote.


Faulconer said extracting the concessions ahead of time puts him in a much stronger position if Measure C is approved.

“There will be a lot of opportunities in the future for negotiation and it was important to me that we get that leg up to make sure we take away uncertainty,” the mayor said. “There are many questions in its text that Measure C doesn’t answer. Now that we have these safeguards in place it gives more certainty.”

Faulconer said his negotiations with the Chargers took several months because he wasn’t willing to leave any crucial questions unanswered.

“I was very firm,” he said. “There were times when it looked like there might not be an agreement.”


Chargers spokesman Fred Maas said the financial safeguards are unlikely to kick in because the hotel-tax hike is projected to generate significantly more revenue than needed to cover all expenses.

Financial models used by the Chargers include two notable recessions over the 30 years of bond repayments, one similar to the recession after the 9/11 terrorist attacks and another as large as the Great Recession that began in 2007.

But there would still be enough money to cover everything the Chargers have proposed, Maas said.

So the concessions essentially force the team to assume the financial risk if its projections are overly optimistic.


However, Maas said the concession where the city gets all revenue from non-NFL events at the new stadium projects to cost the Chargers roughly $10 million per year.

Measure C says such revenue would cover stadium operating costs because those events would take place there.

In addition, the tourism marketing money concession would force the Chargers, when the stadium authority is created, to buy some sort of insurance or sign a letter of credit guaranteeing such funding if hotel-tax revenues fall short, Maas said.

The concession where the Chargers commit to staying in San Diego until the initial debt on the project is fully paid off stems from Faulconer’s concerns that Measure C describes 40 years of bond payments but only a 30-year commitment to stay in San Diego from the team.


Maas said the lengths of time are different to allow the city a chance to refinance the bonds, not because the team envisioned leaving town before the initial bonds were paid off.

With the concession from the Chargers, the team must agree to stay in San Diego the same number of years it would take to pay off the initial bonds sold to finance the project.

Faulconer had been expected in the spring, when the Chargers first unveiled the initiative, to oppose it, in part based on his longtime alliance with local hoteliers, who are mostly against Measure C.

Faulconer has also been a longtime supporter of a contiguous expansion of the waterfront convention center — which the hoteliers want — not the annex that Measure C would build.


The mayor said he set those concerns aside.

“I’ve always said it’s important to do what’s best for San Diego,” he said.

If Measure C is approved, the Chargers would contribute $650 million for the stadium portion of the project, using $300 million from the NFL and $350 million from the team, licensing payments, sales of “stadium-builder” ticket options to fans, and other private sources.

The city would raise $1.15 billion by selling bonds that would be paid back with the higher hotel tax revenues. That $1.15 billion would cover the city’s $350 million contribution to building the football stadium, $600 million to build the adjoining convention center annex, and $200 million for land.


david.garrick@sduniontribune.com (619) 269-8906 @UTDavidGarrick