LOS ANGELES -- In an election so close even an umpire couldn't make the call, San Jose voters today will decide if city funds can be tapped to build a new stadium for the San Francisco Giants.
"It's bottom of the ninth and the score is tied," said Duffy Jennings, spokesman for the Giants. "As with any game in that situation, the outcome will be determined by who wants it most."
Recent local polls show support and opposition running neck and neck for Measure G, which would allow San Jose to build the 48,000-seat stadium with public funds. Various revenue streams, including a 2% utility tax increase, are slated to secure tax-exempt certificates of participation to fund a portion of stadium costs.
Under an agreement reached earlier this year by San Jose and the National League baseball team, the city will pay $155 million of the estimated $265 million stadium. The Giants, owned primarily by real estimate investor Bob Lurie, will sign a 30-year lease and pay the balance of construction costs as well as operating costs.
Local supporters, including San Jose Mayor Susan Hammer, say the stadium will create hundreds of new jobs and bring economic development and prestige to California's third largest city.
But members of Citizens Against Stadium Taxes dispute whether baseball will boost the San Jose economy, and they question the city's priorities. Opponents of Measure G charge it is not good public policy to increase taxes for a baseball stadium when the city is in a recession and cutting services.
"We've got a lot of people who are resistant to spending tax dollars on baseball," conceded Ed McGovern, who heads the pro-stadium campaign.
"We're hopeful, but it's going to be a tough election."
San Jose officials have said that if Measure G passes, the City Council will increase utility taxes by two percentage points, to 7% from the current 5%, which will cost each San Jose household an average of $2.90 per month. The utility taxes and other general fund revenues will secure an estimated $155 million of tax-exempt COPS, according to Darrell Dearborn, deputy city manager.
Mr. Dearborn said the stadium is "worth the risk and the investment," because it will bring long-term benefits to San Jose and surrounding areas. He argues that the city is not in severe financial trouble.
"We do have a balanced budget," he said. "There are some reductions in services, but we are not cutting police or fire."
Standard & Poor's Corp. recently released a report concluding the stadium could bring direct benefits to the city. The economic impact of major league baseball is generally greater than that of other sports because of the number of home games and high attendance levels, the report says.
The rating agency said any debt financing for the stadium would not "unduly burden" San Jose and would have no "material bearing" on the city's credit rating. While the report notes that stadium construction and nearby improvements will be costly, it concludes that the city's debt burden should remain manageable.
San Jose officials said debt service on the city-owned stadium will be a general fund expenditure, due to recent legal concerns about special taxes in California. In December, a state Supreme Court ruling invalidated a sales tax increase for new jails in San Diego that was approved by majority vote. The court said the levy was a special tax and therefore needed a two-thirds approval vote.
"We to be very careful to avoid any suggestion that special tax revenue is attached to this project," Mr. Dearborn said. He said net rental payments from the Giants to the city on a long-term lease will constitute less than 10% of debt service on the certificates, a level that avoids certain federal regulations on private security for tax-exempt debt. San Jose is not the first California city to consider tax-exempt debt as a way to attract a sports team. In late 1989, Sacramento sold a $96 million COP issue, of which $40 million was earmarked to entice the National Football League's Los Angeles Raiders to the state's capital. When the Raiders spurned the city's offer, the certificate proceeds were used for infrastructure projects.
The Giants moved to San Francisco from New York in 1958. Cold and windy conditions at Candlestick Park have prompted the team to look for a new home. The urgency has increased in recent years because the Giants' lease with Candlestick expires in 1994.
In 1987 and again in 1989, San Francisco voters rejected a proposal to build a new stadium for the Giants. In 1990, San Jose voters supported an unsuccessful regional plan to increase utility taxes to fund a new Giants stadium in Santa Clara County. The measure was rejected by neighboring cities.
The loss of the Giants to San Jose could be another fiscal blow to San Francisco, which has been struggling with a budget deficit this year. Mayor Frank Jordon has pledged to do his best to keep the team. However, during his campaign last year, the mayor said he supports a plan to retrofit Candlestick, and Mr. Lurie has said he wants a brand new stadium for his team.
