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July 6, 2011
Chargers Say They Don't Have to Pay Rent in Lockout
voiceofsandiego.org
by Andrew Donohue
As if we needed it, here's another reminder of why stadiums and arenas are such a bad deal for taxpayers.
The first stop in our exploration of whether an NFL lockout will cost San Diego taxpayers: figuring out if the Chargers still have to pay rent at Qualcomm Stadium.
There's a clause buried in the city of San Diego's contract with the team that allows it to forgo paying the $2.5 million rent if a "force majeure event" prevents the team from using the stadium.
Force majeure literally means a "superior force" and is an unexpected event, like a natural disaster, war or other "act of God," that would keep a party from living up to its contract.
The National Football League's 32 teams collectively have decided that they need a greater share of the league's revenues and have begun a battle that threatens the upcoming season. It's not entirely unforeseen, either. This labor strife has been simmering for years.
The Chargers say, though, that the lockout is indeed a force majeure.
Here's a little icing on the cake.
Intuitively, losing out on $2.5 million in rent would seem bad. But there are years in which the city actually sends the Chargers more money than it receives from the team because the team gets rent credits for things such as property taxes on skyboxes and compensation for lost ticket sales because of the addition of disabled seating.
NoLandGrab: This sounds like the equivalent of throwing out one's tenants and then using it as an excuse to stop paying the mortgage.
Posted by eric at July 6, 2011 10:51 AM