When the city issued its prospectus for the muni bonds to build Petco Park, they neglected to mention the city’s massively underfunded pension obligations. The resulting fallout almost cut the city off from the debt markets and ended Mayor Murphy’s political career. Almost 20 years after the Petco Park ballot measure, it is still UNCLEAR whether the hotel taxes and property tax revenue are actually covering the city’s obligations on those munis. Raising hotel taxes that already don’t appear to be enough for Petco Park muni servicing while adding far more in debt obligations is a disaster waiting to happen. That’s just the known fiscal impact.
The Spanos family claims poverty because the team’s value is in equity rather than cash. Companies with these kinds of problems just sell some of their equity to fund cash obligations instead of demanding public subsidies for anti-trust exempt industries. The Spanos family would have no shortage of interested investors. Up the team (post equity sale) and league contribution to an even $1 billion, and the city could probably make a deal. Even Mark Davis will eventually do this when the Raiders move to Vegas.