Giants' Lesson: Part 1

Building a baseball stadium without buckets of public money

Through all the smoke and mirrors of the Cardinals' quest for a publicly funded new stadium, there's one place they don't want the argument to go.

That would be San Francisco.

The reason is simple: Two years ago, the Giants became the first Major League Baseball team in four decades to open a privately financed new stadium. Much to the chagrin of the Cardinals' would-be corporate-welfare recipients, the success story known as Pacific Bell Park is a $319 million state-of-the-art monument to taxpayer sanity.

No fewer than four times had the Giants rattled their gold-plated cup at the voters for public financing -- backed by open threats to move the team -- and all four times the answer came back a resounding no. Bluff called, new ownership came in and built the thing with not much more assistance than the customary $15 million chunk of tax-increment financing for public improvements.

The Cardinals hate this story. They hate it so much that one of their partners -- the Post-Dispatch -- went far out of its way Feb. 17 to snicker at San Francisco in a press release/lead editorial on the team's public-relations bulletin board (a.k.a. the Post editorial page).

The editorial began mundanely enough, repeating a stream of bald-faced lies presumably intended to become true through incessant repetition:

There's the one about downtown not being able to afford to lose the team -- it could;

The one about naming rights going to the public -- they won't;

And the one about $100 million in penalties to the team if Ballpark Village isn't built -- the civic equivalent of "I did not have sex with that woman."

But the revealing part was the decision to drag the dastardly Giants into the thing.

"Businesses operate in the real world, and there the Cardinals deal is as good as it gets," the Post declared. "No other major league team has made such concessions, and that includes the San Francisco Giants. The Giants built their own stadium, but pay zero in city and state sales taxes. At 12.516 percent, the Cardinals pay the highest taxes in baseball."

Take that, San Francisco Giants. Your piddling little $319 million in private funding for a stadium pales next to our team's having to pay $100 million if Ballpark Village isn't "built" by ... uh ... well, by infinity. Or 2035. Whichever comes first.

Anyone who remembers the loophole-rich Kiel Opera House renovation deal is righteously skeptical of the latest version of the stadium deal.

But the public shouldn't worry about lawyers and loopholes. The real story is how our overtaxed Cardinals are burdened by competing against those tax-exempt Giants, right?

Well, not exactly. I took it upon myself to call San Francisco about all this -- especially the part about the Giants' paying "zero in city and state sales taxes" -- and it turns out that this is news to them.

I read the "zero sales taxes" quote to Staci Slaughter, vice president for public affairs for the Giants.

"That's just absolutely false," Slaughter said. "We pay every business tax just like every other company in San Francisco, from the payroll tax to the property tax to the sales tax -- every tax you can pay. There's a ticket tax to the city, a parking tax to the city, and we also pay $2 million a year for a ground lease to the city.

"We didn't get any break. The public should be clear that we pay our fair share of taxes in San Francisco."


So I called city government.

George Putris, San Francisco's tax administrator, told me he couldn't discuss any particular taxpayer. He did say he could tell me what all corporate taxpayers -- including the Giants -- have to pay to the city.

There's a 1.5 percent payroll tax; that parking tax, which is -- get this -- 25 percent on all parking-lot proceeds in the city; and an admission tax ranging from 50 cents to $1.50 (not all that different from the dreaded 5 percent city amusement tax paid by the Cardinals). And there's a 7.5 percent utility tax, along with something called a possessory interest property tax that renters of government property pay.

Yes, the Giants' $2 million ground lease from the Port of San Francisco (on a 66-year lease) would qualify it as a renter of government property. So there are taxes on top of the $2 million annual rent, costs the Cardinals don't face.

At this point, I wasn't sure whether to bother visiting the U.S. Census Bureau Web site to confirm that total taxes per capita in California ($2,474) are 61 percent higher than in Missouri ($1,532). And noting that corporate income taxes are about a third higher in California seems to be rubbing it in.

I did call a California tax official, who confirmed that no sales taxes are collected from Giants' ticket sales because sporting events are seen as an exempt service. But both the state and the city seem to be making up for this on other fronts.

So much for the Cardinals' whining about how much they have to "pay" in sales taxes (actually they collect sales taxes; they don't pay them). It appears that the Giants have a comparable tax burden -- if not a larger one.

By blowing smoke on the tax issue, the Cardinals are clearly trying to keep legislators and others from taking a good look at how the Giants successfully built their own stadium.

Nor do the Cardinals want it noted how well the Giants fared in the standings during the first two years of competing under the crushing burden of paying interest to a bank.

We'll take a closer look at the Giants' stadium experience next week.

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