A small legal victory was won in terms of accountability of government officials to taxpayers when it comes to decisions regarding the financing of stadium projects.
On the surface, a California appellate court overturning a lower court ruling that taxpayers have no standing to challenge the sale of Petco Park bonds by a the city of San Diego is a small and somewhat procedural victory. In view of the legal precedent it sets in relation to the emergence of private-public stadium project partnerships, the ruling might have become more significant.
According to Kevin Penton of Law360, the court ruled that a state “good-government” law does give standing (paywall) to taxpayers in municipalities to challenge moves to sell public bonds by those municipalities.
This ruling reverses the ruling of a lower court that the laws didn’t apply to the specific situation in question, which is the city of San Diego selling off bonds to refinance debt originally incurred to build Petco Park, the home of the San Diego Padres. Over two years ago, the city was set to do so, but this lawsuit filed by attorney Cory Briggs has delayed that transaction since.
It’s uncertain whether the city will appeal to the California Supreme Court right now, and the effect to Petco and the Padres will be minimal if anything. Even if the challenge is successful, the city’s payments on the bonds will continue. This ruling, if it stands upon potential appeal, has far more potential to make an impact in the future.
As publicly-financed stadium projects have taken a serious downturn, partnerships between private investors and municipalities have risen to replace them. In places like Atlanta with Mercedes-Benz Stadium and numerous proposed MLS stadium projects, these types of deals which marry private dollars with taxpayer-backed bonds or assessment breaks are becoming more and more frequent.
While these deals can represent a savings for taxpayers as opposed to footing the bill for these stadium construction/renovation projects completely on the public dime, there is enormous potential for conflict of interest problems to arise. Whether it’s private parties bidding on stadium project contracts making donations to the campaigns of office holders or legal maneuvers like the city of Cleveland suing itself to avoid putting a subsidy for the Cavaliers to a public vote, there are many ways that such deals can go sideways.
This ruling will help curtail such abuses, at least in the state of California. The ability of taxpayers to hold their city officials accountable on every matter related to stadium financing is crucial to maintaining the interests of the general public in those matters.