Chargers May Skip Out on Rent - NBC 7 San Diego

Chargers May Skip Out on Rent



    Chargers May Skip Out on Rent

    Wish you could skip paying your rent for a whole year; well the Chargers may do just that.

    A clause in the Chargers' contract states that the team can forgo paying it's $2.5 million rent if a "force majeure event" prevents the team from using the stadium and that includes lockouts, reports

    Force majeure means an unexpected event or act of God.

    This doesn't necessarily mean that the city will be losing money, in fact it may save money. Our media partner VOSD reports that in 2010, the Mayor's office and the Office of the Independent Budget Analyst said the team pays an average rent of $700,000 per season after rent credits, not including playoffs.

    From 2005 to 2007, the city actually had to pay the Chargers, VOSD said. The Chargers receive a number of rent credits from the city, which eat away at their rent payment. The team receives a property tax break for its luxury boxes; it receives compensation from the city for lost seats due to compliance with the Americans with Disabilities Act; and the stadium's concessionaire pays a portion of the team's rent. VOSD says a second ADA settlement in 2006 forces the city to pay the Chargers for lost seats due to compliance, this money is a direct payment exclusive of rent credits.

    VOSD says this financial bind with the Chargers contributes to the city’s $12 million worth of annual losses from its operation of Qualcomm Stadium.