A legislative budget committee's recommendation to tap the state's general fund for a $15-million loan to the proposed Olympic training center in Chula Vista appears to endanger the financing scheme. In light of the state's $3.6-billion budget deficit, the money for the 150-acre sports complex would have to be considered a low priority.
But it would be a shame, for San Diego and the United States' Olympic program, to delay or block development of the year-round training center because loan terms cannot be negotiated.
The money will help build a $65-million, state-of-the-art complex on Lower Otay Lake, where elite Olympic athletes would receive the most advanced training available.
The nonprofit San Diego National Sports foundation signed a written promise to guarantee the loan, but the final contract included no requirement for collateral and demanded just simple interest. Angered by those terms, a budget conference committee moved the first $5-million loan installment from the state's unitary fund, a protected account derived from corporate taxes, to the general fund and demanded compound interest payments.
Private funding for the project is becoming scarce. EastLake Development Co. has donated 150 acres, and $25 million in cash pledges have been gathered.
The committee was right to demand collateral. By the same token, we would like to see the loan for this worthwhile project go through.
The foundation must find a way to assure state legislators that the loan will be repaid. When this is done, the unitary fund should be made the source of the funds, so that the financing won't be lost when Sacramento balances its books.