The Chargers recently completed their best-ever regular season, but it wasn't a win for the city of San Diego. The city is at least $400,000 in the red after paying operating costs for home games at Qualcomm Stadium.

The team is searching for a site for a new stadium and is analyzing locations in Chula Vista, National City and Oceanside. A new stadium could cost $750 million to $1 billion to build, according to Chargers estimates. The lease would spell out who is responsible for operating expenses.

Under a lease with San Diego, the Chargers are supposed to pay $2.5 million a year for two exhibition and eight regular-season games they play at the city-owned facility. But the city provides the team rent credits and pays for many other stadium costs. At the end of the 2006 season, the city was left with a deficit that could total $900,000 or more when final costs are calculated.

The shortfall would have been even larger but the team paid the city $609,866 for its playoff game Jan. 14. The team is required to pay that amount for each sold-out playoff game at Qualcomm.

"The only way we could walk away in the black is if the Chargers played two home playoff games," said Erik Stover, the city's stadium manager.

With rent plus the playoff payment, the city stood to collect $3.1 million from the Chargers last season. But the city's costs - including the rent credits - for two exhibition games, eight regular season games and one playoff game totaled at least $3.5 million. That means the city spent at least $400,000 more than it collected.

The final tab is expected to increase because police costs were based on a conservative estimate, city officials said. The city's expenses include:

$978,000 for operating costs - the largest were $431,213 for salaries and benefits of non-police city employees, $363,841 to Jani-King Janitorial Services, and $59,263 for electricity on game day.

$602,000 in rent credits, including $189,227 to compensate the team for parking for the disabled. Drivers with disabled placards park free at the stadium under a lawsuit settlement.

An estimated $715,000 for police staffing. Officials said they will have a more exact figure this week, and that it will likely be higher.

$242,000 for fire marshals.

$1 million to $1.5 million to compensate the team for seats that were removed to comply with the Americans with Disabilities Act. Chargers executives and city officials are negotiating that figure.

Taxpayer advocates say the lease is a lesson for officials in Chula Vista, National City and Oceanside.

"This is a big challenge for all these smaller cities that are attempting to work out a deal with the Chargers without losing," said Lani Lutar, head of the San Diego County Taxpayers Association. "Their goal is to maximize profit, and no one can criticize them for that. But a city can't be cheap about bringing in top negotiators to prepare an adequate contract without loopholes."

Chargers general counsel Mark Fabiani said the team will pay for the maintenance and operation of the new facility. Game-day police and fire coverage would be negotiated, he said.

Lutar said the Qualcomm lease is another example of San Diego officials' poor judgment. Previous City Council decisions contributed to the city's $1 billion pension deficit and wiped out potential revenue from the Naval Training Center redevelopment project, which is generating profits for developer Corky McMillin Cos.

Terms of San Diego's lease with the Chargers were last negotiated in 2004, when the Chargers agreed to drop an unpopular ticket guarantee in exchange for a flat $2.5 million annual lease payment. Under the guarantee, the city of San Diego agreed to buy unsold tickets - whatever amount needed to total 60,000 for each home game.

The guarantee, which the city agreed to in 1995, was a rent credit - the only one of its kind in the 32-team league. The city spent $36.4 million on tickets by the time it was eliminated.

San Diego City Attorney Michael Aguirre said the city erred by getting rid of the ticket guarantee because it would have expired after the second preseason game of 2007. The Chargers' rent for the upcoming season would have been $7.2 million. The rent would have increased each year until the 2020 season, when it was scheduled to be $9.9 million.

"When the contract worked to the benefit of the Chargers, they kept it. When it was going to start working for the city, they got rid of it," Aguirre said.

Richard Rider, chairman of the San Diego Tax Fighters group, said then-Mayor Dick Murphy and the City Council were more intent on removing the public relations problem than protecting taxpayers.

"The problem is not the Chargers, but the people we put in office and the city manager," Rider said. "They gave out tens of millions of our money with no benefit - except they get to use skybox seats."

Fabiani said dropping the ticket guarantee was only one part of the deal struck in 2004. The team agreed to drop a requirement that the city maintain Qualcomm as a "state of the art" facility - at a cost of millions in tax dollars. Had the team kept the old rent structure in place, it could have sued the city for breach of contract over the "state of the art" clause, he said.

The team's contract with the city goes through 2020, with the rent scheduled to increase to $3 million in 2014. However, the team can move after the 2008 season by paying off the remainder of $60 million in bonds for the 1997 expansion of Qualcomm Stadium, done at the request of Chargers owner Alex Spanos.

Revenue from the team falls far short of the city's annual bond debt of $5.7 million. The city won't pay off the bonds until 2027.

In January 2006 the Chargers dropped a plan to tear down Qualcomm and build a new stadium at the 166-acre site. The team offered to provide traffic improvements, wipe out the bond payment and build a public park at the site in exchange for 60 acres. The team would have built a mixed-use project, including 6,000 condominiums, using profits to help pay for the new stadium.

Aguirre and Mayor Jerry Sanders opposed the plan, partly because they did not believe the team should get the 60 acres of city land at no cost. City officials estimate the land may be worth $500 million.

Fabiani said the Chargers would have paid off the bond debt as part of their plan, which he believes Aguirre worked to defeat. Aguirre said the team should make the bond payment for a few years to repay city taxpayers who supported the Chargers through the ticket guarantee when they were losing.

The Chargers want to select a site for a new stadium this year and ask voters to approve a ballot measure in November 2008. Fabiani said that if the ballot measure passes, he does not expect a new stadium to open before 2013.