While the football team that calls itself the Chargers prepares to depart San Diego in a matter of weeks, the ghosts of stadium politics recent past are reconvening over Mission Valley and the Kevin Faulconer-led City Hall downtown.
This isn’t clear-skied 1965, for sure.
Back then, a stadium measure got 72 percent of the public vote. San Diego Stadium opened in 1967 as a scenic home to the Chargers and the San Diego State football Aztecs. The Padres made it a threesome in 1969.
Advertising its city as a can-do place, San Diego Stadium opened on time and on budget for the price of about $195 million in today’s dollars.
“It might be the best stadium I’ve ever seen,” NFL Commissioner Pete Rozelle said of the Frank Hope Jr. design, which also drew accolades from architects and customers.
Decades later, stadium fatigue set in.
Strife marked stadium politics. The stadium was expanded twice, yielding dodgy outcomes.
Chargers ownership under Alex Spanos and son Dean sought a new stadium without great deftness. Uneven talks over the course of 15-plus years with various City Halls gained hardly any yardage. At the public ballot box, a Chargers initiative met defeat last November.
Hello, Los Angeles, where free tenancy in a privately financed stadium awaits Spanos.
In San Diego, the quest for clarity and consensus presses on. What to do with the stadium’s 215-acre footprint and the 14-acre Chargers Park? What will become of the much-neglected, money-losing stadium whose naming rights are to expire next week?
Stadium Game Deja Vu
Recalling City Hall’s portrayals of the Chargers of Spanos and Mark Fabiani, negotiators opposite San Diego State have depicted the school’s reps as elusive.
Almost six months since the Spanos decision left the football Aztecs as the only tenant in Qualcomm Stadium, SDSU leaders and supporters have yet to roll out a detailed, actionable plan for the site.
Whetting the appetite – but not promising a plan would surface – school president Elliot Hirshman penned a conceptual essay in April 2016.
He posited a “SDSU West” campus on the site, should the Chargers move on. Likewise, a development team under SDSU benefactor John Moores, the former Padres owner who helped effect Petco Park, touted a concept for university expansion, a river park and a stadium for football and soccer.
Details were scarce. Again, nothing was promised.
Do SDSU students now have a terrific excuse for turning in their homework late, citing school leadership’s example as precedent?
In fairness, the school only last month broke off talks with the FS Investors whose citizens initiative, “SoccerCity,” seeks a soccer-first stadium as part of a mixed development.
The two sides sniped at each other in public, and fumed about fuzzy communications. Sound familiar?
A difference from the Chargers-City Hall dynamic is that universities aren’t necessarily in the business of issuing a development plan for 200-plus acres.
SDSU’s stated needs for the property are 35 acres for a campus expansion and a stadium. Also, it wants those needs reflected in a bidding process among developers.
A Spanos contrast to consider
The Spanos family owned the Chargers when it sought hotel-tax money through a citizens’ initiative last year.
FS Investors own no sports team while seeking public land (including Chargers Park) from which they would cover sports-team costs that include membership in Major League Soccer and the soccer club’s projected financial losses.
The soccer bill is sizable.
In a list of land costs shared with SDSU, the FS group listed $190 million in MLS costs — $150 million for the team franchise fee and $40 million for team operational losses.
Having acknowledged their pursuit of profit — they’re not a non-profit outfit — FS Investors thus would need to wring from the Mission Valley land overall profits that also fund their $190 million in MLS obligations.
The denser the development, the greater the revenues, generally.
Denser isn’t ideal, because the rest of Mission Valley is largely built up and here would ratchet up the attention of would-be environmental litigants.
As for the cost, in the same itemized list, FS showed projected parking expenditures: a whopping $336 million of the $767 million in capital requirements.
The figures shared with SDSU aren’t cemented in place, said Nick Stone of FS Investors, but accounting for so many vehicles on the site is a fact Stone lamented in late February while stating his fondness for transit-oriented development.
Required by law to provide parking, the plan stashes a large number of spaces underground, which frees up land use but is strenuous.
How might the parking cost be reduced through reduced density?
For starters, here’s an old-fashioned idea.
Have the FS folks pay the MLS fee themselves, apart.
Thus FS partners led by Mike Stone, a private equity ace, would walk the path almost always traveled into sports team ownership.
The Spanos family owns the Chargers because their patriarch, construction magnate Alex Spanos, put up about $45 million to buy the team in 1984 from Eugene Klein.
As for the $40 million in MLS losses for the San Diego team projected over an unspecified period, have them fall to the team itself, also a standard practice.
By assuming these MLS costs, FS would relieve the land of the burden of having to yield an additional $190 million in profit.
With the resulting decrease in density should come a windfall in reduced parking costs.
In theory, SDSU could be a problem-solver here.
As a university, it can ban vehicles while also pursuing development. This would shrink parking needs and costs.
So, if the “SoccerCity” initiative doesn’t go the distance, perhaps an SDSU-FS alliance could still emerge.
Would FS, absent a victory for its initiative, agree to pay the MLS costs apart from land use? Might the MLS fee be bargained down?
Would FS agree to SDSU having control of the site’s underlying property, in return for a rent-free spot in an SDSU-built-and-controlled stadium?
SDSU has no need for the that FS envisions for an academy and training venue.
Where the Chargers initiative drew fire from numerous elected Republicans and Democrats, reaction to the SoccerCity plan has fallen on party lines.
Three Democrats on the City Council have called for the initiative to go on the November 2018 ballot.
The date is far too late, said Nick Stone, wielding the MLS-stated timeline like an ax.
Republicans Faulconer and councilman Scott Sherman have endorsed SoccerCity and seek a public vote this November via special election.
Faulconer was far less embracing of the Chargers initiative, questioning it sharply early on before endorsing it late in the campaign when polling numbers showed it would fail. Sherman opposed it.
The Chargers initiative went to a general election, requiring a super-majority because it sought a tax hike. It fell 23 points short of approval.
SoccerCity requires only majority approval of voters but must go on the next general-election ballot — nearly a year after the MLS’ stated deadline — unless the City Council decides otherwise.
In the ballot drive that included $331,000 in funding from Padres lead investor Peter Seidler, whose ballclub’s executive ranks include the wife of Faulconer’s chief of staff, the initiative secured the necessary 71,646-signature count from registered voters.
However, City Council action would be required to meet the MLS deadline because San Diego voters, by nearly a two-thirds margin, passed a measure last November requiring initiatives such as SoccerCity to go on the next general-election ballot (barring the council voting otherwise).
It strains logic that FS Investors and Faulconer would have gone down this road, at millions of dollars of expenses to FS and significant exposure of political capital to Faulconer, if they doubted they’d get the five City Council votes needed for either direct adoption of SoccerCity or its move onto a 2017 ballot.
Faulconer and his aides, per U-T reporter Jeff McDonald, met with FS 25 times between January 2016 and this past Febraury, meetings the city says were routine diligence regarding the future of the Q site.
The city also met with the Chargers 22 times in that span.
On Feb. 19, 2016, negotiations at Chargers Park broke down between Team Spanos and the tandem of Faulconer and County Supervisor Ron Roberts on a plan for a new stadium in Mission Valley.
The move north assured Team Spanos a long-term home that meets NFL standards and lifts revenues, though not before the club plays three seasons in a small soccer stadium.
Spanos took his team to a Raiders-loving city that didn’t court the lightning-bolt squad. Also, the team must pay the NFL $550 million in relocation fees, spread out over numerous years.
Likewise, San Diego State football seeks a long-term venue and far greater stadium revenues in an increasingly revenue-driven football world. But, if the school and its supporters are serious about getting a stadium built on their own in Mission Valley, they’d likely have to line up close to $300 million.
Landing in a Power-5 conference would provide SDSU far greater TV revenues, but the likelihood of Power-5 membership is so remote that Aztecs supporters ought to limit their football sales pitch to the need to maintain Division I status. Amid the hyper-inflationary arms race within major college football, that will be plenty daunting.
So for SDSU football to survive as San Diegans know it, full control of a new stadium may be, if not the only ticket, an ends well worth pursuing.
Of course the Chargers didn’t seek a campus. SDSU’s hunger for campus expansion is largely for education and research needs but also to secure its football program’s future. Witness campus-based Aztecs basketball, which benefits from having students living nearby.
Enabled by mega-billionaire owner Stan Kroenke, the Los Angeles Rams owner offering tenancy, Team Spanos ultimately yanked out San Diego roots that plunged 56 years deep. Losing 72 percent of their games the past two seasons, the Chargers failed to whip up football enthusiasm as well.
Whether it was the right move, it was a bold play, one that Faulconer, elected in 2014 and re-elected in June 2016, labeled a “huge mistake.”
SDSU fostering a bid for the Q site and its own stadium would be bold as well. And also driven in part by desperation.
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