Stadium task force: Plan ‘fair’ to Chargers, taxpayers

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By: James R. Riffel, City News Service , Steve Fiorina Posted: May 18, 2015

Construction of a 65,000-seat football stadium for San Diego should be financed with a mix of financial contributions from the city and county of San Diego, the Chargers and the NFL, plus bond and land sales, an advisory group appointed by Mayor Kevin Faulconer recommended Monday.

A report released by the nine-member group two days before its deadline said no new taxes would be included, so that a two-thirds vote of the public would not be required. Funding sources would exceed $1.4 billion for a facility estimated to cost around $1.1 billion, according to the report.

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We have overstated costs just a bit, and understated revenue just a bit, making for a very prudent, fiscally conservative recommendation,” said Adam Day, chairman of the Chargers Stadium Advisory Group. “It overcomes all the hurdles that were thrown in our path — both real and imagined — and it is a good deal for the taxpayers.”

He said the task force conducted extensive research and analysis of NFL stadiums that have been constructed in recent years. Another consideration was to make sure the Chargers and other tenants would enjoy the financial benefits of a new playing facility, rather than designating all the new revenue streams toward construction costs.

“We developed a financing plan that would actually succeed in this unique San Diego environment, ensuring that it is fair for the Chargers and other tenants, fair for the city and county, and fair for taxpayers,” Day said.

“Our plan is the first of its kind, and it should jump-star negotiations between the Chargers, the city and the county,” Day said, adding that the recommendations provide “a fair and workable path to a new stadium in San Diego.”

Mark Fabiani, the Chargers’ general counsel on stadium issues, issued a statement saying that he’s grateful for the CSAG members who volunteered their time.

“We will now ask our stadium development team — including our financing, legal and land-use experts — to thoroughly review the CSAG results,” Fabiani said.

Faulconer said the plan is “tangible” and “achievable.”

“Earlier today I communicated to Chargers owner Dean Spanos that the city/county team and City Attorney Jan Goldsmith are ready to sit down and negotiate,” Faulconer said. “I’d like to start by June 1. San Diegans deserve a good and fair deal, and I will not accept or support anything less.”

The mayor’s full statement:

“San Diego has come together since we began this path toward a new stadium. Despite so many dramatic changes and potential distractions, both here and elsewhere over the last four months, our community rallied and kept moving forward. Today, San Diego has a framework to build a new stadium that’s tangible, that’s achievable and that won’t raise taxes.

I thank each volunteer who has served on the Citizens’ Stadium Advisory Group for their diligent and careful efforts on behalf of their fellow San Diegans. They have shown the spirit of optimism and determination that makes San Diego great.

We are now ready for another first – beginning formal negotiations with the Chargers. The County and City of San Diego have, for the first time, assembled an experienced negotiating team that will review the CSAG report as it prepares for talks with the team. Earlier today I communicated to Chargers owner Dean Spanos that the City/County team and City Attorney Jan Goldsmith are ready to sit down and negotiate. I’d like to start by June 1. San Diegans deserve a good and fair deal, and I will not accept or support anything less.

My continued commitment is that if we reach a stadium agreement with the Chargers, San Diegans will have their say with a public vote. When this measure will be on the ballot will be discussed through negotiations with the team.
As we all begin to review the details of the CSAG report, one thing is clear: we’re all in this together. The Chargers are beloved by generations of San Diegans. San Diego has worked in good faith with the team and the NFL and will continue to do so. I am confident that if the team comes to the table with a willingness to work together, we will get this done for the benefit of our community, with protections for taxpayers and for the enjoyment of future generations.”

Supervisor Ron Roberts, who has served as the public face for the county on stadiums, said the report shows a path forward for the project.

“While there is much to be done in the coming months, this is a time for optimism,” Roberts said.

The task force has already recommended that the facility be built adjacent to Qualcomm Stadium, which would be razed to make way for development, including a massive parking structure, a 500-room hotel and a park alongside the San Diego River.

Day said he envisions a pedestrian-friendly, transit oriented mixed-use project, but not a high-density development that would draw opposition from Mission Valley residents.

The next step will be for a team of financial and legal experts to take the recommendations and mold them into an actual plan that can be taken to the Chargers and voters. The city and county of San Diego jointly hired Nixon Peabody, which has consulted on 25 stadium projects, and Citigroup, which has been involved in raising money to build stadiums recently in Atlanta, New York and Orlando.

The Chargers have been pushing for a new playing facility for more than a dozen years, and have recently taken steps to build a joint $1.7 billion stadium with the rival Oakland Raiders in the Los Angeles suburb of Carson. The proposed 72,000-seat facility off the San Diego (405) Freeway is considered to be a backup plan for both teams in case they aren’t able to forge agreements in their current cities.

Also, the owner of the St. Louis Rams is planning to build an 80,000-seat stadium in Inglewood, another Los Angeles suburb.

The funding breaks down to:

  • $300 million from the Chargers
  • $200 million from the National Football League
  • $225 million from the sale of 75 acres of Qualcomm Stadium land to a developer
  • $173 million of bondable construction capital leveraged with team’s $10 million annual rent
  • $121 million from the city of San Diego, which would come from savings from retiring Qualcomm Stadium debt
  • $121 million from the county of San Diego
  • more than $100 million from fans in the form of personal seat licenses, and surcharges on parking and tickets
  • $21.6 million rent from San Diego State University and the organizers of the Holiday and Poinsettia bowls, with $1.25 million paid by both annually

SDSU released a statement that said the development of its athletic program was a critical part of its goal of becoming a Top 50 public university, and it would channel the support of its 350,000 students, faculty, staff and alumni toward the development. University officials have long eyed the Qualcomm property for potential expansion.

The report said another $50 million could be raised with naming rights, sales of bricks, and capital contributions from concessionaires and telecommunications firms.

Faulconer said that while a two-thirds public vote won’t be required, he still would like a final deal with the Chargers to go before voters. He said that San Diegans want a plan that makes sense, is fair and is fiscally responsible.

“That’s one of the things we’re going to spend most of our time on here as we move forward with negotiations with the Chargers, which is to make sure that it is a plan that’s fiscally responsible,” Faulconer told City News Service. “To have our City Attorney’s Office working together with outside experts, we have a team that is together, that is ready to go, and I’m confident that we’ll come up with a solution that makes sense.”

City Attorney Jan Goldsmith said the report shows that a stadium project is doable.

“These people put a lot of time and effort into this, and I’m really impressed with their volunteer work,” Goldsmith said. He said he doesn’t believe any legal issues exist that would be insurmountable.

The advisory group released renderings of what a new stadium might look like by Dan Meis, who is responsible for designing NFL facilities in Cincinnati and Philadelphia, as well as the Staples Center in Los Angeles and Safeco Field in Seattle.

A San Diego State University spokesman issued this statement regarding the stadium proposal:

“San Diego State University appreciates the opportunity to have participated with the Citizens Stadium Advisory Group in the planning process for a new stadium and we are eager to participate fully in a partnership that will retain the Chargers in San Diego and advance our region. As we continue our efforts to become one of our nation’s top 50 public universities, the development of, and investment in our athletic programs, including our football program, is a critical priority. And we are committed to channeling the support of our 350,000 students, faculty, staff and alumni to ensure the successful development of a new stadium for San Diego.”

Former Chargers linebacker Shawne Merriman told 10News, “I’m more excited than at first. Now you have room to grow. Now it’s a real proposal to me and fair on both sides.”

Dan McLellan, vice president of the San Diego Stadium Coalition, added, “Sadly, there’s little to be excited about here. I think they’re asking for too big a contribution from the team.”

San Diego City Councilman Scott Sherman released this statement:

“I give my utmost thanks to the members of CSAG who have sacrificed their time to complete this report. After years of just generalized concepts, we now have an in-depth, detailed plan. As the Councilmember who represents the area, it is also very encouraging to see the inclusion of a 31 acre park to expand and enhance the San Diego River Park as well as plans to upgrade infrastructure and traffic mitigation in the surrounding community.”

San Diego Taxfighters Chairman Richard Rider issued the following statement:

“I’d like to see the actual Charger stadium proposal. But based on the task force’s official write-up which I presume is accurate, appears to be a $467 million taxpayer giveaway to keep the Chargers here — ignoring cost overruns and ‘surprises.’ And apparently that’s not counting the 60 acres of land valued at $180 million (not sure how land ownership is handled). Again, I caution that my interpretation of the proposal may not be completely accurate.

The fact that there is no actual tax INCREASE is no surprise — the proponents were desperate to avoid any taxpayer vote on the matter. I predicted this wrinkle months ago.

Is it sound policy for our city and county to provide such a huge subsidy to a business owned by a billionaire that employs millionaires? Not in my mind. That money and salable land are assets that can be used to help with our pension funding problems, and our even bigger multi-billion dollar infrastructure deficit.

I’d like for the Chargers to stay, but not at that cost — a total of about $650 million (or more). Not even close.”

Kris Michell, president of the Downtown San Diego Partnership, told 10News, “I think it’s a great day. It’s very exciting because it’s realistic and hit every mark. It didn’t overstate revenue, didn’t understate things. It should be given serious consideration.”

Chargers fan Tyler Roberson told 10News, “I think everything is awesome. I hope the Chargers go along with it.”

Quincy Cheatham echoed that thought, saying, “We love our city, love our Chargers. Need them to stay here.”

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