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Mayor will look at new stadium ideas

Posted Aug 16, 2011

Chargers Special Counsel Mark Fabiani explains what San Diego Mayor Jerry Sanders' reported three-day national tour means for the stadium effort and mitigates concern stemming from AEG's stadium effort in Los Angeles.

The San Diego Union Tribune’s Matthew Hall reported this morning that San Diego Mayor Jerry Sanders plans a “U.S. tour for Chargers stadium ideas.” According to Hall, this is Mayor Sanders’ “strongest show of support yet” for building a new football stadium for San Diego.

According to the story, Mayor Sanders and “three advisors will leave Wednesday for a three-day nationwide tour of downtown sports and entertainment districts to get ideas for what might work locally.”

We asked Chargers Special Counsel Mark Fabiani for his take on the latest developments.

Mark, is today's story about the Mayor's national stadium tour significant for Chargers fans?

Fabiani: Dean Spanos and I have been working closely with the Mayor and his staff for more than two years now on the downtown San Diego site, so we have seen first-hand the Mayor's strong commitment to finding a solution. What this national tour does is make that strong commitment known to a wider audience, especially to Chargers fans. In addition, the tour will allow the Mayor and his staff to see the tremendous amount of jobs, new tax revenues, and economic development generated by sports and entertainment districts in downtowns across the country.

Where do things stand with the proposed downtown San Diego stadium site?

Fabiani: We have broad agreement throughout the community – including from government, business and labor leaders – that the downtown San Diego site is the right location for a new Super Bowl-quality stadium. The downtown site allows us to take advantage of the existing infrastructure (parking, roads, mass transit, and so forth), creating significant cost savings compared to other sites. The downtown site also allows the City of San Diego to free up the land taxpayers own at the existing Qualcomm Stadium site (and maybe also at the City-owned Sports Arena site), creating significant new job and tax revenue opportunities for the City.

Now that we have this widespread agreement on the site, our goal is to come up with a financing plan that works for the taxpayers and the team, and that is what we are trying to do now. A successful financing plan will likely include significant contributions from both the Chargers and the NFL, access at some point in the future to downtown redevelopment money, use of the millions in annual savings that the City will gain from no longer operating the aging Qualcomm Stadium, and the design of a multi-use facility that will anchor a sports, entertainment and convention district downtown.

What do you say to Chargers fans who are concerned about the news that AEG, the developers of the proposed downtown Los Angeles stadium, plans to break ground by June of 2012?

Fabiani: A great many Los Angeles stadium ideas have come and gone over the last 15 years, ever since the Los Angeles area last had an NFL team. And every time one of these ideas has come along, the Chargers are rumored to be the favored team.  We've learned to deal with these rumors (and we hope our fans have too) by keeping things in perspective: Dean Spanos and his family have spent more than nine years, and well more than $10 million, to find a solution in the San Diego region, and we are still working hard at it. The fact is, building a new NFL facility anywhere in California is enormously difficult. Ed Roski, a billionaire and one of the most respected developers in the country, has had a shovel-ready project in the City of Industry since 2008 and has not yet been able to start construction.  

Because the stadium-building task is so difficult in California, I think we all ought to view reports that ground will be broken in downtown Los Angeles by June 2012 with some context. Off the top of my head – and so I'm sure I'm leaving some out – here are the things that would have to happen over the next 10 months to allow the downtown L.A. developers to break ground in June 2012:

(1) The current non-binding Memorandum of Understanding between the developer and the City of Los Angeles must be converted to a real, binding legal contract – which will require significant and time-consuming negotiations.

(2) The developer will have to finish its Environmental Impact Report (EIR), submit that report to the public for review, and then have the report certified by the City.  Generally the EIR process on a major project such as this can take as many as 18 months, sometimes even longer.

(3) All of the inevitable court litigation over the EIR will have to be resolved before construction can begin. (Both Los Angeles City and California state officials have said that they will oppose the kind of EIR litigation exemption that Ed Roski received for his City of Industry project.)

(4) The downtown L.A. stadium project may have to survive a public vote, if project opponents succeed in gathering enough signatures to place a measure challenging the stadium project on the ballot.

(5) The developer will have to find an NFL owner willing to sell either some or all of his team at a price acceptable to all parties. (Recent press reports indicate that the L.A. downtown developer wants to be a majority owner of a team).

(6) Whichever team is bought must apply to the NFL to relocate and must satisfy the NFL's relocation guidelines.

(7)  The NFL must decide on a relocation fee (a recent L.A. City analyst's report concluded that such a fee could be in the neighborhood of $500 million) and approve the move of a team.

(8)  The entire multi-billion dollar project, which envisions not just the construction of a stadium but the replacement of hundreds of thousands of feet of convention space at private expense, must be financed in capital markets that are under enormous stress because of the ongoing world financial crisis.

Now, maybe all of these issues can be resolved over the next 10 months, but the challenge will be a gigantic one by any measure.

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