Stadiums spur economic development

Friday, May 04, 2007
By Tom Shanahan, Chargers.com

At one point in a forum discussion of local governments and building football stadiums, Elaine Scruggs, the mayor of Glendale, Ariz., smiled and asked the panel not to tell Arizona Cardinals Owner Bill Bidwell that she was originally opposed to a new stadium in her city.

“I was wrong,” said the mayor of Phoenix suburb. “We were a bedroom community and now we’re a destination city. We’ll have the Super Bowl here in 2008 and seven hotels are under construction. We were pleased Fox Sports talked on TV about the ‘The Road to Glendale’ for the BCS championship game last January. A condominium development across from the stadium was sold out before any of them were built.“

Scruggs, Glendale’s mayor since 1993, said that although tax dollars were used in Glendale, the city is getting a healthy return on its investment. She appeared as part of a panel Thursday night at the National History Museum in Balboa Park that sponsored by the College of Professional Studies and Fine Arts at San Diego State.

Scruggs was joined by a wide range panelists that included:

Mark Fabiani, the Chargers’ special counsel to team president Dean Spanos; Scott Barnett, President of TaxpayersAdvocate.org and former director of the Taxpayers Association; Walt Ekard, Chief Administrative Officer of San Diego County; and Tim Curry, Ohio State professor and author who specializes in studying the impact of sports teams and stadiums on cities.

Fabiani summed up the Chargers proposal of finding a partner to privately finance a stadium without using public dollars. A stadium would be built in a mixed-use development, with revenue from retail, commercial and residential developments providing the funding.

“Our idea is to put responsibility on the private sector for the stadium, infrastructure and everything else that is needed to make the stadium work,” Fabiani said. “The private sector will pay for the daily maintenance and the long-term maintenance. The private sector does everything. No other NFL team has done this.”

The Chargers originally made proposals to the City of San Diego to redevelop the existing Qualcomm Stadium site. But the Chargers, with the permission of the City, have moved on to discuss plans with Oceanside, Chula Vista and National City.

“We want to take underutilized land and add value to it to generate profits from development,” Fabiani said. “We’ll take those profits from the development along with money from the Chargers and a loan from the NFL to finance a stadium. The city we’re working with will come out ahead with underutilized land generating income and jobs.”

Barnett, who in his role as a taxpayer advocate found fault a decade ago with the deal that expanded Qualcomm Stadium in 1995, said the Chargers are offering a unique proposal that spares public funds. He added the City of San Diego made a mistake by not engaging more discussions with the Chargers before it granted them permission to talk to other cities in San Diego County.

“In 1992, the average subsidy for a city to pay for a stadium was $220 million,” Barnett said. “For the San Diego Padres, the City issued $300 million in development bonds for Petco Park. This is the way deals were done. But when the Chargers came forward and said they weren’t asking for taxes or public bonds, this is a different animal. I have to tell you I’m astonished the City of San Diego didn’t sit down with the Chargers and say, ‘How do we make something work?’”

Barnett added that money that would have remained in the city will now be spent on the Chargers elsewhere in the county.

“The Chargers are going to find a stadium,” he said. “It won’t be at Qualcomm, and what we’ll then have is an 18,000-space parking lot with an $11 million trolley station built to serve a 40-year-plus sports facility that is falling apart. Are we going to sit back and let the Chargers determine their future in Oceanside, Chula Vista or National City? We should be proactive in the process. The Chargers are a significant regional asset.”

Curry has studied stadium developments in his book, “Big Time Sports and Downtown Redevelopment.” As a professor at Ohio State in Columbus, he explained the impact of Columbus building an “Arena District” around a hockey arena for an expansion NHL team, the Columbus Blue Jackets.

“Sports brings together different groups and forms coalitions that otherwise might not be formed and otherwise might not get projects done,” Curry said. “In our case, in 1995 we had a chance to get an NHL franchise.”

Curry said although the project included public funds, downtown has been revitalized as people moved back downtown into new condominium developments that are only five miles from the Ohio State campus.

“Sports stadiums, when not overdone at taxpayer cost, can generate enthusiasm and economic stimulus,” Curry said.

Ekard said that his job with the County requires him to consider the impact of losing the Chargers as well as the environmental and economic impacts. He said the Chargers and Padres are important to the image of San Diego as a major-league city.

“It has become clear to me that the Chargers are committing to finding a way to make it work in San Diego (County),” he said. “Do we want to take the risk of losing the football team and then the cost of trying to get one back in 10 to 15 years? It may not be possible. We lost our NBA team 20 years ago and can’t get one back.”

One of the questions from the audience was about whether Qualcomm would be as valuable as a football stadium or as another type of development.

“The value of land depends on what you’re able to do with it,” Fabiani said. “The land theoretically has value. But the Qualcomm land has a negative value. It is an empty stadium and parking lot with $19 million a year in tax dollars to maintain the site and $50 million of deferred maintenance payments. For all the people who defend the stadium as status quo, they are defending a piece of land that is draining money from the city. We weren’t able to find a partner to develop Qualcomm because of the City’s financial problems. That‘s a big risk for any development.”

Fabiani also mentioned sites in Oceanside and Chula Vista that could consider a better way to utilize the land.

“In Oceanside, the golf course doesn’t generate much money,” he said. “In Chula Vista, there is a site by the bay front that is a power plant. Could that site be better used than as a power plant? A lot of people say yes. Could the Chargers be part of unlocking the value of that land? That’s up to the people to decide. It’s worth a debate, but unfortunately the City of San Diego wasn’t willing to engage in that debate.”