This is an archived version of a Field of Schemes article. Comments on this page are closed. To find the current version of the article with updated comments, click here.
March 18, 2010
Quakes stadium rezoning approved
Lost in yesterday's blizzard of stadium news was word from San Jose that the city council approved a rezoning bill needed to clear the way for a new Earthquakes stadium near San Jose Airport. For those interested in the gory details, Center Line Soccer liveblogged the hearing.
When the stadium will open is still up in the air: Quakes owner Lew Wolff is still working on selling naming rights and other sponsorship deals that will allow him to finance the estimated $40-60 million construction cost. And, of course, he also has other things on his mind.
Seems to me Wolff's plan all along was to use profit generated by rezoning industrial land for housing, then flipping that land, to build the stadium. In effect, Wolff wanted to take this profit from it's normal destination - city coffers (Cities do this with "new" land all the time, and pocket the profits) and use it to build the stadium (which would have been city owned, but leased to his company long term) instead.
Not sure how that will play now that the housing market is less than stellar in this area. I can't imagine developers are falling all over themselves to add inventory right now.
Neil, do you mean by the "finance" comment that Wolff would now be willing to commit his own funds significantly to the facility?
Yeah, so he claims. Though it's all coming from mostly unidentified "sponsors." I'll believe it when I see it, I guess.
John, that has not been the plan for well over a year now. Wolff decoupled the Airport West site purchase from the iStar site rezoning for industrial use plan a long while back when the market collapsed. The funding plan for the stadium now is a combination of sponsorships and out of pocket from the ownership group. They've already agreed to purchase the option on the Airport West land in anticipation of purchasing the land and building the stadium. In fact they've already started construction on the Earthquakes practice facility on the site and the city has committed to building youth soccer fields on an adjoining site as well (with funds that were earmarked for that use long before Wolff bought the team. The city just had no site to build the youth fields on when their original site near SJSU fell through). Also the KCBS article was not entirely accurate. What the council approved on Tuesday night was not just a rezoning from industrial to commercial but they also approved the final EIR for the site as well. The team is now free to move into the construction permit phase.
All in all this has to be the most public friendly stadium plan in the works today with $0 in public money involved in the land purchase or the stadium construction. And to my knowledge no infrastructure improvements are needed on the site since the local freeway interchange and Coleman Ave were both recently upgraded as part of the SJ Airport renovations (not that SJC is seeing a big increase in air traffic lately with carriers abandoning the airport left and right).
So, will the stadium now be owned by the club or is this still a long term lease situation? Dan, you said that Wolff had taken an option to buy the land, does this mean he will own the stadium as well? If he's putting his own money in, I'd have to assume so.
I believe the last I'd read he was going to own the stadium outright. Initially the plan was for the team to give the stadium to the city and then lease it back from them. However I have not heard anything in relation to that since they decoupled the iStar site from the overall stadium plan. I suspect with more of his cash going into it Wolff and Co are going to retain ownership. The end of the rezoning plan has also coincided with the stadium now being considered for things like concerts to generate ancillary revenues which makes sense since the stadium will in effect have to help pay for itself now rather than using the land swap model like they originally had planned.
So it'll actually pay property taxes and everything? Judith Grant Long is gonna plotz...
That was the impression I got watching the latest city council meeting, but don't quote me on it til I can find you some docs to back it up. However it tracks since during the "we're going to lease it back" phase it was only going to host soccer events. Now they're talking concerts hosted by promoter AEG among other extra uses that were not originally envisioned. All of which have an eye toward generating revenues they originally did not anticipate needing. Part of that no doubt will go to offset the cost of the stadium but I believe some of it is also going to offset taxes.
That was my first thought too, Neil.
Gasp! You wannus to build it ourselves AND pay taxes!!!!
What kind of communist organiz-....