January 28, 2010
Consultant to San Diego: All the other cities fund NFL stadiums, you should too!
The San Diego Chargers have announced they won't be opting out of their Qualcomm Stadium lease this fall, an action that comes as exactly zero surprise, since no new stadiums (including the proposed one east of Los Angeles) would be ready in time for them to move this year anyway. Add in that the penalty the Chargers would have to pay to break their lease plummets from $53 million this year to $26 million in 2011 and ... why is this worthy of a 600-word news story again?
Also falling in the dubious news category is the report given by "sports financing consultant" Mitchell Ziets yesterday to San Diego development officials, in which he concluded that significant public financing would be needed for a new Chargers stadium. His evidence? The 11 NFL stadiums built since 2002 had an average of 55% of their costs paid for by the public. He added that a new stadium would only work "if it makes sense for everybody," but apparently didn't actually attempt to calculate, say, what a stadium would cost or how it would benefit the city.
Given that the city of San Diego is paying Ziets $160,000 for his consulting services, you have to hope Ziets bought a really nice calculator to come up with that 55% figure. Though I suppose it's still more exhaustive research than reading Bret Easton Ellis.
December 14, 2009
San Diego poll: No public money for Chargers
The San Diego Chargers public-money-for-a-stadium campaign got off to a shaky start last week, as a TV news poll found almost 3-to-1 opposition to spending any taxpayer dollars on a new football stadium. This isn't unusual for early in a public-funding campaign, but the depth of opposition is a bit notable — if nothing else, Chargers ownership is going to need to start saving up to meet the 100-1 rule.
December 11, 2009
Chargers bait-and-switch: Oh, yeah, we want money, too
After years of saying they'd build a new stadium with no public money, just free land, San Diego Chargers officials did a public about-face yesterday, saying when they said "no" they actually meant "some." "It's almost certainly going to involve some sort of taxpayer money," with team stadium czar Mark Fabiani told a local chamber of commerce, adding that it was better to get this out on the table now rather than during a voter referendum campaign: "We have no interest in spending hundreds of thousands of dollars, even into the millions, on this site, and then finding out that nobody wants to support it."
To be fair, some form of public funding has been on the table for a while: In addition to the free land, the Chargers had talked up kicking back property tax money to help pay for stadium construction. Still, it's worth noting that in a post to this very website, Fabiani argued that renovating the Chargers' current home of Qualcomm Stadium wasn't feasible because in San Diego "there is no public funding for stadium improvements" and "there is simply no way to privately finance such a renovation." It's 6 am in San Diego right now, but I have an email in to Fabiani; I'll post a followup here if he gets back with an explanation of how this jibes with his new stance.
UPDATE: Fabiani replied to my email (still not even 7 am in San Diego!), though he didn't respond directly to my question of whether it still makes sense to argue against Qualcomm renovations because they'd need public funds, instead writing: "No one, so far as I know, has expressed any interest in renovating Qualcomm." On the switch to a public subsidy demand, Fabiani said this was because San Diego's proposed stadium site wouldn't include land for additional development, as the team was previously seeking; as for the type of public subsidies that would be required, he wrote that that's "the subject of a CCDC-sponsored study by stadium finance expert Mitchell Zeits," and so "too soon to say."
Fabiani added that voters would need to "agree that an investment downtown will result in significant returns for taxpayers elsewhere" such as reusing the Qualcomm site to "generate hundreds of millions of dollars of revenue" for the city. Hey, I remember that one!
December 03, 2009
L.A. Threat Watch: NFL cities hitting "panic button"
A nice rundown by San Diego Union-Tribune columnist Tim Sullivan of how the approval of a new NFL-ready stadium in Industry, California is helping NFL teams in other cities leverage new stadium demands of their own:
Every city with an NFL tenant and without an ironclad lease is feeling intensifying pressure from Ed Roski's City of Industry initiative. Every team within range of an escape clause has been wielding newfound leverage since October, when Gov. Arnold Schwarzenneger signed a bill exempting Roski's project from the California Environmental Quality Act. ...
The threat of extortion is always implicit in professional sports. Any business owner has a right to maximize revenue and to seek concessions from the landlord, rights that are obviously accentuated when that business is immensely popular and limited to 32 outlets in 50 states. Still, the shortcut granted Roski has caused a discernible shift in the balance of power, providing NFL owners a tangible relocation threat at a time when public financing is deeply problematic.
"It's not a coincidence," said David Carter, executive director of USC's Marshall School of Business. "I think it's a combination of the economic environment and the political realities that cities are facing right now (and) the Southern California option that is very real."
Sullivan goes on to note that Roski still faces some potentially steep hurdles in acquiring a team: He's part-owner of a casino, a big no-no with sports leagues, and wants to be majority owner of whatever team relocates (and, let's not forget, pay for it with development rights, not cash). Still, that hasn't stopped San Diego Mayor Jerry Sanders from suddenly devoting attention to building a new stadium for the Chargers, or the Florida Times-Union from running an editorial begging fans to buy tickets to Jacksonville Jaguars games because "Los Angeles doesn't have a pro football team and doesn't need one, but Jacksonville does."
Noting that the Chargers haven't explicitly threatened to move to Industry, Sullivan rightly proclaims one of the rules of stadium politics to be: "You don't need to announce a threat that is already perceived." Still, there are always ways of hinting...
November 18, 2009
California NFL stadiums creep forward
California may be setting records for budget deficits, but that isn't stopping it from also setting records for most NFL stadium projects all at the same time. Some recent developments:
- The city of San Diego is about to hire a stadium consultant to explore ways to pay for a new downtown stadium for the Chargers near Petco Park. Chargers stadium czar Mark Fabiani told the San Diego Union Tribune yesterday that the total cost at that site could be less than $800 million, though it's unclear if he was including land costs — the Union Trib notes that Fabiani had previously indicated that revenue from developing land around a new stadium "would play a big part" (their words) in funding construction.
- Zennie Abraham, a former economic advisor to the city of Oakland, notes that San Francisco came out with an
economicenvironmental impact report for its 49ers stadium plan the same time as Santa Clara issued its EIR, and claims the S.F. report looks better. (Abraham derides the Santa Clara report as "written as if by a snickering, snipping bureaucrat who had no patience with questions.") Abraham further notes that with two cities in the running, "the NFL will use Santa Clara as a, well, pawn, in the creation of a deal that ultimately works for both the league and the 49ers." Of course, he could just as easily have said that San Francisco will be used as a pawn to get a better Santa Clara deal. It's how whipsawing works. - "Walnut's most high-profile resident" came out in favor of the new NFL stadium proposal in neighborhing Industry, calling it "a great opportunity to provide a lot of jobs and to be an economic boost for the area." This famous Walnuttian? Charlie Beck, who was just appointed to be the new chief of the Los Angeles Police Department, notwithstanding that he lives 20 miles from the city limits. (Also, Lance Parrish and Taboo may argue this designation.)
November 12, 2009
San Diego floats $1B Chargers stadium
And the new front-runner for a new home for the San Diego Chargers is ... San Diego? The city, which had mostly left new stadium talks to various suburban towns the last few years, this week jumped back in with both feet, proposing a $1 billion NFL stadium near the Padres' Petco Park that would be paid for, well, they'll get back to us on that. Redevelopment of the Chargers' current stadium site could pay for part of it — insert the usual caveats about the value of development rights in 2009 California here — and while the San Diego Union Tribune reports that the potential site is within the city's downtown redevelopment area, which could allow for tax increment financing, where property tax dollars are kicked back to pay for construction costs.
The Union Trib wasted no time in declaring itself thrilled by the prospect of a new stadium, which would apparently be "gleaming." It also left no doubt about the reason behind San Diego's sudden revival of interest in wooing the Chargers:
[R]epresentatives of [Ed] Roski's real estate company have made it clear that if a stadium is built [in Industry], the Chargers will be among the NFL franchises they will woo.
The Chargers are an asset to this region on many levels, and not just for football fans. It would be a painful loss if the team ultimately accepted the promise of greater revenue from a 21st-century stadium in L.A. or elsewhere.
Right on cue. If this keeps up, Roski should demand a cut of all the new stadium subsidies he generates for the NFL in other cities.
October 07, 2009
L.A. developers target six (or seven) NFL teams
Majestic Realty stadium czar John Semcken has officially announced his hit list for NFL franchises to lure to Los Angeles, and it looks like the L.A. Times guessed right:
Semcken said new talks would begin after the Super Bowl in February, and may involve the Jacksonville Jaguars, the Buffalo Bills, the Minnesota Vikings, the St. Louis Rams, the Chargers and the Oakland Raiders.
The San Francisco 49ers could also be pursued if a vote for a new stadium in Santa Clara fails.
Semcken said a new stadium could open in 2013, but a team could be relocated as early as next year or the year after, playing at a temporary site for the first couple of years.
In related news, Majestic owner Ed Roski has lost $1 billion of his $2.5 billion net worth in the last year, according to Forbes, thanks to the California real estate crash. Stadium consultant Marc Ganis calls this "significant"; Majestic says it's just a flesh wound.
September 28, 2009
Media playing "Guess who's coming to L.A. stadium?"
With an Industry NFL stadium looking more likely, newspapers are busying themselves with the game of figuring who'd play there. The Los Angeles Times declares the San Diego Chargers the frontrunner "because the Chargers have a window each year to get out of their Qualcomm Stadium lease without the threat of a lawsuit." The Jacksonville Jaguars, who are blacking out their entire season on TV thanks to poor ticket sales, are considered next most likely, with the Minnesota Vikings, St. Louis Rams, Buffalo Bills and Oakland Raiders earning honorable mention.
Of course, the Times also notes that Industry developer Ed Roski wants to own part of whatever team moves to his new building — but wants to pay for it not with cash, but with development rights to other parcels in Industry, which is a bit dicey, considering that "California development rights" is the new "swampland in Florida."
The Chargers, meanwhile, are rushing to take advantage as their newfound belle of the ball status, meeting today with Escondido officials to discuss a new stadium there. Ironically, the team's main demand there is development rights, though a North County Times estimate shows that they'd actually want a huge swath of the city's property:
In order to generate $400 million in revenue, the ancillary development would have to be either 1,400 condos, a retail complex significantly larger than the Westfield North County mall or about 2 million square feet of office buildings, which would nearly double the amount of office space in the city.
Escondido, the paper notes, currently has two half-built condo complexes sitting empty, and a 30% vacancy rate on its existing office space. I know it's old-fashioned, but the Chargers really might want to hold out for actual cash.
September 05, 2009
Goodell rattles Vikes move threat saber, goes off message on Chargers
NFL commissioner Roger Goodell did what sports league commissioners are good for during a TV interview on Thursday:
"We have a franchise that is owned by someone that really cares about the Minneapolis community [and] wants to get something done that is responsible," Goodell said. "We understand the challenges that exist not only in that market but more broadly in how to finance these projects. But it is something that we need to get done because the Vikings belong in Minnesota and I know the ownership feels that and the public leadership feels that."
Goodell also addressed the San Diego Chargers stadium situation, saying, "It's clear the stadium needs to be either completely renovated or a new stadium built." Whether he was hinting a change in policy (renovation hasn't previously been on the table for Qualcomm Stadium, at least not according to the NFL) or merely misspoke, Goodell was immediately slapped down by Chargers stadium czar Mark Fabiani, who told the San Diego Union-Tribune that it's "been proven over and over again by anyone who has looked at it over the years" that renovation is "just not feasible, either technically or financially." Well, except for a bunch of local architects and the former chair of the city's stadium task force.
The interview, incidentally, was conducted by sports consultant Rick Horrow, who knows a thing or two himself about the stadium-grubbing game. It airs next week on the cable channel Versus (not to be confused with the far better Versus).
May 29, 2009
Chargers reject $1B stadium plan
You know you're having a bad day when you offer to build a $1 billion stadium for your local football team, and they tell you to shut up and mind your own business. That's what happened to San Diego developer Perry Dealy on Wednesday, when he told the Chargers of his plans for a mammoth development project on the site of their current home of Qualcomm Stadium, and immediately got a fax back from the team telling him thanks but no thanks, as the project doesn't have "a realistic chance of being implemented."
The plan does sound a bit dubious, relying on San Diego designating the site a "redevelopment zone" based on a plume of polluted water under the current stadium, then kicking back property taxes from the new development to pay for construction. (Yes, it's tax increment financing yet again.) But still, it's unusual for a team to turn up its nose at any stadium proposal, even if just as a stalking horse to get other localities to up their bids. Chargers spokesman Mark Fabiani explained the oddity this way to AP:
Fabiani said the announcement of Dealy's project put the Chargers in the awkward situation of explaining how they could turn it down when few other options have surfaced.
"That's part of why this effort by Mr. Dealy is so damaging to us," Fabiani said. "It causes people to ask that question."