One of the key attributes of the plan to build an MLS stadium on the site of the San Diego Chargers‘ old stadium was that it would not only require no public money, but also the developers would pay “fair market value” for the 80 acres of land involved. So how much would that be? How about maybe … $10,000?
The sale price would be linked to the fair market value, yet to be determined, but it would have to take into account the cost of demolishing Qualcomm, estimated at perhaps $15 million, and other environmental issues and other problems, such as flooding and habitat preservation. Also taken into consideration would be the potential of setting aside room for an NFL stadium, and other “extraordinary costs.”
If these conditions reduce “the fair market value…(to) a negative number,” the initiative says, then FS would be required to pay the city $10,000 as a one-time lease payment.
In effect, then, the soccer developers are asking the city to pay for the cost of prepping the land for new development, which could eat up the entire $240 million market value of the parcel. If that sounds crazy to you, that’s exactly the word one real estate expert uses to describe the proposal:
“If I was the city, I’d say this is crazy,” [real estate development consultant Gary] London said this week. “The city is selling the property as if it was distressed property (under the FS initiative).
“This is not distressed property,” he said. “This is almost an empty piece of land, with the exception of one stadium, that is practically flat. This is in the center of San Diego and is probably the most valuable land asset, public or private, in the city of San Diego right now.”
And then there’s this:
Greg Shannon, chairman of Sedona Development and current chairman of the local chapter of the Urban Land Institute, said a private landowner would “never sell” land the way the FS initiative proposes.
“From what I can tell, it’s a huge giveaway from the city to the developers,” Shannon said. “They’re saying there’s no taxpayer subsidy. That’s a huge taxpayer subsidy.”
One hopes that this is just a butt-covering clause to indicate what happens on the off chance that infrastructure costs get out of control, and not something the team actually anticipates. Even so, though, this is a potentially whopping hidden public cost that the developers really should have mentioned when they first announced their plan, though I guess then people might not have been quite as excited about it. We’ll see how excited voters are if and when this thing goes up as a ballot initiative later this year.