Wednesday, November 23, 2005 | As the city of San Diego and the Chargers begin high-profile negotiations in the team’s play for a new stadium, the two sides are set to duke it out in another venue. Chargers officials are quietly seeking more than $2.5 million in damages from the city and what would essentially be a reduction in their annual stadium rent, claiming to have lost money because of efforts to make Qualcomm Stadium accessible to disabled individuals.
The city agreed in a 2000 contract to indemnify the team for any revenue losses that resulted from a lawsuit filed by a group of disabled rights activists. The activists claimed that when Qualcomm Stadium was renovated in 1997, it failed to comply with the terms of the Americans with Disabilities Act.
In 2001, the city and the team settled with the activists and the city agreed to outfit Qualcomm Stadium with the proper seating. As a result of the retrofitting, team officials claim they are owed lost revenues from the displacement of seats and the obstruction of views.
The team is asking for slightly less than $2.5 million for lost seat revenue from 2002 through the first six home games of 2005. It is also asking for $123,511 in lost concession and merchandise revenue because expected seats weren’t filled.
The team has also asked an arbitrator to determine what it is owed in losses for the remainder of the 2005 season and seasons going forward. An arbitration hearing is set for Dec. 1.
Mark Fabiani, special counsel to the team, declined to comment on the case.
“The entire proceeding is covered by a confidentiality agreement between the Chargers and the city,” he said in an e-mail. “Although it seems from the questions you are asking that (City Attorney) Mike Aguirre’s office may not be respecting the confidentiality agreement, the Chargers fully intend to abide by the confidentiality agreement.”
A ruling in favor of the team would present a potentially tricky public relations situation. The team is in the midst of a push for a new stadium and plans to eventually ask the voters to give it 60 acres of land in exchange for the rights to build a new stadium and mixed-use development.
The team continues to live with criticisms that its previous contracts with the city amounted to corporate welfare.
“It’s just another nickel-and-dime deal with the Chargers,” said Don McGrath, executive assistant city attorney.
McGrath said the Chargers’ annual rent would essentially be lowered if the team wins the case because the team will be awarded annual damages. The team is scheduled to pay $2,450,000 in rent this year for the stadium.
In 1997, the city undertook a $78 million renovation of Qualcomm Stadium in a deal that was supposed to keep the team locked into San Diego until 2020. However, an out-clause built into the contract forced the city to rework the contract last year because the team was free to negotiate with other cities.
A group of disabled-rights activists led by Beverly Walker sued the city, and eventually the Chargers, following the 1997 renovation over a lack of disability access at the stadium.
Before settling the claim, the city indemnified the team for any loss of revenue resulting from the installation of disabled-friendly seating. The Chargers claim the city built the stadium, and therefore, was responsible for complying with applicable laws such as the ADA.
Team officials claim the removal of seats and the obstruction of views have caused them to lose more than $2.5 million since 2002.
The city argues that the Chargers bear responsibility for the ADA non-compliance as well because they selected the architect and plans for the 1997 remodel and maintained a “right of approval” throughout the construction process.
The city agreed under the provisions of its 1997 contract to provide the team “approximately 71,400” seats as a result of the stadium update. Lawyers for the city argue that the city has continued to live up to terms of this contract regardless of ADA considerations, as there were 70,576 seats as of the end of the 2004 football season.
The city also argues that if the Chargers are awarded losses, they must be calculated on a game-by-game basis because the team must show they would have been able to sell the seats that were lost to ADA renovations, especially during the 2002 and 2003 seasons when the team suffered from poor on-field performance.
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