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Saturday, Aug. 26, 2006 | The general manager of the ipayOne Center discusses minor league sports in San Diego, as well as his big plans for developing the Sports Arena area.
When Ernie Hahn’s family-owned management group purchased the San Diego Sports Arena 15 years ago, they had no idea what they were in for.
The family had big dreams for the site. They wanted to use the 38-acres to develop condos, apartments and shops. But what they got was hockey, soccer and arena football. Now, after a decade-and-a-half, San Diego’s minor-league sports roster has been purged. With the departure of the now-defunct Gulls, Sockers and Riptide, Hahn still has big dreams. He wants to turn the site of Midway’s ipayOne Center into a “Little Italy type of place” and contemplates a day when the National Basketball Association will return to San Diego.
We caught up with Hahn to talk about the future of minor league sports in San Diego and his designs for the future of Sports Arena Boulevard.
There’s been a lot of talk over the years about what to do with the ipayOne Center here, and recently there’s been talk of potentially building a sports park over at Qualcomm Stadium and maybe putting condos here. How long does the ipayOne Center have to live?
The lease that we have on this site runs through about 2018, so there’s about another 12 years left on this lease.
Certainly, we got involved with this site 15 years ago – our management group – to look at redeveloping it over time [with] the housing, affordable housing, parks, on these 38 acres.
It’s just taken longer than we thought to kind of get to that point. And at the same time, there’s a need to get a new facility built. There’s owners that are interested in bringing an NBA team to town. We’ve looked at sites like Qualcomm and some other areas around town to see what the feasibility of that is.
Neither of those I think is dependent on each other. I don’t think there necessarily needs to be a new arena built to necessarily take this one down and redevelop it. I mean, that’s one scenario. The other scenario is you get the new one built and this one comes down, it gets redeveloped.
So the future of this site is that at some point in the next 12 years, it will come down. And there’ll be some form of development that is kind of a smart growth, work, live, community development that helps stimulate the tax increment for this area and allows this development to take place, and a lot of future developments to kind of go off its heels.
Can you add the necessary infrastructure to make building condos in this area feasible?
Yeah, I mean, ’cause if you look at it, the infrastructure works when you’re even having 13,000 people come for a concert, or 5,000 or 6,000 people. Even if you were to build a certain amount of units here that works within the community plan – I think there’d be some modest infrastructure items that would need to be updated probably on Sports Arena Boulevard. Some of the lights and sinking of lights and doing things of that nature. We’ve done a lot of studies up to this point and it does work. And, I look at this area, not only this area of the arena, but around it, and say that over the next 20 years this could be very much like a Little Italy-type of place.
We often get mired because of the adult establishments that are here and some of the quote, unquote, crap that’s just been dumped here over the years. But, once tax increment starts running in, that allows this community to bond on other projects in the city, and a lot of the other stuff can disappear over time and you can really start rebuilding the community from the bottom up.
What would it take to get out of the current lease with the city right now?
I think you could do a lot of different things. You could extend long term on another extended lease that allows you the financial ability to go out and secure a long-term debt …
You could do a joint venture with the city, or you can “fee simple,” you can buy the property, and I think all of those things are all things that could be considered with this property and what they want to do.
What we do know is that if it continues to run just as a facility for the next 12 years – in 12 years the city has the property back – but for the next 12 years, the property’s really not doing a whole lot for the benefit of us, or for them. Running sports arenas is a pretty lean proposition. There’s just not a high margin there. It’s a tough business and I come from a family of real estate developers and that’s why we got involved with this property from the get-go. I use to joke that we didn’t get into this property because we wanted to own a hockey team and wanted to be rock-and-roll promoters. We did that because there’s a facility here, that was the business at hand, whereby we wanted to eventually get to a point where we could redevelop it and make this place a better place.
Ok, you talked about the hockey team. I’ve been playing hockey in San Diego since I was six years old. The Gulls meant a lot of me as it did to a lot of San Diegans. What happened?
Man. (long pause) And I helped create that – my dad was instrumental in creating the West Coast Hockey League back in ’95 when the IHL left and went up to LA. I played a pretty big part in that as well, with the TV contract with Channel 4 and really establishing a lot of the partners. Certainly in my position for the first five or six years I was really involved with the hockey team.
But the bottom line is, like any business, you have to make money. And if you don’t make money that’s OK too as long as you want to keep putting back into that business for the long term plan on either how it can turn around or as long as you want to keep feeding that hobby. And it got to the point where the change came into the East Coast Hockey League – travel, other expenses, housing the players has got so much more expensive over the last four or five years that it just was not possible to make money with this franchise. And so a combination of losing money, year in and year out, just got too much, where we have a business, we have employees that have families and to make sure it can run and be here for everybody, it just didn’t work for us anymore.
We’ve seen the Sockers and the Riptide leave San Diego in the past few years as well. Is this a sign that minor league sports are dying in San Diego?
That’s a good question. And I think, you know, minor league sports are a tough sell -period – in most markets. Certainly markets that have NBA or NHL or you know Major League Baseball or NFL franchises, with them chewing up that many dates. Usually you see in those markets the ability for those franchises, that work well, and then maybe a top-notch college program to work well.
Minor league sports is a tough one to make work. And I think we were pretty successful with the hockey team for a lot of years. But you know what’s successful for us based on revenues and expenses in San Diego may not be the same for Boise, Idaho, where that team, although its an ECHL team or a WCHL team, it’s in Boise, Idaho, you might as well call it the NHL team there, because it’s the only game in town.
When’s it coming to San Diego?
I think the NBA needs to decide if they think San Diego’s a great marketplace. I certainly do. But I think they need to be convinced a little bit of it. It’s certainly a better market in my opinion than Memphis or some of these other cities where the NBA has gone recently. There are a couple of ownership groups that are very interested in bringing a team here. But, with all of that said, I think the NBA is the real key. I think San Diego’s ready for an NBA team now. The question is, is when is the NBA itself ready to admit that San Diego’s a good market for it?
Well a lot of people agree that this isn’t a sports town. So, what evidence is out there to make the NBA believe that they should bring a team here?
You know, I think the corporate support, although it’s not that of a top 10 or 15 markets, has increased a lot. I think the Padres have shown that. They’ve done extremely well with their corporate support for the team on a local level. Chargers are getting there. They’ve had success, I think they’ve just about sold out all of their luxury suites that they have at Qualcomm now. I think if you go back to when the NBA was in town back in ’83, I think the city’s changed enough, the demographics, the wealth, and the sponsors have changed significantly since then.
So I’m bullish. I think it can work. But I also think it’s going to take a really good, very savvy ownership group that has a lot of tie-ins with the community, along with other sponsors to really promote the project well.
– Interview by SAM HODGSON