The Morning Report
Get the news and information you need to take on the day.
Monday, Oct. 16, 2006 | Asked by his colleagues to study whether a professional football stadium would fit on 52 acres of bayfront land without disrupting maritime industry, Port Commissioner Steven Cushman came back with a simple answer last week: Yes.
The port didn’t release any formal study, documents, graphs or numbers. Just the text of the commissioner’s broad reassurances.
If the idea of actually placing the new stadium alongside National City’s bayfront is to survive the next stage, there will have to be a lot more heavy lifting in the coming months. The stadium project, four years in the making, is now projected to be at least a $1 billion development. And, if it is to be done in National City, it will require maneuvering of great deft to overcome the immense logistical and capital challenges presented by a development project that could be spread to three different cites and require the cooperation of a whole host of governmental entities.
Had the port – owner of 32 of the 52 acres currently being eyed – said no last week, the National City idea would have died on the spot. Instead, team and city officials got the green-light and began to work in earnest on the load of questions that will determine whether the city’s once long-shot bid becomes reality.
As has been the case for previous stadium iterations, the Chargers must find a development partner willing to shoulder the costs and risks of the proposal, which attempts to funnel the proceeds from new, mixed-used development to backfill the costs of what is estimated to be a $600 million home field. That estimate has increased by $200 million since the Chargers first unveiled a stadium proposal in early 2003.
But the costs don’t stop at the stadium.
The team and city officials must figure out what infrastructure twists and manipulations it will take to pinch the stadium within the tight confines under scrutiny. That means adding parking garages to fit as many as 10,000 to 12,500 cars at a cost of $150 million, tacking on new on and off ramps for Interstate 5 for an estimated $100 million to $200 million, and either rerouting or adding on to the existing trolley stop near the proposed stadium site.
“The challenge is the infrastructure numbers are huge,” said Mark Fabiani, Chargers special counsel.
Additional expected expenses include the possible relocation of existing maritime businesses on the port land, a cost the team pegs at $50 million, and paying the port to lease the land. The team is also on the hook for whatever debt remains on the city’s Qualcomm Stadium bonds at the time it vacates the current stadium, a cost that will likely run in the tens of millions of dollars.
The Chargers say they have cast off the idea of getting public cash to pay for the stadium, although they are still hoping to be gifted public land for the accompanying development by a city tempted by the idea of new growth and tax revenue.
The team originally floated a proposal to the city of San Diego asking for 60 acres of the 166-acre Qualcomm Stadium site in Mission Valley. It planned to construct condos, retail and office structures, and a hotel on the given land, using the proceeds from the development to finance the new stadium.
It won’t be quite that simple in National City. The development won’t fit neatly on one slab of earth in the South Bay city. So officials instead intend to cobble together perhaps three separate parcels just for the development aspect of the proposal.
And it doesn’t look like all that land will even be within the boundaries of National City. Any deal will likely include land from Chula Vista and the city of San Diego, setting the stage for a deal that would require a three-city revenue sharing agreement. Add to that the port’s involvement, and the level of governmental cooperation that would be needed to turn the deal would be astounding.
Officials say they don’t know exactly how many acres will need to be conglomerated to fulfill the development needs. And if they know exactly what land they want to use, they aren’t talking about it publicly. The 60-acre idea from Qualcomm doesn’t fold over perfectly into the National City model because of the gulf in property values between the middle of Mission Valley and the South Bay.
“It’s not so much the acreage, but the potential value,” said Chris Zapata, city manager of National City.
Fabiani said he was encouraged by the idea of a dispersed development plan. “I think that’s what is exciting about this phase of the project. We’re no longer having to do everything on one site,” he said.
The team hopes that the promise of new development, and therefore new tax revenues, will be enough to entice cities into giving land as part of the deal.
“The whole idea is, does the Chargers’ involvement bring sufficient value to justify the public providing a piece of land, for example?” he said.
A land swap would likely rouse stadium opponents, as many considered such a gift the equivalent of a cash subsidy. Although they have yet to survey their residents, National City officials think the benefit of a new stadium would be two-fold, spurring new development of bars, restaurants and hotels around the stadium while also boosting the city’s profile.
Bruce B. Hollingsworth, port president and CEO, noted in an Oct. 6 memo that a number of other issues would have to be dealt with in the development process because of the location of the land, such as height restrictions due to the proximity to federally protected marsh areas.
Meanwhile, the Chargers are continuing their search for a development partner. As was the case at Qualcomm, the developer will likely need to be a major player with the capability to help shoulder the costs and risks of the $1 billion project.
When the Qualcomm proposal fell through in January, it was because no development partner could be inked for the project. The team blamed the shortcoming primarily on the city of San Diego’s financial woes and City Attorney Mike Aguirre, but also acknowledged some developers didn’t share the team’s optimism in a plan to add 6,000 new condos to Mission Valley.
Fabiani said the team had met with three possible development partners regarding the National City site. A solid financial framework for the site has yet to be hammered out.
So far, the National City stadium idea has faced great backlash from port businesses, who say professional football isn’t compatible with the port’s mission to drive maritime industry, something that would drive away good-paying waterfront jobs. Twenty of the 52 acres eyed by National City for the stadium site are owned by BNSF Railway, which has stridently opposed the project.
The National City Maritime Terminal currently generates $24.3 million a year for the port, a healthy share of its $32.4 million of total maritime revenues. The port receives $2.9 million annually from the tenants currently situated on the land desired for the stadium.
At the same time, officials in Chula Vista continue to push their city as the prime location for the new stadium. Residential homebuilder HomeFed Corp., which owns 3,000 acres in the Otay Ranch area, has hired a sports consultant, who is conducting private talks with the Chargers and studying whether the presence of a new stadium would sufficiently boost the company’s land value to justify its involvement in a deal.
Fabiani said the team is set to meet with the HomeFed’s principals at the end of the month.
While the National City site is considered superior by many because of its proximity to transit and downtown San Diego, the fact that the Chula Vista option falls on private land would greatly lower the number of bureaucratic hurdles faced. But officials remain concerned about the distance of Otay Ranch from main transit lines.
The idea of placing a Chula Vista stadium on the bayfront has also resurfaced again as of late.
The two South Bay cities appear to be friendly in their competition. They were originally cast off as second-tier suitors when the Chargers began shopping themselves to other cities inside the county in May. However, with the city and county of San Diego making little progress on any formal plans, National City and Chula Vista have clearly emerged as the most viable options for hosts of a new stadium.
Zapata noted that a stadium in either city would be a win for a part of the county that is often overlooked.
It’s understood that a National City plan would likely rely on Chula Vista for help. But Councilman John McCann, who is spearheading that city’s stadium push, said they are focused on their own deal for now.
“First and foremost, we’re looking at what we can do at Chula Vista,” McCann said. “We also think that National City has a viable spot as well.”