I’ve been meaning to make a point for a while now. In January 2006, just after the Chargers walked away from a proposal to build a new stadium at the site of the current facility, I wrote a column titled “The Condo Glut Killed the Stadium.”
Conventional wisdom had it that the Chargers had simply hit a wall trying to deal with the city and, specifically, City Attorney Mike Aguirre.
Let’s be clear. That’s not totally incorrect. I couldn’t fathom a circumstance in which the Chargers negotiated and then managed to build a new stadium working all the while with Aguirre and the current state of affairs at the city.
Unimaginable.
But, that’s not exactly why the Chargers walked away from the Mission Valley proposal they had been trumpeting for several years.
As I wrote back then Chargers’ Special Counsel Mark Fabiani made an important point when he explained why the Chargers were unable to ink a deal with a development partner. Remember, the Chargers’ proposal was relatively simple: They wanted control of city land that they could turn into 6,000 condominiums. The profits from that development would pay for a stadium.
Here’s what I wrote:
Fabiani said the Chargers courted three types of potential development partners. The first group was interested, but then, they weren’t. The second group, simply didn’t have the means to put up that much cash now.
And the third group … well, I’ll let him tell it.
“There was a third group that said, ‘This project is interesting but you’re assuming that the housing market is going to remain really strong and we don’t necessarily share your view of the housing market in San Diego,” Fabiani said.
In other words, “we don’t think we would be able to sell 6,000 condominiums for how much you think we’d be able to sell them.”
So let’s think back. Say the Chargers had found a development partner who was willing to weather the storm at City Hall and had the cash to put up. Let’s say the team had found a company that didn’t recognize the trouble brewing in the real estate industry and, specifically, the San Diego condo market.
They would have gone forward with a ballot initiative for November 2006, right? Then, assuming voters approved it, they would right now be finishing up plans for construction of 6,000 new condos — in Mission Valley of all places.
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| Nausea, er, Mission Valley |
There are more homes on the market then there ever have been in San Diego. Foreclosures are exploding in number. Chula Vista officials, once drunk on the housing boom, are freaking out.
Downtown developers are trying to figure out how they’re going to sell about 1,700 new condos that either have been built there or are just about done — all this at the same time condo owners downtown are trying to sell more than 500 of their own units.
As Kelly Bennett recently reported, condo developers downtown are deciding against finishing their projects or choosing to turn them into hotels instead.
It’s in this climate that the Chargers were set to add 6,000 new condos in Nausea Valley.
It just wouldn’t have worked. Had they gone forward with the plan and built them in this slumping market, they’d have broken the already bent back of whichever homebuilder they worked with: Hovnanian, Lennar, etc.
Most likely, though, they would have seen what’s happening now and pulled out.
Like I said, the city of San Diego’s dysfunction may very well have killed the proposal. But it probably never would have gotten the chance.