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Friday, Oct. 2, 2009|In the middle of last year, Escondido attorney David Ferguson was introduced to San Diego Chargers booster, restaurateur and businessman Dan Shea. Shea was concerned about talks flagging for a new Chargers stadium in Chula Vista. He wanted Ferguson to help.
Ferguson, a 60-year-old Los Angeles native who moved to San Diego when he was a lawyer in the Navy, has made complicated deals work in Escondido before. He has practiced land use law in the city for 30 years and helped write growth management plans there and in Chula Vista. In the 1980s, Ferguson chaired a committee that brought the California Center for the Arts to Escondido. The venue has hosted Mikhail Baryshnikov and Yo-Yo Ma.
Ferguson worked behind the scenes in Escondido for nine months to develop a plan for a stadium at the southwest quadrant of Interstate 15 and Highway 78. After the proposal went public last month, Escondido has emerged as perhaps the last best hope for keeping the team in San Diego County. We spoke with Ferguson about why Escondido could be different than other failed proposals, its chances for success and who could come up with $1 billion to build a stadium.
What makes Escondido different than the city of San Diego, different than Chula Vista, different than Oceanside different than National City, all of which haven’t been able to put together a workable proposal for a new stadium in San Diego?
The main advantage that Escondido has is that we don’t have what I call a “fatal flaw.” By that I mean in San Diego the primary site there would involve the Port district having to give up the property for the (Tenth Avenue) Marine Terminal, which the Port authority is dead set against doing. Chula Vista, of course, had the power plant which the [Public Utilities Commission] designated as a must-run facility. Oceanside has the airport and the indications I’ve heard is the [Federal Aviation Administration] is opposed to closing that airport. At this point in Escondido, no one has identified a fatal flaw.
From a growth management perspective why does this project make sense for Escondido?
Without giving away too many things, the stadium would not be Escondido’s first $1 billion investment. We already have one going on with the new hospital, the Palomar Pomerado hospital that’s under construction. That’s going to cause a great deal of revitalization and rejuvenation in the area it’s being built, which isn’t actually too far away from where the stadium would go. We could basically have two $1 billion facilities coming online within about five or eight years of each other. That’s just going to do tremendous things for that side of town.
How close are you to finding private funding for the stadium other than the Chargers? Recent reports have said the team needs to come up with an extra $400 million.
There are two parts to the answer here. I think we’re probably 30 to 45 days away from identifying the magnitude of the problem. We’re probably then six months away from finding the answer to the problem. What I mean by that is we’re having to go back and reexamine the model that the Chargers have been using for their financing. The model that they have been using since [they considered redeveloping the area around current home Qualcomm Stadium] is that a significant portion of the money will be raised from what they call “ancillary development.” That model was put together in the heyday of the real estate market. As you recall from the Qualcomm proposal, it involved building thousands of condominiums, office space, commercial space, hotel space. The question is in today’s market and in the reasonably foreseeable market is that still a viable approach.
What would the alternatives to that be?
We’re looking at all sorts of different fundraising vehicles. One of the most promising is the sale of preferred seat licenses. There are discussions with the NFL about guaranteeing a certain number of Super Bowls for the new stadium which would allow you to then go out and make advance sales of the seats for those Super Bowls.
I presume that some private development would be needed regardless of what other options are out there.
The Chargers have said they’re not going to use any public money for this project, does that pledge include stadium operations costs or donated or leased land from various cities?
I can’t say specifically what [team special counsel Mark Fabiani] or the Chargers mean when they say that. From my standpoint what that means is that we’re not going to have any public subsidies where the taxpayers are paying taxes to underwrite the Chargers stadium.
What’s completely open and legitimate in my mind, however, are tax sharing agreements in which the stadium and the public share the enhanced and new revenues caused by the new stadium. The stadium, that quadrant is within the existing redevelopment agency. The enhanced property taxes would be captured by the redevelopment agency. If the stadium does in fact end up costing $1 billion that would be an increase in property taxes flowing into the redevelopment agency of $10 million a year. It would not be unreasonable for a share of that $10 million a year to be devoted to paying for the construction of the stadium.
How much of a threat is the proposal by a Los Angeles County’s city of Industry to build a stadium there?
I would expect that if the Chargers cannot find a viable site in San Diego County that the City of Industry would be very attractive to them. The biggest hurdle the Chargers I think face in this stadium proposal is the financing. Up there they have a city and a billionaire standing by to solve that problem for them. They have stated and I think they’re sincere that they would rather stay in San Diego County. However if it turns out we cannot accommodate them in San Diego County I think the City of Industry would be their next choice.
If you had to put a number on this deal, say one to 10, with 10 being the Chargers start playing here tomorrow where would you put where you guys are at right now?
I can’t give us more than a five until we get over the financial hurdle. Once we get over the financial hurdle, my hopes will go up more. I think that the site, as we discussed, has a lot of positive things going for it in terms of its location, its infrastructure, the political climate. But the big hurdle is still how do you pay for a $1 billion stadium. That’s not an Escondido question that’s a Southern California question.