The Morning Report
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The Chargers might be eyeing the land under his feet, but Ernie Hahn, general manager at Valley View Casino Center, is just trying to keep San Diego’s half-century-old sports arena up to snuff.
For years now, the Chargers have been trying to build a new stadium. According to the team’s proposal, funding for their dream facility would come from the Spanos family and the NFL, while the city’s contribution would include selling and developing Qualcomm Stadium’s 166 acres and the 100 acres around the sports arena site. The thinking there is that selling off the land would mean the city could chip in without raising taxes, not to mention the new tax revenue from developing those parcels.
The team is banking on that plan to revive the city’s hopes of again hosting the Super Bowl. It’s pretty clear the NFL won’t be considering San Diego for the gig unless it replaces the “antiquated” Qualcomm Stadium.
Mark Fabiani, special counsel for the Chargers, said the team is essentially starting from scratch in talks with the city now that Kevin Faulconer is mayor. “We are only in the most preliminary possible part of our discussions with the mayor’s office,” Fabiani wrote in an email. “The sports arena site has not yet been discussed.”
Hahn says he hasn’t heard a peep from anyone in team ownership or city officials about the future of his facility. Instead, he’s been focused on pouring $4 million into structural improvements: a luxe, stage-level VIP lounge, new bathrooms, larger-than-life shots of the venue’s biggest moments in sports and music history and a sweeping arena-wide curtain to accommodate lower-capacity Sockers games and more intimate concerts.
If Hahn is concerned about encroachment from across town, the more immediate threat isn’t the Chargers. It’s San Diego State’s Viejas Arena. The school has a booking advantage from a deal with promoter titan Live Nation, which means Hahn often misses out on top-talent tours.
I talked with Hahn about what the sports arena still brings to the table, whether his venue has an edge over SDSU and what the next few years might hold for San Diego’s major sports facilities.
This interview has been condensed and edited for clarity.
What purpose does the arena actually fulfill in San Diego these days?
For the last 47 years, it’s been the entertainment in San Diego. You have more competition – you have an amphitheater down in Chula Vista, you have an arena over at San Diego State. This arena still does 110 events a year, it still ranks in typically the top five facilities for its size in the United States for the 10,000 to 15,000-seat arenas. It’s usually a top 50 facility worldwide even in San Diego, which is a tough market in general.
What makes it tough?
Just lots to do. Whether it’s the surfing and the sailing and the sun and just people being out all the time – coming into a building just historically has made San Diego a little bit of a tougher draw. I think you see that along the lines with most all the sports teams in the past in San Diego. Even the Chargers, if they occasionally have a blackout, and Padres attendance is really a derivative of how well they’re doing. There’s a lot of competition. So I use that in light of our rankings, typically worldwide, referencing what I think is normally kind of a tougher market. Then I think we do a pretty good job.
$4 million is nothing to sneeze at. How often do you have to do that kind of extensive upkeep?
That was the big one. We wanted to give an older facility with these improvements some of the amenities that new facilities had, which means a really cool space to hang where they can get food or a really nice lounge and a bar. We’ve got something that nobody else has and that’s the history. This is the building where Jimi Hendrix played twice and Janis Joplin twice and The Doors three times and Elvis three times and Led Zeppelin six times and The Who and — everybody but The Beatles has played here, and in most cases, multiple times. We went back and found those original photos when they were taken of those artists here. And so when you walk around the outer concourse … you’re now taking a wall, which has no character, and you backlight it and you put these 12-foot high images that come all the way across and there’s instant association with that building.
Do you think that historical factor gives you an edge?
Yes, it gives us an edge, I believe, on the experience.
The problem, especially when it comes to the music industry today, is unlike 15, 20 years ago, there’s just a lot that I can’t control and a lot that people can’t control … Live Nation, who’s the biggest in the world, they have a strategic relationship over at San Diego State. They pay umpteen hundred thousand dollars a year to San Diego State and they get the exclusive rights to book that facility for concerts. Then when those concerts come through, they’ll pull almost all the revenue from parking, concessions and all that stuff as part of their deal … So any of the shows that Live Nation is getting, and I’m not going to say for the right reason, but they are taking to their facilities as a nature of business. And they’re 1,400 seats less than us. In the older days, because we had 1,400 more seats, the big shows that would sell out would always play this building because there’s an extra hundred grand on the back end for the artist. But now with some of these acts are getting paid so much up front from Live Nation on these big deals that they actually can control them to play at the smaller building, and in my opinion, play the wrong building.
It does give us the advantage from the standpoint that unlike some of these other facilities or San Diego State, 100 percent of the facility is seated here. I mean that everyone’s got a chair, whereas the upper five rows at San Diego State are all bench seating style. The parking is conducive – we got 3,000 parking spaces right here on site. A lot more opportunities to indulge in a beverage here. A lot of times on these state campuses, sometimes you can’t drink, sometimes you can drink, depending on what’s going on. You’ll see now the lounge and some of the other amenities that we have, I think it is a better experience. We’ve been able to kind of high-tech up an older facility with flat-screens and these wall-wraps and murals to take what might’ve felt older before and kind of give it a nice new touch. And so far, everybody’s loved that.
Have you seen an uptick in revenue since rolling some of this stuff out?
It’s hard to measure that because a lot of these concerts that should’ve been here sometimes aren’t coming here. I can’t control that. They’re going to the wrong venue, for the wrong reasons. But it’s a tough business.
What I have noticed is that most people my age – I’m 46, or around that, when there was only one facility growing up, they saw most of their concerts, they saw their first sporting events, their hockey, their basketball here. Much like at Qualcomm Stadium, which used to be Jack Murphy Stadium or San Diego Stadium. When you make these facilities nicer, when you give them an upgrade, you’re doing two things.
One, you’re making it a better facility to go to. Two, there’s a piece of your heart like any relationship that remembers coming here when you were 4 years old or 5 years old and running around the terrace … When they come back here and you’ve made the improvements, they still have a great feeling in their heart for this facility. I think they’re ultimately, whether it’s this or Qualcomm, they’re rooting for that facility to be better just because there’s a piece of them that they’ve shared over the years.
Your family originally set out to repurpose this land for housing. What would it to take to get back to that goal, or is that off the table?
We got involved with this property because we were going to come in and control this property. We were working with the city to try to get a new arena built downtown, essentially where Petco Park is. Got very close, within $20 million and the city put it all together but we didn’t get it done in the end.
So at that point you just thought, we’ll refocus our priorities and keep using this as …
So we owned a hockey team, we owned a soccer team, we promoted concerts, we did what it took to have the different events and then there was a point in time, probably late ’90s, where we started looking at OK, what’s gonna happen with this facility long-term?
Ultimately it still came down to, if you take down the arena, where else are you gonna do events? And there’s another arena out there but where else are the family shows going to go, where do the ice shows go?
So I would tell you the future, it’s hard to say. Like I said, I turn around one moment, I hear the Chargers are planning on using this facility for the land and the money that they’re going to get from the city to build their thing, which I find ironic just ’cause nobody’s talked to us about it. We got a lease that’s around for another six years.
At the same time, for us, if there was a new arena that was built, I know the NBA would come back to San Diego. You could get a lot more concerts – it would be really exciting. So really, I look at this new stadium and an arena as one thing that wherever they decide to put the stadium, they need to build an arena. Because the stadium’s only gonna do 12 to 14 events a year and the arena’s going to do 200-plus.
What’s your relationship like with the other major development players when it comes to the Chargers?
We really haven’t been included in those conversations. It always goes back to Dean Spanos, and of course, the guy they’ve hired to work with them, Mark Fabiani, for years. I don’t want to say it’s in a vacuum, because they’ve involved the community groups and all that. I just think – take me out of the middle of it and our group out of the middle of it, I just think it’s one of those things that they would have more success if they were driving a bigger project that had more for everyone.
If you’re just selling football, there’s only so many football fans. If you’re selling a project that has 50 concerts a year, that has an ice hockey team, that has an NBA team, that has a football team, that has all of these things and more, and you’re going to go to a critical vote – you may not like football but you may love concerts, you may love other special events. But if you’re gonna count to 50 or 60 percent in the end, you’re gonna have a much easier job doing that with a project in the end that ultimately can drive the number of nights you need. You can drive 220 nights a year versus 20 nights a year in two great facilities and all that, that’s — to me, that’s a winner. That’s how you get it done.