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The Chargers may abandon Qualcomm Stadium but the city’s prepared to let a food and beverage company sink $6 million into building upgrades – and taxpayers could be on the hook to pay that company back if the team leaves.
A divided City Council subcommittee voted on Wednesday to push forward a contract with food and beverage provider Delaware North that calls for the company to upgrade kitchen and food sales areas, and for the city to pay that money back if the Chargers move to Los Angeles.
City staff says that regardless of whether the team leaves, it needs to keep the stadium operational and hosting events for at least a few more years.
Councilman Todd Gloria, who voted no along with Councilman David Alvarez, ripped what he dubbed a rushed proposal.
“Unless we want to talk out of both sides of our mouths, we know that there’s a strong desire to replace (Qualcomm Stadium) and one of the main barriers to replacing that facility is that we don’t have enough money to do it. So why on earth would we try and put another $6 million in debt on the taxpayer when we’re having a hard enough time funding a new facility?” Gloria said.
The budget committee voted 3-2 to send the contract to City Council, with Council members Myrtle Cole, Mark Kersey and Scott Sherman supporting it.
On top of bolstering an endangered facility, the proposal’s timing is bad for another reason: Effective Wednesday, Qualcomm Stadium’s longtime food and beverage contractor, a company called Centerplate, walked away from the stadium, leaving the city to grapple with how to cater June events and serve food and drinks at the One Direction concert in July. It has yet to formally approve the new contract.
“We had discussions with Centerplate. We requested them to stay and they declined,” Deputy Chief Operations Officer Ron Villa told the budget committee. “They adamantly declined. We are now in a situation where we have major events coming forth that we need to be prepared for, for our residents and visitors, and that’s why we are here today.”
The city’s contract with Centerplate expired Feb. 15, five days before the Chargers went public with plans to team with the Oakland Raiders on a Carson stadium.
Real estate assets director Cybele Thompson said waiting to see how those plans played out wasn’t an option. The city needed a food and beverage contract to host events inside the stadium. (Most of the events it’s got coming up are in the venue’s parking lot.)
And it wants to get the best bang for its buck on Qualcomm Stadium.
“If stadium is in decline and we’re not going to do anything to maintain it, we’re not going to be able to get any outside events or catered events or concerts,” Thompson said.
Basically, Thompson said, the city’s convinced Qualcomm Stadium won’t be razed anytime soon.
“We can’t wait five years until a new stadium is built to put a new concession agreement in place,” Thompson said.
And if the Chargers leave, the city will get more than a punch in the gut. It’ll owe more on a crumbling facility it’s still paying off.
Then there’s the fact that Delaware North will get the first shot at a food and beverage contract if there is a new stadium, potentially complicating discussions about using those revenues to help finance a stadium.
But in the weeks since the Carson announcement and the current contract ended, a city-assembled team heard proposals from a handful of food and beverage vendors, including Centerplate and Delaware North.
It ultimately chose Delaware North – and Centerplate, unsurprisingly, wasn’t pleased.
After Centerplate’s former CEO was captured on video kicking and choking a dog last fall, Mayor Kevin Faulconer said the city would review its contract with the company.
But when Faulconer appointed a task force to explore stadium options, the Chargers’ stadium point man, Mark Fabiani, blasted the mayor for allowing his longtime consultant Jason Roe, who’s a registered lobbyist for Delaware North, to attend task force meetings.
Things have gotten uglier since.
Centerplate sent Faulconer and other city officials a letter on April 6 raising questions about the selection process.
The Connecticut-based company mentioned Faulconer’s connection to Roe and city officials’ apparent failure to ask questions about financial proposals Centerplate made during its contract meeting.
Centerplate chief legal officer Keith B. W. King, who sent the letter, said the city hasn’t responded to the letter.
“I personally reached out to city Chief Operating Officer Scott Chadwick with an offer to stay through the end of the year in order to ensure a smooth and seamless transition given the timing of the award and all of the logistics involved,” King wrote in a statement. “To date, we have not received a response from the city to our letter dated April 6, nor a formal response to my verbal offer to Mr. Chadwick.”
Thompson, the city’s real estate assets director, couched the situation differently.
“Centerplate’s response was we’re either leaving on April 15 or we want to stay another season, effectively another year,” she said.
Whatever the circumstances, the company left the stadium for good on Wednesday, the same day city officials presented the new contract to the Council subcommittee.
Thompson told VOSD that the city wouldn’t necessarily owe Delaware North $6 million if things go south (or north, rather, to L.A.). The repayment amount drops 20 percent per year and the city will get to sign off on any renovations the company makes at the stadium, she said.
Bottom line, Thompson said, “the longer the Chargers stay here, the less we would be repaying.”