The Morning Report
San Diego news and info
you need to take on the day.
On Valentine’s Day 2017, a bunch of very powerful men – and one woman – gathered in the board room of the San Diego Regional Chamber of Commerce.
Love was not on the agenda.
Mayor Kevin Faulconer and former Mayor Jerry Sanders, the Chamber’s CEO, had summoned the group. The goal was to forge a compromise between the investors behind SoccerCity and developers Tom Sudberry, of Sudberry Properties, and Mike Neal, the CEO of H.G. Fenton. Neal and Sudberry were growing very hostile to the proposal to replace the aging Mission Valley stadium the SoccerCity team was shopping around.
Peter Seidler, the largest shareholder of the Padres, was there. Steve Altman, the former president of Qualcomm, was too. They were both investors in the soccer plan.
Sanders welcomed everyone and left. He had experience with such meetings. Sudberry and Neal had once been at war themselves. When Sanders was mayor, he got the two men in a room and demanded they come to an agreement. They did.
Organizers, including Aimee Faucett, Sanders’ then top aide and now Faulconer’s chief of staff, hoped Faulconer could do something similar. A lot was at stake. Sudberry was a major Faulconer supporter. It was a gathering at Sudberry’s house, after all, where leading Republicans had chosen Faulconer to run for mayor, after former Mayor Bob Filner’s demise became obvious.
But Faulconer already supported the SoccerCity plan. In fact, he and his team had been shepherding a deal with the soccer investors and San Diego State University for months.
But that deal, if not dead, was on life support at best. Faulconer wanted to avoid an all-out war between Sudberry and SoccerCity. He was sure SoccerCity backers were close to a deal with SDSU – if they could only hammer out the details. Faulconer could not have a fallout on another front.
But Neal, Sudberry and Sudberry’s lieutenant, Marco Sessa, were furious about the potential traffic impacts and the plans for retail within SoccerCity’s proposed development. It’s not a good time for retail landlords, and Sudberry has his own nearby project whose retail components rely on tenants.
Of more concern, but related, was traffic. A retail and entertainment district next to a new stadium would create, if successful, significant traffic in Mission Valley, already known as a maze of congestion. Sudberry had put years into earning approval for his project, Civita. He resented SoccerCity’s ballot approach, which would leapfrog many permitting hassles, environmental reviews and traffic mitigation demands.
At the meeting, Nick Stone, the public face and lead organizer of SoccerCity’s effort, gave a presentation to the group comparing his plan to Sudberry’s Civita. The two developments would be remarkably similar. They would take up about the same amount of land, have the same number of homes. Stone listed things his project would do to alleviate traffic that Civita did not.
It didn’t sit well.
Far from driving the two sides to a deal, the presentation infuriated Sudberry and Sessa. The meeting grew so hostile, Faulconer got up and left within just a few minutes. The heated exchange continued without him.
The prospect of a deal with Neal and Sudberry was dead. A week later, SoccerCity’s backers officially published their initiative, which locked in its terms, and started gathering signatures. They still hoped that, presented the signatures and wowed by the benefits, the City Council would adopt the plan outright. The investors had the mayor’s backing, after all. They acted with confidence, some described as swagger, that they would prevail.
But Sudberry and Neal would not go quietly into the night. Soon, they would invest millions into a campaign to sink the proposal. Allies launched a competing ballot initiative. SDSU designed its own vision for the land and called off talks with SoccerCity. A rift between Faulconer and Sudberry broke open. The City Council refused to accept the SoccerCity plan outright and steadfastly opposed a special election to speed up decision making.
Now, a year and a half since that tense meeting at the Chamber, as the campaigns begin to win over voters who will decide between two measures with plans for the land, most major political institutions in town — from labor unions to the Democratic Party to the conservative Lincoln Club — are united against SoccerCity’s proposal, now known as Measure E.
Even Seidler, one of the investors in the SoccerCity plan, felt obligated to release a statement last month saying he had become neutral on the decision.
“While I financially and conceptually backed Soccer City in 2016 and early 2017 based on my reasoned assumption that SDSU leadership, San Diego political leadership and Soccer City would collaborate on a modern stadium, it both surprised and disappointed me that common ground could not be found,” he wrote.
It wasn’t always this way. For a year, while it became more and more likely the Chargers would leave San Diego, the mayor’s office, San Diego State University executives and FS Investors worked behind the scenes to put together a deal to transform the land into a joint soccer-football stadium. It would be a win for the mayor, for the university and for the city, salvaged from the devastating loss of the professional football team.
That’s what they thought, anyway. In coming months, the idea and the partnership would start losing in board rooms and the many lunches, dinner parties and legacy associations of San Diego’s elite. Once persuaded to leave the deal, SDSU would transition into a fierce critic of FS Investors.
Voters in November will now decide whether the SoccerCity plan should go forward, whether the city should have to sell the land to SDSU instead or whether neither of those options is adequate.
This is a story about how that happened. It’s a story of how elites in small rooms can hatch ideas that mobilize thousands of people and dominate local public affairs for years and how other elites can mount an opposition with equal ferocity. It is based on documents, emails, interviews with 24 people in and around the talks between SoccerCity, SDSU and the group of people who rallied on SDSU’s behalf for something more for the university.
Steve Altman is like most of the early partners FS Investors brought together to support the soccer effort. He’s not that into soccer.
Altman is the former president of Qualcomm. When he left the company, in 2012, he didn’t have an office. He knew Mike Stone, the lead partner of FS Investors, from philanthropic events for Big Brothers, Big Sisters. Stone offered Altman an office next to his own. There, Altman dabbled in investments.
He may not be into soccer. But Altman is into sports.
He started supporting SDSU sports in 1999, when SDSU’s new basketball coach, Steve Fisher, visited him and other Qualcomm leaders and asked for help building an elite program. Fisher was putting together a new Director’s Cabinet – an exclusive club of SDSU athletics supporters, who would donate at least $30,000 every year.
Altman was in. He was a charter member of the Director’s Cabinet.
In 2015, Stone asked Altman if he wanted to attend a meeting about bringing Major League Soccer to San Diego. He sure did. He was worried about what might happen if the Chargers left and what that would mean for San Diego. He told me he thought it would leave the city with a huge hole. More importantly to him, it would leave SDSU without a football stadium.
He liked the idea of a smaller, modern stadium for both soccer and college football.
“I thought that when we did this whole thing, it was a great thing for the university and people would go ‘Way to go, Steve,’” he said.
“It’s been a weird run, though,” he said.
The weird run started with Mike Stone, who lives in La Jolla. Mike Stone is the leader of FS Investors. He has not been very public but he has been active behind the scenes.
Stone’s brother is Harlan Stone, chairman of CSM North America, a sports marketing and talent agency. Harlan Stone knows Don Garber, the commissioner of Major League Soccer. In early 2015, Garber called Mike Stone and asked if he knew of people who would be interested in bringing the league to San Diego.
Stone did. He was also part of the Director’s Cabinet at SDSU and he began conversations with university leaders about a partnership. The conversations were going well enough that by January 2016, the two sides – SDSU and FS Investors – set up a formal meeting to brainstorm what they might be able to do together.
It was an interesting time. San Diego was as close as ever to losing its professional football team. The next week, Chargers President Dean Spanos was in Houston to sell his counterparts on his vision for a Chargers/Raiders stadium in the Los Angeles area. The other NFL owners, however, rejected Spanos’ plan.
The Chargers were left with one year to decide whether to take an option to move to Inglewood with the Rams.
Conversations between SDSU and FS Investors accelerated, and a new vision for the plot of land that had supported Qualcomm Stadium for decades started coming together. At one point, FS’s Nick Stone asked Tom McCarron, the university’s chief financial officer, in an email, if the university wanted FS to dedicate any of the land to student housing as they transitioned to the design phase beyond the stadium.
McCarron replied that, no, in the next three to four years, the university needed about 600 dorm-type beds but they would have to be close to the campus core.
“All to say I don’t believe we want units at the QUALCOMM site but I’ll discuss with others on the campus this week,” he wrote.
This would later emerge as a major point. The university and its supporters later contended that FS Investors’ plans for the site beyond the stadium were a surprise. And they now say SDSU must expand into the Mission Valley land, in part to support student housing. This early exchange seems to indicate that developing all the land was part of all the early discussions. When I asked McCarron about his comments, he said SDSU does need that land.
“My point was we wouldn’t need dorms there for the first couple years. Our demand has increased dramatically for housing. That was kind of a point in time,” McCarron said.
By May 2016, meetings between FS Investors and its partners, at that time going by SD MLS, McCarron and the university’s lead architect and vice president for real estate, planning and development, Bob Schulz, were proceeding. They decided to pick an architecture firm to bring the concept to life. SDSU officials preferred Gensler Sports.
They were preparing for a big meeting the next month. Garber, the MLS commissioner, was visiting San Diego. When he arrived, the SD MLS team took Garber to visit Qualcomm Stadium. He was not impressed. He told them he could not support building a stadium in the middle of a large parking lot.
They told him to wait. They had a presentation for him of what it could be.
On June 13, 2016, in the offices of development firm Oliver McMillan, FS Investors, SDSU executives and Gensler made a presentation to Faulconer and Garber.
“It worked out great,” said Nick Stone.
The mayor was in.
By October, Faulconer also endorsed the Chargers’ ballot initiative to pave the way for a new covered stadium downtown. But that was a long shot from the beginning. Looking back, it was all theater. The Chargers were trying to convince the NFL and local fans they were genuinely attempting to make something happen. The mayor, for his part, seemed to know his efforts to keep them were also part of the show. But he wanted it to be clear, eventually, that it was the Chargers’ decision to leave San Diego and not his decision to let them go.
Faulconer’s team was having more success overseeing the SDSU and FS Investors negotiations. In that situation, there were two potential partners who wanted to get something done. It must have been refreshing compared to the long, boring civic brawl with the Chargers. The mayor was sure they could make it happen. He gave the project his full support based on the bet that they would work out a deal. The university has very few alums with more influence in the region than he does, and he has been part of the university’s culture since he was part of student government there.
By January 2017, amid frantic efforts to persuade the Chargers to stay, the SD MLS team, the mayor and SDSU would come as close as possible to a final deal.
Close. But no deal.
Over the summer and fall, the negotiations between FS and SDSU officials were intense, playing out over emails, web conferences and text messages – hundreds of text messages. On the FS side, Nick Stone was the chief negotiator and it was almost his full-time job. On the SDSU side, J.D Wicker, the athletic director, Schulz and McCarron led the talks.
Megan Collins, the chief of staff for then-President Elliot Hirshman, was also deeply involved. Hirshman himself participated, especially in meetings at City Hall.
On Oct. 20, 2016, Nick Stone emailed McCarron a broad draft of the terms. It included some red flags for SDSU officials.
For one, Stone had both the university and his partners sharing costs of the initiative itself, 50-50. SDSU, though, could not legally support a signature-gathering effort.
The university, as a public agency, can’t use public money to support a political activity or ballot initiative. That restriction has been quite a burden on SDSU staff to this day as officials constantly differentiate their work from what supporters are doing (and doing, purportedly, on their behalf).
The email also said that, five years after the stadium was built, MLS SD would hand over ownership of it to the university as a “gift.” Stadiums, though, are notoriously awful assets to own. They are costly to operate, they depreciate and rarely deliver a net profit from the events they host. There’s a reason most NFL stadiums are owned by local governments and not the teams. The teams don’t want them.
Nothing in the terms pointed to SDSU having any role in the development of the rest of the land around the stadium.
That language calling the stadium a “gift” to SDSU would also end up coming back around when negotiations fell apart. For now, they continued strong.
Then came the 2016 election. The Chargers’ measure failed, as did Measure D, which would have mandated the city sell the Mission Valley land to a university and prohibited a Convention Center expansion along the bay. Nick Stone was happy. He texted McCarron about the good news and asked why another university vice president had said something nice about Measure D.
McCarron replied that Stone should not worry. It was just a note of gratitude about the supporters of the measure – including John Moores, the former Padres owner who has long believed SDSU should take over the Mission Valley land.
McCarron and Stone had a new, important goal to drive toward. They needed to make a final case to the mayor that they had a deal the public and the city could accept.
The meeting was set for Nov. 30, 2016, at the mayor’s office and it would end up being the first sign that their infant pact was in trouble.
All of the biggest players in the talks had it on their calendars: The mayor would be there with then-chief of staff Stephen Puetz and land-use adviser Mike Hansen. Hirshman, Collins, Wicker and McCarron were also set to come. Seidler, the largest shareholder of the Padres and an investor with SD MLS, was coming as well.
But in the days leading up to the gathering, FS sent over a draft presentation titled, simply, “San Diego Stadium.” It led with images of how it would “secure the future of SDSU’s Mountain West champion football team for students and fans.” It would also “bring professional soccer to San Diego and cater to the broad soccer interest in the city by 2020.”
The city would sell the land for $1. SDSU would “contribute 50% of stadium development equity (pre-development costs, construction equity, etc.).” And the soccer partners would share those costs 50-50 and pay for all the costs of getting the rest of the land ready for development – meaning things like demolishing the old stadium, building out the river park, bringing a new soccer team to the area and converting the old Chargers training facility to a professional soccer facility with player accommodations.
The stadium would have about 23,000 seats and would expand to 30,000 for football. The presentation made clear the entire plot of land around the old stadium would be developed into housing, retail and commercial spaces.
It envisioned the City Council being so impressed by the plan and signature-gathering that, rather than put the measure to voters, the Council would adopt it outright by June — just nine months away — and construction could begin soon after.
At first, SDSU officials sent back only minor suggestions. “Much tighter and more effective than the one I saw yesterday. Well done,” wrote Schulz, in an email to Nick Stone. Schulz declined to comment for this story.
Within another day, though, something would go seriously wrong. SDSU leaders suddenly didn’t feel the presentation was ready for prime time and they demanded that the language about sharing stadium costs at 50 percent each be stripped. The day of the meeting, the soccer investors decided to call it off.
The mayor, though, insisted the meeting go on. He at least wanted to know about the stadium, how it would look and what the prospects would look like for getting an MLS team to San Diego. The SDSU officials decided to still attend.
In the room, two attendees confirmed Hirshman described what was happening as a “brotherly tiff.” Hirshman declined to comment for this story.
The mayor wanted to make SDSU happy.
“Kevin was pushing really hard on us to find a zone of agreement between us and the university,” Nick Stone said.
After the meeting, Mike Stone and Hirshman had a series of phone calls to get the negotiations back on track. They succeeded, and their teams started driving toward a written deal.
Within two months, however, the whole thing would fall apart again. This time, nobody was putting it back together.
The Campanile Foundation’s board is a who’s-who list of the city’s connected and powerful individuals. It’s the fundraising vehicle for San Diego State University, and it serves as an advisory board for the president of the university.
In December 2016, Hirshman asked the group for some help with the emerging deal. In particular, Jack McGrory, the former San Diego city manager who had become a wealthy real estate developer and consultant, and Christopher “Kit” Sickels, also a successful property developer and investor, offered to get involved.
Sickels started trying to digest the deal, and he wasn’t impressed. He wondered why there was so much urgency. Sickels spoke to Mike Stone, who had his team lay out all the reasons the initiative needed to be finalized soon. If SDSU wanted a say in things like how big the stadium was and other points, it needed to happen quickly.
Sickels was unmoved. He recognized that SDSU was a vital partner if the project were to succeed. He felt the university should be an equal partner in the whole development, not just the stadium. “SDSU needs land for multiple purposes,” he wrote in an email to Mike Stone. “If SDSU funds the front half why not half the land?”
Sickels said he thought of Hirshman as a brilliant man. But Hirshman was an academic. He was out of his league on this kind of real estate negotiation.
“I think he was an outstanding president. He’s not a real estate guy. You put him in a room with Mike Stone and Nick Stone and it ain’t fair,” Sickels told me.
Then the news came. The Chargers were moving to Los Angeles, and would eventually join the Rams in a new stadium in Inglewood.
SDSU officials, FS Investors and the mayor’s office knew the spotlight would suddenly be on them. They once again decided to meet, on Jan. 16, 2017.
FS Investors offered the university two different small plots of land almost for free. But Sickels and McGrory thought they were weak offerings and questioned whether they could even be buildable. To handle Sickels’ point that the university should get half the land, Nick Stone and his team produced what would be one of the most controversial documents of the entire negotiation.
It was a spreadsheet of costs for improving the land. It outlined all the work SoccerCity was going to have to do to the land to make it ready for development. That would cost about $13 million per acre, all told.
At yet another meeting between the mayor’s staff, the soccer investors and SDSU staff, this time with Sickels as well, Nick Stone produced the spreadsheet.
They couldn’t just hand land that took $13 million per acre to prepare over to SDSU.
Sickels took that as FS Investors demanding SDSU pay them $13 million per acre if it wanted any better plots of land apart from the stadium. Word of this spread through the SDSU and Campanile network like fire. To SDSU’s most influential supporters, it looked like FS Investors was just exploiting the university to pay for a massive investment in Major League Soccer.
“That dog just doesn’t hunt,” McGrory told me.
The mayor was worried. He decided to get Kris Michell involved. At that time, Michell was head of the Downtown Partnership and often the only woman – or one of two – in these big deal-making meetings. She’s now the chief operating officer of the city, working for Faulconer. She arranged for a breakfast meeting one Saturday morning at her house.
When the mayor and Puetz, his chief of staff, showed up, McGrory was there.
Michell served breakfast and insisted McGrory could help. He was on the Campanile Foundation. He knew real estate and above all, he knew deal-making. She had worked with him at the city in the ‘90s when he made gigantic deals, some that would haunt the city for years after his term as city manager ended.
The mayor gave McGrory the complete briefing. McGrory left saying he would do what he could. The mayor’s aides would later see McGrory’s involvement as the beginning of the end of the negotiations between SoccerCity and SDSU officials.
McGrory said he saw his role as helpful and that he entered the discussions with an open mind. But he quickly saw faults in the strategy FS Investors and the mayor’s team had adopted.
“The way they approached this thing was heavy-handed. I don’t know who was involved with it but it wasn’t a well thought-out process. There wasn’t a thought on their part of how it would look politically when it was brought to the light of day,” McGrory said.
This, if true, was a prescient insight. Without the full support of the university, the measure turned into a piñata, with only the mayor’s support providing it any buffer from its rivals.
But back in the moment, Hirshman and Mike Stone decided to give it a major push forward. They spent much of the weekend of Jan. 21 and 22, 2017, discussing the deal over the phone.
They came to an agreement. That Monday, Mike Stone sent Hirshman the term sheet he felt they’d agreed on. His team also sent out a press release that day unveiling the “concept plan” for the stadium site that “could serve SDSU.” Major League Soccer had a Jan. 31 deadline for expansion applications. Over the next few days, FS started publicly discussing the proposal and the plan to gather signatures and have the City Council adopt the proposal.
The term sheet included a proposed statement both SDSU and the soccer investors would release concluding that both parties were working on a final detailed arrangement.
SDSU would never sign off on it, though.
McGrory, Sickels and another counterpart – JMI’s John Kratzer, a close associate of former Padres owner John Moores – were raising red flags.
“When I saw (the term sheet), I said, ‘Are you kidding? You can’t take this anywhere. It does nothing for SDSU. They may have been able to get this thing done if they stayed within reason, but they got off track,” McGrory said.
There was still time to work things out. The initiative was not yet official. Once it was published and had begun gathering signatures, it would be impossible to change. But that hadn’t happened yet. The mayor clearly thought a deal was still on or close.
Ten years ago, there was a different developer war in Mission Valley.
Sudberry, of Sudberry Properties Inc., partnered with a family that owned the old Quarry Falls property west of Interstate 805 and north of Friars Road. He planned a large development of nearly 4,800 homes called Civita.
But the H.G. Fenton Company and Neal, its CEO, did not like it at all. Neal was finishing development of nearby Mission City, and he was furious about the amount of traffic the new development would generate.
Sudberry’s plan, like Neal’s before, would require special City Council approval because it required an amendment to the zoning plan for Mission Valley. Neal formed a group, San Diegans for Responsible Planning, and hired an array of consultants, legal advisers and lobbyists to attack Sudberry’s plan.
One of the firms Neal hired was Southwest Strategies. The fight got ugly. That is, until Sanders, then the mayor, forced Neal and Sudberry to sit down and work out a deal. Sudberry adjusted some traffic improvements, and Neal agreed to stand down. The Civita plans were later featured in the New York Times as part of Sanders’ narrative that he was turning the city around.
Now, 10 years later, Southwest Strategies has again been hired to help kill a major development envisioned for Mission Valley. But this time, Sudberry is helping Neal pay for the consultants.
Sudberry had heard about FS Investors’ plans for the stadium site and did not like that he wasn’t consulted earlier. Civita, of course, sits nearby and is not quite done. Sudberry has been among the most powerful political donors in San Diego for many years. He is a leader of the Lincoln Club, and was a major force of support for Faulconer.
In that fateful meeting at the Chamber, Faulconer tried to broker a deal like Sanders had, but that didn’t work.
One of Sudberry’s major concerns, like Neal’s a decade ago, was traffic. SoccerCity’s traffic differences – compared with the SDSU plan Sudberry and Neal prefer – come mostly from the large planned retail within SoccerCity’s plans. The investors behind the soccer plan dreamed of a large entertainment district and 740,000 square feet of retail for bars, restaurants and shops to support a vibrant night life near the stadium.
As Sudberry and Neal’s hostility to the proposal started to heat up, Michell floated a compromise. Maybe SoccerCity could just cut 90 percent of its retail?
SoccerCity didn’t budge.
By March, Sudberry and Neal were ready for battle. They formed Public Land, Public Vote and hired, among others, Southwest Strategies. They launched an aggressive online campaign demanding the City Council not adopt the SoccerCity initiative as law and instead hold public hearings and send it to a vote.
Cory Briggs, an attorney known as a snake in the garden for many of the biggest builder dreams in San Diego, reported in a declaration to court this year that he got an interesting call.
“At one point, after it appeared that the SoccerCity Initiative would end up on the ballot, an attorney representing Sudberry Properties contacted me and asked whether SDOG and I would be willing – in exchange for money – to file a lawsuit over the SoccerCity Initiative to block it from getting on the ballot,” Briggs wrote in his declaration, referring to San Diegans for Open Government, the group that often files suit against big projects with Briggs as its lawyer.
I asked Briggs if he could specify what day it was. He said that he got an email requesting the call on May 22, 2017, and sent a follow-up about the conversation the next day. So the call itself was either of those days.
In his declaration, he offered more details.
“When I asked why Sudberry was unwilling to file suit in his own name, the attorney told me that Tom Sudberry, one of the client’s principals, did not want his name associated with a lawsuit directed at the City because Sudberry had too much business pending before the City and couldn’t risk making the decision-makers angry,” Briggs wrote.
Briggs declined to discuss the matter further with me or name the attorney who called. He said the caller was from the law firm Allen Matkins. Sudberry denied such a call came from his company or on his behalf. He declined to sit for an interview but eventually provided a statement through spokeswoman Laura Fink.
“In a routine campaign inquiry, Public Land Public Vote asked Attorney Cory Briggs if he had independent plans to pursue litigation against FS Investors’ Soccer City initiative, as he frequently represents clients pursuing lawsuits in high profile San Diego public land use issues. The inquiry never included any attempt to encourage or finance such litigation – to say otherwise is patently false,” Fink wrote.
When I showed that to Briggs via email, he responded that was not true: “Developers never – repeat, NEVER – call my office as part of a ‘routine inquiry.’ (I laughed for five minutes straight when I first read Fink’s statement. Maybe she meant it as a joke rather than as a lie.)”
Briggs also produced an email exchange he had with political consultant Tom Shepard, who had also been working with Public Land, Public Vote. In it, he said thanks for the offer, he would love to work with an attorney involved with the opposition to SoccerCity but he couldn’t “shill.”
There may be a dispute about the lengths Sudberry and Neal were willing to go to shut down SoccerCity – but not about their determination. So far, between them, H.G. Fenton Company and Sudberry Properties have put in $2.65 million in Public Land, Public Vote and the No on SoccerCity/Measure E effort. The Alta Company chipped in $49,000 of its own. Alta is led by Allan Grant. The Grant family owned the land at Quarry Falls on which the Civita development rose.
Neither Neal nor Sudberry would agree to an interview but they provided a written statement.
“From our first conversations about SoccerCity to our review of FS Investors’ final 3,000 page initiative, it has been clear – from unmitigated traffic to the exposure of San Diego taxpayers, this is a bad deal for the community; we aren’t alone in our assessment – groups as diverse as the Sierra Club, the San Diego River Park Foundation, the San Diego Regional Chamber of Commerce, the Lincoln Club, neighborhood planning groups and leaders across the political spectrum are also opposed. We are proud to stand in coalition with them in encouraging voters to say ‘No’ on Measure E.’” Neal and Sudberry wrote.
Eventually, SoccerCity’s deal with SDSU got put into formal writing in the form of a memorandum of understanding. It prescribed an arrangement where SDSU could buy land for a price settled by competing appraisals.
It went nowhere.
McGrory said that was the actual end of the negotiations.
“Once everyone finally saw the MOU, and what it was doing to the university, everyone’s eyes widened and decided this is not a good deal for SDSU. We do need to expand. The university does need land. And this is not going to be the right deal for the university,” he said.
They decided, though, they could not be just opposition. They knew the question would keep coming up about what they would do instead of this plan.
They crafted a measure that would simply get the land into the hands of SDSU by authorizing and directing the city to sell the land to the university. Simultaneously, SDSU crafted a more complete vision of what it would do with that land — officials delicately danced with the line prohibiting them from advocating for a ballot measure. McGrory is now a member of the board of trustees of the California State University system, which has endorsed SDSU’s plan.
Now, McCarron, the university’s chief financial officer, is leading a group of his colleagues and consultants on a tour across the region making the case for it.
They tout how the development starts with the hydrology and flood dynamics of the area, recognizing that as the water flows into San Diego River, the development transitions to park and wildlife. It would feature mid-rise buildings, millions of square feet for university needs, including a business of tourism academic center.
It would also happen to have a small stadium they would love to have a partner help finance.
McCarron didn’t want to spend much time talking about what happened with the university’s partnership with SoccerCity.
He spent the most time with the soccer investors and seemed to have had the best rapport with them.
“We didn’t get married,” McCarron said. “That happens sometimes in relationships.”
There are three bullet points that always come up when people explain why San Diego State leaders soured on the partnership with the soccer investors.
One: is the size and design of the stadium. As Wicker, SDSU’s athletic director, and Sickels, the real estate developer and member of the Campanile Foundation put it, the stadium SoccerCity wanted seemed like a soccer stadium SDSU would be allowed to play football in.
The second objection was that SDSU officials had no idea what SoccerCity imagined for the rest of the site beyond the stadium, and were dismayed by what came out in the initiative.
“Once we got into some of the details of it, we did not have a common vision of what that site would be,” McCarron said.
SoccerCity leaders argue they and their SDSU counterparts long ago made joint presentations to the MLS and mayor with images of the stages of development marching across the whole plot of land. But that’s not the same as detailed plans.
The third issue that people bring up is that SoccerCity was reluctant to put things in writing. And when it did, it was different than what SDSU officials had been led to believe.
On the front of those concerns, often, was Collins, the university president’s chief of staff. Two sources confirmed SoccerCity partners started to refer to Collins, jokingly, as “chief of no.”
Nick Stone disputed that he ever said that but acknowledged things started to get hard. They felt like they were getting new demands from SDSU that were infeasible.
“With the benefit of hindsight, it’s now clear that this wasn’t just a case of poor communication, but rather a newfound desire to block the deal,” he said.
When the SocceerCity initiative became public, the dispute did too. SDSU released a terse statement about the proposal, the stadium’s inadequacy and what it said was misleading information about the value of gifting the stadium to SDSU that SoccerCity had proposed.
Within two months, SDSU would formally call off talks with the soccer partners.
What seems clear after all the interviews is that SDSU’s top management did picture making a deal with SoccerCity. They came as close to commitment as a handshake. But right when that agreement came, outside advisers to the university raised alarms that the institution could get a much better deal, secure a brighter future and control the entire plot of land if they dumped the soccer guys and pursued something on their own.
Whether this is nefarious or just the proper checks and balances of a public institution, it’s what happened.
Combined with the hostility and spending coming from rival developers in Mission Valley, the pressure was overwhelming. In the midst of all of it, Hirshman left his post.
McGrory said that one of the first meetings the new, interim president, Sally Roush, took was with him. She did not object to his plan to pursue an initiative.
And he pursued it.
McCarron said SDSU’s plan for Mission Valley is the plan for good, no matter what happens this November.
“It is our plan, and it doesn’t matter the vehicle that allows us to buy that land. It is our plan, it will stay our plan and we’re going to continue to refine it. It is a legacy project for the university,” he said.
And if they succeed, it will have a lot less retail than SoccerCity.
Correction: We removed a reference to Faulconer being surprised to see McGrory at a breakfast meeting. This was incorrect due to a misunderstanding of sources. McGrory was there when Faulconer arrived but it was planned.