Sorting out the Chargers stadium search

Somewhere between “Can’t wait till next year” and “It was fun while it lasted,” you have a large family, and a much larger decision.

For more than seven years, the San Diego Chargers have been searching - searching for a lifeline that will pull them out of the depths of purgatory that is a generations-old home field. Seeing their NFL contemporaries climb the ladder of prominence and economic advantage that comes with state-of-the-art stadiums has put the organization in an uncomfortable position.

Do they wait it out with their current city, full of rabid fans that hold the team in the highest regard? Or do they jump ship to another location, leaving behind almost 50 years of history and tradition? Those two options are obviously more complex than those simple statements. But nonetheless, that’s where the organization finds itself.

Much has already been said, written and reported about this issue. But until a final decision is reached, the team’s search for a new stadium will be one that is constantly on the minds of the people of San Diego. Here’s a not-so-brief breakdown of the specifics.

What’s wrong with Qualcomm Stadium?

On the surface - nothing. But in comparison to some of the NFL’s newer facilities, The Q is seen as a dinosaur, a 40-year-old concrete monstrosity that is below standard, and wastes hundreds of acres of valuable real estate on parking alone. The team’s desire for a newer, more modern battleground is nothing new. Since 1999, 14 NFL cities new stadiums (including Chicago’s renovated Soldier Field) Qualcomm, which was built in 1967, is the fourth oldest venue in the league, joining Lambeau Field in Green Bay, Wisc., Candlestick Park in San Francisco, and Oakland-Alameda County Coliseum.  

And while there are talks of a combined use Bay Area stadium for San Francisco and Oakland to share, Lambeau Field is an icon that won’t be replaced any time soon.

While Qualcomm is still adequate, the organization would like to join the large majority of teams that play in state-of-the-art stadiums.

A move out of Qualcomm also benefits the city, as it is currently riddled with close to $19 million in expenses for stadium operation annually.  The stadium itself is a financial drain on the city, generating only $16.2 million in total revenue for Fiscal Year 2008, $2.5 million of which was generated by the Chargers for the city.

Proposed New Stadium Sites

After the Chargers reviewed several sites over the last seven years, the most viable option has emerged in Chula Vista along the South Bay waterfront. In November 2008, Gaylord Entertainment terminated its plans for the development of a 32-acre resort complex and 1,500-plus hotel rooms on the waterfront.  While it was a big blow for a city that is racked with an enormous debt, the vacancy once again opens the door for a potential stadium.

“The mayor [Cynthia Cox] had asked us to basically allow Gaylord to go forward,” said Chula Vista Deputy Mayor John McCann. “Now that Gaylord has pulled out, we’re pushing forward with the Chargers aggressively.”

The site is 139 acres and is bound on the west by the South Bay. It runs along the length of Bay Boulevard to the east. It also encompasses a parcel of land that is currently being used by the South Bay Power Plant and its additional storage and operational structures. Both the city and team would like to see the power plant removed, which would open up the ideal site for stadium construction. There is also a second proposed site in the Otay area, though it is not as preferred as the bay front. It is east of I-125 and would be part of a larger project that incorporates development of a new university and the expansion of the Olympic Training Center.

“The infrastructure is already in place [at the power plant site],” said McCann. “You have the I-5, you have the I-15 that connects as well as the 905. It’s 10 minutes from downtown San Diego and Petco Park, the trolley currently runs down the I-5 corridor, so you have an existing trolley there. It has a second set of tracks on the west side of I-5 that could potentially be used as a second trolley or a Coaster from North County.”

Chargers special counsel Mark Fabiani said the most recent discussions in February focused on what has to happen to shut the power plant down, because progress cannot be made until that inevitability is reached. Its removal would not be beneficial solely for the purposes of a new stadium.

“The power plant is a gross polluter,” said McCann. “So we could get rid of this 1960s, decrepit, concrete plant and replace it with a beautiful, green stadium. You’d actually be able to improve the environment. I believe this creates a nexus for change. Universally, whether you’re on the business side, whether you’re on the environmental side, or whether you’re from the general community, everybody in Chula Vista wants that power plant torn down.”

The Dawn of a New Energy Source

In order for that to happen, Chula Vista must develop an alternative source for energy to accommodate for the loss of the plant. Enter Sunrise Powerlink.

If approved, Sunrise Powerlink would be a plan to build a 500-kV transmission line, which would run for roughly 125 miles from Imperial County.  The project, which has already been given the go-ahead by the California Public Utilities Commission and the U.S. Bureau of Land Management, would be the first transmission line connecting the San Diego region to the state’s energy grid in nearly 25 years.

According to SDG&E spokesperson Jennifer Briscoe, initial groundbreaking could begin in mid-2010, pending approval from the U.S. Forest Service.

“It would be about an 18-month process and the project could be fully operational in 2012,” Briscoe said. “It is a great opportunity for San Diego to bring in clean energy and get rid of some of the fossil fuel-based energy sources.”

Part of the conditions of the plan would be for San Diego to utilize the application of green energy, including wind, solar and geothermal power. All of these green energy methods are available from the Imperial Valley and the desert areas east of San Diego County. Once Sunrise is completed, the South Bay Power Plant can be removed more quickly, thus clearing up an opportunity for a stadium to be built.

A New Q?

The team’s initial discussions, in 2002, centered around a proposal to redevelop San Diego’s 166-acre Qualcomm Stadium property - a plan that featured 6,000 condominiums, offices, a hotel, a park, retail and restaurants and, $175 million in road improvements. Team officials jettisoned the idea in January 2006, saying city officials weren’t supportive, and that they could not find a development partner to share the financial burden. Since then, the prospect of a “New Q” has seemed bleak.

But with the infrastructure already in place, and given that it is a more centralized location than Chula Vista, why not have that as a potential site? Darren Pudgil, director of communications for Mayor Jerry Sanders’ office, said that any Qualcomm proposal would undermine the City of Chula Vista’s efforts to work with the Chargers.

“Ever since the Chargers talked with Chula Vista, that’s where the focus has been,” said Pudgil. “The mayor will be highly involved in finding a site, whether it’s in the City of San Diego or the San Diego region.  If things fall through with Chula Vista, the Qualcomm site would be on the table.”

Be that as it may, there has been a recent development group led by Perry Dealy, president of Dealy Development, Inc. They’re spearheading an effort to present a solution at the Chargers current home, proposing a complete redevelopment of the city’s Qualcomm property.

“It’s not just a plan to build a new football stadium, but rather redevelop it into a mixed-use, housing, office, residential, hotel, specialty retail, entertainment retail, kind of a venue,” Dealy said.

Dealy, whose team includes an NFL stadium architect, has been at work on the plan for about two-and-a-half months.  He said that he hopes to have all of the financial data in place in two to three weeks. At that time, if the plan seems viable, they will make a presentation to the City of San Diego.

Who Foots the Bill?

The [Chula Vista] stadium project is estimated to cost more than $1 billion, and San Diegans are undoubtedly leery about what that means for them as taxpayers.  But it’s never been the team’s stance to involve the public in the funding effort.

“This has never been anything other than a privately funded project, and if we can’t privately fund it than it’s not going to be built,” said Fabiani.

He also said that a consortium of investment elements is ideal, including the Chargers and the NFL, who would put forth a substantial amount of money. The new stadium itself will generate revenue that would help with financing. They would also be supplemented by any other project-related development that would accompany the stadium project.

“We may not get 100 percent of the way there with all of those elements, but if we can get most of the way there, we feel there are creative ways to close the remaining gaps,” Fabiani said. “We’re not looking for taxpayer contributions; we never have.”

McCann, too, said the City of Chula Vista is committed to not using any of its general fund for the project. Dealy added the intent [of his project]is that there would be no cost impact to the taxpayers, and it would be financed through a tax-exempt bond, and pay for that through tax increment on the redevelopment.

But, if the Chargers were to vacate the Qualcomm site, the City of San Diego would have a huge windfall. It would be relieved of the $19 million every year that it spends on the stadium, and the city would get back the 166 acres of city-owned land for potential future development.

“That might be worth something to the city, so they might be willing to help make that happen,” Fabiani said. “That’s the kind of thing we’d like to be able to talk to the city about, if it comes to that.”

The Super Bowl Factor

“We don’t know that having an NFL team has ever created significant revenue annually, but the Super Bowl obviously does,” Pudgil said.

And that fact may be of greatest importance to the city. San Diego is widely regarded as one of the best Super Bowl cities anywhere. One has to wonder: Does the NFL need San Diego to host a Super Bowl more than San Diego needs to host a Super Bowl?

Certainly not. The last time the city served as host was in 2003. The reason? You guessed it.  Gone is the notion that “warm weather is king.” These days, the owners (who vote on where the Super Bowl will be played) have turned the selection process into a big game of “show and tell.”

In recent years, cities like Houston, Jacksonville - even the tropical paradise of Detroit - have hosted the world’s biggest game, all because of their snazzy new digs. Keeping with that theme, Dallas and Indianapolis will play host in 2011 and 2012, respectively.

So keeping the Chargers in the region is a much bigger issue than merely trying to ensure the sense of civic pride that exists in NFL towns. A new stadium would be a cash cow for a city struggling financially, as host cities typically see between $300 million-$500 million in new revenue.

Though some economists claim that the total economic impact is always inflated by the NFL and by boosters, there’s no doubt that host cities benefit from a huge financial windfall.  The estimates don’t account for visitors who’d normally be in those host cities, even without the Super Bowl - especially in ideal late-January destinations like San Diego, Miami, and New Orleans. In addition, many profits from restaurants and hotels are sent to those companies’ corporate headquarters out of the regions, and are not wholly re-spent locally. However, there are more long-term impacts, including simple “cutaway” shots during the Super Bowl broadcast that are essentially free tourism advertisements. (And we all know how much Super Bowl ads cost.)

And as recent “new” stadiums become relatively older over the next couple of decades, San Diego and its 75 degree winters would undoubtedly become a more frequent inclusion into the Super Bowl rotation.

The Southern California Chargers of Los Angeles?

So what may happen if a deal isn’t reached between San Diego or Chula Vista and the team? Relocation.

Under the terms of the Chargers’ current Qualcomm lease, there is a three-month period every year that the team can choose to terminate the lease without being sued by San Diego, provided the Chargers pay a “termination fee.” Those fees are $56.2 million in 2009 and $54.6 million in 2010. However, in 2011, the fee drops to $25.8 million - a figure that while still large, could be small enough for the team to absorb and relocate.

If it comes down to a business decision and leaving San Diego is in the best interest of the organization, Fabiani said “nothing would prevent that.”

Of the few potential out-of-county relocation sites, Los Angeles seems to be the most likely choice. The NFL would obviously like to see a franchise in the nation’s second-largest market, but there are more pressing issues on Commissioner Roger Goodell’s plate.  However, in mid-February, the planning commission for the City of Industry (approximately 15 miles east of downtown L.A. in the San Gabriel Valley) approved a proposal for a new $800 million stadium, a plan that was initially introduced by billionaire Ed Roski in April 2008. Roski is a minority owner of the Los Angeles Lakers and Los Angeles Kings, and has expressed his desire to own part of an NFL franchise, should one relocate to the city.  But until a team reaches its saturation point of frustration based on a lack of progress and demonstrates a desire to cut ties with its current city (see Oakland, Minnesota, New Orleans, San Diego), Roski’s proposal is merely a pipe dream.

Northern Exposure

The Chargers are obviously keeping tabs on the situation with Roski’s plan, and are taking steps to ensure their presence in the region. In late January, they signed Wasserman Media Group to help promote the team in the L.A. and Orange County markets. Wasserman will help sell season ticket packages, advertising at Qualcomm Stadium and luxury suites. But Fabiani has said in interviews that signing with the prominent marketing firm is not an indication that the team wishes to relocate, and that it’s “a side issue” that has nothing to do with the search for a new stadium.

Fabiani said the team’s desire is to stay local, something that the Spanos family has been committed to throughout the process.

“If [the Chargers] had wanted to move, they could have done so a long time ago under their old lease,” he said. “You can’t control what goes on in other cities, you can’t control what other people are developing elsewhere, but what we can control are our efforts here. If you look fairly at it, we’ve been looking for seven years and spent more than $10 million. It’s pretty hard to argue that the Chargers aren’t doing everything they can to stay here.”

That may very well be true, but it also remains to be seen whether that commitment remains strong in the next couple of years. After all, a seven-year odyssey of optimistic site evaluations, abandoned proposals, and unfulfilled wishes has yielded nothing but large stacks of paper, and not the green kind. Though it hasn’t been stated publicly, one would be ignorant not to assume that the team’s patience is wearing thin.

“I think [the team] has always been very straightforward with us,” said McCann. “When things didn’t work out in National City, they told them. Same thing with Oceanside. You’re going to have your victories and you’re going to have your setbacks. We have pretty much a one-year window to be able to perform.  We understand the urgency and need to move things forward very quickly. I think we’ve set a good foundation, but we need to at least have the framework of some type of deal this year.”

So the waiting game continues. The Chargers will eventually get their new stadium. As Fabiani has previously said, “We’re a lot closer to the end of this process, than the beginning.” It remains to be seen when and where that end will be.

Tags: SDNN

This entry was posted on Tuesday, April 14th, 2009 at 3:25 pm and is filed under Football, Local News, Politics & Government, Sports. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.