Thursday, December 10, 2009
What's the latest on the discussions between the Chargers and the City of San Diego about building a new stadium downtown? We speak to Mark Fabiani, the Chargers' point person on stadium-related matters.
MAUREEN CAVANAUGH (Host): I'm Maureen Cavanaugh. You're listening to These Days on KPBS. Petco Park, the home of the Padres, had a lot of opposition before it opened; now it's praised as a major addition to city life in San Diego. Supporters of a new Chargers stadium in downtown San Diego are hoping people remember that as the plan develops to use public money to build a new stadium at the site of the old Wonder Bread building. The idea has some powerful proponen – proponents, that is, from San Diego Mayor Jerry Sanders to the head of the Centre City Development Corporation, but there are still major issues with the proposal. Joining us to talk about the new Charger stadium proposal is Mark Fabiani. He’s special counsel to the president of the San Diego Chargers. Mark, welcome to These Days.
MARK FABIANI (Special Counsel, San Diego Chargers): Thank you for having me. It’s a pleasure.
CAVANAUGH: Now I think many people in town were surprised when they heard back in October that the Chargers and the City of San Diego were talking about a stadium again in downtown San Diego. What changed to bring that about? Who reached out to whom?
FABIANI: Well, one big thing changed and that is that the voters decided that Mike Aguirre shouldn’t be the City Attorney any more, and that really opened up the possibility to get something done inside the city. You know, before that, people thought that Mike would block anything that got any traction so we didn’t even try and neither did the mayor or any others of the city leadership. But when Mike left office, almost immediately the mayor’s office called us, we met with the mayor in early January, we’ve been meeting pretty consistently throughout this year since January. But in October, the mayor asked to meet with Dean Spanos and ask Dean, face to face, are you interested in a site in downtown San Diego. And Dean, of course, said yes, we’re – we’ve been working for seven years to keep the team in San Diego and if you’ve got an idea for a site downtown, we will do everything we can to work on it. Which is what we’ve been doing since October, working on a daily basis with the City, with our advisors, our architects, our engineers, to see whether the site might work, so we’re excited about it. Having said that, as you said in your introduction, there are lots and lots of hurdles to still overcome.
CAVANAUGH: Now there must be people and agencies in San Diego instead of just Mike Aguirre who aren’t crazy about this idea. I wonder what kind of talks you’ve had with not only the mayor’s office but other city agencies since October.
FABIANI: Well, I think people are interested in the idea for one reason and that is it reduces the cost of this project from something well over a billion dollars to something more in the seven or eight hundred million dollar range for a simple reason and that is downtown already has all of the infrastructure that you need. We wouldn’t have to build a single parking structure, wouldn’t have to expand a single road or freeway, the trolley is already there, so the cost of the project is reduced significantly. In addition it’s already in a redevelopment area so you have the potential of getting the benefit of a redevelopment district. And the third reason people are interested is you could potentially clear out the Qualcomm site, just scrape it clean of the stadium and have the taxpayers now owning 166 acres right in the middle of the city that could be enormously valuable for sale to a developer, for use as a park, or for some combination. So for those three reasons, I think a lot of people are interested. To say that they support the idea, though, that would be premature. People have a lot of questions. I just gave a speech up here in North County. There are lots of questions and they deserve to be answered. And right now, I think there are probably more questions than answers but we’re working on it.
CAVANAUGH: Now what are some of the challenges associated with the site itself that would need to be worked out?
FABIANI: The biggest challenge is the challenge that we have tried to overcome and failed to overcome for the last seven years on various sites around the county and that is how do you pay for this privately.
CAVANAUGH: Well, yeah, yeah.
FABIANI: We understand that there is no appetite in San Diego at this particular time for taxpayer funding of a project of this sort, so we have got to figure out a creative way to pay for it privately or to convince taxpayers that even if they put some money into it, they’ll be getting a lot more out of the project than they put in. And could that happen here? Yes, it could happen for one reason and that is the Qualcomm site, which is owned by the city could be freed up. You know, right now, Maureen, it costs $15 million a year for the City to maintain the Qualcomm site. That means if the Chargers do nothing and simply play out our lease there through 2020, taxpayers will be spending hundreds of millions of dollars between now and then on the Qualcomm site. So if you cleared out that site and taxpayers saved that amount of money, hundreds of millions of dollars over the next 10 or 15 years, and in addition, the City adds 166 acres that it could sell or enter into a joint venture with a developer or use as a park, it could be a tremendous asset to the City. So we would have to convince taxpayers and the mayor and everyone else that this is a fair bargain. And, of course, it’s way too soon to know whether we can do that but we’re going to try.
CAVANAUGH: I’m speaking with Mark Fabiani. He’s special counsel to the president of the San Diego Chargers. We’re talking about the proposal, the idea of building a new Chargers stadium in downtown San Diego. Now part of the proposals in the past, Mark, I want to talk about this just a little bit more, was that the Chargers pledged that no public funds would be used to build the project. Why this turnaround?
FABIANI: Well, there’s a turnaround for one reason and one reason only. The site downtown is very small. It’s no more than 15 acres and potentially around 10 acres, which makes it barely big enough to hold the stadium and nothing else, which means it would be a very urban stadium. It would be a great design. It could be used 365 days a year on the ground levels for people to go in and out of. So all that’s very interesting and cool but there’s no room for any related development and there’s no room for the Chargers to help pay for the stadium by building a mixed use development next to the stadium, which has been our basic concept for the last seven years. So the site itself dictates a change in your financing plan. How much of a change? Again, I think it remains to be seen. The Qualcomm site could generate a lot of revenue for this project if it were developed or if it were sold. The City’s saving a lot of money if the Qualcomm site is no longer a City obligation. So there are all sorts of potential revenue opportunities out there. Whether they’ll be acceptable to the public or not, whether, when there’s a vote, people will actually vote for it, obviously that remains to be seen and we have the burden of convincing people that it’s going to be a good deal for taxpayers.
CAVANAUGH: What would – what kind of money would the Chargers be providing for this plan or percentages? What would they be bringing to the table?
FABIANI: Well, we have said from the start that we would bring several hundred million dollars of team equity to the proposal. That means the team would invest that much in cash. We hope to get another $100 million or so from the NFL in the form of a loan. So we would be bringing more to the table than most NFL owners bring to the table. And that’s not a complaint, it’s just the recognition that that’s the marketplace we operate in, that most NFL owners have most of their stadiums paid for by the public, which means that they get revenue that if you paid for a stadium privately, you wouldn’t get. Again, not a complaint but it’s an economic reality. At the same time, people in San Diego expect us to win every game, they expect us to resign every player, they expect us to do everything we can to win the Super Bowl and that costs money and we have to stay competitive. But even so, we’re willing to put in more than the average NFL owner puts in.
CAVANAUGH: Now, is this Wonder Bread site in downtown San Diego, is that the primary focus of the team right now for a new stadium? Are the sites in the north county and the other places that we’ve heard basically on the back burner now?
FABIANI: I would say that’s fair. The back burner is something that we hope is not an insult to those sites, particularly Escondido. The City worked extremely hard with us over this year to try and put something together but when the Mayor of the City of San Diego stepped forward in October and said I want to get something done in downtown San Diego, I think Escondido took the prudent step and said, look, we’ll go on the back burner but if it doesn’t work out in downtown we’re still interested. And we really appreciate that. I can’t say enough about how hard the business leaders, the community leaders, the elected officials in Escondido worked. But to answer your question directly, yes, our sole focus at the moment is on downtown San Diego. Every bit of time that we have, all of the money that we’re spending, all of the experts that we’ve hired, they’re all doing the same thing and that is looking at the downtown site.
CAVANAUGH: There’s a little bit of the idea of pulling a rabbit out of the hat, though, of getting – of actually getting this done. I mean, the City’s downtown redevelopment agency would need to raise the cap on the amount of money it can spend for downtown redevelopment projects, you might have to get voter approval. I mean, how realistic is the idea of getting approved for this, Mark? Do you put…
FABIANI: A rabbit out of a hat is a great description. I’m going to use that in the next speech that I give this afternoon at one o’clock because it’s a great way to describe it. And, again, this is nothing against San Diego. Look around California. The oldest NFL stadiums are in California, in Oakland and San Francisco. There’s no NFL team in Orange County or Los Angeles County, two of the wealthiest markets in the entire world. So it’s not just San Diego where it’s difficult to get something done, it’s all of California. And it’s, again, nothing against our city, we just have a tough time getting it done. And if we do get it done, it will be akin to pulling a rabbit out of a hat. We will have to come up with a lot of creative ideas, we’ll have to persuade people that those make sense and I wouldn’t say it’s impossible but we’ve been at it seven years and we haven’t gotten it done yet so I think that’s an indication of how difficult it is.
CAVANAUGH: So, finally, Mark, what are the next steps in this process?
FABIANI: There are two big next steps. One is the analysis of the site itself. We’ve retained Turner Construction Company, one of the nation’s biggest construction companies, to analyze the site from an earthquake fault perspective, from a contamination perspective, and that work is ongoing. So that’s one track: Is the site buildable, and then related to that, we’ve retained our stadium architects to see whether we can fit the stadium on the site. The initial inclination is that, yes, we can, so all of that is one track. And the second track, we have a train moving down that simultaneously and that is the funding track. Is there a way to pay for this? The CCDC has retained an expert consultant to come up with ideas. You already mentioned raising the spending cap for the CCDC. There’s already been a meeting between the City and the County on that topic. So that’s the second track, is can you pay for this? And we don’t expect this to go on for years and years. We think answers to both of these, you know, main questions, is it buildable and can you pay for it can be reached in a matter of months, not years.
CAVANAUGH: Mark, thanks for your time this morning. We really appreciate it.
FABIANI: It’s always a pleasure to be on. Thank you.
CAVANAUGH: I’ve been speaking with Mark Fabiani, special counsel to the president of the San Diego Chargers about the new proposal to build a Charger stadium in downtown San Diego. If you’d like to post comments about what you hear this morning, go to KPBS.org/TheseDays. Coming up, San Diego City Councilman Carl DeMaio as These Days continues here on KPBS.