San Diego, SDSU Bickering Over Value Of Mission Valley Stadium Property
A conflict between the city of San Diego and San Diego State University burst into the open this week as the two sides sparred over the sale price of the city's Mission Valley stadium property.
A draft appraisal, which values the 135-acre piece of land at $68.2 million, was made public Tuesday. The appraisal includes some controversial discounts — namely $18 million to demolish the existing stadium and construct a new river park.
City negotiators contend that deducting those costs from the sale price is, in essence, forcing city taxpayers to foot the bill. Measure G, the voter-approved measure that authorizes the property's sale to SDSU, prohibits the property's development costs from falling to the city's general fund.
"They said they'll build a river park and maintain it with no cost to the taxpayers general fund," said City Councilman Scott Sherman whose district includes the site. "But yet they want to deduct the cost of that construction from the purchase price and the appraised value of the land. To me that's costing the taxpayers money."
SDSU officials argue that the university will still be covering the river park construction and stadium demolition costs — even if they end up costing more than what the draft appraisal estimates — and that they are still relevant factors in determining the value of the land.
"We don't agree that having those things considered as part of the appraisal means in any way that the city is paying for those," Jacobs said. "We just believe that some of those should be considered in determining fair market value."
SDSU has yet to give the city a formal offer, but Jacobs said the university would willing to pay the $68.2 million.
Dave Davis, who owns the firm that put together the draft appraisal, emailed both parties Tuesday acknowledging the disagreement and saying he had "an ethical responsibility to both" of his clients. He asked that any changes to the assumptions used in his appraisal be approved by both the city and university.
"If the city accepts the fair market value as the purchase price, they will, in effect be paying for the demolition and river park improvements as an off-set to the purchase price," Davis wrote. "Conversely, based on a third-party market rate valuation, not accounting for impact of the costs of demolition and the river park on the appraised value represents a 'double-hit' to that hypothetical private sector buyer in an open market transaction."
Both Sherman and Jacobs said the disagreement over the price was not insurmountable, and Jacobs said the university still expected to have a purchase agreement ready to present to the California State University board of trustees in January.