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SDSU Increases Offer For Mission Valley Stadium Site To $87.7M

 October 29, 2019 at 10:55 AM PDT

Speaker 1: 00:00 A higher offer for the mission Valley stadium site might settle a dispute between the city and San Diego state university. And a letter delivered to mayor Kevin Faulkner yesterday. SDSU is offering to pay 19 point $5 million more for the 135 acre site than it offered earlier this month. The new offer of nearly $88 million will go before the city council for review. Journey me is San Diego union Tribune reporter Jennifer van Grove and Jennifer, welcome to the show. Thanks for having me. What was the amount that San Diego state originally offered and how did they calculate it? Speaker 2: 00:37 So 68.2 was their original offer and the way they came up with that number is they essentially took the number that came out of a land appraisal, um, which valued the land that they wanted to buy at 68 point $2 million in 27 teen dollars. And so there are a number of factors when coming up with that 68 point $2 million. The appraiser discounted, um, the land, I believe, $253 million based on all the improvements that were going to be needed to, uh, to remain on site. Um, and so he came up with that number, SDSU agree that that was a fair market value. That's the offer they put forward. But there was some pushback from the city as we know, Speaker 1: 01:23 right. Members of the city council said that offer wasn't faithful to the terms of the voter initiative that allowed the university to take over the site. How did they say that the original offer violated that initiative? Speaker 2: 01:35 So in the $253 million of deductions that the appraiser baked in, some of that included deductions for stadium demolition of STCU stadium, which is there now. And some of that included, um, the cost to kind of prepare the land to build a 34 acre river park, which we know SDSU has promised to do. Well, the city has interpreted measure G, which was the, the voter initiative passed last year. They've interpreted the language in that measure to say that the city's general fund cannot take a hit on those type of deductions. And they had evaluated, I think based on some feedback from the appraiser that the difference was about $18 million. So they were looking for 86 point $2 million to kind of cover the difference between taking those hits that they didn't believe that they could take. Speaker 1: 02:30 So this new offer addresses those concerns almost to the dollar Speaker 2: 02:33 it does in fact. So the new offer is 86 point $2 million. And because of another concern related to the 20 $17 amount, SDSU was also offering to pay 2.15% an annual appreciation for 37% of the land. And that's the land that's owned by the water department and they're doing that so that it comes in at closing date in present day dollars in that amounts another one point $5 million and that's an estimate right now. So that number could change. But that brings a total offer up to 87 point $7 million. What? Is there any indication as to why SDSU decided to increase this offer at this point in the process? Well, I don't know for sure, but my guess is because they have a very aggressive timeline in building a new stadium. So they want to get a new stadium open for their football program by 2022 fall of 2022 in order to do that, they wanted to break ground early next year. Speaker 2: 03:34 The longer that they go back and forth with the city, the more likely it is that their timeline is going to get delayed. They're not going to be able to close on the land, they're not gonna be able to break ground. So they really needed to get this deal done. And I think when they made their first offer, they presented it to the council and they heard council members say, we don't know that this offer is consistent with measure G and that is going to be a problem. So I think they took that feedback, looked at their timeline and kind of came back with something that they knew would meet with council members approval. There are a couple of changes. SDSU is made to the original plan one that concerns an extension of Fenton Parkway and the takeover of Murphy Kenyon Creek. Tell us about that. Yes, so the Fenton Parkway bridge, it's this piece of infrastructure that the city has wanted to build for decades. Speaker 2: 04:25 I think most recently it was supposed to be built ahead of the the Superbowl that was the hosted than a Qualcomm stadium. Never happened. Environmentalist kind of got in the way of that. However, the city had hoped that any developer of that property would come in and build that bridge. Originally SDSU had no intention to do so. It became clear that that was going to be a sticking point. So the original offer, SDSU said, we will build you that bridge. We know it's going to cost about $22 million will front load the expense. We expect our share to be 25% and we'd like, you know, credits from our developer impact fees. The new offer, most of that remains the same, but the new offer, they would like eight point $5 million of the purchase price to go towards the bridge, which my guess is that, you know, that decreases the burden of money that they have to raise to, to kind of front load the expenses. Speaker 2: 05:18 They still only expect to pay for 25% of that bridge costs at the end of the day. As far as Murphy Canyon Creek, it's also been a sticking point. And that's because the, the Creek is pretty complicated. Um, it's been known to have drainage issues. It floods sometimes when it rains, and so the city had always wanted the university to take it over. The university didn't think it needed to the original offer. They said, okay, we'll take it over, but you guys need to do the past, do maintenance on it. And I'm not sure what the cost was to the city, but it must have been substantial enough to where STCU knew that they were going to have to take the Creek over as is in order to, to get this deal done. So that's what they're offering. Now they're, they're offering it, take it over as is and kind of deal with it on their own. Speaker 2: 06:06 And has the California state board of trustees, which of course oversees SDSU. Have they already approved this plan with this purchase price? No. So, I mean, I assume that they're apprised of what's going on, but what will happen is, so SDSU is currently working on an environmental impact report that studies their full project, um, and it's called the mission Valley, our STC mission Valley campus master plan. So that environmental impact report, um, they are currently revising that and they hope to take a final version to their board of trustees at the end of January. At that time, the board of trustees will likely, you know, unless there's some major issue with their report, certify that report and then kind of sign off on those purchase and sale terms at that time. So things are still moving along. Things are moving along. Indeed. I've been speaking with San Diego union Tribune reporter Jennifer van Grove. Jennifer. Thank you. Oh, thank you. Speaker 3: 07:09 [inaudible] Speaker 4: 07:13 [inaudible].

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In a letter delivered to Mayor Kevin Faulconer Monday, SDSU is offering to pay almost $20 million more for the 135-acre site than it offered earlier this month. The new offer of nearly $87.7 million is due to be discussed by the City Council next week.
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