San Diego Union-Tribune

NORBERTO SANTANA JR.

Chargers tout new stadium proposal | Task force welcomes beginning of dialogue

January 17, 2003

Mark Fabiani, special counsel to Chargers President Dean Spanos, said the team would assume the attendance risk for the new stadium. The Chargers would cover a portion of their $200 million obligation for the stadium by obtaining a $68 million loan from the National Football League.

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Copyright SAN DIEGO UNION TRIBUNE PUBLISHING COMPANY Jan 17, 2003

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The Chargers' proposed $400 million stadium would catapult the team into the top half of the NFL in revenue, with the facility generating an additional $8 million annually from luxury-box and club-seat sales.

That, team officials say, would give the Chargers the cash to compete for top players and coaches.

The Chargers last night presented their proposal to the Citizens' Task Force on Chargers Issues, a board appointed by the City Council last summer to study what it would take to keep the team in San Diego.

Task force members gave the presentation high marks and expressed interest in exploring the team's ideas, but some said questions remain.

"I think they did a good job of starting the conversation," said panel Chairman David Watson, a land-use attorney and former San Diego planning commissioner. "It doesn't tilt me, but I'm pleased we're starting a substantive dialogue."

The Chargers contend that they cannot remain economically competitive at 36-year-old Qualcomm Stadium, which underwent a $78 million renovation in 1997. The city issued $60 million in bonds to pay for the improvements, and the other $18 million came from selling the stadium's naming rights to Qualcomm.

The team wants the city to pay $200 million for the new stadium, an expense the Chargers say can be covered by selling or leasing part of the 166-acre stadium site to a developer for an urban village that would include housing, retail shops, offices and a 300- room hotel.

By selling 66 of the 166 acres to a developer, the city could make more than $123 million on the deal over a 25-year period, the Chargers say.

The new stadium, which the team hopes could open in 2006, would occupy about 25 acres of the remaining 100-acre site, which would feature open space and parking. The city would own the 100 acres and rent it to the Chargers under a 25- to 30-year lease.

Rent payments would be negotiated, but there would be no ticket guarantee, according to the stadium proposal.

Under the current lease, the Chargers are guaranteed revenue equal to the sale of 60,000 tickets for each game. When attendance falls below 60,000, the city makes up the difference. Since 1997, San Diego taxpayers have been billed more than $31 million under the ticket guarantee.

Mark Fabiani, special counsel to Chargers President Dean Spanos, said the team would assume the attendance risk for the new stadium. The Chargers would cover a portion of their $200 million obligation for the stadium by obtaining a $68 million loan from the National Football League.

Task force members said they were excited to finally talk in depth about a Chargers stadium proposal, but they were troubled because the team is declining to discuss its finances.

At the start of the meeting, Ron Saatoff, chairman of the task force's subcommittee on finance, read a letter from the team saying it would not disclose team finances.

Without those figures, Saatoff said the task force can't confirm the team's assertion that it needs a new stadium.

Saatoff also questioned some of the financing ideas the Chargers are proposing, saying he worried the project would dip into the general fund for debt service on any bond that would be issued.

He also wondered what would happen if the proposed development on the 66 acres fell behind.

Fabiani said the team would negotiate with the city at that point. He also said the Spanos family would consider developing the site, but he made no firm commitment on that point.

Task force member Bruce Henderson, an attorney who challenged the building of the Padres' new stadium, said he wanted to know what would happen to the $60 million in bonds the city issued in 1997 to pay for Qualcomm's most recent renovation.

"There's a lot of numbers missing," Henderson said.

Joe Martinez, an architect serving on the Qualcomm Stadium Advisory Board and the task force, praised the team's proposal for making the stadium part of an urban village.

But Martinez questioned who would cover costs such as roads and parking, which he said could cost $100 million.

Fabiani said the presentation was meant to begin the discussion. He said he hoped that the City Council would move ahead on a "highly public process" and continue discussing the project.

The Chargers envision the 66-acre development project being built over several years.

Under the team's plan, the hotel would be built in the first year, followed by retail shops in the second year. The housing would be phased in over three years, with the office space to be built over five years.

The Chargers would like to have a stadium measure placed on the November 2004 ballot.

The team has said Qualcomm, with its 17,000 parking spaces, will be underused after the Padres move into a downtown ballpark in April 2004.

In 1998, nearly 60 percent of San Diego voters approved Proposition C, a $411 million public-private partnership to create the Padres' ballpark in the city's East Village.

Delays caused by court cases and political scandal drove the price up to $458 million, with the city's share reaching $206 million.

At the start of yesterday's meeting, there were comments about the sometimes strained relations of the Chargers, task force members and city.

Task force member Patti Roscoe, who also serves on the Super Bowl Host Committee, expressed frustration with the negative comments lately surrounding the Chargers and the stadium bid.

"San Diego, for some reason, seems to work backwards," Roscoe said. She urged community members to support a solution first instead of criticizing.
Roscoe issued a call to team fans that "this task force needs to hear from you."

When Fabiani began his presentation, he said that "there's been a lot of frustration" throughout the process.

When he finished his talk, Fabiani said, "We want to be in San Diego. We've been here for 40 years and want to be here for 40 more."

Staff writer David Graham contributed to this report.

Norberto Santana: (619) 718-5069; norberto.santana@uniontrib.com