Saturday, January 28, 2017

My 10 Year Plan for San Diego Sports

We can't do anything about the Chargers. We can start setting up San Diego to be successful with sports over the next 10 years - and maybe even give ourselves a second chance at the NFL.

Ok folks, here's the deal. The Chargers are gone. They aren't coming back.

San Diego should grieve, and San Diego fans have every right to be angry. After a certain point it becomes unhealthy to dwell too much on the sadness and anger. As a community, we're fast approaching the point where those raw emotions need to be channeled into something productive.

I don't mean anti-trust lawsuits against the Chargers or NFL. They don't want to be here. Let them go. Don't chase the name, logos, uniforms, colors or records. I want to talk about something different.

My 10 year plan for San Diego sports follows past the jump.

Worry About What You Can Control

First things first. San Diego has do something about Qualcomm Stadium and San Diego State University (SDSU). Here's what we know at the moment:
  • There is no indication the NFL has a team (relocation or expansion) ready to immediately (i.e. within the next 5 years) fill the void created by the Chargers' departure to Los Angeles.
  • Suitors are already lining up to claim the Mission Valley site.
  • SDSU has a lease with the City which runs through 2018, and may be extended to 2020.
  • The City loses millions of dollars annually on Qualcomm Stadium and the parking lot.

So, the first order of business is getting SDSU Football set-up for long term success.

First, this assumes that the City of San Diego and the Water Company can come to an agreement regarding use of the site. Assuming this happens, then I unequivocally support the following ideas:

Turn the bottom 30-40 acres of the site nearest to the San Diego River into a park and restored water habitat. One, I support the idea of a restored SD River through Mission Valley, Two, during times of heavy rainfall, it makes sense to ensure no structures are damaged by floodwaters.

Beyond that, here are the two suggestions I'd have for the remaining 120-130 (or so) acres...

First - donate the land to SDSU and turn MV into an expansion campus. The reason I support this idea is because it will allow for more student housing, which would then allow for additional enrollment at the university. Economic studies have shown that investment in higher education is likely the best long-term economic play San Diego could make. Adding a stadium SDSU (and Major League Soccer - hereafter MLS) could share is an added benefit which helps fill the sports gap created by the Chargers' departure.

Second - donate at majority of the land to SDSU, then sell the remaining acreage for mixed use commercial development. If City leaders are dumb enough to pass on decades of economic growth in favor of immediate gratification, then let's at least temper the damage by not selling the entire site for development. Mission Valley doesn't need thousands of new apartments and condominiums, and doesn't need another shopping center. It seems that MLS' interest is tied to at least some commercial development of the site - if this is true, then the City will have to strike a smart balance which provides some immediate payoffs with an expanded tax base, while protecting the long term potential of economic growth spurred by campus expansion.

I do not support redevelopment of the site for residential use (outside of SDSU students/faculty), or converting the substantial majority of the site into more of what Mission Valley already has tons of.

With either option one or two - San Diego solves the Mission Valley problem in a way which provides economic benefit to the City, while guaranteeing the future of SDSU football and opening the door to the MLS.

As it stands now, the proposal offered by FS Investors to bring an MLS expansion team to San Diego and provide a more intimate venue for SDSU seems to more closely match the Second Option. I will wait until the Citizen's Initiative is available to render a judgement, but as long as SDSU is fully on-board with the proposal, I am generally inclined to support it.

Send The Right Signal

Assuming San Diego works out a good deal for SDSU with the Mission Valley site (either as part of the MLS proposal or otherwise), it sends a strong signal to other sports leagues and potential investors that the primary problem with the Chargers leaving San Diego wasn't the City as much as it was the limited funds of the Spanos family along with the business allure of Los Angeles.

Success with the MLS plan also potentially gives San Diego a jumpstart working with other partners on deals.

The next obvious candidate is Anschutz Entertainment Group (AEG). AEG was recently involved in pitching a redevelopment plan for Seaport Village which would've included a new arena. Although their plan wasn't selected, it still is important to continue discussions with AEG, for a few reasons:
  • San Diego should actively be looking to replace the Valley View Casino Center (VVCC), which is entering its 6th decade of service.
  • AEG currently operates the VVCC, and has extensive ties to the sports and entertainment world - they are the co-owners and operators of LA Live and the Staples Center.
  • It is possible that AEG and other interested partners (say like, the Jacobs family) could eventually bring an NBA expansion team to San Diego, or entice a franchise to relocate. 
  • Given that a new arena would likely cost between $375 million and $550 million, it's still a better public investment (if necessary) than an NFL stadium, because of the much larger number of event dates. Sacramento put about $255 million into the Kings' new arena.
  • Such a facility could work quite well within the existing Sports Arena lot, or even downtown at the MTS facility where the Chargers proposed their stadium in Measure C. For that matter, you could use the 16 acres in the MLS proposal if an NFL team doesn't materialize within the next 5 years.

To be fair, this is something John Gennaro suggested in his Generally Speaking Podcast. And from a financial perspective, the worst-case trade off might look like this:

Spend $250 million in public money (total) to approve the MLS plan for Mission Valley, as well as build a modern arena where the Gulls can continue to play, and which has the potential to attract an NBA or NHL franchise in the future, as well as NCAA Regional Finals and concerts.

Even for football lovers like me, this is an appealing secondary option.

Plan for the NFL 10-15 Years From Now

Everyone needs to understand there's absolutely no chance San Diego gets an NFL team in the immediate future, and there's a few reasons for this:

Having burned every bridge possible in getting to Los Angeles, it makes no sense for Dean Spanos to even attempt a return. Further, there's no incentive for him or his family to sell - both because of the nature of the NFL's relocation agreement, and because they're likely to make a shit-ton of money.

It's way too late in the game to court the Raiders. San Diego had a chance to pursue them as a Plan B in 2015 when the Raiders wanted a "modest" stadium for $900 million. Remember, Nevada gave the Raiders a $750 million stadium subsidy, and the NFL didn't get greedy or rich by turning down taxpayer money. Unless their relocation to Las Vegas goes sideways, the Raiders are not coming to San Diego.

Assuming the Raiders deal in Las Vegas is completed, there are no teams with dire stadium situations or convenient escape clauses which might want to talk with San Diego about relocation. The Jacksonville Jaguars are frequently mentioned, but that supposes a) Shahid Khan (the Jaguars owner), would choose to relocate to San Diego because it represents a significant market improvement over Jacksonville and/or b) Khan wouldn't rather relocate to a potentially much more valuable market in the future (say... Toronto, Mexico City, or London?).

San Diego has no viable plan for a stadium, (meaning no firm location, no renderings, and no approved financing plan). Further, the current location of our 50 year old stadium should be reserved for SDSU, as established above. Lastly, assuming the MLS plan for Mission Valley is approved, there would be 16 acres set aside for an NFL facility - but according to that plan, those acres would only be set aside for 5 years, which is not a good timeframe for San Diego.

Most importantly, San Diego cannot afford a stadium at the current NFL market rate - especially without a franchise/ownership group contributing to the project. There's no chance stadiums become more affordable and more compact for another 10 years, which is when a lot of the NFL's mid-market franchises come to the realization there's no appetite for public subsidies and most NFL owners can't afford to cover three-quarters of a $2 billion -$3 billion stadium.

With all of that in mind, it simply makes no sense for San Diego to even consider pursuing the NFL in the short or medium term.

What it does mean, however, is that San Diego should start planning now for a potential NFL return after 10-15 years have passed, and there's a chance stadium costs have been forced down. Here's what that kind of planning entails:

Lay out multiple locations for a new stadium. Assuming the Mission Valley parcel isn't held open indefinitely, it would be smart to start identifying potential stadium locations within the City and County of San Diego, and at least do some of the legwork in determining who owns the land and which agencies have jurisdiction over the land. It's even smarter if you identify locations which are suitable for mixed-use development or begging for redevelopment, and start discussions with potential interested parties.

You could also start figuring out a responsible means of providing public financing. I hate to be the bearer of bad news, but unless the corporate base of the City and County explodes in the next 10 years (or unless San Diego lands a "white knight" ownership group), there's almost certainly some sort of public financing involved.

In Closing

The Chargers leaving San Diego is both a cause for sadness and also the opening for new opportunities.

It will be crucially important in the coming months and years for San Diego to take advantage of opportunities which present themselves - while internalizing the lessons of the past to ensure citizens of the City and County aren't financially hurt. San Diego State University's athletic (if not academic) future needs to be protected as well. 

At least on a cursory inspection, the FS Investors proposal for Mission Valley which brings an MLS franchise to San Diego, seems to be the right kind of opportunity.

Citizens and fans may need to be patient. But if it's done right, San Diego may yet rise from the ashes of our current disappointment and emerge better off for the Chargers departure in the long term.

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