STADIUM TALK: San Diego's Hail Mary Pass: How the city can build a stadium downtown and keep the Chargers

Don't move until you see it.

Let's be honest with ourselves. Right now, the odds of the Chargers staying in San Diego are not as good as the odds of them going to Los Angeles. I figure it this way...

• Odds of at least one team in Los Angeles next year: 100%
• Odds of the Chargers eventually moving to Carson with the Raiders: 25%
• Odds of the Chargers eventually moving to Inglewood with the Rams: 50%
• Overall odds to move: 62.5%

By any measure, those odds are not good. But that doesn't mean the same thing as impossible.

However, I'm not here to spread bad news. If you're a little crazy, and willing to take a different look at some things, there's a sliver of a chance that my crazy idea could work.

So, let's go down the rabbit hole...

What We Learned From the Owner's Meetings

First and foremost, we learned that the NFL and NFL Owners are not planning on delaying things in Los Angeles for another year. They want a resolution to this situation in January 2016. They are planning on a vote in January 2016. And since the goal of such a vote is to identify which team is going to Los Angeles in 2016, I think everyone can safely put to bed the idea of a delay until 2017.

Secondly, we learned that while some owners have indicated which way they intend to vote, many others are on the fence. We know this because many owners expressed the need or desire for Chargers' owner Dean Spanos to have a meeting with Rams owner Stan Kroenke. Reading between the lines, what does this mean?

The owners want the Inglewood project, but believe the Chargers have the best case for relocation.

If the Carson site was even comparable, the Chargers and Raiders would have this locked down already.

Thirdly, we also learned that the NFL and NFL owners have serious misgivings about allowing Mark Davis to move to Los Angeles. Towards that end, Davis is closing in on identifying a potential minority partner to assuage the NFL's concerns about cash flow and business connections in Los Angeles.

This is important for a few different reasons, and it also begs a couple of questions.

While many assume that this strengthens the case for choosing the Chargers and Raiders with the Carson project (and it does a bit), such a decision still hinges on owners deciding that Carson is either a superior site, or at least close enough to Inglewood to make such a choice possible. Clearly, that's not the case (at the moment).

This move should be alarming to the Chargers, because such a move makes the Raiders equal to the Chargers, in terms of being a potential partner with the Rams in Inglewood.

Also, it's been reported that the primary factor in asking Davis to take on a minority partner is to provide someone with experience and/or knowledge of the Los Angeles area. So, this creates a few questions for me.

Does Dean Spanos have this kind of knowledge or experience? If not, why isn't he required to bring on a partner? If the NFL is trying to force Davis to sell the franchise, why have him do something that strengthens his long-term position as owner of the Raiders?

I could be wrong about this, but it seems to me the NFL is trying to create a situation which gives Davis rough parity with Spanos, and allows the NFL to choose the Raiders and Rams in Inglewood if Spanos continues stalling.

What San Diego Has To Do By January

Please see the image below as a reference.

Map of East Village - from Google Earth

In the meantime, we know that the Chargers want nothing to do with San Diego's proposed Mission Valley stadium, because:

1. They prefer the proposed JMI convention center / stadium (convadium)
2. They believe the city's expedited Environmental Impact Report (EIR) for the Mission Valley Stadium won't hold up to a legal challenge
3. Any possibility of a deal in San Diego derails their "We have to go to Los Angeles" narrative.

Unfortunately, it looked like the city was planning to proceed with pursuing a contiguous convention center expansion, along with the 2/3rds needed for a tax increase to pay for it.

Thus, the JMI proposal was dead and that's when JMI made the single most important move in this entire San Diego situation. As a means of expressing their opposition, JMI concluded that they planned to pursue construction of condominiums on the parcel of land they owned next to the 12th Avenue Transit Station. Their original plan was for a hotel to accompany an off-site convention center expansion. Crucially, a new hotel was essential to accompany any type of added convention space. Without the hotel, any convention center expansion was meaningless.

Since that time, as reported by Scott Kaplan of Mighty 1090 on October 8th, various elements downtown have realized the following:

• Any contiguous convention center expansion has to gain a 2/3rds "yes" vote for funding, plus defeat lawsuits aimed at limiting development along the San Diego bayfront.
• JMI isn't building a hotel, unless the convention center expansion is off-site.
• Without JMI's hotel, there's no need for any convention center expansion.
• The report used to justify a convention center expansion indicates that a split convention center would still be profitable and increase the number of conventions.
• People who oppose the contiguous convention center expansion would not be opposed to the convadium concept.
• By pitching the Convadium as a Citizen's Initiative, the need for an EIR can be bypassed.
• Further, a Citizen's Initiative started within the next 3 months could easily reach the November 2016 ballot, where the Chargers feel they'd have their best chance for success with a public vote.

Here's the catch. Because the NFL owners plan on voting on relocation in January, any possible initiative to build the convadium has to be launched with enough time for the Chargers, Raiders, Rams, and NFL to work out an arrangement.

The Great Compromise

We've established the following:

• Inglewood is the preferred site in Los Angeles.
• If Mark Davis can find a minority-interest partner, the Raiders are a viable candidate for relocation to Los Angeles.
• The Raiders have no options in Oakland of any kind.
• Owners believe Spanos has the best case for relocation. Therefore, the NFL will be looking out for his interests in any deal which is reached.
• The Chargers want the Convadium option in San Diego, but can't pursue it without some assurance of a landing spot in Los Angeles if it doesn't work.
• Dean Spanos, for the moment, doesn't want to partner with Stan Kroenke in Inglewood.

Therefore, if San Diego can get a Citizen's Initiative launched (and based on the information in this post by Vincent Bonsignore of the LA Daily News), here's my sketch at a Grand Bargain:

• San Diego launches a Citizen's Initiative for the Convadium.
• Kroenke goes to Los Angeles alone in in 2016. He pays an expansion fee of $500 million (this is author speculation). This rewards him for launching and funding the Inglewood project.
• The Raiders and Chargers agree to stay in their home markets for 2016.
• Kroenke agrees to a generous tenant arrangement in Inglewood, possibly along the lines suggested by Fred Roggin in this interview with Scott Kaplan and Billy Ray Smith on Mighty 1090 on 10/7.
• If the Chargers get the Convadium passed in San Diego in November 2016 (when the Chargers believe they have the best chance to win), the Raiders then go to Los Angeles in 2017. The Raiders pay an expansion fee of $500 million.
• The other 29 owners split $600 million worth of relocation fees (about $20.7 million each).
• Spanos gets the Raiders G4 Loan worth $200 million, and the leftover $400 million worth of relocation fees to stay in San Diego and put towards a stadium (i.e. he doesn't get to just pocket the cash).

(Of course, if the Convadium vote fails, or an initiative never gets off the ground, then the Chargers and Raiders roles are reversed).

Paying for the Convadium

The single biggest prohibition to the Convadium is the cost. According to the estimates, the Convadium is estimated to cost about $1.42 billion. If you add $250 million to buy the land and relocate the MTS Bus Yard, the final tally comes out closer to $1.67 billion.

(Author's Note: In previous Convadium studies, I mistakenly added the Contingency cost to the Total, when it was already included in the Total. Previous posts indicate an incorrect total cost of $1.54 billion, as opposed to the correct total cost of $1.42 billion. I apologize for any confusion this has caused.)

In all previous estimates, I've proposed creating a Stadium and Convention Fund using an increase in the Transient Occupancy Tax (TOT) to help pay for it. This would require a 2/3rds public vote.

However, if the Great Compromise I suggested above came to pass, I've got a possible method for paying for the Convadium which may not require a tax increase.

Here it is.

Paying for the Convadium

	Revenue Source	$ (in millions)
Private Contributions 66% of Total	Raiders' G4 Loan	$200
	Chargers' G4 Loan	$200
	Relocation Fees	$400
	Chargers Contribution	$200
	Personal Seat Licenses	$100
Public Contributions 34% of Total	Qualcomm Land Sale*	$200
	City / County Contribution	$370
Total Cost		$1,670

*Qualcomm Site Sale is based on selling 80 acres at $2.5 million per acre.

You've read this correctly. In this plan, the City of San Diego potentialy gets a stadium and convention center expansion for $570 million dollars. Just as a reminder, pursuing the separate convention center expansion ($549 million) and Mission Valley stadium ($350 million) would cost a combined $899 million in public money.

It is expensive. But it kills two birds with one stone, saves $329 million, and doesn't face any potential lawsuits based on waterfront access, or CEQA compliance.

In Closing

San Diego has proven to the NFL they want to keep the Chargers. What they haven't done is offer a plan the Chargers are enthusiastic about. The primary reasons the Convadium hasn't been pursued are staunch political opposition and prohibitive cost.

However, over recent weeks, opposition has begun falling by the wayside. Furthermore, the possibility of a compromise between Dean Spanos, Mark Davis, and Stan Kroenke might provide the crucial revenues necessary to make the project a reality.

This is probably San Diego's last best chance to keep the Chargers. Additionally, it's a wonderful opportunity to solve the issue of expanding the convention center. It's also a great opportunity to find a new use for the Qualcomm site in Mission Valley, such as potentially creating a second campus for San Diego State University.

Let's see if this Hail Mary reaches the end zone. The only way to know is to heave it.