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Why Isn't Downtown an Option?

Neither San Diego or the Chargers can actively pursue the stadium / convention center proposed by JMI Realty without also damaging their current negotiating position. is there a chance this could change?

JMI Realty's proposed downtown stadium / convention center
JMI Realty's proposed downtown stadium / convention center

Yesterday, I wrote a post about how JMI Realty's proposed stadium / convention center could be financed. Today, we'll be looking at the issue through the political lens.

The Chargers might want downtown, but they can't jeopardize their chances of going to Los Angeles by pursuing it.

San Diego might want downtown, but they can't pursue it without an assurance the Chargers will stay in San Diego long enough to get it put on a ballot (i.e. November 2016).

So, where does that leave us?

Is Downtown What the Chargers Want?

This point can be argued either way.

Chargers' Special Counsel Mark Fabiani told the Citizens' Stadium Advisory Group (CSAG) that the team was "agnostic" when it comes to the location of a new stadium. Furthermore, the Chargers have yet to publicly state it's "Downtown or nothing." This is why a lot of people in San Diego think downtown is a Chargers smokescreen, and the Chargers have no one to blame but themselves for that perception.

On the other hand, many believe that the Chargers prefer downtown, as Fabiani himself says in this interview with Darren Smith of Mighty 1090. In my opinion, this preference is confirmed (via inference) during this radio interview between Fred Roggin and NFL Vice President Eric Grubman back in April.

"I think there's probably a deal that (the Chargers) would sign off on. Whether or not there's time to present that deal, or there's the will to present that deal, is really the question. I don't question the Chargers' sanity, or their resolve."

- Eric Grubman on the Fred Roggin Show 4/21/15

But, no one can pursue this deal at this time, and here's why:

  • The Chargers and Raiders have a financing plan and entitled project in place in Carson. If that project is approved, both of those teams will relocate to Los Angeles for the 2016 season, no matter what happens in San Diego and Oakland.
  • Until / unless the Inglewood project is selected, the Chargers and Raiders can't abandon the Carson project with nothing in place in their home markets. Furthermore, it might still be in the Chargers' best interests to move into the Inglewood stadium in 2016, regardless of what San Diego offers.
  • The Chargers will not publicly express interest in any project in San Diego, until Carson is not an option. Doing so would diminish the Chargers' "We have to go to Los Angeles" narrative, which fundamentally rests on San Diego's inability to present an acceptable solution.
  • On the other hand, San Diego has to keep the possibility of a December 2015 vote in place and that means a project downtown cannot be pursued.
  • There's no possibility whatsoever of avoiding an Environmental Impact Report (EIR) for downtown (which would take 12-18 months) without a ballot initiative. The Chargers, talking about the proposed Mission Valley stadium, believe a ballot initiative couldn't be voted on until April 2016 at the earliest.
  • Furthermore, considering the opportunity for a stadium downtown is currently impossible for the Mayor and San Diego's elected officials. One, they committed themselves to the process which started with CSAG, and two, because there's no incentive to offer a downtown stadium unless the team is willing to pursue it in good faith - as any change in plans plays into the Chargers' "We have to go to Los Angeles" narrative.

Presuming downtown is an option that San Diego would like to pursue, how could they move it forward?

How the Mayor can Move This Forward.

I know there will be some who'd argue that the Chargers should declare their intentions first. I've argued this, in fact. However, it's not necessary for that to happen in this particular case.

What we're really after is San Diego officials cracking the door, and allowing the Chargers (and by extension, NFL) to see the opportunity exists. Importantly, the collapse of the contiguous convention center expansion, first by illegal tax, and then allowing a land option to expire gives San Diego City Officials all the leverage they need to push the matter with hoteliers and gain their support (or at least non-opposition).

Furthermore, San Diego is in a better position to open this possibility. They can make the initial offer without damaging their attempts to get a Mission Valley stadium proposal on a ballot for December. San Diego could also make the offer public without actually committing themselves to it - and by extension, not allowing the Chargers to claim dysfunction on San Diego's part.

Something like this:

"With the contiguous convention center expansion likely dead, and no other option for new convention space on the immediate horizon, San Diego would certainly be willing to consider the JMI Proposal, if the Chargers could commit to being in San Diego for the 2016 season. Without that commitment, however, we cannot abandon our plan on a stadium in Mission Valley this December."

It may not be much, but it's enough to tell the Chargers (and the NFL) that if the team is serious, the option is available. Especially considering that the Chargers and the NFL know the best chance for a successful vote in San Diego is November of 2016.

The question is whether the opportunity can be created to pursue the downtown option?

How Can Stan Kroenke Help San Diego?

Wild Speculation Time!

Let's presume, for the moment, that the Inglewood project is chosen by the NFL later this year.

And since we know the Chargers will jump at the Carson deal, the real question is if the Chargers are going to Los Angeles in 2016 no matter what (i.e. Inglewood).

According to Scott Kaplan of Mighty 1090, Kroenke may have a trump card on Dean Spanos:

"There is, supposedly, a document between Stan Kroenke and Dean Spanos that was a Letter of Intent for the two of them to partner in Inglewood... The relationship soured between the two... and that Kroenke is sort of holding (the Letter of Intent) as an ace-in-the-hole."

- Scott Kaplan on the Scott and BR Commercial Free Uncensored Podcast #4, June 10, 2015.

If this report is accurate, it means one very important thing.

Dean Spanos doesn't want the deal on that Letter of Intent, at least not as it is now. We know this because he elected to walk away from the Inglewood project and pursue Carson on his own.

Therefore, when Kroenke and Spanos sit down to discuss this, I can see Kroenke making Spanos an offer like this:

"If you want to come to Los Angeles with me in 2016, we're sticking with this Letter of Intent. Or... go back to San Diego and try to get a deal there in 2016. You'll still have Inglewood as leverage. If the deal passes, I'll give you money (possibly part of the relocation fee) to help cover the stadium costs. If it doesn't work, come back in 2017, and you, me, and the NFL will come up with a better deal for you to play in Inglewood."

Kroenke gets what he wants: Los Angeles to himself for 2016.

Spanos gets a shot at the deal he wants in San Diego, and as a backup, he gets a better deal in Inglewood.

Author's Note: Don't post comments about the NFL only accepting two teams in Los Angeles simultaneously. It's a preference, not a requirement. The NFL will settle for any agreement which gives the NFL the best chance to succeed in Los Angeles, makes Kroenke and Spanos (and Mark Davis) happy, and makes the other owners wealthier.

In Closing

After fits and starts, the plan the Chargers have ben pitching since 2012 is finally in a position to move forward.

In a case of tragic irony, (or poetic justice, depending on your perspective) the opportunity they've waited for happens at precisely the moment the Chargers cannot seize it, due to their pursuit of Los Angeles.

In response to the Los Angeles threat, San Diego has to move full speed ahead on the Mission Valley site, using CSAG's financing framework and working toward a vote in December.

In order for the Chargers to pursue downtown, they would have to commit to staying in San Diego for the 2016 season. Until they can make that commitment, there's no reason for them, or the City to pursue the downtown option.