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The NFL Gets to See San Diego's Stadium Cards

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Tomorrow, the NFL is meeting with San Diego officials to discuss their plans for getting a stadium built in time to prevent the Chargers possible move to Los Angeles. What will San Diego show them, and will it be enough?

Rendering of a proposed stadium in Mission Valley
Rendering of a proposed stadium in Mission Valley

On Tuesday, NFL Vice President Eric Grubman will be visiting San Diego to discuss the City's stadium plans with elected officials, well as members of San Diego's stadium negotiating team, headed by Christopher Melvin of the firm Nixon-Peabody,

The purpose of the meeting will be pretty straightforward.

The NFL wants to determine whether or not the expedited Environmental Impact Report (EIR) has a realistic chance of success. The also want to see what the actual financing plan looks like.

The Last Time Grubman Visited San Diego

Back in April, Grumman visited San Diego for the first time in regards to anything related to getting a new stadium built in San Diego which would satisfy the requirements of the Chargers and the NFL. Much of his visit involved telling the Citizens' Stadium Advisory Group (CSAG) what the NFL was looking for in a viable financing plan, as well as the need to get something put together as soon as possible.

If you recall, there weren't a lot of positive vibes from the meeting.

Time is slipping away, to wait is not a good option (regarding a vote in 2016).

- NFL VP Eric Grubman to San Diego press on 4/14/15.

Since that time, CSAG released a financing plan in May, the City and the Chargers started stadium negotiations in June  - only to walk away a couple weeks later. The Chargers stated they felt the risk involved in pursuing an expedited EIR was too risky for the franchise to gamble on. I also think part of the goal was to make San Diego look foolish, thus bolstering their claim for needing to move to Los Angeles.

What's Grubman looking for this time around?

"Since it is just an outline, and since neither we or the Chargers will have seen anything in advance, there will be no negotiations. Perhaps just questions and answers so that we leave with a complete understanding of the outline and the timing."

- Grubman in the San Diego Union-Tribune, 7/26/15

More specifically, Grubman is going to be looking for two things.

He wants to see for himself how credible the City's expedited EIR process is going to be, and whether it has a realistic chance of surviving the (likely) legal challenges. To be honest, he's likely to agree with the idea of not relying on land sales or redevelopment o help fund the project. On the other hand, removing that source of revenue creates a loss of at least $150 million - $225 million in revenue.

Author's Note: As I've said before, I'm dubious about the City's EIR strategy. I think the NFL will be dubious about it as well, and I think they will support the Chargers not tying the future of the franchise to it. As I've said previously, everyone already knows that 2016 is the best chance of keeping the Chargers in San Diego.

Therefore, what I think Grubman really wants to see a financing plan, or at least a solid outline of what a financing plan might look like. In the Union Tribune article linked above, as well as this article from NBC San Diego, we have a couple of new revenue sources which could more than make up the finding gap.

  • $700 million in the form of Lease-Revenue Bonds (funny, someone mentioned this possibility back in February).
  • Sale of the Sport Arena site. It's not currently known how much revenue that could generate, but if you use the estimate provided by CSAG, a guess would be between $100 million - $150 million.

The bottom line is that the NFL wants to see whether or not a stadium in San Diego is actually realistic. If the money's there, and the NFL thinks the revenue sources are solid, it really makes a strong case for the NFL to keep the Chargers in San Diego long enough to let a public vote play out, regardless of when it happens in 2016.

"They also have been working on putting together an outline for the overall financing of a project. Assuming that is correct, they would update us on the timeline and they would go through their thinking on a financial plan."

- Grubman in the San Diego Union-Tribune, 7/26/15

If the money's not there, or not realistic, then why even bother?

Wrapping Up

This is the next step forward for San Diego in convincing the NFL the City has the ability to make a credible offer to keep the team in San Diego, and the ability to pull off a vote by the end of the 2015 NFL Season (i.e. early January 2016).

While I think San Diego can make a credible financial offer, I'm not sure anyone really thinks they can do it in that amount of time. Therefore, I think it's especially critical that San Diego presents a credible financing plan, one which can be discussed in detail in early August at the NFL Owner's meetings in Chicago.

While Grumman said there won't be any votes on teams moving to Los Angeles, I think there will be decisions made to eliminate cities if they don't have a plan in place. In other words...

San Diego may not be able to keep the Chargers until 2016. But they can lose the Chargers within the next few weeks.