Resetting The Stadium Question, Again

Well, depending on your point of view, last Tuesday was either a rousing success or a major disappointment.

Measure C, the Chargers stadium initiative, was soundly defeated by San Diego City voters, by a (current) margin of about 57% to 43%. The measure would’ve raised the Transient Occupancy Tax (TOT) from 10.5% to 16.5% to cover the costs of building and maintaining a stadium + plus convention center annex in downtown San Diego.

As we all know, this plan was put forward by the Chargers following a furtive attempt to discuss the City’s proposed new stadium in Mission Valley, and largely within a 2 month window following the NFL’s decision on Los Angeles in January 2016.

We also know (as CBS Sports’ Jason La Canfora reminds us regularly) the Chargers have the 1st option on whether or not to join the Rams in Los Angeles, and that they have until January 15, 2017 to exercise or pass on that option.

So, where do we go from here? Let’s discuss this a bit...

Questions to Answer

What Has to Happen for the Chargers to stay in San Diego from the NFL’s perspective?

The process is complicated, but the result is simple... Dean Spanos has to be able to pursue a stadium in San Diego without fear of losing his option in Los Angeles. That means the Raiders are either approved to move to Las Vegas, or somehow stay in Oakland. That question has to be resolved before anything else.

When Would Another Election be held in San Diego?

The best chance for a successful vote for the Chargers going forward is likely the national election in November 2018. One thing the Chargers have said consistently is that they are more likely to succeed in a high-turnout election. According to Chargers’ Special Counsel Mark Fabiani, the team’s research has also indicated that a Special Election is not likely to be successful, due to low voter turnout.

Where Would the Stadium be located?

Well, with the failure of both Measure C and Measure D, Mission Valley and Downtown are on the table. Mission Valley is likely to be cheaper, as the City already controls much of the land. Downtown is the preferred location for the NFL and the Chargers (likely because advertising, sponsorship, and non-NFL revenue opportunities are higher), but there’s at least an additional $200 - $250 million price tag involved because the city doesn’t own the land, and the MTS Bus Yard would need to be relocated.

How Does This Affect Other Stakeholders?

Whether you agree with them or not, this recent election proved how aggressively the San Diego Tourism Industry will protect their interests, both in regards to raising the TOT and the waterfront Convention Center expansion. Any downtown plan without their buy-in (or at least passive support) is Dead. On. Arrival.

There’s also the question of county involvement. Does it hurt or help the Chargers if a public vote is opened up to County voters. Is the $150 million (or any other amount) from SD County in the City’s 2015 Mission Valley plan for real?

The City’s agreement with the San Diego Padres specifies the presence of parking - not to mention the Padres and Chargers making a deal on how to share event revenues.

Any Anti-Stadium Messaging Regrets?

Did the “No on C” campaign permanently kill any possibility of getting a deal done? The “Jobs & Streets First” campaign slogan explicitly means that no stadium should ever get tax revenue (or by extension, any public revenue), not this particular plan shouldn’t get tax revenue. That’s going to be a difficult bell to unring.

Lastly, Can the Chargers Help Themselves?

Fire Mike McCoy and hire a Head Coach who can figure out how to close games in the 4th quarter. It doesn’t take a genius to figure out that even marginal 4th quarter/game management improvement is the difference between this team being in the thick of the division race versus playing out the string.

Avoid the inclination to play hardball with your (likely to be top 10-15) 1st round draft pick. Get him signed and in camp as soon as possible.

Seriously consider firing Mark Fabiani. Fabiani has had 15 years to get a deal to the finish line. All Spanos has to show for Fabiani’s efforts are: a rushed and failed campaign in San Diego, an extra $100 million from the NFL as a parting gift for losing the Los Angeles Relocation Derby, and an option with an owner and site Spanos doesn’t love. Maybe it’s a sacrificial gesture, but it’s still easier than swimming through the ashes of the bridges he’s burned in San Diego.

If you’re going to keep the option on Los Angeles past 2016, be honest with voters about the threat. Don’t hold Los Angeles over everyone’s heads the way a distant thunderstorm threatens a flash flood. Make it explicit that if this last chance doesn’t work, the team will move to Los Angeles and then leave it alone. Everyone deserves to clearly know what the stakes are.

With all these thoughts in mind, and if the Chargers don’t move to Los Angeles, here are my suggestions going forward:

Timetable for A Plan

The Chargers and San Diego should commit to a plan which involves the November 2018 election. Here’s why:

This allows for over 1 year of discussions, negotiations, public vetting, and detailed design work before submitting a Citizen’s Initiative (this is going to happen just to avoid the costs and time involved with an Environmental Impact Report). One of the primary (and justified) criticisms of Measure C was that it was crafted by the Chargers without input from other stakeholders. This timeframe allows all the stakeholders to work out their disagreements and come to an amicable resolution.

There’s potential for the California State Supreme Court to decide whether specific tax increases proposed via Citizen’s Initiative require a 2/3rds affirmative vote, or a simple majority.

It gives the City and Chargers’ fans a 1 year break in the stadium drama and allows the team to focus on football, and allows the team to focus their efforts at winning back the community.

Time heals some wounds. Consider the Padres in the mid-1990s. Imagine new owner John Moores putting Petco Park on the ballot in 1995, following the “Fire Sale” and the MLB Strike which cancelled the remainder of the 1994 season (including the playoffs, and Tony Gwynn’s run at .400). By attempting to move in 2015, then putting a stadium on the ballot in 2016, that’s essentially what the Chargers just did. The Padres instead spent all of 1995 winning back fans, put a playoff team on the field in 1996, followed by a losing (but entertaining) 1997, then their best ever team in 1998 and the passage of Petco Park.

What are some possible plans?

If the Chargers want to pursue the TOT increase path for a second time, I’d suggest at least making a contiguous Convention Center expansion part of the plan. Measure C might have been too cute by half - if the plan had allowed for any Convention Center expansion (contiguous or annex, depending on how things break in court), it might have drawn support from the SD Tourism Industry and at least broken 50%.

Finding a 3rd party to help share in costs could be a way forward. Earlier this year, I suggested a joint stadium and arena in the downtown location favored by the Chargers. AEG was interested in building a (mostly) privately financed arena in Seaport Village, and may be interested in downtown now that Measures C & D failed. Maybe you could get something like this to work: A joint stadium and arena downtown would cost about $1.65 billion ($1B for stadium, $400M for arena, $250M for land and MTS yard). Suppose that Dean Spanos sold 17% of the Chargers to AEG, equal to about $350M, plus $650M he offered in Measure C. Then, AEG and some wealthy basketball enthusiast(s) (like maybe the Jacobs family, if they sell their stake in the Kings?) go in 50/50 on the new arena and try to get an NBA expansion franchise for San Diego. This might leave a public cost limited to the land, infrastructure improvements, and the MTS yard. Further, it would free up the Sports Arena site and Qualcomm site for other development/uses.

A modern stadium in Mission Valley would certainly be popular with fans, as it mostly preserves the existing fan experience in San Diego and modernizes it for the 21st century. According to the Chargers and NFL, the City’s 2015 proposal would cost about $1.2B, up from the City’s estimate of $1.1B. When the public’s offer of $350M was combined with the Chargers $650M funding proposed, that left a $200M gap which neither side was willing to broach - it appears there wasn’t much interest on either side to move from their positions (the City and County stood firm likely for political reasons, the Chargers wanted downtown more). It remains to be seen if there’s a path forward here, or if a 3rd party gets involved (similar to what I mentioned above) to provide further development at the site. Working against this is support to try and secure the Mission Valley site for an SDSU expansion, including a smaller stadium for the Aztecs and a potential MLS franchise.

Of course, maybe there’s some other option out there that no one knows about yet.

In Closing

Assuming the Chargers are willing to stay in San Diego and able to work out an extension of their option in Los Angeles, there’s one more chance to get something done in San Diego before the team decides to move north.

The announcement that Chargers Special Advisor Fred Maas and and San Diego Mayor Kevin Faulconer met on Tuesday is a step in the right direction. It needs to be the first of many such steps.

If it’s done right, with everyone working together, there’s still a puncher’s chance.