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Take It Or Leave It

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Once the Chargers had made the decision to stay in San Diego for the 2016 season, the City and County claimed they were willing to negotiate in good faith. Is that really true?

The now dead Mission Valley Plan
The now dead Mission Valley Plan

Since the Chargers announced on Monday afternoon that they intended to pursue the JMI Joint Use Facility in Downtown, there has been a steady stream of criticism directed at the franchise by the San Diego political establishment.

However, there is one very telling detail which was mentioned by County Supervisor Ron Roberts, and has since been repeated by Roberts elsewhere.

The Chargers Did Entertain Mission Valley

The Chargers apparently were willing to stay in Mission Valley. The sticking point is that they were asking for an additional $200 million from the public, for a total of $550 million in public money.

The day before they officially announced they were staying in San Diego for the 2016 season, an article in the OC Register had details about the Chargers looking at temporary training facilities in Santa Ana. The article also mentioned the team would be asking for $500M in public money from San Diego - a critical point which I wrote about this next morning.

Therefore, no one should've been surprised in the least when the Chargers made that request.

Taking One Last Look at the Mission Valley Plan

In summary, the plan called for $200 million from the City, and $150 million from the County. The remaining $750 million was to be paid by the Chargers and the NFL. Total cost of $1.1 billion. Click here for the City's full proposal.

However, there were two big problems with the Mission Valley plan:

First, there was the expedited Environmental Impact Report (EIR) the City created for the project. This prompted the Chargers to walk away from negotiations with the City in 2015. We'll come back to this in a moment.

Second, several people believed the cost estimate of $1.1 billion was too low. When the City presented their plan to the NFL ownership committees back in November, San Francisco 49ers CEO Jed York told them "your numbers are light." NFL in-house counsel also questioned if the "$1.1 billion budget would be sufficient to build the stadium."

So, let's reconsider the Mission Valley Plan with what we know now.

The City and County didn't move off their offer of $350 million in public money for Mission Valley. According to Roberts, Mayor Kevin Faulconer flatly told the Chargers no.

The Citizen's Initiative process, which the Chargers would be using to bypass the EIR requirement, could have added a re-zoning of the Qualcomm site which would free up land for sale. Remember CSAG's estimate: 75 acres at $3 million/acre for a total of $225 million. Why didn't the City or County entertain this option?

The NFL offered an extra $100 million towards construction of any stadium in San Diego (or Oakland).

If you factor in that the price tag of the Mission Valley Plan was deemed too low (by let's say $200 million for argument's sake), these are the conclusions you're left with:

  • The Chargers and the NFL were willing to contribute at least $750 million towards the Mission Valley Plan.
  • The extra $200 million was to cover the gap between what the NFL (and likely the Chargers) believed what the Mission Valley plan would cost, and the City's initial estimate.
  • The City and County were not willing to entertain the idea of contributing anything more than they initially offered, even with the Citizen's Initiative process available to free up the Qualcomm site for development and additional revenue, and even when outside analysis indicated their plan might be under-budgeted.

That's right everyone: The City and the County, who claimed to be so excited to just have a partner at the table, gave the Chargers a final offer at the outset. Not "we'll discuss it and get back to you", or maybe "OK, but that's a hard cap and you're on the hook for the rest", or even "We can come up to $450 million, but that's it."

They essentially said "Here's the Mission Valley Plan. Take it or leave it." The Chargers chose to leave it.

As an aside: If you adjust the $303.8 million the public spent on Petco Park in 1998 for inflation, that actual public cost would be $441.5 million in 2016. I'd hasten to add the Padres contributed only $153 million in 1998 ($222 million, adjusted for 2016), which works out to a 2/1 public/private split. If the Chargers in fact offered $750 million for Mission Valley, the worst possible split would've been 57/43 private/public.

And so, we're left with a "winner take all" political battle. Either the Mayor wins, gets the contiguous Convention Center expansion, and forces the Chargers back to Mission Valley on his terms (or they go to Inglewood). Or the Chargers/JMI/Citizen's Plan wins, killing the contiguous expansion and getting their stadium downtown.

Conclusion

So, for all the happy talk about wanting to work together, and finding a solution which benefits everyone, what we got instead was a political establishment which was determined not to move off their initial position, even when they had what they wanted: a partner at the table who was willing to consider their preferred plan.

Maybe San Diego's elected officials thought they had all the leverage following the NFL Owner's vote in Houston. Maybe they were still angry over what had happened in 2015 and were determined not to give an inch against an opponent they believed was not sincere (and there's no shortage of evidence to support that conclusion). Maybe there's a political calculation to protect Faulconer's political future. I don't know, and I really don't care.

Whatever the case is, it doesn't matter. Mission Valley isn't happening for one reason above all others: when time came to negotiate, the City told the Chargers to take it or leave it.