Stadium at San Diego’s 10th Ave Marine Terminal Site Potentially a VERY Bad Idea

by on October 2, 2012 · 10 comments

in Business, Politics

UT San Diego CEO threatens port commissioner in effort to intimidate local officials into supporting development plan.

San Diego has a stadium problem.  I know.  You’re shocked—SHOCKED!—to hear this.  I mean, after all, it’s been the best kept secret in San Diego this side of peanut butter.  We’ve only been talking about a new football stadium to replace the aging and crumbling city owned Jack Murphy/Qualcomm Stadium for the Chargers (and Aztecs) for over a decade now.  And yes, it has been that long.  It may only seem like yesterday.

The Chargers have long contended that in order to remain financially competitive in the NFL they would need a new football only stadium with all the bells and whistles of the rest of the modern facilities that have cropped up throughout the league.  And there have been a LOT of them.

Think about it for a minute:  There are 32 teams and 31 stadiums in the NFL (the two New York teams share a stadium).  Of those 31 stadiums, almost all of them, with the notable exceptions of the three facilities in California (not coincidentally, I might add) are either brand new or have been completely rebuilt almost from the ground up.  Those that haven’t been replaced altogether have been completely refurbished and renovated:  Lambeau Field in Green Bay, Soldier Field in Chicago, and even Arrowhead Stadium in Kansas City have all undergone complete, extreme makeovers in the last decade.  You can also include the Louisiana Superdome, which was completely renovated after it was nearly destroyed in 2005 by Hurricane Katrina.

All other stadiums in the NFL are either brand new or nearly brand new.  That fact in and of itself is not so impressive.  What’s the big deal?  So they play in a new stadium?  That doesn’t necessarily mean an economic advantage, right?

Oh, but it does.  The way these new stadiums are designed, they have themselves become a revenue generator in ways that the old buildings could never be; in ways that Qualcomm Stadium can never be.  I’ve given my rationale for building a new stadium in San Diego before, and most of those same arguments still apply.  The truth is that Qualcomm Stadium still blows a $17 million annual hole in San Diego’s budget, and that without a new stadium San Diego will eventually lose the Chargers, and likely the Aztecs and San Diego’s two bowl games along with them.

Here’s one more factor:  A brand spanking new stadium in Downtown Los Angeles came one step closer to becoming a reality a few days ago when the LA City Council unanimously approved a plan sponsored by AEG to build a football stadium connected to the LA Convention Center.  The Chargers have never threatened to leave, even though they have an out clause in their lease with the City of San Diego that allows them to declare their intention to move between February and April each year until 2020.  Dean Spanos does not want to move his team, but with every step closer that Los Angeles takes to actually building a stadium, and with no progress here in San Diego, eventually a decision is going to have to be made.

In case you haven’t figured it out by now, I fully support the idea of building a new stadium in San Diego.  Having personally visited nearly every NFL stadium that was online and operational prior to 2006 (including some that no longer exist) I understand the difference between the new facilities and Qualcomm Stadium; I understand the advantage they provide.  I want to see San Diego build a new home for the Chargers and Aztecs (and yes, the Aztecs will play their home games there…..there is no need to build two stadiums in San Diego.  Studies have demonstrated that the market cannot support two of them).

Read my piece in the OB Rag linked above.  I give you all of the facts and figures, the numbers on potential economic impact that a new stadium could have.  I absolutely believe that if done right a new stadium would benefit San Diego.  And yes, that means a public investment—not a public donation—where the city stands to benefit financially, or at least make its investment back.  It can be done.  I’m not quite sure how it can be done (I’m not smart enough to figure out the finances of the thing), but I’m confident it can be done in a way that’s fair to all parties involved, including the public.

But that’s the key:  The new stadium has to be done right, financing and all.  The way it’s done and where it’s built has to make sense for San Diego.  It has to not hurt commerce in San Diego, or carry even the threat of negative economic impact.

Last January, shortly after he completed his purchase of the San Diego Union-Tribune, Doug Manchester ordered his editorial staff to produce a couple of edicts in support of his grand vision for a stadium-arena-sports entertainment complex on the 10th Avenue Marine Terminal site just south of Downtown.  You can read them here and here.

In their editorials, Manchester and his partner in crime, John Lynch, make their case for refurbishing the San Diego bayfront and combining the Convention Center with a stadium and arena complex.  And I have to admit that their vision sounds great, and their artist rendering of what the site might look like is pretty exciting.  But we also must take these plans with a grain of salt and realize that such a waterfront site is a developer’s wet dream, and hotel magnate Manchester is, first and foremost, a developer.

The issue recently came to the fore again when an email exchange between Lynch and Port Commissioner/Congressional candidate Scott Peters became public.  In the exchange, Lynch threatens to use his newspaper’s power to force the Port Commission to disband if Peters didn’t vote his way on the extension of the lease at 10Th Ave with Dole to ship and unload bananas at the terminal.  KPBS uncovered more of the sordid details in Lynch’s efforts to strongarm local pols into supporting their grand master plan.  “Ron, this is scandalous and not on [sic] the best interests of the city what can we do to stop it?” wrote Lynch in an email to County Supervisor Ron Roberts regarding the pending approval of the Dole lease, reported KPBS.

In their UT editorial (the long one, second linked above), Manchester, Lynch, et al, make the case that the union entities representing the workers at 10th Ave would ultimately support their plan to remake the bayfront with a stadium and a sports arena because they would be replacing the dock jobs at the site with other union jobs.  But there are a whole host of other things that Manchester and Co. apparently don’t want the public to consider.

First of all, the dockworker jobs at 10th Ave are very good paying jobs (there are about 300 of them currently according to the San Diego and Imperial Counties Labor Council).  Replacing those jobs would largely be low paying jobs in the service industry, such as hotel and food service workers.  They are not the kinds of jobs around which San Diego can build its economy.  All jobs are not equal, and it’s unlikely that the San Diego and Imperial Counties Labor Council (as cited in the UT editorial) would be on board with replacing high paying dock jobs with food service jobs.

Second is the impact it could have on the San Diego economy as a whole.  I happen to be in agreement with mayoral candidate Bob Filner in that the port has the promise to carry real economic growth and expansion to the San Diego region if expanded properly.  San Diego is the fourth largest of 11 port facilities in California.  The 10th Ave Marine Terminal is one of only 19 “strategic port” facilities as designated by the U.S. Navy in the entire country that has agreements in place to load or offload Navy equipment and personnel on short notice, which requires a higher security clearance since 9/11.  Given the importance of the Navy to the overall San Diego economy, anything that risks losing major Navy business is something that we must think twice about.  The rarity of deep water port facilities and the ability to move goods in and out of the region make the port an invaluable resource for economic growth and prosperity.

Manchester and Co. talk about relocating the 10th Ave operations south to National City, but they offer no facts or figures as to the feasibility of this option; whether the 10th Ave operations can be fully relocated to National City without disrupting current operations there, and without losing any of the current 10th Ave jobs and functions.  And they don’t tell us how much it would cost San Diego to expand the National City port in order to accommodate them.  They seem to assume that we can merely snap our fingers and it’ll be done.

They also provide only loose projections as to how much a new stadium complex would cost and where the money would come from, much of which is likely to turn out to be pie-in-the-sky wishful thinking.  And their projections for the sale and redevelopment of the current Qualcomm site are rife with unrealistic expectations given the already high density of the area and the problems even more density will cause.  The Chargers already tried out a plan to redevelop the Qualcomm site with a new stadium and concluded that in this economic environment it was not feasible.  There’s no reason to think that has changed in the last 6 years.

Then we come to find out through the KPBS investigation that Doug Manchester has significant stock holdings in Host Hotels and Resorts, the company he sold his Marriott Marina and Manchester Grand Hyatt to.  The stock was part of the sale agreements.  It stands to reason that any development on the 10th Ave Marine Terminal site would enormously benefit Manchester personally and financially.

Let’s set aside for a moment the fact that a newspaper’s job is to report the news, not to make the news.  That’s especially true for the largest (and only) newspaper in the eighth largest city in the country.  It shouldn’t be the job of the local newspaper to strongarm local pols into bending to the will of its developer owner.  Ignore that for now.

If Manchester the developer is so convinced as to the vitality of his plan, then he should be willing to show us the details of how a stadium on the 10th Ave Marine Terminal site would benefit the overall economy of San Diego, and how it can be done without damaging the viability of the San Diego region’s port activities in the least.  Then and only then might I jump on board.

In the meantime, there is a framework for a plan to build a new stadium adjacent to Petco Park that shows some real promise and will not interfere with port activities.  Can it be done?  Can the financing be done in a way that works not only for the Chargers but for the City and County of San Diego as a whole?  I have no idea.  But for the time being it’s a far better option with far fewer potential pitfalls than the monstrosity being promoted by the rich developer cum media mogul.  And it can be done without the crybaby owners of the local newspaper issuing direct threats to local officials or putting our local economy at risk.

You can follow Andy on Twitter at @AndyCohenSD

 

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Andy Cohen

Andy spent 15 years working in the highest levels of the San Diego professional sports world, including both the Padres and the Chargers. He began his foray into writing while a volunteer for Francine Busby's 2010 Congressional campaign, eventually becoming a contributor to the now defunct SDNN. He has reported on local and national politics for both the OB Rag and the San Diego Free Press. When not reporting news and events, he offers political and policy commentary from a liberal perspective, occasionally turning back to his sports roots. While he does not hide his more liberal political bent, Andy always strives for fairness in the telling of a story.
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{ 10 comments… read them below or add one }

avatar doug porter October 2, 2012 at 12:07 pm

What really strikes me about the “oh, we’ll just move the port to National City” part of Dougchester’s deal is that nobody ever even talked to National City. It’s like “that Port thing is dirty, let’s send it it National City”. The underlying racism behind that mentality is, in my opinion, as criminal as the “it’s-the-best-thing-for-San-Diego, I’m not doing this for personal gain” crap that his minions in Mission Valley are spewing via their offset presses.

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avatar Andy Cohen October 2, 2012 at 12:17 pm

One more thing that I was remiss in not mentioning: Another thing that should be considered is whether or not the economic growth that “The Dougchester” says he would create with his plan would be actual growth, or would it simply displace other activity from other areas of Downtown? Would it actually create new and unique activity, or would it merely pull patrons away from other Gaslamp area bars and restaurants? What is the saturation point of the Downtown area? Manchester et al haven’t provided us with any of that kind of info.

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avatar Taxi Rob October 2, 2012 at 12:45 pm

A very good question. I’m from Cleveland originally, where The Flats, a former industrial area on the banks of the Cuyahoga River, was redeveloped into an entertainment district (with almost no redevelopment funds, “organically” you might say). Now when the Warehouse District took off (a new entertainment district 1000 feet away, built almost entirely with redevelopment funds) it resulted in the failure of many long established Flats establishments.

There is, in fact a finite supply of entertainment dollars, a lot of bar owners in SD have already found that out the hard way. As patrons flock to new and shiny watering holes, many have closed their doors or been sold (some a few times over). The Gaslamp has been a blessing and a boondoggle for Downtown, how much more should we dump into it when Dougchester starts stealing business away, on top of the loss that has resulted from people flocking to North Park for their fix of the nightlife? What do we do with the Gaslamp when those restaurants and clubs begin to fail?

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avatar Taxi Rob October 2, 2012 at 12:54 pm

A. Move that piece of crap airport to Brown Field
B. Build a new stadium in place of Lindbergh Field
C. Redevelop the rest of the airport property, and tie it to a total harbor redevelopment plan, including
D. Build an attraction more awesome than Navy Pier in Chicago, since we have the ACTUAL Navy here

That should keep everyone busy for the next 20 years., keep the Chargers and Comic Con from leaving, and add enough new housing units so that prices stay flat city wide. There, I just solved all our problems.

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avatar thoughtfulbear October 2, 2012 at 1:42 pm

L&M&Co had better get it through their collectively-thick heads: NOT GONNA HAPPEN. PERIOD. They’re already getting called out on all sides over this, and rightly so (and special props both to Scott Peters and to National City’s mayor, who so very beautifully told them precisely where they could park it – one hint: not in HIS town. Cue the popcorn!)

The Chargers already HAVE a stadium. USE IT, and GET USED TO IT.

Fooled me once, shame on you; fool me twice…

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avatar John Lawrence October 2, 2012 at 2:21 pm

According to David Cay Johnston in his book “Free Lunch,”: “Many commercial sports franchises in America have never earned a profit from the market. The only increases in value that the teams reported came from the taxpayers.” A new stadium for the Chargers/Aztecs will follow the same path trodden by the other billionaire team owners and hoteliers. Stick the taxpayers with the bill for the new stadium.

According to Johnston, “The logical place for a [stadium] is where the foreseeable uses for the land are very low in value, like the edge of a city or a spit of land off the beaten track. Proposals for a [stadium in the ] downtown of almost any major city are at best filed away under ‘economic lunacy.’”

Andy, you say “I’m not smart enough to figure out the finances of the thing.” But that is the crucial consideration here. These guys are smart enough to figure out how to get free public land. Isn’t the 10th Ave terminal owned by the city? These guys are smart enough to figure out how to get taxpayer supported bonds and all the rest so that they end up making even more money while the good jobs at the port disappear, business is drawn away from the Gaslamp, traffic in downtown becomes a nightmare and Spanos, Manchester and all make out like bandits.

You can bet your bippie that they will want free land for the stadium and they will want txpayer supported bonds to build it. They will probably also want a deal to not pay taxes and they will want other government subsidies.

The financing of the whole thing will be kept out of the eyes of the public thanks to Manchester’s U-T which will make every effort to sell it to the public who will end up taking on all the risk while the billionaires pocket all the profits.

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avatar JEC October 2, 2012 at 4:06 pm

Excellant call out on the Navy’s designation of the 10th St. Terminal – but then, it’s smoke and mirrors. It’s a game of millionaires and billionaires – if they can’t afford it neither can we. Consider, with 2- 0 ten thousand seats go vacant for the Falcons game. The Chargers are lucky to sell out two out of eight. Spanos complains there are too many other activities in San Diego – far out dude – not a problem at a $100 + a ticket. Since the Spanos clan got hold of the Chargers all they have done is whine about us taxpayers not lining their pockets. And yes the Chargers have threatened to move – more than once. Recall that John Moores offered to pony up $120 million to get a competing basball park built in Tijuana before Petco was even finished. Yeah, go Padres – and take the Chargers with you. And Andy, about financing – that is something I understand very well. Food for thought – debt is such a free lunch – if someone, anyone has the money to cover debt service let them step up and start by putting in the bank. Yeah, I know the story – “oh but the bond money will build the facility to generate the revenue” – poppycock! The Business is here, the team is playing and the overpriced tickets are kind of being sold. Is a half a billion bond going to be retired by selling the other 15% of the unsold tickets? A $500 million bond for 30 years (certainly let’s stretch that out why not 50 years – because it’s bad policy) will cost about $29 million per year At $140 per ticket (net – meaning about $175 per) that’s 207,142 tickets a season – more tickets at a higher price. About 25,000 per game – yeah, I know, all those corporate sky boxes – why not advance purchase and do it condo style? I see those corporations lining up now. And ask yourself – the Spanos clan was/is based out of Stockton last I heard – exactly where is all that money being parked? I know most of the players drawing those million dollar salaries do not live in San Diego nor California.

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avatar thoughtfulbear October 2, 2012 at 5:45 pm

Yes, and Stockton ended up having to file for bankruptcy. I do feel sorry for all the folks up there that’s going to impact – but NOT the Spanoses. Let them pitch in to help Stockton untangle its money woes, if they want to “park their money” somewhere useful – it’s where they made theirs, isn’t it?

And yes, there are lots of things to do around SD that are far more affordable than some football game. This is a news flash to him?

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avatar Lanette October 8, 2012 at 12:18 pm

I have a question – why can’t the new stadium be built next to the current stadium (this is what was done in Atlanta). The infrastructure for transportation is already in place. I don’t think that a stadium downtown will bring the impact economically due to the laws of increasing (in this case decreasing) demand – PETCO has appropriate facilities for concerts, parties as well as baseball games. PETCO, Gaslamp and the Convention Center have already made downtown a wonderful flourishing area – Is there really an issue with attracting more downtown hotels and high end condos/apartments or business to justify the expense of another stadium downtown? What happens to Qualcomm? Does it go to SDSU, to the city?

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avatar Andy Cohen October 9, 2012 at 12:06 am

Lanette- That was the original plan that they presented back around 2005, I think. They were going to build the new stadium on the current stadium property, raze the old stadium, and redevelop a significant chunk of the rest of the property–complete with public park space along the river–in order to pay for it. It was going to be a combination of mixed use development (combining high density housing and commercial uses) and a hotel, among other things. But when the housing bubble began to burst, that plan was no longer viable, since redeveloping the site was the key to paying for the whole project. They had to scrap that plan because it would no longer “pencil out,” as they say.

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