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New Stadium Not Set in Stone or AstroTurf

The San Diego Chargers are mulling their next options for developing a new football stadium, including variations on prior ideas for projects in Mission Valley and East Village, after the California Coastal Commission’s approval of a convention center expansion that doesn’t incorporate a stadium and that the team opposed.

Mark Fabiani, special counsel to the Chargers organization, said the team’s recent proposal for a multiple-use facility combining a stadium with downtown convention space — at a cost of around $1.2 billion — is not necessarily dead, since the convention center project must still overcome legal challenges to its funding mechanism.

Nevertheless, the team is in active discussions with its development and financing partners, as well as San Diego city officials, on alternatives for a stadium-only or mixed-use project not tied to conventions. That includes a proposal first put forward several years ago, which calls for selling the city-owned Qualcomm Stadium site in Mission Valley to commercial developers and using the proceeds to help finance a new downtown stadium.

Fabiani said that idea was scuttled by the real estate market plunge of 2007-08 and its recessionary aftermath, which essentially put a halt to big commercial and residential developments nationwide. But the economy and construction financing climate have since improved considerably, opening new possibilities for commercial partnerships that could finance a stadium.

“We couldn’t get development partners to talk with us two years ago, or even a year ago, so things have improved in that sense,” Fabiani said.

Next Mayor Will Play Key Role

Fabiani said the team is also looking into naming-rights and other public and private partnership arrangements to finance the Chargers’ plans, put forward in 2011, for a football-only stadium that would be built on an 11-acre site in East Village. The site, east of Petco Park, was most recently used for city bus operations.

Another possibility is building a new stadium on the current Mission Valley site of the aging Qualcomm Stadium, although the options for feasible adjacent commercial development would be limited. The Chargers and city leaders have generally favored a new stadium in a central urban hub, preferably downtown.

Fabiani said the Chargers are in talks with the organization’s primary investment partner, Colony Capital LLC of Los Angeles, about bringing other regional or national development partners on board for a stadium project.

The team has also been in regular contact with interim Mayor Todd Gloria, although Fabiani said the future direction of a stadium project could depend largely on who wins San Diego’s mayoral election in November.

“Todd Gloria as City Council president will still have his finger on the pulse of everything that is happening with this project,” Fabiani said. “But it’s ultimately the next mayor who will decide where this goes from here.”

Alex Roth, communications adviser to Gloria, said the city remains committed to working with the Chargers on a new stadium.

“We understand their enormous value to San Diego,” Roth said, in an email. “We’ve had some productive conversations with the team in the past few weeks, and interim Mayor Gloria has made clear that his door is always open.”

Funding More Challenging Today

When the team introduced its stadium concept in 2011, the cost was estimated at $800 million. About half of that was expected to be covered by the Chargers and the National Football League, with the city funding the other half through a combination of state redevelopment agency money and voter-approved bond financing.

However, the city has since lost the redevelopment funding option after California disbanded the program last year, and voter approval of a stadium project is still deemed by many as an iffy prospect amid a fragile economic recovery.

In September, the Chargers asked the California Coastal Commission to reject the proposed $520 million expansion of the San Diego Convention Center, as the team touted an alternative $1.2 billion project combining a football stadium and big-event space for conventions in East Village.

The Coastal Commission on Oct. 10 unanimously approved the 740,000-square-foot convention center expansion, which includes a new five-acre rooftop public park.

The decision essentially paves the way for the project to move forward in late 2014, with an expected 2016 completion, but it must clear challenges in two private lawsuits related to its funding mechanism. City hotels have agreed to fund the bulk of costs through assessments on room bills, but the lawsuits contend that voters should approve such fees.

Provided the convention center expansion proceeds, the next-door Hilton San Diego Bayfront hotel is planning its own $200 million expansion, which would add 500 rooms.

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