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Chargers Cloud Direction for Downtown

A San Diego Chargers stadium and an expanded convention center have been seen as competing downtown priorities for the past half-decade, both struggling to gain mass support.

But it’s not certain whether an exit by the Chargers — which appeared imminent at press time — would make things any clearer for the convention center’s prospects.

Clarity will not likely come until a number of moving pieces fall into place later this year. Those include the fate of a November ballot measure seeking a 5 percent increase in the city’s hotel tax — to fund possible projects including a downtown stadium or convention center expansion — and what becomes of a crucial waterfront parcel near the current center that is now being targeted for another development team’s new hotel.

Local attorney Cory Briggs, one of two leaders of a citizens’ group now gathering signatures for the hotel tax initiative, said it’s time for voters to decide the ultimate priorities for downtown and Mission Valley, which could also be targeted for post-Chargers civic improvements if the measure passes.

“This ballot measure was designed to work regardless of whether the Chargers stay or go, and regardless of what hand we are dealt,” Briggs said in a recent interview. “This will be a chance for the public to say, ‘these are our priorities, and this is what we want going forward.’ ”

The local hotel and tourism industry — which sees the convention center as the top priority for downtown, preferably as a contiguous project — and city officials are still formulating their response to the citizens’ initiative.

LA Chargers?

Meanwhile, as the city waited for the Chargers to return to the negotiating table to discuss a downtown or Mission Valley stadium, media reports on Jan. 19 indicated that the Chargers had already applied to trademark the names “Los Angeles Chargers” and “LA Chargers.” That occurred two days after the NFL on Jan. 12 voted to give Chargers owner Dean Spanos the choice of joining the St. Louis Rams in Inglewood within the next year, or returning to San Diego to negotiate a deal to stay in place.

Immediately after the NFL vote, Spanos said he would take a few weeks to mull his options, and at press time he was in negotiations with Rams owner Stan Kroenke. Spanos could go to Inglewood as Kroenke’s full partner or as a stadium tenant, and if he chooses not to go at all, the option to partner with the Rams would switch over to the Oakland Raiders.

Even if the Chargers returned to local negotiations, and a downtown stadium was on the table, the numerous issues to resolve would include what type of facility to build, where to place it, how to finance it, and whether voters would be on board for a new stadium, a convention center expansion, or some type of combination project.

To date, there have been no major public efforts by the Chargers and the local hospitality industry to team up on a plan. Officially, stadium and convention center proposals for downtown have proceeded on separate and sometimes conflicting tracks for at least the past five years.

2008 Plans

The latest convention center expansion plan dates back to 2008, when center operators entered into a memorandum of understanding with the Unified Port of San Diego to explore the feasibility of a hotel and a center expansion on a site being leased by developer Fifth Avenue Landing LLC, adjacent to Embarcadero Marina Park South.

In 2012, local hoteliers and San Diego City Council approved a funding mechanism under which hoteliers would collect an extra surcharge on room bills — between 1 percent and 3 percent — which was expected to fund the bulk of costs for the $520 million center expansion. The court struck down the funding mechanism in 2014, on the grounds that it was a tax that needed to be approved by voters.

The Chargers in 2010 put forward the team’s proposal for an $800 million, 62,000-seat stadium on an East Village parcel occupied primarily by a city bus lot that would need to be relocated. That plan called for the Chargers to contribute $200 million and the NFL another $200 through its construction loan program, with the remainder to be financed by the city.

While the city never finalized a financing plan for that project, much of its share likely would have come from community redevelopment funds among other sources, subject to a public vote targeted at that time for 2012. Chargers and government officials have said that plan was essentially scrapped after the state of California disbanded its redevelopment agencies.

The Alternatives

Since 2010, there have been several behind-the-scenes discussions involving the Chargers, developers and government officials about alternatives for a downtown stadium. Those included a 2013 proposal by the Chargers to build a combination stadium and multipurpose event center that could host conventions in East Village; and a similar proposal with four variations of stadium and event space put forward in 2014 by JMI Realty, which spearheaded development of Petco Park.

The opportunity for a Chargers/tourism industry project was likely extinguished when the Chargers in 2013 called on the California Coastal Commission to reject the proposed contiguous convention center expansion and instead consider the team’s East Village dual-purpose facility plan, which the Chargers expected would cost around $1.2 billion.

The Coastal Commission ultimately approved the convention center expansion with conditions, but the Chargers’ lobbying of the coastal panel did not sit well with city officials or the local hospitality industry. To date, no formal proposals for a combination stadium/convention facility have come before any local government agency. Also, government and convention center leaders have not put forward a financing plan to succeed the mechanism that was scuttled in court.

More Hurdles

San Diego City Council Member David Alvarez said the downtown situation has now been complicated further by a new hotel project being proposed for the Fifth Avenue Landing parcel, previously deemed crucial to a contiguous expansion of the convention center. The San Diego Convention Center Corp. last year stopped making payments on its earlier $13.5 million lease purchase of the seven-acre property located behind the center.

Fifth Avenue Landing LLC, which holds the lease, and The Robert Green Co. of Encinitas recently announced plans at the site for an 831-room, $270 million hotel. The project would require approvals by the port district and coastal commission.

In a recent letter to Alvarez, Fifth Avenue Landing partners Raymond Carpenter and Arthur Engel noted that the developer is under contractual duty to submit a proposal for a development that includes at least 400 hotel rooms, under terms of its lease with the port district.

Fifth Avenue Landing officials have subsequently said the company can still sell the land option back to the city if officials decide to proceed on a new plan incorporating the parcel. Convention center officials are currently considering alternatives including a noncontiguous, campuslike configuration that could be located near the current center.

Regardless of the Chargers’ situation, Alvarez said the city should be focused on maximizing visitor dollars generated by the convention center and pursuing the most accurate information on alternatives to achieve that, especially if it plans to reacquire the Fifth Avenue site.

“Right now, we still don’t have all of the data that we need to decide whether a contiguous or noncontiguous project is the way to go,” he said.

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