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Wednesday, Feb 28, 2024

Exit Planning San Diego Can Update Economic Playbook

It could hardly be called surprising, but the San Diego Chargers have now made it official: the football team is leaving for Los Angeles after more than a half-century in San Diego.

“San Diego has been our home for 56 years,” said Chargers Chairman Dean Spanos, in a statement announcing the pending departure. “It will always be part of our identity, and my family and I have nothing but gratitude and appreciation for the support and passion our fans have shared with us over the years.”

The Chargers are now determined to build a new identity in the Los Angeles market; they have rebranded as the Los Angeles Chargers. Beginning in 2019, the team will play in a $2.66 billion Inglewood stadium being built by Los Angeles Rams owner Stan Kroenke.

Aside from obvious hard feelings among diehard fans (and ex-fans), the team’s departure creates a potentially long list of local winners and losers going forward, along with various scenarios filled with opportunities and challenges for the San Diego region.

These are among the apparent business and economic upshots, which San Diego Business Journal will be examining in further detail in coming weeks.

Potential Winners

Education: Some economists see the Chargers’ exit as an opportunity to turn the current Mission Valley site of Qualcomm Stadium into a long-sought extension of San Diego State University, and other entities that could create something along the lines of a technology incubator. “One of the key points of the future economy is that it requires education,” said Ray Major, chief economist with the San Diego Association of Governments. “I would love to see San Diego State be an incubator the way UCSD is.”

San Diego State officials have previously supported proposals that could incorporate elements such as administrative offices, student and staff housing or a new stadium for the SDSU Aztecs.

Other Sports: Teams including the San Diego Padres weren’t immediately commenting beyond their disappointment about the Chargers’ exit. But the move will undoubtedly allow local sports fans to focus more of their attention — along with spending on tickets, T-shirts, memorabilia and business-related sponsorships — on the Padres, hockey’s San Diego Gulls and San Diego State University’s Aztecs. College football is poised to become the prime football offering for San Diego, along the lines of what UCLA and USC already mean to Los Angeles (now among the many obstacles facing the Los Angeles Chargers).

Convention Center Expansion Backers: With the Chargers and their talk of a new downtown stadium now in the rear-view mirror, local advocates of expanding the San Diego Convention Center will likely savor the chance to focus public attention — and potentially taxpayer dollars — on a long-sought expansion of the current waterfront facility. But they will face the same challenges the Chargers encountered at the ballot box, among other lingering issues.

Potential Losers

Local charities: Since its inception in 1995, the Chargers Community Foundation, founded by Alex Spanos, has raised more than $5 million for local schools and other beneficiaries. Local sports coaches have also received more than $200,000 in grants from the foundation. It has also underwritten significant health care services, including a program offering free mammograms to uninsured and underinsured women, in partnership with the Susan G. Komen Foundation.

“Absent the Chargers brand, there’s going to be a deficit with how are we going to reach these folks who haven’t been to the doctor, but watch football,” said Laura Farmer Sherman, president and CEO. “They really had an impact in our community and we’ll just have to figure out how to bridge the gap.”

Stadium workers: In 2015, service provider Centerplate (since replaced by Delaware North) employed 831 at Qualcomm Stadium. At that time, the city employed 37 full-time workers at the venue, including building and maintenance supervisors and other managers.


Development: Though the Chargers weren’t convinced, the 166-acre Mission Valley site has long been seen as a desirable, transit-friendly location to build new residential and commercial amenities. The Chargers’ exit could bring some clarity to the long-delayed matter of updating the Mission Valley community plan to address traffic and other chronic problems. Real estate consultant Gary London, who heads The London Group, said his own research indicates the area should be “intensively” redeveloped into a mixed-use project.

“It’s the largest, best-located, undeveloped land asset in San Diego County,” he said. “We’re talking about the potential to locate technology headquarters there, build lots of office space, hotel, retail, lots of residential, rehabilitate the (San Diego) River, build a big river park,” he said.


Redevelopment: Just like the Chargers’ thwarted downtown stadium, any Mission Valley project will face significant preparation to address ground contamination from spilled fuel, water drainage and other environmental issues. Development in San Diego rarely happens quickly at any location. Nick Totah, a local commercial broker with Marcus & Millichap, notes that an approved development blueprint could be years away, depending on neighborhood opposition and the time it takes to complete entitlement, construction and other approvals.


Civic pride and reputation: During NFL seasons, San Diego will miss out on the millions of U.S. TV viewers, especially in the East and Midwest, watching games being played in splendid weather and wishing they were here. The Super Bowl, with all its attendant PR benefits, will also likely not be returning. But it’s not yet known how the loss of the NFL will impact hotel or convention bookings, as visitors have long had other reasons to visit, including beaches and the San Diego Zoo. Hoteliers have previously said Chargers games have limited impact on their bookings.

Business recruiting: Experts so far do not expect the loss of NFL football to significantly impact the ability of technology and other companies to attract workers to the region.

“As a startup community, we compete with cities like Austin and Boulder,” said Mike Krenn, president of San Diego Venture Group. “They don’t have football teams.”

Joe Panetta, president of BIOCOM, said the issue is more about image and how the Chargers’ story reflects more broadly on how things work in San Diego. “The fact that we couldn’t make this work reflects poorly on the city.”

Consumer spending and jobs: Despite more than 40 years of U.S. sports teams leaving their hometowns for greener pastures, academic and economic experts have found limited information on the long-term economic impacts. In most cases, the fallout has been minimal. That’s partly because high-paid sports stars don’t necessarily live or spend money in their home markets; stadium and other game-related jobs are generally low-paying; and consumers find other things to spend their money on after the team leaves town.

Alan Gin, an economics professor at University of San Diego, estimates the Chargers’ presence currently generates about 1,400 direct jobs, 200 indirect positions, and $104 million annually in direct expenditures.


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