Your article on the recent real estate conference at the University of San Diego (“Conference Focuses on Redevelopment of Downtown,” Jan. 24) quoted several speakers, including the former mayor of Seattle, as saying the business community must tell the story of the economic and cultural benefits of Downtown redevelopment. I could not agree more.
That is why a broad cross-section of San Diego business and labor leaders recently formed MANDATE, a citizens’ coalition supporting the implementation of the Downtown Ballpark District and East Village redevelopment that was decisively approved by 60 percent of San Diego voters in November 1998.
Redevelopment in Downtown San Diego over the past 25 years has stimulated a 6.3-to-1 ratio of private to public development. Private investment in the ballpark district, which is the largest redevelopment project in our city’s history, promises to match or exceed that ratio. This is going to be an economic and cultural home run for San Diego, and that story, indeed, needs to be told.
I served on the finance committee of the citizens task force on ballpark planning, which recommended the site and the financing principles for the ballpark district. East Village was selected because of the enormous public benefits of redeveloping 26 blighted blocks into a thriving neighborhood.
For the first time in the history of professional sports, a franchise has assumed the obligation to redevelop an entire neighborhood around the venue in which it plays. The Padres and their development partners are investing $640 million in hotels, offices, retail and residential development in the ballpark district, in addition to the $115 million (plus all construction cost overruns) they are investing in the ballpark itself.
I am a third generation San Diegan. I have been involved in Downtown San Diego real estate most of my professional life as a developer and lender. I served six years on the board of the Centre City Development Corp. and was chairman of the Southeast Economic Development Corp. for three years. The ballpark district has stimulated interest in commercial and residential development in a part of Downtown that has languished for decades. It is the catalyst CCDC has long sought as the cornerstone for a new Downtown neighborhood.
In 1998, the total assessed valuation for all the property in the East Village, from Sixth Avenue to Interstate 5 and from E Street to Commercial Street, was under $210 million. The Padres and their partners alone are investing more than three times that amount in a 26-block area that represents about 20 percent of the East Village.
More than $1 billion of new development is in the pipeline or the planning stages. It is entirely conceivable that several billion dollars will ultimately be invested in and around the ballpark district, including as many as 10,000 residential units. Many of those are going east of 12th Avenue, where CCDC has tried unsuccessfully for years to encourage residential development. That is all attributable to the ballpark. It is already happening, but it would go away if the ballpark were not built.
There has been much debate recently about the financing of the ballpark district, and the focus has been on the cost and sources of servicing the debt on the bonds that will cover the $300 million public investment by the City, CCDC and the San Diego Unified Port District.
The real story should be the billions in value that is being created by the private investment. The incremental property, hotel and sales taxes that will be generated by the ballpark district will pay off the bonds and pay for improvements and services in neighborhoods throughout the city.
Tying the ballpark to redevelopment will keep the Padres in San Diego for future generations without impacting local taxpayers, other projects or city services.
This is a win-win for San Diego. The business community wants it. Labor wants it. Civic and neighborhood leaders want it. And most importantly, the people of San Diego want it. The voters spoke loudly and clearly. That is why MANDATE was formed, because we expect the city and the Padres to implement the visionary project for this region that the voters approved.
Deputy City Manager Bruce Herring said, “The good news (about the Chargers ticket deal) is the rent they pay to the city goes up by 10 percent.”
Herring neglects to mention the city’s cost of each ticket purchased under the ticket guarantee will go up by $3.60, while the city would receive 40 cents of the increase for each ticket sold by the Chargers. The city will receive higher net rent under this increase only if the number of tickets purchased under the guarantee is less than one-ninth the number of tickets sold by the Chargers. The break-even point is 60,000 unsold general admission tickets per season.
During the 1999 season, the city spent $6.2 million to buy 146,426 unsold tickets at an average price of $42. It could be worse in the 2000 season. If the $4 price increase causes a 5 percent attendance decrease compared to 1999, the city would spend $7.7 million to buy 169,104 tickets at an average price of $45.56. But even if the city’s ticket guarantee purchases are the same as in 1999, the city’s cost would be $6.7 million.
Herring’s idea of “good news” is unusual, to say the least.