San Diego officials aren’t sweating the announcement of naming rights for a proposed pro football stadium in downtown Los Angeles, and the influx of new development and visitor dollars that it could bring to that city if it becomes reality.
Instead, representatives of the city and the San Diego Chargers say they remain focused on finalizing financing for projects that would keep the team in town, and also maintain the local downtown’s competitive edge as a convention and tourist draw.
Los Angeles-based Anschutz Entertainment Group, more commonly known as AEG, announced Feb. 1 that it had reached an agreement with Farmers Insurance Group of Cos. on a 30-year naming rights deal — reportedly valued between $600 million and $700 million — for a stadium in downtown L.A. called Farmers Field.
The privately financed, 65,000-seat stadium, with an estimated price tag of $1 billion, would occupy the footprint of the current West Hall of the Los Angeles Convention Center.
Developers have not yet reached terms with the city for property acquisition and other project elements, and also have not secured a National Football League team to play in the stadium. The site would be designed to host football games, international soccer matches and other championship competitions, along with concerts and other entertainment events.
Leaders of AEG, which also developed Staples Center and the adjacent L.A. Live entertainment venue, said the stadium’s contiguous connection to the Los Angeles Convention Center would allow the city to lure top-tier conventions and trade shows previously unable to commit to Los Angeles.
Convention Center a Priority
San Diego officials said they were not immediately concerned about the Los Angeles announcement, noting the city already has baseball’s Petco Park, a convention center and several hotels that generate consistent downtown visitor traffic and tax revenue.
“L.A. had two pro football teams at one point, and it didn’t have that much of an impact on San Diego,” said Darren Pudgil, a spokesman for Mayor Jerry Sanders.
Still, Pudgil noted that the city’s top priorities include expanding the local convention center, which he said loses about a year’s worth of potential business annually from not being large enough to accommodate all the organizations that want to hold events there.
City officials in the coming months, perhaps by midyear, are expected to finalize financing plans for the proposed $700 million convention center expansion, which is currently in the design phase and would add more than 400,000 square feet.
Another local focus is securing funding for downtown infrastructure improvements that would support a proposed new stadium for the Chargers. Officials are aiming to place a ballot measure before voters in 2012, on a proposed $800 million stadium that would likely have an element of public financing.
Questions about future funding for the local convention center and stadium projects have recently arisen, following Gov. Jerry Brown’s proposal to eliminate state redevelopment agencies, among other remedies being considered by the Legislature to fix chronic state budget problems.
“Redevelopment is being looked at as just one part of the puzzle,” Pudgil said, referring to the potential impact of the governor’s proposal on funding for local downtown projects.
Chargers Have Local Commitment
For now, the Chargers are committed to playing in San Diego in 2011, although the team’s contract with the city includes a February-to-April window allowing it to exit the agreement, provided it makes remaining bond payments on Qualcomm Stadium.
During a recent press conference, NFL Commissioner Roger Goodell said the league would prefer to keep the Chargers in San Diego and bring a new team to Los Angeles.
Mark Fabiani, a special counsel to the San Diego Chargers, said the big price tag on the naming rights deal at Farmers Field could actually be helpful in financing a new San Diego stadium. The Chargers would need a strong naming rights deal to get a stadium built, and the AEG announcement could help drive up prices in the naming-rights market.
Fabiani said via e-mail that the Chargers are proceeding with feasibility work on the downtown San Diego site, “which is going well.” It is also watching for the outcome of state budget talks, which could impact local redevelopment, as well as the result of NFL negotiations with its players union.
“We owe the city a big piece of information that we can’t provide at this point,” Fabiani said. “How much money can the NFL contribute to the project once the collective bargaining situation is resolved?”
Minimal Foreseeable Impact
Even if a new Los Angeles stadium is built, at least one trade show industry expert says he’s not convinced it would have much of an impact on San Diego’s convention business.
Michael Hughes, managing director of Connecticut-based consulting firm Red 7 Media LLC, which tracks conference trends, said a downtown L.A. stadium might impact that city competitively if it boosts its overall tourism infrastructure — for instance, by encouraging the building of more hotels, restaurants and night life elements.
But that ripple effect could take years to play out, and so far L.A. Live and adjacent downtown development has not stolen significant convention traffic from other cities.
“Convention and trade show planners look for hotels in close proximity to the convention venue,” Hughes said. “San Diego is already strong in that capacity.”