It looks like there is one route to a football stadium in downtown San Diego and Mayor Kevin Faulconer doesn’t want any part of it.

That could end any push for a downtown facility unless the Chargers insist on twisting the mayor’s arm or seeing it through on their own.

The downtown effort began in earnest last summer when, JMI Realty, the company founded by former Padres owner John Moores, hired a well-known NFL stadium guru to put together a financial framework for a combined Chargers stadium and Convention Center expansion near Petco Park.

But when JMI shipped off the plan to the lead consultant working on a Chargers stadium for Faulconer, the mayor’s people disregarded it.


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Stephen Puetz, the mayor’s chief of staff, maintains JMI’s proposal was no different than the numerous unsolicited third-party plans Faulconer received last summer. And now, even though the Chargers have decided to search for a new stadium in San Diego and an attorney backed by Moores is pushing a ballot measure that could make it easier to build a downtown facility, Puetz says JMI’s proposal remains irrelevant.

The result seems clear: If the Chargers want a stadium downtown, they may have to pursue it over the mayor’s opposition. That might happen. The team’s owner says downtown is still on the table and JMI’s plan is the only one that has been floated for many years.

The Chargers’ Mark Fabiani said the team worked closely with JMI in 2013 when together they tried to stop the city from expanding the Convention Center on its current footprint along the bay.

“We have continued to stay in close touch with JMI and are well aware of their financing concepts for downtown,” Fabiani said.

He declined to comment further.

The JMI Proposal

JMI’s interest in a downtown stadium/Convention Center is simple. The company is a hotelier and large property owner in East Village, and any new facility would go right next to a big parcel of land the company has near Petco Park and the Central Library. JMI has been pushing to put the stadium/Convention Center – the “convadium” – next to that land since Chargers stadium discussions heated up at the beginning of last year.

Over the summer, JMI hired NFL stadium consultant Mitchell Ziets to figure out if such a plan was financially feasible. Ziets was the consultant former Mayor Jerry Sanders hired in late 2009 to develop a stadium plan on behalf of the city. The city paid Ziets $160,000 over the next year and a half, but he produced no plan. Sanders’ staffers said there was just no deal to be done at the time.

Steve Peace, a JMI deputy, told me that what Ziets came up with for JMI was less a formal financing plan than a framework for how a downtown convadium might work. Peace said Ziets was given two main guiding principles. First, the Chargers should not be required to pay more than the Minnesota Vikings did in that team’s recent successful stadium proposal in Minneapolis. And the city’s hoteliers shouldn’t spend any more than what they were expected to pay as part of the failed Convention Center expansion financing plan along the bay.

“His instructions were: Don’t give sticker shock to the hoteliers and don’t give sticker shock to the NFL,” Peace said.

Ziets came up with a $1.7 billion proposal, a number Peace believes is cheaper than a standalone stadium in Mission Valley and a separate bayfront Convention Center expansion once you factor in all the costs for financing the projects and pay off the existing debt at Qualcomm Stadium.

Ziets’ plan includes either a hell of a lot of public money or less than what’s being offered the Chargers now, depending on how you count it. And there’s the rub.

Ziets uses the well-worn money pots always trotted out to justify spending public dollars on both a stadium and Convention Center expansion. He targets savings from the city’s current losses operating Qualcomm Stadium and increased hotel-room tax projections from an expanded Convention Center – including a new hotel JMI would build if an expansion happens next to its land. Those sources add up to a couple hundred million.

But, aside from the Chargers, Ziets’ real big number is more than a half-billion dollars from the city’s hotel industry. That’s where the mayor’s office has problems. Faulconer doesn’t believe the next part of JMI’s plan will work.

The Briggs Interlude

In July, Ziets sent his financing proposal to the city’s Chargers consultant, where it landed with a thud. Another shoe dropped in October, when activist attorney Cory Briggs launched a citizens initiative to do a laundry list of things that would make it easier to build a convadium downtown, such as allowing for a speedier and legally sound environmental review. Moores’ company and Moores personally threw almost $700,000 at Briggs’ initiative to make sure it would happen.

Under the Briggs plan, the city’s hotel-room tax would increase by 5 percent, but the hotel industry would be allowed to deduct part of their new tax bill if they funneled the money toward a Convention Center expansion.

That way, Briggs would consider cash that the hotel industry would put toward a Convention Center expansion private money.

Briggs’ initiative also bars any public money from going toward a new football stadium. But, crucially, Briggs says that prohibition only applies to the stadium portion of a convadium.

In other words, no public dollars would be allowed to pay for the stadium bowl, bleachers, locker rooms or uprights. But there would be no problem, Briggs said, if taxpayer money went toward the sewer pipes or property purchases the convadium would need to get built.

“Conceptually, I see nothing in the [Ziets proposal] that runs afoul of the provisions in the Citizens’ Plan that prohibit a public-money giveaway to build a stadium,” Briggs said.

The Mayor Says No

When I first asked the mayor’s office for the Ziets financing proposal in mid-January, staffers told me they had no idea what I was talking about. It was only after I kept pushing that Puetz, Faulconer’s chief of staff, sent over the document.

Puetz told me that he wasn’t attempting to hide anything. He hadn’t remembered that Ziets’ plan even existed.

“A lot of people were sending stadium plans around that time,” Puetz said.

Surely, I said, a financing proposal from Ziets, a consultant the city itself had hired a few years back, was more reputable than one the mayor might have received from other third parties.

“I actually don’t find it reputable,” Puetz said.

The hotelier portion of the financing plan, he said, would require a tax increase to raise the needed funds. In California, a tax increase for a specific project requires a two-thirds vote to pass.

And, Puetz said, the mayor opposes any stadium financing plan that would require a two-thirds vote.

“That will never pass,” he said.

Interestingly, the mayor himself has proposed a tax hike that would require a two-thirds vote to expand the Convention Center at its current location. In Faulconer’s State of the City speech, he pledged to put it on the ballot, but did not say when.

If Faulconer tries to put a standalone Convention Center expansion on the June ballot, it would crush any effort to build a convadium. If the mayor goes for November, the Convention Center expansion could compete directly with a Chargers-led downtown stadium proposal as well as the Briggs/Moores initiative.

Briggs believes that his plan only needs majority support to become law, not two-thirds. Puetz chuckled at that assertion and referred to Briggs’ penchant for suing the city over its complicated financing schemes, including a number of lawsuits related to tourism.

“I’m sure that will be litigated if the thing actually passes,” Puetz said. “The irony of that.”

Without the mayor’s support, the downtown convadium seems dead. But one big interest group still says it’s deciding between downtown and Mission Valley. The Chargers.

The Zombie Convadium

Chargers owner Dean Spanos has left open the possibility for a stadium either downtown or in Mission Valley. This week, the Chargers hired Fred Maas, an ex-downtown redevelopment official and former stadium adviser to Sanders to work with the city on a stadium plan. Maas has long eyed the proposed convadium site, which is now a large bus yard, so his shepherding a stadium there would make sense. If the team wants a stadium on the site, the pressure might force Faulconer to yield.

But JMI’s Peace told me that the hiring of Maas meant downtown was off the table because Maas had indicated a preference for the Qualcomm site already.

“Our read of this is they’re going to do Mission Valley,” Peace said.

The Chargers would not confirm that.

Either way, we’re headed toward an interesting climax. The Chargers must decide by the last week of March what kind of proposal they want to try and put on the ballot in November. Briggs and Moores must decide if they’ll keep spending money to get their proposal on the November ballot, too. And the mayor and City Council must decide by March 10 if they want to put a tax hike to expand the Convention Center along the bay before voters in June.

    This article relates to: Chargers Stadium, Convention Center, Government, Must Reads

    Written by Liam Dillon

    Liam Dillon is senior reporter and assistant editor for Voice of San Diego. He leads VOSD’s investigations and writes about how regular people interact with local government. What should he write about next? Please contact him directly at liam.dillon@voiceofsandiego.org or 619.550.5663.

    23 comments
    Greg Chick
    Greg Chick subscriber

    I think any city has no right to be involved on sports and more than a church.  I find sports issues to be as tribal as religion and outside of a cities jurisdiction.  Will anyone tell me why sports needs to be a government project?  

    Bob Stein
    Bob Stein subscriber

    Congratulations Liam on your well deserved step up to the LA Times.

    It’s too bad San Diego is neither a big or dynamic enough media market to retain ambitious talented journalists like you. An issue, we all pay for in stories like the one you’ve written about here.

    Phillip Franklin
    Phillip Franklin subscriber

    What have I been saying for the last year or so about Dean Spanos and his demand to build a new Charger stadium or else he would move the team?  Every news  media outlet  here (all who seem to be wanting the Chargers to get everything they want) has said he is leaving for sure.  I of course said Spanos is nothing more than a parasite leech who will never leave.  I mean never.  Why because he is too damn cheap to spend one thin dime of his own  money on a new facility and expects the taxpayers of this city to not only pay for the new construction of a $1.5 billion dollar facility, but he wants all the money from seat licences, naming rights, and free development land and deals.  All of course at the tax payer expense.   Spanos simply has no shame.  


    He tried to pull off some hair brained scam involving Goldman Sachs Wall Street crooks for some scam in Carson.  I imagine they would sell those as some type of junk revenue bonds to gullible investors who would lose their entire investment.  Even though most of the NFL owners hate Stan Kronenke with a passion they voted basically in unison for Stan Kroenke and  the Rams in LA because they probably realized they would be holding the bag when the Spanos crap in Carson blew up in their faces.  His own sleazy rich friends in the NFL know him and realized the huge risk his smoke and mirrors scam would come back and bite them in the ass.  So they sent him back to San Diego where we have to re-open this horrible drama of a billionaire trying to jack this city out of billions in subsidies while the city can't even maintain its current needed infrastructure and needs.  


    Now all of these greedy developers are trying to get their hands on these billions in taxpayer funds.  It never ends.  The local politicians need the greedy developers for the campaign contributions and will rob every last dime of the city treasury to satisfy their needs.  The convention center  can't even book enough business to maintain its current structure and the business it does book it looses millions.  The city still owes well over $50 million on the $70 million it borrowed 20 years ago to make wasteful improvements which were a joke.   Coincidentally Qualcomm Stadium is structurally sound yet the city looses so much money on it each year because they have to pay millions to the Spanos family for the Chargers to play there; it can't even afford to do its routine maintenance.  The same is true for the convention center.  But the big shot politicians along with the greedy developers just can't let this go because they see dollar signs in their eyes for taxpayer money which is this city's number one industry and product.  San Diego thrives on the public trough.   There is not even one politician here who will stand up to this greed and corruption which has been the norm of this city for several decades.  And that in a nutshell is why we get stuck with the likes of the Spanos garbage.  The Spanos types of leeches and parasites do nothing but grow and nurture in the cesspool of San Diego greed and corruption.    My guess is that it is only fed by the voter apathy of this government funded town.

    Bill Bradshaw
    Bill Bradshaw subscribermember

    Lookee here!  “The usual suspects” are surfacing: Fred Maas, John Moores, Steve Peace, and look soon for Jerry Sanders.  As just a coincidence, I’m sure, the planned location of a new downtown combination stadium and convention center annex just happens to be next to land owned by Moores.  And the financial legerdemain has begun, so hold on to your wallets and hope Mayor Faulconer sticks to his guns.  In fact, he might remind Dean Spanos in their next “cordial” meeting that since the NFL has generously offered a hundred mil to Spanos to stay in San Diego, that should figure in the size of the public “contribution”.


    And, of course, true blue public minded Cory Briggs is helping facilitate the process with his “citizen’s initiative” that so inspired Moores in it’s public spiritedness that he threw in 700k for the initiative.  Don’t be surprised at a donation from the Clinton Library because Moores, a Democrat stalwart, is well connected to the Southwest.


    Only in San Diego. 

    Phillip Franklin
    Phillip Franklin subscriber

    @Bill Bradshaw Bill this is how San Diego operates.  It has become our chief product.  We have been a government funded town for so long that it is the only business this city knows.  It attracts the leeches and the parasites who continue to grow and prosper in the long standing San Diego voter apathy.  We attract these types like flies on a pile of crap.  It is just the way it is until the people of this city decide enough is enough.

    Grammie
    Grammie subscribermember

    When you google San Diego, there is mention of our weather, our beaches, the Zoo, Balboa Park, and many other attractions. The Chargers are not mentioned at all.

    Why do we 1.5 million residents continue to be held hostage to the desires of several millionaires, some elected officials, developers, and all of 40 thousand fans, to the detriment of our infrastructure and quality of life? 

    Stanton
    Stanton subscriber

    The NFL pirate cabal has spoken. Kroenke and the Rams won. The Charger and the Raiders lost. The Chargers have zero leverage in San Diego. Zero. It's over. No tax money for a Charger stadium. None. Zero.

    wadams92101
    wadams92101 subscriber

    The one thing missing from all of this is input from the impacted communities of East Village, Barrio Logan, Logan Heights, and Sherman Heights.  This area has a community plan and it doesn't include a stadium.  Moreover, these urban neighborhoods don't need more low wage convention and tourism jobs.  East Village and Barrio Logan are doing well as incubators for high wage startups.  East Village is attracting an increasing number of academic institutions.  A convadium will kill all that with bars, parking lots, and its own mass - and all for a sup-optimal convention center expansion that only JMI wants.  Checkout the comments on Briggs rebuttal article: http://sandiegofreepress.org/2016/02/cory-briggs-responds-to-critique-of-citizens-plan/#comments


    Bill Bradshaw
    Bill Bradshaw subscribermember

    @apriliausa Bruce Henderson is a local hero for many because he tried to stop the Chargers' last cushy deal and Petco Park.  He is a pariah to others because he cost a lot of time and money with his Petco lawsuits.  His analysis here is flawed in one respect.  He says politicians are hopelessly over-matched in negotiation with team owners because of pressure from team fans, which is normally true.  But in San Diego, what fans do the Chargers have at this point but a few thousand diehards that are vastly outnumbered by detractors?  If the city does play tough with the team, it's only risk is that they leave, opening the way for a better-run franchise to come calling.

    Bob Gardner
    Bob Gardner subscriber

    Tis time for our mayor and some of his cronies on the council (ie - Scott Sherman) to just tell the Chargers that they are done talking to them and if the Chargers want to build a new stadium, go find some land, buy it, and build whatever they want. The City of San Diego has more important issues to deal with than subsidizing some fat cat who wants his pockets padded with money.


    Pat Flannery
    Pat Flannery subscriber

    What are Steve Peace and Fred Maas up to? They are master chess players and they both want downtown. But how to defeat Tom Sudbury and Mission Valley?


    John Moores owns East Village, Tom Sudbury owns Mission Valley. But Sudbury also owns Kevin Faulconer! This is a high-stakes chess game between Moores and Sudbury.


    Steve and Fred’s first  move therefore must be to neutralize Faulconer, to get him away from Sudbury and Mission Valley. They will probably use “Bishop” Spanos and “Castle” Chargers to corner Sudbury’s “Queen” Faulconer (sorry Kevin I don’t mean it that way).


    Kevin will be forced to protect himself when cornered by Peace, Maas and Spanos. Sudbury will then have to protect his “Queen” by releasing him from his Mission Valley promise. Kevin is no good to him out of office. Now, to win, Moores has to sell Downtown to the public. That is Cory Briggs’ job. It will become clear to everybody that this is just one giant battle between two local developer “Kings”, Moores and Sudbury. The stakes are enormous.


    “Queen” Kevin, being the good politician that he is, will sit on the fence.


    Meanwhile a host of “Bishops”,“Castles” (hoteliers, Briggs and labor unions) will chase each other around the board making a lot of noise but the real battle is and will remain between the two “Kings”, Moores and Sudbury, while we the citizens are mere “pawns”, hardly noticed amidst all the sound and fury.


    Is that the real game, Steve and Fred?

    Richard Tanner
    Richard Tanner subscriber

    There still are some basic precepts that should be answered about the Stadium regardless of where it is located. .  The Chargers lease the City Owned stadium from the City.  I believe that issue really came up in the Los Angles discussions.  The Chargers would still be leasing just another landlord.  Now the Chargers want to have a new stadium and they want the city (in some form) pay for a big portion of it.  Does this mean the City would still own the stadium or would they be in some partnership with the Chargers or maybe even the NFL as they are willing to put up some money.  It appears to me that the Spanos  want to become a stadium owner.  I think the cost was too high in LA. (Carson is not part of this discussion). The city has shown it is not qualified to conduct negotiation to reach a lease agreement.  They have done the City a gross disservice in the past with their negotiations.  This includes, the Mayor, the City Council and the City Attorney  they just do not have the expertise and the skills.  The games the Mayor, the spanos and the hoteliers are playing all end up with the City on the hook.  If the City wants a stadium in Mission Valley, then put it on the ballot and let the city put it up.  Then they own it, can lease it, collect from the vendors, the parking, and the extra usage.  It probably makes sense for the City to replace the current one as it is old (but as John Madden said, it is a great place to play football).  The Mayor should not give up the ownership to the Spanos, or the NFL.

    Bill Bradshaw
    Bill Bradshaw subscribermember

    @Richard Tanner The last thing most sports team owners, clearly including Spanos, want is to own their stadiums.  Ownership brings increased responsibility for things like maintenance, security, upgrades as times change and what to do with the stadium in the off-season which, in the case of football, is 355 days a year.  Look at what happened to the Dodgers when they went to L.A.city officials for help in refurbishing Dodger stadium.  The mayor reminded them of their ownership and offered nothing but a promise to expedite any permits they needed.


    Stan Kroenke is an outlier; he's like Donald Trump claims, "really, really rich", particularly since he's married to one of the Walton heirs. 

    Don Wood
    Don Wood subscriber

    Let's see: The big hotel owners are still trying to decide if they like or dislike Brigg's and Frye's initiative. So the mayor, who caters to the big hotel owners, is trying to fend off the Chargers and put a separate tax increase measure on the ballot to build a

    contiguous convention center expansion on the bayfront, requiring a 2/3rds vote.


    When Briggs and his clients win their lawsuit challenging the current illegal TMD tax, the current TOT surcharge funding the Tourism Marketing Board will disappear, meaning no more money to promote tourism and hotel subsidies.


    At that point, the big hotel owners will see the Briggs/Frye initiative as a tourism promotion funding lifeline, and support it even though It prohibits any future bayfront expansion of the convention center.The big hotel owners (and the mayor who serves them) will probably support the Citizen's Plan initiative and work with the Chargers to make a downtown convadium a reality.

    Erik Bruvold
    Erik Bruvold subscribermember

    @Don Wood MAYBE.  That presumes don that the Conadium is actually a good thing for hotel industry to spend money.  I have doubts.  Unclear it actually drives more business as opposed to be a way to build a football stadium using $600 million of hoteliers money

    Don Wood
    Don Wood subscriber

    @Erik Bruvold @Don Wood  Eric: If the big hotel owners and the TMD execs lose the SDOG lawsuit, their TOT surcharge money goes away, and Joe Terzi and his staff will run out of money. Unless the TMD and the city want to float a new tax initiative that takes a 2/3ds vote, supporting the Briggs/Frye measure might be there best bet to stay in business.

    Edward Moretti
    Edward Moretti

    Why do people say "hoteliers money"? Isn't that tax money? That's money from the people not the hoteliers.

    And why does Faulkner oppose JMI? Aren't they hoteliers? Didn't they contribute to his slush... I mean, campaign fund? All of this is WAY beyond my pay grade.

    Erik Bruvold
    Erik Bruvold subscribermember

    @Edward Moretti @Don Wood Well lets remember the history (BTW - NOT advocating this but I would definitely not bet against it).  The TMD was passed and "in exchange" the existing 10.5 TOT flowed ENTIRELY to the City.  In the days before, the City allocated between 1 and 2 cents to convis and a host of other organizations.  In the world that a SDOG lawsuit wins I would not at all be suprised to see a push to return to that status quo. I could easily see that occurring while a measure to pass a TOT increase of 2.5 to 3 cents is readied.  And I THINK it wins.  Probably important for the visitors industry?  Getting the SDOG suit resolved prior to November because their best bet for a tax increase will be during a November election of a presidential year.

    BTW - I think it pretty clear that the citizens initiative would get challenged in court.  Isn't clear to me AT ALL that Briggs cares if that part of the initiative (the bizzaro tax rebate part) is thrown out.  

    bgetzel
    bgetzel subscriber

    @Edward Moretti The"people" who would provide the money are tourists. I can care less if outsiders fund a stadium. I always found it strange that a TOT increase has to be approved by 2/3 of locals. If the money doesn't come out of their pockets, the local voter needn't have a say!

    Judith Swink
    Judith Swink subscriber

    @bgetzel @Edward Moretti ANY tax increase in the State of California requires a 2/3 majority vote to pass it. Doesn't matter what the increase is for - the voters must decide if it's a tax increase they agree with. Who actually pays the increased tax - resident or visitor - is not relevant under the State law.

    bgetzel
    bgetzel subscriber

    @Judith Swink @bgetzel @Edward Moretti The law doesn't make sense, but it is the law! Given that, the Mayor is saying that the approval of $350 million of public money for a stadium only needs a 50% +1 vote for approval. Am I to take that as meaning that the money will come from the general fund (re: impact the funding of basic services), without raising taxes?