Mayor Kevin Faulconer may have just gotten the boost he needed to keep alive his push for a special election that could define his legacy.
The city’s real estate department sent city leaders on Tuesday the appraisal it commissioned of the city-owned land that a development group would need to acquire to build SoccerCity, a mixed-use project that includes a new MLS soccer stadium.
The land is worth $110 million, according to the appraisal, which was completed by a third party hired by the city. It includes not only the area under and around Qualcomm Stadium, but the property and office space in Murphy Canyon — the former Chargers headquarters.
The SoccerCity initiative, if successful, would require investors in the project pay a “fair market value” for the land. The initiative says the mayor would determine the fair market value based on an independent appraisal.
That valuation is supposed to consider the challenges of redeveloping the land, which houses an old stadium. The land is uneven and subject to flooding.
This is that independent appraisal. It considers things like the cost of demolishing Qualcomm Stadium ($11.5 million) and what a normal developer would likely have to pay to get it permitted ($8 million).
We Stand Up For You. Will You Stand Up For Us?
The soccer city initiative appears to fall under the purview of Measure L, but I am unsure about the other.
Is the TOT tax increase one that was proposed directly by the Mayor? If so then I don't think that would fall under measure L. The Mayor seems to have taken a risky gamble since he needs 5 votes to schedule the election. This article could be telling us the very reason why he took that gamble. I presume that the scheduling of the other special election falls under different rules.
The truth why the rush for sucker city land grab, Kevin Faulkners legacy, of course it's not to get a soccer expansion team or capitalize on FS investors, his time is running out and he needs a larger "accomplishment" when he makes the run for governor and waiting until 2018 would cause him to loose an opportunity to "show leadership" and "success". If he overrides the will of the people VOTERS by holding a special election it telegraphs his real motivation and loyalty is not to the people or the city but land grabbers, special interests and those who would line HIS pockets. WOW and I use to support this guy...
Makes me think of that old song "Smiling Faces" Say NO to Sucker City because there's only one Qualcomm site, one piece of "open land", one chance to get it right so let's get it right for San Diego!
@sdjakeblues Other articles have indicated an answer to your question. It has to do with getting a soccer team. There supposedly exists a conundrum that a financing and stadium plan needs to be in place in order to get a team. Coordinating the process of building a stadium with getting a team could be difficult.
Not to go Oliver Stone, but the timing of the release of this appraisal is more than a little suspicious.
Why did the city wait until the day after the council vote to release this information?
Why did Faulconer not tell the council he would veto a no vote until after the vote was taken?
Why are we suddenly seeing TV commercials for and against Soccer/Sucker City?
Why is the pro-convention center group suddenly sending out emails and holding rally’s promoting the value of the expansion (and the importance of addressing homelessness)?
All this to influence a popular vote that may or may not happen in five or 17 months?Seems unlikely.
What’s up?Their strategies elude me.
@Bob Stein Hey, Bob...I picked up "Under the Perfect Sun" on your recommendation. Eyes wide open. Thanks.
Enjoy.If you want a live view of how things work take in a downtown Rotary Club, Chamber of Commerce or San Diego Business Journal lunch, dinner or event.
The possible deductions from the $110 million for infrastructure improvements could be substantial, making the City's net take minuscule. Just ask the City of Seattle of the infrastructure improvements they got stuck with in the building of Safeco Field. Work on the access roads, San Diego river flood prevention, etc. could run into many millions. There is also a question on who pays for the environmental clean-up (re: the possible oil plume under the property). Is that also an infrastructure improvement that the City deducts from the property purchase price?
The only way to truly determine the price of an asset is to put it on the market. Appraisals are educated guesses and it's important to remember here that an ardent supporter of the concept picked the appraiser.
"The initiative says the mayor would determine the fair market value based on an independent appraisal."
That's one of the many examples of loose wording in the proposal that could result in what's being delivered being a lot less than what's being promised. The mayor could just search for the independent appraisal that gives him the value he wants, either low favoring the developer or higher favoring the city.
There're a lot more issues with this proposal beyond an appraised value of the land.
Wait a minute is this appraisal Gross or Net after paying off the current stadium bond financing company? I thought the city already owes more than $100 million just to pay off the current debt?
There ain't no such thing as a Free Lunch !
@john stump , The appraisal should be the gross value of the land. Per KPBS, the city still owed $38.4 million+ before the Chargers' $12.7 million buy-out. Apparently, the terms of the loan don't permit a full pay-off until 2020. http://www.kpbs.org/news/2017/feb/02/chargers-pay-end-san-diego-stadium-lease/
Thank you for citing a media source on a financial fact. Given the known and obvious biases of this SDSU media source, could you please cite actual facts from the City's Auditor or CAFR. KPBS is not a reliable source for actual facts.
You also state that Appraisals should be stated in GROSS terms and not take into account the encumbrances, liens, and other conditions that effect the cash out to the City seller. Please let me know your basis for this statement as a Real Estate industry standard.
Finally, thank you for turning over at least one rock and revealing that even the GROSS appraisal number will need to be reduced by some $26 + million in reported debt.
Keep up the good work
@john stump Perhaps I am not reading your question correctly, but appraisals state the value of the property. They look at comparable sales, income and replacement cost. Debt and liens are not an issue in the appraised value of property.
An easement could impact the value ( i.e. road through the middle or a requirement of use) .
Regardless of the appraised value , this is a terrible backroom deal.