In an email exchange last month, an elite group of San Diego’s most prominent developers traded talking points on how to kill SoccerCity, the private plan to redevelop the Qualcomm Stadium property in Mission Valley into a dense urban district built around an expansion Major League Soccer team.

The project, proposed by La Jolla-based private FS Investors, finds itself on the wrong end of virtually every entrenched interest in San Diego politics. Organized labor, San Diego State University, anti-development community groups and rival developers have all lined up against it.

The City Council could end the project’s fledgling hopes on Monday. The Council already opted against scheduling a November special election and is now expected to put SoccerCity to voters in 2018. FS Investors says that’s too late for the MLS’s expansion decision.

If SoccerCity goes down, many will claim the kill shot. But it was the biggest developers in town who actually put hundreds of thousands of dollars into a professional campaign to stop it and they worked together to find the best arguments.

In late May, it was not clear that the City Council would reject the special election FS Investors say they need to make soccer happen.  The cadre of developers opposed were still aligning their closing arguments.

The May 30 email exchange began when Fred Pierce, former head of redevelopment for the San Diego State University Foundation and current developer of student housing and university-reated projects, forwarded a TV appearance he made to Perry Dealy, whose company Dealy Development often works with Doug Manchester.


We Stand Up for You. Will You Stand Up for Us?

Manchester is President Trump’s nominee to be the ambassador to Bahamas, former owner of the Union-Tribune, and a hotel developer.

Dealy then forwarded the appearance to a dozen of the city’s highest profile developers and political donors, suggesting they follow Pierce’s talking points.

He sent it to Manchester and two other employees at Manchester’s firm, plus John Lynch, who was Manchester’s CEO at the Union-Tribune. It also went to Mike Neal and Tom Sudberry, executives for H.G. Fenton Company and Sudberry Properties, two major Mission Valley developers who have spent over $500,000 opposing SoccerCity.

Others on the email included Casey Brown, who is redeveloping the old Mission Valley home of the Union-Tribune; Ernie Hahn, the general manager of the Valley View Casino Center in Point Loma, who has vocally advocated for a new sports arena for the city; Brad Raulston, former director of National City’s redevelopment agency; Jack McGrory, CEO of a real estate investment company and San Diego’s former city manager who is now advising SDSU on the issue and who FS Investors last week accused of undermining negotiations with SDSU in a UT story that referenced the emails; Mike Turk, a condo developer active in the coastal area and board member on the pro-business Lincoln Club; and David Malcolm, a former Chula Vista Councilman, Port Commissioner and developer.

The list includes all San Diego’s top-tier developers except notably one: Dene Oliver, of OliverMcMillan. Oliver brokered FS Investors’ initial meetings with the mayor and SDSU but he’s not a partner, he says.

“I am not, nor have I ever been the developer of Soccer City, nor have I ever had any financial interest what so ever in SoccerCity,” Oliver wrote in an email.

Dealy was circulating ideal messaging for the developers opposed to the project.

“This is the most professional compelling argument to postpone the vote until November 2018 along with the city moving forward with a competitive process for the redevelopment of the Q property,” Dealy wrote.

The argument, he said, was to focus on three things. First, the need for a solution at SDSU. Second, a full reuse study for Qualcomm that would accommodate SDSU football, an NFL team and soccer. Third, launching a competitive process to choose a developer to get the best use of the land and meet regional needs.

“We need to engage in a full court press with City Council to block the Nov 2017 vote!!” he wrote. “Barbara Bry is already leading the fight to postpone the vote and initiate a public process, we have two other council members who appear to support Barbara’s position. Need a total of 5 votes!!”

“The unifying principle of this right now is that we’re not one of them,” said Nick Stone, partner at FS Investors. “I’m surprised but not stunned that the traditional, old guard development core has come together to oppose this. That said, the Manchester-McGory-Bry alignment is surprising.”

In an interview, Dealy said the common denominator between all the people he sent the email to was regular involvement in major civic issues – which can’t be said of FS Investors, which has never been a major player on city issues.

“These guys have no history here,” Dealy said. “They are not those you see out in the community, on boards and commissions, showing up for charitable organizations. I never see them.”

Dealy said the group shares the concern that the deal isn’t good enough for SDSU – originally, FS Investors said it could accommodate Aztecs football at its new stadium and make way for some westward expansion for the campus, but SDSU since ended negotiations and said it doesn’t work for them.

The developers also don’t think the project did enough to mitigate traffic and parking near Mission Valley, which threatens other developments in the area. Dealy conceded there could be some concerns over competition from neighboring developers.

Pierce said the developers on the email chain had already publicly stated they opposed SoccerCity.

“Maybe with these complicated things, you need to be in the business to know what’s good business and what’s bad business,” he said. “I’ve had people point the finger at me and say I’m one of the country’s largest developers of student housing. I’m on record from day one when I weighed in saying I am not now and will not ever in the future pursue a business interest at the Qualcomm site.”

Unlike Dealy, Turk said he doesn’t really care that Mike Stone and Nick Stone, the principals at FS Investors, aren’t active in local civic affairs.

“To tell you the truth, if it was a good project, I don’t care about that,” he said. “Some developers from outside the city could do a good job too.”

Turk signed on with others on the Lincoln Club board supporting an open competition to develop the land, but said he wouldn’t be part of any teams that pursue the site.

FS Investors saw the antipathy as expected.

“All we’re trying to do is bring an innovative and younger sport to this city, and it doesn’t surprise me that it isn’t understood by that group,” Stone said.

Some of them have their own ideas for the land.

In March, Manchester sent a letter to NFL owners informing them of his plans to spearhead a redevelopment of the property with eyes on bringing the NFL back to town. He said he’d already put together a master plan with a team that included Dealy, McGory, Brown, Hahn, an executive at his company named Dick Gibbons who also received the email, and urban designer Randy Morton, who didn’t. Morton’s firm, though, was also part of a bid Manchester made last year to redevelop the Seaport Village area.

McGory and Manchester told the UT there was no conflict between McGory’s work with SDSU on SoccerCity, and the alternative proposal for the Qualcomm Site, because McGory was not part of a redevelopment team or financially connected to any redevelopment efforts.

Pierce laid out two scenarios he’d like to see play out at Qualcomm, assuming SoccerCity goes before voters in November 2018 (potentially without an MLS team at that time). Dealy expressed similar wishes.

Pierce wants the city to pursue an open competition, soon, so it can put an alternative on the ballot alongside SoccerCity.

That could mean running a full request for proposal process and choosing the best option, then letting voters decide whether to approve it. It could also mean simply asking voters on the ballot whether they want to do an RFP process, though Pierce said that’s worse.

“It’s important for voters to have a choice, not just up or down on a flawed initiative,” he said.

Either case would be unusual for San Diego, where developments selected by an RFP are usually adopted by the agency overseeing them. That was the case last year, for instance, when the Unified Port of San Diego selected development groups to remake Seaport Village and Harbor Island, or when Civic San Diego’s board elected a project proposal for a property in southeast San Diego.

Stone also thinks the city is going to have practical and legal problems that keep it from moving fast on an RFP – in fact, he thinks nothing could happen on the site for another 10 years if his plan goes down. Stone provided a letter from FS Investor’s law firm, Latham & Watkins, outlining some of those issues.

The Mission Valley puzzle.

The city could have done more to position itself to issue an RFP, if that’s what it wants to do at the property, or if it hopes to move the process along quickly.

City planners since 2014 have been updating the Mission Valley community plan, a comprehensive outline for future growth and development in the area.

That process, though, has ignored Qualcomm Stadium site.

Marco Sessa, a senior vice president at Sudberry Properties – one of the firms funding opposition to SoccerCity – and a member of the Mission Valley community planning group, said that’s because the city leadership instructed planners working on the update not to work on anything for Qualcomm while the city was still trying to keep the Chargers from leaving town.

“We were frustrated,” he said. “We said, shouldn’t we be thinking about what should go on that site, so that someone else doesn’t come and tell us what should be there, which is exactly what happened?”

Sessa said he doesn’t believe the decision not to plan for the stadium site’s future was because the mayor was already talking to SoccerCity; rather, there was uncertainty about the site, and it’s possible they just didn’t want to waste time on it until the Chargers made a decision.

“The frustration is, for over a year there has been a group meeting and talking about the Valley, there could have been a process to build consensus,” he said. “If the city does go forward with an RFP, the biggest thing will be having something vetted and in public that would be a roadmap. From a planning perspective, it’s a lost opportunity.”

Mark Steele’s company, MW Steele Group Inc., is one of the contractors hired to write Mission Valley’s new community plan. He said they haven’t put anything together for the Qualcomm Site yet, but they intend to.

“We’ve really been holding off as a practical matter, because there’s so much other activity,” Steele said.

Diego Velasco, an urban planner and principal at the firm agreed.

“There are a lot of politics around that project,” he said. “You can’t plan when there’s an initiative out there.”

They said the SoccerCity plan, like Measure D on last year’s election before it, would have implications for all of Mission Valley.

You can’t just leave a hole in the plan and drop the initiative into it. If voters approve it, it would change the baseline assumptions for traffic throughout the area, and might require planners to call for less development in other parts of the Valley as a result.

“The initiative process is a strange one for us in the planning field,” Steele said. “It’s a really interesting dilemma. I’m sure someone has thought it through, but we haven’t.”

    This article relates to: Land Use, SoccerCity

    Written by Andrew Keatts

    I'm Andrew Keatts, a reporter for Voice of San Diego. Please contact me if you'd like at andrew.keatts@voiceofsandiego.org or 619.325.0529.

    20 comments
    craig Nelson
    craig Nelson

    Thank goodness the City Council drop kicked the Sucker City proposal for minor league soccer. I guess this will give the Stoners time to defend themselves in their Texas oil scam lawsuit. Hope to see competing proposals from Manchester, JMI , Sudberry, etc. (y'know people who actually build things other than corporate raiders) . Competing projects would bring out the best deal. 

    Don Wood
    Don Wood subscriber

    Anybody who thinks that Mayor Faulconer runs San Diego needs to read this article, which lays out a whos who of the people who really run this crooked little beach town. San Diego likes to brag about how its grown into a big city, but at this point, we don't have any city hall politicians who could stand a chance of standing up to this group of developers and influence peddlers. If you get on their bad side, you'll end up with egg all over your face, just like the mayor has. VOSD editor Scott Lewis once promised to do a series of stories profiling the people who really run this town behind the scenes. This list would be a very good place to start that effort.

    Michael Foulks
    Michael Foulks

    This looks like the standard case of the new kids ruffling the wrong feathers and being crushed by the powerful old guard. I get it. Still though, it sucks to watch it play out. I was lucky to meet Nick and most of the FS team at various gigs and, as even their opponents confess, these are good, solid people. 

    A revitalized MV, a brand-spankin new MLS team, a Landon Donovan-led, home-grown youth academy, and a fresh sports culture in San Diego? Nah. Let's pass. Nice, San Diego.


    wadams92101
    wadams92101 subscriber

    Really Andrew? "[A]nti-development community groups"?  Even if you intended this phrase to apply only to Council Policy 600-24 community planning groups, its a pretty snarky comment for a non-opinion news piece. There are plenty of planning groups and planning group members who support development and increased density.  However, you mention only "[o]rganized labor, San Diego State University, anti-development community groups and rival developers have all lined up against it."   You identify no separate category for groups like AIA-SD, E+DC and C-3 who have come out against the FS proposal.  Does that mean you believe these groups to be "anti-development"? http://sandiego.urbdezine.com/2017/05/11/aia-and-edc-letter-qualcomm-stadium-soccer-city/

    Barry Vague
    Barry Vague

    Wrong Mr. Steele! You have a job to do and you were hired to do it. Now, get to work. Your firm was hired to do the planning not to sit and wait. Was sitting and waiting written into the contract? Voters deserve to know what value actual land planning (not investor planning) can bring to the area. That ship will sail if you continue to professionally sit on your thumbs. We want the best for the valuable land at the Q site. What is best there? Your firm was hired, do the study.

    Ken Brucker
    Ken Brucker subscriber

    “These guys have no history here,” Dealy said. “They are not those you see out in the community, on boards and commissions, showing up for charitable organizations. I never see them.”

    • How many rounds of golf does a guy have to play with Perry Dealy to be considered to have a history in San Diego?
    • Must they be at Torrey Pines?
    • North or South course?

    Jeb Makula
    Jeb Makula

    Could we just tear it down and use that land to build some low/middle income housing (that we are desperately short of)?

    Chris Brewster
    Chris Brewster subscribermember

    One intriguing aspect of this story is how badly the Mayor calculated his power and influence in this issue and ended up on the opposite side from his traditional supporters. Another is how the political norms were overturned. Much of the story here has been about how a Democrat council majority put up a roadblock to a Republican mayor's initiative, but the irony here is that what appear to be mostly Republican business interests opposed it. For whatever reason, a mayor who has avoided tough decision-making decided to go large on a major issue and convinced Republican members of the City Council to back him, against his own base. That base (or at least a major part of it) was bailed out by the Democrat members of the City Council whom they would normally prefer not be in office. It also ended up with the Mayor exercising very public retribution on those who opposed him, probably further sullying his reputation. This is not politics as usual in San Diego. 

    Bo Smithers
    Bo Smithers

    @Chris Brewster  Two key points here... First, these developers want to do their 'own thang' and don't care what party Kevin represents.  Second, and more importantly, Big Labor (aka, the labor unions) are 120% in lockstep with the Democratic party.  No labor contract in place, or promise for one, they take their ball and go home.  Moreover, Jack McGrory (who became a 12th hour "voice" for SDSU) was the catalyst behind, quite possibly, the largest fleecing of tax dollars in San Diego history  - namely the Chargers ticket guarantee, and horrifically, the local pension crisis... which, surprise-surprise, was/is backed by Big Labor Unions.  Simply put, the labor unions hold too much power and the old money in San Diego doesn't like 'futbol.'  Full stop. 

    Chris Brewster
    Chris Brewster subscribermember

    Mr. Smithers: For the most part, though not always, developers and business in this town have supported Republicans. For the most part, though not always, labor has supported Democrats. (For example, the largest labor union for city workers, the San Diego Municipal Employees Association, backed Faulconer in his reelection campaign, so labor is not even 100% in lockstep with the Democrats.) The strongest opponents of this soccer proposal, financially speaking, are competing business interests, not labor. I therefore respectfully disagree with your assessment. As for Mr. McGrory, at the time the pension changes were made, to which you refer, the city council was majority Republican and there was a Republican mayor. They made the changes to save money in other areas of their budget by trading future pension benefits for salaries. In any case, it was their decision, not his. The same is true of the ticket guarantee. I think you suggest that Mr. McGrory controls the decision-making at SDSU, which I think is rather unlikely. That said, my post was not aimed at these aspects of the issue. I respect your right to express your point of view though.

    John Porter
    John Porter subscriber

    The Mission Valley site should be turned into a large recreation area, such as Central Park in New York.  Bazinga !  Of course it won't because the developers, who rule the city won't let that happen.  Meanwhile, I continually dodge potholes around the city as I drive.  The city government is totally negligent in their basic duties, while pursuing their money making dreams.  So sad....  

    Jay Byrd
    Jay Byrd

    @John Porter I don't think we need another unused park.  I know you mean well and I applaud you for the thought.  However, I visit a lot of the county's parks.  I sometimes worry that if I had a health problem, I might not be found for hours.  I admit, I like the Soccer City idea.  It does include small pars and walkways.

    Molly Cook
    Molly Cook

    Sigh.  More ways to spend money on things San Diego neither needs nor many of us want.  Driving through sections of San Diego is like driving through the Bronx or, in other cases, like the decrepit rural South and yet there's the idea that one more bigger, fancier development will make all that go away. Our schizophrenia is unnerving and in so many ways unconscionable. 


    Bob Stein
    Bob Stein subscriber

    One move this story reveals is that while the messages we see in advertising are always audience friendly, at least for some audience, the reason for the advertising itself is often born out of the malevolent motives of advertisers that would never make it onto the screen.

    In this case, we see TV advertising presenting Soccer City as a plan for suckers that will siphon tax dollars and screw San Diegans.Yet ironically, every one of the antagonist developers you include in this story routinely survives, heck prospers, by siphoning tax dollars and screwing San Diegans.

    There’s a painfully obvious warning here about the sincerity or authenticity of what we see in advertising.

    Or as we’ve also seen this past week, just as Sudberry and Manchester want to crush their young competitors so they can grab the spoils, our hotel industry doesn’t give a rat’s ass about the homeless or our pot holes.  Both messages are just a convenient way to cover up their real motive.

    Molly Cook
    Molly Cook

    @Bob Stein 

    Amen, Bob...A-a-a-a-men.


    Thanks, by the way, for the lead to the book "Under the Perfect Sun." 

    craig Nelson
    craig Nelson

    @Bob Stein Waiting for your analysis of the FS advertising campaign which dwarfs the SuckerCity advertising. Using the SDSU logo on their adds when SDSU calls them liars and is opposed to their deal? Promoting the deal as the key to the future of SDSU football when SDSU wants nothing to do with a tiny minor league stadium? Putting 2 old soccer has been's on the payroll to promote the deal? Leaving out the fact that they are not obligated (per the SD city attorney) to even build the stadium or the park under the terms of the initiative? The Stone(d) brothers have nothing on Joe Izuzu, they should go back to making coffee for Mitt Romney in NYC. 

    Bob Stein
    Bob Stein subscriber

    @craig Nelson @Bob Stein

    Craig,

    Advertising people like to say that “you never advertise what you are, you advertise what you want people to think you are.”

    In other words, all advertisers present what sounds, reads or looks best to their pre-determined audience.That’s how persuasion works.You reflect what your audience believes (or wants to believe).

    These beliefs are directly related to what’s being sold and also underlie what’s being sold.

    For example, with Soccer City the former draws on the belief that soccer is an up and coming pro-sport and valuable for San Diego because it fits our culture; the latter draws, without expressly saying so, on the belief of the importance professional sports play in the way men define who they are.

    Now you might say given this theory of advertising that advertising is without virtue.It doesn’t do what’s right. It merely reflects what its audience will believe.And you would be right.

    But protection from its lack of morals comes in the form of the persuasion contest that advertising creates.Because once the game begins, every side must enter the fray.And eventually the truth, by which I mean the beliefs held by the largest audience, wins out.

    Your reference to Joe Isuzu is a good example.The truth eventually won out.How?

    Well, Isuzu used a lying salesman as a spokesperson because most car buyers believe car salesman are liars. Isuzu reflected the beliefs of their audience in order to attract attention to their advertising and hopefully to their cars by extension.

    My guess is in keeping with another old advertising maxim, that being “nothing exposes a bad product faster than good advertising,” Isuzu attracted so much attention to their less than appealing cars that eventually they went of business in the U.S.(I know the full story is more complicated, but I doubt I’m far from the mark.)

    So based on the voting results of the recent Chargers debacle, I’d say the majority of San Diegans believe our largest developers are essentially municipal rapists.

    Plus, whatever is currently going on between them and/or their politicians is reinforcing this idea.

    With any luck, their internecine competition (or persuasion game) will explode into a full public war, at which point the truth will win out.That being no matter what these guys tout as benefits for San Diego, their actions are motivated by their desire to grow their personal bank accounts, aka their greed.

    VoSD should do everything they can to spark the war.Publishing insider emails is a great place to start.

    Robert Cohen
    Robert Cohen subscriber

    Citizens Initiatives are odd ducks. Wealthy, well meaning (giving the benefit of the doubt) individuals can pay for signatures and bypass municipal bureaucracdoes to build something they think serves the public good and make some money while they are at it. I'm not sure if the public interest is served but as we have seen not only with Soccer City but with potential developments in Del Mar and Carlsbad as well, competitors jump in and challenge the plan. Seems terribly inefficient but that is where we ate now. While not a fan of Doug Manchester, maybe he's doing SD a favor by taking an active interest in slowing down a runaway train that is Soccer City.

    Sean Duffy
    Sean Duffy

    I can't believe it has taken this long for information like this to come out. The "Old Guard" stopping progress in San Diego? What else is new? 


    Anyone buying into what this Axis of Greed is selling is either drinking the kool-aid or is looking out for the their own pocketbook. 


    I can't believe anyone is choosing to align with Pierce and McGrory, given their history of financial decisions for the city of San Diego (they're both responsible for the massive pension crisis we're still reeling from!). Or "Papa" Doug and his Trump connections and now apparent Trump tactics