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Assembling the Properties for a Downtown Convadium Not Nearly the Obstacle It Seemed

Over the past year,  a steady stream of voices has reminded San Diegans how hard it would be to assemble the property needed to build a massive convadium in East Village. Many of those perceived issues have either been solved or are less impossible to solve as they once seemed.

It seems so long ago that building a downtown convadium – a joint convention center-stadium – was described as an extremely difficult feat.

One of the biggest obstacles was how much land would have to be assembled that the city supposedly didn’t own or control.

One by one, though, the perceived barriers to building the convadium are coming down.

For instance, the Metropolitan Transit System recently sent a letter to Chargers owner Dean Spanos signaling its leaders are now ready to talk about selling the largest piece of land needed to make the project possible. And almost two years ago, according to emails we obtained through a public records request, MTS’s general counsel tipped the Chargers off to potential locations where it might be able to move its East Village bus yard. The lawyer encouraged the Chargers to jump on it.

The new letter came five days after MTS’s board in closed session outlined the parameters of those negotiations.

This comes a year after the agency publicly outlined the difficulty of relocating the bus yard it currently operates on the envisioned sight, estimating it could take until 2025 to relocate to a suitable location.

And that land the city doesn’t control that would need to be acquired? Turns out the city of San Diego owns a lot of it already. It was tied up in legal uncertainty over the end of a statewide program under which it was originally acquired.

But that too became a non-issue in September, when another public agency loosened its restrictions on future development.

This all comes just as a state appellate court determined all tax hikes adopted by citizen initiative – like the Citizens Plan, a proposal by local attorney Cory Briggs that would allow for a downtown convadium – don’t fit under the California Constitution section that requires a two-thirds vote. Many lawyers are reading that to mean that taxes put on the ballot by initiative can pass with just a bare majority of voter support, not two-thirds.

JMI Realty Inc. is pushing a convadium so it can capitalize on the land it owns nearby and develop it into a new hotel. Former Assemblyman Steve Peace, senior adviser to John Moores, who founded JMI Realty, has been one of the few who believed all along that building a convadium was doable.

“This is the easiest land-accumulation challenge for a project of its size in America’s history,” he said. “We just laugh when we hear about how hard it will be.”

Putting the Pieces Together

There was a steady stream of voices reminding us how hard it would be to assemble the property needed to build a massive convadium in East Village.

“The small site you would have to cobble together to build a stadium downtown is currently spilt up among multiple land owners, and a Citizens Initiative does not allow proponents to take other people’s land,” wrote Tony Manalatos, an adviser to Mayor Kevin Faulconer, in a February email blast.

“Most experts we’ve talked to have concluded that building a stadium downtown – on land not owned by either the city or the Chargers – would increase costs by hundreds of millions of dollars and take years longer to complete,” wrote Faulconer and County Supervisor Ron Roberts the same month, in a joint statement.

“If one were to move the proposed Mission Valley stadium downtown, where the city does not own any land for a stadium, it would increase hard costs by at least a quarter billion dollars,” wrote Faulconer’s Citizens Stadium Advisory Group in its final report. “The city would have to buy multiple parcels of land and pay to relocate and clean a large bus yard, a process expected to take up to seven years.”

Indeed, the land eyed for a stadium includes 21 separate properties. It’s immediately east of Ballpark Village, a new residential complex being constructed next to Petco Park.

Map by Tristan Loper

Fifteen of those 21 properties are effectively owned by the city of San Diego.

They were owned by the San Diego Redevelopment Agency, but that was dissolved in early 2012 when the state ended its redevelopment program. That agency’s assets became property of a so-called successor agency, which was tasked with slowly phasing out the redevelopment program. The city of San Diego itself serves as the successor agency – although it is technically a separate legal entity – and the City Council determines how those properties are used.

Before September, though, there was still a major restriction on that property. Any proposed change would first need to go to a countywide board that oversees the end of the redevelopment program. That board’s decisions would have needed to go to the state’s Department of Finance for final approval, too.

It wasn’t certain the state would approve any changes, and even if it did, it would have taken time.

In September, however, the state pre-emptively approved it for new development. Now, all that stands between greenlighting it for a convadium – or anything else – is a vote of the City Council.

The city has an agreement for the land to continue providing parking for Petco Park, so that would be a requirement for any future project. Otherwise, the City Council has wide leeway for how it’s used – homes, retail, offices, a public park or “entertainment,” like a convadium.

That’s one hurdle out of the way. But the biggest perceived hurdle has always been with MTS and its bus yard, which occupies two of the 21 needed properties and over a third of the total area.

MTS, though, is starting to accommodate that challenge, too.

MTS Opens Negotiations

MTS capped a year of slowly moving toward selling its property and relocating its bus yard last week when it formally asked Spanos to start negotiations.

“Since approximately 2012, I have made several attempts to initiate a dialogue with the Chargers and begin planning/due diligence efforts in the event the Chargers were serious about a downtown stadium project impacting (the bus yard),” wrote MTS legal counsel Karen Landers in a March 22 letter to Spanos. “Those contacts resulted in no action by the Chargers.”

Nonetheless, she said, it’s clear the Chargers are moving forward with a downtown convadium.

“On this basis, MTS would like to request a meeting with your team to discuss your timeline, MTS’s requirements for a negotiated sale and transit mitigation measures that must be considered as part of your project,” Landers wrote.

Previously, MTS estimated relocating the bus yard could take five to seven years, and Landers reiterated that in her letter. The agency also estimated in 2010 the cost of relocating to be up to $150 million — $50 million for replacement land, and up to $100 million to build the new facility.

MTS needs a facility within a five-mile radius of its current site to keep operations costs from going up. It’s efficient for the agency to store its buses downtown, since so many bus lines begin and end there. It says every five minutes of travel time away from the current bus yard would add $900,000 in annual operating costs.

And the bus yard is big. The current site is 7.75 acres, and the agency says it needs around that much space to accommodate the facility. They’ve publicly disclosed two other potential locations – one was city-owned, but has since been leased to the Monarch School in Barrio Logan and is no longer an option. The other is the city-owned vehicle maintenance yard in Golden Hill. MTS had a consultant mock up that site, but determined it wasn’t feasible. Those are the only two potential sites they’ve discussed publicly.

But in recent years, according to emails obtained by Voice of San Diego, Landers has repeatedly tried to engage Chargers special counsel Mark Fabiani in preliminary discussions that would make a relocation possible.

She’s also mentioned that there are viable sites available, and encouraged the Chargers to consider pre-emptively purchasing them.

In May 2014, she told Fabiani MTS would need a 10-acre site to move its facilities.

“Therefore, as soon as an East Village stadium site is truly a focus of the Chargers organization, we encourage the Chargers to work with MTS to begin studying relocation possibilities,” Landers wrote. “It may be in the Chargers’ best interest to purchase property (upon approval of MTS that it might be feasible for a relocated facility) to hold in the event the East Village plan moves forward.”

The letter didn’t specify any potential sites, and MTS wouldn’t disclose any now.

In January 2015, she tried to schedule a call or meeting to hash out some details.

“Currently, various parcels near our rail yard are on the market (or soon to be) and could potentially be used for replacement facilities,” Landers wrote. “MTS has no need for these properties unless required for a relocation of (the bus yard) caused by a stadium project.  We also don’t currently have any funds set aside to purchase property to hold as a contingency for the stadium project.”

Landers said she was worried the properties would be bought by someone else.

“Ideally, if the Chargers/JMI/et al want to keep the East Village site as an alternative, it would be great (and calm my worries about how and where (the bus yard) could relocate) if those entities bought some of the properties coming up for sale to hold for a relocation site and/or future development,” she wrote.

She offered to study the feasibility of any site the Chargers would consider purchasing.

In the new letter to Spanos, asking to begin negotiations, Landers made another request.

Accommodating the crowds anticipated to come with a new stadium, she said, is beyond the current transit station capabilities. It would need to be reconfigured significantly.

She recommended a new working group to figure out how that can happen.

Taken together, the emails show that while MTS is now asking that formal negotiations begin, informal negotiations to make sure the agency comes out OK have been happening for some time.

Fred Maas, special adviser for the Chargers stadium project and the former head of San Diego’s downtown redevelopment agency, said he’s comfortable with how things are going.

“I’m an eternal optimist,” he said. “In due course, everyone who wants to see this happen will be reasonable.”

The list of people who want to see this happen could soon include MTS.

That’s because, regardless of the outlook of a convadium project, the agency is starting to come around to the idea that the land isn’t best used as a bus yard, said spokesman Rob Schupp. He said it’s possible the agency could move the bus yard nearby and lease the property to a developer to secure an ongoing revenue stream for the next 99 years.

“It has increasing value, and we’re recognizing that with all these downtown condos there will someday be increased pressure to move,” Schupp said.

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