The Chargers Stadium Consultant's Quiet End - Voice of San Diego

Chargers Stadium UNVEILING THE UNSEEN

The Chargers Stadium Consultant's Quiet End

Eighteen months ago, San Diego hired a well-known consultant to
help put together a Chargers stadium deal. He left without a
trace.

The gun San Diego Mayor Jerry Sanders hired to develop a proposal for a new downtown Chargers stadium came in with a bang.

He’s an investment banker with dozens of professional sports deals on his resume. He was going to develop a financial plan to pay for the $800 million project, maybe even help the city negotiate. He was going to give the city the expertise needed to erase decades of poor deals with the team.

Eighteen months later, the gun has left without a trace.

San Diego’s downtown redevelopment agency, the Centre City Development Corp., paid sports finance consultant Mitchell Ziets and his Evolution Media Capital company $160,000 to help the city map out a stadium plan on about 10 acres of land near Petco Park in East Village.

Ziets finished his contract last July and hasn’t been in touch with city or redevelopment officials through email for nine months, according to invoices, emails and calendars obtained through a public records request. The downtown agency did not release all communications with Ziets, claiming they were exempt from state’s public records laws because Ziets was hired through a contract with the agency’s lawyers.

Aside from an overview of nationwide stadium financing plans delivered at a CCDC meeting in January 2010, nothing from Ziets’ work with the city has been made public. On numerous occasions, city and redevelopment leaders promised Ziets would write a report specific to San Diego, but recently they stopped giving any timeframe for its completion.

Now, both the Mayor’s Office and CCDC say Ziets’ work is complete without a report.

“As you’re aware, the idea at the outset was that, during this time period, Ziets would provide guidance as we put together a deal,” mayoral spokeswoman Rachel Laing said in an email interview. “However, because of unforeseeable factors (namely, the uncertainty stemming from NFL labor issues), he was unable to provide guidance on an actual deal during the period he was under contract.”

Labor strife, including the fate of the NFL’s cashed-out stadium loan program, frustrates the development of a financing plan. Gov. Jerry Brown’s proposal to eliminate redevelopment, which was expected to be a source of public dollars, also complicates a deal.

CCDC paid Ziets the last of the $160,000 owed to him in July. But the Mayor’s Office still hopes the consultant will write a report at no charge once NFL and state redevelopment issues are resolved.

“While he’s not obligated to do so, professionalism — as well as the opportunity for additional consulting business at the next phase of a deal — provide incentive for him to do so,” Laing said.

To date, Ziets’ $160,000 contract has been the only public money spent specifically on the downtown stadium deal beyond city staff time.

Even without a formal report, Laing, former Sanders’ policy advisor Phil Rath and former CCDC head Fred Maas said the contract with Ziets was money well spent because of his knowledge of the investment community and relationships with professional sports leagues. The city needed his expertise, Rath said, when talks with the Chargers began over the downtown stadium in fall 2009.

“We were very concerned about being prepared for any possible engagement strategy” by the team or the league, said Rath, who now works as a lobbyist. “If the Chargers came out and said the site is clean, we have a design, this is our contribution, what say you? We were not going to get caught with our pants down.”

♦♦♦

Five years ago, University of San Francisco professor Daniel Rascher wanted to interview the most well-known stadium financing expert for the inaugural issue of an academic sports journal. Rascher chose Ziets.

“I felt like Mitch had done more stadium deals than anybody,” Rascher said.

Ziets’ resume goes back nearly 20 years, when he worked on developing Camden Yards, the Baltimore Orioles’ baseball park and touchstone for modern sports facilities. He’s helped on more than 75 franchise acquisitions or stadium deals, including the Staples Center arena in Los Angeles and the Georgia Dome in Atlanta.

His name pops up in sports business stories. He testified for the then-Seattle Sonics when the basketball team was moving to Oklahoma City. He told a conference of investors that public subsidies have helped build stadiums since “the Roman Coliseum.” He worked for the Padres on the Petco Park deal.

Ziets, who is based in New York, couldn’t be reached for comment for this story.

Calendar records and emails show that Mayor’s Office and CCDC officials had at least 14 meetings or conference calls with Ziets, though contact was more frequent than that. Rath said often he just would call Ziets when he needed help.

In January 2010, Ziets accompanied Rath and Maas to Los Angeles to tour L.A. Live, that city’s sports and entertainment complex. Sanders recently has made noise about a similar idea in San Diego. Also, Ziets talked with the Mayor’s Office and downtown agency officials about potential financing options, including measuring Petco’s boost to local tax revenues and asking about Qualcomm Stadium’s value, the impact of hosting the Super Bowl and possible contributions from San Diego County.

Ziets’ biggest asset, Rascher and Rath said, is his familiarity with the thinking of investors and professional sports leagues about stadiums. Rascher worked with Ziets on a Sacramento arena project a decade ago, and said Ziets constantly was receiving updates from his colleagues on his laptop and on the phone. He called him a “bulldog.”

In meetings with the city of San Diego, Rath said, Ziets dressed and talked like an investment banker, but he was more relaxed than the stereotype.

“He was not a Gordon Gekko-type,” Rath said. “He was much easier to get along with.”

Ziets provided expertise the city needed and wouldn’t have had otherwise, Rath added.

“The single most valuable investment is somewhat intangible in that the city made it clear that it was going to take any potential negotiation with the Chargers very seriously,” Rath said. “That we were not going to just jot it on a napkin and just hope that it worked out in the end. Because that clearly has not been a very wise approach.”

♦♦♦

Secrecy always has surrounded the details of Ziets’ contract and work.

His contract wasn’t directly with the city or CCDC. Instead, the downtown agency hired Ziets as a sub-consultant on its legal contract. That allowed the agency to shield Ziets’ work from disclosure through attorney-client privilege, even though Ziets wasn’t providing legal advice. Ziets had expressed concern about confidentiality, agency officials said at the time.

When he denied recently a public records request for all Ziets’ communications, an agency vice president said the consultant’s analysis involved proprietary information involving the NFL, its teams or other professional sports leagues and was exempt because of the legal contract.

The lack of disclosure made it difficult to track Ziets’ progress, especially as city and downtown agency officials kept moving the deadline for him to complete his work. Initially, Ziets was expected to finish a report by last spring, a timeframe Ziets himself confirmed when he delivered his CCDC presentation in January 2010. The agency postponed his report until after the city decided to increase a key limit to downtown redevelopment revenues, dollars that are expected to help pay for the stadium. Once the state Legislature unexpectedly eliminated that limit in the fall, agency and city officials said a report needed to wait until other spending priorities became clear.

In a December interview, Maas said he expected Ziets to complete a study once the financing landscape became clearer under the terms of his original contract. Maas, then the head of CCDC, didn’t mention that Ziets had completed his contract with the downtown agency five months earlier.

Asked about his comments, Maas said last week he wasn’t aware then that Ziets had finished his contract. Maas reiterated that it made no sense for Ziets to complete a study until the NFL lockout, redevelopment and other issues were resolved.

“My perspective then and now as it comes to stadium meetings I’ve been involved in is that he’s on ice,” said Maas, who’s now working as an informal advisor to Sanders on the stadium search. “Not cryogenic ice, but ice. He’ll be revived to the extent he’ll need to be revived when there’s something that needs analyzing.”

Like the Mayor’s Office, Maas said Ziets could return to the city for a report at no cost with the incentive of further contracts to assist with negotiations once a deal took shape. Sanders and the Chargers have said they’re targeting a November 2012 ballot measure to approve the new stadium.

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