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The Condo Glut Killed the Stadium

Discussion in 'Latest Chargers News & Headlines' started by robdog, Jan 12, 2006.

  1. robdog

    robdog Code Monkey Staff Member Administrator

    Jun 29, 2009
    Source: <a href="http://www.voiceofsandiego.org/site/apps/nl/content2.asp?c=euLTJbMUKvH&b=312470&ct=1779883" target="_blank">Voice of San Diego
    By Scott Lewis

    Let's get one thing straight -- the Chargers' stadium proposal was a good one. The football team had adroitly designed a plan that would make everyone happy.

    It was a free stadium.

    Nobody would have to pay for it. Everyone would gain: football fans would skip together down the sidewalk, the next 50 Super Bowls would be in San Diego (or was it 40?) and the perpetual thorn in the Chargers' side (aka City Attorney Mike Aguirre) was set to eat some humble pie.

    Because it was a great deal.

    And that's exactly why it died this week.

    When everybody's happy with a deal like this, there's something wrong. I'm going to take a stab at what that was.

    I'm pretty sure it's something to do with those guys twirling those signs on street corners -- a phenomenon particularly endemic to the congested confines of Mission Valley's sprawl. Seriously.

    The Chargers' proposal, as team spokesman Mark Fabiani describes it, was simple in concept if extremely complex in its implementation. In order to avoid the whole issue of asking taxpayers to foot the bill for a massive civic project, Chargers officials came up with a solution: We'll build the stadium, we'll pay off the debt on the old stadium, we'll do everything -- all San Diego has to do is give us a bunch of land.

    And here was the magic: They were going to take the land and turn it into 6,000 condos -- yes, a couple of other things too, but mostly condos. They planned to sell the condos and profits from those sales would be high enough to pay off the builder of the stadium. The snafu that finally killed the proposal -- and it's almost certainly dead -- was that the Chargers couldn't get a wealthy partner to pony up the capital to build those magic condos.

    And although Fabiani deftly directed blame for the failure to the cloud of crap currently hanging over city government -- oh, and Aguirre as well -- he also acknowledged that there were other factors that negatively influenced potential development partners.

    And one stood out specifically:

    The San Diego housing market.

    Fabiani said the Chargers courted three types of potential development partners. The first group was interested, but then, they weren't. The second group, simply didn't have the means to put up that much cash now.

    And the third group - well, I'll let him tell it.

    "There was a third group that said, 'This project is interesting but you're assuming that the housing market is going to remain really strong and we don't necessarily share your view of the housing market in San Diego," Fabiani said.

    In other words, "we don't think we would be able to sell 6,000 condominiums for how much you think we'd be able to sell them."

    And they've got a point. The inventory of condos for sale in San Diego has soared recently, as has the number of homes for sale on the market.

    One need only look at the street corners in Mission Valley right now to see what that means: Guys twirling signs trying to get people to buy condominiums.

    How about downtown? The inventory of condos there has soared. And thousands more are in the pipeline. It's hard to imagine how the availability of condos for sale won't be great for years to come. When potential condo buyers have many options to choose from, they're less likely to pay out the nose for a place. Especially if that place is in horrid Mission Valley.

    The Chargers' proposal for a new stadium was so good because it appeared to protect taxpayers at the same time that it kept the team -- and their fans -- content.

    But stadiums are not profitable enterprises for cities. They are part of that group of civic endeavors in architecture that are produced out of a surplus of resources. Along with central libraries, for example, cities are supposed to sacrifice for stadiums. You have to give something up, like time and money, in order to get one.

    If stadiums, by themselves, were a profitable thing to do -- rather than just a benefit to the culture of the community -- we wouldn't even need discussions like this. People would just build them using their own capital.

    The Chargers thought they could get some land from the city and then the magic of the Southern California housing boom would do the rest. At least some of their potential development partners said that was a faulty assumption.

    So, either the Chargers will have to suck it up and simply pay for everything having to do with construction of a stadium, or taxpayers will. And with talk of bankruptcy still in the air around the city, it's hard to imagine any politician being able to sell the idea of directing taxes to a costly stadium project.

    After all, politicians are always being told to treat governments more like businesses. In this case, the businessmen wanted nothing to do with it.

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