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New Stadium: Is the Devil in the Details?

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    NEWSLETTERS

    TK
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    Twenty-four hours ago, the Chargers and Mayor Jerry Sanders spoke optimistically about ways of underwriting a new downtown stadium in the event the state hijacks the city's redevelopment funds. But cautionary notes are now being sounded about potential legal and financial complications that could intrude on the process.

    Face-to-face meetings between Mayor Sanders and Chargers President Dean Spanos are about to resume. Among the prospects on the table are leveraging city-owned sites to help underwrite a stadium in East Village because redevelopment money is under a cloud in Sacramento.

    But the undertaking may not be simple or straightforward.

    New Stadium: Is the Devil in the Details?

    [DGO] New Stadium: Is the Devil in the Details?
    Cautionary notes are now being sounded about potential complications.

    Could the Qualcomm Stadium property give the Chargers financial leverage to reap the public subsidies they want for a new stadium in East Village? How about the real estate under and surrounding the Sports Arena?

    "The basic idea is a good one," says Chargers special counsel Mark Fabiani.  "That is, turning money-losing pieces of land that the city already has.  It's like you don't have to go out and buy these pieces of land -- you can go out right now and do something with it if you chose to."

    City officials say the Sports Arena site may not be a clear-cut prospect for raising cash to go toward East Village.

    But what about the stadium site?

    "Well, I think the Qualcomm site will definitely factor into whatever deal we put together," said Darren Pudgil, the mayor's press secretary. "Regardless of what happens to the redevelopment money downtown, should that state take that or not."

    All well and good, but legally speaking, the stadium site -- plagued with a decades-old underground plume of petroleum leaks from the nearby Mission Valley gasoline terminal -- isn't entirely free and clear. 

    It turns out some of it has already been leveraged, financially speaking.

    "The whole idea of using the site is to use it as an asset to do a bond," said former City Attorney Mike Aguirre, explaining that a portion of the stadium site is security for bonds that bankrolled city water and sewer facilities.

    "If the city wants to use that land," Aguirre added, "they're going to have to refinance the land and take those encumbrances off."

    That could pose further issues involving the city's financial health, the bond market, and how to proceeds from the leveraging must be allocated. 

    The city and Chargers hope to put a stadium measure on the ballot in November 2012.

    Even if it were a financial and political winner, the project would take several years to build -- unless lawsuits of the kind filed against the Petco Park project delay the timeline.