A residential streetscape rendering of the SDSU Mission Valley (SDSU West) site plan | Courtesy a representative of Carrier Johnson + Culture

SDCCU Stadium’s Fate: Two Solutions – October 2018

Carrie Rossenfeld Features

From SoCal Real Estate’s October 2018 issue:

SDSU West and SoccerCity each have their own ideas for this iconic San Diego landmark.

By Carrie Rossenfeld

The question of what will happen to SDCCU Stadium has been tossed around San Diego ever since the Chargers headed north to Los Angeles last year. The former home of the Chargers, the Stadium (previously Qualcomm Stadium) is an icon for anyone who loves football or has been to a major concert in San Diego. But without the Chargers to anchor it, what will become of it?

As of this writing, two potential solutions are on the November ballot for San Diegans — the SoccerCity initiative and the SDSU West initiative. Both propose redevelopment of the property to a sports use in combination with other uses said to benefit the region economically and culturally. But the proponents of each solution are each vehemently opposed to the other, both sides either citing false claims or pointing out flaws in the other’s plan.

In addition, local news sources report that earlier this year, the City of San Diego had brought lawsuits against both sides, claiming that the initiatives illegally infringe on the mayor and City Council’s authority, but the cases were rejected by separate San Diego Superior County judges in July. Currently, the city is appealing these judgments, which could potentially change the ballot. But for now, they remain.

SoccerCity was first proposed in January 2017 in what its proponents call a “highly detailed” plan and what SDSU West says was a 3,000-page proposal. According to its website, the SoccerCity initiative is “a comprehensive citizen’s [sic] initiative to help bring a new Major League Soccer team to San Diego and redevelop the stadium site in Mission Valley for all San Diegans to enjoy.” It also says the initiative includes a state-of-the-art stadium for the soccer team and SDSU’s Aztec Football, more than 60 acres of parks, and the beautification of the San Diego River, an entertainment district with retail and restaurants, housing and research space, infrastructure improvements, recreation fields for the community, and a soccer academy for local children.

In addition, the SoccerCity website also says the team behind the initiative is a group of local business leaders, philanthropists, and soccer legends, including Mike Stone, head of FS Investors. A press release from the proponents in January 2018 quotes Nick Stone as manager of the SoccerCity Project.

A rendering of the SoccerCity plan that incorporates the San Diego River | Courtesy SoccerCity backers

In contrast, the SDSU West initiative (aka SDSU Mission Valley), a 14-page plan, was proposed in the fall of 2017 and is sponsored by Friends of SDSU, self-defined as a volunteer group of San Diego civic and business leaders, educators, and SDSU alumni. According to Frederick W. Pierce, president and CEO of San Diego–based student housing investment and operating company Pierce Education Properties, past president of SDSU Alumni, and a leading member of Friends of SDSU, the initiative authorizes the City of San Diego to sell the SDCCU Stadium property to SDSU at fair market value for SDSU to develop a west campus, including 66 acres for the San Diego River Park and active recreation space and a new 35,000-seat multiuse stadium to house SDSU Football and potentially professional soccer.

“And it must do so subject to full, public environmental review [CEQA] and with full community input and governmental approvals,” Pierce tells SoCal Real Estate. “That process will require complete mitigation of the project’s environmental impacts.”

But in January 2018, the backers of SoccerCity announced that they had released an analysis of the SDSU West initiative, outlining specifically how taxpayers would subsidize much of the cost of the plan. The SoccerCity team said that the SDSU West initiative, which it called “developer backed,” would create a public subsidy that would run into hundreds of millions of dollars and that it pushes park costs off on taxpayers, doesn’t commit to one dime of traffic mitigation, proposes building less student housing than SoccerCity, diverts $150 million more in university funds for a stadium, and would eliminate the likelihood of a Major League Soccer team.

Responding to those statements, Pierce tells us that SDSU West is not developer backed and that, while about 25 percent of the steering committee of Friends of SDSU are real estate professionals, they are not supporting SDSU West so that they can become its developers, as FS Investors suggests. “All of these individuals have publicly committed they will not be financially involved with the development of SDSU West.”

Pierce also says that while the city will retain ownership of the land designated for the River Park under the SDSU West Initiative, the initiative requires SDSU to provide the park at no cost to the city’s general fund. “In addition, on its website SDSU has committed that it will build and maintain the River Park.”

Addressing SoccerCity’s claims that the SDSU West initiative would necessitate taxpayers to pay a huge public subsidy, Pierce says, “This statement is factually incorrect. SDSU is not paying significantly less — SDSU West requires SDSU to pay fair market value for the property, the same as SoccerCity.”

Regarding traffic mitigation, Pierce says the requirements for traffic improvements for SDSU West will be determined based upon the environmental impact report (EIR) that will be conducted pursuant to CEQA, and SDSU will provide those improvements stipulated in the EIR, including a fair-share contribution toward off-site improvements. Conversely, he adds, there is no EIR, CEQA, or public review under the SoccerCity initiative.

In response to SoccerCity’s student-housing development claims, Pierce responds, “The SDSU Mission Valley plan developed by SDSU provides for between 4,500 and 4,600 units of housing. There is no constraint on how much of that housing could be student housing.”

Responding to SoccerCity’s claim that the SDSU West initiative diverts $150 million more in university funds for a stadium, Pierce says SoccerCity does not provide for 33,500-spectator capacity but was limited to 32,000 as a joint-use stadium for football and soccer. “Equally important, the SoccerCity stadium plan and surrounding uses precludes any feasible expansion of the stadium. SDSU has designed its stadium to be cost effectively expandable to 40,000 seats, which is the likely ultimate size. At 32,000 seats, the football program is not sustainable, but at 40,000 seats it is perfectly right-sized.”

He adds that SDSU has a financing plan to pay for the $250 million cost of the multipurpose stadium. “Without that stadium, there is no revenue source to raise the $150 million suggested by SoccerCity, so there would be no funds to put to alternate use.”

As to SoccerCity’s statement about the likelihood of a Major League Soccer team under SDSU West’s plan, Pierce says, “Seven of the current MLS franchises play in shared-use facilities. If MLS wouldn’t play in a university stadium, why did FS Investors propose a joint-use stadium with SDSU? Their own logic conflicts with itself, and the fact that there are so many existing shared-use stadiums in the MLS shows that their premise is clearly flawed.”

In response to Pierce’s comments, Nick Stone tells us that the SoccerCity proposal is for a 100 percent privately funded stadium, along with a River Park with construction and ongoing maintenance costs fully covered by the developer, a sports-and-entertainment district, and homes and offices in a mixed-use center with the trolley on site. “Just as important, the plan provides all of the space that SDSU has said it needs to grow and flourish for decades.”

Stone adds that the development “would happen immediately, as opposed to the decades-long timeline of any potential alternative.” And he states, “All of the commitments we have made are legally binding and guaranteed. If, for whatever reason, we are unable to attract a Major League Soccer team here, ownership of the property will never transfer to SoccerCity, and the initiative then allows SDSU to step into our shoes and develop the site.”
He also says that to meet SDSU’s stated land needs, the plan sets aside 35 acres for campus expansion. “And instead of SDSU’s picking up the entire cost of a new $250 million stadium — as proposed under SDSU West — SoccerCity would take on half the construction and operating costs. This will save the university tens of millions of dollars that can instead be used for academic purposes.”

Stone points out that according to an independent analysis by the San Diego County Taxpayers Association in June, SoccerCity will generate twice as much tax revenue for the city of San Diego as the SDSU West proposal. In addition, he says that according to the San Diego Regional Economic Development Corporation, SoccerCity will generate more than 25,000 permanent jobs and deliver a staggering economic impact of $2.8 billion every year. And he says SoccerCity has been endorsed by Mayor Kevin Faulconer; Councilman Scott Sherman, who represents Mission Valley; and more than 100,000 citizens.

But other research and endorsements favor the SDSU West initiative. Industry sources report that The Sierra Club, San Diego Police Officers Association, The Lincoln Club, and all of San Diego State University’s most prominent alumni organizations support the initiative. Also, endorsements for SDSU West have been made by Congressmen Juan Vargas and Scott Peters, Supervisor Greg Cox, and City Council Member Barbara Bry.

As of now, the voters will have their say in November.

Since this article was originally written, SoCal Real Estate has learned that both lawsuits by the City were ruled against by the Superior Court, then appealed by the City to the Appellate Court, with the Appellate Court denying to hear either case, clearing the way for both initiatives to be on the ballot in November.