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January 26, 2008
Q&A: Mark Fabiani

Q&A: Mark Fabiani

Fabiani joined the Chargers as special counsel to President Dean Spanos in 2002 to work with the community and local governments for development of a state-of-the-art football facility to replace Qualcomm Stadium. He previously served as deputy campaign manager for Al Gore's presidential campaign in 2000 and, prior to that, was special counsel to President Bill Clinton. He was also a deputy assistant attorney general at the Justice Department, a deputy assistant secretary at the Department of Housing and Urban Development and deputy mayor and chief of staff to Los Angeles Mayor Tom Bradley. Fabiani was interviewed Jan. 16 by the Union-Tribune editorial board.

Your preferred model for a stadium in Chula Vista is the bayfront – shut down the power plant, put the stadium there and use a site in eastern Chula Vista for economic development that would pay for the stadium, perhaps in conjunction with a university campus. Is that correct?

That's a good summary. And one of the things that's built support for us in Chula Vista is, number one, most of the people we met with want the power plant to be removed. And obviously they haven't succeeded at that, even though people have been trying for many years. So some people, correctly or incorrectly, see a major project involving an NFL team as something that might provide the political impetus to help make that happen. And then people like the idea very much of a university campus on the east side. In fact, we learned pretty clearly that if the stadium were to be built on the east side, and that would mean that there would be no university there, people would be against the stadium.

The idea of San Diego State participating. Is that dead?

We've talked to President (Stephen) Weber. They obviously have a lot going on with their current expansion plans. But they're very open-minded about it. They want to see a proposal. They want to see what they would get out of a new stadium, what kind of financial benefits they would get. Right now San Diego State is not in an advantageous position with the city of San Diego at Qualcomm. They don't have advertising. They don't have use of certain facilities. They don't have things that a lot of other major college programs have.

Do they have bonding authority they could contribute to this, in effect borrow money for its contribution?

We wouldn't be looking for them to contribute to the stadium. What we'd be looking for them to do is jump-start that university complex. Because what we've learned and I think what (Chula Vista) Mayor (Cheryl) Cox and the city will tell you is if they had a major anchor tenant, like San Diego State, there are a variety of smaller schools, both in San Diego and in Mexico, that would also join up. And then you have a critical mass there.

How would developing that campus help the Chargers finance the stadium?

If you could participate in the ancillary development that would come along with the university campus. In other words, you wouldn't simply be building more housing on the east side of Chula Vista, which would have a dubious chance at this point, given the market. You'd be building things that come along with a major university campus, whether that is shopping or housing for students or professors or research facilities or office parks. You would really have a whole new character in that area that you could then develop. And we would have to enter into a fair deal with the city, a lease, sale of the land, the city being a profit-participant, in some of that development. And in theory it would work the same way as it would have worked four years ago at Qualcomm. We would take the risk of the development. We would hope to generate sufficient revenue from the development to pay for the amount of the stadium that we can't pay for ourselves.

In terms of the university campus, you have two private companies that are in final negotiations with the city to in effect give the city 500 acres. And they would do the ancillary development on the adjacent land. What incentive would they have to cut the Chargers into that?

We're not looking at participating in the related development by the two companies that you spoke of, but I can tell you that the siting of the university campus would be a major advantage to those two companies. And we've talked to both of them. We have good relationships with both of them. And I think that if we were the impetus that jump-started that university, they would see that as a good thing. That doesn't mean they cut us in on their development, but it means they could be supportive of this kind of thing and that's important.

Starting a major university campus there would be a years-long process in getting it approved and financing from the Legislature.

We're also talking several years at least before the power plant is going to be shutdown. So we're not looking anymore at the time frame we looked at when we all first met years ago, when we were looking at getting something on the ballot in '06 or '08 and getting something going.

Talk about the time frame.

I think we'll know a lot more in the next six months about the future of that power plant. And what we may learn is there's just no firm shut-down date. In which case the point you made is a very valid point. Why continue down a road where you might not even have an available site within years? On the other hand, if there is a relative certainty about the shut-down date, then you've got a 2011 date or 2012 date that you can work with.

For what?

For the decommissioning of the power plant. And then in the interim, assuming that that was something you were able to nail down with sufficient certainty, in the interim you would put together your financing plan. You'd go on the ballot.

When?

Probably a special election in '09. Which might happen anyway in Chula Vista if Councilman (John) McCann is elected to the state Legislature. If not, you can fund your own special election. But probably some time in '09. And then, as you know, you've got several years of environmental impact process, planning process, community design work.

So in the best-case scenario today, when would the first kickoff occur in the new stadium?

2014.

The government is funding Indianapolis' new stadium, which goes hand in hand with how the public in Indianapolis feels about the Colts. Is there an additional burden in San Diego for getting that kind of public enthusiasm? It's not just about winning games, it's about how Indianapolis or Charlotte feel about their teams. What is it the Chargers or the community have to do to build that kind of public sentiment that they have in some of these other cities?

I think if you look at the television ratings in San Diego, if you look at any other measure of fan enthusiasm, we have some of the best fans in the league. We have some of the most enthusiastic fans. If you walk through our parking lot before the game, that is the greatest tailgating scene anywhere in the country. And I've been to Green Bay, which supposedly has the greatest. I don't think it's a San Diego-particular thing. I think it's a California thing. That Proposition 13 ethos. The lack of support for any kind of tax increase. The two-thirds requirement for any kind of dedicated tax increase. These are institutional factors that impact the entire state. And that's why you have the three oldest stadiums in the league now in California. It's why you have no team in Los Angeles, the second-biggest media market in the country, have no team in Orange County, which is one of the most attractive demographic areas in the entire world. You don't have the teams there because there's just not the public support for financing these kinds of facilities in general ...

And that's not a complaint. We've recognized that from the beginning, that to get something done in California you've got to do it differently. You can't hold out your hand and say we expect X amount of money ...

If Mike Aguirre is not re-elected as San Diego's city attorney might you again be interested in the Qualcomm site? It was you who said you would not do business with Mike Aguirre.

We face in our view three barriers at the Qualcomm site. Two of them are potentially changeable and removable. One of them we don't think is. The three barriers are first, the mayor of the city of San Diego, Jerry Sanders, is openly indifferent to our stadium effort. He said that. He's been clear about that. He's a good person. We like him and we respect what he says. But you can't get it done without the strong leadership of either a governor or the head of the Board of Supervisors or the mayor. So that's issue number one. Now that could change. Issue number two is Mike Aguirre. Mike is positioned in an office, and we've seen it happen over and over again for the last several years, where he can effectively block action on major items, can delay action on major items, can simply refuse to act on items that the mayor and council want him to act on. The pension example is one that sticks out for everybody. And he's someone who believes that no matter what anybody else tells him he can file his own lawsuits in the name of the city of San Diego. Now that's something that no developer is going to want to get in the middle of. We know from experience. We've had probably hundreds of meetings by now with potential developers. Nobody wants to spend millions of dollars, go way down the road, get dragged through the mud by Mike Aguirre, end up in court against the city of San Diego, have the project indefinitely delayed, and again and again and again.

He can still file suits whether he's city attorney or not.

I think you'll find most developers believe it's one thing to be in court against a community gadfly. It's another thing to be in court against the city of San Diego with the city's name on the pleadings and the resources of the City Attorney's Office arrayed against you. So that's problem number two. And problem number two could change. Mike Aguirre could be defeated in the election coming up.

The problem that we see as unsolvable is the economics. When we proposed the Qualcomm idea in 2003 and 2004, we had a project that cost roughly $650 million – the stadium at $400-$450 million and another $200 million or so of infrastructure. And those were good numbers. We thought that that project financed itself based on about 6,600 condominiums on that site along with a far lesser amount of commercial space, a hotel, some office space. Those numbers worked. They barely worked, but they worked. And we were prepared to move ahead with that kind of deal. The thing that's changed is the construction costs related to the project have skyrocketed. And again, don't take our word for this. Look at the commodities markets for concrete and steel, the two biggest parts of both the stadium and the infrastructure around it. So the cost of the project has gone from $650 million to well north of $1 billion once you put in the infrastructure improvements. And there is a limit to what you can build on 60 acres in Mission Valley. You can't build 25,000 condominiums there. And I won't even mention the fact of course that the condominium market has gone in completely the other direction. So the economics become impenetrable at that site. Even if Problem 1 were solved, Problem 2 were solved, there's just no way that the plan we proposed in 2004 works on that site. And I know the next question, because I always get it, is how can you do it in Chula Vista. And the answer is there's more land. In addition, there are potentially two sites. So you don't have the phasing problems that we had at Qualcomm, where you had to play in the existing stadium, build the new stadium, tear down the existing stadium and then five or six years in build your first moneymaking condominium. You could do things simultaneously if you're dealing with two sites. So that's my economics lecture.

Have Chula Vista officials said they should be the Chula Vista Chargers?

They have never raised that once. And we've been pretty clear that we would very much prefer to keep the name the San Diego Chargers.

You said the footprint for the Chula Vista bayfront stadium might be 18-22 acres plus whatever on-site, off-site mix of parking. So with that much land, is it all or nothing in terms of the power plant or are there other possible compromises?

As you may know, the Public Utilities Commission staff wrote a report a couple of weeks ago, which said that they recommended that that power plant be repowered. We have not looked at whether you could somehow have a repowered power plant and a stadium in conjunction with each other. That's something that we should look at and will look at in the next several months. It's a great question. But our goal for that site would not be to do anything other than build a stadium and a park.

Is there any linkage between a stadium and the Gaylord convention center proposal?

We've been in contact with the Gaylord company and they've had a lot of questions for us. We've tried to answer them. I think initially they were concerned that you'd have a Qualcomm Stadium-type situation sort of plunked down next to them where you'd have a big empty parking lot for most of the year and a big empty stadium. We've tried to explain what we have in mind. I think there are some obvious synergies, because if you have a Super Bowl there, which we would every three or four or five years, it would be a huge thing for their convention business. It would be a huge thing for their project. So we expect if that project goes forward to be able to work pretty well with them.

That's a pretty bold commitment that you just made from the NFL to come every three to five years to San Diego for the Super Bowl.

I obviously am in no position to make commitments for the NFL but if you look at the history of the NFL there used to be a rotation: Southern California, New Orleans, South Florida and then a few other cities thrown in. But the rotating cities had Super Bowls every four, five or six years. It changed because there was such a stadium boom that occurred in the last 10 years. And the league went out of its way to reward cities that built stadiums. And so that's why you had Super Bowls in Houston and Jacksonville and Detroit. I think eventually you'll have a Super Bowl in Dallas. You'll eventually have one in New York, I think, even though it's a cold-weather Super Bowl. But at a certain point everyone's going to have a new stadium except for us in California, everyone's going to be back on an even playing field. And then you get back into the rotation and San Diego's a great place for Super Bowls. And the Spanoses have fought hard for Super Bowls in the past. They have a good relationship with the other owners and the commissioner.

If Chula Vista offered you everything, would you give them the name change?

If someone gave you everything I think you'd have to look at what they were requesting. The Spanos family wants to keep the team in the region. And if someone actually came up with a plan, I think that's unlikely, to give you everything you'd have to look at whatever they wanted.

 

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