By Jeffrey Siniard on Jun 2, 2015, 9:00a
We’ve finally arrived at the point we should have reached months ago.
Negotiations will start today between San Diego and the Chargers on the construction of a new stadium. The City and County will be represented by financial experts from Citigroup, as well as legal work from the law firm of Nixon-Peabody.
However, there are many questions surrounding this set of negotiations, and each of them will have a direct impact on whether or not these negotiations are a success.
So, let’s take a look at a few of these questions, and see if we can determine what strategies will be in play over the coming days and weeks:
Question #1. Are the Chargers Negotiating in Good Faith?
People in San Diego have every reason to be dubious.
Despite the Chargers’ insistence they wanted to remain in San Diego, their flirtation with AEG’s Farmer’s Field project, the possibility of a partnership with Kroenke in Inglewood apparently gone bad (relevant audio is from 09:00 – 21:50), and now news that the Chargers started the Carson project as early as 2013 all convincingly argue otherwise.
I have said the Chargers are all-in on Carson in 2015, and will only seriously consider making a deal with San Diego once Carson is no longer an option.
Throughout this winter and spring, most of the announcements from the City – either by the Mayor or the Citizens’ Stadium Advisory Group (CSAG) – have been greeted with disdain by the Chargers, or matched by an announcement from the Chargers regarding their proposed stadium project in Carson. Each of these statements or announcements serve to re-direct any momentum in San Diego and / or exert leverage.
Here are some examples:
On January 14th, Mayor Kevin Faulconer announces the creation of CSAG. On January 15th, Fabiani criticizes the idea, and “incorrectly” names Stephen Cushman as a member of the task force because the Chargers’ are starting their “we want downtown” smokescreen in San Diego.
On March 13th, CSAG announces their selection of the Mission Valley site. On March 16th, Fabiani shoots down the Mission Valley site on KPBS. It should be noted that as news regarding the selection leaked before the official announcement, Kevin Acee and Nick Canepa both write columns in the UT San Diego. One talks up the proposed convention center plus stadium concept from JMI Realty, while the other disses the selection of Mission Valley.
On May 18th, CSAG releases their financing framework. That evening, the Chargers announce the hiring of Carmen Policy, announce that A.G. Spanos and John Spanos will assume day-to-day operation of the team’s business and football operations, respectively. On May 19th, they closed escrow on their 11 acres of the Carson site – which cost the team $20 million, according to Fred Roggin of NBC 4 and Beast 980 AM in Los Angeles.
It’s possible these are all a set of fantastic coincidences.
In my opinion, we should definitely expect some kind of news this week from the Chargers about the Carson project which will essentially serve to redirect any momentum in San Diego and/or exert leverage.
Based on the next steps coming for the Carson project (following the model in Santa Clara used by the 49ers), and this ambiguous tweet quoting Carson Mayor Albert Robles
I’m speculating that the Chargers and/or Carson will announce the formation of a Stadium Joint Powers Authority (JPA) either late Tuesday night or Wednesday. This JPA will serve to issue construction bonds if the Carson project is approved by NFL Owners later this year, and would eventually operate the stadium once construction is completed.
Question #2. How Long Can Negotiations Take?
Depends on how you feel in regards to Question 1.
However, there is one very important weekend we should all be keeping our eyes on. That weekend is December 5-6, 2015. That is the projected date the Inglewood project can begin construction, according to Mayor James Butts of Inglewood.
This start date is what drives the current frenzy in Los Angeles. It means that a decision on Los Angeles needs to be reached by NFL Owners before that start date. Otherwise, the NFL runs the risk of Stan Kroenke – owner of the St. Louis Rams and co-developer of the Inglewood project – forcing the NFL’s hand by initiating construction without league approval.
However (whatever you think of the likelihood), it’s possible that the the NFL could choose the Carson project this fall. Therefore, to ensure that San Diego has a chance to keep the Chargers, a Special Election would need to be held in the Fall of 2015, before the NFL has to make a final decision.
According to this article by David Garrick in the San Diego Union-Tribune, San Diego would need at least a 4-5 month preparatory period to stage a Special Election. Also, the Special Election has to be held by end-of-January 2016, because of preparations for the Primary Election in June 2016.
In order to make a deadline of December 1, with a minimum of 4 months lead time, an agreement would have to be reached no later than August 1, 2015.
This leaves a window of 30-60 days for the Chargers to reach a deal with the City and County.
Considering the Chargers’ lack of deal-making ability with AEG, Kroenke, or over the years in San Diego, should we be optimistic?
Question #3. How Should the City (and County) Proceed?
I recommend a two-track process.
Assume the Chargers are negotiating in good faith, and assume (absent a deal in San Diego this year) the Chargers are going to Los Angeles in 2016, no matter what. This means the City & County and Chargers have to agree to the following conditions at the outset.
- A deal needs to be reached on (or about) June 30th.
- The Chargers will help pay for the ballot initiative which creates the Special Election.
- San Diego will set up a Special Election by December 1, which in turn gives the NFL owners a chance to hold a Relocation Vote before the Inglewood project breaks ground
- The Chargers are legally bound to stay in San Diego if the Special Election for a stadium is approved by voters.
Assuming the Chargers are not negotiating in good faith (which is my take at the moment), the City and County should have the following process in their back pocket, ready to deploy the moment it becomes obvious:
- If a deal is not close by June 30, the City and County will suspend negotiations.
- On July 15th, the City and County will make a final offer. The final offer must be accepted by July 31st.
- If the Chargers do not accept a deal by July 31st, the City and County will announce no deal for 2015, as there will not be enough time to hold a Special Election before the NFL has to decide on the Inglewood stadium project.
- If the Chargers do not move to Los Angeles in 2016, the City and County will offer to reopen negotiations from scratch, with the intent of having a stadium initiative on the ballot for the November 2016 General Election.
- The final offer from July 2015 will not be offered again, under any circumstances.
- One other thought: If the Chargers decline the Final Offer, the City of San Diego could really stir the hornet’s nest by then offering that deal to Mark Davis, absent a deal in Oakland.
Of course, if any of the following occurs, the City and County will be compelled to adopt the 2nd Track.
- The Chargers attempt to reopen items in negotiations which have already been settled.
- A deal isn’t close, and the Chargers try to push negotiations past June 30th.
- The Chargers schedule intermittent (or short) meetings with the City’s and County’s negotiators.
- The Chargers “filibuster” each and every debate point, resulting in a dead process.
The City and County put their best foot forward this spring. They’ve hired a negotiating team, and CSAG has completed its stadium financing framework within the accelerated timeline requested by the Chargers and NFL.
The Chargers (i.e. the Spanos family and Fabiani) have said repeatedly that their preference is to remain in San Diego
Repeated flirtations with various Los Angeles projects indicate otherwise.
As Vincenzo Coccotti said to Clifford Worley in True Romance… “Now, what we got here is a little game of show and tell. You don’t wanna’ show me nothing, but you’re telling me everything.”
It’s time for Dean Spanos and Mark Fabiani to put their money where their mouth is.
And I don’t mean $10 million over 14 years.