Some Ballpark Figures
By Ron Donoho
It’s gonna be a hell of a game. Heavy hitters have been assembled. Wily veterans have been employed. Strategy will be key; weaknesses will be exposed. In the end, victory will go to those who demonstrate the greatest desire to achieve their goals.
This type of obtuse narrative used to predicate embryonic baseball seasons. Trite? Yep. Still appropriate as the sport spirals from the rank of hallowed game to cold business? Yep again.
The business du jour is a new ballpark. A San Diego task force has determined the Padres can’t survive in today’s modern marketplace of entertainment-driven spectacle without a new edifice. It’s a sad state of affairs. But it appears to be all too true.
Accordingly, a downtown site for a new park was selected by another task force and approved by the San Diego City Council. What’s left are the financial arrangements. No one knows yet how much loot Padres owners will cough up. Or what portion the public will be asked to subsidize. “Creative financing” is the operative phrase. A proposal is due by midsummer. A November ballot issue is expected.
While we wait for dollar figures to be assigned to appropriate spreadsheet squares, speculation abounds. To keep you as close to the negotiations as possible, San Diego Magazine herewith answers 10 of the more pertinent—and occasionally impertinent—questions about picking out, paying for and possibly playing in a new ballpark.
1. First of all, where exactly have the poobahs proposed building a baseball-only ballpark?
Good question. Officials have picked the so-called “South Embarcadero” site. Hmmm. We thought South Embarcadero denoted the waterfront area in downtown’s Marina District that stretches from Seaport Village to Campbell Shipyard. It has been our understanding this area includes North and South Embarcadero Marina Parks, the Hyatt Regency, the Marriott Hotel & Marina and the San Diego Convention Center.
But as far as Padres officials are concerned, South Embarcadero now includes a part of downtown formerly known as Centre City East.
At the onset of the ballpark site search, the L Street Corridor in Centre City East was the name of the parcel of land in question. But “Centre City East” didn’t ring sexy enough. So it was suggested the site be dubbed part of the “Historic Warehouse District.” That name soon gave way to “East Village.” But when it was announced that this multi-monikered spot had won the nod as possible future home to the Padres, it had somehow become the South Embarcadero.
Whatever you call its neighborhood, the proposed site sits somewhere between Eighth and 11th avenues, bordered by Imperial and K streets—and is roughly three to four blocks from San Diego Bay.
2. Why is South Embarcadero—it’s still Centre City East to us—the best site for a new ballpark?
Two words: redevelopment opportunity.
“If you take a realistic view of the financial constraints involved, you see that the South Embarcadero is the greatest economic engine available without incurring any direct tax to San Diego citizens,” says attorney Pat Shea, chairman of the city’s Task Force on Ballpark Planning.
Many others share Shea’s view: Peter Q. Davis of Centre City Development Corporation (CCDC), City Councilman Byron Wear, Downtown Partnership’s Rubin Andrews, Leslie Wade of the East Village Association, Steve Zipfel of the Gaslamp Quarter Association and veteran downtown real estate mogul Malin Burnham, among others.
Oh, and don’t forget St. Vincent de Paul’s Father Joe Carroll. Any and all development of the community—in which Father Joe’s headquarters exists—will bring job opportunities to a constituency of lower economic denizens, says the real padre.
Padres owner John Moores calls the site “high risk/high reward.” High risk for the Padres, that is, and high reward for the city. Moores wanted to build on the most alluring land in the running, old Lane Field near the North Embarcadero waterfront; Padres President Larry Lucchino favored building a ballpark adjacent to Qualcomm Stadium in Mission Valley. Both settled for the blight that is Centre City East.
The reality of present-day downtown is that while the Gaslamp Quarter is booming, few venture east of Fifth Avenue. Visitors and even a majority of locals believe the stratosphere of the protective urban universe ends at Sixth Avenue. To an extent, that’s true. A ballpark, therefore—encircled by a “ballpark district”—is a genuine opportunity to grow the city in a manner that began with the introduction of Horton Plaza and continued with the creation of the convention center. (For more on a ballpark district, see question 5.)
Besides being an urban-planning asset and a stimulus for redevelopment, a downtown ballpark creates jobs and attracts business, helps keep Major League Baseball in San Diego, creates synergy with the convention center and will become a major tourist attraction, the task force concludes.
Oh, but since we’ve mentioned most of the sites that were in the running, what of conjecture that Chula Vista was ever a serious contender? Lucchino’s response to this question during a press conference was a succinct “No comment.” Our interpretation of his reticence: Chula Vista is merely a once-and-possible-future bargaining chip.
3. Why is this downtown site the worst choice for a new ballpark?
It’s not what the fans want, claims former City Councilman Bruce Henderson.
Henderson is not a Libertarian, though it’s easy to assume otherwise. Henderson considers Richard Rider’s political bloc a nice little party, thank you very much. But when the self-appointed voice of concerned taxpayers runs again for city council, he’ll still be a registered Republican.
And just as they fought the Qualcomm Stadium expansion and oppose convention center expansion, Henderson and company also say the proponents of a new Padres park have their own best interests in mind—not the taxpayers’.
“First of all, the downtown site doesn’t reflect the desires of the fans that I’ve talked to,” says Henderson. “If you get away from the people with financial interests, you hear that ordinary people have no interest in leaving Qualcomm Stadium. But this downtown site is the one I predicted would be chosen because it allows them to use tax-increment financing, which doesn’t have to be voted on.” (See question 8 for more on tax-increment financing.)
Henderson says he is not opposed to redevelopment of Centre City East. “Nobody should oppose working with the owners of property there to revitalize,” he says. “But it doesn’t strike me that a ballpark would do it. I admit there is a possibility that, like the saying goes, ‘If you build it, they will come.’ That’s what John Moores and Larry Lucchino are banking on.”
Unfortunately, Moores and Lucchino get to call all the shots, says Henderson. “In getting to the point where we are, the Padres won all the fights,” he says. “Back in November, it was clear to the Padres that the task force was getting out of their control. The city went out and secretly hired negotiators. The task force screamed bloody murder.” Henderson says the task force was coming to the conclusion that the public might agree to vote yes to spending as much as $75 million for a ballpark as long as the Padres contributed a couple hundred million. “Moores wants that to be the other way around,” says Henderson. “So they pulled the strings and the task force was cut off at its knees.”
4. Don’t others see John Moores as the second coming of Ernie Hahn?
In January, Malin Burnham opined that the ballpark proposal represents “the second coming of downtown development, and John Moores should be compared to Ernie Hahn.”
In 1993, San Diego Union-Tribune columnist Neil Morgan wrote: “The first that most San Diegans knew of downtown redevelopment was the disappearance of sailor bars and pawnshops and even the Hollywood Burlesque house—all to be replaced by Horton Plaza. That innovative center was the mad dream of the late Ernie Hahn, who had made his fortune in shopping centers and risked a part of it to show that this one could reverse the exodus from downtown.”
In creating Horton Plaza, $33 million was chipped in by the city; Hahn spent $140 million.
Told of Burnham’s assessment, Moores says Burnham’s praise by association is excessive. “I think Ernie Hahn was a terribly important person in the history of the city. It’s difficult to see me [as] picking up the mantle of Ernie Hahn. But I’d like to think that the Padres ballpark can be the same kind of catalyst that Horton Plaza was.”
5. What’s a “ballpark district,” and who would oversee it?
It’s the area designated for redevelopment that would surround the ballpark. Speculative plans call for creation of new commercial buildings (offices, restaurants, hotels) and much-needed residential units. Lucchino dreams of a family-oriented, tree- and grass-lined “park within a park” in the district.
One development team that already says it wants to build a 500-foot-tall, $100-million San Diego Tower downtown (San Diego Magazine’s February cover story) has shifted its attention to Centre City East. That interest is due to the ballpark proposal, says tower partner Barry McComic, CEO of McComic Consolidated Inc. He predicts that “developers from all over the country are going to check this place out as a result of this ballpark proposal.”
Despite his opposition to a new ballpark, Henderson says if one is built, the redevelopment district should be run by the CCDC. “Given the decision to build, I don’t think the redevelopment should be overseen by a separate fiefdom,” he snipes. “We don’t need any more puppets involved—like the puppets we already have on the city council.”
While it’s shocking to see Henderson and CCDC on the same side of an issue (sort of), CCDC spokesperson Donna Alm says the organization is the logical choice to oversee downtown redevelopment. “That’s what we were created to do,” she says.
Here again, though, nomenclature gets confusing. While the Padres refer to a ballpark district in South Embarcadero, Alm prefers to discuss redevelopment “environs” in the East Village.
“Part of our planning process is to grow the East Village, especially from the Gaslamp and from the waterfront,” says Alm. “But this project can also be the link to Balboa Park that we’ve been trying forever to accomplish.”
Alm says 12th Avenue could become “a big player” in a redevelopment plan. The two trolley stops on 12th presently aren’t laid out very well; CCDC has been plotting with the Metropolitan Transit Development Board to widen walk areas and possibly extend the avenue to Harbor Drive.
Alm says a buffer zone of commercial offices and possibly a hotel or two could be established that would immediately surround a ballpark. “Residential development will be a part of the mix, of course,” she says. “But I don’t think people will want to be right next to the noise that would come from crowds at ballgames.” Alm also notes that tax-increment financing for commercial space is substantially higher than for residential.
“High-tech offices could play a big part in this,” says Alm. “High-tech companies are already moving downtown. And they’re discovering that they don’t need to be set up on sprawling campuses, that they can work in vertical quarters.”
6. Bottom-line it: How much is this ballpark going to cost?
It can be done for $200 to $220 million, according to Moores. Various public estimates have ranged up to $250 million. But Jack Monger, chair of the finance committee on the mayor’s task force, admits the tab could conceivably reach $300 million.
“For planning purposes, it’s fair to think that a ballpark is a $200 million proposition,” says Moores. “To be safe, we’re planning on a 10 percent contingency. But if there have to be changes to streets, if utilities have to be moved or there are underground pipelines that are problematic, then the cost could go up from there.”
San Diego has experienced notable cost overruns on major construction projects of late. Remember the extra tens of millions of dollars that went toward the Lindbergh Field expansion? Sure you do.
“They should be able to do this for under $300 million,” figures Monger. “Maybe closer to $200 million. But more than the actual cost, what I’m interested in is what it represents as out-of-pocket cost to the taxpayers. If taxpayer participation is the same level at $200 million as it is at $300 million, then it really doesn’t make much difference what the actual cost is.”
7. So what level of “taxpayer participation” are we looking at?
We don’t know yet. Money meetings between the Padres and city negotiators began in earnest only after the city council officially accepted the task force site proposal in late February. Talks are ongoing. A financing proposal is expected by late June. Lucchino promises there will be ample time for the public to digest the details before a likely November vote.
Shea is adamant that any deal have zero effect on the general fund. Shea’s task force recommends there be no ticket/seat guarantees, no increase of property or sales tax rates, and that the Padres—not the city—be at risk for cost overruns.
In terms of available resources, both the Padres and the city may have enough coin in their respective coffers to pay for the construction of a new stadium singlehandedly. But neither side expresses the desire, obviously.
“The question needs to be this: How much can the Padres afford to pay for a ballpark without crippling their competitiveness?” says Moores. “We clearly could afford to pay for 100 percent of a ballpark. But then we’d probably have to draft [magazine editors] to play the infield. And I don’t think tickets would sell real well for that. We could create the nicest ballpark in the world and have the most mediocre baseball team to play in it.”
Though no city official cared to offer so blunt an assessment on the record, a knowledgeable source told San Diego Magazine the city also has more than enough money set aside to pay for a new Padres ballpark. But in light of unfavorably perceived negotiations with the Chargers, local politicians are treading lightly on the subject of public money for sports venues.
8. Besides John Moores writing a check for hundreds of millions, what are some realistic options for financing construction?
For starters, three words: tax-increment financing.
Here’s how it works. The owner of a parcel of land in Centre City East with a beat-up warehouse sitting on it presently pays a specific property tax to the city. But the introduction of something like a major-league ballpark into an area makes property values zoom. (Barry McComic thinks property values could increase 100 to 150 percent.) If an area is designated as a redevelopment zone, according to law, the city can take the increased tax revenue and use it to float bonds designated to finance ballpark construction. It’s estimated that anywhere from $40 million to $80 million could be raised from redevelopment of a ballpark district.
Another possible up-front financing source is naming rights. San Diego Gas & Electric owns 111¼2 acres of land in the vicinity (a parcel bordered by Ninth and 12th avenues and L Street and Imperial Avenue, and two blocks south of Imperial between Ninth and 11th). SDG&E’s parent company, Enova, is in the process of a merger that will create a mammoth new power company called Sempra Energy. Word is that company officials love the sound of Sempra Energy Field.
Enova spokesperson Doug Kline says only that company officials are “aware of all the speculation.” Estimates of the value of the SDG&E land range from $10 million to $40 million. A deal between the Padres and Sempra could involve land and/or cash for naming rights. (Incidentally, since SDG&E used this property for gas storage, the land needs to undergo an environmental cleansing process before any construction could occur.)
“All revenue sources will be looked at,” says Paul Jacobs, a Denver-based attorney hired by the city to help negotiate with the Padres. “There are a lot of options.”
Here are a few other creative finance avenues whispered to San Diego Magazine:
* Participation by San Diego’s city and county employee pension funds as part of respective investment portfolios. That avenue could potentially represent $50 million, according to a source. This use wouldn’t be unprecedented; in the 1960s the city employees’ fund paid for the City Hall parking lot.
* The deep-pocketed San Diego Unified Port District is always a possibility.National corporations may also seek exclusive “pouring rights” (i.e., Coca-Cola or Pepsi) or other sponsorship deals.
* An increased share of the Transient Occupancy Tax (TOT) could be collected. By law, hotels built in a redevelopment zone can be designated to contribute a higher portion of TOT to specific ventures within the zone.
* Private-sector contributions from investors other than Moores are possible. Specifically, some wonder if Padres players will dig into their own wallets to invest in their new playground.
9. How has funding for new ballparks been handled in other cities?
Here’s how public/private ventures in other cities round out: Denver, $231 million total cost (82.5 percent was funded by the public); Baltimore, $211 million (90 percent public funding); Atlanta, $260 million (80.39 percent); Cleveland, $185 million (76 percent); and Arlington, Texas, $191.5 million (81.2 percent).
To help pay for Oriole Park at Camden Yards in Baltimore—the prototype for modern/retro ballparks and a project overseen by former Orioles President Larry Lucchino—proceeds from a state lottery were used. Jacobs Field in Cleveland was aided by a “sin” tax on alcohol and cigarettes; Turner Field in Atlanta was subsidized by the Atlanta Olympic Initiative; The Ballpark at Arlington and Denver’s Coors Field were subsidized by new sales taxes.
The new (or relatively new) ballparks in Denver, Baltimore, Atlanta and Cleveland ranked first through fourth in attendance among Major League Baseball’s 28 teams in 1997. Attendance at those parks ranged from 3,888,000 to 3,447,000, according to Arthur Anderson’s professional sports consulting group. The Texas Rangers’ new ballpark in Arlington was seventh, with 2,982,000.
The Padres home attendance in 1997 was 2,089,336. That figure is more than 100,000 less than 1996 attendance.
10. Will Tony Gwynn ever play in a new home ballpark?
Not unless the National League adopts the designated-hitter rule. Or there really is a Fountain of Youth. The 37-year-old Gwynn is signed to play through the year 2000. He’s due to reach the magical 3,000-hit plateau this season or next—and hasn’t given any indication he plans to play as a fortysomething.
At one task force meeting it was announced that a construction schedule for a new ballpark would be between 42 and 58 months. (That was news to Padres officials anticipating a 22-month schedule.)
The Padres are ambitious, says Doug Austin, design chairman for the task force. “It might be possible to get this done for the 2001 season, but remember that this is a public-works project where government will be involved,” he says. “Politicians don’t move quickly.”
If the task force timetable is correct, the earliest a park could be ready would be three and a half years after voters give the go-ahead. Three and a half years after November 1998 (when a first public vote is likely) is May 2002. On May 9, 2002, Tony Gwynn will celebrate his 42nd birthday. Maybe he’ll be asked to throw out the ceremonial first pitch.