Barbara Bry: ‘Why Is the SDSU Deal Really Taking So Long?’

by on May 27, 2020 · 4 comments

in Ocean Beach, San Diego, Sports

By Barbara Bry

Here’s the story insiders don’t want to be told, but you deserve the facts:

In November 2018, San Diego voters approved Measure G, authorizing sale of the Mission Valley stadium property to San Diego State University.

Measure G set clear guidelines for that sale:  The price to be determined by fair market value, SDSU to build a regional river park along with neighborhood parks, trails, and a multi-purpose stadium and SDSU to conduct a comprehensive environmental impact report and perform appropriate mitigation.

Rather than a rushed process, as has occurred on many recent city transactions, there has been over a year of intensive negotiations and hundreds of thousands of dollars spent by the city on outside attorneys and consultants.

Earlier this year, the City Council, which has been excluded from the negotiations, gave City Attorney Mara Elliott clear direction on resolving the few issues that remained in contention.

As requested by the city, the California State University Board of Trustees presented the city with a final offer earlier this month. It complies with Measure G and provides the City with $87 million of revenue and immediate relief from continued maintenance costs for the site. A council meeting focused on the Mission Valley plan [is] set for Friday [May 29], but it is not clear what agreement the council will be considering.

Contrary to earlier commitments by the city, the City Attorney last Friday [May 22] produced a new memo raising numerous issues — some that had been resolved weeks and months ago, others of which had never been raised before.

That memo conclusively demonstrated what many of us have suspected for some time:  That the City Attorney, who wasted hundreds of thousands of dollars trying to deny San Diegans a chance to vote on this matter, is doing everything she can to block, delay and ultimately torpedo an agreement and block implementation of voter-approved Measure G.

Let’s be clear.

SDSU has gone beyond the Measure G guidelines accepting city imposed changes to the appraisal process, resulting in an $18 million increase to the property’s fair market value, committing to environmental mitigations that go far beyond the requirements of Measure G, providing 18 indemnifications that protect the city, and securing over $600 million for development of the new campus, stadium and river park.

But every time SDSU accommodates the city’s demands, the City Attorney moves the goal posts.

For example, the City Attorney has demanded that CSU subordinate the bonds to pay for campus construction to city easements across most of the property. No bond underwriter can sell bonds with such a subordination.

The City Attorney backed away from the city’s previous approval of SDSU’s River Park design, which was the product of a two-year public process between all stakeholders, and she is now demanding to shift control of that design to the city’s Public Utilities Department.

To put the City Attorney’s outrageous demands in perspective, none of these issues were raised when the City Attorney approved a last-minute proposal to the Chargers for development of a new stadium and ancillary development on the site in 2017.  Had the City Attorney’s ridiculous easement demands been in place when the property was originally appraised, the fair market value would have been reduced by tens of millions of dollars.

This has already been one of the longest and most tortuous negotiations in city history — and that was after voters had already approved all the key guidelines for the sale.

In the next few months, CSU will be negotiating with the Governor regarding next year’s budget. The state is projecting a deficit of over $50 billion. If this agreement is not finalized soon, the $600 million commitment from CSU for purchase and improvements for the site could very well fall victim to the state’s budget crisis. The result?  The City loses the $87 million cash plus no on-going budget relief from the City’s million-dollar-a-month maintenance costs.

This transaction should have been completed more than a year ago. Nothing the city has gained over the past year and a half can even remotely compare to the money and opportunity cost each month the transaction is delayed. SDSU and the City should be partners seeking the best for our community.

Those of us with business experience recognize the inevitable train wreck of politicians and attorneys allowed to run amok. We have had enough of arrogant politicians ignoring the people, whether it is allowing scooters to run wild, tolerate illegal short-term rentals, or impose high rise apartments in single-family neighborhoods.

It is painfully past time to get the SDSU transaction done and implement the will of the voters.

Let’s get the deal done!

Councilwoman Barbara Bry is a candidate for mayor of San Diego.

{ 4 comments… read them below or add one }

Avatar Polecat May 28, 2020 at 9:07 pm

$87 million for 46 prime acres is a joke, not “fair market value.” You determine fair market value by an auction, not two competing groups putting their respective “give us cheap city land” plans on the ballot.

The SDSU plan is better than Soccer City, but that doesn’t mean it is good.

My residential lot is worth about a million dollars, and is 1/6 of an acre. That comes to $6 million an acre. SDSU wants to pay $529,000 an acre. OB is more valuable than Mission Valley, but not worth 11 times more!

That is a giveaway. SDSU is a good cause, but it should be funded by the state, not giveaways of city land. If the state wants to expand it, because it is the 2nd most competitive and 1st most popular of the Cal State campuses, great, they should pay for the land at real prices just like all the other sites.

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Avatar Polecat May 28, 2020 at 9:18 pm

Sorry, I got my math wrong. SDSU’s proposal is to pay $87.7 million for 135 acres of land, $649,629 per acre. Still a giveaway of public property.

Have a look at actual prices for commercial property in San Diego here:
https://www.loopnet.com/search/commercial-land/san-diego-ca/for-sale/?sk=410c86e04e6b33d4c25874be5f805496&e=u

Hopefully that link works, if not just search “land” in san diego. The first result is $1.1m an acre in an inferior location in Santee. The second result is $8 million an acre on El Cajon Blvd. A Kearny Mesa lot of 0.89 acres is going for $4.2 million. A million valley lot of 1.5 acres is selling for $3 million, that $2 million an acre, more than three times what SDSU proposes.

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Avatar Geoff Page May 29, 2020 at 9:21 am

You need to consider a few other factors. First, the purchased land has a huge concrete stadium on it that has to be removed. Second, there is a plume of hazardous material under the property. Third. the property is in a flood zone. You can’t make the comparisons you are making unless you can find a similarly impacted piece of land.

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Avatar Polecat May 30, 2020 at 8:56 pm

Maybe you’re right and those issues mean the site is worth 60-75% less per acre than other commercial lots in Mission Valley. The way to find out is to just sell it like any other property to whoever offers the most.

Instead our dysfunctional city allowed only two offers, who had to grease palms and do an expensive political campaign. The least bad of two very bad offers won, but that doesn’t mean this is a screwed up giveaway of city land, and Bry and every other counsel member is part of the dysfunction.

Or should I just be happy it wasn’t just gifted along with a brand new billion dollar stadium to some sleazebag NFL billionaire?

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