Why is the SDSU deal really taking so long?

Here’s the story insiders don’t want to be told. I know this email is long, 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 set for Friday, but it is not clear what agreement the council will be considering.

Contrary to earlier commitments by the city, the City Attorney last Friday 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.

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.

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