Battle over Padres' Park Shaping Up as Hardball:
Suggestion for private bond financing strikes out
By Anthony Millican and Ray Huard
San Diego Union-Tribune
September 21, 2000
It has all the makings of a poker game, with the fate of the downtown ballpark at stake.
San Diego city officials suggest that the Padres could obtain private bond financing for the project. Privately backed bonds could be a financing bridge until voter-approved, tax-exempt bonds could be issued by the city.
But that is not as simple as it sounds, Padres President Larry Lucchino said yesterday. A draft city proposal faxed to team executives Tuesday outlines an arrangement that could leave the Padres at risk, Lucchino said.
€ <Picture> Workers on ballpark just 'political pawns,' says one
For example, if the city never issued ballpark bonds, the team might not be repaid for covering the city's share of construction costs. The city's obligation, spelled out in a memorandum of understanding between the parties, is capped at $225 million.
Lucchino said the project will not resume until the city issues bonds or finds some other way to cover its obligation.
"We never intended, nor are we able, to take on a $400 million-plus project," Lucchino said. "We can't do that and won't do that. So what does their proposal offer and how would that be enhanced?"
Talk of corporate bond financing comes on the heels of Lucchino's announcement Tuesday -- a surprise to City Council members, if not Mayor Susan Golding -- that work on the ballpark will be halted Oct. 2.
The shutdown, team and city officials said, will occur because money advanced by the two parties soon will be exhausted and no comprehensive financing plan is in place.
Golding said the next move must come from the Padres.
"Clearly, the private sector financing would be more expensive, but you have to weigh that against the shutdown and (starting up) again and how much that would cost, which is also in the millions of dollars," Golding said at a City Hall news conference yesterday.
She noted that the agreement between the city and the ballclub specifies that the Padres are liable for cost overruns on the project.
"The Padres are going to have to do one of two things if the project is shut down: One, absorb the costs because they are responsible for cost overruns. Or, two, cut the project back," Golding said.
A variety of issues have interfered with the city's ability to issue bonds, including an investigation into the financial relationship between Padres owner John Moores and City Councilwoman Valerie Stallings.
Golding said that investigation, by the U.S. attorney, is the biggest roadblock.
"We cannot take action with that staring us in the face as long as she's on the council," Golding said.
She stopped short of calling for Stallings to resign.
"That's something Valerie has to examine in her own heart," Golding said. "I can only state the facts."
If Stallings resigns, the mayor said, "It removes an obstacle to this major public project."
"But, on the other hand, there has been an accusation, there has not been a conviction, and people are innocent in this country until proven otherwise."
Even if Stallings were to resign, the council would have to recast a series of ballpark votes. That might give opponents new opportunities to challenge the project. In addition, if the federal grand jury that has heard testimony in the Moores-Stallings investigation were to issue indictments, the financing picture probably would be further clouded, regardless of whether Stallings was still on the council.
Jane Potter, Stallings' chief of staff, said the councilwoman would have no comment on Golding's remarks. Nor, she said, would Stallings comment on whether she will resign.
Assistant City Attorney Les Girard declined to comment yesterday when asked whether the city's ability to issue bonds would be enhanced if Stallings resigned.
Golding said she expects further negotiations with the ballclub.
"Whether or not the Padres are interested in doing it, what the risks will be, what the costs will be has yet to be determined," Golding said. "All I can say is that we've made a proposal. I'm sure that they will counter that proposal. My hope is that in the end there will be a way to do it."
One possibility is for Major League Baseball to help with the financing until the city could step in, Golding said.
"They might be able to be of assistance considering the circumstances," she said.
A spokesman for Major League Baseball did not respond to telephone messages yesterday.
'May be a role' [for MLB]
Lucchino, in a news conference at the team's Mission Valley offices, said the team has talked to Major League Baseball executives about the matter.
"There may be a role for (Major League Baseball) in the solution here, but I don't think it is fair to impose our obligations and those of the city of San Diego on the other 29 cities in Major League Baseball," Lucchino said.
The mayor said she is still not interested in coming up with a short-term financing plan that would keep the project going for only a matter of months. She said, however, that an interim private financing plan covering a year or more would be acceptable.
"If it were going to be for a year or two years or five years or seven years, I would want it with the idea that we are on our way, that we are going to build this project, that it's going to be completed," Golding said.
The mayor declined to predict whether a long-term financing plan could be put in place in time to avoid a work shutdown.
"All I can tell you is we're going to work to do everything we can to continue the project," Golding said.
Lucchino noted that the city's draft proposal included a lengthy disclaimer which included language saying it was not to be considered a firm proposal.
"That disclaimer is larger than the damn document," Lucchino said with a laugh.
However, in the next breath he said the proposal represents a starting point.
"Is it a positive step forward? Yes," Lucchino said.
No copy [of city's proposal] released
Neither Lucchino nor Golding would provide reporters with a copy of the city's proposal. Golding said she would not reveal details because the proposal is under negotiation.
City Council members were shocked Tuesday when the Padres issued an afternoon news release announcing that construction would be shut down.
Golding said she had seen a draft of the release when she met with Lucchino on Friday. But, she said, she urged him to delay releasing it. Golding said she was surprised by the timing of the release because it came at the very time she was working with the council on developing financing proposals to keep the project going.
After the news release was issued, Lucchino said, he received a call from the mayor's chief of staff expressing surprise.
"There is no way they could be surprised because they asked us on Monday to hold off until Tuesday," Lucchino said.
Council members were in the dark, he said, because Golding did not tell them about the planned announcement.
Despite the disagreements, Lucchino and Golding said they remain hopeful that the project eventually will go forward, even if there is a shutdown.
"While the project looks to be jeopardized, it is not over . . . . It is up to the elected officials and the Padres to work together to make this thing a reality," Lucchino said. "We said we'd do our jobs. Let's do our jobs and get it done. Stop talking, start working."
Link to San Diego Union-Tribune
Related Articles:
Mike Conklin
Chicago Tribune
Eating Crow over Comiskey II
Will Horwath,
Detriot's "ComicEra" Park
Michael Gee,
Camden Yards Is No Cure
Copyright © 2000, Save Fenway, Inc. Please send email to webmaster@savefenwaypark.com.
Webmastering by Cymatium Web Designs and Randy Divinski