San Diego City Council approves Chargers deal

By: JOE BRITTON - City News Service | Monday, July 12, 2004 9:37 PM PDT ∞

SAN DIEGO ---- The San Diego City Council approved an agreement on Monday between the city and the Chargers to restructure the team's lease at Qualcomm Stadium and end a lawsuit filed by the franchise.

The deal ensures the Chargers will stay in San Diego through the 2008 season and eliminates the controversial "ticket guarantee" clause in the team's 1995 stadium lease.

That provision obligates the city to provide the team revenue equivalent to the cost of 60,000 general admission seats for every home game through the 2007 preseason.

The attendance guarantee has cost the city more than $36 million since going into effect in 1997.

"We are now going to be able to turn the page on one of the darkest chapters of San Diego sports history and begin to write a new chapter on the future of the city," Mayor Dick Murphy said.

The panel voted 7-1 to accept the settlement. Councilwoman Toni Atkins was excused from the meeting to attend a conference on the East Coast.

Councilwoman Donna Frye cast the lone dissenting vote.

"I believe we can do better," she said.

The agreement, outlined by Murphy two weeks ago, does not include an agreement on a new stadium, but provides for the city and Chargers to meet to consider long-term stadium options.

"We want the Chargers to be in San Diego permanently, and this agreement is the only way we can make that happen," said Mark Fabiani, special counsel to the Chargers.

"This provides a foundation to at least investigate a potential long-term solution to keeping the Chargers here," said Dan Barrett, owner of Barrett Sports Group, a consulting firm hired by the city. "There's not an obligation on either side for a new stadium."

Under the plan, the Chargers will be assessed a $56.2 million termination fee if the team leaves at the end of the 2008 season, and lesser amounts in ensuing years. The money would be used to pay off outstanding city bonds for a 1997 renovation and expansion at Qualcomm Stadium.

The Chargers sued the city last November, claiming the team had met a financial threshold that allows the franchise to renegotiate the lease at Qualcomm and begin looking to move the team to other cities.

The agreement approved on Monday requires the Chargers drop the lawsuit, eliminates the organization's renegotiation rights and provides for all disputes to be settled by arbitration rather than in court.

It also drops a requirement that the city maintain a "state-of-the-art" stadium, a provision that could have cost the city millions in deferred maintenance costs, according to Councilman Michael Zucchet.

The new lease will require the city to perform only routine maintenance.

"I believe that the city got the better part of this deal," Zucchet said.

With the new lease, the team will be charged $2.5 million annually in rent for the next 10 years, $3 million annually between 2014 and 2016, and $4 million annually through 2020.

About a dozen people turned up at the meeting to speak out on the settlement.

"We now have an opportunity to move ahead in the spirit of cooperation," said businessman Dan Shea, a member of the Fans, Taxpayers and Business Alliance, which helped push the agreement.

Opponents argued that the negotiated rent was not high enough and that taxpayers would be the ones impacted by the settlement.

"It seems to me that every time we make a significant agreement, subsequent changes are to the detriment of the public," one speaker told the council.