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SDSU to San Diego: Approve Mission Valley transaction ASAP or deal could collapse

Aerial view of SDCCU stadium in Mission Valley looking down toward the northwest.
Aerial view of SDCCU stadium in Mission Valley looking down toward the northwest.
(John Gibbins/The San Diego Union-Tribune)

University representatives warn that additional delays would put financing to buy the city’s stadium site in jeopardy

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In what could be perceived as an ultimatum, San Diego State University leaders said the in-progress deal that would see it take ownership of the city’s 135 acres of Mission Valley property could fall apart if it isn’t approved next week.

The message, delivered during a Wednesday press conference, follows two weeks of public and private maneuvering by both sides, as the school eyed a July close of the landmark transaction. However, that timeline appeared out of reach when the city published its May 19 City Council agenda, which does not include an action item related to the deal.

“As we all learned this morning, our signed (purchase and sale agreement) isn’t on the docket for May 19 so there will be no early July close of this transaction,” SDSU President Adela de la Torre said in the press conference conducted via Zoom. “I can’t tell you why the PSA isn’t going before council next week, but I can tell you that the financial uncertainties that every agency in the state is now facing make the perils of not closing this deal much more real.”

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Later during the media event, school representatives pressed the city to reconsider and docket the contract for the May 19 hearing, although scheduling restrictions make that appear unlikely.

The contractual back and forth aims to bring to an end a transaction that dates to the November 2018 passing of Measure G, a citizen’s initiative that directed the city to sell its Mission Valley stadium site to SDSU. The school’s development plan, which has been approved by its board, calls for a 35,000-person football stadium, 4,600 housing units with 10 percent set aside for low-income households, 80 acres of parks and open space, 1.6 million square feet of office and research space, 400 hotel rooms, 95,000 square feet of campus retail and 13,192 parking spaces.

Nearly 1 1/2 years into sale negotiations, city leaders and university officials are in agreement on the price of the land ($86.2 million plus inflation costs), various transportation improvements and a 34-acre, city-owned river park built at SDSU’s expense. But disagreements related to future environmental liability and affordable housing oversight have proved to be sticking points.

Last week, San Diego State submitted what it characterized as a final purchase contract in anticipation of their roughly 600-page document being presented to council members for approval on May 19. However, City Attorney Mara Elliott simultaneously outlined the city’s remaining legal concerns in a lengthy memo, suggesting the deal, at least as presented, was not ready for a vote.

City officials did not indicate when a contract would be ready for consideration.

“The city is working hard at the City Council’s direction to ensure a fair deal that meets the spirit of Measure G,” said Christina Chadwick, a spokeswoman for Mayor Kevin Faulconer. “This is a once-in-a-lifetime opportunity with transformative potential for Mission Valley and the education system. We want to get it right, and we’re confident that once this transaction is complete it will be something all San Diegans can be proud of.”

Now, without quick action, more than $660 million in funds previously allocated by the CSU Board of Trustees to cover the purchase price, stadium construction and site infrastructure could be on the line, SDSU representatives said.

“The financial perils of not closing in July really center around the pandemic that we’re involved in. We — the city and the California State University system and the state of California — are working in the worst economic environment in the history of the county,” said Jack McGrory, a California State University board member who also helped craft Measure G. “This is the time to make this deal now, before we get mired in the economic mess of cutting budgets and looking at all the projects that could potentially be cut.”

The former San Diego city manager also said that the university is unwilling to make additional changes to the purchase contract.

“Fine-tuning this thing is a waste of time at this point,” he said.

The strong statements could be put to the test when the council considers the transaction at a future, to-be-determined date.