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on the seat guarantee, it’s still a good deal "Wow, aren’t you glad you’re not city attorney right now?" How many times have I heard that question since the stadium expansion issue blew up after I retired in December? The answer is plenty. Being in the center of the city's legal affairs was always exciting and challenging, particularly when there was some sort of a crisis. I miss that part. But I’m not suffering for lack of being in the middle of another political controversy, where, as usual, there's a lot more heat than light. (Fortunately, in late February, Superior Court Judge Anthony Joseph tempered some of the fire by declaring the expansion legal.) At the outset, I want to make it perfectly clear that I think state and local government never should have gotten into the business of running stadiums and sports arenas for the benefit of team owners. Prior to World War II, the owners supplied their own playing fields. The dramatic change came in 1958 when Major League Baseball expanded to the West Coast. The smartest owner of them all, Walter O'Malley, talked Los Angeles County into helping him build Dodger Stadium. Government assistance was pretty meager by recent standards, but the county did help by acquiring the stadium site through eminent domain in other words, by condemning the land and giving it to O'Malley. Since then, things have gotten pretty expensive for those governments getting into professional sports. By the 1960s, when San Diego decided to join the game, the cost was relatively reasonable. Construction of San Diego’s stadium was a bargain, even in those days, and the community embraced it enthusiastically. Today, it’s a different world. Owners expect the latest of modern amenities and they expect government to pay for them. Whether it’s a brand-new stadium or a substantially remodeled one, if the team's home government won’t do it, someplace else will. That's the dilemma communities with teams have gotten themselves into, and, although there seems to be political second guessing in some towns these days, realistically, local leadership must face the likelihood that teams will leave if their demands aren’t met. In San Diego’s case, back in 1995, the city's leadership considered the impending end of the Chargers' lease term, the stadium's fading structural grandeur, the NFL's Super Bowl requirements and the team owner's desire for glitzy, fashionable improvements. Without local government action, a negative outcome was easily foreseeable: The Chargers in San Diego were history, particularly as Los Angeles, one of the world's megamarkets, became available. It’s pretty hard to come up with an argument that the city should have ignored the Chargers. After all, it has been apparent for quite a while that the Padres are in an exit mode. The trend in baseball is toward smaller, modern, but old fashioned-style ball parks. Team President Larry Lucchino is famous for the role he played in building Baltimore's fabulously successful Oriole Park at Camden Yards. He makes it clear that he and John Moores, the club's principal owner, want a similar facility ... somewhere. With all this in mind, the choices made the eventual decision obvious: San Diego Jack Murphy Stadium must be renovated and made modern along the lines the Chargers thought necessary. With high hopes the completed renovation would place San Diego in the permanent Super Bowl rotation, the city, with the mayor in the lead, began renegotiating the Chargers' lease. Before beginning a discussion of the negotiations and their much-criticized results, I need to make it clear that the process represented the first time in the stadium's history that the city attorney's office was not an integral member of the city's negotiating team. Essentially, the mayor was the chief negotiator, with the city manager as her chief assistant. The city attorney's office was asked limited, technical questions and, upon completion of negotiations, was directed to draft the final documents. Complicated contracts require sophisticated negotiating. Former Assistant City Attorney Curtis M. Fitzpatrick is one of the most skilled and experienced negotiators in town. His hand is everywhere in the history of the stadium. He is the father of the stadium's financing and was instrumental in putting together, with one exception, all the complicated contractual arrangements between the city, lenders, tenants, concessionaires and all others doing stadium business with the city. The exception was the last Padres lease, which then-Assistant City Manager Jack McGrory and I negotiated. I take some considerable pride that it’s the one Larry Lucchino described as the worst in Major League Baseball from a team's perceptive. Jack and I did a pretty good job. A negotiator's task isn’t to get a deal that’s completely one sided. Negotiations involve the give and take necessary to strike a bargain. In anything but the simplest of situations, neither side gets everything it wants. Usually, each side has to agree to some things it really doesn’t want. The negotiator's job is to come up with an agreement his side can live with. With 20/20 hindsight, it’s unfortunately quite obvious that at least a couple of the terms of the most recent deal with the Chargers were vulnerable to negative public scrutiny. The 60,000 seat ticket guarantee and the "shop around" or "buy out" termination provisions are what I have in mind. If Curt Fitzpatrick or I had been on the negotiating team, I’m quite confident the deal could have been made without those two unfortunate terms. With that said, I have to observe that the criticisms heaped on the deal are considerably over blown and unjustified. It’s easy to pick a deal apart by seizing on parts that are favorable to one side while ignoring others. Sure, the ticket guarantee at first blush looks like the city assures a wealthy team owner financial success. But to a certain extent, that’s what parties to an agreement do. A deal has to benefit both sides or it won’t be successful. The so-called ticket guarantee really is a form of rent adjustment, common in many leases. It should have been clearly formulated for what it is. The matter of "reopeners" is important to team owners. In fact, the then commissioner of baseball, Peter Ueberroth, insisted, as a condition of his required approval, that such a reopener be in the lease Jack and I negotiated with the Padres. We drafted it in such a way that all it required was renegotiation, not agreement. A somewhat similar provision in the present controversial Chargers deal allows the team to buy its way out of the contract under certain carefully prescribed circumstances. The "buy out" price is so high, however, as to not likely be attractive to the team's owners except in an extremely improbable situation. (The price, by the way, would be high enough to help the city substantially in cracking the nut of what’s left of the remaining debt for expansion and improvement.) Because of ever changing sports economics these days, teams will insist on some sort of a reopener provision. Perhaps the details could have been more artfully expounded, but lack of appropriate articulation doesn’t make the provision as bad as the critics say. What I think is most unfortunate in this whole thing is that the critics were silent when, during lengthy negotiations, opportunities (and there were many of them) were available for them to express their views. Modifications could have been made to meet the criticisms and the project, the Super Bowl and the team's tenure could have been assured. Instead, some opportunistic lawyers, talk show hosts and financial writers emotionalized the situation beyond belief. Whatever the motives, their Demagogic attacks ill serve San Diego and its citizens. John W. Witt was San Diego’s city attorney from 1969 to 1996. |