San Diego Approves Stadium Lease Extension with San Diego State

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The Marching Aztecs perform on the field before San Diego State plays host to Boise State at SDCCU Stadium in San Diego on Saturday, Oct. 14, 2017 (Photo by Hayne Palmour/Zuma Press/Icon Sportswire)

The San Diego City Council on Monday approved a lease extension between the city and San Diego State University for the Aztecs to continue playing football at SDCCU Stadium.

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The council supported the extension 6-1, with City Councilman Scott Sherman voting against approval. Council members Chris Cate and Chris Ward weren’t present.

The extension starts January 2019 and extends through December 2020.

The city will receive $1.1 million per year from SDSU as well as net parking and concession revenues, which totaled $733,485 in fiscal year 2018. SDSU will continue to reimburse the city for game-day expenses, as the university does under the current agreement expiring Dec. 31.

SDSU also agreed to leverage its event-related relationships in order to attract more bookings for the stadium to net the city additional revenue.

Additionally, staff were advised to formulate a decommission plan for the stadium ahead of the lease’s conclusion. The city also reserves the right to reopen lease negotiations if the SDSU West proposal to redevelop the Mission Valley stadium site is successful in November.

The city doesn’t receive a flat rate from SDSU under the current agreement. Instead, it receives a $1 ticket surcharge, which totaled $154,000 in fiscal year 2018. SDSU also currently retains net parking and concession revenues.

Despite additional revenue under the new agreement, the city Independent Budget Analyst office still projects the city will operate the stadium at a $5.6 million deficit in fiscal years 2020 and 2021.

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Subsidizing operations is akin to funding arts initiatives and libraries, City Councilman David Alvarez said.

“We have city assets that we use for the public that we do not get reimbursed. The decision for us as policymakers is: Do we believe the benefit is worth it? … I think it’s something really worthwhile,” Alvarez said in reference to the city’s partnership with an educational institution.

The council’s Smart Growth and Land Use Committee advised city staff in July to return to the bargaining table with SDSU to improve the city’s side of the deal before the full council considered the extension.

The city didn’t secure additional dollars during resumed negotiations; instead, it received SDSU’s promise to assist in marketing the stadium in order to increase event revenue.

Sherman wasn’t pleased with the final arrangement.

“We’ve been subsidizing San Diego State for a while with the $1 per ticket. And the subsidy is smaller this time, but it’s still a subsidy,” he said. “San Diego State just built a $2 million locker room — we can’t get another million or two out of them to get the taxpayers to break even?”

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