Padres, City Strike a Deal for Stadium Until 2000

Guaranteeing San Diego a major league baseball team through the end of the century, the San Diego City Council ratified a new lease Monday that keeps city-owned San Diego Jack Murphy Stadium as the home of the Padres.

In an era when professional sports teams are wresting concessions from cities throughout the country, city and ballclub officials described the agreement as unusual for two reasons: the Padres could not abandon the stadium even if the team were sold to another owner, and the city gave up nothing in overall financial considerations.

With the San Diego Chargers football team committed to the stadium until 2003, the new lease with the Padres, which will expire March 31, 2000, gives the complex two professional sports franchises as tenants for at least 12 years.

Clearly pleased with the agreement, City Manager John Lockwood told council members: “You have been able to guarantee professional sports, both major league baseball and (professional football) through the rest of the century, and you have done it without litigation.”

That is in sharp contrast to the experience of U.S. cities, which have been forced to wrangle with pro sports franchise owners who have threatened to take their teams--and the prestige and economic benefits they generate--to other eager cities if their demands were not met.

Perhaps most notable was the deal cut earlier this year by the Los Angeles Raiders, who abandoned the Los Angeles Coliseum for a $115-million financing package and a new stadium in suburban Irwindale.

New York Yankees’ owner George Steinbrenner has threatened to move baseball’s most famous club to New Jersey unless the city builds him a commuter train stop. And Washington Redskins’ owner Jack Kent Cooke has said he might take his football team to the suburbs unless Washington, D.C., builds him a new stadium.

More than a year of negotiations between the city and the National League Padres did not always proceed smoothly. In September, City Atty. John Witt told participants at a stadium management conference in Cincinnati that Padres’ negotiators had said “not only no, but hell no” to city demands for a clause binding the team to the city.

Witt, who did not know that a Times reporter was in the audience, also accused the Padres of engaging in “big lie” tactics by telling city officials that no other ballclub had such a clause in its lease. The city showed that the Philadelphia Phillies had such an agreement, Witt said.

The new agreement comes eight months after Padre owner Joan Kroc announced that she intended to sell the team to Newport Beach businessman George Argyros, and six months after that effort collapsed because of Argyros’ failure to sell his ballclub, the Seattle Mariners of the American League.

The proposed sale threw a scare into city officials and baseball fans who feared that the team, which moved into the stadium in 1969, would be moved.

But all that was forgotten Monday.

“We’re pleased with (the new lease),” said Dick Freeman, executive vice president of the Padres. “We worked out something to our satisfaction, and I think the city feels the same about it.”

Mayor Maureen O’Connor praised Kroc, who “has always placed the wishes of the citizens of the City of San Diego over her own. . . . Thank you for your cooperation,” she told Freeman. “Thank you for being with us to the year 2000.”

Under the new lease, which requires the Padres to play all home games at the stadium, the club will pay the city about $2.6 million next year, the same amount the club is paying this year. Deputy City Manager Jack McGrory forecast that the city’s revenue would increase to about $3.8 million per year by the end of the lease.

The city pays about $7.5 million to maintain the stadium and pay off the bonds used to build and expand it. Because total revenue from the Padres, Chargers, San Diego State University Aztecs football team and special events falls about $500,000 short of that total, the city subsidizes stadium operations from other income, McGrory said.

The lease, which was approved Monday morning by the Stadium Authority, gives the city 10% of ticket sales up to $15 million--up from 8% in the current agreement--and 8% for sales over $15 million. The Padres’ 1987 ticket sales were $11.5 million.

Parking fees will increase to $3 from $2. The city, which now collects $1.75 of each $2 in fees, will collect the entire $3 up to $1.5 million. After that, parking fees will be split evenly.

In return, the city will give up its 10% cut of subscription television revenue, its 10% cut of skybox catering revenue and all its revenue from skybox payments. The city will also pay for all maintenance costs. The Padres now reimburse the city for all maintenance costs over $177,000.

The city will no longer be required to buy $176,000 in Padre season tickets.

Earlier this year, both sides were concerned that the deal could be held up by Baseball Commissioner Peter Ueberroth, who opposes leases extending more than five to seven years because of financial uncertainties in organized baseball stemming from a possible downturn in television payments.

But the commissioner approved the lease last Wednesday, after the Padres included “language” that satisfied Ueberroth’s office, Freeman said. He would not detail the language.

The new lease is timed to expire on the same day as the city’s scoreboard agreement with the Padres, under which the city collects 10% of the advertising on the stadium’s scoreboard or $150,000, whichever is more.

It will also bring the city within three years of paying off the 1967 bond issue of $27 million used to build the stadium and subsequent bond issues that expanded it.