Hat Trick Needed to Make Arena a Reality : Development: Harry Cooper has yet has to break the ice in meeting three goals that would assure a downtown sports complex.

TIMES STAFF WRITER

In the parlance of one of the sports that he hopes to attract to a new downtown sports arena that he wishes to build, Harry Cooper needs to score a quick hat trick.

With a March deadline approaching, Cooper, the La Jolla millionaire who last year acquired the existing Sports Arena lease and announced plans to replace it with a new downtown facility, finds himself needing to score three impressive goals--a feat known in hockey as a "hat trick."

In Cooper's case, the goals involve three interrelated objectives: lining up investors to bankroll the estimated $120-million-plus project, obtaining the City Council's blessing and luring professional hockey and basketball franchises to San Diego.

There also is this notable difference in the challenge facing Cooper: Although a hockey player can be pleased with a one- or two-goal performance, Cooper knows that, unless he scores three times, the game is lost.

"Each part depends on the others--accomplishing one makes the other things possible," Cooper conceded in an interview. "Investors don't want to get out front on a project like this until they're sure it's going to happen. The city--for reasons I understand--isn't going to commit itself until it's confident about our financial plan. And the leagues won't make any moves until they're sure the city is behind us."

Though none of those goals is yet in hand, Cooper can show tangible progress on each as he points toward a 1994 target opening date for his proposed new arena:

* A financial package--anchored by a variety of potential tax breaks and plans to have a corporate sponsor pay up to one-third of the construction cost to have the arena named after it--is "slowly jelling," Cooper says.

* Several basketball franchises--the Seattle SuperSonics and the New Jersey Nets are most often mentioned--have expressed preliminary interest in possibly relocating here, and professional hockey's expansion plans hold promising possibilities for San Diego. Last week, Cooper announced that he has secured commitments from investors willing to put up $50 million to try to buy one of the seven new hockey franchises that the league plans to award during the next decade.

* The city, although unlikely to provide direct financial aid because of budget constraints, is providing Cooper with a combination of moral support and technical expertise that has helped narrow the search for a downtown site to the Centre City East area.

"Overall, the picture is becoming a little clearer," said City Architect Mike Stepner, who serves on a task force overseeing the project. "The outline is there, and more is being filled in as we go along."

Under a timetable set by the City Council, Cooper is scheduled to update city leaders by early spring on the progress that he has made in the nearly one year since he unveiled his ambitious proposal to build a 22,900-seat "sports palace" downtown to replace the 24-year-old Midway area arena.

That meeting will begin to provide definitive proof of whether Cooper's frequent sanguine predictions about the new arena--and its prospects of housing professional sports--are realistic or an overly optimistic assessment heavy on hype but thin on specifics. In particular, the session will help city leaders better evaluate Cooper's best-case scenario, which calls for ground breaking in 1992 and completion two years later, with pro basketball and hockey teams perhaps playing in the current Sports Arena for several seasons before the new one opens.

Simple prudence, combined with memories of past arena deals that collapsed after promising beginnings, dictates that judgments be withheld pending that report. Significantly, however, a growing number of people inside and outside City Hall--many of them initial skeptics--have become cautious believers in the project and in Cooper's ability to succeed where numerous others have failed. Notably, Cooper's willingness to spend several hundred thousand dollars of his money on feasibility studies has allayed some early apprehensions.

"He's definitely given me a lot more cause for optimism," said City Councilman Ron Roberts, who proposed the concept of a downtown arena in his 1987 campaign. "He's invested a lot of his own money in trying to push this ahead and has put together a very professional team that's been making progress on a number of fronts. I'm still not 100% convinced, but he's moved me in that direction."

With the characteristic blend of infectious enthusiasm and dogged determination that helped him parlay the computer technology innovations that he pioneered into a personal fortune, Cooper says flatly: "This thing is going to happen. Whatever problems there are, we'll find the solutions. . . . Within five years, I expect to be sitting in the Palace watching hockey and basketball games."

But while more than 2,000 San Diegans already have paid $50 deposits on potential basketball season tickets, their prospect of ever seeing a game in a new arena is far from, to use that sport's terminology, a slam dunk.

Indeed, Cooper's three major objectives--financing the arena, winning city backing and attracting professional franchises--are formidable in and of themselves, but actually understate the daunting challenges facing him. In particular, each of those overall goals encompasses several equally difficult tasks.

The financing, for example, has been complicated by the fact that property is considerably costlier and more difficult to assemble in downtown than in the area that Cooper first envisioned as the site for the new arena--Sorrento Valley, where he owns a 38-acre tract. Describing downtown land prices as "a moving target" launched skyward by some property owners' attempts to capitalize on his plans, Cooper concedes that a downtown arena could cost as much as $20 million more than one built in the city's northern regions.

Similarly, in his courtship of National Basketball Assn. and National Hockey League franchises, Cooper must convince league owners that teams can flourish in a city where as recently as the early 1980s--when the NBA's Clippers defected to Los Angeles--they could not survive financially. Moreover, he must overcome city officials' lingering reluctance to embrace, at least in this early stage, a plan similar to others that never got off the drawing boards after being announced with identical fanfare.

"History is not our ally," Cooper concedes. "But I think we're overcoming that problem. The leagues and owners are willing to close the door on the past. No politician wants to be embarrassed by getting behind this and then have it fall apart, so I think I've also gotten as much help as I can reasonably expect from the city. The rest is up to us."

Because the other parts of his plan are contingent upon selection of a site, the search for a suitable eight-block downtown location has dominated Cooper's efforts in recent months.

Recognizing that publicity about his plans has driven up property owners' asking prices--"Land I could have picked up cheap last year, now I can't afford," he laments--Cooper is understandably reluctant to identify a specific site. City officials, however, say the top prospect is an area near the Metropolitan Transit Development Board bus yard, bordered by 12th and Imperial avenues and by 17th and J streets. Occupied primarily by warehouses and surface storage lots, the site offers the easy freeway and trolley access essential to the arena.

Typically not one to second-guess himself, Cooper says he regrets having been so publicly expansive about his plans over the past year. Doing so, Cooper argues, served only to tip off land owners who saw his arena proposal as the means to a quick, inflated profit--and to raise the stakes, should the deal fail.

"If I could do anything differently, at that first press conference I should have just said that I had bought the old Sports Arena and planned to operate it forever," Cooper said. "Then, after quietly buying up the land we needed downtown, that would have been the time to talk about a new arena.

"That would have been quicker and cheaper, and if it didn't work, it would have been only a personal disappointment," Cooper added. "Now, I feel like I'd be letting the whole city down if I walked away. That's why I plan to see this through, whatever it takes."

Though Cooper is in the process of acquiring the needed development options, he acknowledges that the city's assistance--via its condemnation powers for private property and help with the acquisition of the MTDB parcel--probably will be needed to assemble enough land at a reasonable price. Land available for $20 per square foot prior to his proposal now is on the market for up to four times that cost, though last fall's opening of the bayfront Convention Center also contributed to that price surge.

"My biggest concern is being priced out of downtown," Cooper said. "We keep getting pushed farther east and south--farther than I wanted to be." As a result, initial plans to surround the arena--for both aesthetic and economic reasons--with a 400-room hotel, a 13-story office tower and 150 condominiums have been scrapped, Cooper said.

Aware that his original interest in building an arena in Sorrento Valley has left some city leaders and others skeptical of his commitment to a downtown site, Cooper feels constrained when discussing his concerns about the financial gap between the two locales. The higher cost of a downtown site is attributable not only to land prices, but also to the need to construct expensive parking garages, as compared to the cheaper surface parking lots that would be feasible in a suburban setting.

"When I talk this way, the city says, 'There goes Cooper trying to bait and switch again,' " Cooper said. "They think I'm still looking for an excuse to build this in Sorrento Hills. Really, I'm just looking at the numbers. I'm committed to downtown, even though that means it costs more. There's just no way around that."

Cooper originally had said that he would look to the city to cover any price differential between downtown and other potential sites. Meetings with City Council members and top city administrators, however, quickly dissuaded him of that notion, with Mayor Maureen O'Connor perhaps framing the economic and political realities in the bluntest terms.

"In terms of priorities, I certainly don't see this being near the top of the city's list," O'Connor said. The message from O'Connor, who could either expedite the project by championing it or delay, even scuttle, it with her doubts, seems clear: Find a way to build a new downtown "sports palace" with a minimum of public aid, or don't build it at all.

Faced with the city's apparent unwillingness to budge on that critical point, Cooper now hopes for a partnership with the city in the form of indirect public financial assistance--a possibility that city officials seem more willing to explore. Those options include restructuring the current Sports Arena lease, as well as tax breaks premised on the assumption that a new downtown facility and redevelopment of the existing arena site will generate higher lease and tax revenues for the city.

Under the current Sports Arena lease, the city receives about $250,000 annually, according to Deputy City Manager Maureen Stapleton. Cooper estimates that a new arena not only would raise the city's annual lease and property-tax revenue to at least $3.5 million, but would also produce additional revenue from increased consumer spending of up to $50 million a year.

"The city has ways to help with the financing other than just reaching into its pocket," Councilman Roberts said. "If a new arena is going to give the city a much-better return, it's in our best interests to explore all those possibilities."

As he has from the outset, Cooper continues to insist that he would prefer an entirely privately financed project, with the largest chunks of money coming from sale of luxury skyboxes and the proposed sign deal that would permit a company to incorporate its title into the arena's name. The latter plan is patterned after Los Angeles Lakers' owner Jerry Buss' estimated $1-million-a-year contract with Great Western Bank that resulted in the Forum being renamed the Great Western Forum.

From Cooper's perspective, any indirect public aid ultimately offered would be a necessary--and justifiable--byproduct of satisfying the city's insistence that the arena be built downtown.

"If the cost is higher because of where the city wants it built, . . . it's only fair that that be taken into consideration," he said.

Assuming that the site and financing questions are favorably resolved, Cooper professes confidence that the final piece of the arena puzzle--the basketball and hockey franchises--will quickly fall in place once it is certain that a new facility will be built.

In perhaps his boldest statement on the subject, Cooper has gone so far as to suggest that an NBA team could play here as early as this fall if the council "sends a strong enough signal" at the March meeting. At other times, however, he backs off that audacious scenario, conceding that he may be "anywhere from several months to a year or so" away from having the firm commitments on a site and construction financing needed to even make San Diego a serious contender for a franchise.

Once hopeful of obtaining a new NBA team--a possibility dimmed by league officials' consistent denial of expansion plans in the near future--Cooper now concedes that acquisition of an existing basketball franchise is a more realistic, though admittedly difficult, goal.

Since last summer, Cooper and Honeywell executive Mannie Jackson have been seeking investors for an NBA franchise even as they attempt to gauge teams' interest in possibly relocating in San Diego.

Cooper and his Sports Arena partner, Richard Esquinas, had joined forces with Jackson when they learned that they had a common goal by virtue of the former Harlem Globetrotter's interest in acquiring an NBA franchise. Recognizing that they were largely unknown outsiders in the basketball world, Cooper and Esquinas felt that Jackson had both the sports and business background necessary to lend credibility to San Diego's bid.

Their relationship recently was strained, however, when Jackson, who felt that he had an exclusive arrangement to try to bring a team here, learned that Cooper himself was making behind-the-scenes inquiries to teams. Cooper, however, calls the disagreement a misunderstanding, adding that he still hopes that Jackson "plays a role in whatever happens here."

Describing preliminary negotiations with existing franchises as "very fragile, very sensitive," Cooper declined to name the teams that either he or his representatives have approached. Others familiar with those talks, however, said that the teams include the NBA's Seattle and New Jersey franchises.

"The interest in San Diego is very solid," one top city official said. "If we had a new arena to offer today, I think we'd also have a team."

Similar feelers are under way in regard to professional hockey, where the National Hockey League's plans to add seven teams by the year 2000 create broader opportunities for San Diego than those available in the NBA.

Though Cooper has secured the needed investors, San Diego faces strong competition within California--from Anaheim and San Jose--for a hockey franchise. But the planned expansion, combined with feedback from existing franchises, leaves Cooper "even more confident" about the prospects of a hockey franchise than about basketball.

Both hockey and basketball franchises have expressed a willingness to play several seasons in the existing Sports Arena pending completion of the new one, Cooper said.

Preliminary financial projections compiled by Cooper's consultants show that a new arena could survive economically until 1997 with either a basketball or hockey franchise. Both, however, probably are necessary for the arena's long-range economic viability.

And, just as he is convinced that his new arena will be built, Cooper has similar faith that both franchises will be in place when it opens.

"Teams playing in old 14,000-seat arenas just love the idea of playing in a new 22,900-seat arena in San Diego," Cooper said. "To a large extent, the Palace will sell itself. It won't be as hard to fill it as it is to build it."

Cooper paused, then, chuckling wryly, added: "At least I hope not."

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