SDSU gets $310 Million to construct stadium. CSU board approval given as negotiations for property continue…
San Diego State University has secured the financing and board approvals needed to build its proposed 35,000-person football stadium in Mission Valley, meaning the school is in position to start construction as soon as it buys the land from the city of San Diego.
Tuesday, the California State University Board of Trustees, which convened online, amended its budget to accommodate the project, OK’d the stadium design and agreed to issue $310 million in revenue bonds to fund stadium construction. “While the negotiations with the city on the purchase and sale agreement are progressing, they are not yet complete. Still, we seek the board’s support for the multi-use stadium to keep the project on schedule for use of the stadium in 2022,” SDSU President Adela de la Torre told the trustees. “It was a tight schedule to begin with, and if we do not make it, it will not be for lack of coordinated CSU efforts.” The latest approvals supplement the governing body’s January blessing of the university’s development plan for the entire 135 acres it plans to buy from the city.
However, at the local level, much still hangs in the balance with the COVID-19 pandemic disrupting the city’s standard business practices.
The yet-to-be-consummated land deal started with the November 2018 approval of Measure G. The initiative, which became part of the city’s municipal code, defined both high-level parameters for the deal and future development of the site.
City leaders and university officials are aligned on major deal points, such as the $87.7 million base purchase price offered by SDSU, and the school’s need to build and pay for a city-owned river park. Still, some of the finer details require additional negotiations. Earlier this month, City Council members were told that weeks, if not months, of contract-related meetings were needed before the sale documents would be ready. And the district representatives will likely be asked to formally weigh in on outstanding policy matters before the contract can be finalized, although no date has been set. “Negotiations are ongoing and both sides continue to make progress toward a (sale agreement) that can be presented to the City Council for its consideration,” said Christina Chadwick, a spokeswoman for Mayor Kevin Faulconer. Meanwhile, San Diego State has pushed forward with the project and planning elements it can control, most notably securing the ability to take on hundreds of millions of dollars in short-, mid- and long-term debt. For instance, the stadium financing plan green-lit by trustees on Tuesday gives the school access to $310 million for the design and construction of the multi-use stadium it plans to build at the northwest corner of the Friars Road property.
Around two-thirds of the project cost will be covered by CSU-backed bonds, with SDSU on the hook to repay the debt using stadium-generated revenue over a 30-year period. The remaining portion of the tab will be covered by CSU bonds that need to be repaid in 15 years or less, with payment anticipated to come from philanthropic gifts and the sale of premium seat licenses.
In total, the school will have access to a maximum of $355.5 million in debt funding, with $45.5 million expected to cover interest and other fees. The sum is based on an estimated all-in interest rate of 4.41 percent, according to CSU documents. The money is distinct from the $350 million already allocated by the school’s board for the site purchase and the broader campus plan. That plan calls for 4,600 residential units (with 10 percent subsidized units), 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. The entire project is anticipated to be completed in 2037 at a total cost of $3 billion, although the public institution’s initial priorities include the stadium and a $54 million river park.
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