San Diego State University is facing a more than $1 million rent hike for use of SDCCU Stadium through the end of 2020 under the proposed terms of a lease extension being evaluated this week.

Wednesday, the city’s four-person Smart Growth & Land Use Committee will vote on the amended lease agreement, which puts forward an annual rent increase from $1 a ticket to a flat fee of $1.1 million plus concession and parking revenue. Based on last season’s figures, SDSU’s yearly payment will jump from about $150,000 to $1.6 million to use the stadium for seven regular season Aztec football games.

“We’ve played at the Mission Valley site since it opened,” said John David Wicker, SDSU’s athletic director. “We’ve always been a tenant there, and have negotiated in good faith.”


The restructured deal, he said, amounts to the university paying more than $150,000 per game for football games played at the site, formerly known as Qualcomm Stadium, over the course of the two-year extension. Wicker didn’t share specifics on how SDSU will cover the increased costs, but noted that ticket prices will not be raised beyond marginal adjustments every few years.

The university’s existing stadium lease, established in 2009, is set to expire at the end of 2018. City leaders initially considered shuttering stadium operations altogether to save money, as revenue from San Diego State football, college bowl games, concerts and other events isn’t sufficient to cover costs of running the stadium.

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In fiscal 2018, the stadium’s operating deficit was $4.6 million; its projected deficit for fiscal 2019, which started on July 1, is $4.4 million, according to information provided by the city. Not counted in those sums is the $4.7 million annual debt service payment that will continue through 2027 to retire the $38 million in debt from the 1990s.

In addition to the Aztecs, SDCCU will host Alliance of American Football games in the first half of 2019, according to a copy of the contract provided by the city. Legendary Field Exhibitions, the parent company of the AAF, will pay rent of $25,000 per game plus operating expenses, estimated to total $100,000 per game. The organization’s lease runs from January 1, 2019 through May 15, 2019. It is contingent on not conflicting with the stadium ballot initiatives and on city council approving the lease extension for SDSU.

Despite the additional revenue, the stadium would still be operated at a deficit in 2019 and 2020, a fact that Councilman Scott Sherman addressed in a memorandum sent to the city’s independent budget analyst last week. Sherman’s memo requests a detailed financial analysis of the proposed lease agreement with SDSU, with breakdowns on the city’s annual cost to close the stadium or operate it for another two years.


Sherman said in a phone interview he would like to see the university keep using the stadium but that the lease extension should be a “fair and equitable” deal.

“What we are looking at is a gigantic subsidy for SDSU,” he said.

Whether committee members Georgette Gomez, David Alvarez and Lorie Zapf agree with Sherman will be determined when the four convene to contemplate the lease agreement on Wednesday. The Smart Growth committee members will vote on whether to present the lease as is, with their recommendation, to the full city council for approval or they may request staff to make changes.


The vote comes during a highly political time for the stadium site with two competing initiatives, SoccerCity and SDSU West, vying to redevelop the city’s 166-acre Mission Valley stadium site with housing, commercial projects, a new stadium and a public park along the San Diego River.

The proposals will have to clear one final hurdle before they’re cleared to appear on the November 2018 ballot. Tuesday, city council members voted 5 to 3 in favor of allowing City Attorney Mara Elliott to move forward with appeals questioning the legality of the measures.


Business


phillip.molnar@sduniontribune.com (619) 293-1891 Twitter: @phillipmolnar

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UPDATES:

4:24 p.m.: This article was updated with additional information provided by the city.

6:28 p.m.: This article was updated with additional information.


This article was originally published at 12:40 p.m.