San Diego City Attorney Mara Elliott in Balboa Park. (K.C. Alfred/San Diego Union-Tribune)

City Attorney Mara Elliott says the SoccerCity initiative doesn’t guarantee San Diego a professional soccer stadium or a river park, and could burden taxpayers with hefty costs for environmental clean-up of the Qualcomm Stadium site.

Elliott, who issued a 27-page analysis of the proposal late Tuesday afternoon, also raised concerns about contradictions and lack of clarity in parts of the 3,000-page initiative, suggesting those could lead to costly litigation.

“The initiative includes novel and untested issues, as well as seemingly contradictory provisions,” she wrote in the analysis. “If the initiative is adopted, there will be many details to clarify and resolve during the implementation, and the parties or a court will need to interpret some of the terms.”


FS Investors of La Jolla, the group behind the initiative, said Tuesday evening that many concerns raised by Elliott and others can be resolved in a lease the group would be required to negotiate with Mayor Kevin Faulconer if the initiative is approved.

And some of Elliott’s concerns are addressed in a long list of concessions the group last week sent Faulconer, with a promise that they’d agree to include those in the lease.

“Our letter to the mayor last week resolves most of the issues raised by the city attorney,” said Nick Stone, a spokesman for FS Investors. “Ultimately, they will be clarified in our lease with the city that the city attorney will draft before any project is finalized.”

Elliott says in her memo that those concessions, which are not binding because they are not part of the initiative language, are not included in her analysis.


She also notes that FS Investors has the power to sell its interest in the property, and that it’s unclear whether the buyer would be obligated to abide by concessions made in an agreement separate from the initiative.

Elliott’s analysis, which comes a few weeks before the City Council might decide to send the initiative to voters in a special election this November, raises many concerns about the 99-year lease required by the initiative.

She says it veers from policies requiring City Council approval of leases longer than three years, the solicitation of a “request for proposals” for available city land, and upward adjustments of lease terms over time to account for inflation.

In addition, Elliott says the initiative’s indemnification language doesn’t protect the city from potential liability to the same extent as city leases with the private sector typically do.


In the concessions FS Investors promised to make last week, they agreed that the terms of the lease will be modeled on the city’s lease of Brown Field airport in the South Bay, which the city’s Real Estate Assets Department has described as the preferred lease structure for a development of this nature.

The developers also promised to agree to a lease that provides periodic adjustments and additional annual payments of 10 percent of the fair market value of the land.

In addition, FS Investors said they would agree to include “appropriate indemnification” language in the lease to help protect the city.

Many of Elliott’s concerns have previously been raised by competing developers, community leaders, various land-use attorneys and San Diego State University.


The initiative proposes 4,800 housing units, 3.1 million square feet of commercial space, 450 hotel rooms and 60 acres of parkland on the Qualcomm Stadium site and adjacent city property.

It also proposes a 32,000-seat professional soccer stadium, but Elliott’s analysis stresses that approval of the initiative won’t necessarily require FS Investors to build such a stadium.

While a soccer stadium is included in a “specific plan” the initiative would create for the area and in renderings included in the initiative, Elliott says the developers won’t have to build the stadium if they can’t obtain permits from outside agencies that may become necessary.

Quoting from the initiative, Elliott says the “Specific Plan and Initiative create no obligations or requirements on the part of the developers within the Plan Area to build or construct parks and/or facilities that require regional, State or Federal permits.”


She says this also means that there’s no guarantee FS Investors would be required to build a 34-acre river park that has been one of the initiative’s key selling points.

While Elliott says it is unknown whether such permits from outside agencies would be required to build the soccer stadium, she says the river park’s location in the southern portion of the project area is more sensitive.

“Given the proximity of the San Diego River, it is likely that at least one regional, state or federal permit would be required,” she wrote.

The initiative requires the developers to construct the river park if permits are obtained within 18 months of their execution of a lease with the mayor. If not, they must pay the city $40 million for construction of the river park, an amount that drops to $20 million if the lease isn’t executed by the end of 2017.


Hear from Mayor Kevin Faulconer, who officially endorsed the SoccerCity initiative at a press conference Friday in downtown San Diego.

In the concessions FS Investors promised to make last week, the developers said the lease they ultimately execute with Faulconer will require the river park to be built “in all circumstances” and maintained throughout the term of the lease.

Elliott said difficulty obtaining permits from outside agencies could also allow FS Investors to avoid constructing 9 acres of additional parkland and 12 acres of “active-use” fields the initiative proposes.

Elliott also raises concerns about the initiative requiring the city to cover costs to eliminate potential pollution problems on the Qualcomm site, and possibly costs to pursue litigation to avoid paying for such remediation.


She says the initiative “appears to anticipate that either the city or a third party” would be responsible for removing any contamination discovered during development of any of the specific plan’s elements.

The city and Kinder Morgan, a fuel tank farm operator, settled litigation last year over pollution at the site, and Elliott says it’s unclear whether the city would have to pay for any newly discovered pollution.

She notes that the Regional Water Quality Control Board has issued “no further action” letters with respect to groundwater and soil contamination on the site, but says “it is possible that additional contamination remains.”

She said such uncertainty could lead to litigation involving the city, FS Investors and Kinder Morgan.


“Even if the city ultimately prevailed, the litigation costs could be significant,” Elliott wrote. “If the city did not prevail, it could be faced with the costs of remediating any environmental contamination discovered.”

It’s possible the new “indemnification” language FS Investors has promised to include in its lease would help mitigate some of this risk for the city.

Stone, the FS Investors spokesman, said the initiative relies on protections the city has separately negotiated with Kinder Morgan.

“All we are doing is making sure the people who are responsible for the problem clean up the problem,” he said.


Elliott also notes that the initiative includes a caveat to the city’s ability to re-acquire the property, under certain circumstances, if no soccer stadium gets built within seven years.

She says that is correct, but that the city would likely have to honor any subleases of the property executed by FS Investors, potentially limiting how much land the city would get back.

Elliott also notes that while the overall project is not subject to review under the rigorous California Environmental Quality Act, a possible professional football stadium included in the proposal would be subject to such review.

Elliott said another concern is that because the proposal is an initiative, the City Council and the mayor’s staff would have no discretion to impose any changes on proposed projects at the site. There would also be no public hearings on projects or permits.


The concessions made last week by FS Investors say the developers would voluntarily hold eight community meetings soliciting ideas and feedback on design features, architectural style, park amenities and other characteristics of the development.

Elliott characterized her memo as a response to questions about the initiative raised by the mayor and members of the City Council.

In the memo, she urges the mayor and council to read the full initiative, stressing that it’s a lengthy and complex document and that her analysis is only an overview of the main terms.

Elliott also said concerns she raised don’t indicate she opposes the initiative.


“Nothing contained in this report should be interpreted to indicate support for or opposition to the initiative,” she wrote.

The county Registrar of Voters declared this week that FS Investors submitted an adequate number of signatures to force the City Council next month to adopt the measure, submit it to voters in the November 2018 general election or call an earlier special election.

FS Investors and Mayor Faulconer say the council should call a special election this November to decide the matter. Support from a simple majority of voters would be required for approval.

david.garrick@sduniontribune.com (619) 269-8906 Twitter:@UTDavidGarrick