San Jose soccer stadium closer to reality
QUAKES OWNER, S.J. OFFICIALS AGREE TO $132 MILLION DEAL
By Joshua Molina
Article Launched: 04/15/2008 01:30:19 AM PDT
San Jose and a team of developers have agreed to a $132 million deal that sets the stage for a major league soccer stadium near the airport as early as 2010.
Terms of the deal must still be formally approved by the city council next month. But Monday's financial agreement between city officials and Earthquakes owner Lew Wolff and his partners is a giant step toward building the stadium and an accompanying retail, office and hotel project on the 75-acre site on Coleman Avenue.
"If and when we pull it off, it is going to make me feel - well, at my age, that would be a great accomplishment," the 72-year-old Wolff said from his Los Angeles office. "It would cap off a long time of development in San Jose." Wolff developed downtown San Jose's Fairmont and Hilton hotels and also owns the Oakland A's, for whom he is working to build a new stadium in Fremont.
San Jose leaders also cheered the tentative agreement Monday because it would funnel at least $17 million into the city's general fund - which is perennially racked by deficits.
According to terms of the deal, Wolff and his partners would pay $132 million for 66 acres of the former FMC manufacturing plant. Of that, about 18 acres will be set aside for the 18,000-seat soccer stadium and parking.
The city bought the land in 2005 for $81 million.
Wolff and his team have until 2010 to pay the city the bulk of the sale price. In the interim, they have agreed to pay interest
that San Jose will accrue on the bonds it sold to buy the property - as much as $12 million over the next two years. And Wolff must extend the city a $3 million letter of credit that would be payable if he walks away early from the deal.
The FMC deal is just one of several complex steps that must happen before Wolff can build the stadium.
The real estate magnate is counting on the city to rezone 78 acres of commercial and industrial property he owns in Edenvale to allow developers to build as many as 1,500 townhomes there. Wolff plans to pay for the soccer stadium with the profit from selling the Edenvale property as residential land.
But first, the land must undergo an environmental review, expected to be completed this summer, and Wolff must come to an agreement with a residential developer. The city would need to amend its general plan to allow any rezoning from industrial to residential - which is not likely for at least a year.
Paul Krutko, the city's chief development officer, said Wolff has received no guarantees that the council will agree to rezone the Edenvale land.
But the sale of the FMC property would allow the retail, office and 300-room hotel project to proceed, regardless of whether the soccer stadium gets built.
"Whether the stadium happens or not, this is a good land deal that will result in significant commercial and office development," said Councilman Sam Liccardo, who represents the area. "If the stadium doesn't happen, we are still better off than if we did not conduct the deal."
The Earthquakes left San Jose in 2005. The team's latest incarnation began play earlier this month; for the next few years, it will play its home matches at Santa Clara University.
Wolff has also agreed to buy the remaining 9.3 acres of the FMC site for $18 million. The Valley Transportation Authority, however, has expressed interest in that portion for a Bay Area Rapid Transit maintenance facility, should BART eventually be extended to San Jose.
Krutko said the city will ask VTA to counteroffer or else try to buy the property later from Wolff and his partners, who also include developers Ed Storm and Deke Hunter, Gap heir John Fisher and the owners of the San Jose Sharks.
Mayor Chuck Reed has called for San Jose to stop converting industrial land to housing, saying the loss of jobs-producing land worsens the city's deficits. But he also has argued the economic benefits of a stadium outweigh those concerns.
Monday's deal, he said, "means we are going to have a pretty good shot at getting a soccer stadium, and we ultimately should get a substantial economic benefit from the development of the property."
Contact Joshua Molina at firstname.lastname@example.org
or (408) 275-2002