On Tuesday, June 29, 1999, the San Diego City Council went into secret session to consider a series of financial concessions demanded by San Diego Padres owner John Moores. Although the closed-door meeting had been billed on public notices as a discussion about "real property interests in the East Village area of downtown San Diego," the real topic was the granting to Moores of almost $5 million worth of "modifications" to the Padres lease at Qualcomm Stadium in Mission Valley.
Confidential minutes of the meeting show that all councilmembers except Juan Vargas attended, including Valerie Stallings, who, later disclosures would reveal, had just 90 days earlier, on March 31, reaped thousands of dollars by selling stock obtained in a lucrative initial offering by Neon Systems, a Texas company controlled by Moores. Later, in November 1999, four days before the council again secretly considered granting the Moores concessions, Stallings again purchased stock in Neon.
Attached to the minutes of that June meeting was a simple one-page matrix, never made public, that laid out for the council the estimated $4.68 million "cumulative impact" -- the cost to taxpayers -- of what Moores was asking for. "Ticket Revenue Cap at $25.5 million," was the first point. The "Annual City Impact" of the cap was given as "-$250,000." Point two was "Parking Increase over $6," and the "impact" was said to be "-$175,000." In all, the secret list contained 11 points, including "10 percent of Skybox Licensing Revenue," impact: "-$468,350"; "Plaza Food Court Improvement Revenues, impact: "-$120,000"; and "Revenue from 3500 Parking Spaces at Qualcomm Stadium when new Ballpark Opens (for five years)," impact: "-$262,000."
Another list provided to the council was titled "Additional Issues Not Accepted by the City." Item seven on the "not accepted" list was "Padres permitted to sell advertising on back of Tri-Visions at Qualcomm." The "Tri-Visions," two huge video displays, had been installed at the stadium by Moores under an earlier agreement, which allowed him to pull them out whenever his team vacated Qualcomm. Their backsides face the busy freeway interchange of I-15 and I-8, offering the Padres magnate a lucrative advertising venue if only Moores could convince the city to allow him to sell the space. At stake was possibly millions of dollars. So far, the city had denied him the opportunity.
Yet another list attached to the secret minutes of the June 1999 meeting was titled "Other terms being studied by city council." These included "Padres permitted to play additional games outside continental U.S."; "Padres permitted to sell naming rights for all or part of new ballpark district and license 'ballpark district' concept"; "Padres permitted to sell naming rights for all or part of new ballpark district public parking facilities"; and "Padres get additional 30 dates at new ballpark."
A fourth list was headed "Terms Padres wish city to reconsider." It consisted of a series of questions, including "Will City allow Padres to use City box at Qualcomm for party and promotional purposes?" and "Will City give Padres 371/2 percent of advertising revenue at Qualcomm (Chargers will get 371/2 percent)?"
The confidential minutes of the June 29 meeting show that Assistant City Attorney Les Girard, not the city manager, briefed the council on the proposed concessions. Then, after a discussion not recorded in the minutes, Councilwoman Judy McCarty made a motion, seconded by Councilman Byron Wear, to "approve numbers 1-11 on the [first] list, to give the negotiating team something to work with in regard to the Padres. Remove the word guarantee from the list." Like the rest of what happened in the closed session, the motion, which passed unanimously with Vargas absent, was not revealed to the public.
Five months later, on November 30, 1999, Assistant City Attorney Girard dispatched a memo, titled "Extension of Padres' Use and Occupancy of Qualcomm Stadium," to the city council. The document, which laid out the financial concessions the city was about to provide to Moores, was labled "Attorney to Client Corresponce -- For Confidential Use Only." Four days before the date of the Girard memo, on November 26, according to her later disclosure, Councilwoman Valerie Stallings purchased between $10,001 and $100,000 of stock in Neon Systems, the company controlled by Moores.
In his memo, Girard cited the authority he claimed the council had given him at the June closed session. The matter had still never been taken up in a public meeting, and none of the terms arrived upon in the closed session had ever been disclosed to the public. "Enclosed as Attachment 1 is the closed session record from the meeting of June 29, 1999, at which authorization was given. The record shows a unanimous vote (with District 8 absent) to convey the Council's concurrence to 11 specific terms.
"Enclosed as attachment 2 is a list of those terms together with their economic impact. Certain other terms offered by the Padres were rejected. Enclosed as Attachment 3 is a list of those rejected terms. The Council agreed to further consider certain additional terms. Enclosed as Attachment 4 is a list of those terms.
"The [city's negotiating] Team met again with the Padres and conveyed the terms," the memo continued. "The Padres requested that the Council reconsider certain of the rejected terms. Enclosed as Attachment 5 is the list of terms the Padres wished the Council to reconsider. The Council, in August, authorized the Team to negotiate certain of those terms within limits. The handwritten notes in the margin of Attachment 5 indicate the Council's direction with regard to the terms to be negotiated. The team met again with the Padres and discussed those additional terms."
The list of concessions provided by Girard to the council in November had grown to 15 points, with a total estimated annual "impact" on the city's so-called "Stadium Fund" of $1.68 million. The cost of the so-called "Ballpark Signage District" was given as "unknown." "Some of the costs are direct negative impacts on the Stadium Fund," the memo said, "for example conveying to the Padres the City's 10 percent share of suite-license revenue, while others are merely foregone new revenue, such as any share of a future parking increase. Most of the terms will have ongoing cost impacts as long as the Padres occupy the Stadium, while some, like the food court expansion, will only be a one-time expense. Finally, the cost impact of some of the terms may vary, such as the suite-license revenue, depending on the success of the Chargers in licensing the suites in any given year, and some, like the estimated revenue for parking at Stadium once the ballpark is open, are difficult to estimate."