Who really owns the Padres? That question has remained unanswered since John Moores and Larry Lucchino proposed in 1996 that San Diego city taxpayers subsidize the team's venture to build a downtown baseball stadium. The team has maintained that Moores, a computer mogul from Houston, and Lucchino, a lawyer who is a partner in the Washington, D.C., firm of Williams and Connolly, are the ball club's principal owners. But the ownership trail ends there, at least as far as the public knows.
City officials, who when asked for documents in the city's possession that identify the team's ownership, say they don't have any records about it and have never asked for the information. The team is officially owned by Padres, LP, a Delaware limited partnership, but that's all the information legally available to the public. A courtroom attempt by attorney Bruce Henderson to require that the city council find out who is behind the team was turned aside by Superior Court judge Mac Amos, who ruled that ordinary citizens cannot compel the city council to find out who owns the team. The council has consistently refused to do so on its own.
Earlier this year, three state appellate court judges — Richard Huffman, Gilbert Nares, and Daniel Kremer — upheld Amos's ruling that Henderson's client, a local citizen, had no right to enforce a city charter section requiring that the city council find out the ownership of the companies it deals with. "To the extent Charter section 225 grants the city council discretion to decide that further disclosure should or should not be required, we are not in a position to dictate that such discretion should be exercised in any particular way," the judges averred. "Finally, this Charter section does not appear to have been adopted to create a private right of action by disgruntled citizens to torpedo measures with which they disagree."
For the time being, that appears to be the final word on finding out more about who owns the baseball team. But there is more to the downtown stadium project than the stadium. As part of its deal for the stadium, the city gave Moores development rights to a swath of the east side of downtown, about 26 blocks. Acting as the redevelopment agency, the city council has been condemning property both within and outside the footprint of the stadium, to be provided to Moores at subsidized prices.
In addition to the stadium and its so-called "Park at the Park," a commercial development in back of the baseball field, Moores has been given development rights and subsidized real estate for three hotels and an office building. In February, the new city council, chaired by Mayor Dick Murphy, who during the election cast himself as a ballpark skeptic, voted unanimously to allow Moores to move ahead with a 512-room "Westin Park Place" hotel and condominium complex at the corner of Sixth Avenue and L Street. At the time of the council vote, the Union-Tribune quoted deputy city attorney Leslie Girard as saying, "This hotel will go through whether or not the ballpark goes forward," because the rooms were "desperately needed."
The approximately one-block site of the hotel is on property acquired from the city's old-line Frost family in a condemnation action last December for about $6 million, according to a report in the Union-Tribune. City documents show that the Moores venture, called JMI Realty, Inc., will pay only about $2 million in cash for the land. The rest of the cost is being picked up by city taxpayers as part of the ballpark project.
Last September, Moores and his JMI Realty, Inc., announced they had lined up a $104 million loan from Bank One of Chicago and West-deutsche Landesbank Girozentrale of Germany. The balance of the financing for the development, which JMI said would cost a total of $148 million, was not disclosed.
On the strength of that announcement, the city council agreed to allow Moores to begin construction on the project without acquiring ownership of the property. In a so-called "Foundation Right of Entry Agreement" dated last December, JMI Realty was allowed to begin construction of what was billed as "foundation only improvements," including "garage slab-on-grade, garage structural wall and column system, and wall waterproofing systems."
Pam Hamilton, who is managing the project on the city's side, says that in return for the right of entry, JMI agreed to post a $400,000 "letter of credit" to provide sufficient funds to remove the foundation work just in case the developer failed to carry through with the project. Since beginning construction, the project has grown from a huge hole in the ground to an expensive-looking, four-story structure of concrete and reinforcing steel, encased in wooden forms. Hamilton says that all the work onsite to date is permitted under the foundation entry agreement. According to Hamilton, the project had been coming along nicely.
But last week, construction suddenly ground to a halt, and JMI announced that it was suspending the operation until the city came up with the cash to build the adjacent baseball stadium, on hold since last spring, when it came to light that then-city councilwoman Valerie Stallings had accepted gifts and stock tips from Moores. "Unfortunately, it is difficult to proceed much further with construction at this time because doing so requires coordination with multiple ballpark-related projects, such as a parking facility next door and a District Central Cooling Plant -- projects that will need to be redesigned or not built at all if there is no ballpark," according to a JMI news release. It turned out that the much-heralded bank loan JMI had announced for the project had never been made.
That move seemed to some observers as though JMI and Moores had left city taxpayers once again holding the bag, in that the land has never been sold to JMI and that the construction work on the project to date seems far too elaborate to be taken down for just $400,000, the amount of the JMI letter of credit. The city's Hamilton says not to worry, that the redevelopment agency's right-of-entry agreement with JMI requires that JMI Realty, along with its parent, JMI Services, make good on any expenses arising from the project's shut-down.