Although the Sports Arena sits on city property, it has been operated by developer Ron Hahn and his son Ernie for over 15 years. The recent announcement that the Hahns were yielding majority control of the Sports Arena to AEG Live led George Varga of the Union-Tribune to crow last week that the move should bring a “swift increase in the number of live concerts” to the venue.
AEG, in effect, assumed the Sports Arena lease, which runs until 2017. But AEG already had a near-exclusive relationship with the Hahns, which allowed the promoter “first refusal” rights to book concerts at the Sports Arena.
“Why would you pay for the cow when you get the milk for free?” asks an insider who says that the AEG lease takeover was not necessary for the company to bring more concerts to the Sports Arena.
Other well-connected sources say that AEG – an international promoter of sporting events and concerts that operates over 30 concert venues worldwide – has other plans, including demolishing the Sports Arena and replacing it with residential and commercial development.
An ad hoc committee formed about four years ago by former councilman Michael Zucchet once claimed that the Sports Arena property would be better utilized for residential and commercial purposes.
“Those questions [about replacing the Sports Arena with condos] predate us,” says Rod O’Connor, senior vice president of operations for AEG Facilities. “Some of those conversations will continue to happen.”
A local insider says, “What AEG does is comes in and controls the real estate and then they just take over. Unlike the Chargers, who hold their hand out for public money, AEG will come in and take a neglected piece of property and with private money build a Staples Center [in L.A.], for example.”
The 14,000-capacity Sports Arena most closely competes with Cricket amphitheater (19,000 capacity) and SDSU’s Cox Arena (13,000). Both are run by Live Nation, which is the largest U.S. concert company; AEG is number two.
In 2001, Ernie Hahn said the following about replacing the Sports Arena with residential development: “Long term, yeah, we’re in a redevelopment site. We’re in the North Bay redevelopment district, which is all in redevelopment. The designated area around us is blighted.… Over time we would like to develop it all.…”
– Ken Leighton