SDSU presents $68.2 million cash offer for Mission Valley site to city council

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SDSU presents $68.2 million cash offer for Mission Valley site to city council

Rendering of the proposed SDSU West river park and bike trail.

Rendering of the proposed SDSU West river park and bike trail.

Photo courtesy of SDSU

Rendering of the proposed SDSU West river park and bike trail.

Photo courtesy of SDSU

Photo courtesy of SDSU

Rendering of the proposed SDSU West river park and bike trail.

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The public negotiations between San Diego State and the City of San Diego over the site of SDSU’s Mission Valley expansion officially began on Oct. 14, when SDSU presented a formal purchase agreement offer to the San Diego City Council.

At the council meeting, SDSU President Adela de la Torre presented the university’s formal cash offer of $68.2 million for the 132 acres of land where SDCCU Stadium lies, based on the site valuation from a 2017 land appraisal.

“We can all agree that the voters of San Diego chose SDSU as the best steward for this public land because of the clear benefit to San Diego,” de la Torre said to the council. “Today, our offer not only complies with everything in Measure G, we believe it goes above and beyond in providing tangible benefits and physical amenities for the residents of our great city.”

JMI Realty CEO John Kratzer, a member of SDSU’s Mission Valley negotiating team, detailed SDSU’s offer in a presentation to the council.

He said the total value of the public-use development is a $150 million investment by the university.

“We think it represents a fair and equitable package,” Kratzer said.

That $150 million price tag includes $30 million to build a 34-acre River Park. SDSU will also pay $578,000 annually to maintain the park, which will remain city property.

In addition to the River Park, the university will construct open recreation spaces and hike and bike trails throughout the SDSU West expansion project.

And as part of its offer to purchase the land as is, SDSU will take responsibility of all existing stadium operating, maintenance and improvement expenses, which currently costs city taxpayers between $7 million and $15 million annually.

SDSU will take on those annual costs upon the sale and transfer of the land.

And the university will pay the $10 to 15 million stadium demolition costs once its new 35,000 seat, multi-use stadium is complete.

Additionally, the university will ensure at least 10% of its approximately 4,600 housing units at SDSU West are set aside for affordable housing.

The university, at the city’s request, will also take ownership of 2.6 acres of Murphy Canyon Creek. The land, although unaffected by SDSU West development, was one of the many snags between SDSU and the city during their confidential discussions.

“The city has asked us to take ownership of (the creek),” Kratzer said. “It’s still our preference not to take ownership … having said that, at the request of the city negotiating team, we have considered the proposal and are willing to take ownership.”

Under the university’s offer, the city is on the hook for deferred maintenance on the creek property and is responsible for any costs associated with capital improvement obligations.

SDSU ownership and maintenance of Murphy Canyon Creek is estimated to cost the university $125,000 annually, after deferred maintenance and capital improvement projects are completed by the city.

The university also offered a number of provisions to accommodate the Mission Valley Community Plan with regards to public amenities and traffic mitigation.

SDSU offered to reserve an acre of land for the city to construct and operate a civic recreation center.

And the university’s traffic mitigation efforts include constructing the two-lane Fenton Parkway bridge, a project the city has planned for two decades. The bridge is expected to cost between $21 and $22 million.

SDSU said it will front the initial cost and build the bridge after a separate environmental impact review is completed.

But SDSU also expects the city to reimburse the university for 75% of the construction costs through development impact fee credits or other reimbursement from the city once the bridge is completed.

At the council meeting, the Independent Budget Analyst’s office also issued comment over its Oct. 11 report that estimated the fair market value of the 132-acre Mission Valley site could be as high as $104.5 million in 2020 dollars.

The IBA provides unbiased analysis regarding legislative items bearing financial and policy impacts to the city.

A new analysis was provided after a miscommunication between the land appraiser and the analyst’s office over an annual index rate.

The analyst’s new 2020 fair market value estimation is $91.9 million.

The SDSU offer to purchase the land from the city is historic for The California State University, which has never paid for a campus expansion site in its history.

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