Wanted: Pro Teams for Unbuilt Arena : Development: New Sports Arena owners face a tough road in snaring a NHL or NBA franchise before they build a new facility.
San Diego developer Ron Hahn has tackled challenges before. One of the biggest, experts say, was coming up with the necessary capital to acquire the long-term lease to the city’s aging Sports Arena.
Hahn and partner Sam Marasco accomplished that feat Thursday, when, after a round of lawsuits filed and then dropped, they closed escrow with previous arena boss Harry Cooper for an estimated $14 million.
But an even bigger challenge awaits Hahn and Marasco as they pursue their longtime dream to build a new, state-of-the-art arena in downtown San Diego and stock it with franchises from both the National Hockey League and National Basketball Assn.
Hahn faces two obstacles, one--the economy--that is potentially devastating. The other, a new arena set to open in Anaheim in June, is less of a threat, if only because it poses an even greater intangible.
Any new arena needs franchises. Hahn says he will not proceed with plans to finance and build a downtown arena, which, once ground is broken, may cost nearly $100 million, without securing a franchise. Anaheim chose to build without commitments from any franchise.
“This is not going to be ‘Field of Dreams,’ ” Hahn said, moments after assuming control of the 13,000-seat San Diego Sports Arena. “It’s not going to be, ‘If you build it, they will come.’ We will not build it that way.”
But Bruce McNall, owner of the Los Angeles franchise in the National Hockey League, told The Times recently that San Diego desperately needs a new arena before having hope of landing a team in either the NHL or NBA.
Even then, McNall said, Anaheim has a tremendous advantage over its neighbor 90 miles to the south in that it’s almost ready to open a $103-million multipurpose arena near Anaheim Stadium that can take advantage of the city’s nearby Amtrak terminal.
“Anaheim is much more likely to get a team than San Diego,” McNall said. “They’ve got a finished building. San Diego doesn’t have anything yet.”
McNall, a member of the NHL Board of Governors, said the NBA and NHL have no plans to expand for several years and that no teams in either league have firm plans to move.
At one time, McNall was mentioned as the possible owner of an NBA team in San Diego. He was linked to Los Angeles Lakers owner Jerry Buss, who lives in North County. Buss has been mentioned as the possible owner of a San Diego franchise in the NHL.
“Whatever Jerry tells me is what I’m going to do,” McNall said. “He’ll be my contact in San Diego.”
Buss could not be reached for comment on Friday.
But Hahn did not dispute McNall’s comments, saying Friday, “I’ve maintained all along that without a commitment for a new building we have no hope of acquiring franchises.”
Hahn said it’s “no secret” that a city ready to open a new arena “is better off than a city with only a dream of building one.”
But, he said, Anaheim will almost certainly not have either franchise until at least the 1994-95 season.
“That’s the situation today,” Hahn said. “But as soon as we have the commitment to site, finance and build a new arena, I feel the equation flip-flops. I’m not alarmed by Bruce’s statements at all.
“You have to remember he’s head of the NHL Expansion Committee. You have to view those comments in the context of his role with the expansion committee and not necessarily as owner of the L.A. Kings.”
Despite statements to the contrary, NHL sources say McNall would not relish the presence of a rival hockey team in Anaheim, since as much as 20% of his season-ticket base at the Great Western Forum in Inglewood comes from Orange County.
But buying and moving an NBA team to Anaheim could work perfectly for McNall, who might do well to land in Anaheim before Los Angeles Clippers owner Donald Sterling, or any other NBA mogul, feels the itch to relocate. Sterling moved the Clippers from San Diego to Los Angeles in 1984 after six seasons.
NBA spokesman Terry Lyons said Friday that the league recently appointed an expansion committee to assess the long-term prospects of adding still more franchises to its current 27.
The league last expanded in 1989 and 1990, adding new teams in Charlotte, N.C.; Miami; Minneapolis; and Orlando, Fla.
Asked to respond to McNall’s comment that Anaheim is in better position to land a team before San Diego because of its new arena, Lyons said, “His comment is a good one.”
But, he added, other factors weigh heavily in any decision to add any new team in Southern California, where the NBA currently has two Los Angeles franchises.
“One is the facility. Two is a solid ownership group,” Lyons said. “Three is a strong market and the ability to draw from that market.”
Lyons said that, in the last expansion, one requirement was each team securing 10,000 season-ticket holders before a franchise was even granted. Hahn hopes to build a downtown arena with a minimum capacity of 18,000 and the ability to expand to 22,000 seats.
“The number might be even higher the next time,” Lyons said of season-ticket commitments. “A city’s potential for television revenue will also play heavily.”
Lyons said the city’s track record with NBA basketball--before the Clippers’ exit, the Rockets spent four seasons in San Diego before moving to Houston in 1971--would not be a factor. In other words, San Diego will “not be seen as the ‘kiss of death’ when it comes to new teams,” he said.
But Douglas Logan, senior vice president of Ogden Entertainment Services and the manager of the new Anaheim Arena, disagrees.
“San Diego has got to overcome its two prior professional sports failures,” Logan said.
And can it do that in a regional market where competition for new franchises is fierce and promises to be even more so over the next few years?
Logan argues that San Diego and Anaheim are not competing in this sense: The cities belong to separate and distinct commercial markets. But in the tightly controlled world of sports franchises, markets so geographically close are, he says, destined to compete--with only one succeeding.
“Do I see there being an opportunity for new franchises in the same league in both San Diego and Anaheim?” he said. “Probably not. It has nothing to do with the marketplace but rather with the structure, and the whims, of professional sports leagues.”
If Anaheim fails to secure either an NBA or NHL team, the city’s taxpayers will owe Logan’s group $2.5 million a year for as long as eight years, under the terms of the current contract. Securing only one franchise would mean a payment of $1.5 million a year.
“If you’re talking an expansion franchise, they generally won’t give you one until they see bricks and mortar,” Logan said. “So you have to bite the bullet and build the arena. We hope we’re successful proponents of that, as Indianapolis turned out to be with its Hoosier Dome.
“What we fear is becoming like San Antonio (Texas) and St. Petersburg (Fla.), which built (new indoor stadiums) and still don’t have a single team to show for it.”
Thus, the dilemma Ron Hahn will face increasingly, Logan said, is whether to build and hope. Without doing so, he said, San Diego may find itself with neither a team nor an arena and no hope of having one before the year 2000.
Hahn sees the economy as a greater concern. But even with a gloomy forecast for ‘93, he’s hopeful of moving ahead on both the franchise and arena fronts and, with luck, having both in place by 1996.
“Absolutely, the current economy plays a role,” he said. “But the entertainment dollar is far more stable than the real-estate dollar. Movie attendance is still good, and while attendance in the pro sports leagues is down, it’s only 3% to 4%.
“That’s nothing compared to unemployment, the lowering of discretionary income or the lack of money in commercial markets. Those are much, much higher. A recessionary economy hurts the development of anything.
“But I’ll put it this way. I would much rather develop an arena now than a new hotel or a major office building in San Diego. That’s not to say it’s a slam-dunk, by any means, but it’s not as bad as some may think.”
Should Hahn fail, he still holds the lease to the city’s only sports arena until the year 2015. By acquiring the lease from Cooper, he eliminates a source of potential competition; he controls a site that could be used as a new team’s temporary home; and he sits on a lucrative parcel that will almost certainly be redeveloped to pay for Hahn’s dream.
Hahn said a city-appointed task force is looking at about a dozen possible sites for the new arena in the downtown area, in hopes of narrowing the list to “five or six” in the next few months.
Should the search for a downtown arena fail, Hahn will look elsewhere in the city.
“But a downtown arena is doable,” he said. “The city prefers it downtown. No question, that’s where everyone’s desire is and where we’ll push forward. We’re excited about the chances.”
Times staff writer John Geis contributed to this report.
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