There’s victory in the air around San Diego’s ballpark neighborhood, a 26-block section of the city’s most blighted area. Never mind that opening day at the $452.6-million PETCO Park, the new home to baseball’s Padres, isn’t until April 8. No matter that there are more holes in the ground than completed hotels, retail and apartment buildings. Area land values have soared from $35 to $200 per sq ft. Economists project $3 billion in development by 2020 in the surrounding 100-block East Village. And the Padres construction team delivered the project on its revised schedule and budget, having survived a 16.5-month construction "time-out," a consequence of lawsuits and a corruption inquiry.

FRACTURED Ballpark buildings are pulled away from grandstand.

"Even the grandest dreamers had no expectation we would see such a remarkable success so quickly, and with so many obstacles placed in our path," says Erik Judson, Padres’ vice president of development.

It all began not quite a decade ago, when city officials decided it takes a village, not just a sports venue, to come out a winner in the game of sports construction and urban renewal. The Padres had been sharing a suburban stadium with football’s Chargers and wanted a home of their own. The city wanted to create 24-7 neighborhoods downtown.

"If the public’s going to invest in a ballpark, the city should require that developers put private money into redevelopment around it," says Peter Hall, president of San Diego’s Center City Development Corp., charged with implementing urban renewal.

The outgrowth is a public-private partnership that not only gave the Padres financial risk for construction and operation of an urban ballpark, it engaged the club in ancillary development in the district. "This is the first time in the history of U.S. professional sports that a team owner has accepted such an obligation," says Charles E. Black, president of Padres Construction. Black is also executive vice president of the ballpark village’s master developer, JMI Realty, chaired by Padres Chairman John Moores.

"This is pretty visionary thinking," says Joe Spear, senior principal with the ballpark’s executive architect, HOK Sport + Venue + Event, Kansas City. PETCO Park "is probably going to be the top performer" of all the recent urban ballparks, predicts Spear, who has designed many of them.

So far, JMI Realty has either self-developed or engaged others to develop $593.3 million worth of hotel, residential, retail and parking structures. Its obligation is for only $311 million. To date, there are 11 projects either complete, under construction or planned. These include a $172-million Omni hotel-condominium set to open April 8; a $51.9-million hotel set to open in mid-2005; nearly 800 residential units in projects valued at $327 million; a 1,109-vehicle garage; and a $15-million chilled water plant.

The ballpark village also contains a square-block park and a tree-lined boulevard. The village is served by four stops on the city’s trolley line, which makes it transit-oriented. Beyond that, there is $479.8 million worth of nonancillary development planned or under way, including a $120-million library.

CATALYST Ballpark triggered transformation of San Diego's most blighted neighborhood, an old warehouse district called the East Village.

The city, whose share is capped at $225 million, is paying for $143.8 million of the ballpark’s $294.1-million hard cost. To date, according to JMI, the Padres have spent over $200 million. And the city and CCDC have invested $60 million for land and infrastructure.

The ball club, which owns one-third of the ballpark, controlled design and construction, with the city retaining design approval. The team is leasing the ballpark, owned two-thirds by the city, for 25 years.

Tax-increment financing is the key to the city’s ability to pay off interest on the ballpark’s $169 million in bonds, without raising taxes. In the district, all property taxes resulting from development are available to CCDC. New hotel occupancy taxes are also used to pay off bonds.

The city took no risk and gets lots of rewards. "In other words, we hit a home run," says Hall.

Scoring took lots of stamina and perspiration, especially for the Padres. At first, the team resisted the site in the underutilized warehouse district–the biggest weed patch in the "Garden City," despite its proximity to the convention center and trendy Gas Lamp Quarter.

Overall, the city’s strategy "had its pitfalls," says Greg S. Shannon, president of Sedona Pacific, Delmar, Calif., and a consultant to the Padres on the master plan.

The development deal was set before all ancillary projects had city approval, he says. And the plan to develop office space with structured parking shared with the ballpark collapsed because the office market never materialized.

Moores calls the terms of the deal "onerous" for the developer. He says that the district could have been larger and the master plan better crafted, which would have attracted more developers. Still, "everybody is thrilled," he admits.

San Diego voters kicked off the scheme in November 1998, approving the scheme by a 60-40 majority. The next month, HOK and ballpark design architect Antoine Predock, Albuquerque, began schematic design on a ballpark for 46,000 fans, including 1,500 in standing room and 2,500 in the new park beyond the outfield. There, for $5 a head, fans can picnic while they watch the field action or a giant video screen on the back of the scoreboard. Unless there is a game, the park is open to the public.

The ballpark is purposefully deconstructed–fractured into elements–and built on a human scale, inside and out. At 56 ft, it sports the biggest deck cantilever in major league ball.

The concourse is open to the sky and between the grandstand and individual "perimeter" buildings that contain concessions, rest rooms and other program elements. Skywalks connect the buildings to upper decks. The grandstand itself is broken up by two towers. And the left field foul pole is the edge of the Western Metal Supply Co., a landmark warehouse that completes the seating bowl.

The open-ended time-out began on Oct. 2, 2000, when construction was only 15% complete, and cost the Padres $20 million. The suspension was a reaction to pending litigation from the development’s critics and a federal investigation into allegations of corruption, both of which delayed financing.

The time-out was a trial. "The stress was enormous," says Richard H. Vogel, vice president in the local office of Hines, the Padres’ development manager.

The construction cost of the delay was $20 million, 3% added to the project cost and 3% for escalation. The baseball team also lost $45 million of expected revenue by operating from its old stadium, says Black.

To recoup some money, the team shaved $18.4 million off the budget by making minor changes to 100-plus items, says Andrew H. Stallings, Hines’ vice president of construction. This included adjusting the inflation factor, which saved $1.3 million, reducing the Padres’ office design cost, which saved $750,000 and adjusting the contingency fund.

By the end of January 2001, the inquiry had exonerated the Padres and Moores of any wrongdoing. A city council woman, Valerie Stallings, pled guilty to two misdemeanor state ethics violations and resigned. Construction did not get under way until Feb. 18, 2002, after 16 lawsuits had been dismissed and bonds were sold (ENR 2/25/02 p. 7). Three months later, the Padres had completed financing. Three weeks ago, on Feb. 13, the city issued a final certificate of occupancy–two years later than expected. Click here to view chart

When worked stopped, all piles and most grade beams and columns for the main concourse were in place. Crews had just started the slab on grade.

"In construction, we don’t do time-outs," says Alan Petrasek, officer in charge for San Diego Ballpark Builders, a local joint venture led by Clark Construction, including Roel Construction Co. and Douglas E. Barnhart Inc. "You learn patience."

Ballpark Builders shrank to five people from 30, and virtually had to build a new team for the restart. Of 19 original subcontractors, only one didn’t return.

Ballpark Builders mothballed the site except for taking delivery on structural steel. When work resumed, it took nearly three months to get back up to speed.

The ballpark is done. Now, everyone is hoping the fans will come. "We are dragging people kicking and screaming into urban America," says Shannon. He adds that of an expected three million ballpark visitors this year, about two million have never been downtown. "The first year is likely to be chaotic," says Shannon. "After that, it will be fine."

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