The Handbook of Municipal Bonds

CASE STUDY 7

Super Bowl XXXII Helps Resolve Bond Default

Bill Huck Managing Director Stone & Youngberg LLC

 

 

 

Before John Elway and the Denver Broncos could take the field in Super Bowl XXXII, the City of San Diego needed to get its house in order. In this case, the “house” was the 69,000 seat Qualcomm Stadium located about eight miles northeast of downtown.

Among the conditions for granting the 1998 Super Bowl to America’s Finest City, was the NFL’s requirement for San Diego to extend its light rail line to Qualcomm Stadium. With the development of the Metropolitan Transit System’s Green Line, fans could take bright red trolleys from downtown to the big game. The extension included building about six miles of rail line east from the existing Old Town station to a new station to be built in the parking lot at Qualcomm.

The proposed alignment for the Green Line ran along the banks of the San Diego River in Mission Valley. Between miles four and five on the proposed route was located the First San Diego River Improvement Project or FSDRIP (“Fizz-Drip”). That was a problem, because in 1995—two and half years before the kickoff for Super Bowl XXXII—$24 million of FSDRIP bonds defaulted because the largest land owner within a special assessment district was deeply delinquent in its property taxes and assessments.

How could San Diego keep its commitment to the NFL if the Transit Development Board was unable to lay track across tax-delinquent property tied up in bankruptcy and foreclosure? ...