San Diego’s new white knight? Mike Stone and pro soccer – The San Diego Union-Tribune
If San Diego needs a white knight after losing the Chargers, Mike Stone might be the one.
He and his fellow investors have proposed replacing the NFL with the MLS, making soccer, not football, San Diego’s rally-around, civic-spirit-raising sport. The plan includes demolishing Qualcomm Stadium and replacing it with a 30,000-seat facility for both soccer and college football.
With the Bolts gone, the city faces a roughly $13 million annual upkeep cost and a mounting list of deferred maintenance items nearing $100 million. Also, there are annual payments for another decade on $28 million in bonds and 166 acres of a prime nonperforming city asset with a major trolley line running through it.
The existential question for Mission Valley, the city, the region and the voters is should they spend years planning, marketing and hoping somebody takes the site off their hands and makes something of it or anoint Stone as the knight-errant to save a city in distress.
“What I’m excited about is being able to deliver an option and opportunity to a city I love,” said Stone, 54, leader of the local ownership group. “I”m not on the City Council and I won’t be making that decision. All I can do is serve up the best alternative. I think it would be difficult to conceive of a more compelling option. So I’m proud of what we have been doing and what is on offer.”
But who is this guy few have heard of?
Stone is a native of Connecticut, a Duke econ major and Harvard Business grad; is husband to a (nonpracticing) clinical psychologist; father of two teen girls and a grade-school son; a swimmer (backstroke on his high school team); and a passionate collector of maps. His father was a cinematographer and director of 30-second TV spots in the 1970s and ‘80s and one of his two brothers clued him in on the business of pro soccer.
During college, Stone started out his career at Bain & Co., where former Republican presidential candidate Mitt Romney held forth at the same time. (Stone says he’s now politically independent having been registered as both a Democrat and Republican.) His first venture was a taxi business he and a couple of buddies acquired in Cambridge, Mass.
He moved to New York City in 1989 and joined J.H. Whitney & Co., a private equity investment firm. In 2009, he joined TPG, a San Francisco-based private-equity firm, with investments typically up to $75 million each in pharmaceuticals, technology, transportation, education and other industries. Two years later he founded FS Investors (originally Freestyle Capital). For Whitney, TPG and FS Investors, Stone says he has overseen or been involved in more than 150 investments, representing several billion dollars of equity capital activity.
FS Investors’ website lists these companies as examples of its portfolio holdings:
In food, there’s Boomchickapop popcorn, Freestyle Hops grown in New Zealand, and Texas-based Taco Bueno restaurants. In entertainment, there’s Fender Instruments (Stratoscaster guitars and amplifiers) and STX Entertainment (The “Valerian” sci-film is due out this year). He’s had interests in wireless towers in Myanmar, energy pipeline steel production in Arkansas and sports (Sacramento Kings professional basketball team).
The company declined to provide further detail on its business investments, saying Major League Soccer qualified FS Investors and its partners to apply for a franchise.
Of course, real estate development competency lies at the core of whether Stone could implement a billion-dollar-plus redevelopment at the stadium property. FS Investors’ real estate deals include:
- Riverstone: 2,000 acres for 6,578 housing units and 1.6 million square feet of commercial space west of the San Joaquin River in Madera County. Next door is San Joaquin River Ranch, which would cover another 4,000 acres for as many as 28,000 dwelling units and 3.2 million square feet of commercial development. Valley Development’s Tim Jones estimated the buildout value, in today’s dollars, at $10 billion with FS Investors and another investor the key sources for site development costs. He called Stone and the other partner “highly trustworthy, very capable, thoughtful, analytical people.”
- LifeWay Campus: A 15-acre, mixed-use development in Nashville, bought for $150 million in 2015 and projected value at more than $1 billion upon completion. San Diego-based Southwest Value Partners is joined with FS Investors on the deal that aims to produce 1,500 housing units,160,000 square feet of retail and 1 million square feet of office space.
- Bayside Communities: FS Investors bought several sites out of bankruptcy for 2,200 affordable housing units in Northern California, Oregon and Washington.
- Other projects: Austin Center mixed-use development in Tampa; One City Center housing in Durham, N.C.; an Exposition Way creative office project in Los Angeles; and Del Mar Marriott and Del Mar Doubletree hotels as a minority partner with Southwest Value Partners.
“To us he’s a tremendous partner and we’ve invested in a number of real estate projects with him,” said Mark Schlossberg, managing partner of Southwest Value Partners. “They don’t come any better than Mike, both from business acumen and integrity in business ethics.”
After Stone moved his family to La Jolla in 2003, he became active in his children’s schools and joined the boards of various charities and institutions, including Big Brothers Big Sisters of San Diego County.
“Many people would follow Mike Stone into a hot pit of fire coals,” said S. Wayne Kay, CEO and president. “I certainly believe that whatever he sets his mind to and puts his energy and backing and financial resources behind, he’s studied it very carefully… I would invest in something that has Mike at the helm.”