Monthly Archives: April 2010

Giants want piece of W’s, Russo wants signs back

Two news items that have been building up:

Ray Ratto first wrote in his SFGate blog about the anti-ownership sign controversy last weekend. The NY Daily News, Oakland Tribune, and East Bay Express picked up the story, with Oakland City Attorney appearing as his normally indignant self.

Now Giants beat writer Henry Schulman has more details on the team’s stepping up of their efforts to get in on the big Warriors free-for-all. Once again with feeling, “Remember the Sonics.”

It’s not hard to see why the Giants would be interested. They see the A’s looking at San Jose and A’s ownership is buddy-buddy with the Sharks. The Giants do pretty well with non-baseball events such as the annual bowl game, concerts, and other offseason stuff. Down south, the combination of HP Pavilion, an A’s ballpark, and a Quakes stadium could make for a very competitive situation. Get a fancy new arena near the downtown ballpark gem and you preserve that “entertainment hub” status while gaining booking flexibility in the process. That would leave Oakland/Alameda County with two older venues, though hopefully the arena’s debt will be taken care of with the W’s move. But hey, keep fightin’ the good fight on that sign issue.

Added 4/30 3:14 PM: Zennie Abraham has made a Freedom of Information Act request for all correspondence and documents related to any and all efforts to build and manage sports venues in Oakland. The request has gone out to all relevant city and county offices/agencies. We’ll see how far that goes.

Oakland’s Report and What it Means

Perhaps you all have heard, Let’s Go Oakland commissioned an Economic Impact Analysis and held a press conference about it yesterday? Before I give you my impression, a few things… I am not going to compare this to the Economic Analysis conducted by San Jose or Fremont (Marine Layer is working on that now, stay tuned). Second, I won’t use this report to compare San Jose or Fremont’s business value to Oakland’s for the simple fact that it is not an appropriate application for a report like this. All that said, here is my summary:

  • I was a bit disappointed that the report still leaves us in the dark about what a final location might be. I had hoped we would get some clue about what Oakland’s preference would be for a site. I don’t like that they estimated the impacts of Howard Terminal, Victory Court and JLS North to be the same, but it is true that the conclusion is the same: Oakland should prefer something in JLS to a stadium in the Coliseum parking lot. The cost to purchase the sites is most favorable at Victory Court ($22M) and most expensive at JLS North (over $100 M). The valuations for the parcels is included on pages 33 through 35.
  • While it could be argued that much of the benefit of JLS is overstated as “spill over development,” it is true that the potential for spill over development exists at JLS in a way that it doesn’t at the Coliseum. So take the spill over development specific number (the report puts it at $4.7B over 30 years based on increased property values and $980M in property tax as a result, in the chart on page 60) with a large grain of salt, but not the concept that spill over development in JLS is a clear benefit to the City versus keeping the A’s in the Coliseum complex.
  • The report concludes that the largest negative immediate  impact of the A’s leaving Oakland altogether would be the loss of one time stimulus of $500M over three years in stadium construction expenditures (which the report estimates to create $790.8M in Total Output). It’s hard to argue with that.

Ultimately, after reading the report, I am pretty confident in the direct impacts that are outlined because a conservative approach was taken. These direct impacts, such as fan spending, are potentially understated if anything. The indirect stuff, like the positive impact of spill over development, is sort of pie in the sky rose colored glasses optimism. But that is how these reports work.

It will be interesting to see what comes next.

Notes from the Oakland Economic Impact Report

4/29 10:19 AM – Doug Boxer has put out his Powerpoint slide deck summarizing the report.

Post to be updated with data as we go through the document, prepared by Gruen Gruen + Associates.

Now this is what I’m talking about! Some data to dig into. Yes, economic impact reports should be read with a jaundiced eye, but it’s also important to understand the context by which the data is being presented. Sure, there are projections based on what would happen if the A’s moved to the JLS area. There are also estimates of the losses Oakland and Alameda County would face if the A’s left. Not trying to cherry-pick, but I found certain things interesting:

Debt service payment for the facility by the JPA was $9,143,741 for the 2008-2009 year. The current principal on the debt is approximately $180 million. The baseball team pays an annual rent of $1,025,000 to the JPA for the eighty-one (81) games it plays in the stadium, and for the use of the adjoining land for parking. The A’s also reimburse the JPA for the cost of cleaning the stadium, which in the 2008 playing season came to $1,185,893. The costs of converting the stadium from football to baseball games are substantial, and are borne by the JPA.

Thus, from an annual operating perspective, the rent paid to the JPA and the operating expenses borne by the Authority are pretty close to financial break-even. However, the costs of updating and maintaining the facility are paid by the Authority, and in the 2008-2009 fiscal year such costs came to slightly over $1.5 million. GG+A is not in a position to estimate how much, if at all, such capital improvement costs could be reduced if the A’s team leaves the Coliseum.

Because the rent paid by the A’s is close to the amount required to convert the stadium from football to baseball, and the cash outflow for debt repayment and needed maintenance are “sunk costs;” the JPA would not suffer financial loss from the departure of the baseball team. But the JPA would hate to see the A’s leave because the Authority realizes that Oakland’s job and income base is expanded by the operations of the ball club in the city. Further, the taxes and fees paid to Oakland and Alameda County by the ball club, the many vendors and service organizations that serve the team, and the fans who attend games flow much needed revenues into the treasuries of the City and the County.

This basically lines up with comments Ignacio De La Fuente has made about the impact of the A’s. If the A’s were to leave, the impacts to Oakland and Alameda County would be as follows:

  • Oakland: -885 Jobs, -$29,452,000 Income
  • Alameda County: -953 Jobs, -$32,566,000 Income

Next up, the proposed sites and impact. BTW, my initial thoughts are that the direct impacts are straightforward and in many cases quite conservative, while the indirect impacts, as usual for such reports, appear to be a bit specious.

Oakland Press Conference at 11 AM

From Let’s Go Oakland leader Doug Boxer:

Let’s Go Oakland is hosting a press conference at 11 am to release the results of an Economic Study regarding a Waterfront A’s Ballpark. Stay tuned for the actual report. We will post it after the Press Conference.

Jane Brunner will be speaking. While this is too short notice for anyone here to attend, we should have our own insight soon. More to come.

The report is available here.

Ziggy throws sliders and truth

GoJohn10 picked this up from A’s reliever Brad Ziegler’s Twitter feed:

Do people really think that boycotting baseball games in Arizona is going to eventually lead to removal of the new immigration law? All it’s going to do is hurt the D-backs. It’s not much fun to play in front of an empty stadium in your home park. We’re going through that when A’s fans boycott our games bc ownership has threatened to move the team. The lack of fans gives them all the more reason to seek other alternatives for a new home city. And the players get punished, having to play in an empty stadium for something that we have nothing to do with. You an make your opinions known in lots of ways, but ultimately, boycotting games affects the players more than the owners. Just remember, to most owners, having a baseball team is a hobby on the side. They all made their money elsewhere before buying the team.  Sorry for the political rant. Just wish true fans would seek alternative ways of protesting other than boycotting games. Don’t punish US…

Ziggy’s from the Midwest, whereas I’m a California boy through and through. But whether you went to Missouri State or UC Santa Cruz, you’ll find out via at least one class as I did: the simple truth that boycotts in general do not work. They can work on a massive scale, but at that point they’re more embargoes than boycotts. In the A’s case, there really aren’t enough fans to make a significant impact. Let’s do some simple math. If the A’s only pulled in 1 million fans this year regardless of record, attendance would’ve dropped by a third.

  • 500,000 fans x ($20/seat + $10/additional) = $15 million stadium revenue

That’ll show ‘em, right? Well, no. They’ll just get an even larger revenue sharing check next season, perhaps as much as $40 million. In the end, a few hundred thousand fans not coming isn’t going to kill the A’s. It will only make the argument for moving stronger. And if you really love the team, really really love them despite the ownership warts, because they wear green and gold and they represent Oakland, they’re worth supporting just so that the players can know that they have more than 10,000+ behind them. It is a privilege, not a right to have a MLB team grace your hometown. With every person that boycotts or is disaffected enough not to go, a little bit of that privilege ebbs away.

Questions Without Answers

With most recent poll indicating Santa Clara residents are slightly in favor of building a new stadium for the 49ers adjacent to the Great America theme park, my mind is wrought with questions.

Most of them have little to do with Santa Clara. No, I am thinking about the two teams that inhabit the Coliseum and what a stadium in Santa Clara would mean to them. In the Raiders case, the new stadium in Santa Clara could mean a few things.

It could serve as pressure on the City of Oakland to “double down” with a new stadium on the old Homebase site. It could also mean pressure from the NFL to cohabitate with the 49ers and become the Oakland Raiders of Santa Clara. This is all assuming Cedar Fair’s concerns are addressed. But really, this is all secondary in my mind.

The real questions for me have to do with the A’s, my first true love. How will a push, if one is coming, from the NFL to move the Raiders south impact the City of Oakland’s efforts for an A’s stadium? How would the 49ers unavailability to share a new stadium in Oakland impact to financial feasibility of a new Oakland stadium? Likewise, how will a Raiders push to stay in Oakland impact the A’s? Would the City be able to pull together two stadium deals at the same time considering all that is going on economically right now?

When last we checked in with the City of Oakland, there were four potential sites (the Coliseum, Howard Terminal, JLS West and Victory Court). As of now, we have no real answer to the biggest question: how much will a  stadium at any of these sites cost?

But getting more in depth, here are the questions I have about Oakland’s baseball efforts in general. Answers to these questions will go a long way toward proving “viability.” I have posed these questions to people within Oakland’s City Hall and they have yet to be answered (Not that I expect answers at this point):

  1. Howard Terminal is a site that has been around a while, and reportedly rejected by the A’s. In the recent Brunner Report, there is mention of changes in Jack London Square have made it more plausible. What are those changes?
  2. Is there any concern that converting Howard Terminal into a baseball stadium will cause problems with the Port? In an ideal situation would those berths be moved somewhere else or just go away? I understand there is a long term lease for that property as well, does that create a challenge?
  3. Shifting a bit, of all the sites in Oakland, my personal favorite is JLS West. One of the common challenges I encounter when going to Jack London Square is transportation. I can drive and park, but on a busy day that is sometimes hard. I once read a study about the possibility of Light Rail or Street Cars connecting Uptown/Broadway, Downtown and the Waterfront. Is there any movement on this? It seems like that would be a big benefit for JLS and a stadium at the JLS West site.
  4. The Public Market in Jack London Square has been delayed a few times. What is the current status of that project? To your knowledge, does the developer see a nearby baseball stadium as a good thing?
  5. This past week I was downtown for business and I decided to take a stroll from the City Center down to JLS. The empty Barnes and Noble building really made the place feel almost deserted. Is there a plan for that retail space? Potential tenants that you know of?
  6. Victory Court is an intriguing possibility. On our mock up we had the stadium angled so you could see out into the Bay and Alameda, it was quite an enticing idea. The two questions I couldn’t really answer when researching the site was, what challenge does the Union Pacific ROW present for the site? And, I read in an East Bay Express article of a coffee company that estimated a move would cost around $30 Million dollars. Are these sort of expenses already known quantities for the City of Oakland? Do you have a plan for purchasing each of these parcels and moving the businesses, or is that something you get to after the MLB Panel is done with it’s work?
  7. Victory Court is fairly close to the Oak2ninth development site. I remember there was quite a bit of back and forth about open space in the EIR process for Oak2ninth. Is there any concern that a proposed stadium at Victory Court would run into similar questions? If so, do you see them as relatively easy to overcome?
  8. What is the status of Oak2ninth? I look at the renderings online and they are gorgeous, but I haven’t seen a whole lot of activity in the area just yet. Is there a timetable for completing that project?

Answers anyone?