No stone left unturned
Two articles from Sunday (Chronicle: Matier and Ross, Mercury News: Bruce Newman/Sharon Noguchi) point to a special trip made to the Bay Area last week by Commissioner Bud Selig’s three-person committee. The committee, which has been studying the A’s stadium issue for more than 40 months, met with San Jose officials on Tuesday, followed by Oakland officials on Wednesday.
The M&R report indicates that Oakland’s bid is moving towards a potential deal at Howard Terminal, anchored by a $40 million sale of land there to help kick things off. Present were Clorox CEO Don Knauss and Signature Properties’ Mike Ghielmetti.
The $40 million part has me confused. To whom would Howard Terminal be sold? To the A’s or some ownership group? To other developers like Ghielmetti? For years, the minimal entry for any Oakland site had to be to take care of the land and any infrastructure at the very least. But if that responsibility has to be shouldered by whomever builds a ballpark, the price to build the venue will only get higher. Remember that at Howard Terminal, some amount of reconstruction of the site’s foundation will be required to make it safe and suitable for a ballpark and perhaps other surrounding commercial development. If the ballpark costs $500 million just in construction cost, and the land acquisition and site preparation costs $140 million, the final price tag is $640 million!
It would’ve been interesting to find out how much time Knauss & Co. spent presenting themselves as ballpark backers first before jumping to a different role as would-be owners. Assuming that they pay the full freight on a ballpark and a minimum $500 million for the A’s, they’d have to come up with $1.14 billion for the whole package. That’s a tall sum just to keep the A’s in Oakland, no matter how it’s sliced. A downtown site such as Howard Terminal was expected to be more expensive than the Coliseum because of the added complexity in pulling off the deal, but is that difference (at least $100 million) worth it? It’s hard to pass judgment on Howard Terminal until we know more specifics. Nevertheless, at this point the committee is probably of many of these details, and that will be important for MLB’s continued evaluation.
Last Tuesday’s meeting with San Jose seemed to be a more ho-hum affair, with the exception of the presence of Brad Ruskin, a very prominent lawyer who has at one time represented all of the major pro sports leagues other than Major League Baseball (he has also represented some MLB clubs). One of his specialties is antitrust law, and he is a trial lawyer, so his presence may be to show that he could represent MLB in an antitrust case if push comes to shove. Opposing Ruskin would presumably be Allen Ruby, who the A’s brought on board earlier in the year.
For his part, Lew Wolff continues to be defiant in the face of questions about selling the team. His angle is that, unlike much outdated criticism about his previous efforts to put together a ballpark deal in Oakland and Fremont, his plan is simply to build a ballpark. Ancillary development using surrounding land is becoming more increasingly difficult to pull off, yet that’s the formula being espoused by all of the Oakland bids: Howard Terminal, Coliseum City, and Victory Court. The committee has to be taking all of this into account.
Another factor is State Controller John Chiang’s review of the land transfers between San Jose’s defunct Redevelopment Agency and the son-of-redevelopment San Jose Diridon Development Agency. If the transfers are upheld, Santa Clara County has indicated that it won’t make any further challenges to the land deal so the ballpark could conceivably move forward. If the transfers are ruled improper, the land would go to the the redevelopment successor agency, which would subsequently auction off the land. The land would be sold to the highest bidder, who may be someone other than Wolff. Keep in mind that San Jose would still hold the final trump card as it was would have any final determination over what could be done with the land. As much as AT&T claims that its land is of paramount importance to its service delivery model, they’d have sold the land years ago if it could’ve been rezoned to medium-density residential as was considered a decade ago. In any case, Wolff seemed confident that he’d be able to get the land however Chiang’s office ruled. That ruling is due in the next couple of weeks.
The cynic in me looks at this trip with a simple explanation. Summer owners’ meetings are scheduled for next week, and while there will be more pressing matters on the agenda (Padres sale, national TV deals, Nats-O’s-MASN deal) it’s expected that there will be some sort of update on the A’s-Giants ongoing saga. What better way to look like you’re doing something than to have a couple of meetings right before the owners’ sessions? It seems unlikely that Selig will be able to render a decision or bring up a vote based on whatever new information was gathered based on the trip since it’s so fresh, so it’s just one more opportunity to kick the can down the road – at least until November. In the meantime, whatever’s happening to the A’s on the field can take precedence, and that’s not a bad thing at all.