Category Archives: Editorial

Settlement could move Howard Terminal forward

Previous posts about Howard Terminal:

Later today the Port of Oakland’s Board of Port Commissioners will hold a meeting, during which an important settlement with SSA Marine will be discussed. This settlement is important as it should resolve the biggest legal obstacle hanging over Howard Terminal. The settlement discussion is a closed session item, so the terms weren’t made publicly available. Still, there’s no reason to think that the terms won’t be approved as the parties apparently have been in discussion for some time, and would probably prefer to avoid further litigation (which could run through next year).

Howard Terminal overhead shot with Jack London Square nearby

During the Don Knauss interview, he mentioned that environmental concerns were overblown. To wit:

We’ve done the diligence there as well and been assured by experts that a ballpark can be built on that site without a substantial cost associated with cleanup. Basically we can build a ballpark on top of that site without having to scrape the site clean like AT&T was built on (China Basin).

Wait a minute. China Basin was built without having to scrape it clean? Actually, it was scraped clean. Site remediation was done by the Giants, not the City or Port, and reimbursed to some degree by the federal government via the Federal Brownfields Tax Initiative. Piles were driven deep into bay mud (fill) to provide a proper foundation. Knauss is suggesting that a Howard Terminal ballpark can be built without replacing the fill currently at the site or even piercing the asphalt cap designed to contain the site’s contamination. I’ve heard this claim before but not the plan behind it. Naturally I have to be skeptical of this claim. China Basin and Howard Terminal are similar enough that it’s hard to conceive of how this would work.

AT&T Park’s foundation was built the many expected: land was cleared, cleaned up, and piles were driven to support the stands and ancillary buildings. This was required because China Basin sits in an extreme liquefaction zone. Howard Terminal also sits in an extreme liquefaction zone, which would presumably mean similar measures to China Basin would have to be undertaken. The difference with Howard Terminal is that the State of California put the asphalt cap over the contamination over a decade ago instead of cleaning it up completely, a process which would’ve cost $100 million ($131 million in 2012). That cost has long been the biggest source of the site costs associated with Howard Terminal.

Then again, maybe Knauss and the Oakland backers have a clever, innovative plan that would not require piercing the asphalt cap, or at least minimizing the number of intrusions. That would probably require building a smaller number of larger sized footings at the site, then constructing an above grade podium on which the ballpark would be placed. If that sounds familiar, it’s because Bryan Grunwald proposed a similar approach at his 980 Park site. There’s no concrete estimate of the cost of such a podium, but I’d expect it to be at least $100 million given the the size and load it would have to carry. That could conceivably be cheaper than cleaning up Howard Terminal. Would it be that much cheaper? We’re talking about building a ballpark in a liquefaction zone. There’s no room to cut corners.

Another issue is the amount of planned infrastructure. Again, Knauss claims that costs are being overblown. But he also acknowledged that parking would need to be provided on site, which makes sense given the lack of parking in the immediate area (only 1,200 spaces within 1/3 mile). And if more parking is to be provided on the 50-acre Howard Terminal site, more infrastructure has to be built to bring cars into the site. I had previously suggested two overpasses, one for vehicle traffic and one for pedestrians. Add those to the podium, other site improvements, and additional improvements to the area north of HT, and we’re talking about an estimate north of $150 million. Maybe it’s less, maybe they’ve come up with something really innovative. The problem is that quality engineering is expensive and requires expensive materials. Heck, even bad engineering can be really expensive.

Finally, there’s the lingering question of Who will pay for it? The Giants paid for their site cleanup, got a tax credit from the Feds, and received a minimal amount of TIF funds for the surrounding area. If Knauss is suggesting the same kind of deal to Lew Wolff, it’s a nonstarter. That’s around $650 million worth of risk, 95% of it to be borne by the A’s, with little promise of the kinds of returns the Giants got at China Basin. (Note: Walter Shorenstein thought China Basin was so risky that he divested his share of the Giants, and many within The Lodge looked askance at the plan.)

Maybe, just maybe, Knauss and his people have this figured out. Maybe there’s a creative way to make this all work for everyone. Again, I’m skeptical. Many of the same claims were made about Victory Court, and that site was swept under the rug with barely a peep.

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P.S. – We haven’t even touched the transportation gap at Howard Terminal (BART or the mythical streetcar). Or whether the City, Port, and County would create yet another joint powers authority. Or lease terms. Or the lack of redevelopment funds for surrounding area improvements.

Is your city disrespected? Nobody cares.

After Tuesday’s Game 2 of the Bay Bridge Series, CBS Sports national baseball writer Jon Heyman jostled the hornets nest that is the Oakland faithful with this tweet:

That brought a furious wave of replies, including some by current A’s players such as reliever Sean Doolittle.

Of course, numerous fans came to the defense of the Coliseum, citing certain sightlines that are better than at AT&T Park (only a few) and the more raucous crowd. I tried to sum up the general sentiment with this tweet:

Now let’s set the table for the discussion to follow. This is Newballpark.org, after all.

  • The Coliseum is, in fact, outdated and a replacement is needed for the long-term viability and competitiveness of the franchise.
  • The long-time, hardcore fanbase has stayed loyal thanks to not being priced out of attending games, despite ownership’s general indifference towards them.
  • Attracting casual fans to games is difficult unless the team is playing extremely well (sometimes) or the opponent is a good draw (Yankees, Giants, Red Sox).
  • The experience of attending a game is not luxurious in the slightest, but it can be very energetic and entertaining.
  • Fans debating about the future of the Athletics mostly squabble over the site of the next A’s home, whether it’s in Oakland, San Jose, or elsewhere in the Bay Area.

Heyman’s uninformed opinion is sadly reflective of much of the East Coast (Northeast) media, which still holds onto the notion that in the Bay Area, San Francisco is “The City” and everything else is a satellite orbiting around it.

Nevermind that Oakland has undergone significant upheaval over the last several decades, or that San Jose has grown to become larger than SF. San Jose remains sleepy and banal, Oakland dangerous and difficult. It takes more than a generation or two to shake a reputation, especially when there are forces at work to maintain certain aspects of that rep (crime, politics, growth policies).

A look back at Frank Deford’s 1968 Sports Illustrated article shows that things haven’t changed that much in terms of perception from the outside. It was during that era that the other Bay Area cities started to puff out their own chests and brandish their own civic pride. That pride led to Bob Nahas getting the Coliseum complex built. It also fomented a backlash against SF, according to late Warriors owner Franklin Mieuli:

“Now, everybody’s thinking is reversed. People feel they must swallow local pride to come to San Francisco. Or they’re indignant. You know, ‘Why the hell should I have to go to San Francisco?’ People come from halfway around the world, breathless, to get to San Francisco, and the people around here are annoyed if they have to go 15 minutes.”

After 45 years, much of the country and the world doesn’t know about this, and more importantly, they don’t care. New York and Chicago have had more than a century to build rivalries among boroughs or along north-south divides, and there’s plenty of documented historical support to back them. Allowing the Warriors and Seals to carry the generic “California” or “Golden State” monikers only steeled Oakland’s collective resolve. Defenders of cities can scream to the high heavens about their town being disrespected. Most casual observers have little empathy when other issues take greater import. Outsiders don’t know that these days, the only true satellites of SF are the Peninsula and Marin County.

Yet the lion’s share of tourist attractions and cultural resources remain in SF. Since the 60′s Silicon Valley become America’s (and the world’s) tech capital, and Napa Valley became the American focal point of the wine industry. Tract homes replaced farms and fields. Ever-growing freeway systems and disorganized public transit systems were built to meet citizens’ needs.

During the decade from 1972 to 1981, Oakland teams won six championships: 3 by the A’s, 2 by the Raiders, and 1 by the Warriors. None really changed much for Oakland as a city, though it did solidify the teams’ fanbases to various degrees. Even when Al Davis took the Raiders to LA, Oakland officials plotted for years to lure him back – and they eventually did.

Oakland has garnered exactly one title since Al left and none since he returned. If the point of having teams winning championships is to build civic pride, the luck hasn’t been on Oakland’s side. Is there anything that can be done to correct long-held misconceptions? Probably not – at least not immediately. Civic leaders can try to build a ballpark or arena downtown, and most have used forms of redevelopment to remake rundown parts of their cities, often with mixed results. Sure, there’s a nice ballpark in Cleveland, but it’s still in Cleveland. The new ballpark in Miami has done little to change the prevailing notion that it isn’t a baseball town. Phoenix has both a ballpark and arena, but outside of events at those venues people would rather go to Scottsdale.

Al Davis, in the 60′s light years ahead of his peers and others in terms of strategizing football, proved sagelike when it came to thinking about cities in the Deford article.

“Haven’t we passed the point of who is Oakland and what is Oakland?” he asks. “Too many people are still living on local color. They can’t see past the Golden Gate. They keep telling me: ‘Hey, we showed those 49ers.’ I have to say, ‘Look, can we show Green Bay? They’re the epitome of football. Green Bay, not San Francisco.’ “

Then again, what happens when the champion IS San Francisco?

P.S. As for the Coliseum, I figure I’ve written about it ceaselessly for 8 years. The issue is really up to MLB at this point. Does the Lodge want to force “progress” via a new ballpark that will inevitably price out many of the fans who currently are a big part of the A’s image? Is the status quo fine for now until whatever form progress takes is fully formed? And who will foot the bill for the Coliseum’s replacement? The bitter truth is that MLB doesn’t care much for the $12 fan, preferring to kick them to the upper deck corners where The Lodge thinks they belong. If someone protests, The Lodge can simply point out that the A’s pull in $30+ million a year in welfare and that Oakland fans should be grateful they still have a team within city limits. Progress, however it comes, will satisfy some and alienate just as many. Unreserved bleachers will become $20 reserved seats. Tailgating opportunities will be reduced. Section 317 will be much higher. At the same time there will be myriad improvements. A beautiful field throughout the whole season. Less foul territory (the most spun thing among A’s fans ever). Facilities that will make marquee players want to stay or sign as free agents. Functional scoreboards. Better food on the concourses. I have seen these things, I have experienced them, and they are good. In the end, it’s as much a choice for fans as it is for MLB. If we’re priced out of the seats that we currently have, how do we react? Do we swallow the higher prices? Go to fewer games? Pick worse sections? There is a price for all cities to be major league. In one way or another, everyone pays for it.

Might as well dream big

Coliseum City strikes me as the City of Oakland’s equivalent of playing a big lottery like Mega Millions or Powerball. The chances are infinitesimal at best, yet they can’t win if they don’t play. So they’re putting in a few million dollars to get some studies done in hopes of a lot of circumstances falling very neatly for them to keep the three current tenants at the Coliseum complex.

Never was this more evident than in the Oakland Planning Commission meeting on Wednesday, when the City gave more details on the plan. It’s expansive, to put it mildly.
  • 68 – 72,000 seat NFL stadium with 1.8-2.2 million square feet of space, covering 12.6 acres
  • 35 – 39,000 seat ballpark with 1.2 million square feet of space, covering 12.3 acres
  • 18 – 20,000 seat arena with 850,000 square feet space, covering 5 acres
  • 14 million square feet of office, R&D, commercial, and retail space
  • 6,370 housing units
  • 15,000 parking spaces at Coliseum site (mostly through garages, existing site has 10,000 spaces)
The word expansive is often trailed closely by the word expensive. At a conservative $150 per square foot, the non-parking buildout alone hits $2.1 billion, closer to $3 billion when including the additional stadium development costs. Either is an astounding figure, and for anyone who actually operates in the commercial real estate development world or has even basic knowledge of the Oakland market, a truly puzzling one. This is redevelopment era thinking in a post-redevelopment world.
Coliseum City Specific Plan

Coliseum City Specific Plan

The facilities described in the project summary would be among the largest and most expensive in the nation respectively. The football stadium would rival Cowboys Stadium in scope, and while there’s no mention of a dome, there’s no way to get the kind of flexibility the City is aiming for without a dome. Cowboys Stadium was built with a $300 million loan from the City of Arlington, yet City Administrator Fred Blackwell “defiantly” stated that the era of publicly financed stadia was over. All Mayor Jean Quan talks about so far is EB-5 funding or grants to provide infrastructure. Infrastructure will probably end up being 10% of the cost of the project in the end. From the looks of things that will include:
  • A new transit hub, including a widened, more pedestrian-friendly bridge from the BART station to the stadium complex
  • Two additional bridges that span I-880 to the arena and greater development west of the freeway
  • An elevated, landscaped public space that connects everything
  • A revitalized Damon Slough
  • A new water inlet leading from San Leandro Bay to the arena
  • Many new garages
Just this list of items is going to run into the hundreds of millions of dollars. It’s a lot of new concrete construction – particularly the bridges, plus land acquisitions, and reshaping of waterfront areas. And let’s also consider the whopping 6,310 housing units. That’s twice as big as the finally reborn Brooklyn Basin project and nearly two-thirds of the way to Jerry Brown’s famed 10k plan, which was largely done under redevelopment. And note that in the map there’s a Ballpark District, which contains housing. Any chance of that getting built if the A’s aren’t there? Not likely.
Furthermore, how on earth is any of this going to be paid for? Something has to drive private development to gamble its own money on the other 90%, and it’s not clear what that is. East Bay Citizen noted that a meeting of East Bay business luminaries will be held to assess corporate capabilities in the region for the Raiders stadium. That’s a start. The stadium will be at least $1 billion to construct. Understand, however, that the East Bay alone isn’t going to cut it. Anyone without blinders on knows that the East Bay’s corporate strength is not a strong suit. Similar to what Kevin Johnson did in Sacramento, East Bay interests need to attract a lot of money from within the Greater Bay Area and outside it to convince anyone that the stadium is feasible. It’s going to be even tougher because the stadium will be twice as expensive as the planned arena.
Some on the Planning Commission rightly asked about how anything would be paid for, a question that went without a real response. Oakland officials can keep talking hope and pie-in-the-sky concepts as much as they want. They can only duck behind that for so long. Eventually they’ll need to reveal the price tag. When they do, they’ll have no place to hide.

I get into it with Kawakami again

This debate happened shortly after Buster Posey’s incredible contract extension was announced.


Good debate with Kawakami. On a related note, I made this observation when I heard the news:

Playing the FUD game

Earlier today, a report from an Orlando sports talk show cast doubt on the Seattle Hansen-Ballmer bid, because according to the report, the $30 million nonrefundable deposit was never paid by the February 1 deadline. The “news” created a minor kerfuffle as fans and media in Seattle and Sacramento tried to make sense of it.

A few hours later, outgoing Kings co-owner Joe Maloof chimed in with his first statement to the media in months: The $30 million deposit was, in fact, paid.

The Orlando talk show host, David Baumann, hasn’t updated his story or tweeted any kind of response to this clarification. By the end of business Wednesday, the focus was on Sacramento Mayor Kevin Johnson’s State of the City speech on Thursday, during which he is expected to reveal names from the local ownership group (a.k.a “whales”).

Wednesday’s histrionics were a classic example of FUD (Fear, Uncertainty, Doubt). Someone misreports something or leaks info that could prove damaging to a competitor. The same thing happened last week with Deanna Santana’s gaffe regarding Lew Wolff’s Coliseum extension letter. Misinformation grabs headlines and spreads throughout the country and industry quickly. Timed strategically in an ongoing campaign, FUD can generate enough negative attention to sink many projects and initiatives.

That brings us to Andy Dolich, who has taken on the role of Comcast Sportsnet Bay Area’s “Business Insider”. As an experienced executive in the NFL, NBA, and MLB, Dolich is well-positioned to speak authoritatively on such matters. He’s seen it all – teams thriving (80′s A’s) and floundering (49ers, Vancouver-Memphis Grizzlies), franchise moves (Grizzlies again), and new venue development (also Grizzlies). He’s extremely well-connected and is still well-networked in the Bay Area, where he maintains his office in Los Altos.

At CSN, Dolich has taken on the role of Doubting Thomas regarding two of his former employers that are seeking new homes in different cities. The Warriors are planning their San Francisco waterfront arena, going so far as to ask for state legislation to help ease some of the red tape they’ll inevitably face on the road to a new venue. The A’s continue to be stuck in Lew Wolff’s quest to move the team to San Jose, dogged by the Giants territorial rights and uncertainty regarding the team’s (and city’s) ability to take all of the necessary steps to make the move. Time and time again, Dolich trots out claims that both projects, just like the 49ers stadium, will be too expensive, too fraught with legal booby traps, too difficult to pull off. He’s probably not intentionally doing this under some unsaid agenda, but what he’s doing right now is spreading FUD. It’s FUD that provides a glimmer of hope to Oakland fans and politicians hoping to keep teams at the Coliseum. Absent any real details for Coliseum City, it’s not difficult to see why some would latch onto negative notions of competing visions as hope.

For years, Dolich has been upfront in his desire to see teams stay in their cities, whether we’re talking about the Bay Area teams or the Sacramento Kings. Strangely, while he willingly presents a case for why a move can’t happen due to various obstacles, he nearly glosses over reasons why a team could stay long-term. Sure, Cisco Field could cost $600 million or more when factoring in all of the prep work. But an Oakland ballpark won’t? Howard Terminal’s costs will be huge and could spiral out of control just like Victory Court. A ballpark at Coliseum City, even if it’s by itself with no other tenants, will have to factor in the $100 million albatross of Mt. Davis debt. That’s not FUD. That’s reality. FUD comes from a vacuum of information related to any particular situation. Dolich even makes the mistaken claim that Cisco Field would require an EIR, even though one has been certified twice by San Jose to cover different capacities and use cases. That heavy lifting is over, with only an addendum required to address the actual stadium in finished form.

Going back to the money issue, that’s where we on this site frequently bang the drum against Oakland. It’s no secret that Oakland itself is an economic weak link compared to the powerhouses in San Francisco and the South Bay. When we talk about the uphill battle Oakland faces, that can be interpreted as FUD. Even so, it’s a consensus view that has been confirmed by city staff as recently as last week. Locals know it, the national media knows it, everyone knows it. It’s incumbent upon Oakland and its supporters to change that perspective – not by talking up the city, but by taking real actions to make people believe in the city. In the end, team owners need to figure out how to pay for their privately funded facilities. To cast doubt on Oakland may seem unfair, but it’s not as if it comes from a position of naïveté. Down in San Jose, we’ve talked about the challenges for some time: redevelopment, lack of city funds for infrastructure, territorial rights, land remaining to be acquired. Daunting as those may seem, they can be overcome via procedural means and nominal investment. That’s different from Oakland, where economic concerns make investors skittish about the market. It all boils down to a simple question: If you’re going to spend $500+ million on a stadium and you can’t depend on a public subsidy, wouldn’t you want to put the stadium in a place where you can ensure you can pay it off? If MLB has concerns about Wolff hitting projections on a San Jose ballpark, what must they think about the prospects of a ballpark in Oakland?

As long as we don’t see ground broken on a ballpark for the A’s, the war of words and FUD will continue. When San Jose Arena was built, the FUD surrounding the project quickly died. Same thing for AT&T Park and now the 49ers stadium in Santa Clara. The only way to kill FUD is to prove that that it’s baseless. By working. By thriving. By building.

Shaikin stirs it up again

Amidst all of the Lettergate hubbub (credit to Mike @muppet151 for the term), now comes an article from LA Times writer Bill Shaikin called MLB gives tentative guidelines for potential move to San Jose. There’s nothing revelatory in the article, and nothing to indicate that anything would happen soon. Yet the headline, much like this headline, seems aimed to inflame or at the very least act as clickbait.

Then again, the information seems to back many of the assertions I made when I wrote about the territorial rights saga last month. Whether there’s real fire to this smoke or this is part of an ongoing misinformation campaign (also exercised by the other side), we won’t know for certain until it’s all over.

This got me thinking about how much compensation should cost. Shaikin notes that determination of any compensation award would be entirely within the purview of the commissioner’s office. Then it occurred to me that when Lew Wolff presented the San Jose concept, it was thought that the A’s might move to San Jose after the current Coliseum lease expires, or the 2014 season. With the A’s unlikely to be able to move until 2018, that’s four full seasons of forgone revenue at Cisco Field, while the Giants continue to lap it up at AT&T Park. That “opportunity cost” is offset somewhat by ongoing revenue sharing in Oakland, which would go away after the new ballpark opened.

With the Giants able to maximize their hegemony over the region and the A’s continuing to limp on at the Coliseum, any thought of the A’s being any kind of financial threat to the Giants has evaporated. And that, right there, may well be the compensation in a sort of unstated, off-the-books form. An extra $40 million to the A’s via San Jose doesn’t necessarily mean it’s $40 million less for the Giants. But it does mean that no money moves in the current situation, which is just fine with the Giants. $160 million for those four years, without Bud Selig having to make the tough decision? Sounds like how baseball would work.

What would happen in 2018? That would be up to whoever is the commissioner, probably not Bud Selig. Maybe there’s some nominal amount of compensation. My argument for a while has been that there won’t be, not because of what Wally Haas did for the Giants 20 years ago, but because MLB and the owners don’t want to set a price for a territory. Doing so would set a precedent for future moves into other territories. In the Giants-A’s case, the situation is unique enough to be difficult to duplicate, and by not setting a real price for Santa Clara County, the owners don’t create a market.

I’m not the only person who thinks compensation will be a trivial matter:

 

This is one of those times I wish I had a time machine so I could tell you how it works out. For now we wait. Forever we wait.