Schaaf aims to use public financing for Raiders stadium while claiming it’s not public financing

Libby Schaaf has crossed the Rubicon.


In further explaining her plans for the Raiders stadium (h/t SFGate/Rachel Swan), the mayor started talking about money. Schaaf explained that “she is now feeling the pressure of (NFL) deadlines,” a sign that Oakland is succumbing to the NFL’s tactics, even though she didn’t provide specifics in the NFL presentation on Wednesday. It’s unfortunate that Schaaf had to go there, but if Oakland is to genuinely provide more than the table stakes offer it was giving previously, it has little choice.

What money, you ask? Yes, there is whatever is expected in terms of infrastructure, land, and debt, but Schaaf also talked about instruments that could be used to finance construction of the stadium.

Namely, that means lease revenue bonds. What are lease revenue bonds? Here’s how the State Controller’s office defines them:

LRBs are a form of long-term borrowing the State uses to finance public improvements, including state office buildings, state universities, prisons, and food and agricultural facilities. Like a GO bond, an LRB is, in effect, an IOU. Unlike GO bonds, however, LRBs are not backed by the full faith and credit of the State, and may be authorized by law without voter approval.

While sports facilities aren’t mentioned in the examples above, they are the kinds of projects that LRBs can fund. In fact, both the Coliseum and the Arena were financed using lease revenue bonds, so the instrument isn’t new. If not structured properly, LRBs can present the same risk as the first Mt. Davis project.

GO bonds are also referenced. GO stands for general obligation, the same kinds of bonds used to fund civic projects via pledged taxes. That may be where Schaaf isn’t considering what she’s suggesting as a form of public financing, since it probably won’t incur new taxes on citizens. Instead there will probably be a number of use fees such as ticket taxes, concessions and parking fees, plus the property tax increment generated by redeveloping the project. Is that not public financing by another name? To me, yes. To others, maybe not. While it might not involve new sales taxes or new property tax assessments, the project will get plenty of other benefits: reduced or eliminated property taxes, lower borrowing costs, and reduced liability.

Schaaf also described how the Mt. Davis payoff would work: the County would buy the debt out via a lump sum payment (the County has money), while the City would pay the County back over time, perhaps using a similar payment schedule to what it pays now. That would mean that Oakland would pay on average $7-8 million a year to Alameda County, instead of bondholders. At the same time, Oakland would have to buy out Alameda County’s share of the land. I expect that it would happen via some sort of land swap since that wouldn’t require upfront cash on Oakland’s part. If no satisfactory swap arrangement can be made, then tack some money onto the annual payment City has to make to County. Then Oakland could make its money back by selling some of the Coliseum land, though that too has its issues. Neither the Raiders nor A’s have expressed any interest in seeing a great deal of development go up next door to the Coliseum as they want to preserve parking. Neighborhood groups decrying gentrification came out in force during the Coliseum City process to protest sales of public land to private developers for what will largely be market rate housing and tech offices. Those factors helped sink Coliseum City. Why would should it be different this time? Because Libby Schaaf is behind it and not Jean Quan?

Lastly, Schaaf indicated that a a successful Coliseum project for the Raiders might help push the A’s towards downtown. Considering that Wolff has HOK working on plans at the Coliseum, he’s probably not pleased by this. I mean, it’s written into the A’s lease:


Licensee and Licensor (or Licensor’s designee) shall continue to engage in good faith discussions concerning the development of a new baseball stadium for use by the Licensee that would be a permanent home for the Oakland Athletics, provided that such discussions shall solely focus on the development of a new baseball stadium that would be located on land within or immediately adjacent to current Complex property. If agreement is reached on development of such a stadium, the Parties will renegotiate any terms of this License Agreement that may need to be modified or eliminated in order to facilitate the construction of the new stadium. The Parties’ discussions concerning a possible new stadium will continue during the Term until Licensee communicates to Licensor that Licensee has made a decision on a permanent baseball stadium at another location or until Licensor provides Licensee notice of early termination (as provided in Paragraph 7.2.2.) in connection with a Raiders Construction Plan.

Should Schaaf actually convince the Raiders to stay, the A’s escape clause could be triggered thanks to negative impacts on the A’s operations. And with the amount of assistance the mayor is getting ready to give the Raiders and the NFL, it’s reasonable to expect the A’s (more likely MLB) to ask for a similar amount of assistance. Howard Terminal or any other site near downtown is going to be incredibly expensive to acquire and/or prep, not to mention new infrastructure that will be required there. If that kind of assistance isn’t pledged, well, that’s how teams start gearing up to leave, isn’t that right Mark Davis?

NFL’s LA relocation committee meeting upstaged by Iger-Carson announcement

Oakland Mayor Libby Schaaf went to NFL headquarters in New York to present her city’s case for keeping the Raiders in town. While no decisions are immediately forthcoming, it was important for Schaaf to keep Oakland in the game. Schaaf and the Oakland contingent arrived shortly before Oakland’s scheduled slot, then left the building by taking the back entrance after she was done, avoiding the assembled press in the process. Maybe the Mayor had to catch the next JetBlue flight back to Oakland or she had tickets to Hamilton, I don’t know. In any case Oakland gave its modicum effort, which was better than literally nothing.

A slide from Mayor Schaaf's presentation

Actual slide from Mayor Schaaf’s presentation

Shortly after the meeting ended, Schaaf’s office proffered this statement:

NEW YORK, NY – Mayor Libby Schaaf released the following statement following the City of Oakland’s presentation to the NFL on November 11 in New York City:

“Today’s meeting with the NFL reinforced that Oakland is correct in continuing to work directly with the team and the NFL to keep the Raiders in Oakland where they belong.

We were very grateful and excited to have the opportunity to make Oakland’s case to the NFL today. I felt it was a positive discussion and that we were well-received by the Raiders’ leadership and the other NFL owners. They were engaged and asked great questions.

Moving forward, the City of Oakland is working to defease the current bond and purchase Alameda County’s stake in the land and existing facilities. We are also beginning to analyze ways that we might monetize future revenue that could be generated from a stadium development.

We remain committed to responsibly keeping as many of our sports teams as possible. My focus continues to be on forging a partnership that supports a team-centered effort to build a new stadium for the Raiders in Oakland that will be successful for the fans and the team and responsible for the city and its taxpayers.” (11/11/15)

What was in the presentation? Mostly it rehashed the work done for Coliseum City. The preso emphasized that the Coliseum land was publicly owned and properly entitled, with a completed EIR in hand. There’s also $40 million in funding available for the planned $140 million expansion of the Coliseum BART transit hub. Beyond that there was little to crow about deal wise. Even though Schaaf isn’t promising any public money for construction, there’s still a laundry list of issues to resolve before any kind of groundbreaking. Among them:

  • Financing for an estimated $100 million in additional infrastructure
  • The buyout of Alameda County
  • Terms to cover the outstanding Coliseum debt (a City/County issue, not the Raiders’)
  • Potential funding sources: tax increment and lease revenue bonds

Those funding sources are what’s expected to pay for the infrastructure at the very least, perhaps more. Keep in mind that the top three items could cost Oakland $400 million or more depending on when the deal happens. It will difficult enough to raise those funds before even considering how to bridge the stadium’s funding gap.

St. Louis and San Diego also had their turns and made their proclamations. But before they even had a chance to plead, an announcement from 3000 miles away sucked all the air out of the room. The Carson Holdings group overseeing the joint Chargers/Raiders stadium project announced that Disney CEO Robert Iger would become a non-executive chairman, with the option to buy a minority stake in either team. Iger, who ran ABC/Capital Cities during the height of ABC’s Monday Night Football run, is a trustworthy known quantity among the league’s owners. That said, Iger is not a billionaire, with a net worth said to be somewhere in the $100 million range. If Iger were to want a piece of the team, he would probably bring in some private equity partners from elsewhere to put up whatever was needed to take care of the project cost in Carson.

For months I have stayed away from the all-too-easy horserace aspects of this story. I won’t handicap any project’s chances now. As a strategic move, the Iger announcement worked like gangbusters. The play was for legitimacy, which is impossible to deny as of November 11. Last week many in Oakland were satisfied in believing that Stan Kroenke’s Inglewood project was superior enough to Carson that the Raiders would be forced to stay by the Bay. Now only a fool would say that.

Oakland poll indicates voters are getting ready to live without some pro sports

We’re nearly one year into Oakland Mayor Libby Schaaf’s tenure, which makes it a fine time for a poll. That led the Oakland Metropolitan Chamber of Commerce to commission a poll called Pulse of Oakland. As Oakland continues experiences its own kinds of growing pains, the government and voters have tough decisions to make over the future of Oakland. As a city that has been defined by its sports teams for decades, sports will a major role in Oakland’s direction. Or will it? The poll, which asked voters to judge sixteen different issues in terms of importance, showed that pro sports came in last. As expected, crime, jobs, and education were the most important, registering for 93-95% of polled voters.

Pro sports, on the other hand, were quite a different story.


While each of the sports teams were considered important for a majority of voters, they paled in comparison to regular kitchen table issues

The Warriors are practically a moot matter by now, thanks to the progress on their SF arena. The difference in felt import between the A’s and Raiders is fascinating, not because of the percentage difference, but because the Raiders and Raiders fans have spent two years pushing Coliseum City, a project in which the Raiders were considered the feature player. Sure, Mark Davis didn’t exactly participate fully with the project. Nevertheless, Coliseum City had name recognition and media attention, whereas the A’s weren’t (and still aren’t) actively promoting anything. If there ever was any urgency towards keeping the Raiders in Oakland, it didn’t show up in this poll.

More surprising was the indication that Oakland residents may be willing to move from a sports city identity. 83% of respondents favored a Coliseum development plan that didn’t involve any new sports venues, while 60% support new stadia at the Coliseum complex.


Polls like these guide politicians at City Hall, and Schaaf is no different. She has stood firm on her pledge for no public money for any new stadia, and she’s not likely to experience any blowback anytime soon based on these poll numbers. I suspect that has to do with so much of the fanbase being situated outside Oakland city limits, where those fans aren’t Schaaf’s constituents. If there’s any worry, it’s for anyone who might eventually ask for voter approval of public financing.

Next week Schaaf will present Oakland’s case to a NFL stadium committee. She’ll talk about Oakland’s trajectory without actually having a Raiders stadium plan to show. While these poll results shouldn’t push Oakland off a cliff, they won’t bolster Schaaf’s case to the owners. In the end, we’re still talking about a $400 million funding gap for just one venue. There’s no way to talk around it.

Levi’s Stadium chosen for 2019 College Football Championship Game

Going into today we knew the first three host cities for the annual College Football Championship Game.

  • 2015: Dallas (Arlington)
  • 2016: Phoenix (Glendale)
  • 2017: Tampa

Today the host cities for the next three championship games were announced:

  • 2018: Atlanta
  • 2019: Bay Area (Santa Clara)
  • 2020: New Orleans

Cities that lost out for this next round included Minneapolis, Charlotte, and Miami. Those three, and the first three host cities, are expected to be considered for the next set of dates. The championship games are slated to be played at the most advanced NFL stadia. The semifinal games, which get a lengthier run-up due to their scheduling on New Year’s Eve, are to be rotated among six of the biggest bowl games (Rose, Fiesta, Cotton, Sugar, Peach, Orange).

Levi’s Stadium has done a good job hosting big events so far, including Wrestlemania and a heavy concert season. It may have excelled at these non-football events while not excelling at hosting the sport and team it was designed to support, 49ers football. The grass is still suspect while the fan exodus at halftime continues unabated. I would like to think that if the stadium weren’t built quite so large or opulently the 49ers would take a step back and focus more on the football, but who am I kidding?

NFL Town Halls: Three days of talking around a problem

They came, they saw, they empathized.

As part of NFL’s relocation evaluation process, the league is required to hold public meetings in the cities from where incumbent teams are threatening to move. Despite the fact none of the three teams considered part this discussion – Raiders, Chargers, Rams  – have actually filed a request for relocation (they aren’t allowed until January), the NFL decided to hold these meetings well in advance of all three teams’ expected applications to leave.

That left the NFL to announce three weeks ago that they would send a team of executives, fronted by Eric Grubman, to the threatened cities to hear from fans and discuss each city’s situation. Grubman was accompanied at each stop by fellow VPs Chris Hardart and Cynthia Hogan, plus league attorney Jay Bauman. All four sat in directors chairs on a blacked out stage, while fans sat in the lower auditorium levels, waiting to speak at podiums placed in each aisle. Politicians and team owners, even Raiders owner Mark Davis, sat among the riffraff.

St. Louis and San Diego share a common problem, in that their respective teams have not participated at all in recent stadium development efforts at home. Local sentiment reflected that, with fans lustily booing the Rams’ Kevin Demoff and the Chargers’ Marc Fabiani, both of whom have openly pooh-poohed those 11th-hour attempts in favor of stadium projects in the LA area. Feeling powerless, fans in both cities sang a common refrain: bring Stan Kroenke and Dean Spanos back to the table so that we can make stadium deals in STL/SD. And as each story about generational bonding or heartbreak was heard, the more it sounded like groveling. That’s what the owners and the NFL have reduced fans to doing: begging to keep the team in town. It’s a common story, at least in North American pro sports, and this won’t be the last time it happens. Some guy within NFL Films will be tasked with editing the combined nine hours of testimony down to probably 30 minutes that will be consumed by the collective 32 NFL owners at a future league meeting. I don’t envy that person one bit.


George Clooney and Anna Kendrick in 2009 film “Up in the Air”

Grubman, who made most of the responses to fan questions, reminded me a lot of Ryan Bingham, the slick, well-compensated corporate hatchet man from the Walter Kirn novel Up in the Air. The film adaptation in 2009 starred George Clooney as Bingham, a man who lived a thoroughly hollow personal existence while obsessing over a quest to reach one ten million frequent flyer miles. That’s not to say that Grubman’s like Bingham personally. From all appearances Grubman is a family man. He even joked in Oakland that he was missing his wedding anniversary for that night’s hearing. Nevertheless, Grubman’s ability to empathize with every fan and speaker was amazing to watch. Veterans and government employees received laudatory Thank you for your service salutations. Several times he prefaced a remark with, I know what it’s like to be a fan. It was as breathtaking and sickening a performance as I’ve ever seen – including Clooney’s, which netted him an Oscar nomination. Then again, Grubman apparently gets paid at least $4.4 million a year as an executive VP in the NFL. Like Bingham with his delegating boss, Grubman is compensated well to, among other responsibilities, take Roger Goodell’s arrows.

Davis has also been an active participant in the joint stadium effort in Carson, though Raider fans and city officials have given him some credit for participating to a degree with the now shitcanned Coliseum City project. He received a largely warm reception from the roughly 400 Raiders fans at the Paramount Theatre in Oakland. He made some opening remarks, stating that the Raiders wouldn’t answer questions at the session. Couple that with Grubman’s admission that the NFL had no solutions for Oakland, and you might think that the whole thing was a charade. You would be mostly right.

When challenged about the Raiders paying only $300 million (plus the NFL’s $200 million in G4 money) towards a $900 million stadium, Davis responded.

That’s basically what Davis has been saying for the last six months. He’s not willing to stake additional stadium revenues to make an Oakland stadium deal happen, as the 49ers did with Levi’s Stadium. Hard selling with ultra-expensive seat licenses and ticket prices works as long as the team is good, but as we’ve seen so far in the 49ers’ tenure in Santa Clara, fans will ditch the team in droves if the team isn’t competitive. Even the Raiders had trouble selling out until the upper deck of Mt. Davis was tapped off. No one wants to be left with the check at the end of the night, whether it’s Davis and his ownership partners, the City of Oakland and Alameda County, or stadium financiers. This is not a trivial amount of money – $400 million – that we’re talking about. Fans need to stop treating this issue like it is.

Yet there were calls for crowdfunding to help bridge the funding gap. Before anyone creates a Raiders stadium Kickstarter, you all should know that there already exists a sort of primitive form of stadium crowdfunding. It’s called a brick campaign. Fans buy custom engraved bricks that end up in a plaza or on a wall at the stadium. Even successful brick campaigns won’t pull in more than around $25 million, a relative pittance compared to the total project cost. The Green Bay Packers held a stock sale in 2011 to finance renovations at Lambeau Field. That effort raised $64 million, from sales of 280,000 shares costing $250 each. If the NFL allowed Raiders fans to make a similar effort (even though the Raiders are not a publicly-owned corporation), the effort would have to sell around 1.8 million shares at $250 apiece to raise $400 million (after overhead and fees). That’s simply an infeasible goal for any team, not just the Raiders.

NFL exec VP Eric Grubman stands on stage while answering a question at the Oakland Town Hall

NFL exec VP Eric Grubman stands on stage at the Paramount Theatre while answering a question at the Oakland Town Hall on Thursday

Last but not least, Oakland Mayor Libby Schaaf was in the house. Schaaf thanked the NFL and fans for showing up. Yesterday, Matier and Ross led off their column with a note about yet another consultant being brought in to put together a package that might sway the Raiders and the NFL. That package could provide infrastructure and potential tax breaks for a stadium deal. While that might sound promising, it’s really just formalizing what Oakland’s willing to offer, which is limited help and no public money. That won’t work for the NFL because the league considers infrastructure and free land little more than table stakes. St. Louis and San Diego are providing real public money towards construction, just as every previous NFL stadium project has in the past. If public money isn’t on the table, there’s little reason to expect the NFL to respond positively. Grubman explained that every stadium deal has three financing parts: the team, the league, and the local piece. Historically that local piece has consisted of public loans or bonds. The NFL has already rejected the Coliseum City plan. The NFL has its script and it’s sticking to it. Oakland is no special case here. If Oakland really wants to keep the Raiders, they need to put some skin in the game. Given what happened with the Mt. Davis debacle, that skin may end up being Oakland’s scalp. Schaaf is right to be cautious and not desperate as her counterparts have been. How do those positions get reconciled? Someone will have to give in, and the NFL has not shown a track record of making concessions.

NFL to hold town hall meetings in St. Louis, San Diego, Oakland

Image from Barcroft Media

St. Louis on Tuesday, Peabody Opera House, 7 PM CT

San Diego on Wednesday, Spreckels Theatre, 7 PM PT

Oakland on Thursday, Paramount Theatre, 7 PM PT

Stream should be available at

Commentary to come after final session in Oakland. Watch the Twitter feed for live coverage.

What to expect when you’re not expecting

Word came Friday that Floyd Kephart is out from the Coliseum City project, which, you might think, should lead to the demise of Coliseum City.

With Kephart’s negotiating rights set to expire on Thursday, the Oakland City Council and Alameda County Board of Supervisors agreed in separate closed door meetings this week to cut ties and send him a letter outlining deficiencies in his latest proposal, said several officials who asked not to be named because the talks were private.

So that’s that. The deficiencies were largely financial, as we’ve discussed ad nauseum. Having three separate groups try and fail at making Coliseum City work is a clear indicator that there’s really nothing that will make it work, at least the way Oakland wants it to. Part of that is the Raiders’ and A’s insistence on maintaining surface parking instead of allowing for a bunch of development surrounding the stadia. Another factor is the extremely limited public resources on hand, especially in the face of outstanding debt on both the old stadium and arena. The stadium debt is not only an obstacle, it is a potential showstopper. Nine figures of debt doesn’t simply get written off if you’re a municipality.


Add this rendering to the long and growing list of failed stadium projects

Oakland and Alameda County continue to talk to the teams, while also exploring a buyout of the County. Alright, before any proposals are made or any substantive talks are to begin with either team, the buyout situation absolutely has to be sussed out. The uncertainty regarding the County’s involvement, which lingered in the background for over a year before becoming a front-and-center in January and remains an unresolved issue to this day, cannot be allowed to complicate any future stadium talks. Either the County is fully out or it will be a partner. There is no in-between. If it comes up again, it will show the NFL and MLB that the East Bay can’t get its act together and can’t be taken seriously. It’s that important.

The buyout is not going to be easy. Normally these types of deals are worked out through swaps of real estate, since municipalities tend to be cash-strapped. Whether that’s workable for the County is another matter, since there is actual cash to be paid out on an annual basis by both parties. If both parties decide to follow through on the County’s wishes, I would expect the deal to be wrapped up in the next six months.

Next, all of the important players are going to have to step it up to a degree that they haven’t displayed so far. That includes:

  • Lew Wolff and/or Mark Davis
  • Oakland Mayor Libby Schaaf
  • Scott Haggerty, Alameda County Supervisor and President of the BoS (if County continues to be involved)

Wolff and Davis will have to provide detailed plans for whatever they want to build at and around the Coliseum. That’s not a problem for Wolff, since he already has HOK working on it. On the other hand, Davis has no such experience and will have to rely heavily on a third party to work out the details. That is, if the Raiders are still staying in Oakland past January. Davis is actively involved in the Carson stadium project. If the NFL puts off the LA decision for a year, or tells Davis to stay put for a while, Oakland will have no choice but to work with him on whatever stadium idea he’s thinking of. Schaaf will have to become a much more visible champion of the project, similar to what Quan did for Coliseum City. Haggerty, who was a leading public figure for the Fremont stadium project, would likely do the same here, with the possibility of fellow supe Nate Miley partnering or taking the lead. Basically, both the public and private sector will need champions, willing to bear the scrutiny and spend money/assign resources to get the project(s) through the planning process.

There’s no timetable for any of this to happen thus far. We may hear more towards the end of the year. I sort of expect the A’s to release renderings and initial plans sometime after the season ends, though I wouldn’t be surprised if that didn’t happen. Procedurally, everyone’s still at the mercy of the NFL, since it actually has its a timetable – one subject to delay – but a timetable nevertheless. Sure, the path towards a new stadium at the Coliseum is less complex with Coliseum City out of the way. Don’t mistake that as being close to a deal. There’s still an extremely long way to go, and many complications to resolve.

P.S. – I neglected to mention the status of the Coliseum land. Ten or twenty years ago, the notion of giving away or highly discounting public land in order to ink a stadium deal was considered a mere cost of doing business. It was the much more politically expedient concept to giving away both the land and a heavy construction subsidy, which most cities were and still are doing. Over the last year groups have protested giving away the 120+ acres at the Coliseum because it represents a giveaway to billionaires, while also not properly addressing the growing housing crunch and concerns about gentrification in East Oakland. What was once practically a given (as it was for the SF Giants in 1997) is now shaping up to be political land mine if not handled properly. As Schaaf and the City Council work out the land DDA (development and disposition agreement), they’ll have to be mindful of how the deal looks to the public. That’s sometimes what happens when parties (cities, teams) don’t act quickly enough. It only gets harder.