Happy New Year! Stan Kroenke and Inglewood have an LA stadium plan

Update 10:50 AM: The NFL released a statement that doesn’t actually address Kroenke or Hollywood Park, at least not until 2016. From league spokesman Brian McCarthy:

“No team has applied for relocation and there will be no team relocations for the 2015 season. We are committed to working towards having franchises that are strong and successful in their existing markets. Any decision on relocation in 2016 or later is subject to approval by the 32 clubs.  An affirmative vote by 24 of 32 clubs (three-fourths) is required.”

Overhead of plan:

New Hollywood Park plan with football stadium

New Hollywood Park plan with football stadium

The LA Times’ Sam Farmer and Roger Vincent have a bombshell to start your week: Rams owner Stan Kroenke is partnering with the capital and master developer behind Hollywood Park to add an 80,000-seat football stadium to the current plans.

Artist rendering of Inglewood’s City of Champions project, with NFL stadium in background

SF-based Wilson Meany is the development partner (think of JRDV for Coliseum City), with plans already in the works. Adding Kroenke’s recently acquired 60 acres to the adjacent 238 acres brings to total development to nearly 300 acres, a massive complex of easily redevelopable land, 50% more than the refocused vision in Oakland. Wilson Meany already has experience redeveloping a race track, having redone Bay Meadows in phases going back a decade. Bay Meadows is a much smaller site than Hollywood Park at 83.5 acres.

Stockbridge Capital, also based in SF, is a large real estate investment that often sinks its teeth into large projects. Stockbridge bankrolled Bay Meadows, hotels in Las Vegas, and more staid assets like office parks throughout the country. It’s a bit ironic that two SF companies are partnering on Hollywood Park, whereas a consortium of mostly SoCal interests are behind Coliseum City.

Kroenke's land is between the Forum (upper left corner) and the large race track.

Kroenke’s land is between the Forum (upper left corner) and the large race track. Note plane flying overhead.

Anyone who reads this site is well aware of the Rams’ current situation in St. Louis. The football team beat the operator of the Edward Jones Dome (a public authority), which entitles the Rams to $700 million in improvements – or a completely new stadium if renovation doesn’t make sense. This was thanks to perhaps the most team-friendly lease in pro sports. A package of renovations was not approved by the City, putting the Rams into a year-to-year lease with no penalty for leaving. As the rumor mill of teams escaping to LA heated up, St. Louis civic and business interests including a former Anheuser-Busch exec put together preliminary plans for a stadium near the Gateway Arch along the Mississippi River. Financing is unclear, with another decade of debt still remaining on the existing Dome in addition to new stadium debt (sound familiar?). Chances are that the State of Missouri will have to be involved in the same manner they’re involved currently, to the tune of a $12 million annual subsidy. St. Louis, meet Oakland. Create a support group.

Teams still won’t apply to move for 2015, as Roger Goodell is pulling the strings here. Instead, this move and maybe another by AEG down the road will ratchet up pressure on St. Louis, Oakland, and San Diego to deliver stadium deals in short order. Inglewood intends to put full Hollywood Park plan before voters this November. Having rejected the Chargers’ desire for a downtown stadium near the convention center and Petco Park, San Diego has a tall order to come up with a satisfactory plan for all parties before the calendar turns to 2016. It’ll be interesting to see how Rams ticket sales are affected by this announcement, since it’s Kroenke, not some third party, doing it.

The Raiders’ lease at the Coliseum has already expired, and the team has given indications that it wants a new short-term deal. Mark Davis prefers a repeat of the previous lease, a 1-year deal that forgoes previously-desired stadium revenue streams in favor of maximum flexibility. Knowing that and the ticking clock, will Oakland put up much of a fight as it did in last summer’s drawn out negotiations with the A’s? It seems unlikely. Oakland has precious little leverage at the moment, especially as it tries to work on plans with both the Raiders and A’s, football team in the driver’s seat.

With the Inglewood announcement, the NFL’s grand plan comes into clearer view. The league has been very hands-off with the teams and cities over the last 1-2 years, allowing their respective political processes to play out. Rules required teams to make good-faith efforts towards new stadia in incumbent markets, all done in various ways for all three teams. St. Louis dared the Rams to go to arbitration and lost badly. San Diego let its convention center’s interest override the Chargers and lost the script on a football stadium. The Raiders stayed involved to a minimal degree with Coliseum City as that project flailed repeatedly. Now the NFL, through its relocation team, can start to hammer cities with demands. If those demands aren’t met, well, hopefully those respective mayors have made the proper political calculations as to what football stadium subsidies mean to their tenures.

2016 has started off with a bang. Meanwhile, Lew Wolff sits back and waits.

P.S. – BTW, if you haven’t kept up on Bay Meadows, it’s not nearly finished. Development was kept on a slow track thanks to the recession and a desire for controlled growth. Phase II is underway.

Maybe the 49ers should’ve built a dome instead

Remember the famed groundbreaking for the 49ers stadium in 2012? It was a joyous regalia, with red carpet for VIPs and an artificial turf field where the grass field would eventually be placed. Little did the 49ers and Santa Clara know that the fake grass would end up being the best-looking field all the way through the stadium’s first year of existence.

If they only knew how it would work out 30 months later...

If they only knew how it would work out 30 months later…

Tonight, a crowd resembling an late-April A’s game at the Coliseum “filled” the seats at Levi’s Stadium for the Foster Farms Bowl. Despite being local, Stanford’s small student body and alumni base was not going to buy the team’s 9,000-ticket allotment. Maryland, having jumped from the ACC to the Big Ten (oops, B1G), is not a great football power whose fanbase travels well. Add to that the thoroughly abused field, plus blustery winds and a chill that were far more reminiscent of the ‘Stick than of sunny Santa Clara (remember how fans were frying in the seats in September?), and the optics more than a little disappointing. The only notable thing, other than the Cardinal’s offense actually looking cohesive, was Foster Farms’ sponsorship of the whole affair, punctuated by animatronic chickens singing 80’s karaoke favorites during the commercial breaks. The bowl’s executive director expressed hope for a Cal-Michigan matchup next year. I’ll go out on a limb and guess that Meeeesh-igan, for some reason, won’t end up as low as 6th (thereby qualifying for the game) in the B1G next season.

Somehow, nearly everything about Levi’s Stadium has ended up disappointing in 2014. The field has been bad enough to be planted five separate times. A stadium that loudly touts its LEED Gold certification can’t properly grow grass. That should change for 2015 with new dirt and sod, if not the roof deck may have heads on pikes as featured attractions. The late summer heat chased fans to the concourses, leading to empty seats. The 49ers were shut out in their first home preseason game. As the team continued to disappoint on the field, novelty and public curiosity wore off, leading to even more empty seats and a lot of head-scratching about the venue. The Pac-12 championship game was poorly attended. The Foster Farms Bowl was even worse.

Was Levi’s Stadium too luxurious? Yes. Did it lack character? Absolutely. Was it worse in ways you wouldn’t anticipate going in? Sure. Can it be fixed? Perhaps not to the degree everyone would like.

The irony of all this disappointment is that considering the >$1.2 billion spent on the stadium, they could’ve put a dome on the thing and fixed a good number of those problems. An enclosed stadium with a roof fixes the summer heat and tonight’s wind, and it could be done without needing climate control, a la Safeco Field. It probably fixes the grass problem, since the stadium would have either Field Turf or a grass tile system like in Houston, so no grass debacle. Yes, a retractable dome would kill the open feel of the stadium. The flip side to that argument is that the footprint would have to be more compact, with fans closer and a more intimate setting.

And like other domes, which attract Final Fours and multiple Super Bowls without weather worries, a domed Levi’s Stadium would be a more flexible venue overall. I recognize that a dome – retractable or fixed – is anathema to building in the Bay Area, where the very site on which Levi’s Stadium sits was once part of the incredibly fertile “Valley of Heart’s Delight.” If anything, we’ve found out that the environment, and human reaction to the environment, are much more fickle than we’re initially willing to admit. An add-on dome is not a realistic option for Levi’s Stadium, considering the limited space around the stadium to support it and the way it was built in the first place. Seat licenses make midfield ticket holders just as likely to retreat to the clubs or not show up at all if they don’t feel it’s worth it. There’s little the 49ers can do at the moment to fix it, though I expect them to experiment a lot on different types of service going into next season.

Levi’s Stadium inaugural season hasn’t gone the way Jed York would’ve wanted. Neither has the team’s collapse. Fixing the 49er fan experience means more than merely providing new amenities to escape to. It means providing value for every fan in every seat location, everywhere throughout the stadium. Providing solutions for that problem will require some Silicon Valley ingenuity, but more importantly it will require swallowing some pride and getting back to basics. That’s innovation that not many companies get right, whether in tech, sports, or hospitality. I’ll write more about what that could entail – for football and baseball – in the new year.

With LA off the table for 2015, what will Oakland and the Raiders do?

The Chargers chose to stay in San Diego last week. Over the weekend, word surfaced that the NFL would not approve any LA relocations for 2015. So for now, St. Louis, Oakland, and San Diego have year’s reprieve. So despite the fact that Coliseum City doesn’t have a deal in place, Oakland’s self-imposed deadlines will come and go with nary a penalty.

Yet it’s little more than cold comfort, as the delay was either caused by the NFL’s and AEG’s need for more time, or perhaps just as likely, certain teams’ need for more time. Either way, the process is not driven by anything happening within the current home cities. All three cities are looking at huge nine-figure subsidies, with little actual desire to deal with the reality of it. Even if the cities give away land, it’s still a tangible asset that’s being given away.

Incoming Oakland Mayor Libby Schaaf will have a number of options available to her and the City Council. If the City likes Floyd Kephart’s work in salvaging the project, they can extend the deal for another 6-12 months, which may be enough to get the Raiders and investors on board. Coliseum City’s EIR work can continue unabated, and there’s no longer any immediate pressure to make a deal. As mentioned previously, shrinking the project from 800 acres to 200 is nothing but good for its feasibility. No need for new bridges across the Nimitz, a new arena, or a trolley. Conversely, it also means that “giveaway” resource of land is more scarce. At the very least it allows for better focus on what can and should be done.

Schaaf beat Jean Quan and Rebecca Kaplan with her cheery pragmatism. That will be put to the test once talks start up anew. It would be safe to assume that with the A’s not in jeopardy, any alternative plans Lew Wolff has for the Coliseum area can be safely placed on the back burner by letting Coliseum City play out. The JPA still needs to hire a GM/Exec Director to lead negotiations whether they’re facing Floyd Kephart or Lew Wolff, so that’s the JPA’s biggest priority. Schaaf has maintained in interviews that she sees the impact of 82 baseball games as much greater than 10 football games. That said, perhaps she could be swayed towards some flexible aspects of the Coliseum City proposal, especially if there’s a retractable dome involved.

That brings me to the fundamental problem facing Oakland: How much stadium do they want to build? If they want to build a flexible venue that will bring in a Super Bowl and a Final Four and other indoor events, the potential price tag will easily surpass $1 billion, perhaps reaching $1.5 billion by the time it’s completed. And with every $100 million over the current $900 million cost estimate, that’s another $100 million added to the still-unresolved funding gap. It adds up in a very painful way.

Despite the uncertainty surrounding the team, Raider fans feel they have one over on 49er fans thanks to Levi’s Stadium’s inauspicious debut. The Raiders getting over on the 49ers two weeks ago is practically Super Bowl-worthy in the Raider Nation, and the 49ers’ turmoil, highlighted by Jim Harbaugh’s impending departure, only serves as a second helping of schadenfreude. Of course, if the Raiders and Oakland get the Coliseum City stadium deal done, they’ll face the same problems the 49ers faced. Longtime season ticket holders will be displaced and relocated to less desirable seat locations as preferred spots go to corporate interests. The crowd will change in noticeable ways, just as it did for the Giants, Jets, 49ers, and Cowboys. The Raiders don’t have to worry about burning through a season ticket waiting list, making tickets less of a seller’s market.

If there’s a lesson to be learned, it’s that right-sizing the stadium has huge benefits. As the second team to official tarp off Mt. Davis, the Raiders didn’t suffer through the constant PR war the A’s have. Regardless, it’s hard to argue with the results. The Raiders have a nice consecutive games sellout streak, few embarrassing empty crowd shots (unlike Santa Clara), and a compact stadium feel that’s difficult to duplicate anywhere outside of Green Bay. A place that’s downright cavernous feeling for baseball is intimate for football. Think about that.

It’s no secret that I’ve advocated for different types of Coliseum renovations for the Raiders instead of a new stadium, simply because they’re cheaper and more feasible. It also needs to be said that if a renovation is done properly it can conserve that atmosphere, instead of letting it weaken by attrition. The Bears’ controversial rebuild of Soldier Field may have killed the stadium’s landmark status, but it preserved the atmosphere and improved the facility immensely, which was a win-win for the Bears and Bears fans.

Citrus Bowl as of mid-December

Citrus Bowl as of mid-December

In May I pointed to the renovation of the Citrus Bowl in Orlando, a $200 million project that gutted 90% of the stadium and modernized it in every conceivable way. The stadium reopened last month with a college football game. Next week it will host two bowl games on the 29th and New Year’s Day. The Citrus Bowl won’t run into any grass problems because it has artificial turf. The turf is unfortunate but understandable, given the cost of maintaining a grass field all year round when its big events occur in December and January. Other than that, the stadium looks practically like a NFL venue, with 60,000 seats, large club areas, party decks, and a completely new bowl with new seats installed throughout. All for $204 million. How was it only $204 million? While it’s hard to isolate specific reasons, a nine-month construction timeline certainly helps. As for the Citrus Bowl venue, it sure looks like an NFL stadium.

 

 

No teams + No developer = No deal

BANG reports tonight that Floyd Kephart, who has been leading the effort to keep the struggling Coliseum City project alive, will not meet this weekend’s deadline to deliver a commitment from one of the Coliseum’s teams, namely the Oakland Raiders. Kephart described the situation in a manner we should all be familiar with.

It’s a complicated land situation; it’s a complicated team situation; and it’s a complicated Oakland situation. There is nothing simple here.

Kephart also revealed that he wasn’t ready to name a developer for the project. Whether that means the developer is under wraps or simply doesn’t exist is up to interpretation. Chances are that any developer’s commitment is contingent upon at least one team anchoring the project, which obviously hasn’t happened yet.

The 90-day deadline set in October was already going to be extraordinarily difficult pull off, so at least Kephart deserves credit for coming through on some of the other deliverables, such as necessary reports and studies (which to my knowledge haven’t been made public). The big stuff, however, is what counts. In the end Kephart won’t get credit for merely trying and he knows that. We’re still 31 days from the final deadline, and it’s worth asking whether or not Oakland should continue this process by extending the ENA another 30, 60, or 90 days. It’s unlikely that any potential partner (teams or developers) will suddenly commit just because the calendar flipped a couple pages. The fundamentals are still shaky at best.

The big takeaway is the Kephart revised the plan down to the 200 acres including the Coliseum and other pieces of public and private land immediately surrounding the complex. That makes for a much more feasible project in terms of acquiring and packaging the land, limiting infrastructure costs, and working out the regulatory aspects. The Coliseum City EIR is written so that the entire 800-acre plan area is the full scope, with the “Reduced Alternative” lowering densities within the full project area, not a smaller plan as a 200-acre project would require. It’s unclear if the final draft will include a 200-acre alternative, but it would seem that if Kephart’s plan moves forward such a major refocus would have to occur.

Lew Wolff has consistently said he’s not interested in being part of the project. He’d rather promote his own vision with no third parties (or perhaps his own) attached. If Coliseum City goes away and Wolff’s plan gets traction, the shoe would be on the other foot as the City, JPA, and Wolff would have to figure out how to accommodate the Raiders, as opposed to a Raiders-focused plan trying to accommodate the A’s.

Meanwhile, murmurs have been getting louder that the NFL will punt on LA for 2015. Hope remains in St. Louis for an 11th hour plan to build a new stadium for the Rams, which might give NFL the chance to extend its wait-and-see posture an additional year. The Chargers are staying in San Diego through at least next year. That leaves Oakland.

The Raiders will have to start negotiating a new lease with the JPA in the new year. Mark Davis prefers a single year or at worst a year-to-year arrangement for maximum flexibility. Davis pushed for the 1-year lease because he thought it would further the process at Coliseum City, which hasn’t happened save for the EIR. The JPA and City want a multiyear deal, which I wouldn’t expect Davis to sign. I’ve heard some strange rumors about backup venues Davis is calling about, which frankly is his right. The Raiders face severe limitations on where they can go, or rather, where they are welcome. We’ve already heard about the LA Coliseum and Rose Bowl slamming the door on the Raiders. There are also issues with Bay Area venues:

  • Levi’s Stadium has been ruled out by Davis. Even if he was interested the 49ers would require a multiyear commitment to pay for finishing construction on the second home team locker room.
  • California Memorial Stadium has a contractual ban on NFL games. Any deal to host the Raiders would run into an immediate legal injunction.
  • AT&T Park could host games, but is small and not ideal from a league perspective.
  • Stanford wants no part of the Raiders.
  • The ‘Stick is being dismantled per a development agreement with Lennar.

Even if the league owners got past Jerry Jones’ and Bob McNair’s objections, they wouldn’t approve a short-term stay for the Raiders in San Antonio. They want long-term stability and certainty. That’s also the problem in LA. Dodger Stadium could provide a short-term home, but the NFL and AEG have to work out a very complex deal for whatever team(s) commits. AEG asked for its own 6-month negotiating extension for Farmers Field. Given the complexity of arranging a temporary venue that it doesn’t control along with planning for the new stadium, getting it all done in 6 months is a tall order. That said, the NFL has assigned Eric Grubman to work on LA among other options, so it’s not like the league isn’t controlling what it can. The NFL may punt on LA for now, and punting is something Raiders fans are all too familiar with this year.

As for the A’s – they’re in a good spot. They have a lease that provides security. They’re working on a CC alternative that should be ready to go if Oakland drops CC. They can wait out the Raiders’ and Oakland’s indecisiveness, at least for a while.

 

Chargers elect to stay in San Diego through at least 2015

Late statement from San Diego Chargers special counsel Mark Fabiani:

On February 1st of every year since 2007, the Chargers have been eligible to terminate the team’s lease for Qualcomm Stadium. And each year since 2007, the Chargers have announced that the team will not exercise the termination clause and instead continue to work toward a permanent stadium solution in San Diego.

Today, the Chargers are making the same announcement that the team has made each year since 2007: The team will not be exercising the lease termination clause and will keep working to find a publicly acceptable way to build a Super Bowl-quality stadium in San Diego. Calendar year 2015 will constitute the team’s fourteenth year of work on a San Diego stadium solution.

The Chargers aren’t fundamentally closer to a stadium deal now than they were at this time last year. If they had chosen to terminate the lease, they would’ve had to pay $17.6 million to the City of San Diego to leave. Without clear short-term and long-term stadium solutions in LA, it makes some sense to wait especially if real money is at stake. That isn’t the case for the Rams and Raiders, who face no penalties if they leave their current homes.

On Monday, the New York Times reported that the chances of any team moving to LA were dimming. We’re still a couple months from the window officially opening, and if LA interests such as AEG are truly interested, I imagine they’ll take that time to work out a deal with the NFL (and perhaps Dodger Stadium).

What say you, Rams and Raiders?

For Davis it’s all about #1

Mark Davis explained where he stands vis-à-vis the A’s now and into the future during an interview with Tim Kawakami.

As I’ve said, I’m not against the A’s, I’m not for the A’s, I (sic) just for whatever’s best for our organization.

I don’t think anything else needs to be added here.

Kephart provides update on Coliseum City, AEG rumors fly

Two articles – one a blog post by Mark Purdy, the other a SFBT piece by Cory Weinberg – provide a tiny amount of news on Coliseum City. Citing confidentiality agreements, New City and Renaissance head Floyd Kephart provided few new details. He did take time to trumpet that the project’s progress, which is better than no progress, I guess. The other “big” takeaways:

  • Kephart threw Colony Capital and HayaH under the bus for getting its documentation wrong.
  • He’s optimistic, saying that New City is “probably between 60 and 70 percent there.” That last 30-40% is a major sticking point, since it involves convincing at least the Raiders to sign on and a master developer as well.
  • Wolff had a discussion with Kephart. Kephart didn’t offer details to Wolff. Wolff reiterated his “wait-and-see” stance.
  • According to Purdy, both Wolff and Mark Davis would prefer to keep surface parking instead of building garages for various reasons.
  • The financing model – and whether includes paying off the Coliseum’s existing debt – remains unknown, at least publicly.

Next week the 90-day “project” will hit its midway point. Kephart is to be commended for getting the meetings, talking to potential principals, and for ably playing catchup, cleaning up the mess left for him by Colony. That still doesn’t mean there’s a deal in place, and Kephart may have to pull a rabbit out of his hat to convince Davis to commit. Private interests would be fools to give Davis any kind of revenue guarantee – that’s how Oakland get into this mess to begin with – since it could add considerable risk for them.

Meanwhile, the LA options for Davis may be dwindling. LA sportscaster Jeanne Zelasko said yesterday that the Rose Bowl and LA Coliseum want nothing to do with the Raiders, leaving Davis with possibly Dodger Stadium in the short term and perhaps Farmers Field in the long term. AEG, which bought a piece of the Lakers when Staples Center was built, is offering a similar “Lakers deal” to a prospective NFL team. AEG was even reportedly hiring a PR person for the NFL stadium effort, which the company is denying. Of course, it was AEG that asked for and received a six month extension to attract a team to Farmers Field.

Anyone following this story knows that Davis will have to give up some percentage of the team in exchange for tenancy in a new stadium anywhere, whether it’s Oakland, LA, or even San Antonio if a new stadium is built there. Here’s how I assess the Oakland vs. LA:

  • Oakland: Steadier fanbase, limited market potential, difficult financing plan, greater civic/government support
  • Los Angeles: Less stable fanbase, greater market potential, known financing plan, less civic/government support

I honestly don’t know how to handicap that. There are no deal terms available.

As for the parking issue, if you really want to read into this it’s quite possible that the Coliseum City alternative that Wolff is putting together is a low-density development like the original Fremont Pacific Commons plan. No high-rises, few parking garages. If true, that’s a huge departure from Coliseum City, though the infrastructure buildout would project to be much less intense, and therefore less expensive for Oakland/Alameda County since the public sector is expected to fund that part. Assuming that Wolff gets a chance to pitch his plan, it’ll be up to City/County to determine whether that’s good enough.