Alameda County approves A’s lease unanimously 5-0

After a relatively brief, much less heated discussion over the A’s lease extension than was had by the City two weeks ago, Alameda County’s Board of Supervisors voted 5-0 to approve the extension. The deal keeps the A’s in the Coliseum until at least 2018, and up to 2024 if the team chooses to stay there. Though the deal is characterized as a 10-year lease, the 2014 season runs concurrent with the new deal.

Supervisor Keith Carson asked the most pointed questions of JPA negotiator Jon Streeter, mostly about the debt and the characterization of the new lease as a better deal for the County (and City) than previous leases. Streeter noted that the more money comes in upfront, plus the A’s have to pay off the lease even if they leave the Coliseum early. Miley noted that the original A’s escape provision calls for no payoff if the team pursued a new ballpark elsewhere in Alameda County. The language was changed to Oakland only, meaning the A’s would pay full termination even if they made a stadium deal in Fremont or even San Leandro. Streeter also repeated the notion that the upcoming scoreboard project, which the A’s are paying for, means that the JPA no longer has a potentially big liability item to worry about, since the JPA has been to date responsible for the outdated, frequently failing scoreboard.

To recap the major deal points:

  • A’s stay until at least 2018, up to 2024. A’s must give at least 2 calendar years’ notice if they plan to leave early.
  • The JPA must also give the A’s 2 years’ notice if a Raiders stadium deal comes to fruition and forces the A’s to vacate.
  • Lease payments are $1.75 for this year, $1.5 MM in 2015, $1.5 MM in 2016-19, and $1.25 from 2020-24.
  • A’s will spend at least $10 million on new scoreboard system. A’s retain all revenue from A’s games, Raiders/JPA can split non-A’s game revenue as they see fit.
  • JPA sets aside $1 million per year (increasing 5% annually) to establish a stadium maintenance fund (presumably for fixing plumbing, leaks, etc.)
  • JPA will pay $200,000/year for the O.co signage caps above the scoreboards. A’s may end up replacing those caps as part of the scoreboard project.
  • A’s and JPA will continue stadium discussions on land at or adjacent to the Coliseum (nowhere else like Howard Terminal).
  • The parking arbitration matter is resolved, all claims dismissed.

The JPA and County clarified that there is $191.4 million in outstanding debt at the Coliseum complex: $106.5 million for the stadium, $84.9 for the Arena. Bonds will be retired in 2025 and 2026, respectively.

Next up is MLB’s expected approval of the lease, and the City of Oakland’s next steps in negotiating with the Raiders and BayIG over Coliseum City.

Lucas Oil Stadium

As I was finishing my Midwest trip, I had to make 4+ hour drive from Cincinnati to Chicago, where I had to return my rental car and fly out of Midway. Thankfully I had a couple places to visit along the way, the great brewers 3 Floyds just outside of Chicago and Lucas Oil Stadium in Indianapolis. Having been to Cowboys Stadium and University of Phoenix Stadium, I was eager to compare the retractable dome peers.

Lucas Oil Stadium opened in 2008, in between UoP (2006) and Cowboys/AT&T (2009). Unlike the other two, Lucas Oil Stadium was meant to be in a downtown environment, adjacent to a pre-existing convention center. The stadium replaced the old RCA Dome, the built-on-spec fixed roof stadium that lured the Colts and owner Bob Irsay one cold morning in March, 1984.

I had never been to the RCA (Hoosier) Dome, so I can’t speak to its quality as a football venue. From what I could tell, it was much like the Pontiac Silverdome, with a two-deck, football-first layout and air-supported roof. Being in Indianapolis, the RCA Dome and its successor became favored venues for the NCAA basketball tournament, since the NCAA’s headquarters are in Indy and the area is well-suited to handling large events. Indy is also home of the DCI Championships, the national drum corps (marching band) competition.

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Like many stadium tours, this one started and ended in the team store. A flight of stairs took us from the street level to the lower concourse level. The lower concourse is split, 3/4ths of it set up in the middle of the lower deck to accommodates suites, while the north end concourse is open at the top of the lower bowl. Throughout the lower concourse are massive sponsor areas for Lucas Oil, Meijer, Stanley, and others. Huge windows illuminate much of the concourse, but the mall-like feel can’t be avoided. It’s better than the awful compromised sterility of MetLife, though that bar isn’t exactly high.

While it has a fairly compact layout, the seating bowl has few cantilevering opportunities. There are columns along the club level corners, creating some obstructed views. The one interesting feature is the press box, which is suspended from the roof above the western upper deck. The view is high up as one would suspect. At the entire press box is along the sideline, not set in the corners as is often the case with new NFL stadia.

HKS designed Lucas Oil Stadium to evoke an old field house, a nod to the team sport the state loves most of all, basketball. Bankers Life Fieldhouse nearby has the same vibe. Neither truly pulls off the homage. BLF already looks rather bloated, so you knew that getting LOS to look right at scale would be a difficult challenge. To minimize the visual impact, HKS placed the footprint slightly off the street grid and turned the stadium so that the north windows face the center of downtown Indy. The effect works when you’re close to the edifice since the façade is broken up into components, but once you see the whole thing with its peaked roof from afar, it’s ruined. There’s simply no avoiding the fact that this is a huge stadium, though at some angles it looks smaller than its peers in Arizona and Texas.

Unlike UoP and AT&T, the roof is designed to open laterally with the field (to the sidelines), not to the ends. Part of the reasoning is that much of the load-bearing structure is built along the sidelines, as opposed to the other two stadia where huge trussed arches carry much of the roof’s weight. HKS did a nice job of not over-emphasizing much of the structural work, which is the opposite of the firm’s muscle-flexing exhibition in Arlington. Again, this helps to reduce the visual scale of the building and largely works. In that sense Lucas Oil Stadium looks and feels more like a really large basketball arena than an enormous football stadium. That says a lot for an industry that has never considered intimacy much of a factor in its fan experience.

One obvious feature not at Lucas Oil Stadium is a museum, or some other nod to team history. There’s a Ring of Honor along the upper deck rim, sure. Despite the team’s general lack of success during the 30 years from roughly 1970 to 2000, there is a rich history that should be better acknowledged. Exhibits along the concourse or on the outside of the stadium would be helpful, yet are inexplicably missing. At some point Peyton Manning will have a statue outside. It would be better if Manning’s tribute was located near plaques for Johnny Unitas, Eric Dickerson, and Marvin Harrison.

Having opened towards the end of the NFL stadium boom, Lucas Oil Stadium is a perfectly good representation of the era and of Indianapolis. It has all the amenities you’d expect and has undergone numerous changes to react to the market. It is also, sadly, the product of a major subsidy from Indianapolis – as is the basketball arena. Indianapolis will always struggle with its big city-small town desires. While Indy will never be a proper big city like Chicago, at least it can be a good host. Indy knows that game inside and out.

Wake up, Oakland

“Better a diamond with a flaw than a pebble without.” – Confucius

There are any number of ways to rephrase the idiom above. Some might use “A bird in hand is worth two in the bush,” though the meaning is not the same. Voltaire coined the phrase a little more directly.

The perfect is the enemy of the good.

As I listened to Don Knauss make yet another sales pitch about the virtues of Howard Terminal (and Damon Bruce’s softball handling of it), I started to write a point-by-point rebuttal of everything he said. Then, thanks to BANG’s Matthew Artz, I read a 6-page letter from Lew Wolff to Oakland Interim City Administrator Henry Gardner. The letter outlined Wolff’s desire for a lease extension at the Coliseum before leading into the questions surrounding the future of the Coliseum.

Two pages of the letter are devoted to a section called “The Raiders”. Instead of pointing fingers at the Raiders or Mark Davis, Wolff mostly pans BayIG, the Coliseum City plan, and all of the work that has gone into it so far.

I contrasted words from both Knauss and Wolff. The Clorox CEO talked about a transformative project that could hugely benefit downtown Oakland, which it could. A similar description has been made about Coliseum City by its proponents, comparing it to LA Live among other developments. Then there was Wolff, going detail by detail about the process, the difficulty, tedium, and the obstacles. He even lashed back at “Negative Forces” agitating at every possible turn, which could be construed as a critique of Don Knauss or others allied with Knauss.

The argument, which has stretched as long as Wolff and John Fisher have owned the A’s, comes down to Voltaire’s quote. Wolff’s #1 job this entire time has been to get a ballpark. Let’s understand some of those efforts.

  • 2003 – Wolff was hired by Steve Schott and Ken Hofmann to be the VP of Venue Development. During that brief tenure, Wolff proposed building in the Coliseum’s A Lot and at the Malibu/HomeBase lots. The A Lot option went nowhere because Schott was only willing to put up $100 million for the ballpark. The Malibu option was not available because it was not JPA-owned land. Eventually the JPA bought the land in order to assemble a larger complex for what would be become Coliseum City.
  • 2005 – Wolff exercises an option to buy the team, phasing Schott & Hofmann out and bringing Fisher and numerous associates of Wolff in. Wolff soon proposes the Coliseum North (66th/High) plan, which would redevelop a large swath of industrial land north of the Coliseum complex into a ballpark and mixed-use (residential, retail, commercial) plan. The plan received great fanfare at first, but quickly died as numerous existing landowners showed no interest in selling.
  • 2006 – The Fremont Baseball Village plan is proposed in south Fremont near the Santa Clara County line. A compromise plan of sorts, the idea was to court Silicon Valley corporate interests without crossing into the Giants-held territory of Santa Clara County. Again, there is great immediate enthusiasm, this time from Fremont city leaders. This time, a combination of the Great Recession and big box stores vetoing any developments they didn’t approve of killed the plan. Another attempt in 2010 was made to put the ballpark near the NUMMI (now Tesla) factory across the Nimitz. That was met with hostility from well-heeled residents on the other side of I-680 and fell apart quickly.
  • 2009 – San Jose becomes the next plan, with a partially-acquired site downtown, major corporate and civic support, and a certified environmental impact report ready to go. Again the plan stalled as the Giants remained intransigent about their held territory. A lawsuit filed by people associated with the San Jose Giants (eventually a SF Giants-owned property) threatened the project and is still ongoing. The City of San Jose became frustrated and launched its own lawsuit in 2012 against MLB. That too is ongoing.
  • 2009 – Let’s Go Oakland launches with support of three sites in downtown Oakland: Victory Court, JLS West, and Howard Terminal. Victory Court becomes the preferred site in 2010. LGO promoted Victory Court as much as possible, backed by local developers. No significant activity occurs in 2011, and by the beginning of 2012 the site is dead due to the death of redevelopment and spiraling site acquisition costs.
  • 2012 – Not long after Victory Court goes away, murmurs about Howard Terminal becoming the new preferred (not by A’s ownership) Oakland site begin. In 2013, the Port of Oakland negotiates a settlement with SSA Terminals to vacate the site in order to consolidate facilities and kill a lawsuit against the Port. That allows the Port to look into non-maritime uses such as a ballpark, which it does in spring 2014. A new investor/support group, OWB (Oakland Waterfront Ballpark), emerges, led by Knauss and former Dreyer’s CEO T. Gary Rogers.
    While Wolff has been trying to deal with the on-the-ground demands of planning and building a ballpark, many in Oakland have been fixated on grand concepts like Coliseum City and the far-off promises of Howard Terminal and Victory Court. Even yesterday, Knauss couldn’t help but bring San Francisco into the discussion, talking up how a HT ballpark would have better weather and views than AT&T Park. Coliseum City would be a transformative project that could attract Super Bowls and give Oakland new cachet.

Oakland’s desires to become something bigger and better are completely understandable. But they’ve been so pie-in-the-sky, so big, that there’s always been huge doubts about what, if anything, the City could pull off. I’ve mentioned before that Oakland has never built anything by itself, and that it needed the County and the business community to come together to make the Coliseum work nearly 50 years ago. That need hasn’t changed, but the sense of teamwork has. In Oakland’s attempt to keep all three teams in place, it has gotten away from what got them the teams in the first place: strong partnerships and sensitivity to the teams’ needs. Nowhere is that more evident than in Coliseum City, where the County is playing the realist role in questioning the project and in looking to the A’s, while the City brings in big names with no commitments, entirely footing the bill along the way.

Oakland keeps searching for the perfect project, the ultimate solution, the one that will finally vault them past the City beyond its rival across the Bay. Some politician(s) would take credit when it gets done, a legacy-defining moment. So they keep dreaming, keep hoping, clearly not worried about the little details that need to be addressed or the problems that arise when undertaking big projects. At some point, someone in Oakland will recognize that the dreams need to be tempered with what can realistically be done, and understand the work that will be required to get it done – establishing partnerships with the teams and stakeholders for starters. If not, the teams will get frustrated and give up. Those dreams will die. The biggest pro sports Oakland will be able to get will be minor league (which for some is okay). And the Coliseum, home of six world championships, will end up unused, even more unloved, and ultimately, something generic like a shopping center. That’s what happens when the well-intended keep pursuing the ever-elusive perfect instead of understanding that good is actually pretty great.

Lew Wolff is getting ready to offer what could be a pretty good deal. If Oakland wakes up, they may be able to react in time to take it.

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P.S. – I’m removing comments from the site for the time being. It’s not because of the commenters or specific comments – although they can be especially inane at times – it’s because those comments and the constantly attacking spambots (which you don’t see) are causing heavy server load, for which I’ve been warned by my provider. I hope that by having no comments there will be less server load. Thanks for your patience.

Selig’s Tortures of Hell and Splitting the Baby

Update 8:50 PMJean Quan is trying to delay the vote, supposedly to get further concessions from Lew Wolff. Wolff’s comments today don’t sound like he’s giving any additional concessions. 

During today’s customary pre-All Star Game media session, Bud Selig addressed the A’s stadium situation for the umpteenth time. Not surprisingly, Selig’s answers yielded little for fans to be optimistic about. Selig answers that were actual answers were mainly confined to the ongoing lease negotiations at the Coliseum, with no hint as to what would occur in the future whether the lease was approved or not.

Somehow I doubt these were Selig’s personal tortures of hell. After all, he knowingly has created these conditions. It’s been much worse for A’s fans and even local media for being forced to report on this never-ending charade, not to mention little old bloggers who try to make sense of it all. Coupled with Selig’s imploring the Oakland City Council to get the deal done was the presence of Lew Wolff beside him at the Home Run Derby last night, as well as today during the session. It was a not-so-subtle reminder of who the commissioner will side with if Oakland can’t come to an agreement on Wednesday, when the City Council will hold a special session at 5:30 to consider the lease. Meanwhile, there continues to be an epic amount of finger pointing within the Council, as the mayoral candidates take stances for or against the lease and then pull 180’s days later. Those who aren’t running for mayor are sick of the politics. While MLB’s threats seemed to have cowed the Council enough to approve the deal, there’s no telling with could happen in the next 24 hours or so. Selig also acknowledged the success of the exhibition games held in Montreal in the spring, while shooting down Montreal as a potential A’s relocation target.

If anyone feels like they’re in hell, it has to be the members of the JPA board, the Oakland City Council, and the Alameda County Board of Supervisors. The mistrust and lack of communication all point to the JPA’s eventual demise, as the two City and County partners have differing visions for how to move forward. The City has been working with BayIG and Colony Capital, and for months has not expeditiously informed the JPA on the process. The JPA decided in recent weeks to figure out a potential deal with the A’s, which could threaten the Raiders’ future at the Coliseum as much as the Coliseum City deal threatens the A’s.

Last week I wondered if the idea of one party buying out the other would come up again from Nate Miley, and sure enough it has. About the only thing that the City and County can agree on is that there are too many cooks in the Coliseum’s kitchen. Miley even brought up a split-the-baby proposal.

“I would say if we could have one party responsible out at the Coliseum and the (Oracle) Arena, that would be the preference,” Miley said.

If there could be an easy way to break up the JPA, that’s it. The arena and stadium have separate financing and debt repayment structures. They’re even separate when it comes to the assessor’s rolls.

 

Most of area is the Coliseum complex, jointly owned by the City and County. Inset within is the arena land to the left. Not shown: additional land acquisitions to the east and north.

Most of area is the Coliseum complex, jointly owned by the City and County. Inset within is the arena land to the left. Not shown: additional land acquisitions to the east and north.

The County would probably be willing to take on the arena and let the City handle the rest of the complex and the development within. If Coliseum City or Wolff’s plan required the arena land, it would be a simple deal to pay off the estimated $70 million owed on the arena after the Warriors leave, assuming that the W’s aren’t liable for the remaining debt. All the County would require is a minimum amount of parking spaces (5,000 or so) to be available and continued access to the BART station via the bridge. That’s a much more manageable situation than the stadium’s $100 million owed after 2017 ($138 million after this year) and $100-400 million in infrastructure costs required to build out a complete development.

The downside of splitting the baby in this manner is that Oakland will find itself in a much riskier position. It alone will have to figure out what to do with the remaining Coliseum debt. It would also have to finance all the new infrastructure without the County’s help. Some state or federal grants could prove helpful, but are increasingly scarce. There’s very little hope of refinancing either the arena or stadium debt in the future if neither is going to have a tenant, so it’ll be up to the developer to pay it off, else the City & County eat it.

Let’s say that the County, as Miley suggests, wants out of this project altogether. Without knowing what the A’s are planning, it’s likely that their Coliseum redevelopment will be similar or smaller in scope than Coliseum City. The problem there is the mutual distrust between Wolff and the City. The City has only been working with the Raiders/BayIG, and would presumably have them as their preferred partner. But if the A’s lease extension is approved, it could jeopardize the existing Coliseum City relationship. Mayor Jean Quan and CM Kaplan can characterize this is not having to choose all they want. MLB and NFL (through proxies) are forcing that decision. Can’t dance with two partners the whole night, Oakland. Sooner or later, one of them’s gonna up and leave, or at least find a new partner.

BayIG backs down on lease term, Quan endorses deal, Wolff denies move out of Bay Area

Ray Ratto has been giving the stadium situation a constant read this week. Wednesday’s piece may have been the best of all, though it can mostly be summed up by this:

halfass

Can we even give the City of Oakland credit for half-assing? May be generous.

Meanwhile, on the news front, the City received another letter Wednesday from BayIG’s lawyers, which indicated that the development mean could be onboard with a plan to provide the A’s 2 years’ notice if a replacement Raiders stadium came to fruition. That’s a backpedal from their original stance, which was to tear down the Coliseum immediately after the A’s 2015 season in order to make way for the new football venue. BayIG suffered a little blowback in the media and from fans, which may have led to this softening.

In that same article, Oakland Mayor Jean Quan continues to believe that the city can continue to host both teams, while endorsing the lease extension approved by the JPA last week. Quan doesn’t get to vote on the deal unless the 8-person City Council is deadlocked. Said Quan,

“I absolutely want the City Council to sign this agreement so that we can get on to negotiating a new stadium (with the A’s).”

We’ll see if she’s forced to break a tie. Several of the council members are undecided, perhaps hoping for concessions from the A’s that probably are not coming.

Word came yesterday morning from The Game’s Chris Townsend that the A’s could be willing to buy out the County’s portion of the JPA, which would allow the team to work on a new development plan for the Coliseum complex. I’m looking into the legality of such an arrangement. The bond issues are heavily tied into specific revenue streams and the property is jointly owned, not divided, so it’s unclear how a private developer could legally replace a public entity. It’s also important to note that BayIG has an Exclusive Negotiating Agreement (ENA) with the JPA for any Coliseum development. That agreement doesn’t expire until October, so any developer whether the A’s or a third party can’t formally engage in talks with the JPA until the ENA expires, assuming it’s not extended. Correction 5:37 PM – As was pointed out in the comments, the ENA is only between BayIG and the City of Oakland, not the JPA. Because of this, Miley or other JPA members could engage in discussions with the A’s over the future of the Coliseum complex.

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Once again, Lew Wolff had to speak publicly about someone else’s suggestion that the A’s could leave the Bay Area. CM Larry Reid suggested the team could go to Montreal or San Antonio, places that coincidentally had hosted exhibition games in March. As I’ve said before, MLB may wield the move threat, but it’s largely toothless without a deal for a new ballpark in a target city. No rumored candidate like Portland, Montreal, San Antonio, or Charlotte is close to having such a deal in place. In fact, Charlotte just opened its AAA ballpark, surviving numerous legal challenges by a local attorney who wanted to aim for MLB, not AAA. Sorry, no Timbuktu.

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A couple other blog posts are worth reading and come from completely different angles. The first is a piece by the Motley Fool advocating for a move to San Jose. It’s a skin-deep analysis, but may portend future San Jose articles in the media, especially if Oakland continues to be a circus. The other is from Death of the Press Box writer Andrew Pridgen, who calls Wolff the “last great owner in baseball.” Mind you, he sets the post up by calling Wolff a prick.

BayIG’s attorney argues against A’s lease extension, asks JPA to stay with ENA

BANG’s Matthew Artz has a story late tonight about Bay IG (the group working on Coliseum City) asking the JPA not to approve the lease and to allow the remaining study work to be completed through the end of the ENA period, which is this October. For whatever reason the letter doesn’t come from BayIG or its members, Colony Capital or JRDV, but rather from the law firm of Wendel, Rosen, Black & Dean. Strangely, the lone signatory is a lawyer at the firm, R. Zachary Wasserman, not one of the regular BayIG representatives. Regardless, the letter sends a strong message to not cave in to Lew Wolff’s and MLB’s demands, citing the ongoing Coliseum City work and the money already spent on the project, which has been all public money so far. The letter:

Re:A’s Lease Extension Negotiations and Coliseum City ENA

Dear Mayor Quan,  Council Members and Mr. Gardner:

We have had a chance to briefly review the proposed new lease with the A’s released by the JPA this week. The “out clause” as it is written in Section 7.2.2 will make it impossible to complete the obligations of the development under the Exclusive Negotiating Agreement (“ENA”) with the City.  The ENA requires our team to produce a deal with at least one of the teams.  As you know, the only team that has been willing to engage in active negotiations with us is the Raiders.

The City has spent three years and $4 Million to adopt a plan and an EIR that would allow a major new development at the Coliseum site creating a new environment that can keep both the A’s and the Raiders in Oakland.  The City entered into the amended ENA with our client Bay Investment Group and JRDV and HKS.  Our clients relied on the City’s good faith for almost six months in continuing to fulfill their obligations before the ENA was executed.  We do now have a fully executed ENA and the proposed A’s lease will make it impossible to fulfill the ENA development team’s responsibilities under that agreement.

The A’s have until the last few weeks expressed no interest in talking about the Coliseum Project.  The Raiders who have clearly said they want to stay in Oakland in a new facility have been meeting regularly with representatives of the ENA team.  We believe that we will have an agreed upon term sheet with the Raiders making the Raiders the anchor of a new multi-use football stadium on the Coliseum Site by the end of the summer.  This will allow the ENA team to meet its obligations to have an agreement with the City in October.

As you know, it is the Raiders desire and plan to play in a new facility in Oakland for the 2018 football season.  They are making arrangements to play elsewhere for the intervening time. It will be critical to demolish the existing stadium in 2015 not only to construct the new multi-use Raider’s facility but also to simultaneously construct the associated developments including a hotel, retail and office buildings.  These ancillary developments are critical to support both the developer’s ability to fill the gap on the cost of the multi-use Raider’s facility and to create the necessary tax benefits for the City and the County and create a new major economic engine for Oakland.

The approval of the new lease as proposed, allowing the A’s to remain on the site would frustrate these negotiations with the Raiders, frustrate the  purpose and language of the ENA and prevent the effective development of the Coliseum City Project.  It is not necessary to choose between the teams.  The goal of the ENA and the goal of our team is to provide the necessary support for both teams – and much more.  The ENA, which is valid through October 2014, provides the City and ENA team a period of time for preliminary study and exclusive negotiations over a proposed project at the Coliseum site (which includes and encompasses the area subject to lease negotiations with the A’s).  Terms requiring a two year “Out” notice in the A’s lease will violate the ENA agreement between our clients and the City of Oakland.  All we are asking is for the time to perform that is provided in the agreement you have approved..

The “out clause” in the proposed A’s lease would be triggered by the presentation of a “Raider’s Construction Plan” – this term is not defined.  If it means a detailed engineering plan, then this would allow the A’s to remain in place for two years beyond when the developer and the Raiders would be ready to start construction – which clearly does not make sense.  In addition, the A’s would not be required to leave until 60 days after the conclusion of the second baseball season following the notice – so if notice were given in September of this year, based on the current design plans, the A’s would not have to vacate until late summer of 2016, which means that the new facility and the ancillary development could not be completed until fall of 2019.  But if there were any serious thought of giving notice this year, the new lease – including the economic terms – makes no sense at all.

The City has spent over $4 million dollars in a far sighted and thoughtful effort to create a new, amazing, and absolutely possible development that will create a major new tax base for the City and County, produce thousands of jobs and make it possible to retain at least two teams in Oakland.Permitting the A’s to remain in the existing facility beyond 2015 under the terms of this proposed lease would make the City’s expenditures and efforts a waste of public funds.  The current proposal also simply allows the A’s to buy more time to find a site outside of Oakland.  frustrate Bay IG’s efforts to develop the site and disrupt the ability to deliver a stadium for the Raiders and the ancillary developments adjacent to that stadium.

We ask you to honor the terms of the ENA and allow the development team the time to meet its obligations in October.  Approving the A’s lease as proposed now will make that impossible.  Any decision on this proposed lease should not take place until the ENA team and the Raiders have been allowed the agreed upon time to perform and to create the opportunity that will benefit the A’s as well as the Raiders, their fans  and the entire City and County.

Along with the City, the ENA team wants the A’s to remain in the City of Oakland and at the Coliseum site.  We welcome the opportunity to discuss this with you and any representatives of the JPA and we are certainly open to discussions with the A’s about how we can work together.

 

Very truly yours,

WENDEL, ROSEN, BLACK & DEAN LLP

R. Zachary Wasserman

The “Raiders Construction Plan” is defined in the lease terms, under section 44.32:

“Raiders Construction Plan” means a bona fide plan for construction of a new football stadium for the Oakland Raiders on current Complex property, adjacent to the current Complex property, or otherwise located sufficiently near to the Stadium such that it will materially impact Licensee’s operations, which bona fide plan must include, as pertains to such stadium project, a fully executed development agreement with a third-party developer and the Licensor for development of a new Raiders stadium, supported by a non-refundable deposit from the developer and received by the Licensor of at least Twenty Million Dollars ($20,000,000.00).

Now, the term “bona fide plan” is subject to some interpretation. Basically it refers to the Disposition and Development Agreement for the land, Master Lease, and any other supporting documents needed to produce the deal. The 49ers and Santa Clara went through the same thing for Levi’s Stadium, so it’s not as if there’s some mystery here. Wasserman is a well-known, respected real estate and land use lawyer. He knows full well what all of this entails.

Matier and Ross have a new item up regarding this letter, including some key quotes. I’ll just present them here.

Nate Miley: “We (the City/County) still owe about $180 million on the stadium. This is either smoke and mirrors, or they are on crack.”

A’s VP Ken Pries: “From our position, we just don’t think that (Raiders project) is going to happen – we are betting it doesn’t.”

After 2014, the amount owed on the Coliseum will be closer to $138 million, much smaller than Miley states but still quite sizable. Miley has been the biggest skeptic on Coliseum City among the JPA board, and has shown no signs of wavering. Larry Reid noted that BayIG has the backing of the City, but not the JPA, so it appears that the two are at loggerheads over more than just a lease agreement. It makes me wonder how the two could come to any kind of consensus. Miley could also step up his rhetoric on having the City buy out the County, though the City doesn’t have the funds (a recent budget surplus isn’t nearly enough).

 

Speaking of funds, the BayIG letter mentions $4 million in public (JPA) funds spent on Coliseum City studies. To date, I am unaware of any money that has been spent by BayIG other the funds that have been released to them. Colony Capital, the financial muscle behind the plan, hasn’t raised a single red cent. Maybe the biggest objection, not mentioned in the letter, is the A’s lease agreement’s demand of a $10 or 20 million, non-refundable deposit from the eventual developer. Such a deposit would show BayIG had real skin in the game.

As for Pries, it’s the first real statement we’ve heard from the A’s that they don’t think much of Coliseum City’s prospects. It’s really nothing more than to confirm why they had no interest in the project as it’s being conceived. The A’s have laid down their cards – they’re calling out BayIG and seeing if they can deliver. It’s yet another way to shake up the tree. BayIG says it will have all of the lingering questions answered by the end of the ENA period. The A’s are betting they don’t. The Raiders? Well, Mark Davis seems content to go with the flow. For now, at least.

Why would Mark Davis want to build at the current Coliseum site?

Infrastructure costs, plain and simple.

Ever since people have talked about building another venue on the Coliseum site, that talk has gotten shut down by the costs associated with relocating utilities, most famously the power lines that run through the complex. While such costs are a low percentage of the overall project cost, the fact is that they would have to be dealt with upfront. And since upfront costs often have to be borne by the team while the public financing piece gets squared away, it’s a budget item that no team owner wants to deal with if he can avoid it.

CC-easements

Utilities running through the Coliseum area. Orange are power lines, green are sewer

According to the infrastructure study released in the spring, the estimated cost to relocate the power transmission lines is $15.8 million. Another $1.4 million would be allocated towards relocating a sewer line (green dotted line). Both of those changes would be necessary to accommodate a football stadium on the D lot south of the existing Coliseum. The good thing is that the relocations would help a ballpark in the A lot as well, so it’s a one-time project cost.

A stadium built within the existing Coliseum footprint would require none of this infrastructure work. Should Coliseum City be developed down the road it would have to be addressed, but that would be the within the purview of the developer, not Mark Davis. There would still be the cost of demolishing the Coliseum, which is unknown at this point (could run into the $10 million range), which would be done whether the stadium was built on the site of the existing Coliseum or adjacent to it.

The cheapest alternative would be to re-do the Coliseum. Even then there would be an unknown cost of partial demolition of the Coliseum, so there’s a cost there. Ever wonder if Davis would be okay if the Coliseum simply didn’t have a baseball infield on it?