Kephart provides some brutal honesty about Coliseum City

New Coliseum City frontman Floyd Kephart provided a wide-ranging interview to the SF Business Times (main article/additional quotes). After 2+ years of the project lacking real details and general cageyness from its spokespeople and supporters, Kephart’s honesty is a breath of fresh air. He minces no words about the difficulties Coliseum City faces, and sets the table for what needs to follow.

birdseye-view_north

Coliseum City with two new venues plus the existing arena

The article, written by Ron Leuty, lays out Kephart’s previous experience, much of it in the horse-racing business, some of which is in financial crisis management. The latter’s probably the best why to describe his current ordeal, with 90 80 days left in the ENA. Kephart admits that CC is by far the biggest project he’s ever worked on. Among the things he says needs to be done:

  • Public benefit analysis
  • Disposition and development agreement
  • At least one signed team
  • Master developer

I put together a more extensive list last week when the ENA extension was signed. The public benefit analysis, while not a requirement, is an excellent idea since it could help garner public support if conducted honestly. That could be crucial if CC ends up going to the ballot box in the future. The DDA is a potential showstopper, since it can take up to a year after a team and developer sign on to hammer it out, as it did for the 49ers and Santa Clara. The DDA isn’t anything like a apartment rental agreement or even a mortgage, it’s hundreds of pages of details about financing, ownership, rights, timelines, and legal responsibilities. Maybe if the Raiders or A’s sign on prior to the end of the 90 days another extension could be granted for the DDA, but it goes to show how far behind the 8-ball this project is.

The big takeaway is that Kephart is meeting with Wolff in early November (perhaps next week?), which will give Kephart a chance to sell Wolff on having a more competent team in place or tailoring the vision for the A’s. Kephart’s aim appears to be lower than what the City was selling for the last two years, as the goal of having one team in place, maybe two is not nearly the same as bold (or pointless) as saying Everyone can stay here, there’s plenty of land.

Wolff could easily dismiss the plans just as he had done over the summer, but with the finish line drawing near, Wolff may be more likely to listen. The reason? Process. Having an active CEQA/EIR process underway is worth millions of dollars and at least a year’s worth of effort, so if Wolff were to sign on or bring in a master developer that will work in concert with the A’s, they’d already be ahead of the game. It’s a risk for Oakland, though, since the Mark Davis could view this as a sign that the Raiders are about to be marginalized. Since Davis hasn’t signed on himself, there isn’t much room for him to complain. As Kephart notes:

“Nothing says what the Raiders want. Is it a life-sized statue of Al Davis at the entrance of the stadium and then they’ll stay? … Maybe the teams have asked the city that — I don’t know.”

Another big piece of news is the timeline.

Yet even if Kephart’s group assembles all the agreements and documentation needed to win over a master developer for Coliseum City, the soonest the A’s would play in a new ballpark would be 2018 and the Oakland Raiders would land a new stadium in 2019 ‘at the earliest,’ Kephart said.

‘We want to cooperate,’ Wolff said. ‘We want to see what happens in whatever timeframe, 90 days or longer. Then we’ll know better what we have to do.’

2019 for the Raiders is a long ways away. It’s unclear whether that would be acceptable for Davis. If someone’s promising a new stadium in LA earlier, he may be willing to take it if the terms are right, even if he’s the second team in LA. 2018 for the A’s pretty much falls in line with reset expectations coming out of the lengthy Coliseum lease negotiations. We all want it sooner, I know.

For now Kephart is saying the right things – the truth – that can help get everyone on the same page. There’s no doubt that the effort at this point is a Hail Mary. Then again, Kephart probably knows a thing or two about long shots. If his work can help get the A’s in a ballpark in Oakland, he’ll have done his job magnificently.

Non-recap of the Oakland Sports Forum

Technical difficulties resulted in me (and others) getting only bits and pieces of the Oakland Sports Forum livestream, which at times suffered from dropped audio and the stream cutting out altogether. Streaming an event while trying to run it is extremely difficult, so try as Zennie Abraham did, it didn’t work out well. Thankfully the forum was archived on Ustream so we can all view it after the fact, though the audio quality remains poor.

At this point late at night I don’t think I can give a proper writeup, so I won’t do that. If I can get the full picture after rewatching in the morning I’ll give it a shot. Instead I’ll drop in a few tweets from last night. Hopefully that’ll give you a sense of discussion.

Rebecca Kaplan and Jean Quan spent a good amount of time pitching themselves as the best possible saviors for the Raiders. Quan plugged the progress on Coliseum City (such as it is), while Kaplan sold herself as a more conciliatory negotiator that wouldn’t damage the relationships between the City and the teams. Joe Tuman had a lecturing moment when he dismissed these mini stump speeches as pure election politics with little to come at the end. Bryan Parker cast himself as an out-of-the-box thinker, though his example of Stanford Stadium seemed a little off the mark. Libby Schaaf, who until recently hasn’t spoken that much about the pro sports teams at all, seemed against the idea of the City buying out Alameda County in order to advance Coliseum City.

Those who attended may have learned a little more about the candidates and their relative stances on pro sports. Ultimately, I don’t know that it will affect the actual vote all the much, as we’re 5 days from the election and whatever messages could be gleaned from this event probably won’t permeate the voting public to any significant degree. That said, it was still a good idea for Zennie Abraham to put on the event (pity it happened opposite Game 7). It may not have been the sequel to The Adult Conversation we were looking for, but there were signs. I suppose that discussion will come in early December.

P.S. – Big thanks to Bryan Cauwels, who tried valiantly to help Zennie fix the stream problems. Bryan is part of Save Oakland Sports and is a good representative for their cause. We may not agree on the future of sports in Oakland, but we always have good, civil discussions about it, probably because Bryan is one of the nicest guys on the planet (I am not).

A’s renew land lease option with San Jose for 7 years

With Oakland’s Coliseum City dominating the news over the last few weeks, it’s a shock to see San Jose come out of nowhere with news of its own. According to the Merc’s Mike Rosenberg, the A’s and San Jose have agreed to a seven-year option on the Diridon ballpark site next to the main train station. The new deal is essentially an extension of the previous land option, which was due to expire next month. The A’s will pay $25,000 per year to retain the option, the same terms as in the previous agreement.

The other big reveal in the article was that last month, San Jose Mayor Chuck Reed met with baseball’s Commissioner-elect (and current COO) Rob Manfred in New York. While Reed didn’t make any headway in getting Manfred to loosen the Giants’ grip on territorial rights, it’s a positive sign for San Jose that the two had a meeting, which could lead to more discussions. Reed’s mayoral successor – either County Supervisor Dave Cortese or SJ Councilman Sam Liccardo – would be the new point person, both willing to take Reed’s baton. Retiring commission Bud Selig created a 3-man panel to act as a buffer so that he wouldn’t have to be directly involved. The panel (BRC) was apparently disbanded earlier this year, leaving Manfred to handle any new talks. It’s no guarantee of future talks for sure, but it does have some weight.

More meaningful is the impact of the land option deal. Though the A’s couldn’t build there tomorrow or even next year, the very presence of the land option keeps San Jose in the game and gives MLB a card to play against Oakland in case they turn future ballpark talks with the A’s into yet another circus. After all, it was Manfred who purportedly threatened Oakland with the immediate approval of a move to San Jose if Oakland killed the A’s lease extension. At the time many called it a mere negotiating ploy, which it was. Oakland folded quickly then, so there’s little reason to think it wouldn’t work on some level again.

Complicating things for MLB is that other tenant in the Coliseum, the Raiders. Since Coliseum City is ostensibly a Raiders project, everyone has to wait for the Raiders’ eventual approval or rejection of the project before knowing what to do next. The list of outcomes is short and clear.

  • Oakland and Raiders sign Coliseum City deal, triggering clause for A’s to escape lease and look to San Jose
  • Coliseum City talks break down, allowing A’s to start up talks with the JPA and Oakland while the Raiders look elsewhere
  • Mark Davis becomes indecisive and signs a short-term lease at the Coliseum, status quo

Lew Wolff has been clear about his disinterest in Coliseum City, so his becoming a signatory over the next three months is just wishful thinking. The terms of the lease extension have kept Howard Terminal out of the discussion, with the focus on the Coliseum only. The Oakland crowd will consider this cagey and deceitful, whereas San Jose (or pan-Bay Area) partisans will call Wolff’s moves prudent and in the best interest of getting a ballpark built ASAP. There’s some truth to both views, and they’re inextricably linked. For some time Wolff’s priorities have been simply to build a ballpark and figure out a way to pay for it. If the Raiders’ fate can be determined, the A’s will be the next domino.

Timing is also interesting. For a while I’ve been of the opinion that San Jose could never be completely ruled out as a ballpark option as long as so many things in Oakland remained uncertain. MLB’s tacit approval – twice – of the A’s-San Jose land option affirms that. If MLB truly wanted to affirm T-rights as iron-clad and non-negotiable, they wouldn’t allow the land option. They know the value there. To be certain, MLB does not want to break that glass if an emergency occurs, but it’s there and it allows MLB and Wolff to maintain focus on the Bay Area, instead of playing the usual stalking horse game with another market outside NorCal. All this comes out just after the 90-day countdown on Coliseum City begins and the Raiders accelerate towards the NFL’s February relocation window. MLB and NFL have been careful to enter in the A’s and Raiders discussions only when they had to, and to let the process in Oakland work itself out. The JPA is readying itself by hiring Robert Bobb to work with either New City Development or Lew Wolff.

Is this the winter when resolution occurs? Well, let’s not get ahead of ourselves. The winter will arrive soon enough.

P.S. – As usual, much of the initial Oakland reaction is, Why doesn’t Wolff (and Fisher) sell the team? Because they have no interest, and no one can force them to sell. Next question.

P.P.S. – How long will it take for Oakland Mayor Jean Quan’s office to call up Rob Manfred, asking for a meeting?

P.P.P.S. – My initial draft didn’t include that third “Indecisive Mark Davis” option. It’s a distinct possibility, though it comes with its own permutations. Davis wants maximum flexibility in whatever he does over the next couple years. He has looked at various non-Coliseum stadia to temporarily host his team. You might think the leading candidate would be Santa Clara, but the terms don’t work for him because he’d have to sign a longer-term lease to cover the additional construction required at Levi’s Stadium. The leading candidate is, would you believe… AT&T Park? The Oakland Raiders at AT&T Park. You can always count on Larry Baer to always have Oakland sports’ best interests in mind.

P.P.P.P.S. – Wasn’t San Jose’s lawsuit vs. MLB supposed to make the city persona non grata in baseball’s eyes? Yet they have a meeting. Funny, that.

Avaya may become Earthquakes’ stadium naming rights sponsor

This was posted to the BigSoccer Earthquakes’ forum by Soccer Silicon Valley’s Colin McCarthy:

avayastadium

Until yesterday there hadn’t been much discussion about who would buy the naming rights to the stadium. Since the stadium is in the heart of Silicon Valley, it was figured that the Quakes would eventually find one prior their first match in 2015.

Avaya is a tech firm based in Santa Clara. They are a spinoff of Lucent/AT&T, specializing in digital phone (IP/PBX) systems. They also are make networking equipment such as switches and routers, and that’s where there may be a bit of a snag. Sunnyvale’s Ruckus Wireless signed a deal last March to be the stadium’s in-house WiFi provider. Ruckus and Avaya are competitors in at least the networking segment, and team president David Kaval has acknowledged the difficulty of working between competitors when trying to land sponsorship deals. Typically a sponsor wants to be known as the official ___ sponsor of the team, whether we’re talking networking, soda, or airlines. Ruckus does a small fraction of the business Avaya does, so there’s certainly the potential for one of the sponsors to be overshadowed by another.

Speaking of networking companies, what about Cisco? We haven’t heard from them in a few years, since discussions about a San Jose ballpark were in high gear. Both Ruckus and Avaya are competitors of Cisco Systems, and while the soccer stadium is quite separate from a ballpark, the ownership at the top for the A’s and Quakes is basically the same. Cisco has gone through a series of acquisitions and layoffs lately, and speculation has bubbled for some time about CEO John Chambers’ possible retirement. If he retires, there’s a good chance that any A’s ballpark naming rights deal would be subject to new bidding, as Chambers was a driving force behind it. Beyond that there’s some question about whether Cisco would sign on to sponsor an Oakland ballpark as opposed to the highly supported Fremont and San Jose sites. The Valley is big, rich, and ever evolving, perhaps too fast for MLB’s glacial pace.

Mesa, A’s show off Hohokam Stadium progress

With two months to go before completion, A’s ownership and the City of Mesa did a tour of Fitch Park and Hohokam Stadium today, emphasizing all the  improvements A’s players and fans will get to enjoy in a few months. I visited back in the summer. I should have a chance to check it out again in the coming weeks. Until then, take a look at tweets by local media showing the project’s progress. The new clubhouse isn’t quite finished yet, but the seats and scoreboard appear to be complete.

Think about that for a moment. Over the span of six months, the A’s are installing new scoreboards at Hohokam, the Earthquakes Stadium, and the Coliseum. That’s a lot of blinking lights!

As much as I loved the old school, laid back intimacy of Phoenix Muni, I’m looking forward to attending games at Hohokam, which is a fairly short bike ride from my brother’s house in Mesa. The spring pilgrimage looks to become an annual rite for me.

90 Days Or Bust

The last post had some fortuitous timing, as a breaking Chronicle item came in just as I was about to hit publish. That was followed by articles in the Tribune and SF Business Times, so read those to get the full (for now) scoop.

In short, the City Council voted 6-1 to approve a 90-day extension. That’s a marked departure from the 6 months that was previously expected. Motivation for moving up the deadline is unclear. It could be confidence on the new investor group’s part. It could be the need for Oakland to show something before the February NFL relocation window opens, which only a 90-day timeline would accomplish. Perhaps it’s a little of both. In any case the City of Oakland and the new working group, New City Development LLC, will have until MLK Day to prove itself.

Raised park concourse that runs through Coliseum City

Raised park concourse that runs through Coliseum City

New City will be headed by Floyd Kephart of Renaissance Companies in San Diego. Renaissance is a consulting and advisory firm. Kephart’s main task will be to bring in the remaining money required to bridge the funding gap. He’s also responsible for signing up a master developer to oversee the entire 800 acre project. There are only a handful of companies that have experience doing projects of this size and scope. Forest City was expected to be the master developer originally, but they backed out when they saw the costs and potential returns. Miami Dolphins owner Stephen Ross runs Related Companies, another experienced firm for such work. Related is heading up the massive, $6.5 billion development north of Levi’s Stadium in Santa Clara. What does Kephart see that Forest City didn’t? We should soon find out.

The lone dissenting vote was CM Rebecca Kaplan, who pointed out that several deliverables are still missing, including the deal terms and financing model. Both of those items were expected over the summer, and when BayIG was pressed for them, were promised again in August (and apparently not delivered). Kaplan’s ties to the A’s extension and Lew Wolff’s recently returned campaign contributions make her moves somewhat suspect, but lack of follow-through on BayIG’s part is rather disappointing and unsettling when you consider the lead time they had to assemble the deliverables.

A big surprise to come out of the session was CM Larry Reid’s complete 180 on the project. He has been a fervent critic of the plan for at least a year now, and his effusive praise of Kephart is quite startling. That said, the project is in his district, so he stands to benefit if it comes through. He’s also not up for reelection this year, so he doesn’t have to back either Kaplan’s or Mayor Jean Quan’s visions. Reid remains Vice Chair of the Coliseum JPA Board.

Three months is an awfully short time to get the deal done. It’s not a matter of tying up loose ends. There are major deal points that have to be addressed.

  • Sign at least one tenant, preferably the Raiders to start
  • Engage the A’s and Warriors (even though neither team is interested)
  • Provide deliverables and reports that haven’t been completed yet (deal terms, financing, 2nd phase market analysis)
  • Bring in a master developer
  • Line up needed capital for stadium phase and ancillary development phases
  • Figure out who pays for the remaining debt at the Coliseum and Arena (if necessary)
  • Gather support of the JPA and Alameda County

It all feels like it’s going to get severely rushed, which could end in a horrendously bad deal for Oakland if they’re not careful. Quan’s calling the announcement a victory, though she neglected to mention that she said several times throughout the year that a team – the Raiders – would be a signed partner, at first during the summer, then late summer, then fall. Problem with trying to sign the Raiders is that because of the lack of concrete information on financing, investors, and viability, there’s no reason for the Raiders to sign on, and national reports echo that. Every time someone in Oakland talks up how the Raiders are getting ready to officially be a part of this, Mark Davis knocks that notion down. With the season almost half over and the NFL’s relocation window looming in February, there’s no reason for Davis to commit to anything before he feels it’s the right moment. The best deal for Davis comes with having the most options open, and that includes Oakland, Los Angeles, and maybe even San Antonio. He at least has limited leverage in that scenario. As for the the A’s, Lew Wolff is standing as far away from this as humanly possible, not wanting to make it anymore complicated, and not wanting to draw the short straw.

The JPA is busy getting ready for life after the Coliseum too. Last week they were ready to hire Republican Guy Houston, but the vote on his hire was delayed amidst renewed scrutiny into legal issues Houston had while in the State Assembly. The JPA did make a hire on Tuesday and his name will be familiar: former Oakland City Manager Robert Bobb. Bobb’s consulting firm is consulting the JPA on stadium and other development at the Coliseum, whether it’s Coliseum City or a Wolff-developed alternative. The cost to the JPA? $25,000 a month. Check out this org chart showing Bobb, Houston (or someone else), and the JPA.

Org chart supplied by The Robert Bobb Group

Org chart supplied by The Robert Bobb Group

The JPA doesn’t have the power to make any planning or zoning decisions. Only the City does. The County is co-owner of some of the land and could provide resources, so it also has a say in whatever happens. All I can say is that when you look at the above chart and all the different parties involved in Coliseum City, it’s a lot of cooks for one kitchen.

Coliseum City ENA likely to be extended at closed session

Update 5:30 PM – Looks like this turned into a nice pre-election announcement for Mayor Quan.


Original post:

Today’s the “big” deadline day for Coliseum City. Or maybe not. Consider the following closed session agenda item, to be taken up this afternoon:

b) Property: Coliseum City properties (various properties bounded by San Leandro Street, 66th Avenue, Edgewater and Helgenberger)

City Negotiators: Fred Blackwell, Gregory Hunter, Larry Gallegos, Daniel Rossi

Negotiating Parties: Bay Investment Group, JRDV Architects Inc., HKS Architects, Inc.

Under Negotiation: Price and terms for disposition of the property

Not much to go on, is there? We know that the deadline is there thanks to previous documents about Coliseum City which specified 10/21:

ENA Timeframe: The Negotiation Period under the ENA is hereby extended to run until October 21, 2014, and may only be extended an additional six months with administrative approval.

October 21 also marks the 360-day point of consideration of the project, during which BayIG was supposed to provide a set of deliverables. A quick recap of some of the major deal points:

  • Tenant sign-on from one, two, or three current sports franchise tenants (Raiders, A’s, Warriors) – None so far
  • Market Data Analysis – The lengthier second part was supposed to have been released by now, has not been made publicly available
  • Infrastructure Study – Completed
  • Investor Business Case – Reportedly late, not publicly released

Last week there was news that a new, previously unknown investor may come in to save the project. Word was that it would be Perry Capital – a hedge fund with two recent executives who have a minority share of the Raiders – they and the City are going to great pains to keep their involvement under wraps until/unless the ENA is extended. Now Matier and Ross report something different:

Council members privately told us they were encouraged by the team’s 11th-hour addition of new deep-pocket investors being represented by San Diego asset manager adviser Floyd Kephart, chairman of the board of Renaissance Cos. Kephart is expected to take the lead role in the newly reconstituted group, New City Development LLC.

So goodbye BayIG, hello New City Development LLC? Okay.

Also last week, we saw a new website promoting the project, Coliseum City Now. I looked into it and found out that the domain was only acquired on September 26. A companion Facebook page started up during the summer. Assuming that both are under the purview of BayIG/JRDV, the timing seems a little suspect. Coliseum City never bothered to have an website outside of the City’s project page for a year. Why have one now? There’s also a Twitter feed, which has never made a post and has less than 20 followers. Chances of a post coming after 5 PM today? Excellent.

birdseye-view_north

Coliseum City in full buildout

In anticipation of the extension, some unnamed City officials reached out to Raiders fans to make a show of support at the open session at 5, during which the decision is expected to be announced. Keep in mind that it’s basically up to the City Administrator, not the City Council. Also understand that not extending the deadline would effectively kill the project, giving Mark Davis every excuse to go to Los Angeles. What other choice does Oakland have?

If the City announces the ENA extension and the new investor, the mountain to climb for them will be steeper that the Mt. Davis upper deck. They’ll need to wrap up the basic terms of the deal, have the Raiders sign on before they decide to move, and start work with the JPA and Alameda County to put together the DDA (Disposition and Development Agreement), which would allow the project to move forward in earnest, in whatever form it takes. In reality, Coliseum City has 4 months to work out the details, not 6.

On a related note, the comments period for the Draft EIR expired on Friday, October 17. The City will take all the comments and get questions answered from stakeholders and other groups that need to provide answers (Caltrans, PG&E, and the PUC for starters). The EIR runs on a separate track from the business side of the deal, though both need to be resolved/approved before any dirt can be turned.

As for the news impact on the A’s – as I’ve said for some time, the funding gap ($600 million) makes the inclusion of a ballpark extraordinarily difficult to pull off in a way that would satisfy both the baseball team, the public sector, and the private investors who are looking for a healthy return. Moving to more far-off forms of financing makes the likelihood of a ballpark even less.

I’ll be checking into the live stream of the open session while watching the World Series. The mix of tweets promises to be entertaining and at times quite confusing.