Yesterday’s important takeaway is that City & County are on the same page

Update 1:05 PM – SF Business Times has more on the land deal aspect, including quotes from Floyd Kephart. 

Yes, Raiders and A’s fans alike can start dreaming up their new stadium(s), all shiny and new. A proper team store inside each. There will be chances to compare whatever’s proposed on each proposal’s merits. And there’s a great likelihood that whatever each team proposes pushes the other out of the Coliseum due to scarce land resources and financing difficulties. When those proposals are presented, we’ll have plenty of time to discuss them. It’s entirely speculation at this point, so I don’t want to focus on that yet.

Instead, I want to look at the one less exciting news item that came out of the last couple of days. As Oakland Mayor Libby Schaaf reiterated during her interview with Damon Bruce yesterday, the City of Oakland and Alameda County are finally working together on plans for the Coliseum. Prior to this week, the City had been working on Coliseum City independently of the County, leaving the County to consider working on its own alternatives. They even got to the point of hiring a new general manager for the JPA along with a development consulting firm headed by former City Manager Robert Bobb before backing away. Eventually they decided that the best way forward was to work in concert with the City, since both parties will need to sign off on any future plans.

The biggest obstacle for the City and County is that blasted remaining Coliseum complex debt. At $200 million (split almost evenly between the stadium and arena), it is an albatross threatening the feasibility of any project at the Coliseum. Thankfully, that debt is being whittled away over time by annual payments, so in a few years it’ll be about 25% less. That’s still a heavy load on buildings that may well be demolished as part of any plan, so dealing with the debt in a responsible way is arguably the biggest responsibility for Oakland and Alameda County all told.

The Coliseum complex's location adjacent to BART makes it hugely valuable to developers

The Coliseum complex’s location adjacent to BART makes it hugely valuable to developers

The one major asset the City and County have available to them is 120 acres of land, comprised of the Coliseum complex, additionally required property out to Hegenberger, and a smattering of parcels near the BART station. Many are presuming that the land could be swapped for the remaining debt, however much that is when the time comes. That may be a bad presumption, considering the complex’s value as a potential Transit Oriented Development site. Even if you discard 30 acres for new venues, that’s 90 acres to play with, one of the largest TOD sites in the Bay Area (along with Bay Meadows and San Jose Berryessa).

How much is the Coliseum land worth? Located in East Oakland and surrounded by light industrial uses, no one’s going to ask for $7-10 million. What is the the fair market value, though? A listing on Loopnet for nearly 3 acres just north of the complex is asking for $6.75 million, or $2.36 million per acre.

coli-nearby

At that rate, the publicly owned 120 acres would be worth $283 million, which would be double the value of the remaining Coliseum debt in a few years. Maybe the JPA uses land sale proceeds for infrastructure, maybe it gets split between the City and County – either way it’s worth more than simply giving away the land to the Raiders or A’s in exchange for paying the debt. One of the owners may even consider those proceeds as a worthy public contribution for a stadium. As the adult conversation continues in earnest, City and County will bring in an appraiser to figure out FMV for that land, find out its revenue generating potential as it gets rezoned, and plan for how to use future revenue streams. It’s a conversation that’s bigger than just keeping teams in town.

If a proposal lowballs land value, as Lew Wolff’s 66th/High (Coliseum North) plan did, selling the land may be considered a nonstarter. If land is the public’s biggest asset and leverage, it hold true to guarding it in the public’s interest. That may lead to discussions in which only parts of the land are sold. In any case, it should be a very lively conversation, one Oakland and Alameda County need to have whether there are two or zero teams in Oakland in a decade.

City of Oakland Press Release Regarding Coliseum City ENA Extension

Hat tip to Zennie Abraham, who posted this first and did a quick video blog about it.

MAYOR LIBBY SCHAAF, OAKLAND CITY COUNCIL PRESIDENT LYNETTE GIBSON MCELHANEY, COUNCIL PRESIDENT PRO TEMPS LARRY REID and SUPERVISOR NATE MILEY SUPPORT THE CITY AND COUNTY JOINTLY EXTENDING AGREEMENT WITH NEW CITY AND ADDING RAIDERS AND A’S TO NEGOTIATIONS

OAKLAND, CA – January 19, 2015 – Mayor Libby Schaaf, Council President Lynette Gibson McElhaney and Council President Pro Temps Larry Reid today announced their support for extending the negotiating agreement with New City, as well as bringing the A’s and Raiders to the table to discuss developing the coliseum land themselves. Mayor Schaaf has also secured a commitment from the Alameda County Board of Supervisors to consider formally joining the City of Oakland in this new approach at their next meeting January 27th. The Oakland City Council will vote in a closed session next Tuesday, January 20th, to extend the Exclusive Negotiating Agreement (ENA) for up to 90 days, with an express condition that the City may negotiate simultaneously with its sports teams about developing the entire coliseum site.

“I’m excited that, for the first time, both the Oakland Athletics and Oakland Raiders have expressed interest in coming to the table to join these serious discussions and that the City and County are poised to move forward together. This new approach represents real progress in crafting a project that protects the public dollar, retains our sports teams, and increases the economic vitality of the coliseum area,” said Mayor Libby Schaaf.

“Keeping our sports teams in Oakland with a world-class development is a top priority of these discussions,” said Oakland City Council President Lynette Gibson McElhaney. “As joint owners of the land in question, Alameda County will be a critical partner in the collaborative effort to retain our teams and determine the best way to build a state of the art complex that will be a beacon of civic pride for many years to come.”

“I appreciate Mayor Schaaf’s hard work to develop an approach that gets the city and county on the same page. I support the idea of signing onto the ENA with New City now that we will also start negotiating directly with our sports teams,” stated Supervisor and Coliseum Powers Authority Chair Nate Miley. “We’ll be doing our due diligence, but I’m optimistic that the City and County will start moving forward as a unified team after our January 27th action.”

More Tuesday, of course.

Alameda County meets with group selling Coliseum City alternative

If you haven’t been aware before, the City of Oakland has an ENA (Exclusive Negotiating Agreement) with the principals behind Coliseum City. That includes newcomer New City Development, headed by Floyd Kephart, local architects JRDV, and Colony Capital (to some diminished extent). The ENA would also extend to any teams signing on to the plan, if the Raiders or A’s were interested. So far, neither has gotten on board. Nor has the Warriors, whose sights are set on San Francisco.

Now comes word that a group called O3 Capital is pushing its own plan to redevelop the Coliseum area. O3’s plan would include three new venues for football, baseball, and basketball, along with an unusual twist – a new terminal at Oakland International Airport. It’s unclear why specifically a airport terminal would be involved, but such an inclusion would make an already complex project significantly more complicated. My guess is that O3 would want a cut of revenues coming from running the airport and the sports venues. That would cut into the operations of the Port of Oakland, which oversees more than 70,000 jobs at the airport and the seaport.

It’s also worth questioning the viability of a third terminal. The airport has lost both United and American over the past several years, becoming more reliant on its status as a low-cost alternative to SFO as well as FedEx’s hub operations. It makes little sense for a third terminal to be built, especially after an expansion for Terminal 2 was already undertaken to satisfy Southwest Airlines’ growth at the airport.

Regardless, Alameda County Supervisor and JPA Board President Nate Miley appears willing to hear O3’s plans and others out. O3 head Tarik Hasan is unwilling to show his plans unless the ENA for Coliseum City expires, which would presumably allow for an open bidding process. With nearly $5 million spent on studies, reopening bidding might look to some like following up on a waste of effort and money, putting Coliseum redevelopment back at square one. It could also be said that the lack of progress made by the various groups associated with Coliseum City have simply shone a light on the fact that Coliseum City is too difficult to make work, so starting over is the next best step. Start over or allow for an extension and hope it works out? That should be decided this Tuesday.

Another thing I’m more interested in is whether others echo Miley’s sentiments on the project, especially within Alameda County. Over a year ago the Oakland City Council and Alameda County Board of Supervisors finally had a full, lengthy discussion about the project and its prospects. The Supes weren’t nearly as sanguine about Coliseum City as the Council was, given their more pointed questions and statements. There hasn’t been a similar session ever since, and I doubt that the Supes have since gained religion on the project with its struggles. The easiest thing for Oakland to do is the extend the ENA, effectively punting on the project for however many months. Inevitably some hard questions will need to be answered, and the Council will have to decide whether to fish or cut bait. Floyd Kephart has a hell of a sell job to make this week.

From Now Through Opening Day

With the MLB-San Jose legal battle out of the way (for now), we can turn our attention back towards Oakland, where most of the news over the last two years has originated.

January 20 – Tuesday is the deadline for the Coliseum City three-month extension, granted to Floyd Kephart’s New City Development group when they took over the project. The Oakland City Council will take up the matter in the afternoon’s closed session. During the evening open session the Council is expected to report on Coliseum City’s progress.

closed

Agenda item for 1/20 City Council meeting

If everything goes as expected, Kephart will get another extension of 3, 6, or 9 months so that he can try to rope the Raiders. The Raiders will probably be given another one-year lease extension, since Coliseum City is not yet a finished product and the Raiders have nowhere else to go for 2015. Mark Davis wants to retain maximum flexibility for his franchise, so a multiyear deal seems out of the question. Meanwhile, the A’s and Lew Wolff will be patiently waiting on the sidelines for Coliseum City to work itself out, wanting no part of the project.

February 8 – On Sunday comes FanFest. It’s worth going just to get acquainted with all of the A’s new players. If there’s a concurrent BlogFest event, there’ll be a post about it. Tickets are $10, and as usual you can expect a sellout.

On a personal note, this year’s FanFest will mark the first one since it came back that won’t be held on the same date as the Double IPA Festival, held at The Bistro in Hayward as part of SF Beer Week. Looking back, the doubleheader was truly my favorite day of the year. DIPA will be held the previous day, February 7 (Giants FanFest day). I may be draggin’ a bit during FanFest.

February 19 – Pitchers and Catchers report to Mesa, AZ. They’ll be at Fitch Park, as the renovated facility in Mesa has replaced Papago Park in Phoenix.

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March 3 – Spring Training Opening Day is a home game at Hohokam Stadium vs. the Giants. You might want to get your tickets in advance, or else the Giants fans will snatch them up. If you want to catch two games during a weekend, come to Phoenix the following weekend, March 7-8.

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March 13-14 – Want a different scene from laid back Arizona? The A’s and Cubs are playing a pair of spring training games at Cashman Field in Las Vegas. Yes, you can relive all the splendor that was the start of the 1996 season, then hit the craps tables and buffets.

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April 6 – Opening Day at the Coliseum. We’ll see if Billy and Bob can work their magic again.

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Get comfortable, folks. We’re gonna be here a while.

 

Last minute inclusion of new Oakland stadium boosts SF’s Olympic bid

Word came yesterday that the US Olympic Committee was going to select its choice as the bid city for the 2024 Olympics. A month ago, I considered the bid doomed because of its wasteful temporary stadium in Brisbane. Now it looks as if wiser minds have prevailed, as San Francisco Mayor Ed Lee and Oakland Mayor Libby Schaaf held a conference call today to promote a new wrinkle in the plan: a main stadium for track and field and the opening/closing ceremonies at the Coliseum complex. Phil Matier has the scoop. Though bid presentations were made in mid-December, there was nothing stopping BASOC from amending the proposal to include the new stadium concept.

That concept is eerily similar to what I suggested a month ago. The stadium would be outfitted for the Olympics, but built for the Raiders in the long run. The idea of a “legacy” stadium could significantly boost the Bay Area’s bid, which was hampered by the $350 million, pop-up stadium on the windy stretch of Peninsula south of the ‘Stick. While pop-up stadia are a great idea in principle, in actual practice they haven’t proven to be as versatile or reusable as originally thought, especially in the case of London’s Olympic Stadium. Maybe another decade will bring technology that can make such a concept more efficient, but I wouldn’t pin a bid’s hopes on it. That’s why a stadium that works for both the Olympics and the Raiders makes sense. Atlanta’s Olympic Stadium was transformed into Turner Field, which was perfectly fine for 20 years until the Braves decided they wanted to chase suburban dollars in Cobb County. That shouldn’t be an issue with the Raiders in Oakland.

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The rest of the bid appears to be designed to look as compact as possible given the dearth of major outdoor facilities within SF city limits. It has AT&T Park repurposed for beach volleyball, the W’s SF arena used for gymnastics and basketball (finals, presumably), Aquatic Park for staging many long distance events, and Harding Park for golf. Some of the more debatable choices include Treasure Island for a series of new facilities (BMX, tennis, sailing). While Treasure Island offers a great backdrop for a BMX track, so does the Embarcadero. Stanford’s Taube Family Tennis Center is arguably the best in Northern California and would only need a temporary stadium expansion to be compliant.

Sites in the East and South Bay are not numerous, especially when compared to the 2012 and 2016 bids. Stanford is only listed for the pentathlon, an outdoor event not dependent on a large stadium. SAP Center is the volleyball venue, while Haas Pavilion is a key basketball venue and Oracle Arena is listed for handball (I think these should be reversed). The Coliseum complex was originally going to have the arena and a new velodrome. Having a velodrome, stadium, and arena there creates a nice hub of activity.

Mercury News map shows locations of venues, does not include new Oakland stadium at Coliseum

Mercury News map shows locations of venues, does not include new Oakland stadium at Coliseum

A hub-based plan is what Los Angeles is going for. Leaning on its previous Olympic experience, LA could be considered the favorite if the chief criteria is efficiency. The compactness of the bid belies LA’s reputation for sprawl, with most of the venues within 10-15 miles of each other. To achieve that compactness even Orange County has been cut out of the bid. Somehow the LA River will be a “feature” of the bid, which could give rise to the least photogenic Olympics ever (Beijing’s smoggy skies providing stiff competition).

Hubs were a feature of Bay Area’s previous bids, but with Stanford 30 miles away from downtown SF, the Bay Area’s hubs were going to be too far flung. Eventually, if the Bay Area bid beats out the others, BASOC and USOC will have to consider better utilizing Stanford and Cal to contain costs. In Matier’s report he suggests that the two West Coast cities lead the pack. Boston has many geographical advantages and is the most compact city, but it lacks many major venues and may be considered too small to make it work. Washington’s bid depends its own Olympic-NFL stadium, replacing RFK Stadium and allowing their NFL team to come back from the Maryland suburbs. Washington has the worst weather, and is dragged down by its perception abroad. SF may be the golden child in terms of image, and is certainly the prettiest locale of the four.

Later today the USOC will meet in a conference room inside Denver International Airport’s terminal. After the decision is made the committee will announce the decision and fly out to the winning city for a press conference. The list of cities on the 2024 Summer Olympics Wikipedia page is not all that impressive despite the name recognition, so 2024 is as good a chance for the US to win as any in the last decade or so. The final selection by the IOC will take place in 2017, so the winner tomorrow will have a lot of time to work with the USOC on fine-tuning its submission.

P.S. – If SF is chosen, and the Raiders sign on to a NFL-Olympics stadium at the Coliseum, chances are that the A’s would be gone. It’d be difficult to have a new stadium, the existing arena, a cycling velodrome, and a new ballpark at the Complex. It’s simply too crowded. Making the parking situation work while supporting several years of construction over multiple phases is a bit much to ask of “permanent” tenants like the pro sports teams.

P.P.S. – There are a number of political and infrastructural issues to tackle should SF get the nod. I’m hesitant to write anything about that stuff until a bid is chosen.

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.