Summary of 2014 Coliseum lease agreement

OAKLAND ALAMEDA COUNTY COLISEUM AUTHORITY

July 3, 2014

STAFF REPORT

6a. Resolution Approving and Authorizing the Execution of a Stadium License Agreement between the Oakland Alameda County Coliseum Authority and Athletics Investment Group LLC

Background. The Oakland Athletics (“A’s”) have been operating at the O.co Coliseum under the current License Agreement (the “License”) since October 31, 1995. It has been amended and extended a number of times. The last extension, in November 2013, extended the License through December 31, 2015. After the 2013 extension to the license was approved, the A’s requested that the Authority work with them to come up with a longer term License Agreement For a number of months, representatives of the A’s and the Authority have been negotiating terms of that License. In light of the desires of both parties to reach a longer term agreement and to begin to work on the possible replacement of 0.co as the home of the A’s, the negotiators are proposing to the Authority a Stadium License Agreement (the “2014 License”) which is attached to this report. The A’s have expressed willingness to sign this form of 2014 License.

Proposed Terms of the Amendment. The following is a brief summary of some of the proposed terms of the Amendment. The full form of the proposed form of the Amendment is attached for review.

Term. The term of the License would commence on the date the last approval is obtained and terminate on December 31, 2024.

License Fees. The A’s agree to pay license fees for use of the stadium of $1.75 million in 2014; $1.25 million in 2015, $1.5 million from 2016 through 2019, and $1.25 million from 2020 through 2024. The 2014 License explicitly prohibits the A’s from withholding license fees as a method for resolving disputes and provides strong protection against such withholding in the future.

Early Termination. The 2014 License provides for certain early termination rights.

  • Construction of new Raiders’ stadium. The Authority is permitted to terminate the 2014 License if certain criteria are met with respect to a plan to build a new stadium for use by the Raiders on the Coliseum site. This termination would take place 60 days after the end of the second baseball (sic) from the date the Authority give notice of an intent to terminate.. The clause permitting early termination by the Authority to accommodate a new Raiders’ stadium contemplates that the A’s would not have to leave the Coliseum Complex site, but could build their own new stadium on the site at a different location than the new Raiders’ stadium.
  • The A’s move from Coliseum site. The 2014 License also provides that, beginning in 2016, the A’s may give notice of an intent to terminate. Termination by the A’s would be effective December 31 of the second year following notice. At the earliest, any termination by the A’s could not take place until December 31, 2018. If the A’s terminate in order to relocate to any permanent stadium site outside of the City of Oakland, the A’s are required to pay in a lump sum the remaining license fees through the end of the term. This lump sum early termination payment by the A’s would not be required if the A’s were to move to a new stadium anywhere within the City of Oakland.

Improvements to Stadium. The A’s agree to spend not less than $10 million to install a new scoreboard system in the stadium by the 2015 baseball season. The Authority agrees to pay for any structural work that may be required to support the scoreboard installation. The A’s would pay to maintain and operate the scoreboard and retain all advertising generated from the scoreboard for A’s games and events. The Authority will control the revenues from advertising on the scoreboard for all other events in the Stadium, including Raider’s games. The Authority agrees to spend not more than $1.5 million to provide enhanced lighting to the parking lot and certain areas of the Stadium.

Stadium Maintenance and Repair. In connection with the Authority’s obligation to maintain and repair the Stadium, the Authority agrees to fund a Stadium Maintenance Fund by setting aside $1 million each year, increasing by 5% each year, to fund its ongoing maintenance and repair obligations. The A’s may designate $150,000 of this fund each year for a particular project. The Authority is required to maintain the stadium even if the amount required exceeds the amount available in this fund. The 2014 License provides for an expedited dispute resolution should the A’s and the Authority disagree on the necessity and cost of the maintenance and repair obligation.

Scoreboard caps. The Authority will pay $200,000 per year for the use of the scoreboard caps where the am name is currently displayed. The 2014 License contains provisions that delineate the rights of the parties should the caps be removed in connection with the installation of a new scoreboard.

Continued Stadium Discussions. The 2014 License provides that the A’s and the Authority will continue to engage in good faith discussions regarding the construction of a new permanent home for the A’s on or adjacent to the Coliseum property.

General Release of Claims. As a condition to entering into the 2014 License, the A’s and the Authority agree to release all claims against the other party, including the claims that are the subject of an arbitration proceeding.

Financial Impact to the Authority: The A’s have provided a financial analysis showing that, compared to the last 10 years of the 1995 License Agreement, the proposed 2014 License Agreement has the potential to return total cash value to the Authority of more than triple that provided by the 1995 License Agreement (and more than double the cash value on a present value basis).

Further Approvals. The Management Agreement, between the Authority, the City of Oakland and the County of Alameda, requires that each of the City and the County approve the 2014 License. In addition, Major League Baseball must approve the 2014 License before it becomes effective.

Recommendation. Staff recommends that the Board of Commissioners adopt the resolution approving and authorizing the execution of the 2014 License and requesting that the City of Oakland and the County of Alameda approve the 2014 License..

Deena P. McClain
Acting Executive Director

P.S. – This agreement, which is supported by Alameda County and the A’s, is to have a vote on July 3. If it passes, the matter would go to the Alameda County Board of Supervisors and the Oakland City Council, who each would have to approve separately. Oakland has indicated that it will vote against the lease and provide a counteroffer. The A’s have indicated that they will not entertain any such counteroffer.

A rift opens between Oakland and Alameda County

In the aftermath of the PR disaster that was Friday’s JPA meeting, discord between the two halves of the JPA, the City of Oakland and Alameda County, was revealed. Tensions had been simmering under the surface for some time, most evidently on display during the all-hands joint meeting last December. In Friday afternoon’s Trib article, JPA Board Chair and AlCo Supe Nate Miley expressed his discontent with the City, calling the no-show a step towards dissolving the JPA. He again brought up the possibility of the City buying the County out of the JPA, which would allow Oakland to go it alone on Coliseum City.

Neither party has the available cash to buy the other out, but Miley seems bent on making it part of the discussion. The implications would be huge. Coliseum City talks have divided the JPA into Oakland as the more pro-Raiders group and Alameda County as more skeptical and perhaps leaning towards the A’s. There are major fundamental differences between how the two sides characterize the talks. The City is optimistic about BayIG and the Raiders, whereas the County is questioning where the money will come from and is already looking at alternatives. Should this divide stay intact, it’s difficult to see how the two sides could come together to approve a large-scale redevelopment scheme like Coliseum City. Maybe the rift can be healed as more information comes in that could build confidence with the County leaders. Coliseum City’s current trajectory makes such a kumbaya moment nearly inconceivable.

I’m starting to think that if the JPA had a quorum and took a vote, the lease extension would’ve been approved 5-3 or 6-2, which would’ve forced the City Council to vote on it. There are 2 CMs on the board and 2 Oakland appointees, Yui Hay Lee and Aaron Goodwin. Goodwin has frequently taken independent positions in the past, most recently being the lone dissenter on the short-term lease vote in November. At the time, Goodwin cited the lack of a long-term agreement with the A’s as the reason for his dissent. 10 years is a much longer commitment, even with the opt-outs (which have been standard practice at the Coliseum for years). When the JPA took $3 million out of the capital improvements fund to fund the Coliseum City studies, it was Goodwin who was concerned about the impact the siphoning would have on the relationship with the A’s.

Goodwin’s name should be familiar to those with some sports business knowledge because he’s been an agent to numerous NBA players for 20 years. His current client list includes Oakland native and Portland Trail Blazers point guard Damian Lillard, among others.

If Goodwin didn’t like the lease or chose to vote as a bloc with the rest of the City side, the results would’ve been 4-4, a stalemate. That probably would’ve forced the JPA to go back to the drawing board, which would’ve been fine in that everyone would be forced to be honest about where the JPA stood with regards to the lease.

With a 5-3 or better vote, the next course of action would’ve been for the City Council and the County Board of Supervisors to vote on the lease. Let’s assume that the Supes approved the lease. It would’ve been up to the City. There’s no telling what could’ve happened. There are several potential outcomes:

  1. Council draws up resolution in support, votes to approve lease
  2. Council draws up resolution in support, votes to kill lease
  3. Council draws up resolution against lease, sends their own version back to JPA
  4. Council never makes resolution, lease never comes up for vote

Any of the last three outcomes makes the City look bad in MLB’s eyes, especially after Bud Selig prematurely announced that a lease agreement had been made. Selig’s power play and not-so-subtle wording put Oakland on the defensive. Whether it’s a setup to force Oakland’s hand or Selig simply siding with Wolff, it’s a difficult decision for the City to make with the Council attempting to balance the A’s and Raiders’ interests. As symbolically good a lease would look to Wolff and Selig, it could look terrible to Mark Davis and Roger Goodell. But the City had to know that this day was coming, and that to keep stalling until a solution magically appeared for them was a pipe dream. Selig has discounted Howard Terminal in concurrence with Wolff. Davis considers Coliseum City the last shot for Oakland, and continually has been disappointed by the lack of progress on the deal front. Oakland’s time to tap-dance around the issue is coming to an end.

That leaves the one lingering question about the lease extension, Why now? The A’s lease is up in 2015, not this year, so the urgency feels out of place. Maybe Selig decided to get the first domino rolling, knowing that Coliseum City had a timetable for a decision later this year. Sports law expert Nathaniel Grow considers a new extension potentially damaging for San Jose’s antitrust lawsuit against MLB. That seems like a long shot, especially considering San Jose’s shaky legal standing in the first place. If that is the motivation, it’ll prove once and for all that MLB isn’t terribly concerned about local politics. They’re looking out for baseball. Everything else ends up collateral damage.

Oakland City Council members no-shows at JPA meeting, vote not taken

Oakland, and Oakland alone, chose Option #3.

Fans and media showed up at Oracle Arena to attend and speak at the JPA Board meeting. The Board was expected to take a vote on the A’s 10-year lease extension. Unfortunately, that vote was not taken because four Board members didn’t attend, including City Council members Rebecca Kaplan (who negotiated the lease) and Larry Reid. Without the City’s official participation, there could be no quorum, and thus no vote. Several attendees who were against the lease were nonetheless angry at the absentees for their apparent procedural gaffe.

It gets worse.

So the City Council made the decision to not send its Board members on Wednesday, but they neglected to inform anyone about it? Why not just cancel the meeting? Inevitably there will be blowback. Some of that has already started.

Perhaps some of that reaction is an overblown response to having to get up early only to be stood up. Still, however tenuous the relationship was between the County and City over the Coliseum and Coliseum City, this certainly hasn’t helped. Remember that it was the County that had the questions about the feasibility of Coliseum City. Here we are, nearly eight months after the last adult conversation, and we still haven’t had another. Someday. Maybe next week? Maybe not.

I suppose that yesterday’s comparison of the JPA to Congress was apt. There’s always hope, I guess.

When the JPA is as effective as Congress

This shouldn’t be this hard.

Both Lew Wolff and JPA characterize the lease extension talks as close. Wolff or Bud Selig may have jumped the gun yesterday. Then again, maybe Wolff made so few changes with his counteroffer that he felt he could consider the deal done. Some staunchly opposed claim that elements of the lease such as the way the parking tax matter is being addressed are showstoppers. Maybe those items really are showstoppers. If they are showstoppers, it should be easy to kill the deal. Conversely, if the sides really are close as they purportedly have been for the last few weeks, it should be fairly easy to close the gap.

These two ways of characterizing the talks shouldn’t both be true. Last week I said that if the JPA, City, and County are truly concerned about the parking taxes (or the opt-outs, or other language), put the whole thing off until after the fall arbitration hearing. That’s effectively the same thing as saying NO to the lease. There are really three options for the JPA here:

  1. Vote Yes and deal with the fallout (coming from the Raiders/NFL)
  2. Vote No and deal with the fallout (coming from the A’s/MLB)
  3. Postpone the vote and hope to delay the fallout indefinitely from either side.

We have no visibility into the talks or the offers and counteroffers, yet I get the feeling that there is very little movement that should properly bridge the gap. There are numerous ways of dealing with the $5 million:

  • Leave the $5 million out of the deal
  • Raise rent to compensate for including the $5 million (from $1.75 million to $2.5 million/year)
  • Have the A’s surrender control of some revenue streams such as concessions or advertising

Now maybe the JPA has provided such options, and Wolff has called those showstoppers, I don’t know. Whatever the case, there seems to be very little creativity that would bring about a solution. Strangely, they’ve been fine with allowing the Raiders to pay very little rent while getting the Harbor Bay headquarters for free (as long as they’re engaged in Coliseum City talks).

Worse, I’ve been hearing a lot of outrage from some about how the A’s are ripping the City and County off for the $5 million. Yet I’m not hearing anything about properly addressing the ongoing $20 million subsidy (debt and operating expenses) that the City and County have to pay for. Are we so numb to that debacle that we can’t consider ways to deal with it? Sure, grandstanding on a one-time $5 million payment is easy if you’re an Oakland or Alameda County pol. Better that than to remind everyone about the even worse deal that they themselves negotiated nearly 20 years ago. If you’re going to really get outraged, get mad about that and ask the pols to make a better deal. Last time I checked, one-time $5 million payments aren’t worth much compared to $20 million annual payments.

I figure the outrage or faux rage is borne more from two separate motivations: the fear of Mark Davis, and the desire to never compromise with Lew Wolff. I imagine that there are some on the JPA who are more realpolitik and don’t want to favor one owner over the other or understand that the best way to go may be with one team instead of two, but there will always be some who can’t give in, can’t make it look like Lew Wolff won. For them, I think the answer is quite simple and can be ratified by a simple No vote. Bud Selig’s comments may have complicated things a bit, but if these stridently principled Nays are that opposed, this should be a no-brainer.

Really, a vote either way would be the best thing for all parties. It would allow both teams to know where they stand and would allow them to plan next steps. If they can’t decide on this on account of $5 million, it makes me wonder how they’re going to make a decision on a project that could cost 500 times as much. If they can’t decide and keep trying to entertain lease discussions they’ll continue to be caught up in the media battle, which they are not winning. It won’t win over the Bud Selig or Roger Goodell. Fans will continue to be frustrated and the whole affair will continue to be a distraction. I doubt that’s what anyone wants.

So please, JPA, if it’s close to a reasonable deal, make the necessary changes and vote YES. If the deal sucks, vote NO. Then we can move on and focus not on short-term fixes, but rather a long-term home. And you’ll look decisive for once, instead of looking like Congress.

Oakland: We’re SF-adjacent!

An op-ed by Oakland Waterfront Ballpark leaders Don Knauss and T. Gary Rogers hit the Tribune tonight, making its case for a ballpark at Howard Terminal. In the op-ed Knauss and Rogers extol the virtues of downtown ballparks, while also talking up Oakland as a beneficiary of spillover effects from the startup boom in San Francisco.

That’s in keeping with the Oakland-as-Brooklyn narrative many are trying to pitch when wooing companies and potential residents to Oakland. From the housing standpoint, it’s definitely working. High rents in SF and comparable or better cultural and lifestyle resources in Oakland make a compelling choice for some residents and companies. But let’s not make this more than it is. Right now, Oakland is a stylish, cheaper bedroom community for SF that Marin’s too stuffy to produce and Daly City is too plain to provide. Is Oakland’s best sales pitch We’re San Francisco-adjacent? If Oakland wants to be taken seriously as a major city of prominence, its pitch shouldn’t be that it’s close to SF. The pitch should be that Oakland is the new home for investment. SF brought in $5 billion of venture capital last year. San Jose brought in $3.5 billion. Oakland? $242 million. Plus Silicon Valley is the home of VC’s and the big companies like Apple, Google and Facebook – companies that regularly acquire or acqui-hire those same startups that Oakland covets. Oakland should be more than simply riding on the coattails of the very city it hates like a bitter enemy. As a coach who recently coached a team based in Oakland would say, C’mon Oakland, you’re better than that.

The other part of the Knauss-Rogers argument seems to be aimed directly at this blog:

Some have said that, as a former industrial site and one close to railroad tracks, Howard Terminal poses unsolvable challenges for development as a ballpark. The reality is that Howard Terminal carries no greater challenge to being successfully developed than other former industrial sites along the San Francisco Bay, including Mission Bay and the famous ballpark across the Bay.

Not unsolvable, guys. I describe these challenges as cost-prohibitive. Nearly any problem can be solved if you throw limitless amounts of money at it. Limitless amounts of money are not available from the City of Oakland’s coffers, and ultimately any group that may want to build at Howard Terminal will face a situation where the cost to develop is too high to make their money back, nevermind making a profit. Those costs, and the lengthy development timeline associated with them, are what Lew Wolff is talking about regarding Howard Terminal. The cost and time of dealing with CEQA, the BCDC, SLC, FRA, CAPUC, Caltrans and local agencies threaten to make Howard Terminal too costly too pull off.

If OWB wants to prove Wolff, me, and numerous other doubters wrong, they sure have a funny way of showing it. The exclusive negotiating agreement signed in the spring, which was supposed to start the pre-development process, only called for a $100,000 deposit by OWB, only half of which will go towards any studies. Frankly, that money isn’t enough to do anything substantial. Howard Terminal will require $2-3 million worth of studies to determine its true feasibility.

Oakland and many of the Howard Terminal proponents had a chance to prove out a waterfront ballpark site five years ago. It was called Victory Court. It offered many of the same economic advantages as Howard Terminal, but lacked the SF-adjacent angle because the nation was mired in a recession. Supposedly over $1 million was spent on studies for Victory Court, some of which could be used for Howard Terminal. We never saw any of those studies. As redevelopment died and the recession showed few signs of abating, Victory Court died. Unlike the big to-do when the initiative was launched, there was never a report issued about the site’s demise. We found out later that acquiring the site at up to $240 million would’ve been cost-prohibitive. Thankfully, Howard Terminal is already owned by the Port of Oakland. However there are plenty of issues that could make Howard Terminal too expensive to develop.  If OWB is so confident in the site, pony up the money to get it properly studied. If OWB really believes in the site, they should’ve paid at least a good portion of that $2-3 million ($500,000 would probably suffice for starters) to get the ball truly rolling. As it stands, the ENA and $50k look like someone did something, but when the time comes to show results, the only thing to say will be that Oakland spent the first year trying to figure out if the ballpark was worth pursuing. We’re past the point of feigning interest, folks. Commit the real money, get those studies going in earnest, and prove Wolff (and me) wrong once and for all. Over the past few weeks there have been a few op-eds from interested parties. Let’s aim for fewer op-eds and more reports. It’s not that hard, Oakland. And if you’re waiting for Wolff to write a big check for those studies, I have to wonder how committed OWB and its supporters really are to the idea.

A’s lease extension vote postponed, aftermath

The Trib reported tonight that after a lengthy discussion by the Oakland City Council about the merits of the proposed 10-year lease extension for the A’s, the JPA vote on the lease will be postponed. Opponents, largely Raiders fans, were ready to break out talking points for Friday’s scheduled JPA meeting. No need for that, though we’ll have to wait for the inevitable lease leaks about the lease the next time it comes up.

I thought the lease would be approved based on CM Rebecca Kaplan’s work on the deal. Problem is that we’re in June, and Oakland’s just starting to have very important budget discussions. While property tax revenue is on the rise, there are still potential shortfalls that need to be addressed. One way to address them – at least this year – is to hold firm on the parking tax fight they’re having with the A’s. Or as I said on Saturday:

Lease tweets

Lease tweets

If the City doesn’t want the parking tax to be a wedge issue, then simply let the matter go to arbitration as planned for the fall. When that’s done, start up the lease discussions anew. Yet, why do I get the feeling that we’ll hear about this again before election day?

Yep, just as I expected.

There’s also another way to manage these lease discussions – do everything privately. Stop broadcasting out to the media that a deal is close, and then when the actual negotiating begins, walk away from the table. The level of pettiness and petulance on display is unseemly. If the two sides really want to get it done, stop with the interviews and soundbites and hammer it out, with input from all stakeholders. If not, MLB will be happy to dictate the terms for you as they did last November.

Speaking of pettiness, what’s this?

Did Wolff instruct the scoreboard operators to change the display from “OAK” to “A’s”? There’s no reason to do this unless Lew’s trying to send a message to Oakland pols. Or unless he felt he needed to test the apostrophe thoroughly. Of course, over the weekend Lew had some fun with his image as the A’s hated owner, so maybe this is an extension of that. If so, he trolled some very excitable A’s fans very hard.

On Twitter I had been referencing a study from Emory University about the types of fanbases each MLB franchise has. The study tried to separate various factors, such as a “bandwagon” effect (fan sensitivity to on-field performance) and social media equity (how frequent and how volatile is team’s Twitter following) and others. While the bandwagon discussion was quite the flamefest, there was a good deal more agreement about the assessment of the A’s social media characteristics. Teams were grouped into one of four silos, and while there could be some debate about a few teams, the A’s place was rather well earned.

Groupings of team by type of fanbase

Groupings of team by type of fanbase

“Depression & Some Mania”, eh? Wouldn’t have it any other way.

Oakland’s reckoning: Raiders or A’s?

More info about the pending lease extension came out via Lowell Cohn over the weekend and from Mark Purdy today. If you’ve been following the story since November, you’ll know that there aren’t many new items here. Yes, the A’s will pay slightly more in rent than they are now or were in the last lease. Yes, they want to put in new scoreboards. And yes, the lease term will be 10 years, with an escape clause if the Raiders build a new stadium that forces the A’s to be displaced. There is one new wrinkle, in that the “eviction” process for the A’s will include a 2 year advance notice by the JPA. That should allow the A’s enough time to properly scope out temporary venues, whether they are existing ballparks in the region or something else like a temporary new stadium. It should also put MLB at ease since they won’t have to go into scramble mode trying to make accommodations for the A’s or visiting clubs.

Cohn’s long blog post is probably the most evenhanded take he’s ever had on Lew Wolff. That alone is notable. More importantly, the post gets comments from both Wolff and Raiders owner Mark Davis on their desires for the Coliseum. Davis confirmed that he would prefer the Raiders to have Coliseum City to themselves. In Purdy’s piece, Wolff confirmed that he has no interest in Coliseum City as currently (or formerly) conceived, citing the complexity of acquiring land for the whole project, three-quarters of which (600 acres) is privately held. Wolff has experience with this, having explored and failed with that option, the Coliseum North/66th-High plan.

Wolff is a developer, and unlike the Coliseum City-Raiders concept, doesn’t need to bridge a $500-600 million funding gap. There could still be a gap, but that could be filled in by the usual private commitments (premium seat lock-in, charter seats, season ticket subscriptions). In turn, Wolff could develop the Coliseum in a more phased manner, with fewer pie-in-the-sky projections. Like Davis, Wolff wants control of a single venue and all of the revenue streams that come with it.

“But under no condition will we become a tenant of anyone in a new facility,” Wolff said. “We have to control our own destiny . . . We would be interested in the land that’s under city control. Once we’ve extended our lease, we can examine that.”

Moreover, Wolff continued to dismiss Howard Terminal, even go so far as to make the elimination of that site as a condition of negotiating on a new Coliseum ballpark, should that opportunity arise.

Naturally, there will be grousing by many in the stAy crowd about Wolff’s supposed fear of Howard Terminal. That’s ridiculous. It really comes down to two things: focus and resources. Right now Oakland is focusing most of its pro sports effort on Coliseum City through the JPA. It has spent money on an EIR, a draft of which is due in weeks. Howard Terminal, on the other hand, has no EIR even started yet. OWB, the group supporting the site, is providing $50-100k on limited work. The rest of the EIR will take at least 18 months from the start and would probably cost $2-3 million to complete. Wolff, having seen prior reports on Howard Terminal, sees this as a waste of money, time, and effort. Why spend $2-3 million to prove a negative? If OWB wants to spend that money, let them. They have the most to gain from an HT park. Something tells me that they won’t.

Then I started to think about the stadium boom of the last 25 years. I tried to figure out if there were any cities or municipalities that worked on two completely new stadium projects within the same city or market simultaneously. There aren’t many examples.

  • New York City – Citi Field & Yankee Stadium built at the same time, opened in 2009 thanks to Rudy Giuliani muscling it through.
  • Philadelphia – With Veterans Stadium and The Spectrum getting old, three venues replaced those two: Wells Fargo Center (1996), the Linc (2003), and CBP (2004).
  • Cleveland – The Jake (Progressive Field) and Gund Arena (The Q) both opened in 1994 thanks to the implementation of a city-wide sin tax.
  • Glendale, AZ – Jobing.com Arena and University of Phoenix overlapped by mere months, and have nearly bankrupted Glendale in the process.
  • Pittsburgh – Heinz Field and PNC Park opened flanking the now-departed Three Rivers Stadium.
  • Houston – Toyota Center and Reliant Stadium (NRG) also overlapped by a year and are in different parts of the city.
  • Seattle – Safeco Field and CenturyLink Field were timed to replace the Kingdome in short order.

Five of those cities had two venues built next to each other. The dual ballparks in NYC, an outlier due to circumstances, happened thanks to shady politics and shadier financing arrangements. The rest were your typical boom-era projects with huge amount of public funding. Most other venues are single-issue, pushed by the teams, and have their own unique financing structure. Oakland and Alameda County aren’t in the position those other cities are, not if various elected officials want to keep their jobs. The Raiders stadium will cost around $1 billion, while the A’s ballpark could cost $500-700 million depending on site. Oakland’s not going to be able to foot even 25% of each venue, so why would Davis and Wolff entertain the JPA’s grand schedule if they’re the ones footing the bill. The last thing Wolff and Davis want is Oakland to have divided focus on two projects that could ultimately compete against each other for scarce resources, whether money or personnel. They’re looking out for their franchises first and foremost. If Oakland gets a civic boost, great, but that’s not paramount for the owners.

And that’s why Oakland will inevitably have to choose between these two teams. Just building a single stadium, getting it approved, getting it vetted by civic groups and voters, will be its own set of difficult tasks. That demands full, undivided attention. If Oakland can’t provide that, it’s worth asking how truly serious Oakland is about all of this. That’s what Wolff and Davis are asking.

Blackwell could become Coliseum City consultant, JPA to vote on lease extension 6/20

Fred Blackwell may end up having his cake and eating it too. Weeks after shocking the City of Oakland with his announcement that he would take the CEO position at the San Francisco Foundation, the Trib reports that Blackwell may end up taking a consulting position to oversee the Coliseum City project. It’s not clear if Blackwell negotiated his availability with SFF or if the JPA will even approve the side gig. Regardless, Blackwell would be valuable to have with the project, even if he isn’t necessarily a decision maker. Then again, considering he’s pulling down $344k per year with SFF and was paid pretty well as Oakland City Administrator, perhaps he should take the gig on a volunteer basis. What better way to show your commitment, eh Fred?

In the same article, JPA board member and Oakland City Councilman Larry Reid continued his Debbie Downer attitude about Coliseum City, especially the developer/investor group BayIG.

As far as the project is concerned, Reid said progress is hard to find. The city still hasn’t been able to sign an exclusive negotiating agreement with their new development team because of a payment dispute with a former development partner.

It’ll take $100k to jettison Forest City. This should not be that difficult. The lack of progress comes in the form of the lack of commitment (the notorious “letter of interest” from the Raiders) and some deliverables, which have slipped on occasion. Still, they’ll continue to plow ahead. What choice do they have?

Then there’s this:

The first question that most will ask after this is, Is there an escape clause? Chances are that there is, beyond the fifth year. That’s what Lew Wolff wants. Mayor Quan and others on the City Council have preferred no out clause, and could vote down the extension after the JPA approves, but can you imagine how bad that would look? Especially with the mayoral race now in gear? Better to compromise and kick the can down the road than to cause yet another scene. And if there is no escape clause, I imagine that MLB wouldn’t approve it (they have to review and approve all team stadium leases). Given the state of the Coliseum, the league would want to retain flexibility for the A’s. That wouldn’t come with a 10-year, no-escape lease.

Lew Wolff has been steadfast in his stance that no future stadium talks can occur with a lease first. That’s the opposite of what Mark Davis is seeking, a stadium deal before the next lease for the Raiders. Davis said in April that a 10-year lease would make it tough for the Raiders to build at the Coliseum. Things might be a little easier if there’s an out clause, since the A’s could simply vacate when it comes time to start construction on a Coliseum replacement, whether it’s on the current Coliseum footprint or elsewhere in the complex. The current plan calls for the Coliseum to remain in use while two stadia go up alongside it. Beyond the obvious questions about parking availability, there’s still a major concern about making the financials work out. There are whispers that BayIG may not foot the bill, not so much because they can’t afford it but because the funding gap is so huge that it cuts heavily into their profit projections. And that may be the case with just one stadium, never mind the replacement ballpark. I expect the one year deadline to get pushed out by six months because of all the details and complexity. Will Davis hang in there? He already considers this stage the 11th hour.

Oakland’s mayoral picture changes, San Jose’s goes as expected

This isn’t Rebecca Kaplan’s first rodeo. She ran for Mayor of Oakland in 2010 on a platform of pragmatism and hope. In the end she was considered a bit young for the job, placing 3rd next to political stalwarts Jean Quan and Don Perata, who got the plurality of first-place votes. Quan famously ran the “Anyone-but-Don” campaign to the mayoral seat, and the rest is history.

I went to a Kaplan campaign event that summer, to get a sense of what she was like on the trail. She was everything I had heard she was – friendly, eager-to-please, and not the kind of same of political operator that many in Oakland were. Eventually, she’d get her chance again when the 2014 election came around. With Quan flailing away on the job and flagging in favorability and job approval, today Kaplan became the 16th candidate to run for Oakland Mayor in 2014. Like the last election, this will be ranked choice voting in November, with everyone running their own version of “Anyone-but-Quan” to some degree.

During that August stop, Kaplan outlined a few things about her pro sports platform, which even then were much more fully-formed than what Quan has proffered throughout her term. From that post in 2010:

  • She’d like to keep the A’s in town, have a rebuilt Coli be the home for both NFL franchises, bring a WNBA team to town, and attract more international soccer matches.
  • Kaplan talked up the potential of TOD developments, citing the Coliseum as a distinct site with potential. She joked about the BART bridge being a “walkway of chain link doom.”
  • She did not say it specifically, but I inferred that she would push for a A’s ballpark solution at the Coliseum, with new ancillary development around it to make it feel like a proper urban ballpark feel.
  • She did not mention any of the JLS sites. She tried to make a distinction between what she called the “Possible Dream” (something that is feasible) and the “Impossible Dream” (something that people simply keep talking about in circles). Does this mean that she’s not a shill for the JLS-area developers that want/need the ballpark to boost their ROI?

Obviously things have changed a bit since 2010. There will be no joint 49ers-Raiders stadium in Oakland, not with Levi’s Stadium set to dominate the landscape in the fall. Coliseum City, which Kaplan has touted from the beginning, has become more crystalized as a plan, though it still has numerous question marks. The “Impossible Dream” remark was about Victory Court, which within a year quietly died. Kaplan has chosen to put most of her arrows behind Coliseum City. Five months from the election, nothing about the project will happen that can sink her campaign. If she successfully negotiates the lease extension with the A’s, the act will most certainly boost her campaign, even if the net result is simply pushing the issue a few years out (again).

Lew Wolff praised Kaplan in code during the Bloomberg interview. We’ll see how real any support is when campaign donation records are released later. Remember that Wolff and John Fisher donated to Perata’s 2010 campaign as when the former State Senator said that putting up public funds to keep the A’s in town was a bad idea. For now, it sure appears as if Wolff has a horse in the mayoral race – then one that can get him the lease he wants. Beyond that lease, there’s no telling what can happen. Once some dominoes fall at Coliseum City, we can get a better sense of how everything else will project.

Mayor Quan has also supported Coliseum City, but at a distance. Kaplan’s position as a JPA commissioner (board member) allows her to take a hands-on approach.

Over in San Jose, the expected frontrunners, County Supervisor Dave Cortese and San Jose Councilman Sam Liccardo, were the top two candidates to emerge from the primary. Cortese is also a former SJ City Council member. Both are members of Baseball San Jose, which should mean that the effort to get the A’s and push MLB/Giants will continue unabated. But while Liccardo is a Chuck Reed disciple, Cortese is more his own guy, forging an alliance with Reed’s biggest nemesis, labor. If elected, it’s possible Cortese could take a different approach from Reed in approaching MLB. Madison Nguyen ran competitively on Tuesday, eventually falling short to Liccardo 25% to 21%.

===

While the San Jose mayoral race looks like a classic labor-vs.-business battle, the Oakland race is much harder to peg, and could reach circus-like proportions with the amount of horse trading that could occur. That’s what happened last time, and guess who won the election?

Forever small market

Update 8:10 PM – Oakland CM Rebecca Kaplan will announce on Thursday that she’s entering the mayoral race. Recent polls had her as a frontrunner even though she hadn’t declared.

In an interview on Bloomberg Market Makers earlier this morning, Wolff talks up the 10-year lease extension that has gained momentum this week. When asked by show co-host Eric Schatzker when the extension might be done Wolff replied,

“Next couple of weeks, I hope… there are some approvals necessary, but the people we’re dealing with now are very intelligent and working with us.”

That seems to be a further nod to Oakland City Councilperson and JPA board member Rebecca Kaplan, who is now involved in negotiating the lease. Kaplan, who still hasn’t decided if she’ll run for the Oakland mayoral gig (thanks ranked choice voting for allowing this to play out), could very easily use the A’s extension as part of her platform, pivoting directly into the race immediately afterwards.

It’ll happen when it happens. Unless it doesn’t.

If you want to get a good idea of how the rest of the country views Oakland and the A’s, look no further than Schatzker’s numerous comments about the small market nature of the A’s. Moneyball may have indelibly painted the A’s as a small market team that plays in a crappy stadium, but there’s also a major disconnect. Market Makers is broadcast from New York, so it’s no surprise that the Schatzker and co-host Stephanie Ruhle know little about the Bay Area (Schatzker’s “southern Bay Area” remark is especially telling). Bloomberg has its own West Coast offices and a TV show broadcast out of SF. Oakland is mere miles from SF and a little further from the South Bay, separated only by a body of water, not a border, and yet Oakland is unable to shake the small market label. It’s not even clear that a new stadium in Oakland will get rid of small market.

Wolff, who had perhaps his best television interview in recent memory, played along with the narrative and called the A’s David to the various Goliaths, though as usual he didn’t complain about said Goliaths. The rising tide is lifting the A’s boat, as the franchise should see $200 million in revenue this year thanks to the new national TV deals. Yet competitively they remain way behind most of the rest of baseball, where 16 teams started the year with payrolls above $100 million. The A’s are stuck with the other small market – or rather, low revenue – teams. A new ballpark running at capacity should properly elevate the A’s relative to their peers. The CBA points out that the A’s are in the #7 market, and given their position they should be taken off revenue sharing once a new ballpark starts operation. But as long as the A’s remain in limbo with regards to a new venue, so will their financial position. They live in a large market, yet they can’t function like one because they don’t make enough money to live that way. Sounds apropos considering how tough it is for individuals to live in much of the Bay Area these days.