Clorox CEO was on with Chris Townsend earlier today. As usual, Townsend had a pretty thorough, wide-ranging interview that touched on a number of A’s and stadium-related topics. I’m going to highlight a couple of items.
Townsend: When it comes to buying the A’s, are you personally interested? Is Clorox interested?
Knauss: No I wouldn’t say we’re interested (Clorox) in buying the A’s. We clearly would love to work with the current ownership, Lew Wolff and John Fisher, on keeping the A’s here. I think there’s a lot of old data that Lew Wolff has about working in Oakland… We think the world’s changed here.
Later in the interview…
Knauss: I think we have this tremendous site down Howard Terminal, which is just adjacent to Jack London Square. We have what I believe can be the premier site in baseball… When I last talked to Lew about that last year, he said ‘we looked at that a long time ago, it’s not viable’. I think the last time the A’s actually sat down with the City in any serious way was over five years ago with Mayor Dellums. At the time I heard some of the old excuses why Howard Terminal wouldn’t work and they’re all void now, it’s a completely different place.
Townsend: Why do you believe Howard Terminal is viable?
Knauss: In 2005 the last time they looked, the Port was close to full capacity. Now it’s under 50% utilization. The Port can easily use Howard Terminal for a ballpark without adversely affecting the shipping business… The second thing I’ve heard over the years is that there is this environmental contamination on the site and people throwing some crazy numbers around about remediating that site. We’ve done the diligence there as well and have been assured by experts that the ballpark can be built on that site without a substantial cost associated with cleanup. Basically we can build a ballpark right on top of that site without scraping the site clean, the same way AT&T Park was built on that pier.
Knauss went on to talk about the revitalization of Jack London Square and the recent Brooklyn Basin deal. Then Townsend moved onto Knauss’s potential interest in owning the A’s.
Townsend: In the past you’ve talked about having a group to buy the A’s. Why have you never made an offer?
Knauss: We’re trying to respect baseball’s protocol. Our attitude is to negotiate this and not litigate this… We’d love to have Lew sit down with us and go over the new world that’s down there, not the old world that he’s familiar with. The other thing is that we’re close to getting this lease renewed so I think we’re demonstrating that you can get things down in Oakland and Alameda County… The second thing is getting site control of Howard Terminal. So I think that’s the reason we haven’t said, ‘Let’s find another ownership group.’ We think that could be viable, but I think clearly we’d rather say, ‘Look Lew, we’ve got a viable site, we believe that the team deserves a new world class ballpark, but there’s a way to get that done here in Oakland.’
Townsend: Clorox moved a number of jobs to Pleasanton. Why do you do that but yet you still say, ‘Ah we’re still about Oakland.’
Knauss: It’s a fair question. There are two things we wanted to try to achieve with that. One is, it’s a bus- it’s really a focus on innovation. The reason we’ve been around for 100 years is because it constantly innovates new products. We wanted to get all of our innovation people in one location. Now obviously innovation is driven by R&D, and we’ve always had R&D people folks out in Pleasanton. We had about 400 scientists out there and we’ve had ‘em out there for decades. What we’ve learned over the years is that when you put all of the functions out there that drive innovation – marketing, sales, finance, human resources, legal, etc. – put all those people out there with the R&D people, then you get much quicker innovation, you get bigger ideas developed. So we wanted to create a new campus out in Pleasanton where we had our nucleus and add those people. We moved a lot of those folks out of downtown Oakland out to Pleasanton – but we kept them in Alameda County.
The second reason we did it was a business continuity issue. The headquarters building – obviously we’re all in the Bay Area sitting on various faults. We wanted to get some dispersion of our IT resources out in Pleasanton too where we thought we could spread out some of our risk from a business continuity standpoint. Those were the two central reasons: better innovation, better business continuity, minimizing risk. We’ve kept people in Alameda County, and we’ve kept our general office in Oakland, and certainly I’m sitting here in Oakland and I live in Oakland. So we’re committed to Oakland.
Let’s try to put this in perspective. Don Knauss was brought in as Clorox CEO in October 2006, shortly before Ron Dellums was elected mayor. Knauss is clearly referring to the anti-sports Brown administration and the general absence of leadership during the Dellums era. Are we – and Wolff & MLB – supposed to believe that a new sheriff is in town, that Oakland has suddenly gotten its act together? Moreover, Knauss recited Quan’s stance on the ballpark issue: As long as we provide the site, the A’s and MLB can’t turn us down. I think it’s pretty simple. If Oakland provides all site prep costs, streamlines the process, and throws in $200 million, then you can get MLB to pay attention. Without that it’s not really an even playing field with San Jose, where the greater number and size of upfront revenue commitments can help pay down ballpark debt early, just as is being done in Santa Clara.
Knauss also talked at length about the issues associated with developing Howard Terminal, which he minimized as much as possible. Muppet151 has a little insight into this:
HT is in a state of constant and PERMANENT review. I talked to the guy in charge of overseeing the site who said it’s somewhat similar to what contained contamination at the San Jose Arena. You can read the SJ documents here:
The HT project manager explained things a little further in an email to me when he said “While the Land Use Covenant restricts activities that would interfere with the cap from being conducted without DTSC approval, it is common in development plans to engineer acceptable solutions that modify cleanup remedies including caps under DTSC oversight.” If the footprint of the stadium extends outward to the point it’s over the capped area, and it’s my understanding it would, the stated scenario would take place.
From a technical standpoint, HT is definitely possible, and can be done. The problem is that this is not a 1 time fix. This is a permanent issue, and worst of all this is infrastructure work that the public will be on the hook for. There was cleanup work done in the area in 2004 making the ballpark possibility a little stronger. But the 200,000 cubic yards of capped material remains, as done the 2002 CA DTSC estimate of a $100 million cleanup should something go wrong. And again, that’s public money. Things might go smoothly….but over time, caps need maintenance, and putting a stadium over the underwater caps makes the situation remarkably unique.
Currently, nothing can be built at the San Jose Arena parking lot, including a garage for the arena or a future high speed rail terminal, without a comprehensive and costly remediation plan. Right now there’s only a sealed asphalt cap there.
Knauss also brought out the “respecting the process” stance used by many on the outside, including the mayors of both San Jose and Oakland. They’re all willing to “respect the process” until they hear something that doesn’t work with their agenda. That’s how the game is played. Unfortunately, as we’ve seen recently, the only way to get Bud Selig’s attention these days is to sue baseball.
When asked about Clorox’s move of hundreds of jobs to Pleasanton, Knauss’s previously well-focused responses devolved into some incredibly inane, weaselly CEO-speak. Read that response carefully. Earthquake faults? When Loma Prieta hit on the San Andreas fault, the Coliseum had enough structural damage to force Games 3 & 4 to be played at the ‘Stick, despite the Coli being on the Hayward fault (and supposedly less prone to damage). Knauss didn’t touch the issue that really caused the move: many of the scientists and their families lived along the 680 corridor and preferred to work there instead of commuting to Oakland. Knauss had to make the tough decision to keep Clorox competitive. That’s the reality of the move, not some BS reasoning about earthquake faults or risk management. And that’s the irony of it. Clorox is perfectly able to move 500 jobs to Pleasanton or 300 jobs to Arizona if it has business or competitive reasons. In terms of pure economic impact (tax revenue, job creation), the A’s are a much smaller company than Clorox, yet they can’t move 35 miles for competitive reasons. Makes me wonder if Knauss just did this to provide cover for the company’s previous and future moves under his leadership. It didn’t cost him anything, that’s for sure.