End of 2015 Poll: When will the A’s move into a new ballpark?

Setting Terms: A Commitment to Exodus

Okay, there was real news about the Raiders and Oakland today, not rumors, so I feel compelled to write about it. I’m over the soap opera news cycle of the last year, looking forward to January, when something LA might (not) be resolved to the NFL’s satisfaction.

As St. Louis and San Diego provided stadium financing plans pledging $350-400 million in public funds for their respective stadia, Oakland officials offered a mere five-page letter promising no public money for construction, hoping that the NFL’s respect of legacy and history would help keep the Raiders in the East Bay. The NFL’s reaction was that the letter was expected, while Mark Davis expressed befuddled disappointment.

At this point, you have to think that based on the efforts City of Oakland and Mark Davis, few people within the NFL believe that any new stadium is going to happen in Oakland. The City has no will to do it, and Davis has spent far more time and effort on Carson than Oakland. The NFL will have to gauge the owner’s interest in resolving the Raiders’ situation against resolving the dilemma in Oakland. Of course, many within the league previously preferred to have the Raiders share Levi’s Stadium with the 49ers, the same way the Giants and Jets share MetLife Stadium. Even with Davis continually dismissing the idea, the concept remains a viable backup plan should nothing continue to happen at the Coliseum.

But again, my beat isn’t the Raiders except in how the Raiders’ plans might affect the A’s. From today we got a big list of deal terms the City is willing to make in the pursuit of the Raiders’ new stadium. Whether or not the Raiders stay, regardless of the Coliseum’s future as the home of the A’s, the numbers are effectively setting the bar for future stadium deals for either team. What is Oakland willing to provide? Let’s take a look at the “concepts” presented to the Raiders.

  1. 69 total acres in and around the Coliseum, including the “South 60” consisting of the B & C parking lots, plus the Malibu and HomeBase parcels. Also included are 9 acres of publicly owned land near Coliseum BART could be used for a hotel or other commercial development adjacent to an expanded BART station and transit hub. The Raiders and a partner developer would receive development rights based on the Coliseum City rezoning effort.
  2.  $90 million in infrastructure, to be designed and approved by the City of Oakland.
  3. No public money towards construction of the $900 million, 55,000-seat stadium. The Raiders would be responsible for all stadium construction costs, including overruns.
  4. At least 8,000 surface parking spots with minimal ancillary development.
  5. Raiders would own the stadium, City and/or County would own the land underneath. That would set up recurring ground lease and possessory interest tax (PIT) payments.
  6. Raiders would take in all stadium revenues while assuming all operating costs.
  7. City’s promised defeasance of the outstanding Coliseum debt (worth $100+ million now, goes down over time).
  8. Construction to start in 2017, stadium opening in 2019.

Per the A’s current lease at the Coliseum, if they are to be evicted because of new stadium construction for the Raiders, the Coliseum JPA has to give the A’s at least two full seasons at the Coliseum while they figure out where to play next. The lease terms also call for the A’s to be compensated for the scoreboards and for lost revenue associated with new football stadium construction.

If we’re to assume that the A’s should get a similarly valued deal to the Raiders in order to stay in Oakland, the deal would be worth $200 million straight away because of the debt and infrastructure costs, plus the value of any development rights wherever the A’s end up, whether that’s at the Howard Terminal, Uptown somewhere, or the Coliseum. That’s the price Oakland will have to pay, and MLB will be happy to press Oakland hard on that. The A’s are expected to build their ballpark entirely with their own money, so it should in theory be a pretty clean deal with no intrusions or complications created by new, single-purpose quasi-governmental agencies like stadium authorities.

Just to be clear, that’s $200 million in value, not cash. The A’s would never see that money except in terms of the completed infrastructure. It could be that certain sites have such high infrastructure costs that they could approach $200 million on their own. New parking garages, the community benefits agreements and PITs Mayor Libby Schaaf mentioned during tonight’s press conference – they’re all worth something. Will Oakland show as much restraint for the A’s as they have displayed with the Raiders? I imagine they would, though it’s far too early to speculate. For the time being, let’s continue to watch how the NFL-LA business shakes out, and see where the Raiders end up as a result.

A’s get an early Christmas present from Oakland

As rumors and nostalgia swirled around the Raiders and what might have been their last game at the Coliseum, the City of Oakland provided some news on the ballpark front as well. According to BANG’s Matt Artz, a 21-page report detailing several potential ballpark sites was sent to A’s ownership for their review. (PDF download)

City staff apparently scoured the city limits looking for sites. Some of them had already been studied in the past. Others haven’t been studied, though we have covered them here sometime in the past. The study is in an early enough stage that many property owners haven’t been contacted about land availability. It’s quite likely that many sites in the current study will drop off quickly, while others have yet to be discovered. Regardless, this is an exciting development that should hopefully lead to some productive talks.

From the quotes and the tone of the article, I expected little more than a rehash of previously dismissed sites. While that’s all there (Victory Court, Howard Terminal), the City included a total of 10 sites, including a couple of alternatives that have been mostly discussed on this blog and not much elsewhere. To me that’s a huge positive, because it shows that the City is willing to consider sites outside the normal developer/booster group focus. It’s a necessary step.

oakland

Four of the ten ballpark sites highlighted within Oakland

We’ll go over all of these in detail. But first I want to spend a moment discussing the USPS site in West Oakland. The 22-acre sorting facility, which you might see as one of the first things in Oakland as your BART train exits the Transbay Tube, is not going to happen. As noted in the document, the USPS site is not for sale. It might only be under consideration because of a twice-delayed initiative by the Postal Service to reduce the number of retail locations and sorting facilities like this one.

In the Bay Area there are a handful of these facilities in San Francisco, Oakland, San Jose, Richmond, and Petaluma. A list of closure candidates indicated that if any facility were to be eliminated or consolidated, it would be Petaluma. Oakland or Richmond could then benefit as it took on Petaluma’s capacity. In any case it’s highly unlikely that the Oakland facility would close down, making the site unavailable for future development.

Over the next few weeks you can expect a few hundred words on every site, including sites I’ve already written about several times. At the same time, keep in mind that unlike the Raiders’ situation, there is no deadline to providing anything to the A’s or MLB. The process is expected to work out much more slowly, which, quite frankly, is the only way to do this right.

P.S. – Bonus points for anyone who can identify a site in the list that I proposed a while back.

Baseball makes net expansion official

MLB continues to try to strike the balance between views and safety. Baseball announced recommendations for netting behind the plate, essentially extending the backstop to the inside edges of each dugout. Implementation of the new standard will be up to each club, since ballparks aren’t exactly uniform in terms of dimensions, even behind the plate. The press release:

MLB issues fan safety recommendations

Fan safety initiative leads to new netting recommendations for next year

Press Release December 9th, 2015

The Office of the Commissioner of Baseball has issued recommendations to all 30 Major League Clubs aimed at enhancing the safety of fans attending Major League Baseball games, while also preserving the interactive elements that are integral to the baseball fan experience.

The recommendations — which resulted from a review that began earlier this summer — include the following:

• Clubs are encouraged to implement or maintain netting (or another effective protective screen or barrier of their choosing) that shields from line-drive foul balls all field-level seats that are located between the near ends of both dugouts (i.e., the ends of the dugouts located closest to home plate, inclusive of any adjacent camera wells) and within 70 feet of home plate. The Commissioner’s Office has retained a consultant specializing in stadium architecture and protective netting to assist interested Clubs in implementing this recommendation.

• Although Clubs already provide warnings to fans about the dangers posed by batted balls and bats entering the stands and the need to pay attention to the action on the field during each at-bat, the Commissioner’s Office recommends that Clubs continue to explore ways to educate their fans on these issues and is providing Clubs with resources to assist them in this area.

• The Commissioner’s Office will be working with the Clubs and online ticketing sellers to identify ways to provide customers with additional information at the point of sale about which seats are (and are not) behind netting.

Commissioner Robert D. Manfred, Jr. said: “Major League Baseball prides itself on providing fans in our ballparks with unparalleled proximity and access to our players and the game taking place on the field. At the same time, it is important that fans have the option to sit behind protective netting or in other areas of the ballpark where foul balls and bats are less likely to enter. This recommendation attempts to balance the need for an adequate number of seating options with our desire to preserve the interactive pre-game and in-game fan experience that often centers around the dugouts, where fans can catch foul balls, see their favorite players up close and, if they are lucky, catch a tossed ball or other souvenir.

“I am confident that this recommendation will result not only in additional netting at Major League ballparks but also draw additional attention to the need for fans who make the choice not to sit behind netting to be prepared for the possibility of foul balls and bats entering the stands.”

The consultant not named in the release is expected to be Populous. The A’s and Giants are committed to making the change, though it may take some weeks before we hear specific plans. The Phillies are looking at a thinner material to use for the netting. I’m interested to see what it looks like.

Part of the view from Section 119 is "obstructed" by the backstop net

Part of the view from Section 119 is “obstructed” by the backstop net

Extension to the inside ends of the dugouts is unlikely to tamp down interest in complete netting from foul pole to foul pole, or at least in line with the edge of the infield down both lines.

The eternal struggle between sightlines and safety, Part 2: Expanded netting

After various incidents and increased concern for fans in the expensive seats around the plate, MLB Commissioner Rob Manfred is getting ready to recommend that teams expand netting past the current backstop area.

The expectation here is that despite the lack of uniformity among backstops (the Coliseum’s notch is perhaps the most unique), nets will extend to the far ends of the dugouts. There’s some inconsistency there as well, since new ballparks sometimes have dugouts of unequal size in favor of home clubs. Unless legislation or legal action forces specific standards beyond the dugouts, it seems as if MLB will provide a minimum standard and give individual teams the discretion to go further if they wish.

Part of the view from Section 119 is "obstructed" by the backstop net

Part of the view from Section 119 is “obstructed” by the backstop net

At the Coliseum, the net is situated in front of the Diamond Level seats, extending to the start of the dugouts on either side. Designing extensions becomes complicated thanks to the walkways between the Diamond Level seats and the dugouts. Unlike a modern ballpark whose dugouts are directly connected clubhouses, at the Coliseum teams have to use these walkways to go into the stadium. Often these walkways are used as extra standing space for players, or as spots for photographers (see above photo).

Transition from the Diamond Level seats to regular seats creates a net design challenge

Transition from the Diamond Level seats to regular seats creates a net design challenge

Since these walkways have to be functional, they can’t have a net hanging down and obstructing them. I suspect that when the time comes to put in a new net, it will run from the far end of the A’s (third base) dugout atop the roof, then follow the shape of the original notch, going behind the Diamond Level seats, and around to the visitors dugout. The Diamond Level seats will get their own protection, in the form of another net that extends eight or nine feet high, just tall enough that anyone standing in that area will be safe. The Mets went a particularly heinous route by installing plexiglas-fronted boxes on the field for the World Series. I had thought that the plexiglas era was behind us, yet there those boxes stood at Citi Field, like penalty boxes for the rich.

net1b

Red line represents a net that angles down to the dugout, blue line extends the same height all the way to the end

Once you solve the problem of how to redo the backstop, there’s the question of how much protection is needed down the lines. Besides the issue of determining the length of the net, there’s also the height and shape. Given that many of the most dangerous bats and foul balls whiz right over the top of the dugout, it makes sense to have protection there. But does it need to be the same height as the backstop? Can it taper down to the far end of the dugout?

MLB and its clubs probably have some decent statistical data that can create a framework for recommendations on the height and length of nets in every ballpark. I hope the teams take this to heart, as there have been too many avoidable injuries in the last year, let alone decades. Then again, sometimes when you try to protect yourself you just set yourself up for another kind of danger.

Schaaf aims to use public financing for Raiders stadium while claiming it’s not public financing

Libby Schaaf has crossed the Rubicon.

showmethemoney

In further explaining her plans for the Raiders stadium (h/t SFGate/Rachel Swan), the mayor started talking about money. Schaaf explained that “she is now feeling the pressure of (NFL) deadlines,” a sign that Oakland is succumbing to the NFL’s tactics, even though she didn’t provide specifics in the NFL presentation on Wednesday. It’s unfortunate that Schaaf had to go there, but if Oakland is to genuinely provide more than the table stakes offer it was giving previously, it has little choice.

What money, you ask? Yes, there is whatever is expected in terms of infrastructure, land, and debt, but Schaaf also talked about instruments that could be used to finance construction of the stadium.

Namely, that means lease revenue bonds. What are lease revenue bonds? Here’s how the State Controller’s office defines them:

LRBs are a form of long-term borrowing the State uses to finance public improvements, including state office buildings, state universities, prisons, and food and agricultural facilities. Like a GO bond, an LRB is, in effect, an IOU. Unlike GO bonds, however, LRBs are not backed by the full faith and credit of the State, and may be authorized by law without voter approval.

While sports facilities aren’t mentioned in the examples above, they are the kinds of projects that LRBs can fund. In fact, both the Coliseum and the Arena were financed using lease revenue bonds, so the instrument isn’t new. If not structured properly, LRBs can present the same risk as the first Mt. Davis project.

GO bonds are also referenced. GO stands for general obligation, the same kinds of bonds used to fund civic projects via pledged taxes. That may be where Schaaf isn’t considering what she’s suggesting as a form of public financing, since it probably won’t incur new taxes on citizens. Instead there will probably be a number of use fees such as ticket taxes, concessions and parking fees, plus the property tax increment generated by redeveloping the project. Is that not public financing by another name? To me, yes. To others, maybe not. While it might not involve new sales taxes or new property tax assessments, the project will get plenty of other benefits: reduced or eliminated property taxes, lower borrowing costs, and reduced liability.

Schaaf also described how the Mt. Davis payoff would work: the County would buy the debt out via a lump sum payment (the County has money), while the City would pay the County back over time, perhaps using a similar payment schedule to what it pays now. That would mean that Oakland would pay on average $7-8 million a year to Alameda County, instead of bondholders. At the same time, Oakland would have to buy out Alameda County’s share of the land. I expect that it would happen via some sort of land swap since that wouldn’t require upfront cash on Oakland’s part. If no satisfactory swap arrangement can be made, then tack some money onto the annual payment City has to make to County. Then Oakland could make its money back by selling some of the Coliseum land, though that too has its issues. Neither the Raiders nor A’s have expressed any interest in seeing a great deal of development go up next door to the Coliseum as they want to preserve parking. Neighborhood groups decrying gentrification came out in force during the Coliseum City process to protest sales of public land to private developers for what will largely be market rate housing and tech offices. Those factors helped sink Coliseum City. Why would should it be different this time? Because Libby Schaaf is behind it and not Jean Quan?

Lastly, Schaaf indicated that a a successful Coliseum project for the Raiders might help push the A’s towards downtown. Considering that Wolff has HOK working on plans at the Coliseum, he’s probably not pleased by this. I mean, it’s written into the A’s lease:

43. CONTINUED STADIUM DISCUSSIONS

Licensee and Licensor (or Licensor’s designee) shall continue to engage in good faith discussions concerning the development of a new baseball stadium for use by the Licensee that would be a permanent home for the Oakland Athletics, provided that such discussions shall solely focus on the development of a new baseball stadium that would be located on land within or immediately adjacent to current Complex property. If agreement is reached on development of such a stadium, the Parties will renegotiate any terms of this License Agreement that may need to be modified or eliminated in order to facilitate the construction of the new stadium. The Parties’ discussions concerning a possible new stadium will continue during the Term until Licensee communicates to Licensor that Licensee has made a decision on a permanent baseball stadium at another location or until Licensor provides Licensee notice of early termination (as provided in Paragraph 7.2.2.) in connection with a Raiders Construction Plan.

Should Schaaf actually convince the Raiders to stay, the A’s escape clause could be triggered thanks to negative impacts on the A’s operations. And with the amount of assistance the mayor is getting ready to give the Raiders and the NFL, it’s reasonable to expect the A’s (more likely MLB) to ask for a similar amount of assistance. Howard Terminal or any other site near downtown is going to be incredibly expensive to acquire and/or prep, not to mention new infrastructure that will be required there. If that kind of assistance isn’t pledged, well, that’s how teams start gearing up to leave, isn’t that right Mark Davis?

NFL’s LA relocation committee meeting upstaged by Iger-Carson announcement

Oakland Mayor Libby Schaaf went to NFL headquarters in New York to present her city’s case for keeping the Raiders in town. While no decisions are immediately forthcoming, it was important for Schaaf to keep Oakland in the game. Schaaf and the Oakland contingent arrived shortly before Oakland’s scheduled slot, then left the building by taking the back entrance after she was done, avoiding the assembled press in the process. Maybe the Mayor had to catch the next JetBlue flight back to Oakland or she had tickets to Hamilton, I don’t know. In any case Oakland gave its modicum effort, which was better than literally nothing.

A slide from Mayor Schaaf's presentation

Actual slide from Mayor Schaaf’s presentation

Shortly after the meeting ended, Schaaf’s office proffered this statement:

NEW YORK, NY – Mayor Libby Schaaf released the following statement following the City of Oakland’s presentation to the NFL on November 11 in New York City:

“Today’s meeting with the NFL reinforced that Oakland is correct in continuing to work directly with the team and the NFL to keep the Raiders in Oakland where they belong.

We were very grateful and excited to have the opportunity to make Oakland’s case to the NFL today. I felt it was a positive discussion and that we were well-received by the Raiders’ leadership and the other NFL owners. They were engaged and asked great questions.

Moving forward, the City of Oakland is working to defease the current bond and purchase Alameda County’s stake in the land and existing facilities. We are also beginning to analyze ways that we might monetize future revenue that could be generated from a stadium development.

We remain committed to responsibly keeping as many of our sports teams as possible. My focus continues to be on forging a partnership that supports a team-centered effort to build a new stadium for the Raiders in Oakland that will be successful for the fans and the team and responsible for the city and its taxpayers.” (11/11/15)

What was in the presentation? Mostly it rehashed the work done for Coliseum City. The preso emphasized that the Coliseum land was publicly owned and properly entitled, with a completed EIR in hand. There’s also $40 million in funding available for the planned $140 million expansion of the Coliseum BART transit hub. Beyond that there was little to crow about deal wise. Even though Schaaf isn’t promising any public money for construction, there’s still a laundry list of issues to resolve before any kind of groundbreaking. Among them:

  • Financing for an estimated $100 million in additional infrastructure
  • The buyout of Alameda County
  • Terms to cover the outstanding Coliseum debt (a City/County issue, not the Raiders’)
  • Potential funding sources: tax increment and lease revenue bonds

Those funding sources are what’s expected to pay for the infrastructure at the very least, perhaps more. Keep in mind that the top three items could cost Oakland $400 million or more depending on when the deal happens. It will difficult enough to raise those funds before even considering how to bridge the stadium’s funding gap.

St. Louis and San Diego also had their turns and made their proclamations. But before they even had a chance to plead, an announcement from 3000 miles away sucked all the air out of the room. The Carson Holdings group overseeing the joint Chargers/Raiders stadium project announced that Disney CEO Robert Iger would become a non-executive chairman, with the option to buy a minority stake in either team. Iger, who ran ABC/Capital Cities during the height of ABC’s Monday Night Football run, is a trustworthy known quantity among the league’s owners. That said, Iger is not a billionaire, with a net worth said to be somewhere in the $100 million range. If Iger were to want a piece of the team, he would probably bring in some private equity partners from elsewhere to put up whatever was needed to take care of the project cost in Carson.

For months I have stayed away from the all-too-easy horserace aspects of this story. I won’t handicap any project’s chances now. As a strategic move, the Iger announcement worked like gangbusters. The play was for legitimacy, which is impossible to deny as of November 11. Last week many in Oakland were satisfied in believing that Stan Kroenke’s Inglewood project was superior enough to Carson that the Raiders would be forced to stay by the Bay. Now only a fool would say that.