San Jose: Wolff throws in the towel

When I posted a few weeks ago on Lew Wolff’s SJ Chamber talk, I discussed the possibility that he may once and for all eliminate Downtown San Jose from all future discussions. On Wednesday, Wolff finally made it official. Rumors of this were present as early as six months ago, but I wanted to see something official first.

Barry Witt’s article in the Merc sheds light on a few new items that fill in the gaps quite a bit:

  • Wolff tried to broker deals to get the rights to Santa Clara County, but Giants ownership was unwilling to give them up.
  • He tried even before he had become managing partner.

This is certainly different from Wolff’s “We’re focusing on Oakland” stance of April 2005, when he took control of the team. Then again, it’s consistent with his statements that he wouldn’t challenge the Giants’ rights. It’s possible that discussions over territorial rights date back to when Wolff was given the VP of Venue Development title.

Chris De Benedetti’s wrap-up of the event has a more East Bay-tinged flavor and includes quotes from Fremont City Manager Fred Diaz, Oakland City Council member Larry Reid, and Mike Healy, spokesman for Oakland mayor-elect Ron Dellums.

There have been clues that pointed to this. Chief among them is #1 San Jose backer Mark Purdy’s change from Fremont as a negotiating ploy to Fremont as the best alternative given the circumstances. This didn’t happen overnight. Purdy’s newest article sounds like a sales pitch to the many Baseball San Jose supporters who need to be convinced to support the Fremont ballpark – it won’t work financially unless their corporate dollars buy those suites, ads, and club seats.

Purdy dives further into the rumor mill with the following:

“There are plenty of murmurs in Silicon Valley circles that Cisco is smitten with the idea of a partnership with the A’s, on many levels — including naming rights to the ballpark. There are rumblings out of Cisco’s offices that concepts for a ‘ballpark of the future’ have already been brainstormed and game-planned. The project allegedly has support from the highest levels, including CEO John Chambers.”

Even though I’m a nerd who works in high tech, I hope “ballpark of the future” doesn’t lend itself to dehumanizing the game. All I want is for AM radio reception to work in the ballpark.

I was supposed to attend the event this morning but had to attend to some personal matters. Jay Hipps from Soccer Silicon Valley has audio from the event if you’re interested. There is some news from the soccer/Quakes front as well.

Fremont’s budget woes

A handful of articles have been put out over the past few months questioning how infrastructure will be paid for at Pacific Commons should a ballpark come in. Chief among these concerns is the extra policing that will be required for event security, traffic control, and additional presence in the new “entertainment district” that should be expected., a police industry website, has the Argus story from June detailing Fremont’s budget woes. In the story are the following nuggets:

  • AT&T Park typically has 18 SFPD officers on staff for a Giants game, 24 for Giants-Dodgers games
  • The Giants pay for security inside the park, SF City/County pays for traffic/crowd control outside the park.
  • In 2005, overtime for Giants games cost $250,000.
  • Fremont typically has only 16 officers deployed at any one time throughout the entire city.
  • Fremont has slashed its budget by cutting $25 million and 220 jobs over the past few years.
  • Fremont may have to dip into its reserve fund to pay for 2006-07 city services.

Sounds daunting, doesn’t it? It does, but only when viewed through the prism of those facts above. There are several things to keep in mind:

  • Population has grown 1-2% in the past 5 years. That along with the state’s budget crunch have severely limited appropriations to Fremont. With the creation of new housing at Pacific Commons (5,000-10,000 new residents), by law appropriations will grow proportionally.
  • Rezoning and reassessment of the remaining Pacific Commons should increase property tax revenues significantly, on the order of several million dollars per year. Fremont gets 15% of every property tax dollar, while Alameda County gets 20% into its general fund.
  • New retail development will increase sales tax revenue. Of the 8.75% sales tax rate in Alameda County, a 0.5% chunk automatically goes towards local public safety. Should 250,000 new square feet be built, that small 0.5% chunk would translate to as much as $500,000 per year alone for local public safety (based on $400 per square foot, per year in sales).
  • Hotel tax revenue growth has been flat since the dot-com bust. The creation of a new hotel (a new Hilton to replace the old Fremont Hilton?) and buzz in the South Fremont area could translate into increased revenues, especially the Fremont Marriott. Fremont’s hotel tax is 8%, lower than both Oakland (11%) and San Jose (10%), so there is room for a hotel tax hike if it’s warranted.

If all of that fails to bring in the necessary revenue, there is always one possibility: a ticket tax. Historically, such a tax has proven unappealing to teams because they see a ticket tax as eating into their own ticket revenue. However, even a nominal tax – say, 50 cents per ticket – should produce upwards of $1 million per year depending on attendance. That should go a long way towards funding the necessary police presence at Pacific Commons. The introduction of such a tax will be a bone of contention. The good thing about it is that the tax wouldn’t be used to pay down any bond-related debt, only for budgeted services.

If anything, the big question is where the staffing will come from. Fremont certainly isn’t going to hire a dozen or so police officers just to staff A’s games. Much of the time stadium detail is overtime work and is charged accordingly. It’s possible that staff will have to come from neighboring jurisdictions such as Newark and Union City. The Alameda County Sheriff’s department may be tapped as well. The Sheriff’s department has grown as a result of the closure of the Oakland City Jail, though I’m no expert as to how prison guard work translates into stadium detail.

Fire and emergency services are no small requirement either, and both of those have been hit by the budget crunch. Again, the incremental increases in revenue should help this even if the state’s budget problems remain. The fact is that the city needs to grow economically to insulate itself against future crises.

As Fremont celebrates its 50th anniversary, its leaders need to plot how the next 10, 20, 50 years will look. A decision on the ballpark development will go a long way towards establishing that legacy.

Six Degrees of Lew

NBC11’s Raj Mathai ended the sports section of the tonight’s late newscast with a mention of a Merc article about the Sharks’ pursuit of a pro hoops franchise. Mathai noted that the Sharks’ failed bid for the Seattle Sonics involved one particular big-money guy at the end: Oracle’s Larry Ellison. The Sonics have already been sold to business interests from Oklahoma City, who last season played gracious and enthusiastic part-time hosts to the Katrina-displaced New Orleans Hornets. New owner Clay Bennett sounds diplomatic so far but just about everyone sees the skids being greased for a hasty exit.

The Sharks’ initial bid appeared dead a few weeks ago, but now it appears that the Sharks will go to the City of San Jose looking for upgrades to HP Pavilion, which could make the Tank more attractive for an NBA team. The actual request is to authorize a study to see what improvements would be required, similar in scope to the ballpark study – though precluding an entirely new arena. While some technological upgrades would be welcome – particularly in the form of upgraded video boards, fascia boards, and HDTV monitors – I sincerely doubt that mere upgrades will make a NBA team leap to SJ. To make a deal attractive for a non-Sharks-owned team, the NBA team would be looking for a large piece of the Pavilion’s current revenue stream, a piece that the Sharks would be loathe to give up. This would apply to the Sacramento Kings should their efforts to build a downtown Sac arena wither. If the Maloof brothers were to show interest in selling the team to San Jose interests, it would be a different story. There are problems with the Warriors, who aren’t going to take a new competitor to their market lying down. Then there’s the overlord himself, David Stern. From a strategic standpoint, it makes little sense to use SJ as anything more than a stalking horse. Stern has been more vociferous in his complaints than Sonics ownership, which tells me that he’s actually interested in keeping them there. If he simply wanted a stress-free arena deal (market notwithstanding), the Sonics, Kings, or Hornets would already be signed long term to OKC, Vegas, Anaheim, or ahem, San Jose.

Speaking of the Warriors, they and the Coliseum Authority still haven’t gotten a naming rights deal in place for the Oakland Arena. There isn’t officially a naming rights sponsor for the new Arizona Cardinals stadium, but there is at least one suitor who has been turned down: hip mexican restaurant chain pink taco. pink taco is not some mom-and-pop taqueria. It’s run by Harry Morton, son of Hard Rock Cafe/Hotel/Casino and Morton’s Steakhouse proprietor Peter Morton. They’re apparently serious, according to a press release and an article in The Business Journal of Phoenix. The Morton family just sold off the Hard Rock brand for some $700 million.

Interestingly enough, a Morton’s location is scheduled to open in downtown San Jose as part of a huge refurbishment of Park Center Plaza. The complex, which was once a major part of Lew Wolff’s portfolio, could soon spawn a big name competitor to Wolff’s existing restaurants. And on the morning of August 30, Wolff will speak about the future of downtown San Jose a block away from Park Center Plaza at Adobe.

(Yes, I could’ve mentioned Wolff’s previous stint as a part owner of the Warriors, but I chose the more circuitous route.)

Wednesday night “rumble”

Wednesday night’s game against the M’s might not turn into Sharks vs. Jets, but it should still be fairly compelling. While the day is officially Fremont Day at the A’s (with full pregame regalia), a “There is No ‘A’ in Fremont” rally will be held outside the stadium. I don’t come back from overseas until this weekend, so I won’t be there. Whatever happens, please keep it civil folks, and focus on the action on the field.

In related news, the Argus’s Chris De Benedetti has a non-update of the Pacific Commons situation, but also has a quote from a NUMMI spokesperson that indicate that the A’s and NUMMI have not had talks regarding the Warm Springs site. We’ll have to wait until Wolff’s speech at the end of the month for anything substantive.

Lew to speak at SJ Chamber

Today’s check of the BigSoccer forums netted a thread titled “Lew Wolff to speak at SJ Chamber.” The first post has the following blurb from member JayCee:

Taken from the Chamber Advocate Newsletter, August 2006

The Oakland A’s owner, Lew Wolff, will be the guest speaker at the San Jose Chamber’s, Silicon Valley Buzz, on Wednesday August 30th.

He will discuss hot topics, including the future of baseball in San Jose and the possibility of securing a professional soccer team for Silicon Valley, etc, etc.

The Silicon Valley Morning Buzz will be held at Adobe in the Gallery Room, 345 Park Ave, San Jose from 8am-9:30am. The event is free for Chamber members and $15 for prospecitve members. For more information and registration, call (408) 291-5286.

With less than two months to go in the season, this is about the right time for the machine to get going again. It was roughly one year ago that the Coliseum North presentation was made, and Wolff has publicly stated that he wants to have everything wrapped up by the end of the season.

What will Lew say to all those people who are by-in-large quite familiar and friendly with him? Will he drive a stake in the heart of San Jose’s downtown ballpark dreams? Will he publicly say that the team’s name will be changed to the San Jose A’s? Will he completely confirm the Fremont project? In a summer that has generally lacked action on the ballpark front, the potential for news is huge. Then again, the man knows how to play the media game, so don’t get your hopes up.

There was also an article on Wolff and his “remote” ownership of the A’s from the LA Times.