Notes from the Oakland Economic Impact Report

4/29 10:19 AM – Doug Boxer has put out his Powerpoint slide deck summarizing the report.

Post to be updated with data as we go through the document, prepared by Gruen Gruen + Associates.

Now this is what I’m talking about! Some data to dig into. Yes, economic impact reports should be read with a jaundiced eye, but it’s also important to understand the context by which the data is being presented. Sure, there are projections based on what would happen if the A’s moved to the JLS area. There are also estimates of the losses Oakland and Alameda County would face if the A’s left. Not trying to cherry-pick, but I found certain things interesting:

Debt service payment for the facility by the JPA was $9,143,741 for the 2008-2009 year. The current principal on the debt is approximately $180 million. The baseball team pays an annual rent of $1,025,000 to the JPA for the eighty-one (81) games it plays in the stadium, and for the use of the adjoining land for parking. The A’s also reimburse the JPA for the cost of cleaning the stadium, which in the 2008 playing season came to $1,185,893. The costs of converting the stadium from football to baseball games are substantial, and are borne by the JPA.

Thus, from an annual operating perspective, the rent paid to the JPA and the operating expenses borne by the Authority are pretty close to financial break-even. However, the costs of updating and maintaining the facility are paid by the Authority, and in the 2008-2009 fiscal year such costs came to slightly over $1.5 million. GG+A is not in a position to estimate how much, if at all, such capital improvement costs could be reduced if the A’s team leaves the Coliseum.

Because the rent paid by the A’s is close to the amount required to convert the stadium from football to baseball, and the cash outflow for debt repayment and needed maintenance are “sunk costs;” the JPA would not suffer financial loss from the departure of the baseball team. But the JPA would hate to see the A’s leave because the Authority realizes that Oakland’s job and income base is expanded by the operations of the ball club in the city. Further, the taxes and fees paid to Oakland and Alameda County by the ball club, the many vendors and service organizations that serve the team, and the fans who attend games flow much needed revenues into the treasuries of the City and the County.

This basically lines up with comments Ignacio De La Fuente has made about the impact of the A’s. If the A’s were to leave, the impacts to Oakland and Alameda County would be as follows:

  • Oakland: -885 Jobs, -$29,452,000 Income
  • Alameda County: -953 Jobs, -$32,566,000 Income

Next up, the proposed sites and impact. BTW, my initial thoughts are that the direct impacts are straightforward and in many cases quite conservative, while the indirect impacts, as usual for such reports, appear to be a bit specious.

31 thoughts on “Notes from the Oakland Economic Impact Report

  1. I’m blown away by one set of numbers I’ve read so far in particular. That they only expect attendance to increase 13% in a new ballpark at JLS (arguably the BEST of the new potential sites). A 13% increase doesn’t even get us back over 2 million fans a season and is far below the MLB new BP average of a 25% increase in year 1 (and miles below the Giants 60% increase). So their estimation is that the new ballpark will have almost no impact on the A’s gate in Oakland. THAT speaks volumes to me about the futility of any effort to build a ballpark in Oakland particularly when you read they estimate the Coliseum could see a 7% increase in attendance in the same time frame which further whittles down the actual impact of the new ballpark to a mere 6%. Why would the A’s bother in Oakland if even the BOOSTER group for the Oakland ballpark can’t even suggest that attendance would increase by at least the MLB average?

  2. @Dan – San Jose’s economic impact report also projected 2.1 million fans/season. It’s conservative, it’s the right approach.

  3. But if I’m reading this report correctly JLS is only projected to get 1.79 million…

  4. Also I’d argue this is not the time for Oakland to be conservative. They’re not the chosen ones at this point, they have to be flashing big numbers and big promises if they want the team. Not conservative numbers that look like building a new ballpark isn’t worth the trouble…

  5. Without being an expert (on anything), it looks to me like they’re as much playing the “benefit to the city” card as “benefit to the team.”

  6. Conservative is the right choice. The Diridon report was based on a 32,000 seating capacity ballpark filled at 76% on average. The JLS report is based on a 36,000 seating capacity.

  7. Also of note… Current in Stadium concessions at the colliseum are estimated at $3.50 per fan. A new JLS ballpark would generate an estimated $5.00 per fan. The Diridon ballpark report shows an estimate of $15 per fan on food and beverage alone. I for one know that I spend closer to $15 at the park on concessions per person than the $3.50 or even $5.00 estimates. Are these numbers off? If not, there is an enormous difference in the revenues between Oakland and San Jose.

  8. correction… $3.30 per fan at the Coli.

  9. @ Dan…The JLS report states an average paid attendance at 2,240,000 for 81 games. 1,790,000 is estimated for a new park at the current coli site.

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  11. Mayor Dellums from the news conference. “The A’s are in first place… If it ain’t broke, don’t fix it… Stay in Oakland…”

    I think the Mayor should attend a game at the coli and see how well the first place A’s are being supported by Oakland at the turnstiles.

    News flash Dellums…It is BROKE!

  12. @Bay Area A’s – the numbers aren’t “off” they are averages, accounting for fans who buy nothing, and fans who buy multiple meals+drinks+snacks for each game

  13. BA A’s, I stand corrected on the numbers. But you’re dead right, Dellums is part of the problem. It couldn’t be more broken. And it’s not encouraging that a BOOSTER group’s report so far does nothing to make Oakland more attractive than SJ. In fact it makes Oakland look worse and puts some solid numbers to how it is worse (and thus giving ammo to the pro-SJ owners, pro-SJ people within MLB, and the pro-SJ supporters).

  14. Also, based on the numbers in the attendance watch above, I feel like attendance being down 1500 fans per game, 14 games in (with games Against BAL and CLE likely not as big a draw as NYY and Sea) with inconsistent weather, a down economy and School still in session might fall into the realm of statistical noise.

    though I assume those numbers are paid attendance not the gate totals. So that’s not to say there is *nothing* to worry about. it’s just probably not past the point of no return

  15. a more stupid phrase could not have been uttered by the Dellums—why do the Oakland boosters allow this man to speak at all about a ballpark?

  16. Apparently you guys didn’t read the report very thoroughly. The 13% is not an attendance projection, it’s an estimate of how much better the JLS location is over the Coliseum location, all other things being equal. They completely threw out the “new ballpark” factor in making their estimate. So, whatever the “new ballpark” angle adds up to would be gravy on top the of the basic improvement in location.

  17. @tps – To clear this up:

    GG+A then assumes that paid attendance for the three sites located in the greater Jack London Square area close to the waterfront (JLS North, Howard Terminal and Victory Court) is 6% higher than at the Coliseum, leading to a figure of 2,240,000, and turnstile attendance of 1,790,000. This 6% difference between attendance for the waterfront sites and attendance estimated for the Coliseum alternative represents our approximation of the effect that neighborhood amenities and “livelihood” will have on longer-term attendance. In other words, we believe that locating a new stadium in a more vibrant and active neighborhood – one where people visit and gather even on non-game days – will serve to reinforce attendance once the initial excitement of a new stadium has disappeared. We have attempted to quantify this difference because greater attendance levels will, in turn, support more jobs, income and tax revenues.

  18. ML, I don’t think it’s clear without this part:
    Therefore, the estimates of “future” attendance at a new ballpark are simply educated benchmarks… utilized in the analysis of ongoing economic impacts. The purpose of this study was not to forecast potential attendance at a new stadium.

    They’re not saying attendance should go up 13%. They’re saying the figures they used for judging long-term economic impact of a new park at JLS were about 13% higher than the 5 year historical figures at the Coliseum. In other words, they clearly didn’t go overboard by estimating 5 years of near sellouts in order to overstate the impacts, but were pretty darned conservative.

    • @tps – Agreed. The context, as noted by another commenter, is not about how the ballpark benefits the team, though it will receive some benefit. It’s about impact to the city, which is usually the case for these types of reports.

  19. KGO states “A’s leaving Oakland would devestate local economy.” I’ve read/heard some pretty sensational crap coming out of the local media recently, but that one takes the cake (for now)! What, all the bars, restaurants, and businesses that surround the Coliseum (sarcasm) are going to miss the 5-10k fans per night/81-times per year? Maybe Jerry Brown should have thought of this back when he gave his buddy’s the rights to build at Uptown. Oh well, time to move on.

  20. You clearly have no idea how even the slightest amount of revenue being lost can affect business in the Coliseum Area, much more importantly, Oakland. We are not out of the woods in terms of the recession. Just because our former mayor didn’t want a stadium located in Uptown doesn’t declare Oakland to be entirely red flagged when it comes to suggested locations for a future A’s stadium. Oakland with it’s financial deficit and budget problems is doing it’s best to be as close to San Jose in the fight to keeping the A’s in town.

  21. Oakland has no airport curfew, does it? The Detroit Red Wings got busted for violating San Jose’s the other night. I wonder if San Jose officials will inform MLB of the airport curfew, which simply isn’t compatible with professional sports. Of course, it only takes 35 mins to get from the area of Oakland Airport to downtown San Jose if there is no traffic – which there wouldn’t be at 3 am.

  22. @AthleticsFan… What is the business around the Coliseum that is currently making most of it’s revenue from A’s fans on game days? I read the report cover to cover last night. I didn’t read anything in that seemed to make that case. It actually says something entirely different to me: Oakland benefits if the A’s are out of the Coliseum. Of course, that assumes they are in JLS. But tho cast the report as proof that Oakland’s economy will be devastated if the A’s leaves seems disingenuous. It isn’t like it is a manufacturing plant leaving town or anything.

  23. Something that would be interesting to me from a transit perspective is the potential lost revenue of BART if the A’s moved from Oakland to SJ. With 81 home games every year I would imagine the loss would be significant. I know eventually BART will come to Dirdion but that’s a long ways off…we’ll be lucky to get BART to Berryessa before 2020.

    Does the report cover this aspect? If not, are there numbers floating out there with the average number of A’s fans who come to the ballpark via BART?

  24. @Jeffrey I was trying to point out a broader view, Oakland as such. If the Athletics move, it is obvious that the city will lose any revenue that the Athletics bring to the city, and BART aswell will lose money in the meantime until a Diridion Station is built.

    It surely isn’t anything like a manufacturing plant, but Oakland needs to keep it’s current businesses (including the Athletics) in order to try to solve their budget problems without worrying about any lost revenue. I am sure that a new ball park at the Jack London Square would be a much better upgrade compared to the Coliseum Area. Now, compare that to the San Jose area? I cannot compare between the two at this time, simply because I haven’t been to downtown San Jose in the recent years.

  25. There will probably be even more fans using BART to get to a new ballpark at JLS in my opinion due to it being in a much more desirable area versus the Coliseum.

  26. re: BART revenue. BART and Wolff wanted to put the stadium right smack near the new Warm Springs BART station, which would have maximized use of the station. The NIMBYs shot that down in a heartbeat.

  27. OAKLANDathletics, that’s true also because all BART lines converge at Oakland 12th Street, so on-average ride times and costs will be lower to JLS than the Coliseum.

  28. @pjk I wouldn’t blame them. A stadium isn’t enough for a BART Station, and to have a lot of businesses opening in and around the proposed BART station and stadium area, that would mean a lot of public money.

  29. Warm Springs BART would be a very long and expensive ride for most BART passengers. And I think the people that live near Warm Springs were thinking how convenient for them to get to big city jobs and entertainment, not as a means to bring the city out the them.

  30. re: to have a lot of businesses opening in and around the proposed BART station and stadium area, that would mean a lot of public money.

    … More businesses mean a stronger economy, more money, more tax revenues, more public services, a higher quality of life.

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