Oakland’s Report and What it Means

Perhaps you all have heard, Let’s Go Oakland commissioned an Economic Impact Analysis and held a press conference about it yesterday? Before I give you my impression, a few things… I am not going to compare this to the Economic Analysis conducted by San Jose or Fremont (Marine Layer is working on that now, stay tuned). Second, I won’t use this report to compare San Jose or Fremont’s business value to Oakland’s for the simple fact that it is not an appropriate application for a report like this. All that said, here is my summary:

  • I was a bit disappointed that the report still leaves us in the dark about what a final location might be. I had hoped we would get some clue about what Oakland’s preference would be for a site. I don’t like that they estimated the impacts of Howard Terminal, Victory Court and JLS North to be the same, but it is true that the conclusion is the same: Oakland should prefer something in JLS to a stadium in the Coliseum parking lot. The cost to purchase the sites is most favorable at Victory Court ($22M) and most expensive at JLS North (over $100 M). The valuations for the parcels is included on pages 33 through 35.
  • While it could be argued that much of the benefit of JLS is overstated as “spill over development,” it is true that the potential for spill over development exists at JLS in a way that it doesn’t at the Coliseum. So take the spill over development specific number (the report puts it at $4.7B over 30 years based on increased property values and $980M in property tax as a result, in the chart on page 60) with a large grain of salt, but not the concept that spill over development in JLS is a clear benefit to the City versus keeping the A’s in the Coliseum complex.
  • The report concludes that the largest negative immediate  impact of the A’s leaving Oakland altogether would be the loss of one time stimulus of $500M over three years in stadium construction expenditures (which the report estimates to create $790.8M in Total Output). It’s hard to argue with that.

Ultimately, after reading the report, I am pretty confident in the direct impacts that are outlined because a conservative approach was taken. These direct impacts, such as fan spending, are potentially understated if anything. The indirect stuff, like the positive impact of spill over development, is sort of pie in the sky rose colored glasses optimism. But that is how these reports work.

It will be interesting to see what comes next.

21 thoughts on “Oakland’s Report and What it Means

  1. Cost to buy remaining parcels @victory ct. = 20 mil
    Cost to buy remaining parcels @ didiron sj = 20 mil

  2. Apples and oranges. SJ has already spent $24 million and the remaining amount is based on actual market rates. What’s cited in the Oakland report is strictly assessed value (improvements of $9 million are noted separately), and there’s no sense of what the true acquisition cost will be. If Peerless Coffee requires $30 million to move including land and relocation, the assessed figure is academic. Maybe George Vukasin gives the city a hometown discount to accommodate the A’s, but I don’t expect him to go in the hole just to be inconvenienced. Same goes for East Bay Restaurant Supply.

  3. Does the report say anything about who would pay for the park? Does Wolff get to develop real estate elsewhere to underwrite the stadium or is he expected to just be like Santa Claus and build it as a charitable contribution to Oakland?

  4. A couple of thoughts/questions…

    Why was this report commissioned by the non-profit instead of the City?
    Will this help motivate the City of Oakland to pursue site identification and acquisition?
    What comes next From the non-profit and/or City?
    Will this report delay the MLB panel decision?

  5. @A’sObserver… What ML said. The cost to acquire the site is just one aspect of the overall plan., There is no mention of what it would cost to relocate the businesses in the report, though Peerless has stated it would cost $30 M to move them. There are 12 parcels all told at Victory Court, what it might cost to move any of the businesses is not considered in that number above, I should have called that out.
    Another challenge to consider at Victory COurt is multiple ROW’s, and the lack of an EIR. There is a Lake Merritt Station Area plan taking shape now, not sure that it will include a ballpark, but the process won’t be complete until late next year at the earliest.
    Maybe ML will put up a handy dandy chart at some point showing the process and each City’s progress. Though I imagine that would just turn into a stupid flame war as usual.

  6. Am I the only one who can’t find the info pjk has on the ancillary real-estate projects that are part of the Diridon Station ballpark plan? Could someone help me out with this?

  7. @pjk, the report assumes that the A’s will pay for the park and it doesn’t say how. I am not sure if that is based on discussions with MLB, or if they just assume that is the case. It is clear that the A’s didn’t provide much input, if any, to the actual report. I remember reading in it that they didn’t provide ticket sales information but I don’t have time to go back and find where that is called out.

    @Bay Area A’s… no idea. I have put in a call to someone who would know, and they have returned my call. But we are playing phone tag for the time being. I hope to end that soon and tell you all who I spoke to and what they told me 🙂

  8. Jeffrey,
    The ticket sales data in the report is not actual sales data, it is the meaningless Fan Cost Index data.

  9. Am I the only one who can’t find the info pjk has on the ancillary real-estate projects that are part of the Diridon Station ballpark plan? Could someone help me out with this?

    Wolff has been working with San Jose on developing different real estate projects, including the soccer stadium. I’m not aware of any plan whatsoever for him to develop in Oakland. He tried to do a big project north of the Coliseum a few years ago and got no cooperation from the players involved.

  10. @pjk/tps – There is no current tie-in ancillary development for Diridon. It’s thought that the 6 acres between the arena, station, and ballpark may be up for grabs, but that’s all subject to a the current, lengthy Diridon Station Area Plan study being conducted by the city. The area can’t be touched much for up to a decade because of the BART cut-and-cover operation that’s planned for it – whenever BART happens.

  11. Is there any chance Oakland could do something like a liquor tax to help finance the park?

  12. FYI, here is the exact formula used by Team Marketing to calculate the “average ticket price” referenced by the study: “Average Ticket Price represents a weighted average of season ticket prices for general seating categories, determined by factoring the tickets in each price range as a percentage of the total number of seats in each venue.” This is very simply the average ticket price the public is looking at when considering a ticket package,

  13. @TPS That’s exactly what I’ve been saying: The FCI is not based on actual sales data, doesn’t include premium seating, doesn’t consider discounting, and doesn’t represent an average of what people actually pay to go to A’s games. It would represent an actual average of price paid only if the entire stadium were sold out to season ticket holders, which is far from the case. It is particularly useless for the A’s, for whom a miniscule number of tickets are sold on a season ticket basis.
    For example, virtually no one bought season tickets for Plaza Outfield seats, and they were (and are) constantly discounted. Using the theoretical average season ticket price for those seats (which was far more than the average price actually paid) does not yield useful data. In fact, a quick scan of the 2010 Season Ticket page suggests the A’s may not even be selling those seats on a season ticket basis any longer, perhaps in recognition of their unsalability on that basis.
    Frankly, you can get more useful information regarding the actual cost of going to an A’s game by simply eyeballing the seating map and then clicking through the posted ticket discounts. This simple exercise makes very clear that A’s tickets do not cost more than comparable Giants tickets, as the FCI would have you believe.

  14. I suppose some people just have no problem raising prices, losing customers as a result, then saying, “The sticker price is irrelevant, we don’t even sell those seats!”

  15. @ tps/bartelby – I can’t believe the two of you are debating something that, in the context of the report, is so irrelevant.

  16. @jesse – No chance on a new tax. City Council is already having trouble garnering support for a parcel tax whose main purpose is to keep the city from laying off cops. Besides, an incremental liquor tax won’t provide that much money.

  17. one opportunity that is being overlooked: a land swap between the city of Oakland and peralta colleges. Peralta gets the henry j. kaiser center (to which they move their administration) the Oakland redevelopment agency gets the Laney ballfields and peralta administration complex (adjacent to victory court). the new ballpark would be built between the channel and 5th avenue, between e.10th and e. 8th. existing laney parking lot could be reconfigured vertically for stadium parking. a transit loop could be run from lake merritt bart out e. 10th, right at 5th, and back in e. 8th. and oh, by the way, another institutional landholder, OUSD, also cash strapped, owns the lands across from the new ballpark….

  18. Any Oakland money will come through a redevelopment channel.

    This report appears to be positioned to demonstrate that a city/county joint project to build the ballpark will pay for itself by creating a one-time construction stimulus, preserving the existing financial benefits of having a large business located in the city and in a major ramp-up in development near JLS with associated property tax assessment advantages.

    It’s not very difficult to make the case that a new park in downtown Oakland will generate significantly more revenue for the team than the current location. It frankly lacks credibility to suggest otherwise. The only real question is can Oakland get it done. As soon as Doug Boxer got involved the chances of that happening increased dramatically.

    Victory Court is clearly the most likely site, with the fewest hoops and the most synergy with existing Oakland redevelopment plans.

    This report is great news for fans who want the A’s to stay in Oakland.

  19. sfresident–errr—I mean Mr. Boxer—-interesting comment that it bodes well for Oakland–personally I take a collective yawn from it–sure any investment in land will have to come from the redevelopment funds—did you hear how the state has been raiding these–SJ has one of the biggest redevelopment agencies and they are having to sell banked land to buy up the remaining parcels–Oakland hasn’t even started the acquisiiton process—once again Oakland is short on specifics in what, how, where and when they will be able to do anything—not to mention they want to build a new stadium for the Raiders and now the W’s are looking towards SF–

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