As the developer turns

Maybe the thing that plagues Lew Wolff the most is an extraordinarily bad case of timing. Exhibit Z: The Merc’s John Woolfork reports that the City of San Jose is considering a second break for Wolff’s purchase of the Airport West (FMC) property, on which the future San Jose Earthquakes stadium would be built. Last year, Wolff and company were granted a $43 million discount, from $132 million to $89 million. The new break would involve extending the deadline to buy the land to 2015, with the option ($2-4 million) used to apply towards the purchase price.

If Wolff were only looking to build the Quakes stadium in San Jose, this would have been a done deal. However, I’ve speculated in the past that if both teams were to play in San Jose, the stadium deals would be linked. Forced to scramble for cash to help finance both projects, Wolff has to be looking at the Quakes’ funding mechanism as something to tap for Cisco Field. Making things more difficult is the value of Airport West, which multiple sources in the article indicate has dropped below the renegotiated $89 million price tag. It’s possible that Wolff pushed for the outright land purchase, but given the wasted investments in Fremont, he (or his partners) may be a bit gunshy.

The irony of these delays is that they affect the Cisco Field project. Wouldn’t $89 million be more than enough to buy the remaining Diridon ballpark parcels and fund area improvements? The City has halted future land purchases until MLB decides, which puts the onus back on Bud Selig and his panel. As this saga drags on, it only becomes more difficult and costly for all parties.

15 thoughts on “As the developer turns

  1. ML – sorry i didn’t see this before, was too engrossed in the other discussions, but your thoughts are what i was thinking as well. Looks like LW is indirectly funding the final purchases of the stadium land parcels, by overpaying for the land for the Quakes stadium and in turn replenishing the RDA fund, which i believed was used to purchase it in the first place (wasnt’t clear from the article)! If this scenario does come to fruition, does this mean SJ also avoids a ballot measure?

  2. Thanks ML – Whats the aggregate value of the Diridion land again? If LW is overpaying for the Quakes land, i wonder if there is a qpq that will happen in turn for the diridon land as well…hmmm.

    • @ST – It depends on when the land was purchased. Regardless, the current value is probably around $50 million.

      As for the question in the other thread, I’m pretty sure Wolff is referring to privately financed stadium and privately owned land. Other SSS’s have been built on public land.

  3. They longer this drags on, the more the Quakes suffer.. and its not even a all around fancy stadium like Red Bull Arena…15,000? Come on

  4. ML….IF the A’s remain in Oakland and no construction for stadium in San Jose happens, what do you think that would mean for Quakes? Would Lew then look at Diridon site for Quakes stadium you think? Or possibly sell both teams.

  5. ML: If MLB does finally decide and tells the A’s they have to stay in Oakland, will San Jose sue to remove the Anti-Trust protection?

  6. @EP–i was thinking the same thing, building the Quakes new digs at Diridon if the A’s stay in Oakland. I just wonder if MLS can survive in the long term. They are doing better than previous years by controlling costs/salaries, expanding with new teams and building new stadiums, but there’s only a few profitable teams and it’s still way overshadowed by every other sport. Will it ever catch on like the rest of the world? I doubt it.

  7. @EP – I doubt that Diridon becomes the SSS site, simply because the land is too valuable on a per acre or entitlement basis. No offense to the Quakes, but 15 MLS home games and a few other events at 20k apiece simply doesn’t have the impact a ballpark has.

    @Zonis – Probably not the City itself. I could see a legal attack with support by SVLG happening, if someone were willing to pony up a lot of cash for the war.

  8. @JK..I can see why you would say that about the MLS but I do think that they will survive no doubt..Just watch how crazy the pacific northwest will be in 2011 with three teams in the league.Season tickets for them are already more than what Buck Shaw can hold! It might not catch on like rest of the world but it is getting bigger.Maybe more so to the rest of the world then the actual causal fan of american sports.

    @ML- Reason I was asking is because I remember right before Quakes left about 5 years ago almost to this day, one of the sites city was looking at in the 11th hour was I believe the potential A’s site. In your view, when do you actually see Quake stadium breaking ground then?

  9. Damn Raiders defense/special teams!
    What I find most interesting about this development is the date for purchasing the former FMC lands: 2015…the year Cisco Field is projected to open. As R.M. implies, perhaps Wolff will use the $89 million slated for FMC at Diridon South. He could even use funds to buy surrounding parcels like the designated hotel/retail zone along San Carlos Street between Bird and Delmas. Then, after the ballpark/district is open he can concentrate on making an SSS at FMC work. I know it sucks for Quakes fans, but at least the team is already in existence here,and Buck Shaw can suffice for another 7-8 years.
    Has Lew Wolff/Earthquakes considered playing at Stanford or perhaps having some games at Cisco Field?

    • @Tony D. – That is definitely NOT what I was implying. I was saying that when Wolff buys Airport West, SJRA turns around and uses the funds to buy the rest of Diridon South.

      @EP – I thought groundbreaking would happen this year at the latest. Obviously that won’t be the case. Perhaps by this next summer or fall.

  10. My bad R.M.,
    Had to re-read what you stated. Well then, I guess I’ll take ownership to the idea of Wolff using the $89 million to get the Diridon deal done himself, not only buying remaining parcels but existing city owned property (NO VOTE!). He could them come back after 2015 and work on the FMC/Quakes SSS deal.

  11. I think Wolff should move the Quakes to Oakland… trade them for the A’s… the city of Oakland might be able to pull the strings for a small-scale stadium… I think MLS would do better anyway closer to the more urban population of SF/Oakland… it’s more akin to what you’re seeing in Seattle and what you’ll be seeing in Portland/Vancouver… the same way A’s will do better closer to SJ corporate world… The strategy of marketing MLS to soccer moms, little leagues, and expats is outdated.

  12. @Al – Let’s make that deal! A’s for Quakes and we’ll throw in the SJ Giants for good measures! 😉

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