Monthly Archives: August 2011

08.02.11
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The Big Lew Wolff Interview, Part 2

Be sure to check out Part 1 of this interview, posted yesterday. You can also get the full interview in PDF and e-reader formats by donating $5 via the PayPal link on the right.

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Part 2

ML: As I understand it, you had met with Mayor Quan in Oakland recently.

I’m actually having lunch with her today. I have not met with her (yet). She has been very nice to make time to see me. There’s no agenda.

[Ed. – I have not heard anything from either camp about what was discussed during that meeting. Nothing to the regular media either, AFAIK.]

ML: Just a chat, really.

What I’m telling you is what I’ll tell her. There’s no magic bullet here. If there was it’s simple. MLB (the panel) would’ve come to me with Oakland and said, “Here’s a suggested financial plan”

ML: Comprehensive.

Remember that they’re the messenger. They’re just doing what they’ve been asked to do and I’m sure they’ve done it three times now. It sort of says to me that nothing has been produced that means anything, to my knowledge. There may be other reasons. The commissioner is contemplating whatever he wants to do. I think we’re getting there soon. I just don’t know.

ML: Okay.

The only thing missing is that I would’ve enjoyed the process of building the ballpark, financing it, and doing all these things. It looks like because of my age (I won’t be able to). So my son (Keith Wolff), who I think is as good or better at this than I am, and he’s a lot more calm than I am. I believe that development – public or private – can’t get done without a sense of urgency.

ML: It sure seems that way.

We have the resources and we have the people. It’s just that I final – I mean I can but I’m the commissioner’s age. I want to be very careful. None of us are going to live forever or be as active forever. I’m lucky, I think baseball’s keeping me active.

[Ed.: I have to point out that he ordered a frittata with fruit on the side, no starches, coffee with no cream. I ordered Eggs Benedict with potatoes, lots of cream with my coffee. Multiple cups.] 

ML: It seemed like that happened with the Marlins, where Jeff Loria fought for years, and when he finally got approval his son-in-law took over.

That’s also true in Minnesota. I’m sad that the owner (Carl Pohlad) didn’t get to see his ballpark. We’re very advanced in our opinion. Why go out and spend $20 million on working drawings if you don’t know you have a site?

So it’s just a matter of waiting for a decision. I’m not a patient person but I’ve become very patient. The thing that makes me most comfortable is that I have a lot of backup to get this done. That’s number one. On the hand this is affecting our whole organization. We’ve got great people – Billy’s been there for fifteen, sixteen years, twenty years for Mike Crowley. I’ve promised them a new, modern facility and I feel responsible.

There’s something I think you’ll like to know. When we bought the team (2005), six teams had payrolls above $100 million. Now it’s twelve or thirteen. While Billy and his guys are fantastic at doing what they do, there’s only so much they can do. We can go and lose $30 million a year like the Haas family was doing but we’re not gonna do that. So if anyone wants me to do that I’m gonna have to say that we won’t.

[Ed. – According to Forbes/Financial World numbers the A’s lost $6-10 million per year during the last years of the Haas era, which would be worth $9-15 million now. MLB’s stance historically has been to consider Forbes’ numbers inaccurate.] 

ML: That’s something I’ve been arguing for years.

And baseball doesn’t want us to do that. All these teams that have spent haphazardly without breaking even have gone and caused problems for themselves and baseball. Remember that baseball is a partnership. The rule of thumb for running a team before you get huge revenues is that if you can keep your MLB salary at 50% of your revenues you’ll probably be at the break even point or make a few dollars. It’s not an internal rate of return 20% or something like that. You shouldn’t be in this business if you want that.

The great thing about Billy and Mike and their people is that they’ve been able to keep us competitive until we get a new ballpark – I haven’t delivered. We’re in a total revenue issue. We just need more revenue and we can’t get it without a new ballpark. We need some scarcity. We can’t have 70,000 seats or people yelling about tarps.

ML: I’ll get into that later.

I don’t have a yacht [laughs] that we’re paying for out of secret proceeds from the ballpark.

ML: We’re talking about Oakland for a little bit. Has anyone presented you with other information about Victory Court, a sales pitch, or anything like that?

Absolutely not. However, gotta be fair. I think Oakland thinks, “We’re not dealing with Lew Wolff. We’re dealing with this committee.” If the committee has done that, I don’t know about it. I think what’s happened is that they’ve discovered what we’ve known. Through no fault of Oakland, the ability to build a new ballpark – well, you know that drawing a boundary around six blocks or ten blocks doesn’t make a ballpark. Is there a soil test? Will you do eminent domain, will you take people’s property? Do the off-ramps have to be replaced? Hundreds of items. And that kind of Socratic discipline – why should a fan in LF worry about that? Those rich owners over there are supposed to do it no matter what.

ML: Let’s move on to this freeway park. It was proposed by an Oakland architect, Bryan Grunwald, who occasionally posts on the blog. 980 Park is a concrete deck over a submerged section of freeway near downtown Oakland. You said that you consider it an A+ in planning and an F in implementation. Care to elaborate?

The problem with that is that talking to you is easy. Talking to guy looking for $2 ticket night on Wednesday is different. I can’t even imagine the cost on that. Forget about a ballpark. Say you’re putting up a hospital there or a park. I think we’re talking a billion – I have no idea. Air rights, we have them all over California. I haven’t seen too many places where they’re building over there – bridges and stuff. Let’s assume that we did that tomorrow. It would take a decade. I wouldn’t know where to start. First of all, we’d say to Oakland or somebody, “Give us the platform and we’ll build on it.” The platform itself has got to be overwhelming. I love those kind of ideas. They win architectural contests, a student gets a master’s degree for doing them, and we do have huge amounts of air rights all over the world. It just will not happen. If that’s the best we can do, might as well forget it.

ML: There are few places where air rights translate into anything. Those are places where the need is great, such as Manhattan.

I just don’t get it. It would be fun to have an architectural contest. But it’s like an iceberg, beautiful at the top, huge (beneath the surface). If that’s the best any of us can do, we have to forget it.

ML: Let’s shift over to San Jose now. You’ve had an ongoing dialogue with the City and Mayor about the Earthquakes stadium. How is that going?

The Earthquakes stadium also has to be privately financed. Certainly it’s a lot less expensive than a baseball park. I think – I don’t have the numbers exactly – they just opened a new soccer stadium in Kansas City. I think it was $150 million or something and I believe every penny of that was public money [Ed.: Cost was actually $200 million, all public]. We’ve worked very hard. What we want in a soccer stadium is a place you can go – we’re not looking to build Wembley Stadium – we’re in the 15-18,000 seat goal in this market. We’ve worked really hard to get the cost down to about $50 million, which everyone in soccer asks, “How can you do that?” Well, people can do it if it’s their own money, it’s not the government. There’s no soccer stadium that I know, except maybe Home Depot Center (that was not fully public).

ML: That was years ago. [Ed.: Columbus Crew Stadium was also privately financed by Lamar Hunt.]

Well they also had a good deal from CSU-Dominguez Hills. I’d like to move it faster but we’re doing it in stages. Right now we’re going through a planning process, not for a building permit but a use permit. We spent money to tear down the FMC building, but we haven’t pulled the string yet to build it because if you look at the economics of it you’re only using it for 19 games or 20 games. The ancillary use of these facilities, which I think is better than what my consultants think, concerts aren’t what they used to be, high school graduations. It’s Silicon Valley, I think you can have product introductions there. A lot of these things that you can’t predetermine. So what we’ve done is that if there are 10 steps to it we’re in step 7 or 8. We’ve spent money to do that but we haven’t pulled the string yet.

ML: On a related note, I went to the game at Stanford against the Red Bulls. I hate to belittle Buck Shaw, but it’s a small venue. Stanford, which was another example of something built with private funds, cost controlled by John Arrillaga. Many people came from down the Peninsula, there were plenty of the existing fan base, locals. For the fans it felt like it was overdue. Did the experience of that game – 40,000 people, the place was buzzing with excitement – change your thinking or reinforce it in terms of what the Quakes need to thrive?

No. Two reasons. One, One of the people at MLS called me and asked if it was it the game or the fireworks. The game was around the 4th of July. If you look at our fireworks games in Oakland –

ML: They’re consistently higher in attendance.

So I said to our guys, “Why don’t we just work out a deal to play at Stanford all the time?” Stanford doesn’t want that. I don’t want it. No, the depth of the market means that except for three cities, maybe, soccer is not profitable. The owners – Anchutz, my guy John Fisher, the Krafts – they love soccer and they’re gonna support it if it takes another decade to get it where it needs to be. We’re the same way. But the market is not for 40,000 people. We wish it was. If we have 15-18,000 fans and they’re really on top of the field – we’re not trying to have private boxes, soccer is a family sport – we couldn’t do Stanford every week in my opinion.

ML – One of the things I noticed from the renderings is that other than the fact that it’s three sides with one open, the design looks like a miniaturized version of White Hart Lane, where Tottenham Hotspur plays. Is there anything to that?

We’re close to them as you know. I don’t think so, except that when you think about a soccer stadium the dimensions of a field are the dimensions of a field. The only real difference to me is if there’s a track, which really screws it up. All we want to do is get noisy and close. I would say that 70 or 80% of them are like that.

ML – The NFL just completed its CBA negotiations after 3 month lockout. MLB has been, as I understand it, having some ongoing discussions with the players union about their new CBA, which is expected to be done by the end of the season – 

End of the year. Or sooner.

ML – Does what’s happening here with the stadium and the unknown that it is right now have any impact with the CBA?

No. However, I believe that, or I hope that we will have a non-confrontational negotiation, which has been ongoing. What you’ll have is, I don’t know the exact term, probably 3-5 years of what we call labor peace. We had that the last 5 years. I think some of the things that both sides are discussing – I don’t want to get into that information – will be beneficial to all of baseball and all of the union. I don’t think it’ll be the threatening kind of thing we’ve seen in basketball.

ML – There’s been almost no media coverage except for the occasional article from a national baseball writer.

I think it’ll get a little more coverage as we get closer to finalizing an agreement. It may not be controversial at all. This is the year to finish that agreement if possible. We’re working on it very hard. It isn’t like one side is screaming at the other.

ML – The players appear to be offering ideas that the owners may be interested in.

I follow it but I don’t want to get into it. The commissioner – you need to give him a lot of credit. His orders, and the head of the union, are we’re in this business together. Let’s work something out. I haven’t heard anything earthshaking.

ML – That’s good to hear.

Usually union negotiations get tougher close to the end. [laughs]

ML – What do you think about talk – and this is coming from national writers who are spitballing – about contraction of the A’s, Rays, or both?

We (the A’s) are against contraction. Nobody’s called us up and said, “We’re thinking about contracting you.” Contraction has a lot more issues to it than just shutting down a team and so on. They’d pay us the value (of the franchise). Then you’ve got minor leagues, places, cities all over the country with ballparks based on our activities, not just Tampa. We want to do the opposite.

ML – Do you think there’s pressure to get this done (a ballpark) so that nobody even has to consider that step?

That’s a very good question. I think getting it done has nothing to do with contraction. Baseball may have as many teams as they need. Some years it’ll be like we ought to contract. I do think that there’s so much going on with the Mets and the Dodgers, you can only address so many things. All of us are multitaskers. I don’t know that it’s so true in baseball. I don’t think it has to do with contraction. But sure, we and Tampa both need viable environments for our fans, or we won’t have any. It isn’t anything against any city.

ML – Do you and Stuart Sternberg (owner of the Rays) ever commiserate at the owner’s meetings about whose plight is worse? 

I’ve decided that mine is worse than his. He’s a good guy.

ML – He’s also a little younger.

He’s got more time. We don’t commiserate so much but we are both concerned. Very concerned.

08.01.11
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The Big Lew Wolff Interview, Part 1

This interview, at 12,000+ words long, is an order of magnitude longer than the typical posts on this blog. Because of that length, and because of my desire to confine the discussion to the topics within each post, the interview is being split into five parts. However, you can also get copies of the entire interview right away if you donate via the PayPal button on the right. The interview is available in PDF, ePub (e-reader), and Mobi (Kindle) formats for you to use on your computer or preferred device (Kindle uploads require calibre or similar software). Here are your options:

  • Do nothing and get all five parts for free on the site from Monday through Friday.
  • Donate $5 or more this week and you get the transcribed formats as soon as Monday morning.
  • Donate $2 after Friday and you get the transcribed formats in a “post-embargo” discount.

It’s rare that I ask readers for anything, and I intend to keep it that way. I took a lot of time out to work on this and I would simply like to recover that effort. Thanks for your support.

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Last Monday, I received an email from A’s PR man Bob Rose. He indicated that his boss, A’s owner Lew Wolff, wanted to have a chat with me. After some back and forth, we arranged for a meeting at the Fountain Restaurant inside Wolff’s Fairmont San Jose early Wednesday morning. The discussion went two hours long and covered a wide range of topics. Wolff expressed his interest in having an unedited conversation to explain what he’s been doing, and I was more than happy to have that chat. The transcribed discussion below has minimal editing – only to clean up incomplete sentences, the inevitable “uh” and “um” moments, and for me to add brief editor’s notes when I felt the need. My comments and questions are all in bold, while Wolff’s is in regular font. Editor’s notes are in italics/square brackets. I have intentionally not included links so as to not distract the reader. The interview runs more than 12,000 words. This is Part 1 of 5. The topics covered are as follows:

  • Part 1 – History of working in Oakland, 980 Park site, Process
  • Part 2 – Oakland now and what it takes, Earthquakes, contraction
  • Part 3 – Territorial rights, Giants’ motives, Dodgers/Mets, Coliseum
  • Part 4 – Tarps, discounts, player development, CBA, payroll, T-rights again
  • Part 5 – Redevelopment, Target Field, Cisco Field, Keith Wolff, museum and history

I hope you enjoy this interview as much as I did. I think you’ll feel that there are many revealing answers in there, and plenty of stuff for Oakland and San Jose backers to dislike. I’d also like to thank Lew for allowing me the opportunity to do this Q&A.

– Marine Layer

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ML: You became managing partner in 2005, after a year-plus stint as VP of venue development. Coincidentally, I started this blog in 2005, partly as a writing exercise, and to inform fans. Over six years have elapsed. Did you think it would take this long?

LW: No, obviously I didn’t. Prior to buying the team I was working on the thing. I’m not sure the title meant anything. I thought that we would figure out a way to do it on the Coliseum site or one of the sites in Oakland. At the time the economy was booming and the value of residential entitlements or zoning was huge. There were a lot of public companies, all these big homebuilders, were dying for the ability to get more and more residential rights, to build apartments or homes.

We came up with the idea. The very first editorial which I saved in Oakland – this was before I was even the owner – said “No public money in baseball.” Which is okay. Except for the Giants and Dodgers, all teams’ new ballparks have had some form of public help (financing). So we had an idea that if we brought a new ballpark to Oakland or any place, we could say to the community, “You don’t have to write a check, but we’d like to entitle certain property for residential” – not for our developer. The reason this escapes everybody is because nobody’s going to take their time to look into it except you.

The idea was this: Say someone wanted to build 1,000 apartment units. And they’re going through the process. You entitle that – assuming the city wants that – those entitlements back then were worth $100k per unit just for the right to build, sort of like land value. Instead of the developer taking that money, that money would go into a small joint powers unit (authority) and be used to fund a baseball park. That’s a double win there. The city gets more housing and those entitlements don’t have to be by the ballpark. They could be in Dublin or Fremont, they could be anywhere (in Alameda County). This was a very interesting concept and we checked it legally. It was very clearly stated in an article in the Chronicle, so it wasn’t a hidden idea. With all the delay and difficulty in both Oakland and Fremont – Oakland in the sense of land availability because it’s a built up city – to get land assembled, and then all the issues with traffic and freeways and off-ramps and so on – so time went on and of course the economy changed. So this entitlement approach to build a ballpark is a dead issue, and we don’t see it coming back for a long time. That says, “Oh my goodness,”  instead of putting up $100 million, which we were hoping to do at the most, we now have to do the whole thing ourselves. That pretty much requires us to be in a central business district (downtown) because the infrastructure is already there. We don’t have to rebuild the freeway or an off-ramp. The entitlement aspect of it – somebody should’ve jumped on it. We couldn’t do it by ourselves. We weren’t looking for money, we were looking for process. So we spent the time before we bought the team and about a year or so after. I think I told you before – I don’t have the book with me- that it takes me one hour, forty-five minutes to go through everything we did in Oakland. Even though somebody has a sign in RF saying, “Lew lied, he never did anything.” That person hasn’t come and sat down and asked, “Tell me what you did do?”

The other side of it is that side – Oakland, Richmond – that whole area was built up rapidly during WWII, shipbuilding and so on. (Land) ownership is very diverse. Just land acquisition alone is difficult. Even though some of the areas look blighted, as soon as you say we’re trying to build a ballpark there, immediately the land values go way up. Some people say that the “North of 66” plan was just a gimmick. What they’re not willing to do and be fair about is that we looked at every possible site – Coliseum, Laney, even the Victory area – all that stuff and somebody at the City said to me, “We can’t help you here. What do you think?” At the same time Councilman Larry Reid was looking at another area around the Coliseum where he was going to acquire a lot of stuff. I drove through there and it looked pretty blighted. All I wanted to do is start a dialogue with 50 property owners or 30. Except for one or two people, nobody wanted to even discuss it. There was relocation, we could’ve moved people to the (shuttered Oakland) Army Base. People will just say, “Oh he just made that up.” If I had my material with me you’d see that before even looking at that we looked at every opportunity that was available. We wouldn’t do it if everybody didn’t want to do it. We couldn’t even get traction.

It’s very simple. One of the very first things any city should do is look at their (county) assessor’s office. Draw a boundary around Victory Court or something. It takes a day or two determine there are 20 property owners and their names. Some of them are in a trust or something. If you just took the assessed value – and because you’re going to buy the property add 50% – you’d have a good idea of the that (total value) is and if you really wanted to, you’d call each person and say, “We’re just thinking about this. You’re a property owner here. We’re not doing anything yet.” Then you’d get an idea of the desire to participate from the beginning. Someone might say, “Oh my god, that’s my business, I can’t take it.” If we gave you that assessed value, and then we paid for relocation to the Army Base and a nicer (newer) facility – I mean it’s a lot of work. I didn’t expect Oakland to do that. But I also didn’t expect them just to draw a line around six blocks and say, “Oh there’s a ballpark.”

ML: We get that too much now.

That’s all we’re getting, because I believe – and this is not a defense – it’s because we’ve explored everything more than once. For two years now this committee, which I ‘ve had very little access to – and I’m sure they haven’t talked too much to the Giants either – guys I know, they’re good guys. They’re supposed to step in and check out if I did everything, and if I missed something. I haven’t heard that I missed anything. You could’ve written a PhD dissertation by now.

ML: Certainly.

There’s other reasons that perhaps Bud Selig is contemplating this. He’s my friend, and he’s involved in lots of stuff in baseball.

ML: You’ve had that information that you showed me last time we talked here two years ago. Because it’s taken this long and you have access to this panel, do you feel that the you and the argument you’ve made have been somewhat rebuked?

No, just the opposite. I think they can’t find a flaw in it. If they can, tell me what it is. They’re not rebuking me. I think it’s so overwhelming. If someone flew in from Mars and you were going to put a ballpark somewhere and one was already in San Francisco, where would you put the next one? [laughs]

Had they come up with a different approach that could be refuted or digested, I think it I would’ve seen it by now. At the same time, I can’t give a reason why a decision hasn’t been made. It’s a baseball decision. The commissioner is a very contemplative person. I’m an owner that wants to cooperate with baseball. When I got into this Bud Selig told me, “What I encourage owners to do is to put baseball first and their teams a very close second.” Instead of putting a team in bankruptcy or whatever’s happening in other cities. I’m just not cut out for that. I feel that being in baseball is a privilege, and we’re enjoying it.

ML: We’ve already gone plenty into my second topic, which is a lot about the pro-Oakland crowd who’ve said you’ve lied. I’ve written that the only thing you’ve really lied about is that you didn’t have a Plan B. Is that right, or am I off-base there?

Well, the word lie is a very strong word in my life. I don’t call people liars. The Plan B would be that if someone says to us – no fault of Oakland by the way – that “you have a team that you can’t move and you have to stay in this facility and make it work with the Raiders there.” Plan B is fairly simple, it’s just that we haven’t addressed them. Moving out of the state to other markets, of which there aren’t many. Selling the team to somebody that can do what we can’t do.

ML: Which a lot of them are hoping that you do.

That’s fine, but that party should also have a real plan, go through what we’ve gone through. The one thing that I wanted to do, because I’ve been in public dealings with cities my entire life, is that I didn’t want to be the owner who says, “If you don’t do what I tell you we’re moving to San Antonio.” Also, I didn’t want to get on a plane and start schmoozing with the mayor of San Antonio or Portland or Las Vegas or Monterrey, Mexico. I don’t think that’s the way to do one of these things. I still don’t think it’s the way to do it. But almost every new ballpark, including the Giants’, has been done under the threat of leaving town. So Plan B, the options are obvious. I think a better way to phrase your question is, “Have you spent time doing that?” The answer is, “We have not.” We still don’t feel like we’re moving out of the market.

ML: I’m in the market and I just took the train down here.

Exactly. Frankly, I don’t have the energy to start discussing with another city council outside the state of California. If we were dead in the water, we’d have to ask baseball what they’d want us to do.

ML: You’ve led into my next subject already with the discussion about what’s been done in Oakland. What is the difference between getting something done here, in San Jose, and in Oakland right now?

Very simple. One, we have a downtown location. When I say “San Jose” all I’m talking about is a specific site in San Jose.

ML: That one. [Ed.: I point in general direction of Diridon]

If somebody that you could go to San Jose instead of Oakland, that doesn’t mean it just happens. San Jose acquired land and went through the process of acquiring it in a downtown area where the off-site costs are minimized. They would be in downtown Oakland if there was a site. There’s a demographic difference, but if our entitlement program worked in either Oakland or Fremont we would’ve been there. I don’t care what people say. We would’ve been there. As much as I love San Jose I wasn’t thinking about San Jose at the time at all. We wouldn’t have spent the amount of time and money we did on Fremont if we wanted to get out of our district. People don’t remember that.

There have been huge demographic changes since the Bash Brothers and the A’s drew X attendance. Back then the population of Oakland was probably twice what it is today. [Ed.: The 1990 population of Oakland was 370,000, slightly less than the current figure of 390,000.] I don’t track it. St. Louis is the city where I came from, and the city used to be 800,000 people, it’s 300,000 now [Ed.: This is correct]. There used to be ten, twelve major company headquarters there. Now there aren’t any except Anheuser Busch, who is rumored to be leaving. There’s been a shift. Even if there were a site in Oakland, if we didn’t have the entitlement program it would be very hard to rationalize it. It’s even hard now. $400-450 million for a privately financed stadium – which it should be private, why should the people pay for it. The process that the public can help you with it can be huge. San Jose, through whatever reasons, has gotten the process so that we can go ahead.

If we started in Oakland, whether it’s Victory Court or floating over the freeway – I want to talk to you about that one.

ML: Yeah. We’ll get to that one (980 Park).

Can I tell you my quick stance on that one?

ML: Sure, go ahead.

It’s an A+ in planning and an F in implementation. [laughs]

ML: Okay!

I love concepts like that.

ML: Well, it came from an architect.

Geodesic dome over a city so that you can control the climate?

ML: [laughs]

I like that stuff, but I’ll let somebody else do it.

ML: That reminds me of a documentary on Robert Moses. There were all these concepts for a Dodgers’ stadium. One of them was a geodesic dome by Buckminster Fuller, which would’ve been interesting for 20 years until they got tired of it.

Two things about that. One thing I think you’ll like intellectually. Housing filters down. So if the Rockefellers live in a mansion with a roof and spread out. I did some work years ago in Guam. A subdivision house with a carport and so on is what filtered down. Now if the Rockefellers were living in a geodesic dome we’d have geodesic domes everywhere.

ML: Makes sense. 

Give me Robert Moses for one year and I’ll have a new ballpark anywhere you want. [laughs] He had more power than the mayor and the president. This great metropolis (New York), that great ability to create, we don’t have that today. I always give a speech that if you have a cure for cancer somebody will be against it. I like the democratic approach to things, but it’s inhibiting the state getting things done.

ML: Sure is. State. Country.

You know when the President said, “shovel ready?” If he meant shovel ready after the environmental work, we’d be talking about a decade sometimes.