We’re almost exactly one month from what could be a very pivotal owners meetings in Milwaukee. And while Commissioner Bud Selig may not end up feting his colleagues over a Brewers’ World Series, it may be that Selig’s frat bro Lew Wolff will be the one celebrating. Merc scribe Tracy Seipel reports that the recently formed San Jose Diridon Development Authority (a.k.a. SJ City Council) will meet in closed session to arrange an option from which Wolff could buy the remaining ballpark site parcels.
As discussed previously, Wolff would in all likelihood have to pay for both land and moving costs for the affected landowners/business, since SJDDA/SJRA is tapped out now and for some time to come. One thing that may help is that Maritz Wolff, Wolff’s real estate investment firm, sold a series of hotels in August for $570 million. Some portion of that could easily offset the estimated $24+ million of the remaining land buys. Now that I think about it, I wonder if the timing is set up for a 1031 exchange, which would limit tax exposure for Wolff (in-depth knowledge on this subject is above my pay grade).
Seipel also reports that the purchase may be part of a final push to convince Selig and the other owners:
Mayor Chuck Reed explained it another way:
“It’s so that Lew can go to the commissioner of baseball and say, ‘I control the dirt.’ ”
Reed characterized the plan as taking away “one more little reason the commissioner can’t make up his mind.”
Because of the black cloud over redevelopment and the lawsuit against the state, it’s possible that much of the money may have to be reclaimed by SJRA for its extortion payment to the state, the big bond payment that’s due next month (which could cause a default), or other issues that the agency has to address. It’s not just a matter of SJRA being broke. They also can’t enter into any new agreements, which is probably what caused City to in a moment of prescience create SJDDA. It’ll be interesting to see how the option agreement is structured. The Airport West agreement went through some major changes before arriving in its current form.
Seipel ends the piece with a note from City Attorney John Doyle, who said that a referendum will be required for the ballpark/land transaction.
There are a number of follow-up questions that can only be answered by the actions of SJDDA and affected parties in the coming weeks:
- What will be the final price for the transaction(s)?
- Does this lead to Wolff buying all of the land, or giving the purchased part back to the City/SJDDA?
- Unlike Airport West, the purchase of Diridon has a much earlier deadline. What is that deadline?
- Is Wolff in effect bailing out SJRA by doing this?
- While Reed openly cheers on the influence that this move may have, Doyle (as you would expect) tamps down expectations on MLB’s decision-making. What’s the story here?
The road ahead promises to be scenic, and a little bumpy.