Mary Ann Azevedo of the SV/SJ Business Journal has the news (print version) that the San Jose Redevelopment Agency is using proceeds from the summer sale of various downtown properties to pay off lingering and pressing debts, instead of using the money to pay for ballpark land.
The numbers paint an interesting picture:
- Sale proceeds are around $19.9 million, which is less than the $25 million SJRA and the City expected to get when the properties went up for bidding early in the year.
- The discount on the five acres of ballpark land is $19 million, based on the combined original purchase price for the various properties and not accounting for inflation.
It would seem that if the A’s paid the full $25 million for the land, it would help the City further service agency debt while also countering a criticism that that Lew Wolff is getting a plum deal. Even if the A’s paid $12 million more, which would be the appraised “ballpark purpose” market value, it would significantly dull the chief argument by ballpark opponents.
Of course, it’s easy to say the A’s should keep piling on the dollars since it’s their money. They’re only footing the bill for the rest of the land and relocation costs, infrastructure improvements (in all likelihood), and the cost of ballpark itself. By my math the cost of the entire project, including land, is somewhere in the neighborhood of $550 million. If the City continues to provide the $19 million discount on less than half the ballpark land, the A’s and Wolff are paying for 96.5% of the entire project along with 100% of stadium construction cost. There’s no other public-private funding mix in recent history that comes close to this. By comparison, AT&T Park’s public-private mix was roughly 80-20 ($357 privately financed construction, $90 million in publicly-financed land, infrastructure, and tax abatement). FYI, the best deal in all of North American pro sports over the last 30 years is probably the late Bill Davidson’s The Palace of Auburn Hills.
Even with the land sale, SJRA is not in the clear. The fate of the agency lies in the California Supreme Court, where the Justices are expected to decide how redevelopment will be formed moving forward.
Meanwhile, Oakland continues to pursue redevelopment despite impending doom. It’s spending nearly $8 million to spruce up the aging Convention Center. The Port of Oakland, in conjunction with the City, is applying for a $40 million grant to transform the Oakland Army Base into a “trade and logistics center.” I’m sure the pollution-plagued residents of West Oakland are in love with that idea.
Interesting stuff RM. I know Wolff has been selling assets now for some time now (hotels, property), thus building up his private equity. If he uses a portion of that equity towards the $550 million, including paying the market value or $25 million for the land, isn’t he basically exchanging assets for assets? Kind of like me selling a home for $400k and buying another for the same price or more. Again, interesting.