Taking stock as the post-redevelopment era begins

It’s never too early to declare winners and losers that were made as a result of today’s earthshattering news.

First the losers:

  • Backers of the Victory Court site. The site was heavily dependent on tax increment (redevelopment funds) to buy the land and pay for improvements. Now that’s out of the question.
  • The City of Oakland. Strategically, it chose to sit back and wait for the originally passed “pay-to-play” ransom plan, which was scuttled today. Now they not only have no way to do redevelopment, they’re stuck trying to figure out how to fill in major holes that have just opened in the City’s budget that were filled by a large redevelopment operating budget.
  • San Jose Redevelopment Agency. As far as old school redevelopment goes, the City is now handcuffed with no way to raise funds. Of course, the City had already been choking the life out of SJRA by finishing several projects, laying off staff, and not taking on new projects. One word: prescient.
  • Affordable housing advocates. Not directly related to stadium building, but it’s a big point of emphasis for redevelopment backers. And consider this: any large mixed-use plan including residential development in any major city in California would require an affordable housing component. Who’s gonna subsidize that now? Already, San Diego is looking for a legislative means to bring back a scaled down version of redevelopment with a focus on affordable housing.
  • Oakland Raiders. Any options the Raiders may have been considering elsewhere in Bay Area (aside from the Coliseum and Santa Clara) have to be considered nonstarters at this point.
  • Redevelopment agency employees. Many agencies had planned for the “pay-to-play” scenario. This is armageddon. Good luck to them.
  • Anyone with a downtown gentrification initiative. Those projects are now for the birds.

The winners:

  • Lew Wolff and Baseball San Jose. If Wolff and his people were secretly rooting for redevelopment to wither and die, they certainly weren’t showing it. But the decision today has such wide ranging, powerful effects on municipalities throughout the state, that’s it’s easy to envision Lew Wolff sitting in his office, thinking, Okay, that narrows the field. With the MLB panel’s report distributed prior to today’s news, they probably laid out several scenarios, and the owners have to be aware by now the ramifications – if not by the panel’s report, then by the news reports. And that plays right into Wolff’s plans. If there was ever a tipping point event for a decision on San Jose, this is it.
  • San Jose Mayor Chuck Reed. It was Reed who oversaw the winding down of SJRA and the creation of SJDDA (SJ Diridon Development Authority) to sidestep the state raid. There may be a legal challenge against SJDDA, but where will it come from? The State doesn’t have the resources to start going after dozens, if not hundreds of redevelopment agencies. Santa Clara County might, but it seems the County got what it wanted by having redevelopment eliminated. Everything else is a matter of negotiation. As noted before: prescient.
  • San Francisco 49ers and Santa Clara. They got their tasks done before the end of the year. Now it’s a matter of selling suites and seat licenses, plus getting the Raiders on board.
  • Your local municipality’s General Fund and local schools. While the State will get a portion of the newly realized tax increment, part of it will be returned to cities, counties, and school districts. For cities with very large redevelopment areas such as San Jose and Oakland, this could actually mean a windfall of sorts, or at least a way to shore up their budgets. How much will it help? That’s for the bean counters to figure out.
  • Governor Jerry Brown. The beautiful irony of this situation is that Jerry Brown used redevelopment in Oakland as a stepping stone to get him back in power in Sacramento. Now he’s killed redevelopment. That’s an experienced politician.

Too early to tell:

  • San Francisco Giants. The death of redevelopment may tip MLB in the A’s favor. Then again, it may not. One thing to consider: the Giants overtures towards the Warriors about getting an arena in Mission Bay may be negatively affected by the ruling.
  • Backers of the Coliseum City plan. The Coliseum is part of a separate joint-powers agreement which allows the Coliseum Authority to raise money for its own projects. The track record isn’t great (Mt. Davis) but the power remains. Still, Coliseum City came about as part of a major planning and redevelopment initiative in and around the Coliseum and Airport. Now at least half of that project has been rendered irrelevant, which could have cascading effects on the Coliseum. On one hand, the Coliseum could be considered one of the only places with land where something could get done. On the other hand, the Coliseum is still pretty much limited to contributing site and infrastructure improvements, with little ability to contribute directly to any new facility or refurbishment. It’s also at the mercy of private developers to flesh out Coliseum City, which given the area, is definitely not a given.

It was hard enough getting something built in California with the state of the economy. Now, if you don’t at least have something already underway or an existing facility or land from which to base improvements, you may as well not show up. Redevelopment as an industry is over. Now bring on the new industry of “creatively” financing traditionally redevelopment-oriented projects.

25 thoughts on “Taking stock as the post-redevelopment era begins

  1. I was truly wondering if this might be the final straw for the pro-Oakland group, and then the first post I see on the FB page of the “Keep the A’s in Oakland” about this issue is “Yes, San Jose has no money, what you gonna do now Lew?” There is probably a very small portion of pro-Oakland folks that really feel this is great news for them. Wow.

  2. davey, it’s the final straw for Oakland. It may not be the final straw for some of the more delusional members of the Oakland Only crowd, but then many of them won’t be convinced the A’s are gone or that SJ is the only way they stay until after they’ve left for SJ or out of state respectively. There’s an old saying, “you can’t fix stupid.”

  3. byrnes on knbr was discussing the sj issue for most of the show from 3-7. he was all over the issue really. he said he thinks the a’s will eventually make the move to sj. then he said sf should fight it down to their last dying breathe regarding the tr. then he said sf should ask for major compensation.

    the callers were pretty split. there were sf fans and byrnes himself who didn’t even know the a’s gave the rights to sj until slusser emailed them in the middle of the show. that shows you how much the propoganda over the years that sf has put out there that sj has always been there when before the early 90s it was shared territory. but the callers regarding the move, some felt the a’s should get sj for numerous reasons saying how the bay area deserves 2 good mlb teams and sf owes it to the a’s for giving up their rights so they could stay in the bay area granted they lost a couple of ballots measures over the decades in a move to sj.

    then there are others including byrnes who think if the a’s move to sj that the corporations down south will fully back the a’s and won’t with sf. he and also some callers believe that sj/south bay residents will support and attend a’s games with sellouts since it’s closer to people who don’t have to travel the possible 40+ miles from the south bay to at&t. one caller in particular said sj citizens don’t want to be linked to the city of sf and he and many others in the south bay want a mlb team of their own.

    some compensation ideas that i found amusing was that sf would demand part ownership of the a’s franchise. huh??? byrnes brought up the idea of revenue sharing regarding the south bay corporate support. course the a’s/mlb help paying the debt service of at&t was mention. others mention it could come down towards on the field personal moves where the a’s would take back the contracts of the likes of zito/huff and the a’s would send some of their young talent ala a green and a few others.

    so sad that knbr has probably spent more time on the whole sj issue than the a’s flagship station themselves over the past few months. i understand the whole revival of the niners and raiders in 2011 but really when the station for much of the first 12 hours of local programming talk about the same issue day after day, week after week in regards to football, it gets a bit boring.

  4. Funny that the Giants and Giants fans biggest fear is that a healthy A’s team would hurt them that much. They’re so afraid their product is crap (maybe they’ve finally accepted what I’ve always felt), that they don’t think it would stand up in a real competitive market. Which in part I understand from the Giants owners. If you know you can’t compete in the market on a level playing field you try and undercut the competition any way you can. That’s business. But from the Giants fans I don’t get it. Are they that bandwagon that they’re afraid they’ll all be tempted to become A’s fans if they’re in SJ?

  5. that’s exactly what they’re scared of other than losing money that probably will never be theirs in terms of corporate support the a’s would get in a move to sj. some companies down there just want to support and promote the city of sj, not sfg or any other team in the sf/oak area and the a’s would get a huge bulk of cash with so many corporations wanting to put their mark and arms on and around a major major sports franchise especially baseball with 81 home games and 162 games in general to promote their product. as much as the sharks have given to sj, it’s still hockey and if sj were to ever be given a franchise from mlb, nfl, or even nba…i’d be willing to be there would be more support for a franchise of one of those leagues in sj than there has been with the sharks/nhl.

    lets face it sf lucked into that world title in 2010, NOBODY picked them before the season and not many picked them when they made the postseason. they caught lightening in a bottle and that’s that. i don’t see them winning any title anytime soon. so with the a’s being irrelevant basically in oak, a move to sj would put them back into the picture and that would sf wouldn’t just sit on their world title from 2010 or their park as much if they had actual on field competition both on and off the field if the a’s move to sj.

  6. So does the “Keep the A’s in Oakland” group expect Wolfe and Fischer to not only pay $500 mill of their own money for a ballpark in Oakland, where the corporate support is very weak and they would lose their shirts, but to also pony up another $250 mill for site acquisitions and business relocations because Oakland doesn’t have the money? Talk about a sense of entitlement…

  7. ML – any follow up on the part you mentioned about SJRDA owing the city $80-$90 million and how that impacts SJ’s ability to get things done for the A’s at Diridon?

    • @Mark N – That money vanished like a fart in the wind. They weren’t counting on it anyway because it would’ve had to go to the state in the pay to play scenario anyway. City took a gamble there and lost. Never should’ve been structured that way in the first place.

  8. Vanished like a fart in the wind… Awesome.

  9. @letsgoas – I wish 95.7 would mix it up and talk about the San Jose issue too. It would help add some variety to the station other than just talking football (of which I agree has gotten boring on the station.) On the other hand, do you really want to hear what John Lund and Brandon Tierney have to say about this? This subject matter is much too complicated for them. As misinformed as Eric Byrnes is, Byrnes probably has one hundred times more knowledge on this subject than the two guys I named combined.

  10. It’s kind of my fault. Townsend called me a few weeks ago to see if I was interested in talking stadium. I was busy and didn’t get back to him until his show was well underway. Maybe sometime in the near future.

    As for others covering the subject, I’d rather they not discuss it unless they’re reasonably well-informed.

  11. If Oakland loses the Raiders and the A’s, I’m going to cry until I have no more tears.

  12. @Jeepers I hear ya man. Lost the Raiders once and to lose them again, as well as the A’s(screw the W’s) …It’s pretty painful. I know it’s considered okay to publicly trounce Oakland (see that Iraq/Oakland SFGate article, as well as any Scott Ostler piece), but it’s a city with a lot of pride that deserves some much needed good news. At this point, I’d be happy if I can bring my future child to either an A’s or Raiders game in Oakland, just like my dad and grandpa did before us.

  13. i only caught maybe the last five minutes of chron live a few minutes ago on the late night replay but they again were discussing a’s to sj. it was newspaper scribes purdy andpoole with also lawyer and csnba legal analyst moskowitz.

    poole brought up the whole a’s dismantling of the team trying to urge mlb to make a decision. basically what he wrote in his last article that has made the rounds in the past 24 or so hours. question i have is did mlb already tell privately the a’s they were getting sj which is what nightengale posted during the christmas weekend and again why beane is at this point blowing the whole a’s org up by dealing away their pitching talent in cahill, gio and bailey while also letting half his veteran lineup go of willingham, crisp, matsui, and dejesus. when asked over or under 50/50 of whether or not the a’s to sj will happen at the end of the segment, he said less than 50% due the history of how hard it is to build a new stadium anywhere in california these days.

    purdy in his 50/50 statement said he’s go over but just slightly at 51 or 52 perecent saying again how hard it is to build a new stadium here and even though if mlb owners passed the 3/4 vote needed and he mentioned in polls conducted regarding a park ballot for sj citizens that’d it pass.he doesn’t know if the potential litigation that’s been mentioned that would come from the city of oakland and even the astroturf group would bring. also mentioned how tricky this could as mlb has said they’d help pay for th ballot measure but mlb is worried that they’d have one owner in wolff doing all he can do pass the ballot and then another ownership group in sfg that would all they could to stop the ballot measure from passing. although hasn’t been mentioned that if 3/4 are voted to let the a’s move that mlb could essentially tell sf and their astroturf group to basially get out of the way during the whole ballot measure process probably next spring. purdy did say any kind of compesation could brought out by how mlb settled the was/bal situation. very surprised that purdy gave it just barely passing over 51 or 52 percent as he’s one of the staunchest proponents of the a’s moving to sj.

    moskowitz said litigation could take a long long time and whether or not the a’s owners if they had to deal with that would just rather sell the team rather than go thru years and years of legal process. worst case scenario that he mentioned as a lot of a’s fans fear as the worst case scenario is mlb would either buy the a’s or have some outsider by the a’s franchise and move them to another city likely out of the bay area. he’d also mentioned that there’s basically a lot of talk about litigation as he’s a lawyer but in the end a cash settlement could eventually take place and or something like the whole was/bal situation that purdy brought up as a possible compensation could take place.

    i’ll watch the replay later in maybe half an hour and post if i missed anything previously on the segment.

  14. segment started showing mlbn talking about the a’s to sj wed after the bailey deal was made.

    purdy said that city has cleared and purchased the land south of the shark tank if the a’s build a park there as wolff has an option if he can get a park built and wolff would pay for construction of the ballpark but they’re waiting for mlb to make a decision. purdy repeating what was posted a week ago about how wolff is very popular among his brothers and it’s really up to selig to TELL them what to do. wants everything buttoned up before a 3/4 vote by the owners.

    poole said the a’s owners have said for a decade now that they can’t win in the playoffs. selig came out and said the can’t compete without a new park but the a’s that season did go reach the playoffs. this ownership could sell the team if nothing happens anytime soon.

    moskowitz said there could be hurdles from environmentalists and neighbors around the new park, and that punk ass team across the bay. doubt the a’s want to go thru the legal process themselves.

    both purdy and poole said they believe the a’s will lose over 100 games next season. even if the a’s get sj and the ballot measure passes in the late spring-early summer. i can’t imagine what the attendance will be like for a’s games the next season or two. could it get as bad as from 95-98 when the a’s couldn’t draw more than 1.2 million in any of those 4 seasons? same thing happened after the billyball era ended where from 83-86 they averaged just over 1.3 million. i doubt it’ll get as bad as it did in the late mid to late 70s when from 76-79 they averaged 496k, 507k, 307k, 842k. gammons on mlbn wed did say that the a’s will be last in attendance and revenue in 2012 and probably in 2013. could see a uptick in attendance in a possible last season in oak in 2014 especially if the a’s are coming on strong like they did back in 99 which was a precurson to their run of maing the playoffs in 5 of the next 7 years.

    course many a’s fans hope for some bad records which would finally land them a high pick in the top 2-3 which hasn’t been the case the past 4-5 years where the highest they’ve drafted is 10th back in 2010 when they picked choice and maybe a major reason why up until they traded for a couple of top level prospects in the past month, why they haven’t had a top notch prospect come out of their system in recent years because of their draft positioning and continuing to be mediocre with mid 70 win teams in 4 out of the past 5 years.

    question i have is what does oakland have in terms of litigation towards the a’s? isn’t the leases up with the coliseum in a couple more years? if so what do they do? force the a’s to stay when their contracturally not obligated to play at the coliseum and or the city of oakland anymore.

  15. As I’ve said before, the litigation threats are a paper tiger. The Giants have problems bringing an action directly, and San Francisco or Oakland have nada in terms of legal claims that pass the laugh test. Any official from either city that started to spend public money on something so quixotic should be immediately recalled.
    For another thing, simply filing a lawsuit doesn’t necessarily stop the bulldozers. Whether or not litigation “takes a long time,” there’s a very good chance the A’s could go ahead and build anyway while lawsuits were pending.
    Finally, the Giants just aren’t going to pee in their own swimming pool by taking MLB on in this fashion. Larry Baer is not Al Davis, and even if he were, he’s got an ownership group of rational businesspeople he must answer to. The Giants are coming off their best season ever, are selling out the joint and raking in money hand over fist. They are currently one of the most lucrative franchises in baseball. Does anyone really think they’re going to put all this at risk by going to war with MLB? If anyone was going to do it, it would’ve been Frank McCourt. He was on his way out anyway, and had a lot less to lose by being a pain in the ass than the Giants do. But in the end, business is business, and he did the rational thing and came along quietly. The Giants will do the same if MLB rules against them.
    Some of the citizens groups could persist with their lawsuits anyway. But Lew Wolff is an experienced California developer, he deals with that stuff every day of his life. Does anyone really think he’s going to walk away after all this time and if MLB rules in his favor rather than take on those groups? If that were the case, he never would have started down this road in the first place.

  16. also this whole issue about not getting new stadium built in california? uh do we see what the niners are doing and they’re about to build a stadium that will double the cost likely of what cisco field will end up being. not to mention a baseball park will have 81 home dates while a football stadium at the most with both the niners/raiders as i think the raiders will join them will have 20-24 home dates if you include potential playoffs down the road.

    i’d think booking events like concerts and etc for a baseball stadium would be easier to do so in a football stadium.

    in all of this too if a’s do get cisco field, niners/raiders get the new santa clara stadium, and w’s move into a new sf arena…does this mean the coliseum/arena event calendar takes a huge hit with 3 brand new venues build over the next decade maybe? even though the coliseum location is still in a good place for transportation due to the freeway and bart nearby, you don’t think event people instead of going to the arena all these years won’t look towards that sf arena near at&t and all those big concerts and vehicle events that the coliseum holds won’t be moved towards either the a’s stadium in sf or the new football venue in sc.

  17. On some levels it is too bad RDAs are done (but on some levels it is good they are done). However, make no mistake, they are done. No way Sacramento touches any bills that will increase spending on the order of what it would take just to minimally replace RDA. Down the road when the economic picture is better? Maybe. Right now with pension funding about to be dealt with and the very powerful unions about to roll out the ‘don’t touch our pensions’ machine, spending bills of the RDA type will be going no where. Again, RDA is dead, move on.

    Regarding this being a blow to VC or the Coliseum City project, is it really? Wouldn’t the projects have to be in an elevated status for their to be a “blow” to them? Other than those of the misinformed and/or right side of the brain “thinking”, these projects were so far from reality as to leave one in awe of how ridiculous they really were. Quite frankly, they were so far from reality that the Oakland Pols should just make up a revenue generating fantasy (they could call it the ‘Human Fund’) and say all projects are a “go!” because the Human Fund will finance them, plan them, bring all parties together to agree on everything, etc etc.

    Lastly, regarding “lawsuits”, unless the A’s or MLB have signed some sort of previous agreement with the city of SF (HIGHLY unlikely), a lawsuit by any party other than the Giants would be a waste of time (though wasting time would be the real goal). As someone mentioned before, the threat of a lawsuit (in terms of it actually winning in court) is a paper tiger. As far as the Giants suing, it’s a ridiculous tact…..unless they believe it is a good idea to have a reexamination of MLB’s anti trust exemption or the mere legality of saying a city is not freely allowed to host a ballpark and team. Fyi, The only lawsuit with any meat to it would be the City of San Jose arguing that second point. As stated before, the ONLY hurdle in the TR argument is The Lodge, period. >=75% of The Lodge supports it then it’s a go, < 75% and the A's move to SJ is dead as a doornail, dead as RDA, dead as the chance of a Coliseum city, dead as ……….

  18. Now that RDA is dead — and with it, VC and Coli City — how long before Jean Quan announces her previously-secret plan to build the A’s a floating stadium set on mobile pontoons, financed by the energy generated by a giant, mutant hamster running within a large wheel inside Ask.com headquarters — energy which she will sell back to the power grid? The big attraction with this plan is that the A’s can then float the thing into McCovey Cove and hit batting practice balls into the Giants’ outfield during their games. AFAIK, during the off-season she plans to use it as a floating prison to house recalcitrant Occupy Oakland protestors awaiting extraordinary rendition to Morocco under the recently-signed Defense Authorization Act law, so stay tuned.

  19. @ emperor – Stop making so much sense.

  20. I would add another winner to the list: The other 49 States in the Union. Why is that? There is little doubt that lots of pork was spent on RDA’s. But this decision is an absolute disaster for the State of California, and that goes way beyond the Oakland A’s. Think about some of the things that were done with RDA’s (Such as renovating the Santa Monica Piers). What will happen? You will have a decline in investment throughout the State because basic things like building and even renovating and buildings and roads, will become not only more difficult, but more expensive. If I am a business I would certainly think twice about investing in California.

    • @David Brown – Good points.

      Some guy tried to troll this site hard. Too bad he just got dropped into my spam list. Oops.

      D-bag tried again. Apparently he won’t get the hint. Quickest ban ever. FWIW, I’ve banned 3 people from this site ever, and jk-usa’s ban was lifted at Christmas. That’s out of 70,000 unique visitors who come every month.

  21. What was he trying to troll with?

  22. @Dan – Personal attacks.

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