Capitol Raiders

No, I don’t mean the Raiders moving to Sacramento. I’m referring to the state’s raid on redevelopment agencies, which we discussed last week.

At issue is a matter of dates. The state contends that via its new redevelopment laws, transactions that occurred in 2011 between RDAs and third parties (developers) are up for review, and that those that were done after June 28, 2011 would be struck down. June 28 is notable because that’s the date that bill AB 1X 26 was signed by the Governor. (A companion bill, AB 1X 27, was also signed by Governor Brown, but was killed by the state Supreme Court in December, leaving no path forward for redevelopment as we knew it.)

Cities are saying that there is no implicit cut-off date because none was specified in the legislation. There are dates for when certain transition activities are supposed to occur, but those were not the “effective immediately” date the state is gunning for. The League of California Cities’ lawsuit was filed last July. October 1, 2011 was when the RDAs were supposed to wrap up all activities, but the lawsuit granted a limited stay, so the RDAs were able to continue operations to some extent. San Jose City Attorney Rick Doyle characterized the legislation as “rushed” when referring to the lack of a date. Now the cities are saying that the effective date is April 20, 2012, the date Controller John Chiang sent letters to affected cities ordering properties to be transferred to the state.

If October 1 is decided as the transfer date, both the SJDDA-Wolff land option deal (November 2011) and funding for the Coliseum City feasibility (March 2012) would be in jeopardy. In the land deal’s case, the property would be transferred to the state and would subsequently be sold or auctioned, preferably for as close to market value as possible. The key there is that Wolff locked in a discount based on the property’s use for a ballpark, a price that would be presumably lower than an open market price. If the state were to assume and sell the land, there would still be an opportunity for Wolff to buy the land. The market isn’t great in the Diridon area right now, but when speculation comes into play all bets are off. If the city refuses to put the ballpark  parcels on its transfer list, the state could sue to get the land, which would tie up the deal for some unknown amount of time. Eventually the land will be sold because the state needs to get proceeds for the state budget and for schools, so it’s a matter of when and how much as opposed to if.

In Oakland’s case, the problem is a matter of expenditure, not property. $3.5 million has been approved for the study, which is supposed to be concentrated in the Coliseum-Hegenberger-Edgewater area. If the state gets the funding for the study struck down, all work would have to be terminated and would remain incomplete, unless a third party came in and volunteered the funds for the rest of the study. Perhaps Let’s Go Oakland or Don Knauss’s group could front the money. The issue there is that both groups prefer waterfront ballpark sites over the Coliseum, so those precious resources may not be best spent on what is effectively a third option, and a bunch of stuff that is not related to a ballpark at all.

There’s also a third way that is emerging, though it’s definitely an edge case. The successor agencies that are taking over for the RDAs are county-based bodies that report to the state. Their boards ultimately decide how the assets get divvied up. Some counties have had their own redevelopment agencies that were also affected by the new law. In Sonoma County’s case, they’ve chosen to keep two redevelopment projects going that would normally have been turned over to the state because they felt the projects were worthwhile. There would appear to be a conflict of interest for in-county activities as opposed to city-county activities, which are more arms-length. Alameda County’s board could conceivably come to Oakland’s rescue because both are partners in the Coliseum JPA. At this point it’s too soon to tell if that will a matter of discussion.

Both the Oakland and San Jose situations are not quite doomsday scenarios (that already happened when 1X 26 was passed), but they create uncertainty and delay at the very least. For Lew Wolff it’s a matter of cost. If Bud Selig is looking to put off a decision until all of this shakes out, he certainly has reason to.

40 thoughts on “Capitol Raiders

  1. Some of the articles have proposed that the Niners stadium might get caught up in this as well do to the small redev funding it received, however I find that unlikely given the early date those funds were approved and the relatively small amount of the total cost the redev funds played in the Niners stadium.
    As for the A’s ballpark, in either city, this isn’t a great scenario. It’s just another excuse for Selig to delay his decision, and yet another reason the only two existings plans (San Jose and Coliseum City) might not happen at all (as if either project needed yet another strike against them).

  2. Can anyone shed some light on the scope of Oakland’s study? Given the site already hosts two sports facilities and has the basic infrastructre, what si that $3.5m being spent on?

  3. If the A’s buy the Diridon land through state auction as opposed to the earlier SJDDA deal would it mean that the requirement for a vote would go away?

  4. I wonder how those lease extension negotiations are going with Oakland and the A’s. If this even has a hint of being drawn out, the way legal rangling often is, I guess that can be considered by some as a plus for Oakland. Not that I have any faith that the city will be able to pull something off when looking back at past performance. then again, that may just give this new East Bay angle time to grow and at the very least make things more uncomfortable for Fisher and co. Not that receiving MLB money in the interim is all that uncomfortable.
    Who knows at this point.

  5. @Nathan – It’s possible.

  6. Have there actually been any lease extension negotiations?

  7. I’m not aware of any negotiations between the Coliseum Authority and either the A’s or Raiders.

  8. North San Pedro/Brandenburg looking better by the day ;).
    Rather than Diridon, perhaps Wolff could consider his iStar/Edenvale parcel or some of the Airport West/FMC property for a swap with Barry Swenson/NSP…just a thought.
    @Nathan, I like how your thinking.
    Just my opinion, but his RDA news shouldn’t effect the ultimate goal of a ballpark in San Jose, but it might effect the final locale of said yard.

  9. @ML/All…
    Thinking out loud here…if the land goes up for sale to the highest bidder, what’s preventing the Giants or some entity on behalf of the Giants from bidding on the land to inflate the price or at worse purchase it to prevent the A’s from getting it? If this is a possible scenario I’m sure both the A’s and Giants are thinking about it.

  10. That’s when MLB has to step in and strip the Giants owners of their franchise. MLB can’t continue to have one franchise acting to the detriment of the rest of the league.

  11. @Stomper00, that’s one of things I was thinking about too. And while I agree with pjk that MLB can’t allow something like that to happen, they’ve allowed quite a bit of things so far, so I’m hardly willing to count on them stepping in.

  12. @Stomper00 – If the Giants or affiliates want to bid $20, $30 million for the land they’re assuring themselves via the process that they’ll never be able to build anything on it. Maybe that’s a worthwhile price for them. I don’t think they can treat that much money very lightly. The Neukom firing is a good indicator of just how money-conscious the ownership group is.

    @pjk – Selig will do nothing of the sort.

  13. @stomper,
    If the Giants want to buy the Diridon plot for $20-30 million, I say let them. See my post above; Wolff might (or should) have other options in San Jose to build.
    This saga won’t even go there (won’t have to).

  14. Yes, that’s the problem, ML. He will do nothing to get the Giants to back off and the Giants know it. Selig expects them to play nice but we’ve all been waiting several years for that.

  15. re: 980 ballpark
    …and we’re supposed to believe a smog-filled ballpark built above a highway in Earthquake Country is a better idea?

  16. Would it not be, as my Grandma used to say, a “kick in the feathers” if Bryan Grunwald’s proposal actually made it to the final docket as a legit opportunity? It may seem outlandish right now but I would not be surprised in the least if this design comes in as a proposed site in due time. Sometimes in life it’s the craziest (present view) ideas that become realities.

  17. @Columbo,
    Fremont would happen WAY before a “floating mountain” 980 ballpark. Relax people; this RDA news (like the Knauss announcement) will simply give us something to talk about until the REAL news occurs.

  18. BTW BY,
    you’re 100% @#$%& wrong about MLB vetoing an A’s move to San Jose because of the Giants TRights. You talk as if you know what’s going on. Didn’t you read what Selig had to say a few weeks back? Of course you didn’t! Reality is proving to be extremely inconvenient to those hellbent on keeping the A’s out of San Jose. In closing, the Chron sure lowered its already low standards by including your biased dribble on its website…outrageous!

  19. Meant BG (Bryan Grumwald), not BY.

  20. My bad Bryan, didn’t realize that piece was from 2010. Your thoughts have been irrelevant for almost two years (lol!).

  21. @ Tony D. – You are without a doubt the most optimistic person on this board, bar none. However, I think that last comment was a bit below the belt. Regardless of what you may think of BG’s proposal, he’s an architect and he has no doubt spent a huge amount of time on this. Whether you think his ideas are far-fetched or not, give the guy some credit for trying to come up with a solution, even if it happens to be in Oakland and not SJ, as you would prefer. From what I understand he’s been to countless meetings at the City of Oakland so I would certainly hesitate to dismiss this guy’s work despite what you may think about it or desire as your optimal outcome.

  22. Actually, I shouldn’t be speaking for BG. My last post was how I would feel if you said my work for the past XX years was “irrelevant.” BG may not care what anyone says. I would though. Good for him if he doesn’t.

  23. Tony, personal attacks are not a good way to make your point. In fact they undermine anything else you choose to say.

  24. And around and around we go…..where the wheel stops, nobody in the heck knows. Same ol…same ol.

  25. This is an interesting development. However, I have to imagine the RDA issue is well known enough that W&F have a contingency plan for this. If not, I’m guessing they will soon. All in all, I can’t see this outside the normal roadblocks developers face. The interesting thing is that it impacts both S.J. and Oakland so neither side can claim it as a win.

  26. Have you guys seen the Oakland Tribune today? Holy Cow!

  27. Dino, please do enlighten the rest of us who don’t get the Oakland Tribune…

  28. Oh are you talking about the poll on the Tribune front page about whether Wolff should sell the team?

  29. 95.7 mentioned a open letter to John Fisher from a handful of pro-Oakland parties. I can’t find it though.

  30. Anyone got a link? I’d love to read (though from what I heard Mark Kriedler saying it’s sound like they are trotting out bullshit again)

  31. I only saw something posted by LGO on Facebook about page A5 and that they’d posting something about it later.

  32. It’s funny, looking at the Tribune website I can see one of the big things that’s wrong with Oakland straight away. The front page has several sections as you’d expect, “top news”, “prep sports”, “living”, “entertainment” and… “Raiders.” They actually have a Raiders section of the online paper, but nothing for the A’s. It’s not even football season!

  33. @Dan: Agreed. They also lack enough A’s content or have out-of-date content. In any case, the Rise Guys don’t seem that interested in the letter, if that’s any indication of the weight that letter carries.

  34. Hopefully, Fisher lays out how there’s no way to pay for a ballpark in Oakland, even if there were a viable site, given limitations on private financing and the lack of public financing. Of course, he’ll change no one’s mind no matter how many facts he has.

  35. Oops. Looks like I read too fast again. The letter is TO John Fisher.

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