I got your lease right here!

In the world of pro sports, $85,000 is not much money. It barely pays for a month of a rookie minimum contract in MLB. It’s the rough equivalent of one decent section’s worth of revenue at a San Francisco Giants game, or the A’s typical daily parking take. In the grand scheme of things, it’s not much. For the City of San Jose, it might be a very important piece of leverage which the City can use against the San Jose SF Giants.

The Merc’s John Woolfork reports that the City wants to get more financial disclosures from the team before it authorizes $85,000 in maintenance funds for Municipal Stadium. The main thrust of the argument against the expenditure comes from a memo (PDF) jointly written by councilmembers Sam Liccardo and Pete Constant.

Finally, as we contemplate whether to continue subsidizing the rent and repair at Municipal Stadium or any other City facility, we should know the extent to which any related entity is financing litigation costing our taxpayers thousands of dollars. Extended delays caused by frivolous CEQA litigation could stall or prevent the most transformative private economic development project – a privately-financed half-billion dollar major league baseball stadium- in anyone’s memory. It would seem minimally sensible to know whether we’re paying for the bullets with which we’re being shot.

Indeed, why subsidize someone else’s antagonism? It’s not exactly neighborly of the Giants to continually come to the trough while suing the city.

Moreover, the memo shed some light on the sweetheart deal the SJ Giants have been getting from San Jose for years. The team is set up as a nonprofit, which is not entirely unique among minor league teams. Thanks to the Giants being a nonprofit, their rent at Muni starts at $1,000 per month. Think about that. The Giants pay less in rent than most apartment renters in San Jose, or the rest Bay Area for that matter. The Giants contribute to upkeep as part of the lease terms, as does the City. But keep in mind that whatever leasehold improvements the team makes can be a tax writeoff (one of many depreciation items), which makes it the costs only slightly more than trivial. And the nature of the improvements is important: the City has paid for structural maintenance and improvements, such as a new scoreboard, electrical equipment, and lockers. The Giants have paid for value-add items like flat screen TVs on the concourse. Next year, the last of the current lease, the Giants will pay $29,000 in rent, which is a tiny improvement.

The memo also compares the Giants’ deal with the Sharks’ lease at Sharks Ice (next door to Muni) and Team San Jose’s arrangement at the San Jose Convention Center. The Sharks paid $5.5 million over the last two years for capital improvements and debt service for Sharks Ice, in addition to $5.3 million in rent just last year alone at HP Pavilion. With the lease due for renegotiation next year, the SJ Giants will be lumped in with the A’s and Raiders, whose respective leases also expire in 2013. Just as you can expect the Oakland leases to reflect additional contributions from the teams, the same should be expected of the SJ Giants.

After all, the Giants definitely don’t need the nonprofit status they’ve had since the beginning of their existence in 1988. That might have made sense back then, when it wasn’t clear how well the community would support the franchise (Lew Wolff knows a little about that). The Giants are routinely one of the best gate performers in A-ball and have their operations almost completely subsidized by their SF parent club/owners. If the Giants want to keep operating as a nonprofit, per the next lease they should comply with the Council Policy 7-1 (PDF), which requires financial disclosures of nonprofits operating city facilities:

…under Council Policy 7-1, non-profit organizations obtaining use of city facilities at a reduced rent must provide a “certified financial statement, including sources of funding and any constraints applied to funds,” and the “City may require, prior to and during the lease/property use agreement, the submission of such additional information as may be needed.”

It would be the neighborly thing to do. If the Giants don’t like it, well, I’m sure there are plenty of other places ready to offer a sweetheart stadium deal. Then we’ll see what kind of blowback the Giants get for being both leeches and antagonists. The irony is delicious. Oh, and if you think this has no teeth, here’s some very interesting language from Council Policy 7.1:

A below market lease/property use agreement may be terminated by the City at any time for any of the reasons established in the lease/property use agreement…

– and –

The City will not enter into leases or property use agreements at below market rates to organizations engaged in political activities or to religious organizations that would use the leased premises to promote sectarian or religious purposes.

Can the Giants’ efforts to derail Cisco Field be called political? Not overtly, but there’s something there.

41 thoughts on “I got your lease right here!

  1. Love it. If the SF Giants want to buy the SJ Giants and use them as a political tool and a block to the A’s and San Jose’s efforts, then time to treat them as such in kind. I hope the next lease is so unfavorable to the SJ Giants that they’re forced to leave town. They’ve never been the same since the SF team bought them a few years ago.

  2. SJ should just change the lease to $1,000,000 a day, and obliterate the non-profit status.

  3. The Salinas Giants? The Walnut Creek Giants?

  4. Sonoma County Giants? Santa Rosa Giants? As much as it could be nice to have an MLB-affiliated team a short drive away from me, I would prefer it not be the Giants’ club.
    .
    Anyway, I couldn’t help but get a little giddy reading this. It’s quite comical, in it’s own way.

  5. Oh since the news thread has already moved so far down the page I thought I’d post this here. Looks like the reporter who said the Pier 30/32 arena was dead has been confirmed as having been full of shit. The Board of Stupidvisors (who never agree on anything) unanimously approved their resolution framing how the negotiations and bidding for the project will be run. They’ve eliminated the need for competitive bidding. They’ve also started the framework for starting community meetings as well.

    http://sfappeal.com/news/2012/06/supes-unanimously-approve-golden-state-warriors-arena-resolution.php

  6. Ladies and gentlemen, your Lodi Giants!

  7. I’d like to see them in Redding. Really put them out in the middle of nowhere.

  8. And this is on top of the $1.5 million the city has already allocated to the SJ Gnats back in 2009 for improvements to Municipal Stadium….f’ em!

  9. San Quentin Giants has a nice ring to it! :X

  10. San Jose Giants: Fighting to keep San Jose minor league. I say a 1,000-percent increase in their rent would be a good starting point for negotiations. $1,000? What a joke.

  11. Let’s give a sweet deal to team affiliated with an organization that willing to do the right thing for MLB and the City of San Jose. I don’t care where the Giants’s single A team ends up! Is time for San Jose to be a MLB city, not single A! I’m tired of supporting the SF Giants when it’s clear that all they want is the money of foolish South Bay fans! Take me out of that category, go A’s!

  12. Typical Giants, GREED IS GOOD, GREED IS RIGHT. This is the article that should be sent to MLB now to expose these @#$* for what they really are. They talk all sweet with their orange Fridays with Boch and their worship of an overweight third baseman while undermining a team that gave them the territory in the BEST INTEREST OF BASEBALL. Shame on you Giant organization!!

    To tell a first class city like San Jose that they cannot have MLB team for themselves and try to sue them while you are only paying $1,000 in rent per month is so unimaginably disgusting I can’t believe it. What is Lew Wolff doing, man up and get with your lawyer to have San Jose sue.

    Now this is an article, thank you ML. My furry grows with each passing day

  13. Your furry goes with each passing day?

  14. That’s right Dan, my furry because my hair is growing with each passing day too.

  15. Minor league teams move all the time. Who cares about that? No one. The really interesting question is whether the San Jose legislators are stupid enough to dive deeper into litigation with the SF Giants over something so petty. The Giants could move the A team and sue and enjoy the games in both fora. Meanwhile, what would San Jose gain? You people are addled when it comes to evaluating the Giants. Completely addled. (But at least you don’t have to worry about Manny any more. Congrats on dodging that one.)

  16. @xootsuit – Tell that to the SJ Giants fans who are caught in the middle. I’m sure you’ll get a nice punch in the face. Wait, they’re too nice to punch you in the face. Maybe in the gut.

    The City’s not going to sue. They’re going to eventually approve the money in all likelihood. But they can play hardball with the Giants, and they have every right to do it. And if the Giants choose to move the junior team away, it weakens their perceived hold on the territory. After all, what’s the point of the acquisition if not to strengthen the case and create a bigger payoff? If that happens, it means the Giants blinked first. That’s not trivial.

  17. @Chi – The problem is that you have civic groups like Save Oakland Sports working to keep all three teams in Oakland, and other groups in the South Bay who want to bring as many teams there as possible. It would be more equitable to have “two-per-city” but no one’s going to make that happen. It’s every city for itself.

    Sacramento is highly unlikely. The A’s aren’t interested and the city is still dealing with the Kings fallout.

  18. Sacramento is Stockton ( read about the latter’s teetering on bankruptcy) with a larger population. The area has been hit hard by the fact that several of its major employers – California state gov’t and nearby military bases are all in decline , in addition to housing prices that have plummeted wiping out equity way more than the better off Bay Area.
    If you study the foreclosures happening for second homes at Lake Tahoe, you we see that many if not most are owners from the Sacto area, not the Bay Area.
    Many of the part owners in the Giants and A’s have homes/family estates up at The Lake , so they know Sacto ain’t gonna happen for a MLB team due to the dire economics circumstances of the Central Valley now and far into the future .

  19. Well Chi, I see the favorable sentiment behind ‘2 for each city’ and can appreciate it. Obviously it does not have basis in reality. However, playing along with your sentiment, it is not illogical to designate the A’s for Oakland while designating the W’s for SF. It doesn’t make sense given the A’s attendance track record and it doesn’t make sense given Oakland’s lack of effective interest in the A’s future. Conversely Oakland has supported the W’s with attendance and they have supported them with a level of effective interest. At this point the only reason the W’s would go in the SF column is because W’s ownership wants to be there.
    Additionally, given that the W’s move to SF is very iffy given the amount of hurdles/complications while the A’s move to SJ is a downhill endeavour if BS all but snaps his finger. Bottom line the W’s in Oakland and the A’s in SJ is a distinctly possible outcome.
    As far as Victory Court back in play…..was it ever really in play? I think the Oakland political leaders, by virtue of their CC idea and comments surrounding the idea, have put even the notion of VC to grave. I think it is clear that Oakland has put its eggs in the CC basket. Oakland wants the W’s to stay and may have the chance(IMHO). The Raiders appear game to stay if possible. Oakland is using CC as a catch all for the three teams. IMHO there is almost no chance Oakland Pols move away from CC and tries to accommodate each team on an individual location basis (as hard as it is to believe, a 3 separate site approach is even more far fetched than CC).

  20. Chi, point well taken. The A’s have given Oakland a far more storied tradition than the W’s. On that level I agree, the A’s would be a more logical fit for Oakland. However, from a business/pragmatic perspective (rightly or wrongly, that is what matters for stadium plans/locations), the city of Oakland and the local fan base have not supported the A’s. On the flip side they have supported the W’s. So again while I agree that the storied tradition goes to the A’s being in Oakland, the W’s are a team that was shown the love by the Oakland fan base and Pols.
    Regarding CC, on one level CC is very logical. Oakland is confronted with all of their teams needing a seriously “upgraded” place to play — and all 3 having designs on leaving without the upgrade (with the W’s and A’s wanting to leave and the Raiders wanting to stay). CC is a one plan (albeit massive plan) solution versus a 3 separate site – 3 separate plans approach. Further, as an article previously eluded to, the MLB and NBA trend is to build stadiums(arena) in a bustling and attractive downtown location. Obviously the current coliseum location/surroundings is not something to fulfill the bustling and attractive requirements (not by a country mile). But CC is not only doing all 3 stadiums as one plan, the plan also adds the bustling and attractive requirement that the A’s and W’s are looking for. So, IMHO, CC’s concept is a good one when we ignore the feasibility.
    With that said, reality is not going to be kind for the pro Oakland groups regarding CC. CC is worth less than the paper it’s written on. The state is broke, the city is broke, and the A’s and W’s owners are just not going to pony up the cost of a stadium in the Coliseum area. Each owner sees far greener pastures just down the road (one westward, one southward) and where they plan to spend their own $$$$$$ to build their stadiums. IMHO, Oakland would be better served to try and make the Coliseum area (in terms of sports) a place for football, maybe use available but unused land to try and generate some $$$ to pitch in to the overall stadium cost, get the NFL to kick in some $$$, then hope that is enough to get the Raiders to cover the rest. IMHO that is feasible. In addition, Oakland Pols should wait for the W’s situation to pan out BUT have a plan in place. I believe chances are not at all bad that the W’s plan for SF will fall apart. With an arena having a smaller footprint, maybe there are some attractive sites near the waterfront that the W’s might be tempted to work with the city on? Lastly, which I know has been repeated ad nauseum, start dealing in reality and accept that the A’s will very likely not be in Oakland in the not too distant future. There just isn’t any current writing on the wall that equals the A’s in Oakland other than they are forced to at gun point (figuratively).

  21. The giants ownership is a contemptable, greedy bunch of d-bags. The San Jose giants are a non-factor in San Jose sports. The team has typically averaged 2,000 per game (the minor league average attendance is 4,400). The San Jose giants did achieve an increase of attendance in ’11 only because the team (their owners are the SF gaints also) always give away freebie tickets promos to artificially increase attendance. If the SJ giants left town – no one would notice.

    It is hard to determine who is more at fault – the giants owners with their amateurish attempt at stalling the A’s move to San Jose – or Selig for allowing this nonsense to continue (or Wolff for not pulling an Al Davis, sue MLB and move the team.) The MLB ATE is not very solid – the Tampa Bay Rays owners group defeated it twice in court (and that is likely why they were quickly awarded the franchise by Selig)

  22. The “amateurish attempt at stalling the A’s move to San Jose” seems to be working pretty well so far, three years in

  23. The only reason this farce is continuing is that Selig allows it to – and Lew Wolff is reluctant to sue MLB.

  24. Well that and San Jose has thus far been reluctant to sue. But that could be changing if Liccardo’s comments are to be believed.

  25. ML, bit of an update regarding the SJ Giants Municipal Stadium upkeep situation. The city voted to continue the upkeep (essentially continuing the existing contract), however they amended that by an 8-3 vote to also include investigating how the money they were paying the Giants was being used as it relates to the lawsuit against San Jose. And pending the results of that investigation it could impact whether they even renew the Giants lease on Muni Stadium next year. Liccardo also indicated he’d talked with Selig in the last month or two and that Selig indicated that the lawsuit may play into whether or not MLB decides for SJ. So here’s hoping the Giants go down in flames on both fronts.

    http://www.mercurynews.com/bay-area-news/ci_20891636/san-jose-fund-municipal-stadium-upkeep

  26. @Dan – New thread just posted.

  27. @ Dan – nice catch, but it seems Licarrdo spoke with Lew about the Commish concerns and not directly…

  28. Bring back the San Jose Missions!

  29. JLL, nah they should bring back the San Jose Bees!

  30. Haha. I’m with you on the Bees — I actually got to see them play. Even so, I’ve always loved the Missions’ logo and its connection to the area. Plus they were an A’s affiliate (only for a year, but still…).

  31. Well that and if I’m not mistaken the Missions were the only minor league team San Jose ever hosted that was above the Single A level (or its predecessors). They were in the PCL right?

  32. @Chico – Anytime you post with a new name, email address, or from a different IP address it goes into the moderation queue. It’s one of the best ways to prevent spam. I could choose to not moderate and then you’d see a lot of spam. Would you like that?

  33. If you want to gripe about ownership and winning, you should do it at Athletics Nation. If you want to talk about building a stadium for the A’s, this is the place.

  34. Ouch, SJ lost the team to Ogden, Utah. Still I agree, like the logo even if San Jose never actually had a mission. Though today the name definitely would have more to do with the area than Bees would seeing as agriculture in the Santa Clara Valley is all but extinct.

  35. Technically you’re right — Santa Clara has a mission but the mission named after Saint Joseph is in Fremont. Not sure why the missionaries decided to build out there — hopefully Lew Wolff won’t make the same mistake. =)

  36. Maybe Mission San Francisco de Asis had territorial rights to San Jose granted to them by the Vatican in an aborted attempt to move there that were never revoked when they didn’t.

  37. @Chi – Hey, I feel disrespected on other forums at times. Suck it up.

  38. @Chi – See Bauce’s linked story. The Army Base is finally getting redeveloped for port-related uses.

  39. @Dan

    Just saw that — I laughed, haha.

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