Coliseum City already running into financing problems

Last week, Zennie Abraham teased with one of his video blogs, this one about Coliseum City. In it, he claimed that a financing plan for Coliseum City fell apart recently.

Abraham, who is still connected with Oakland City Hall to an extent, made a few other points:

  • Mega-developer Forest City Enterprises (responsible for Uptown among other projects) was/is to be the master developer.
  • A businessman from Torrance wants to bring the Raiders south.
  • The Raiders pushed for a cheaper, open-air stadium ($900 million)

Last night Abraham elaborated on the story, filling in some of the gaps.

  • The “Torrance businessman” is in fact Ed Roski, he of the City of Industry stadium plan.
  • Roski attended a Clippers game in april with Raiders managing partner Mark Davis, who may be willing to split with 17% of the team to take care of some inheritance tax obligations after Al Davis passed away. In the past Roski has wanted a 30% share, large enough to be managing partner.
  • A big stumbling block is the potential of seat license sales, which continues to plague the original Mt. Davis project but is also considered a requirement for new NFL stadia due to the enormous cost.
  • Redevelopment funding alternatives are under consideration, such as the establishment of a Mello Roos or Community Facilities District (CFD). It’s not clear how that would work in the case of Coliseum City where a large swath of land is publicly owned. Normally, property owners all choose to vote to tax themselves to fund public improvements, such as infrastructure.

Here’s the thing about Roski’s plan: it’s about as sexy to the NFL as Coliseum City is to MLB. The main draw of Industry was Roski’s advertised low cost to implement, thanks to cheap land, a cheaper stadium design (built into a hillside), and redevelopment money that could’ve paid for new infrastructure. The state’s RDA raid claimed $180 million that was to be earmarked for the project. If, as expected, the funds go away, Roski might have to lobby local legislators to pass a bill that creates a carveout on his behalf, which is a step further than what the Warriors and AEG were seeking in their venue efforts. Regardless, you can’t blame Roski for trying. He waited until the Farmers Field deal fell apart. He can do the same for Coliseum City.

The interesting outside angle for Roski is that last week St. Louis declined to pay for $700 million in improvements for the Edward Jones Dome, setting the stage for negotiations on what would probably be a new outdoor stadium somewhere in the metro. Of course, a new NFL stadium is guaranteed to cost more than $700 million, so it’s hard to know what kind of deal the city/county/state could offer Rams owner Stan Kroenke. A situation involving the Rams and Raiders at Roski’s Industry with Roski getting smaller minority shares could be just the ticket. Now there’s no speculation of this deal happening, but it’s definitely an option, if remote.

Going back to Coliseum City, I’ve said for over a year now that the financing for the project, whatever the scale is, looks iffy at best. That’s expected to be borne out in a feasibility study that should come out latter this summer/fall. What we’ve been told so far has not made the financing picture any clearer:

  • City Administrator Fred Blackwell said in February that the Raiders stadium may not end up with a NFL G-4 loan because of difficulty getting the revenue backing for the loan (club seats). The G-4 money may not be an issue moving forward since the Falcons are getting the last full slice.
  • Contradicting Blackwell, Oakland Mayor Jean Quan has said that she wants the NFL’s loan. She also said she wanted a retractable dome stadium, which appears to be a nonstarter at this point.
  • The “preferred” open air stadium will still cost $900 million, which isn’t chump change, and if the 49ers’ stadium is any guide, destined to grow in cost. In most current stadium development agreements the team is on the hook for cost overruns. How could the Raiders agree to that when Mark Davis doesn’t have the cash?
  • If it’s not a dome it can’t be used as a convention center or an otherwise flexible facility. What incentive is there for Oakland and Alameda County to invest limited resources for a limited use stadium? Is it just because the Raiders are playing nice right now?

Another interesting element about the financing piece is that investors are focused on the area currently known as the Coliseum complex, plus the Malibu/HomeBase lots. In the Coliseum City study, an alternative will include a ballpark in the northern corner of the complex. But what if Forest City recommends that additional commercial or retail development go there instead to help pay for the cost of the NFL stadium? That would be something. Forest City helps kill two Oakland ballpark plans (even if no one cares for Coliseum City for the A’s). Why not get them to develop Howard Terminal while you’re at it?

Speculation about who outside investors are or which country they come from is neither here nor there. The problem is that whoever it is, they need to be able to make money off this plan. We’re starting to see far more realistic discussion of the revenue generating capability at Coliseum City, not some pie-in-the-sky projections. This is a good thing, because it will eventually lead to the adult conversation about what it’ll take to keep one, two, or all three teams in town. Until now every party involved in Coliseum City has been looking to get someone else to pay for their stadium, their resurgence. Soon, we’ll finally find how much it’ll cost everyone, including the public. That’s a lot more honest than the discussion that led to Mt. Davis.

38 thoughts on “Coliseum City already running into financing problems

  1. @ML

    You’re going to continue to get hated on if you continue pointing out the facts/flaws with these stadium plans.

    If I was the Raiders I would try and partner with AEG to build a stadium, even if that meant giving up 30% ownership to a company that has proven it can build a winning sports franchise (LA Kings) and build a state of the art arena.

  2. @ml
    Great article

    @Oakland supporters
    Chin up…not over till it over even though what I read hurt a bit….just support the A’s and Raiders while there here.

  3. @Mike 2

    Im just scared of what Mark Davis want to do. I kind of realized Mark has all these L.A connections. I think what is stopping him from selling is Carol Davis his mother who still owns the team with her son….keep em in Oakland carol

    Hey thanks for being nice to Oakland supporters but cut the charade. ..I know in the back of your mind the A’s are going to San Jose its ok bro lol 🙂

  4. Msrk Davis meets with a guy who wants the Raiders in LA; Coliseum City is not going anywhere; NFL wants the Raiders in Santa Clara. Yikes. Oakland is going to need lots and lots of money that it doesn’t have if it wants to keep any of the teams. Pep rallies, press conferences and cardboard signs won’t do it.

  5. @stand

    We all know the Raiders are not the brightest run franchise in the NFL. They have paid dearly this past decade with old Al going senile and running the Raiders into the ground. It would make sense from a fiscal standpoint to partner up with a company like AEG or M.L.S.E (Maple Leafs) and try to build a stadium even if that meant relocation to LA if a stadium in Oakland falls thru. Like I said earlier AEG has proved that it can turn a losing franchise around and make it a winner. I am not advocating a move out of the Bay Area for the Raiders, I just think that with the right investors and capital the Raiders would become a sound organization again.

  6. @Mike
    If the Raiders leave again . I can see the 49ers making a strong marketing moves to take over the enitre bay area market, east, north, south and pennisula. Mark Davis will have to bank that LA can work second time around if he is bold enough. …

  7. As expected G4 funding is gone, the city has no realistic funding mechanism and Mark Davis is broke. The Oakland football stadium was DOA from the beginning, people who were cheer-leading the anti move efforts of all 3 teams are starting to realize that keeping one is going to be a challenge. Keeping three is not going to be possible. And frankly this can only help San Jose and the A’s case as it pertains to MLB.

    Additionally given that the Raiders are abstinent and insisting that Santa Clara isn’t an option the only landing place that makes sense (other than staying in the Coliseum long term) despite the NFL’s misgivings about Roski’s plan is the Industry Stadium. Even with the $180 mil outstanding that stadium is still much further along in the process than AEG’s all but dead stadium downtown. It is still a much better location to acquire PSL’s compared to Oakland. And is still the path of least resistance to getting a stadium up and running in the next decade for one, perhaps two teams if the Rams situation is as dire as it seems (I would also assume the Rams are SOL as in regards to getting G4 funding too).

  8. screw coliseum city. its a horrible idea. just let the raiders have the coliseum site to themselves. they can have their new coliseum and raiders hall of fame without all the extra bullshit like retail and a convention center etc.

  9. Does anyone know if the Raiders’ PSL owners at Mount Davis were guaranteed X number of seasons when they initially purchased their PSLs?

  10. @all
    If Coliseum City ffails

    I dint blame the Oaklane crowd for this thinking…if we cant have the A’s and Raiders in Oakland…then get out of our site…. A’s outta state and Raiders in L.A…im tired of it….if nobody public, private or political in the east bay are too cheap or broke then we dont deserve it. I mean there are so many things to do in the bay area , maybe 49ers, Giants, Warriors, and Sharks are enough for this big suburban market…that is how i feel

  11. Zennie Abraham is completely incorrect that Mark Davis met with Ed Roski Jr. this past April. This story was originally reported on April 14th 2012 that they were seen together at a Clippers game. In fact, Mark Davis has season tickets for the Clippers and the Warriors, and spends half of his time in L.A., and half of it here up North with his mother Carol. The NFL does not even back Roski’s planned stadium in City of Industry at all, so it’s funny-as-hell that this story even has any legs. You can say all you want about the funding for Coliseum City, but Ed Roski Jr. is not getting a NFL team, and his proposed stadium will n ot be built.

  12. We are finally getting down to the reality that Oakland will likely be losing all three of its major sports teams. Neither East Bay govt. nor private/corporate funding seems to be available for building new sports facilities in Oakland or anywhere within Alameda County. Hopefully, at least both the A’s and Warriors will still remain in the Bay Area. The Raiders now seem more and more likely to be moving back to Los Angeles.

  13. re: We are finally getting down to the reality that Oakland will likely be losing all three of its major sports teams.

    …That does seem to be the writing on the wall that nobody wants to read.

  14. Anyone who declares at this very premature stage that the Raiders are going to LA or definitely staying in Oakland in the long term is foolish and doesn’t understand the numbers. The situation is very fluid, and I imagine that it’s in Mark Davis’s interest to keep it that way.

  15. It looks like Mark Davis is saying all the right things and trying to make all the right moves to stay in Oakland. But he has to know the odds of getting a new stadium in Oakland are not good. So he is talking up LA folks as a backup plan that could very well become THE plan.

  16. “still connected with Oakland City Hall to an extent”

    That’s a very delicately euphemistic way to put it. The guy spends 99% of his energy promoting himself, and often gets things terribly wrong. I wouldn’t believe him.

    • @xoot – Oh no doubt Zennie has issues and his choice of blog topics is pretty strange. When it comes to the stadium stuff in Oakland, he does have some credibility.

      @Aaron – I don’t know Davis anymore than I know you. I understand what his position is: cash poor, but with the team as leverage. Best to quietly play different cities off each other to get the best deal possible, and use Santa Clara as a fallback if all else fails.

  17. @ML
    Well ml since you know Mark Davis well….what do you think about the Raiders stadium situation???

    Dude… I bet u a nickel that A’s do well , win the world series and then Oakand will have an investor on their behalf to fund a know damn well San Jose will be stalled and the sf giants will use Oakland to keep A’s outta san jose

  18. re: Oakand will have an investor on their behalf to fund a ballpark.

    …We’ve all been waiting for this benevolent hero for years but he/she has never appeared. It’s the same old “Wait out Wolff until some rich people come forward willing to build Oakland a free ballpark.”

  19. @ML, I hope you’ve extended your domain name rights for the website. Might need another 10 years till something finally happens for either team.

    I’m not in the Oakland-only crowd, and have seen enough of your work to know SJ is likely the most profitable move for ownership (i.e. least risk), but i’m surprised by the Raiders pitching around.

    I assumed the A’s would eventually move (haha, how wrong was I!) and the Raiders would cut a new stadium on the current site when they could bunk with the 49ers or Cal for a year.

    I guess with Marky-Mark spending all his money on haircuts, looks like nothing is left over for financing a stadium.

  20. @pjk: It’s been discussed how the Giants possibly interfered with the Piccinini attempted acquisition of the Athletics. Also, if any group is interested in purchasing the A’s, they’re not going to march around and demand MLB sell them the A’s. Judging from how long this San Jose saga has dragged on, it’s clear that MLB would love a team in San Jose. Therefore, they’re not going to seriously consider any Oakland-based proposals until they’ve 100% given up on San Jose and unless the A’s are interested in collaborating on a project, investors won’t be. Makes sense? I really think it’s time to retire the battle cry of “Oakland wants a free ballpark,” because it’s a much more complex issue than just that.

  21. After the Knauss interview on 95.7 a couple weeks ago, the radio show host asked why parties interested in buying the A’s are not coming forward right now? What’s the harm in it? Groups came out of the woodwork interested in buying the Dodgers recently, we all knew Larry Ellison wanted the Warriors when they were technically for sale, no? What’s the harm? Perhaps it’s the requirement that the buyers also build their own stadium in Oakland that has them scared off, not some mysterious gag order.

  22. I do believe that the NFL would ultimately want two teams in Los Angeles, one National Conference and one American Conference. However, until the new LA football stadium is completed, I’m sure the NFL would want only one team in LA to play in a temporary location such as the Rose Bowl. It will be much easier to be the first team to move to LA as opposed to being the second team. That’s why Mark Davis is probably feeling the pressure to make a decision on LA, since he will likely be competing with the Rams of Chargers on making the first move. Also, if any other team moves first, then the NFL could stall the Raiders to either stay in their Current Oakland situation or move in and share the new Santa Clara stadium with the 49ers . Either way, Mark Davis may be forced to make a decision sooner rather than later on a new home.

  23. re: I really think it’s time to retire the battle cry of “Oakland wants a free ballpark,” because it’s a much more complex issue than just that.

    …What other financing plans have been proposed for ballpark construction at Howard Terminal or Coliseum City besides the A’s paying for their own stadium?

  24. @Mike2 – ML is being factual and objective about how Oakland city officials are dealing with the A’s (especially)and the Raiders, etc. Comparing the Sac situation and Kevin Johnson and how Oakland has dealt with the A’s is a farce.

    Sacto didn’t whine about what crooks the Maloofs are. Instead, in two months, they organized a buyer for the Kings, and a plan for a new arena – Oakland has not achieved either for the A’s in 19 years. The Sac kings/Sacto city officials make Oakland appear more foolish, and makes Wolff credible when complaining about the difficulties of doing business with Oakland. Most A’s fans (myself included) once believed that Wolff possibily was not bargaining in good faith with Oakland about a new A’s ballpark there and that Wolff wanted an excuse to stop the negotiations with Oakland. Now Wolff looks more credible about ruling Oakland out – especially after the Kings/Sac deal.

  25. @pjk: The Dodgers were for sale at the time. The A’s aren’t for sale now. That’s the difference. As for “what’s the harm in saying your interested?” I think you’re seriously underestimating the amount of work that goes into purchasing a prosports team. There is not “harm” per se, but it’s not something a serious bidder is going to announce unless (A) The team actually were for sale. (B)Conditions of sale are known. People purchase houses that are for sale. People just don’t walk up to any house they like, knock on the door and annouce their intent to buy… unless you’re the King of Zamunda or something.

  26. re: People just don’t walk up to any house they like, knock on the door and annouce their intent to buy

    …in the movie, “Bugsy,” Warren Beatty as Bugsy Siegel did exactly that. Everything is for sale, he noted.

  27. @pjk
    You know what the A’s, Raiders and Warriors owe it to the east bay faithful to invest in Coliseum City….Oakland does have a lil money to spare but I feel they should GIVE US A FREE BALLPARK STAEIUM AND ARENA. OAKLAND DESRVES IT. IF THE TEAMS SAY NO. ill run to real bay area winners like the 49ers, Giants ane Warriors. So whats it going to be Lacob, Wolff and Davis? ???

  28. Standfor: I’d say the Raiders and Warriors maybe owe it to the East Bay, since each received hundreds of millions of dollars worth of facilities improvements in the 1990s. What kind of facility improvements have the A’s received? Zip. Zilch. They had their formerly pleasant ballpark turned into a monstrous football stadium. If any of those three teams could leave with a clear a conscience, it’s the A’s. I won’t delve deeply into the longstanding attendance problems the A’s have had, which is another reason for the A’s to look elsewhere. The team is subsidized by MLB and is not self-supporting.

  29. @ru155,
    The A’s WILL still move! Your assumption is still on point and this thing is far from over. Any reason why Wolff still sits behind home plate smiling (even last week with a former SJ mayor) and isn’t begging San Jose to drop its lawsuit? Hmm.?

  30. @TonyD,
    Wolff has no need to say anything about the SJ suit. It’s a piece on the chess board. You don’t kill off your pawn, you sacrifice him for a bigger piece. Not to say the SJ suit goes anywhere or that Lew has some backroom deal set up, but it’s not in his interest to take any public stance.

    I have my reservations about whether this thing moves forward in court. Ultimately I think a decision has to come from the lodge, and it’s whether Lew has the coalition to meet Selig’s prerequisites for including it on the schedule.

    I personally hope davis stays put, but LA is a cash-whore (no soul) for football, and that’s hard to turn down.

  31. ”susanslusser 44s
    Yoenis Cespedes is in the All Star Home Run Derby. #Athletics”

    at least he gets to go

  32. @ru155 – “and the Raiders would cut a new stadium on the current site when they could bunk with the 49ers or Cal for a year.”

    Just as an aside, they probably wouldn’t go to Cal because of the “Professional Sports Events License Tax” in Berkeley that requires 10% of any pro game’s gate to go to the city.

  33. @Briggs – While pjk has an annoying tendency to sound like a broken record, the idea that the team and ballpark would cost $1 billion is not only important, it has gained traction in the media. Even Don Knauss was forced to acknowledge that. The more people can talk in terms of real dollars the better. I’m happy to advance that.

  34. The Raiders would be dumb to move to LA. It was a disaster the first time around and to abandon the Bay Area fan base a second time for a fan base who proved they were bad is not a good move. The Raiders would struggle big time selling PSLs in LA.

    LA is a bad football market and it is because there are too many transplants and there other things to do. Bay Area is far different and despite being half the size of LA supports 2 teams and has done so for decades.

    Mark Davis is in straight denial. Amy Trask resigned because she saw the logic of sharing with the 49ers in Santa Clara and co-branding the stadium and having input with design. Because of Davis’ stubbornness he has put the team in a corner.

    He has to share with the 49ers, it was inevitable. The NFL does not want to see the Raiders back in LA as it was a known failure.

    The NFL wants the Chargers and perhaps the Rams in LA because their stadium issues are far worse than the Raiders who have a 1B NFL Stadium 35 miles away ready in 2014.

    The NFL needs leverage for the Rams and Chargers and LA is that leverage. The Raiders have a solid plan B and the NFL is saying “Share with the 49ers or rot in Oakland”.

    Meanwhile Oakland is in a dream world trying to keep all 3 teams. That is why they will ultimately lose all three.

  35. Sid: Based on Facebook likes, the most popular NFL team in LA is the Raiders. By the same measurement, the most popular NFL team in Alameda County is the 49ers. There’s apparently still a substantial Raiders fan base in LA. What happened the first time was Al couldn’t get new stadium or any luxury boxes so he bolted back to Oakland and maybe he regretted that move back – he got new luxury boxes that sit empty or are leased at much less than the going rate around the league. If the Raiders can get a new stadium in LA with luxury boxes, what reason is there to stay?

  36. Why does everyone on this blog assume the Raiders will be moving to SC if a stadium in Oakland cannot be built. Davis has already shot down that idea.

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