Running the numbers on the gondola

I wasn’t sure how long I’d last at FanFest, so I made sure to pack a lot of activity in the morning just in case I petered out in the afternoon. That turned out to be good planning.

    • Arrived at the Amtrak Jack London Square station at 9:20
    • Walked to Howard Terminal while passing through Jack London Square via Water Street. 0.7-mile walk took longer than expected because of the amassed crowds and booths. Arrived at the east gate by the old oil storage tank at 9:38.
    • Went back towards the action at JLS, sat on a bench outside 10 Clay Street for a breather. Listened to coach and player intros, 9:55.
    • Looked around, found the Regatta 1 space where the A’s were holding the ballpark Q&A sessions. Grabbed a good seat at 10:15.
    • First Q&A session started at 10:30, lasted a half-hour.
    • Headed towards food truck corral to meet Jeff, who couldn’t get in the first session. We decided to get non-food truck grub, so we decided to walk the gondola route down Washington at 11:30. (Sadly, Jeff’s brother Kevin couldn’t make it as his munchkins were having a little too much fun with some balloons, so they had to leave early.)
    • The walk up Washington to the convention center took 17 minutes (also 0.7 miles) with light pedestrian and vehicular traffic. After we arrived at the convention center, we went into the Marriott. Jeff retraced his journey with Casey Pratt to the Warriors’ practice facility. We didn’t have access to the fifth floor entrance, so we left to get lunch at 12:15.

Gondola Route down Washington, ballpark placed at Howard Terminal

  • After lunch I was starting to crash and Jeff had to visit his sick grandma, so we hiked over to the 12th Street BART station. He was going to Pleasanton, me to Oakland Airport at 1:15.

As is often the case, the escalator at the BART entrance was out of service. I took the stairs and groused about it a little. During our journey I showed Jeff the video the A’s and BIG posted of the gondola simulation. It looked cool, though it missed the transfer from BART to the gondola station (900-foot walk). The station itself is planned to sit above the intersection of 10th Street and Washington Street.

To make the station work, a two-block stretch of 10th Street would be converted into a pedestrian mall. Washington would remain open to vehicles, though the streetscape could be changed to accommodate more trees and perhaps wider sidewalks and less parking. I think it would be a good idea to put in a reversible bus lane for use during games. Jeff thought Washington should be closed to vehicles like 10th. I agreed, pointing out the political difficulty in doing so.

After we boarded a southbound BART train, I downloaded the gondola economic impact report. While the numbers from the report looked impressive, a closer look showed one particular set of numbers was missing: The cost to riders.

To be fair, this is how such reports are often written. The reason often given is that the agencies or private parties involved are working on different ways to charge for the service, and a final determination hasn’t been made. However, I took some of the aforementioned numbers and tried to figure it out.

  • $123 million to build gondola over 0.7 miles, including a station at each end (Washington & Water, Washington & 10th).
  • $4.6 million annual operating cost
  • 1 million riders each taking round trips

If you write a $123 million loan for the gondola, you end up with an $8 million annual debt payment spread over 30 years at 5%. Add the operating costs (labor, maintenance) and it comes to $12.6 million per year just to break even. That’s important, because the A’s aren’t going to depend on local or regional mass transit funding to make this happen. It means that every one of those million riders, not all of whom will be A’s fans, have to provide the equivalent of $12.60 in revenue for every round trip.

Powell-Mason cable car line (via Google Earth)

Should the A’s get this thing built, they’ll come up with innovative ways to help pay for the gondola. They could pass the cost on to subscribers of their All Access plans. Or levy a transportation fee with every ticket. Still, $12.60 to cover the literal last mile to the ballpark is a bitter pill to swallow. No wonder their pitch includes tourists! The gondola path includes a descent over I-880 down to the waterfront, reminiscent of the Powell/Mason and Powell/Hyde cable car lines. Speaking of which, have you looked at how much it costs to ride a cable car these days? $7 each way! Makes a $12.60 round trip look like a bargain! Sort of.

This is how the Oakland Airport Connector worked out. I rode the elevated cable-car line from the Coliseum BART station to Oakland International Airport. It cost me one-way $6.65 (less 50 cents if using Clipper). The tram ran smoothly and had only few other people in it.

Saturday afternoon on the Oakland Airport Connector

I enjoyed the OAC the two times I’ve taken it, but I can’t get past the idea that it’s an incredible waste of money. There is some history behind this money pit via Matier & Ross:

When it was proposed, the cost of the 3.2-mile elevated tram line was put at about $134 million. By the time work began in 2010, the cost had risen to about $500 million — requiring BART to issue $110 million in bonds to pay for it.

Despite the growing costs, the project was propelled forward because it was seen as a boon for the airport and a job creator in the midst of the post-2008 economic crash.

Now, however, it’s a headache for BART — and another red line in the system’s looming $477 million budget deficit over the next decade.

If BART is smart, they won’t touch the gondola with a ten-foot pole. Make that 900 feet for good measure. At least aerial trams don’t run into cost overrun problems.

Now consider that the cost of the gondola for a family of five, not including their regular BART fares or parking or anything else, could be $63. I’m about to get the Spring Training Pass. 12 games for $50 plus a $5 handling fee. Good to know bargains like that still exist.

25 thoughts on “Running the numbers on the gondola

  1. Great analysis. Not as big a boondoggle as HSR, but pretty bad bang for the buck.

  2. Now that I can see the numbers; let’s say I don’t think it would be worth the gondola ride. If my family is with me for a game (which 99% of the time is true), that is an extra $50.40 just for the gondola ride to JLS. OUCH!!

    And, any word of of the Athletics and City/County have even came close to an agreement on the Coliseum property? I heard the city is 100% wanting to sell now, county is the hold up?

  3. ML, A well done easily explained analysis! I’m fearful that if this gondola ever gets built, it will lose its novelty appeal within a few years, particularly among Bay Area residents, and become an underutilized financial boondoggle. As far as attracting tourists is concerned, this idea is a pipe dream and I don’t believe that many tourists in San Francisco will venture over to Oakland in much the same way that few NYC tourists set foot outside of Manhattan to any of its four outer boroughs, other than to get to and from its airports. City tourists are downtown city centered for the most part, and rarely venture to points of interests in outlying areas of each particular city.

  4. One thing to consider is that the A’s are pitching the gondola as a sponsorable asset. I read somewhere (I think it was Oakland Fan Pledge on Twitter, that there is a Gondola with a naming rights deal for $36M but I don’t recall how long that deal was for). So even if we assume that high water mark is what a non profit like Kaiser would pay there is still around $90M in debt and then operating expenses.

    I have a hard time getting excited about it from anything other than a “That looks cool” perspective.

    • Quick search reveled this was actually 36M GBP for 10 years but for a Gondola in London to serve the Olympics. None of that dynamic exists here (marketing expense primarily for a global event in a world renowned city). I’d be willing to guess the A’s will still be looking at least $100M even after a sponsorship.

    • Naming rights don’t defray the large cost of building a stadium. Why should they make a dent in the transit system used by a subset of the stadium’s users?

      • Not a bad point. I was more shooting from the “backing into a break even fare” perspective. Let’s be real, it ain’t gonna be a break even fare.

      • It’s certainly not going to defray all the cost, one really should not expect it to do so, but 100 million isn’t 123 million (if they can get that much for sponsorship)

        Every little bit helps. I believe Kaval said something at the fan fest to the effect of he was expecting/hoping to get support at the ballet box from fans of the team and community supporters.

        He is going to need it.

  5. The gondola ride will be prohibitively expensive. Estimated we $26/round trip. Similar to Heavenly’s $40/rt, except Heavenly is 2.5 miles vs .7 for Oakland. Moreover, the superstructure for the gondola will be ugly as hell. This is another dumb idea promulgated by the A’s.

  6. Naming rights for a gondola? Seriously? What makes naming rights work is the massive volume of references to “AT&T Park” how many thousands of times on radio and tv multiplied by how many viewers and listeners there are. That isn’t going to happen with a gondola.

    • There would be company logos / insignia on the stations, platforms, and cars, television broadcast could be required to show it, and mention it by sponsors name during broadcast (required by contract), a time or two a game.

      To your point that’s far less than the actual naming rights of a ballpark, however the cost to company’s would be far less then naming rights to the ballpark as well, along with the millions of eyes that would be on it that actually ride the thing. (Millions over time)

      As long as it’s worth something (if it is) they cut into the cost of the project, that the bottom line.

    • It did happen in London. Emirates Air Line.

      • It’s even happened in the Bay Area. Salesforce paid for naming rights to the transbay terminal that was completely separate from the building naming rights.

      • If the gondola happens it’ll be because they have a solid business plan that has a good chance of being executed. Not because “every little bit helps.” They’re not opening a lemonade stand.

      • Yeah, sure. But A transit center is different than a less than a mile long single mode of transportation, right? I mean, the number of people that SalesForce thinks will pass through that center when it is, maybe, probably, someday open again…

      • @ ML

        “If the gondala happens it be because they have a solid business plan that has a good chance of being exacuted. Not because every little bit helps”

        Um, yeah…I think we know that, right?

        Of course its has to be based on a business plan that works, it is also highly likely that it will based on some sort of city, county, bay area wide, state, and/or federal taxes of some sort…so every little bit does help, dosen’t it?

      • Credit to the A’s for going the private financing route. A project like this isn’t going to have the kind of ridership to qualify for scarce federal, state, or local transit funding whether grants or taxes. I can’t imagine what kind of hell this thing would go through when transit advocates for other projects find out this competes for Measure BB money.

      • Not sure what type of transportation (tax), future intertainmment district or parcel (tax),and or infrastructure (tax) money from the city of Oakland they will come up with.

        But, I am pretty sure they will.

        This along with whatever they can get for naming rights (if anything), as well as other advertisements within in the gondala’s themselves will help, for god’s sake they have small advertising inside AC transit buses.

        Not sure if they ever get it done, but if they do I am sure every little bit will help.

      • For now the team is saying the gondola will be 100% private. I am bemused by the concept, but the second transportation money is potentially put towards this boondoggle I will become vehemently against it.

        Transportation is a huge problem in the Bay Area and less than a mile of a gondola is a terrible investment with our money.

      • You will certainly not be the only one that would have a problem with that, so I am sure they will be as “creative” as possible when using the people’s money.

    • I’m sorry… this whole thing is just a joke. I sure hope they wake up and pull the plug on this whole thing quickly so they can actually plan something that will work.

      Maybe something can be built somewhere…. before 2030…

      • I agree the gondola idea is pretty farfetched. A gondola over a major highway or highways? Carrying thousands of people a night? What about people afraid of heights (like me, for instance) who might get antsy on such a contraption? At some point, there’s going to be a determination that the only place a new ballpark can go is at the Coliseum site. But the A’s apparently can’t privately finance a ballpark there. So either the city has to step up (won’t happen) or MLB will have to “contribute” to make the ballpark a reality.

      • pjk: I agree the gondola idea is pretty farfetched. A gondola over a major highway or highways?

        The Portland Arial Tram crosses over Interstate 5 as well as major thoroughfares such as Barbur Boulevard, Oregon Route 10 (Naito Parkway), and Oregon Route 43 (Macadam Avenue).

        Alsp pjk: What about people afraid of heights (like me, for instance) who might get antsy on such a contraption?

        I would suggest that people that are afraid of height avoid taking gondola rides.

  7. “So either the city has to step up (won’t happen) or MLB will have to “contribute” to make the ballpark a reality.”

    The only realistic way that MLB could contribute to a successful new Bay Area ballpark outcome for the A’s is to finally allow the A’s to consider its entire Bay Area market as possible sites for its new ballpark.

  8. The gondola is a red herring. To expensive, low capacity, no time savings over walking, low revenue unless the A’s pay for it (don’t count of much tourist revenue (it’s not the London Eye). Frankly, if the A’s pay for the gondola, they wouldn’t contribute to other access mitigation. The gondola is diversionary.

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