Coliseum Purchase Agreement, or The Detail I Missed

I have to apologize for something.

I made my last post of 2019 in mid-December, thinking little would happen between then and the following FanFest. In hindsight that was a miscalculation. That’ll teach me to take a break, I guess.

What happened during that gauzy holiday season? You may remember the A’s were in talks with Alameda County about acquiring the County’s share of the Coliseum complex. Having followed the trials and tribulations of the post-Mount Davis Coliseum era, I figured this would be a relative cakewalk compared to the lawsuits and threats of the past.

On this point I was wrong.

The talks dragged on for months, culminating in an announcement on December 23, which also happens to be my baby brother’s birthday. So you’ll have to forgive me for the familial distraction. When the announcement was made, I saw it and retweeted it. There was no post about it as I didn’t feel it merited the effort. I figured the A’s would simply assume the payments on the debt payment schedule and assume control once the schedule was completed. On that point I was correct. But I missed a pretty large detail which only became prominent when the A’s and MLB started exploring markets outside of Oakland.

Remaining payments due on Coliseum debt

Again, I was wrong.

The Coliseum’s debt was refinanced a while back, extending the payment schedule out to 2026. That’s two years after the last season on the A’s current lease, which ends with the 2024 season. In the negotiation, the A’s got a bargain basement price for the County’s half of the complex, $85 million. During last week’s Board of Supervisors meeting, Alameda County Supervisor Keith Carson admitted that the deal was done to encourage the A’s to stay in town. You might call it a literal hometown discount.

Okay, the A’s got a deal on the land. So what took so long, and what did the County get out of it? This was the detail I missed. As I was in yet another debate over a related topic on Twitter, I went into the archives for the County’s press release on the deal. I found an important detail I hadn’t noticed before.

The missing detail

Practically, this shouldn’t matter much if the A’s stay in Oakland, regardless of whether it’s at Howard Terminal or the Coliseum. In that context it’s a reasonable exchange. The County added a poison pill provision in which the A’s have to pay off all remaining debt within 180 days of announcing they will move away from The Town. Hypothetically, if the A’s announce they’re moving this week while they’re hobnobbing in Vegas, they will owe the County $65 million by the end of the year. Presumably, that’s on top of the existing lease obligations with the Coliseum JPA, of which the A’s won’t be a full partner until the debt is retired.

Before you tell me this is no big deal or not a poison pill, let me refer you to the Warriors’ lease at the Coliseum Arena. When the Dubs announced they were moving to SF, it was assumed that the team would pay for the lease on the years the continued to play there, then leave the JPA stuck with the remaining bill. The JPA fought that tooth and nail, eventually winning in court in 2020. When the move was announced I said at the time that the Dubs might not be able to easily escape the remaining years on the lease. I was told back then that the Dubs would win out. The dispute dragged on for 5 years and may have killed the prospects for a Bay Area WNBA franchise in the process. In my estimation the Dubs have been on a pretty steady losing streak since they moved to SF, on the court and in the courtroom.

This matters vis-a-vis the A’s situation for a couple of reasons. First, there’s now obviously a precedent set thanks to the Dubs. And since the County set up an agreement for the A’s similar to what they did for the Dubs, it’s probably equally enforceable. That’s good for the County even if you think they were lowballed, which they willingly were. At least the bills are getting paid. 

Second, if you think ahead a few years there are a number of endgame scenarios. Let’s say the A’s, frustrated about the progress in Oakland, formally announce they will leave for Vegas on Opening Day 2024. Based on the lease terms they would be absolutely in the right to do that. Under the existing lease they would have no obligation past 2024, a clean exit. But because they entered into the purchase agreement with the County, they’re now on the hook for $15 million a year in 2025 and 2026 for a place they left in the rearview mirror. Sure, in the process they got development rights and veto power over future plans at the Coli. The right of first refusal almost as powerful as any development agreement. Yet $30 million is a tough pill to swallow if, as the A’s keep saying, there is no future there. Does that make any sense to you?

The other more extreme endgame scenario would be to announce they are leaving now. That also doesn’t make sense because the A’s would be responsible for $65 million, plus whatever’s remaining on the lease through 2024. Not to mention there is no MLB ballpark in Vegas for them to move into for 2022. If you think teams can break leases as easily as a lothario breaks hearts, look at what’s happening to the Tampa Bay Rays. They are stuck at The Trop until 2027 thanks to an ironclad lease. The A’s have effectively brokered a deal that does the same thing. Maybe that dovetails with moving into a Howard Terminal at the now-2027 opening date. It’s worth emphasizing that they didn’t have to do any of this. They could’ve stuck with the existing lease and walked away after 2024 with clean hands, or negotiated yearly leases after 2024 while a site elsewhere shook out. If you think $30 million is pocket change to a billionaire, what makes you think John Fisher would so cavalierly dismiss $30 million given how frugal he is?

In my pondering the implications of this detail, Chronicle Sports Editor Christina Kahrl promptly pointed out that her colleague, reporter Sarah Ravani, included the detail in her summary the day it happened. All credit is due to the real newspeople, of which I am not one. Have I mentioned how wrong I was about this?

In the end, it’s yet another wrinkle that adds some color to the existing ballpark talks. The City of Oakland is holding out, even talking about competing bids for their half of the Coli. The A’s are in Vegas right now, continuing to say “HT or bust” while perhaps formulating a strategy to get out of the lease/purchase terms. It’s all so petty. If history serves as any guide, that scheming will be futile. Maybe they leave anyway. It won’t be without a fight.

3 thoughts on “Coliseum Purchase Agreement, or The Detail I Missed

  1. Respectfully disagree with you on this one ML: it IS NO BIG DEAL. Whether it’s $65 or $20 million, the A’s would still own the land and have a say on how it’s developed (or flip it for a nice profit later). The Warriors never owned anything at the Coli. After nearly 25 years of getting nothing done in Oakland, finally leaving for greener pastures: pricele$$!

  2. ML,

    Thanks for bringing this topic up. If the A’s decide to relocate, they would be required to pay the balance of the county’s portion on the outstanding debt immediately. I can’t see the A’s paying legal fees to pursue a legal fight they would lose. I am guessing they the A’s will delay an announcement until there is a more definite site. (Las Vegas will pay for an EIR in hopes of landing the A’s or an MLB in the future.) Some questions:

    1. Was Alameda County’s $85 M selling price set to cover the remaining the debt? (We will give you the land if you take over the debt.)

    2. Is the $115 M offer made to Oakland by the investment group that includes Dave Stewart set to cover the remaining debt plus the payments made by the city of Oakland in 2020 and 2021? (We will give you the land if you take over the debt and reimburse the city of Oakland for payments made in 2020 and 2021.)

    3. If the A’s move to Las Vegas could 10,000 to 15,000 seat of temporary seating be added to the Ballpark in Las Vegas or would MLB and the A’s be okay with playing in a 10,000 seat stadium for three years? (I am guessing the A’s would try to play out the intermitting years in Oakland in much the same manner that the Raiders played out their years.)

    4. Would the Arizona Diamondbacks be willing to share their stadium for 3 years if MLB and the A’s provided remuneration?

    5. Would MLB waive the relocation fee if they felt it would be in the best interest of baseball to make Northern California a one team market for the next 10 years. (A new franchise in either Sacramento or San Jose could be on the table 10 years from now.)

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