Well, that was a disaster.
Friday morning started off with great anticipation, as fans and the media eagerly awaited the City of Oakland’s version of a term sheet. As I wrote last week, the City and the A’s are working at cross purposes in trying to come to terms, as the A’s don’t want to stray too far from what they proposed while the City wants change enough of it for the City Council to pass it.
The term sheet with attachments dropped Friday morning at 9:15 AM. Reporters from all major Bay Area print and broadcast outlets swooped in to study it. Now keep in mind that the City is now dealing with two term sheets, the one proposed by the A’s during the spring and the version put together by City staff. While the A’s and City keep working to come to agreements on major deal points, the only big achievement so far is a consensus on a 25-year non-relocation clause, up from 20 proposed originally by the A’s.
The City’s term sheet entirely omits the offsite IFD (infrastructure financing district), called JLS though it doesn’t include Jack London Square proper. Instead the focus is on a single IFD at the 55-acre Howard Terminal site. From a passage standpoint this is the best move by the City, since the offsite IFD didn’t have broad support and likely wouldn’t withstand a vote of property owners to tax themselves. However, the A’s lobbied for the offsite IFD from the beginning and continue to push for it, turning the issue into a potential showstopper.
Casey Pratt from ABC7 and Brodie Brazil from NBC Sports California both interviewed A’s President Dave Kaval later in the day. Kaval didn’t budge much on the IFD stance, though Pratt caught Kaval not being forthcoming about the state of a potential short-term extension at the Coliseum. I started to feel uneasy at points in both interviews as I got the feeling that Pratt and Brazil were practically negotiating, but for what? The City has its own negotiating team, as do the A’s. Were they representing fans, who until now have been criminally underrepresented? Perhaps, though there are always dangers in turning this already public negotiation even more public. I understand wanting to give fans some nuggets of hope, but this isn’t the way to do it. It’s already a confusing mess, since if the resolution passes on Tuesday it will likely be rejected out of hand by the A’s. If it’s voted down, which the A’s prefer, the City will have to go back to the drawing board while the A’s will have license to look beyond Vegas in terms of relocation. Hell, they’ll have the freedom regardless of what happens on Tuesday. That Kaval already has a Vegas trip planned immediately after the vote indicates that Kaval and Fisher are anticipating either outcome.
What I find puzzling is that at some point in the past 3/6/12/18 months the City should have recognized the offsite IFD was a loser and proactively adjusted the plan accordingly, or at least pushed the applicant (the A’s) in that direction. Now City has a funding gap of $351.9 million and no clear path(s) to bridge it. Kaval mentioned in one of the previous public hearings that the A’s could get the ballpark built with only $22 million in infrastructure built prior to opening day. My guess is that $22 million would go only towards the fencing and other safety measures that would be required for minimal rail safety, though obviously that’s far short of the full grade separation wanted by Union Pacific and Amtrak.
The A’s chose to propose the ballpark with all of the virtually all of the needed infrastructure, especially the transit hub, located offsite. In doing so, they made the offsite part of the project much more expensive. The transit hub, which will cover a two-block stretch of 2nd Street, is likely to cost $50-100 million to implement. There are also the bridges to build for grade separation. If the A’s included the transit hub as part of the Howard Terminal IFD, they could’ve reduced the offsite cost while providing a reasons for the City to invest in the transit hub: efficiency and better packaging. The team probably didn’t go this route because they didn’t want a transit hub right next to their luxurious condo towers. The funny thing about that is that because they already conceded the western blocks of the site as a buffer against Schnitzer Steel, those blocks are set up well for office uses, parking, and a transit hub if they want it.
Even if the transit hub is relocated, the grade separations remain a priority, even moreso because of the refocused traffic. That $352 million cost doesn’t magically go away. As I leafed through the term sheet it struck me that the offsite infrastructure cost is about the same as the construction cost for PacBell/AT&T/Oracle Park (not adjusted for inflation). It never gets cheaper, and as the A’s keep dillydallying with sites and cities, the price will continue to rise especially if new requirements they didn’t anticipate 10 or 20 years ago are piled on.
Other cities will be talked about as the A’s and MLB grow more frustrated with Oakland. These days that’s par for the course. Just remember that there are a couple factors that will have sway that no candidate city can control. One is inflation, or the rising cost of construction. That’s partly explained by building more complex buildings than what used to be standard (see my visit to Globe Life Field as the most recent example). Places that need retractable roofs and comprehensive HVAC systems can add a cool $300-400 million off the top. That’s an equalizer for Oakland. The other factor is written into the MLB’s constitution.
As a team in one of the largest markets, the A’s agreed to be taken off revenue sharing indefinitely. When that occurred I complained that Oakland, while in the powerhouse Bay Area, is functionally more of a mid-market team like San Diego or team in the Midwest due to its inherent disadvantages in media and location. Regardless, the A’s have to play by big boy rules, so they get no quarter, no revenue sharing. That means that any move to a new market (Portland, Las Vegas, Vancouver) must be contemplated not only as a new market, but also a market that will require the A’s to go on revenue sharing due to yes, inherent disadvantages in media and location or market size. If MLB’s philosophy is to get franchises off revenue sharing as a necessity (call it small market welfare), moving the A’s to a much smaller market contradicts that notion. Ironically, crippling the A’s revenue picture a few years ago may be the one thing that saves the A’s for Oakland in the end. If only they can get a ballpark built.
P.S. – The Oakland Coliseum is about 16 acres in size. It’s huge. The Howard Terminal looks very close, maybe 14 acres. The packaging could be a lot better for 30,000 seats.