Two weeks after a potential investor group headed by Colony Capital and Rashid Al Malik’s HayaH Holdings was revealed, that same group was formally approved as part of the master developer team. With that approval comes a 12-month extension on the ENA (exclusive negotiating agreement) to figure out all most of the details, plus a 6-month administrative extension if needed.
That’s the news. Now let’s try to understand what has to happen next.
The City of Oakland has about $250,000 remaining in money it assigned towards Coliseum City studies. Bay Investment Group (BayIG), the Colony/HayaH partnership, will put in $500,000 towards a market study to determine the viability of Coliseum City. This is important since BayIG is expected to push that study to its own individual investors, who as a group will decide if/how to move forward. The forthcoming study is not to be confused with AECOM’s feasibility study, which was made available during the summer.
Over the next 12 months, the public and private sides have to make good on a set of deliverables. Some within the City, especially CM Larry Reid, wanted a shorter 6-month + 6 month extension instead of the 12 + 6 deal that was approved. Reid’s concerns, aired last week in a committee meetings, were that 12 + 6 was too long a period and didn’t show the necessary urgency to the NFL and the Raiders. Raiders owner Mark Davis has indicated that he wants a lease/stadium deal in place shortly after the NFL season ends.
Nevertheless, Coliseum City will move forward on its own timeline because BayIG asked for 12 + 6 in order to get everything in order. A short list of deliverables looks like this:
- November – Estimate on cost of remaining pre-development work
- February – Assessment of new infrastructure costs
- April – Letter(s) of intent from team(s) who choose to sign on with plan
- May – BayIG market analysis
- Summer/Fall – EIR and Specific Plan
These items, along with additional smaller ones, should lead up to preliminary project approval in whatever form it takes, plus a DDA (disposition and development agreement), the contract fine print on how Coliseum City is built, including costs, financing, and timelines. Zennie Abraham caught up with Oakland Asst. City Administrator Fred Blackwell at the meeting to summarize what’s next.
Simply put, BayIG just bought the City of Oakland and Alameda County some time. However, it’s easy to see how the list of deliverables doesn’t exactly line up with the timeframe that Davis is trying to dictate. Moving forward, the issue is whether the dev team can show significant enough progress to get Davis to sign on and sign a separate lease at the Coliseum that would keep the Raiders in Oakland throughout the transition. Then again, that part’s a little confusing too. When Raiders uber-fan Dr. Death asked JRDV’s Ed McFarlan when the earliest groundbreaking could be he received this rather optimistic response.
That seems unlikely given the scope of the project and all the little details that need to figured out. Is that groundbreaking for a new stadium alongside the existing Coliseum? Certainly it couldn’t be demolishing the current Coliseum and building on the same site, since the demo itself would take months and would displace both the Raiders and A’s. While BayIG indicated that it will reach out to the A’s and Warriors to gauge their interest in Coliseum City, it’s extremely unlikely that either team will commit. Despite recent setbacks, both teams are focused on their San Jose and San Francisco plans, respectively. Plus they’d have to commit without all deliverables in place, especially that market analysis. If you think that Lew Wolff would sign a short-term lease without knowing the development’s impact on the A’s, you’re crazy.
For the next 12 months, BayIG has control over most of the process. They could press the deal if they see encouraging signs, or they could kill it if the market analysis looks bad. They’re in great shape considering that they’ve only committed $500,000 towards the project – chump change for billionaires. Just as important, they don’t have to adhere to a specific vision of Coliseum City, though they’re positioning themselves to have at least the football stadium in place. Consider last night’s report on the agenda item:
The Coliseum City Master Plan is providing the basis upon which the City is currently under a separate contract with a specialized planning consultant firm to complete a Specific Plan and CEQA/EIR analysis. The Specific Plan will also identify alternatives to the Master Plan and will consider different development scenarios that will envision zero up to three sports facilifies at the site. Pursuant to CEQA, the separate planning contract will prepare an EIR to address the potential physical environmental effects of the Coliseum City project.
There’s nothing new there, but BayIG is positioned to take advantage of it. There could be a single football stadium, a football stadium and a ballpark, even an arena. At this early stage, it looks like it’ll just be the Raiders stadium, though even that is far from a given. BayIG could find that the best thing to do is to minimize its investment in the stadium, or seek out revenue streams from the stadium or team that could help pay back their investment. The infrastructure cost, which will be borne by City/County, could also prove prohibitively high on top of the remaining debt to be carried at the Coliseum. BayIG could even go with zero venues at the Coliseum. Such a plan would probably not get approval from City since it would represent a white flag. Yet it remains a distinct possibility – if not now, within a few years.
The upside, regardless of your optimism or skepticism of Coliseum City, is that things are coming to a head. Coliseum was introduced more than 21 months ago, and has shown only the most tentative progress until a few weeks ago. Now’s the time to put up, to see what results Coliseum City can yield. No more stalling, and for that we can all be glad.
Note: The only local mainstream media coverage of yesterday’s news came from CSNBA’s Scott Bair. Seems like everyone else was preoccupied with transit strikes and some other multibillion dollar development in the South Bay which is a lot more than vapor.