A strange and very tentative ruling came down from the Sacramento County Superior Court regarding the $40 million in redevelopment funds earmarked for the 49ers stadium. Judge Allen Sumner ruled that the contract signed by the City, former Redevelopment Agency, and 49ers is legal for a simple reason: the 49ers are a third party. The State’s argument and the law passed in 2011 was such that agreements between a municipality and its redevelopment agency were not so-called enforceable obligations, where tax increment revenue was pledged to pay for a project or debt. Since the 49ers are a party to the agreement, the contract is, in fact, an enforceable obligation. Moreover, the judge wrote that the 49ers aren’t a mere third party beneficiary, they are also a direct party to the agreement since they loaned the money upfront in the first place as RDA funds were on shaky ground during that period.
Despite the judge’s ruling, $15 million in currently frozen funds will not be freed up for the 49ers or schools per last fall’s deal. Instead, Judge Sumner chose to let Santa Clara’s Successor Agency (son of RDA) figure out the repayment schedules (ROPS) for the 49ers and the schools. Until that is determined, the money will remain frozen. This is clearly a victory for the 49ers and for other private parties who have made deals with cities in the run-up to the death of redevelopment. In making this ruling, the judge was clear in that the court had no business redefining what an “enforceable obligation” was.
Reading this ruling’s impact beyond the scope of the 49ers stadium, it won’t necessarily help San Jose or the A’s since they completed their land deal for part of the Diridon site in October 2011, well after the law took effect. Then again, Santa Clara and the 49ers didn’t have their DDA finalized until December 2011. I guess we’ll have to wait for a court to rule on the A’s land deal, whenever that happens.
As the cities of Santa Clara (+ San Francisco) and Miami get closer to the NFL’s May awarding of Super Bowl L to an official host city and stadium, one city is struggling to get its ducks in a row whereas the other is taking care of its final bid details. Miami’s bid is flailing as funding for a major upgrade to Dolphins Stadium remains in limbo. Meanwhile, Santa Clara’s City Council is prepared to approve a series of concessions to the NFL that should sew up the game for the South Bay, while creating a risk that Santa Clara will run in the red in the process.
To help pay off the 49ers stadium, the Stadium Authority has several revenue streams tied to taxes and fees employed for every Niner home game and other events. The NFL requested that such fees be waived for the Super Bowl, and apparently the City is more than happy to comply. Fees being waived include the following:
10% NFL Ticket Surcharge – At a conservative set price of $500 per SB L ticket, the $50 surcharge would yield $3.75 million with an expanded capacity of 75,000.
$0.35 Ticket fee – Meant to fund some senior and youth programs. A cap of $250,000 per year is imposed on this revenue source. If the 49ers play at least one home game, it’s likely that the 49ers would hit the cap, rendering additional collection of this fee moot.
Hotel tax – A Mello Roos district was created to provide some stadium funding, backed by a hike in the transit occupancy tax from 9.5% to 11.5% in the stadium’s immediate area. The NFL asked for its share (350 rooms for an unspecified number of days) to be waived. Assuming that the NFL needs 350 rooms for the full two weeks, the City would forego some $70,000+ in hotel taxes. The City notes that it expects to make up this loss via taxes collected on additional room bookings.
Off Site Parking fee – The City has imposed a $4.54 fee per space for event parking. That too will be waived. This appears to be for all Super Bowl activities, not just the game itself. The City notes that the fee is meant to offset the cost of traffic management.
The non profit San Francisco Super Bowl Committee is supposed to reimburse the City for the cost of services rendered by the City (and other jurisdictions). The committee is not going to backfill the City’s lost revenues. Strangely, no estimates of this impact were disclosed, even as the City touts $300 million in additional economic activity for the region. Much of that major economic impact will be felt in San Francisco, where the majority of non-game events will be held. The key will be the layout of the Super Bowl hub surrounding the stadium. If attractions such as the NFL Experience are staged at Moscone Center instead of the Santa Clara Convention Center, real economic impact for Santa Clara will be limited outside of Super Bowl Sunday.
A year ago I wrote about what it would take to host a Super Bowl in the Bay Area, and despite Santa Clara “taking one for the team”, there is a burgeoning sense of excitement about the possibility of hosting the big game. It’s just too bad that the City Council, knowing it had at least a little leverage with the knowledge that Miami is struggling so much, hasn’t considered driving a harder bargain with the NFL. Maybe next time – if there is a next time.
The leaked document came from Deloitte, and there’s nothing to indicate that it’s inaccurate. In fact, the Panthers didn’t deny the report, only saying that the document presented “an incomplete picture” of the team’s profitability. According to the team, the missing context was the uncertainty surrounding the league lockout preceding the 2011 season. It’s not unusual these days for teams to considerably shrink operations during a lockout, establishing a sort of bunker mentality. The consequences can be cruel, as it usually means laying off dozens if not hundreds of “non-essential” personnel. In the Panthers’ case, they decided that they’d be best off reducing player payroll. And so they did with a $77 million roster, $43 million short of the $120 million salary cap set for 2011. Philosophically all of this probably made sense back then, as the team was in rebuilding mode with #1 draft pick Cam Newton and Ron Rivera replacing John Fox at head coach. Newton’s Rookie-of-the-Year campaign juiced the loyal fanbase enough to boost the following year’s payroll to $100 million. Despite that uptick, the Panthers’ record only improved by one win last season. The team finished 3rd in the NFC South, going 7-9. The NFLPA predicts that the 2013 cap will be $123 million.
Carolina Panthers 2011/12 balance sheet summary from leaked Deloitte audit
The Panthers are ranked #16 in the Forbes NFL valuations list with an estimated revenue of $269 million for the 2012 season and a valuation of just over $1 billion. Not knowing Forbes’ exact formula and numbers, I imagine that the discrepancy is mostly a matter of accounting, depending on whether partner distributions (profit-taking) and other maneuvers with team revenue are counted. Distributions amounted to $12,228,541 for both years, or roughly a 6% return on the original $206 million franchise price. That leaves a rather large net income amount that they can do whatever they want with.
One of those things they can do with the money is fund the improvements they are requesting for Bank of America Stadium. You may remember that a month ago, the team struck a deal with the City of Charlotte and Mecklenburg County for a package of improvements that would total $300 million. This week the state balked at giving the share it was expected to provide ($62.5 million), and the leak certainly won’t help Panthers owner Jerry Richardson’s case for a handout. It’ll be interesting to see if new pressure mounts to have the local public funding aspect of the deal reversed, since it’s clear that the team can pay its own way. To do so may require scaling things back a bit, but really, why on earth is $250-300 million necessary for a stadium that’s only 17 years old and is one of the better designed and maintained facilities in the league? The Panthers had expected to pay $96 million of the project cost. If the City/County reneg on their part, Richardson could be forced to scale back the project to, say, half the size and cost at $125 million. That amount in a loan for 25 years at 6% runs $9.3 million per year. With what we’ve learned this week, Richardson and the Panthers can afford it. Of course, this news didn’t come in time before Atlanta officials announced that a deal has been struck for the Falcons’ $1 billion retractable dome plan, which will include $200 million in public funding.
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What does this mean for the Raiders? Politically, it’s terrible. Not only will the memory of the Mt. Davis debacle not go away, now comes this news that should cast doubt on any team crying poor and looking for a public handout.
Except for one thing. When the Raiders cry poor, they are in fact, poor. Not poor as in sleeping on the street, but poor in terms of losing money on a regular basis. Forbes noted that the Raiders posted losses last year and in 2009. The Oregon professor consulted by Deadspin for the article, Dennis Howard, mentioned that when he looked at league financials a decade ago, the Raiders lost money then. Considering how bad a deal Mt. Davis has been for all concerned parties, it could be the worst all-around stadium deal in the history of sports. Nevertheless, the fundamentals are that the Raiders continue to come up short in the revenue game in Oakland. Worse, they don’t have the cash reserves or cash flow to bankroll a significant new stadium project. Perhaps they don’t even have enough to fund a revamped Coliseum as I’ve suggested. Season ticket rolls going into the new tarped-off Coliseum were lower than another Raiders team – the Texas Tech Red Raiders, who hit over 30,000 season tickets last year – and that’s an also-ran program in the Big 12.
The NFL is giving the Raiders guidance and the Raiders are taking steps to boost revenue, but as we know in the Bay Area, they’re not going to see big returns unless the team starts winning as it did a decade ago. It’s hard to see how this can be turned around as long as the dependency is there. No wonder the NFL is skittish about earmarking G-4 money for a Raiders stadium project. We know that in the short term the Raiders will have two choices: stay at the Coliseum while working out a venue deal in Oakland, or go to Santa Clara for 5-10 years. I wrote a month ago that the costs could prove prohibitive in Santa Clara if they were to pay for the true cost to stage the games, compared to continuing to get a large subsidy from Oakland/Alameda County. Ultimately, the cheapest option may be for the Raiders to limp along in the Coliseum as is while the parties wait for the fanbase to grow as the team improves. Hopefully, this doesn’t also mean that the A’s will have to keep sharing the Coliseum indefinitely. That’s not something that either the NFL or MLB want.
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Added 11:00 AM – Deadspin just completed a reader chat with University of Michigan sports economics professor Rodney Fort. Some of it is good reading.
Yahoo! Sports’ Jason Cole wrote last night that the NFL is souring on AEG’s Farmers Field stadium plan for downtown Los Angeles. That may sound revelatory, but in reality the landscape hasn’t changed much since he wrote an article in October 2011 claiming that the NFL doesn’t like AEG’s terms for hosting a team (or two) at Farmers Field. With AEG’s future up in the air pending a possible sale, Farmers Field appears to be stalled. But this was to be expected with the sale, so why is this news? It isn’t. That shouldn’t stop us from trying to understand the NFL’s misgivings.
First, let’s start off with the supposition that Farmers Field is to be operated similarly to Staples Center. AEG wants as many tenants as possible using the stadium, taking up dates on the schedule. It also wants the flexibility to hold non-football events, hence the desire for a retractable dome to make the stadium an enormous exhibit hall for the LA Convention Center. There’s the potential for numerous sports events outside of a regular season NFL slate, such as the Super Bowl, NCAA Final Four or regionals, a bowl game, fights, soccer and rugby matches, plus motocross and monster truck raillies. Add a bunch of conventions and the schedule should be full, right?
The problem is that the Staples Center model isn’t congruent with the uses of a large stadium. Staples is famous for being able to hold two events in a single day thanks to its seating flexibility and existing infrastructure. For football, hosting a game takes a full day, and the Saturday and Monday surrounding a game can be expected to be blocked out because of the time required to install and remove a football field. Since the venue will be positioned to go after the largest, most lucrative events, prep time may not be that big a deal. Still, it’s indicative that the Staples model doesn’t exactly scale.
AEG has advertised for some time that the now-$1.8 billion stadium would be fully privately funded, the most expensive stadium ever built. Assuming that AEG would build the stadium without the benefit of low interest, tax-free bonds, the onus is squarely on AEG and its tenants to ensure that the place is paid for. AEG’s model takes a cut of a team’s stadium revenue instead of requiring a rent payment. AEG has apparently backed off its demands of a percentage interest in any team looking to move to Farmers Field. Either way, they’re getting their money upfront or at the back end. Essentially, AEG is taking the place of a large public subsidy, and unlike municipalities they need to make a profit. That’s understandable for everyone except the NFL and interested owners. Roger Goodell’s memo from last summer detailed the process for any team applying for relocation to LA in 2013, suggesting that two teams call the stadium home in order to defray the cost. Again, that would be compatible with what AEG is looking for, but as long as AEG and the NFL are in a stalemate over the terms of the revenue split, there’s no deal.
A stalemate downtown should create better chances for the other LA stadium plan, Ed Roski’s City of Industry stadium. However, Roski is mired in a dispute with the state over TIF that’s earmarked for $180 million worth of improvements to the undeveloped hillside stadium site. The state says that because the project didn’t finalize contracts and measures that were to be taken to fulfill environmental requirements, the deal doesn’t fall under the category of an “enforceable obligation” and didn’t need to be honored by the state. There’s no reason to think the state will lose that debate, so it’s a mystery how that infrastructure will be paid for.
The NFL is actively looking for other potential partners and stadium sites, pursuing the Dodger Stadium site through Guggenheim Partners and Frank McCourt. A discussed site swap to build a new ballpark downtown and a football stadium at Chavez Ravine seems like even more of a pipe dream due to the complexity and cost. That leaves a few sites in further out locales such as Carson. Roger Goodell would prefer more competition and more lucrative bids before seriously entertaining a franchise relocation or expansion (or both). The problem is that as rich as the LA area is, a stadium is so expensive that if there aren’t enough huge money stakeholders to carry some of the weight, that stadium can be termed in a similar state to so many other Hollywood projects: development hell.
For cities with old or “outdated” stadia and teams trying to get better stadia, LA’s struggles represent a bit of a reprieve. St. Louis, still reeling from arbitrators siding with the Rams, doesn’t need to fear the team pulling up stakes immediately. San Diego area interests can go back to working on yet another stadium proposal. And the Raiders and Oakland/Alameda County can continue to try to get on the same page. For the Oakland/Alameda County, the impact is different. If a retractable dome/convention center concept doesn’t work in LA due to the cost, why would it work in Oakland? AEG already operates the Coliseum complex, and if they were to partner on this they’d want the same deal in Oakland that they were offering in LA. If anything, this development is great for the Raiders since they can try to shift the discussion to a new outdoor stadium, which is what they and the NFL really want. The financing part is still severely problematic, but at least the parties could hone in on a singular vision they could all agree on moving forward. The big question is whether the public side (Oak/AC) decides the most cost-effective option is a renovated Coliseum as opposed to an entirely new stadium. If so, they’re all back at square one.
When the 49ers rolled out the final cost estimate on their Santa Clara stadium, many including yours truly were incredulous. We thought that the 49ers would need help to pay it off, probably from a partnership with the Raiders. With a $80 million per year mortgage to pay off, the challenge to bring in enough events to properly service the debt should bring the 49ers and Raiders together. Yet there’s plenty of reason to think that the two sides may have a difficult time making that pact.
It all started when the 49ers negotiated with the City of Santa Clara to control full rights to seek a second tenant. The 49ers can control the terms of the lease, covering rent payments and details, revenue sharing at the stadium, and coverage of costs to hold games at the stadium. The lease can go in any number of directions, making it difficult to determine what the lease might look like. If the Raiders had gotten in on the ground floor and committed to Santa Clara early, they might have been able to shape the discussion. However, they also might have been asked to shoulder half of that $80 million mortgage. Given the difficulty the team has in selling tickets and PSLs, that’s a huge gamble.
Instead, if the Raiders ask to be a tenant in Santa Clara, they could pay a flat rate per game or per season. Right now they only pay $1.5 million in rent at the Coliseum, but that masks the millions of dollars it costs to operate the stadium. The 49ers’ stadium lease has language that requires an additional $1 million annual payment if the Raiders move in. There are costs for utilities, insurance, hundreds of personnel for concessions, parking, and security, plus emergency services. It’s common for total operating expenses for a full season of NFL games to run in the $10 million range or more. So those costs could be factored into the rent payment, or they could be left for the Raiders to pay separately on top of a rent payment. Knowing that, $11 million should be the baseline for an all-inclusive lease for the Raiders.
Of course, we know that the 49ers aren’t going to allow the Raiders to merely cover operating costs. They need to pull their own weight. The Raiders may have to pay $20 million per year to play in Santa Clara, or alternately, $1 million per game while surrendering concessions revenue. If that were to happen, the Raiders could find themselves somewhat stifled in terms of maximizing revenue generation. Still, that could prove a better proposition than a brand new stadium in which the Raiders would have to cover all of the costs themselves.
Then there’s the issue of stadium capacity. With 68,500 seats, the Santa Clara stadium will sit in the middle of the pack among NFL stadia, and 1,500 seats less than Candlestick Park. The Raiders have been operating at the 63,000-seat Coliseum since they came back in 1995. Last week they decided to tarp 10,000 seats to create their own artificial scarcity. If the Raiders come to Santa Clara, they could artificially reduce capacity by adding their own tarps or move forward with 68,500. If they do the latter, it’ll be a tough sell given the team’s history of underwhelming ticket sales. It’s not a make-or-break scenario, but it wouldn’t look good if the Raiders had to immediately tarp sections of a new stadium once they moved in.
The Raiders are looking to hire a new executive, perhaps to assist Amy Trask and Mark Davis on what will surely be difficult review of the team’s future stadium options.
We’ve talked a lot in the past year about how the Maloof family is broke and can’t do anything on their own, whether it’s funding their piece of a downtown arena or sell anymore pieces of the Kings without losing control of the franchise. Travel west along I-80, and you can see that Oakland and the Raiders are in the same situation. Oakland has had to rob Peter to pay Paul for the Raiders study, and the prospects for the Coliseum are bleak without some extremely creative (and probably public) financing. Al Davis had his estate structured so that his son Mark could keep control of the Raiders, but the Raiders can’t sell additional shares of the club without giving up control. Overextended as they all are, they’re still under the gun to come up with a future stadium solution that works for both parties, while not adding significantly to either party’s debt load.
That puts the Oakland/Alameda County and the Raiders in very tense dance over how much each side will pay to create an anchor for Coliseum City. Make no mistake, both sides will have to pay something, starting at $100 million depending on how extensive the project will be. If there’s a new stadium, especially one with a retractable roof, up to $200 million could be provided by the NFL. If it’s a redone Coliseum, the NFL will offer significantly less. It’s all based on the scale of the project.
$143.75 million from City of Charlotte/Mecklenburg County via a 1% food and beverage tax hike (47%)
$62.5 million from North Carolina (20%, pending state approval)
The actual improvements will cost $250 million, the rest will cover the establishment of a maintenance fund, costs associated with staging City/County events, and other gameday expenses such as traffic control. The stadium, which was privately built by Panthers owner Jerry Richardson, will not get any major structural changes such as the addition or elimination of seating decks. Accessibility will be improved by the addition of escalators. Video boards will be replaced. Obviously those items won’t cost $250 million by themselves, so there will be other buildouts elsewhere in the stadium. Perhaps they’ll expand concourses, build field suites, or create additional premium spaces inside the stadium. BofA Stadium still ranks as excellent in terms of design, sightlines, and amenities, so the new improvements may be what Richardson wants to make the venue a viable future Super Bowl candidate. The Panthers would be guaranteed to stay and additional 15 years if the deal is approved and improvements completed.
Sidebar: It was the enormous success of the Panthers’ initial PSL plan that helped sell the 1995 Coliseum renovation plans to Oakland/Alameda County and Al Davis. The Panthers paid for their entire stadium with PSLs and other private sources, with the City only providing a cheap land lease. Where the East Bay went wrong was in severely overestimating demand.
Earlier this morning, Andy Dolich spoke with the Rise Guys about the Raiders’ tarp news and the prospects of Coliseum City. While he continues to believe that the best place for the A’s and Raiders is the Coliseum, his vision has shifted a bit. In 2010 he talked about a new multipurpose stadium with “technology” that could accommodate both teams. Now he prefers a separate ballpark at the complex and a refurbished Coliseum, which he estimated to cost $300-400 million. My immediate response:
Dolich thinks that Raiders refurb would cost $300-400 million. I think that’s way too low. $500 mil to start + existing Mt Davis debt.
Considering what’s budgeted for the Panthers and the Bills, does anyone think a $300-400 million budget as realistic for what the Raiders and the NFL would want? Frankly, I think that by the time everything got going, $500 million may be undershooting it by quite a bit. Dolich also thinks the Diridon ballpark cost could rise to $600-700 million based on additional costs to get the site ready. I tend to disagree with that, though if this saga keeps dragging on $600 million is an easy reach. Even if the land is free, why would two-thirds of a larger football stadium cost half as much as a nearly half-capacity ballpark?
Also, consider that we explored a Coliseum refurb on this blog back in 2008. It would’ve involved gutting the original bowl and replacing it with a new West stand and a single deck of seats along each end zone.
Colors denote different seating decks or phases of development
The project as described back then would’ve taken two full NFL seasons and about 18 months to complete, with the Raiders playing in a 47,000-seat temporary configuration while construction work progressed, similar to their 1995 season at the Coliseum. Complicating matters is that Lew Wolff wants an out clause in his five-year lease extension request if the Raiders begin this very type of project. That makes sense, since there’s no way the stadium could host baseball during this period.
Let’s say that a refurb could be capped at $500 million. The breakdown of costs by party could look like this:
$200 million from Oakland/Alameda County (Coliseum Authority)
$200 million from Raiders
$100 million from NFL
The Coliseum Authority could get their piece from land leases, new stadium taxes, or other sources. However, they have factor in the remaining $100 million of debt on Mt. Davis since it affects City and County budgets every year ($20 million annual subsidy). The Raiders and the NFL could work together to sell new PSLs, naming rights, etc.
The NFL has two, maybe three $200 million slots in its G-4 program for new stadia, one already claimed by 49ers. Another could be the Vikings or Falcons. In theirs and the Raiders’ cases, the teams have to at least match the NFL spend, which means that they have to come up with $200 million of their own. The 49ers came up with closer to $800 million, though much of that is money borrowed through the quasi-governmental Santa Clara Stadium Authority. Chances are that the Coliseum City stadium project would borrow through the Coliseum Authority.
Oakland pols will want as much private funds going into the project as possible, but the Raiders will be wary of digging themselves too deep a hole. That stands to reason because of poor suite and club seat sales over the years, along with mediocre season ticket rolls. There’s been a lot of talk about Oakland not requiring a vote, none about how much it’s willing to invest besides land and infrastructure improvements. Unfortunately for Oakland, land and infrastructure only gets you in the door these days. How much skin will each side put into the game? The answer won’t be known without a (hopefully public) discussion about what it’ll take to make Coliseum City happen.
This week the Raiders released a seating map for their 2013 season. The startling revelation from this release is that the Mount Davis upper deck seats have been completely eliminated, as have the outer sections of the original third deck.
Sections for sale do not include the outer 4 sections of the original upper deck or the newer Mt. Davis sections
A look at 2012 attendance sheds some light on what the Raiders’ motivation may be. While the first two home games were considered sellouts (for blackout purposes, not complete sellouts), attendance dropped off quickly as an unappealing group of non-division opponents accompanied a six-game slide into irrelevance. Whatever goodwill was earned during the “Oakland Loves Its Sports Teams” rally was squandered by Thanksgiving, with many fans already looking forward to 2013 when the team was forgotten locally as the 49ers continued their surge into the playoffs.
2012 Raiders Home Attendance
The stated football capacity of the Coliseum 63,132 64,200according to the Raiders, already the second (or fifth) smallest stadium in the NFL. If Mt. Davis and the ends of the original upper deck are removed, the new capacity should will be 51,000 53,250, with Mt. Davis accounting for some 10,000 seats by itself. While this would increase the team’s chances of hitting every game’s blackout target, if the NFL approves this change it’s tantamount to admitting that those seats are unsellable, at least while the team remains mediocre. CSN’s Paul Gutierrez notes that there was only one home blackout in 2012 because of the Raiders’ use of the 85% rule, so blackouts may not the issue. Instead, the Raiders may be eschewing the 85% plan altogether, because it somewhat disincentivizes sales above the 85% mark of regular, non-club seats. Per the CBA, revenue from marginal sales above the 85% mark had to be split evenly between the Raiders and the visiting team. If the Raiders presell a ton of the best seats to Raider fans and not invading fans, they might be able to boost the home crowd feel even as fewer seats are available. That was certainly the case for the A’s at the end of the 2012 season and in the postseason.
HNTB, the firm that architected the Coliseum renovation in 1995, was commissioned by the Chargers to examine deficiencies at Qualcomm Stadium compared to other newer stadia. Interestingly, the study included the Coliseum, even though the Coliseum is less than half new. Included in the study was a measurement of the highest, farthest seat at the 50-yard line for each stadium. That seat on Mt. Davis is 336 feet from the 50, the farthest of the 10 venues in the comparison. While the same seat on the opposite side of the field was not measured, given what is known about the bowl that seat is probably 100 feet closer.
If there’s a winner in this, it’s the LA firm that Lew Wolff contracts to remove and replace the A’s tarps every season. Looks like they’ll be getting a new customer right quick. Fans also get very inexpensive seats in the process. Wolff himself is probably feeling rather victorious today. Losers? 11th hour or walkup ticket buyers. There will be a much smaller inventory for the secondary market, which in recent years had tickets on Mt. Davis for less than $10 on StubHub.
Raider fan, what do you think about this? Good/bad move? An admission that the team will be terrible? Sound off below.
Think about it. Barely over a year from now, a crew will assemble at Candlestick Point and take down the venerable, unlovable, frequently renamed Candlestick Park. Developer Lennar wants the land clear to redevelop as soon as possible, and that means reducing the drafty concrete bowl to dust. The 49ers’ Santa Clara stadium is moving forward by leaps and bounds, setting aside doubts about its readiness for the 2014 NFL season. As with most big demolition jobs, the ‘Stick’s destruction will have a ceremony for 49ers and Giants fans to remember the old stadium. The Giants moved over a decade ago and haven’t looked back, the 49ers appear to be doing the same in moving two counties south.
There’s time for a proper eulogy when the event actually occurs. For now, let’s look at the events that led up to this point.
It’s easy to forget that in 1997, the Eddie DeBartolo, Jr.-led 49ers proposed a new stadium flanked by a shopping mall and a massive garage (9,000+ spaces) at the ‘Stick. It’s all a very 90’s vision, with a large amount of public financing via sales tax increment, a grossly underestimated construction cost ($200 million added within a year), voting irregularities, and a new outlet mall designed to complement existing SF shopping districts such as Union Square. Voters approved the $100 million set aside for the plan, which languished for years as the 90’s dot-com boom went bust and DeBartolo was caught bribing former Louisiana governor Edwin Edwards $400,000 for a casino license. (Edwards, who is also infamous for his “live boy, dead girl” quote, has a reality show starting this month featuring him and his new wife, who is 50 years his junior.)
The 49ers’ Candlestick replacement/mall plan was oh-so-90’s
Even as the plan withered and died when DeBartolo’s less spendthrifty sister and brother-in-law took over the team, the $100 million remained there if someone, anyone was interested in taking over redevelopment of Candlestick Point. So when the team started talking with Santa Clara about building a stadium near the team’s headquarters, SF Mayor Gavin Newsom had the plan dusted off and brought in mega-developer Lennar to give it an update. Lennar moved the stadium site from Candlestick Point to Bayview/Hunters Point, dropped the mall idea, and replaced it with various income-level housing developments and an office park. A carveout for the stadium with a green parking lot was envisioned as a fallback plan just in case Santa Clara fell through. Voters in 2007 (10 years after Eddie D’s plan) approved the Lennar plan. The 49ers remained lukewarm to the stadium because of costs to cleanup contaminated land and the cost of a short bridge to bring vehicular traffic from the Candlestick side to the Bayview. Things only got worse when the stadium was pitched as the anchor for a future Summer Olympics hosting effort, the complexity and uncertainty of the bidding process scaring off the 49ers and the league.
Lennar’s Candlestick/Bayview/Hunter’s Point redevelopment plan
Newsom tried to “warn Santa Clara” not to tie up public funds on the stadium, while State Senator Carole Migden wrote SB 49, a Hail Mary of a bill designed to prevent teams from moving within 90 miles of their current home (within territory). That bill, like the stadium mall plan, went nowhere, leaving SF with no leverage and a still-uncertain plan to keep the team in town. The 49ers and the NFL went on the offensive in Santa Clara, went door-to-door to sell their stadium, and got voter approval in 2010. Since then it’s been all details such as the EIR process and a couple of NIMBY-related lawsuits, bringing everyone to last year’s groundbreaking ceremony and the impressively fast construction work since then.
A footnote to this story is the presence of one Fred Blackwell. Blackwell served as the SF Redevelopment Agency’s Executive Director from 2007 until 2011, then jumped across the bay to take Oakland’s Assistant City Administrator job (also redevelopment). While Mission Bay had most of SF’s redevelopment focus over the past decade or so, the ongoing state of affairs in the southeast part of the city always made it a target area. Mission Bay was always the one with real economic promise. Still, Blackwell oversaw much of the debate between Lennar, SF’s Board of Supervisors, and community groups all looking out for various interests and generally not getting very far very quickly. Eventually, the project’s EIR totaled 7,700 pages and Lennar shelled out millions to nonprofits in the name of affordable housing and other community benefits.
Blackwell may feel he’s in a similar position to 2007. During last month’s Coliseum Authority meeting, it was revealed that the Raiders and the NFL really just want to focus on a simple stadium, not the broad vision that the City of Oakland is considering. Like the scope creep that helped sink the SF stadium concept, a wide ranging and ultimately very complex redevelopment scheme in East Oakland may make it difficult for the Raiders to commit to staying if the vision remains fuzzy and exponentially more difficult to pull off than a stadium-only plan.
It’s easy to see why the Raiders want to narrow their scope. They’re not making claims of a renaissance in East Oakland. The last thing the team or league wants is to see the stadium jeopardized by a dependency on another component of which it has little or no control.
Getting the two visions (one is effectively a subset of the other) together will not be easy. A look at the pattern of NFL stadium development over the past 20 years shows that few have been part of any kind of urban renewal plan, unlike ballparks or arenas. With the limited number of football games in a season, this makes sense. The notable exception to this rule has been Lucas Oil Stadium in Indianapolis, which is not part of any redevelopment scheme, but rather an expansion of an existing convention center footprint. The Atlanta Falcons want to move to a site closer to the Georgia World Congress Center for a similar purpose. In Oakland, the stadium may have a retractable dome, which would inflate its cost significantly but also provide greater flexibility to hold different types of events. Even with ballparks, urban renewal is not a given. The St. Louis Cardinals’ Ballpark Village is finally starting construction nearly a decade after Busch Stadium opened.
Can Blackwell and Oakland pols pull together all of the resources, the financing, and the political will to execute a vision that’s projected to be twice as expensive as the scaled down Lennar-Bayview plan? Not even mighty SF could prevent the 49ers from escaping all of the craziness. It would be hard to blame the Raiders for following a similar, simpler path.
A lot to go over in this edition. Thanks to all who have been contributing. The response has been excellent so far, I hope it continues. I have a couple of surprises in store for you generous folks.
Update 2/5 12:00 PM – Sacramento Mayor Kevin Johnson had yet another press conference to give an update on the Kings/arena effort. The big takeaway is that there is not yet an announcement on a big money equity group. That may happen next week, in conjunction with the City submitting its arena plan to the NBA. Meanwhile, billionaire Ron Burkle looms larger than ever, as he has emerged as a potential bidder for AEG. Keep in mind that Burkle would have to partner with private equity to buy AEG. It would make sense for Mayor Johnson and Sacramento if Burkle, Mastrov, and silent money were to come in on a package deal for the team and arena, similar to Guggenheim Partners’ overwhelming bid for the Dodgers.
The Giants are reportedly being less strident in their concerns about a Warriors arena at Piers 30-32 in San Francisco. The sides are hashing out their differences with the City in the middle. 2013 must mark a new era of a “kinder, gentler Giants”. [SF Chronicle/John Coté, Neal J. Riley]
The 34-minute power outage at yesterday’s Super Bowl at the Superdome is being blamed for now on monitoring equipment that tripped a breaker after sensing an anomaly. Power outages happen from time to time at sporting events depending on load, grid, and stadium. The spectacular 2011 blackout from a 49ers home game was notable. I vaguely recall an A’s game that had the lights go out in 2012, though I can’t remember if it was a home or road game. While somewhat embarrassing for New Orleans, it seems unlikely that this mishap will affect future Super Bowls in NOLA, especially if the true cause can be properly identified and fixed. [LA Times/Patrick Kevin Day | Deadspin/Barry Petchesky]
If the problem is grid-related, the Santa Clara stadium shouldn’t be hit in the same way due to built-in redundancy with multiple substations next to the stadium. Santa Clara runs its own power utility, which allows for more leeway in utility planning than if it had to work with PG&E. [SJ Mercury News/Mike Rosenberg]
Somehow the Miami Marlins continue to make out well at their new ballpark despite their mistakes. The Marlins have paid only $102 million of the $131 million they were supposed to contribute. If the full project comes in below projected cost, the remaining money that’s supposed to come from the team will be rerouted to a capital improvements fund, instead of refunding Miami and Dade County taxpayers. [Miami Herald/Charles Rabin]
MLB executive Kim Ng toured Hermosillo, Mexico’s Estadio Sonora while checking out the Caribbean Series. The 16,000-seat stadium could potentially be used as a spring training home by Arizona Diamondbacks or another team. Hermosillo is 4.5 hours south of Tucson, inland of the Gulf of California. [MLB.com/Alden Gonzalez]
Reno’s City Council approved a subsidy plan to pay off Aces Ballpark, which will keep the D-backs’ AAA affiliate in Reno for the next 30 years. The subsidy will run approximately $1 million per year. [Reno Gazette Journal/Brian Duggan]
The Scranton-Wilkes Barre Railriders (AAA-Yankees) are moving into their completely rebuilt ballpark, PNC Field, after a year of barnstorming. [Scranton Times Tribune/Jim Lockwood]
A Mesa-based service organization called the Hohokams (natch) has long had a contract to provide manpower at Hohokam Stadium during spring training. As the Cubs complete work at their new park, no deal has been made for the new ballpark. [Arizona Republic/Editorial Board]
El Paso Union Depot
El Paso’s upcoming Populous-designed AAA ballpark will take stylistic cues from the city’s historic Union Depot train station. The ballpark, which will replace the not-that-old City Hall, is expected to open in time for the 2014 season. Meanwhile, a legal challenge to the $50 million deal has caused the city to halt an effort to issue bonds for the stadium. [El Paso Times/Cindy Ramirez, Zahira Torres]
A 100-feet-deep sinkhole found at the Birmingham Barons’ new ballpark site has put a snag in construction. Apparently sinkholes are quite common throughout Birmingham. [AL.com/Joseph D. Bryant]
Henderson, NV is suing developer Chris Milam and others over an alleged bait-and-switch scheme that involved 480 acres of land that was meant to be used for a stadium complex. Instead, Milam may be looking to build housing on the land. The City is suing to prevent that from happening based on the very low land sale price furnished to Milam. Caught up in all of this is former Bureau of Land Management director Bob Abbey, who signed off on the deal. [Las Vegas Review Journal/Alan Snel]
NBC Bay Area reported last night that somehow, the City of Santa Clara hasn’t completed planning for how to make football games work in concert with operations and Mineta San Jose International Airport. The FAA has made a Determination of No Hazard for the stadium, based on building height and sufficient clearances, even though some light standards will be slightly higher than FAA mandates. However, this only works when the weather is good, and the two runways at SJC are used for takeoffs to the north and landings from the south. When the weather gets bad or fog comes in, the airport flips the script and the landing approach comes in directly over the 49ers’ stadium site. If you flew in and out of SJC during the stormy recent November and December, you probably got a good glimpse of this. I did over Thanksgiving.
Yellow line extending from Mineta San Jose International Airport’s 30R runway runs directly over 49ers stadium site (shown as a parking lot). Image from Google Earth
When bad weather forces this change, jets landing at SJC tend to loop around the West Valley (Cupertino/Mountain View) before making a 180 turn to land on 30L or 30R, the two commercial runways at the airport. During good weather, planes taking off to the north usually make a sharp easterly turn before heading east or south. Assuming that those planes are in good mechanical condition, takeoffs don’t operate that close to the stadium site. Even flights going directly north to Portland or Seattle tend to go east and loop around until they get to the right altitude before going north. It’s when planes in low altitude fly into SJC from the north that the stadium’s location becomes an issue.
Is this a big deal? Sure it is. San Jose and Mineta Airport are used to this to an extent, as the regular approach to SJC has jets constantly flying almost directly over HP Pavilion and directly over several tallish buildings in downtown. That’s what happens when the airport is built in the middle of the city. It’s convenient, but it brings its own set of issues. Comparatively, the approaches to SFO and OAK are over water, though SFO-bound planes coming from the east often turn north close to the Santa Clara stadium site. Even the Diridon ballpark site came under scrutiny because it’s close to the approach, especially the general aviation runway (non-commercial).
None of these buildings provide the kind and scale of target as the Santa Clara stadium, which on gamedays will regularly hold 70,000 including workers. This will be amped up even higher for an upcoming Super Bowl, when the number of people in the immediate area could approach 100,000.
The early rains we had this season are somewhat unusual for the Bay Area, since we’re used to getting our heaviest rain from late January through March. It just goes to show that on a seasonal and monthly basis, it can be difficult to tell what will happen. The El Niño/La Niña phenomenon can be a contributor. Months out from Super Bowl XLV at Cowboys Stadium, no one was predicted the sleet and freezing rain conditions that beset the Metroplex. While early February could be great weather (mid 50’s, sunny) for Super Bowl XLIX or one of those NBC-flexed Sunday Night games, chances are high that bad weather will force a change to air traffic control. I don’t doubt that a practical plan will be developed to deal with that situation, but it’s a lot of juggling and adds an aspect of uncertainty that isn’t present at other NFL stadium sites, let alone Super Bowl sites. Let’s hope, for everyone’s sake, that everyone’s on their P’s and Q’s when games are played during the rain or fog. A lot more than division standings or a trophy will be at stake.
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