Category Archives: Football

02.11.12
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49ers incentivize Turner-Devcon to finish stadium by 2014

The Merc’s Mike Rosenberg has the reason why the 49ers and City of Santa Clara are working so hard to get the stadium legally decided: 2014 is the plan. Aiming for a preseason 2014 opening, the team is incentivizing contractors Turner-Devcon to finish by that point by offering a multimillion dollar bonus. They’re also flipping the script a bit by penalizing the contractors for every regular season game missed.

The contract requires Turner-Devcon to start building by July 1 and finish the stadium so it can open by the end of August 2014. If not, the firms would be penalized $6 million for each 49ers game missed, plus daily fines that could hit $20 million.

The penalties are harsh enough that the firms could actually lose money on the deal if they don’t finish the project on time. On the other hand, if they complete the stadium in time for the 2014 preseason, the 49ers will reward the firms with a $5 million bonus.

It’s a highly aggressive schedule, one that the stakeholders will be hard-pressed to achieve. Assuming that the Superior Court strikes down a possible referendum push, the 49ers are aiming for a July start to construction (groundbreaking would occur well before then). That puts the bulk of construction time at 25 months, though it’s likely that they’ll still be buttoning the place down for the two months prior to the 2014 regular season start.

These kinds of incentives are fairly commonplace. Road construction firm C.C. Myers earned a sterling reputation from finishing rebuilds way ahead of schedule of the 10 freeway after the Northridge quake and after the 2007 MacArthur Maze collapse when an overturned tanker caught fire and melted an overhead ramp.

Turner-Devcon is expected to be pretty busy over the next few years as they’re contracted to do the Santa Clara stadium. It’s also likely that they’ll be called upon to work on the Earthquakes stadium and Cisco Field. It’s just too bad that, knowing that the NFL wants the 49ers’ home built ASAP, they’re facilitating it to the best of their ability, approving the G-4 loan and arranging for the additional financing with multiple financial partners. What kind of help are the A’s getting from MLB? They’re on the “front burner”. Supposedly.

02.10.12
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SJSU to build Bill Walsh Center

In keeping with its efforts to maintain relevance in the high stakes world of college football, San Jose State University will build Bill Walsh Center, a $9-13 million football training complex on the north end of Spartan Stadium. The Merc’s Jon Wilner has the details.

Bill Walsh Center overlooking the north end zone. Credit: SJSU

The Bill Walsh Center is expected to house the football program, while the existing Simpkins Center will be repurposed for academic support. The project has been in the works for over a year, while donations have been gathered. The BWC is expected to be completed in time for the 2013 football season. $9-13 million is a drop in the bucket compared to the $321 million Cal spent on Memorial Stadium or even the $100 million John Arrillaga used to rebuild Stanford Stadium. Despite that disparity, it’s enough for San Jose State to continue its program in the WAC, and in light of the outlandish amounts spent at other FBS schools, is a refreshing show of restraint. And in honor of a coach whose genius was largely predicated on dinkin’ and dunkin’ down the field, I suppose the expenditure’s size is appropriate.

02.05.12
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News for 2/5/12

Lots of got stuff for y’all to digest (along with your Super Bowl feast) today:

  • Two Bay Area sports families are at odds. According to Matier and Ross, the heirs to former Warriors owner Franklin Mieuli are suing the York family over the value of a 5% minority share of the 49ers. The Yorks say the team’s only worth $360 million, making the stake’s value only $18 million. The Mieuli heirs are pointing to Forbes’ recent valuation of the 49ers, $990 million, and want to sell the stake 5% of that valuation, or $49.5 million. Considering how the lowly Jacksonville Jaguars were sold two months ago for $760 million, you have to think the Yorks will come out on the losing end of this or settle before any trial begins.
  • The Detroit News has a new profile of Tigers and Red Wings owner Mike Ilitch. During his tenure as Tigers owner, Ilitch went from miser to saint. What changed? Strategic moves to properly build a team and bring in free agent talent after a new ballpark was built. It’s a clear case of a ballpark not being the panacea, but rather the foundation upon which a competitive team can be built, rebuilt, and sustained.

“They had an old ballpark in Tiger Stadium that was self-limiting in terms of attendance and revenue. There would be a Catch-22 to Ilitch’s early years: Until he got a new ballpark, he could not subsidize big contracts. Once he got a new ballpark, he was stuck with a bad team and heavy debt.

The combination punch was a haymaker, at least in the early years after Comerica Park opened in 2000.

But by late 2003, after the team had bottomed out, Ilitch made a series of Red Wings-caliber moves.

He expanded payroll at the same time a new front office was about to chart an upward plan in strategies that, coupled with investments in Rodriguez, Ordonez, etc., fueled a baseball revival in Detroit.

Once the stimulus package was in place, team fortunes — and revenues — soared.”

  • The Marlins are laying down grass at their 97%-complete ballpark, and they plan to grow it long to support an aggressive running team.
  • A San Francisco-based hedge fund manager, Christopher Hansen, is aiming to buy the Sacramento Kings and move them to his hometown, Seattle, where he and city leaders are working on a new arena deal. Two reports are in from the Sacramento Bee and the Seattle Times.
  • Yet another plan to replace the Metrodome is being “fast-tracked” through the Minnesota legislature. The plan would require playing as few as two games at the University of Minnesota’s TCF Bank Stadium after the Metrodome was torn down and while the new stadium was being built.
  • Did you know that Reno-Tahoe is putting together a bid for the 2022 Winter Olympics? A group has formed to explore a possible bid. Reno-Tahoe may be competing with Denver for the honor of representing the US for the 2022 games. Denver would seem to have the advantage in terms of facilities, though the distance between Denver and the region’s best ski resorts in Vail/Beaver Creek and Breckenridge is pretty long (though that didn’t stop Vancouver, whose 2-hour trip to Whistler was even longer). Preliminary cost estimates for the bids are around $1.5 billion, which would be less than Vancouver’s 2010 effort.
  • For some unknown reason, secondary ticket prices for today’s Super Bowl are down 50% compared to last year, even though the game is being played in a smaller venue.
  • The Nats are trying out a “Take Back the Park” campaign, in which they are pre-selling tickets to a single April series between the Nats and Phillies. The catch? They’re only selling to buyers with DC/VA/MD addresses, verified via credit card records. The Phillies, whose own ballpark is frequently sold out, often have fans take the 2.5-hour trip down I-95 or Amtrak to the District to catch their team drub (maybe not for much longer) the Nats.

That’s all I got. Enjoy the game.

02.04.12
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Hosting a future Super Bowl

The last and only time a local (host) team won a Super Bowl was XIX (1985), when the 49ers beat the Miami Dolphins at Stanford Stadium. Although not technically a home game at Stanford Stadium, the game’s location within the heart of the Niner fanbase made it a de facto home game. As soon as 2017 (maybe 2015 but unlikely), we may once again have a Super Bowl held locally. As the popularity and TV ratings of the big game have only grown since its inception, so have the stakes and requirements to host the game. The 49ers and the City of Santa Clara have frequently touted the Super Bowl as a major reason to build the stadium near Great America, and from all appearances the Bay Area will have all of the infrastructural pieces in places to host the Super Bowl when the time comes.

But what are those infrastructure requirements? According to numerous sources, the requirements are these:

  • 70,000+ seat stadium
  • A dome or outdoor stadium if average January temperature is 50 degrees or higher
  • 24,500+ hotel rooms within an hour of the stadium
  • Up to 2 million square feet for the NFL Experience and related ancillary activities
  • Additional space for the new “Super Bowl Village” (multiple blocks if possible)
  • Host city or region must also have an NFL team

Stadium

The 49ers stadium is designed to hold 68,500 and appears to have the available space to easily expand up to and past 70,000. The upper deck and corners on the suite/press box side of the stadium are empty, making 1,500 temporary seats no problem. They might even be able to squeeze in double that number, which considering the likely face value of those tickets (>$1,000 per) is nothing to sneeze at. There isn’t quite the room for the 49ers to get greedy the way Jerry Jones did with Cowboys Stadium, when he tried in vain to eclipse the attendance record by stuffing in 30,000 extra seats. Eager to avoid another ticket scandal, the NFL let up slightly on 63,000-seat Lucas Oil Stadium, which added only 5,000 seats for the game.

Climate

Over the nearly 50 years of Super Bowl, the game’s locale has shifted from very large college football stadia (Rose Bowl, Orange Bowl) in warm climates (Southern California, South Florida) to domes (Superdome) and now, highly flexible retractable-roof stadia (Cowboys Stadium, University of Phoenix Stadium, Lucas Oil Stadium). 2014’s game is defying all previous conventions by being held in North Jersey’s MetLife Stadium, which lacks any kind of roof and whose average January temperature is barely above freezing. Whether the typical fan thinks the weather requirement is appropriate given the normal playing conditions throughout the regular season and playoffs is beside the point. Most attendees are high rollers and corporate bigwigs, and given the amounts they are paying to either sponsor the game or pay for the tickets (straight up or through a secondary seller) they should be getting a little comfort. In Santa Clara, the average temperature is around 50 degrees, with an average daily high of 60. If the weather is anything like what we’ve experienced this week in the Bay Area, game day should be a highly pleasant experience. If it’s rain, then break out the ponchos. One advantage the West Coast has over other potential sites is that here the game starts at 3:18 p.m., while it’s still light out and a little warmer to boot.

Hotel capacity

Three major hotels that provide a combined 1,540 rooms are within walking distance of the stadium: Hyatt Regency, Hilton, Marriott. The Marriott is the largest and oldest of the three, whereas the Hyatt Regency is the swankiest and is connected to the convention center. The Hilton is the smallest but also the closest to the stadium. Another 500-1,000 rooms are within five minutes. Clearly that’s not close to the NFL’s requirements. Not to worry, San Francisco and San Jose will be glad to pick up the rest of the demand. Downtown San Jose has over 2,000 rooms. Hotels near the airport have another 1,000. San Francisco has more than 33,000. Still more hotels are scattered throughout the rest of the Valley and up the Peninsula. Capacity is clearly not a problem. Logistics might be, though visitors will have a number of choices. Some may choose to stay as close to the game site as possible. Others may want to do the touristy thing in San Francisco and come down to Santa Clara only on certain days. The main issue is more the way the NFL demands blocks of hotel rooms. The league has been known to demand 95-97% of area hotels’ capacity for the event several years in advance, with the actual rooms booked a year in advance. For a city with a solid year-round tourist trade like SF, a Super Bowl can create chaos and even lost revenue if the Super Bowl doesn’t materialize. Regardless, if the 49ers get their new stadium are built, it’s practically guaranteed that they will get a Super Bowl, allowing all Bay Area hotels to either work with the NFL or compete for attendees on price.

NFL Experience

Now in its 20th year, the NFL Experience is considered a temporary football theme park adjacent to the Super Bowl. That makes it a bit ironic that there’s an actual theme park across the parking lot in Santa Clara, right? Usually, a convention center or arena is not available adjacent to the stadium. In Santa Clara, there will at least be 300,000 square feet of convention space (Indy has 400,000), plus plenty of parking lots for the tented structures used for the rest of the Experience. At currently $28 per person plus whatever money the NFL gets from merchandise and concessions, it’s a huge moneymaker for the league. Recently added to the attraction was a nighttime adult version with a clubby atmosphere and separate admission. In Santa Clara that’s probably a good idea, but it’s a poor substitute for the real nightlife happening 40 miles north. The attraction is seeing hockey-stick growth in popularity: attendance may top 750,000 according to some estimates.

What about Great America? Could Great America’s attractions be used? Sure, though negotiating a deal may be difficult. Great America’s season doesn’t open until late March, and its hiring practice doesn’t actually hire its mostly seasonal workforce until February, even for employees who have been working there for years. There’s also the issue of money. In the Super Bowl host bidding process, the NFL demands 100% of revenue from everything associated with the game. For 2012, a single adult ticket at Great America costs $56. How much more would the tickets be for Super Bowl week in order to satisfy both parties? And what kind of value proposition would it be for Cedar Fair to have its workers come in two months early, work only for a week, idle them, then work again when the season starts? It might be worth it, it might not.

Super Bowl Village

Unlike the NFL Experience, the Super Bowl Village is a free attraction. In Indy, it takes up three blocks of Georgia Street between the convention center and Bankers Life Fieldhouse (formerly Conseco). Like most street fairs it has its own vendors, concert stages, and an anchor in the form of ESPN’s massive broadcast facility. Again, there’s space for this to make this work in the parking lot.

Onerous terms

Cities promoting themselves to host the Super Bowl often point out that the economic impact of the event is up to $400 million (Indy’s projecting a more conservative $155 million in direct spending). Actual ticket and concession revenue for last year’s game was $109 million, this year it’s projected to be $72 million largely due to the smaller stadium. And of that ticket and concession revenue, virtually all of it goes straight to the NFL. Their terms are so demanding that there is no room for any municipality to squeeze out any direct revenue from Super Bowl week. I took a look at an old RFP the City of San Diego filled out in 2000 for a future Super Bowl. Here are a few choice terms that the NFL dictates:

  • The NFL requires at least: (1) 100,000 square feet for team city television satellite uplink truck units, newspaper darkrooms, cable TV remote studios, etc.; (2) an additional 100,000 square feet of space for an international television compound; and (3) an additional 200,000 square feet of space for the broadcast network compound. [ed. – All told that’s 9 acres.]
  • Is there space in immediate proximity to the stadium available at no cost for: (1) hospitality tents, and (2) the NFLP Tailgate party (a minimum of 1,250,000 square feet is required for the event)?
  • The NFL should be able to retain 100% of all revenues derived from the hospitality area and Tailgate party, including food and beverage and novelties sales revenues. Will the NFL be able to do so?
  • Is there a site at or adjacent to the Stadium which is authorized for use as a helipad to accommodate up to 400 landings and take-offs on game day and a lesser number on each of the 12 days before game day? [ed. – Note that the Santa Clara stadium is directly underneath the takeoff path for flights coming out of SJC, not sure how relevant this is to helipad placement.]
  • Will the NFL be able to cater a meal for the event without having to pay any fees to the lessor or any other concessionaire?
  • Is there an arena adjacent to the Stadium? If yes has it been secured in writing for the NFL’s use on game day and for 10 days before game day?
  • The NFL should have the right to determine and approve everything relating to Stadium operations on Super Bowl Game day, including the assignment of meeting rooms, tent space, parking lots, adjacent buildings, etc. Will this requirement be met?
  • The Stadium and all of the surrounding parking and other areas owned or controlled by the Stadium owner must be provided rent free for the entire period of occupancy by the NFL.
  • The NFL recommend staffing levels of at least 300% above normal sellout events. If the NFL is required to pay a portion of the Stadium staffing or operational costs, include a breakdown of the total cost of the NFL’s use of the Stadium and all of the surrounding parking and other areas owned or controlled by the Stadium owner. Will the NFL be required to pay any costs?
  • The NFL must have the unlimited right to use the existing scoreboards and video boards at no cost. Will this requirement be met?
  • The NFL requires that the Stadium provide a certificate of insurance evidencing comprehensive general liability coverage with a limit of liability of no less than $100,000,000, indemnifying and naming the National Football League and National Football League Properties, Inc., as additional insureds.
  • The NFL must have the right to control all ticket sales and to retain 100% of the revenues from ticket sales, and to control all other access to the Stadium (i.e., credentials).
  • A minimum of 50% of all suites (or no less than 45 total) should be allotted to the NFL.
  • At least 75% of the suites allotted to the NFL must be between the end-lines, and the allotted suites must include 50 yard line locations for the televising network, each of the competing teams ,the NFL Commissioner and the NFL President.
  • Is there any contractual obligation to existing suite holders for tickets to the Super Bowl Game?
  • The NFL should have exclusive, cost-free, use of at least 350 bus parking spaces in close proximity to the stadium, including 35 spaces for the media, 25 spaces for each team, up to 50 spaces for half-time personnel, 100+ spaces for NFL Properties, potential member club buses, etc. These spaces should be in a well-lighted area for post-game departures up to 5 hours after the Super Bowl Game.

After looking at the NFL’s demands, it’s not hard to see why, despite raising $25 million to support Indy’s bid for Super Bowl XLVI, the city agency that owns and operates Lucas Oil Stadium is expected to lose $800,000 during the week. Let’s say that of the $300 million in overall spending, 10% of that is tax. That’s $30 million in taxes spread out over several counties and cities. That’s not a bad haul if the cost to bring the game in isn’t too high. Therefore it’s incumbent upon the 49ers and the City of Santa Clara (and Santa Clara County) to make the stadium and its surroundings as ready to host the Super Bowl as possible from the get-go. If they can pull that off, it’ll make them more likely to be considered for rotation into future Super Bowls. The whole thing sounds like a mini Olympic games. Speaking of Olympics… that’s for next week.

02.02.12
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49ers get $200 million G-4 loan

Get ready for the ceremonial hard hats. The NFL has granted the 49ers $200 million in G-4 loan funds, the financial linchpin in the team’s Santa Clara stadium plan. That money, combined with the $800 million in loans put together by BofA, US Bank, and Goldman Sachs, should make it possible for the team and the city to move forward with a soft groundbreaking very soon. That would be followed by a modest demolition and clearing of the parking lot, which has little but asphalt and parking safety light poles running through it.

Not coincidentally, Santa Clara took a preemptive legal step and sued anti-stadium group Santa Clara Plays Fair to stop them from getting the stadium project on the ballot again. An unusual step, City Attorney Ren Nosky moved forward with this in order:

“to remove any uncertainty over this issue” and “establish once and for all” that the project can’t go back to the ballot.

It’s an interesting move, and probably a good one for all concerned. It puts SCPF on the defensive, because it’s likely that the city will have its legal argument at the ready and, depending on how quickly the lawsuit in Santa Clara Superior Court is heard and how much support SCPF gets from outside, the group may be ill-prepared. We’ll see if they get the requisite support from the ACLU, as advertised. Presumably Ralph Nader’s League of Fans should also be involved, though not from a legal funding standpoint.

The two sides will be arguing over the contents of the 400+75 page, two-part Disposition and Development Agreement (DDA). There’s a lot of stake, because if the court were to strike down parts or all of the DDA, the team’s financing could be at risk. SCPF wants a new referendum, so if a judge rules that the DDA were partially or wholly improper compared to the terms passed with the 2010 referendum, it’s a huge delay that could, via the vote, kill the project entirely. For Jed York, the reasoning is probably simpler – he wants to open the place in 2014. Even with the staggering cost of the venue, it’s all the more reason to get a jump on being able to service the stadium’s debt. I figure if the lawsuit were heard in the spring, the judgment could be wrapped up by summer at the very least. Meanwhile, the city would be concurrently clearing the land. The stadium would take 27-30 months to construct, so they could hit their target if absolutely everything went right. If they experience a delay because of the lawsuit and/or referendum, it’s pretty much a 2015 launch unless the team wants to split the 2014 season between Santa Clara and The ‘Stick. I may be a fly on the wall for some of the hearings.

Moving away from the legal realm, the terms of the NFL loan are curious in that they aren’t forcing the Raiders to share the stadium in Santa Clara. The league is asking to 49ers to keep the Raiders in mind. This is something of a pivot, since last year I had heard that if both Bay Area teams were to stay, one facility somewhere was the best possibility. I suppose this is in keeping with the Raiders’ and Mark Davis’s city-agnostic stance. The Raiders in play for both Santa Clara and Los Angeles, and I have to believe that the NFL likes that kind of flexibility. The more teams that could move to LA the better. San Diego is one. The Vikings can’t get anywhere in the Minnesota legislature. Buffalo will probably opt for small improvements to Ralph Wilson Stadium, for which the G-4 program has a subset of rules for financing. Under new ownership, Jacksonville is not in play for the time being. The St. Louis Rams appear to be at the greatest risk of leaving, with onerous lease terms for the city and the team’s long LA legacy. It could play out several ways:

  • 49ers/Raiders in Santa Clara, Rams in LA
  • 49ers in SC, Rams/Raiders in LA, Chargers in SD
  • 49ers in SC, Raiders/Chargers in LA
  • 49ers/Raiders in SC, Rams/Chargers in LA

What I don’t expect to happen is for the NFL to hand out three loans of $200 million to Santa Clara, Los Angeles, and San Diego (or SC, Oakland, SD). For this CBA cycle and the number of teams that need new venues, the NFL is probably working with a $1 billion cap on G-4 loans, with some allowance for improvements to older venues. The previous CBA, which ran six years, had only three venues built during the period (Cowboys Stadium, MetLife Stadium, Lucas Oil Field) and one that opened just as the CBA period started (U. of Phoenix Stadium). The G-3 loan program then ran out of money in early 2007, which should be a signal to all teams that are looking for the NFL to pony up: he who hesitates is lost.

01.31.12
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Sticker shock for 49er fans becomes real

According to Team Marketing Report’s NFL Fan Cost Index for 2011, the San Francisco 49ers had, on average, the 9th highest priced tickets in the league at $83.54. That price was a 9.4% rise over 2010. Given the facts that the team was in the bottom 10 in terms of payroll, and the 49ers play in one of the more decrepit stadiums in the NFL, that’s a bit of a shock. But that’s nothing compared to longtime season ticket holders experiencing sticker shock when they found out how much their locations would cost in the new Santa Clara Stadium.

The 49ers have been preparing for the blowback for a while. It’s happened everywhere else seat licenses have been offered: Dallas, New York, and yes, Oakland. Priced at up to $80k per seat for the premier 50-yard line lower club locations, it’s clear that these seats aren’t for the guy who makes less than $80k per year. These seats are for the corporate crowd. Will they sell? Of course they’ll sell, just as suites are selling. Even so, don’t worry about whether they sell or not – the NFL doesn’t count club seats against its minimum ticket sales requirements for games.

I’ll put the stadium financing dilemma in the most basic terms. Let’s say you’re buying a $1 million house. You have 15% down, or $150k. You need a loan of $850k over 30 years. Your credit isn’t the best, so your interest rate is 8.5%. That puts your monthly mortgage payment at more than $6,000. Every month. Now add three zeroes to that payment and convert it into an annual payment. That’s more than $72 million per year.

Now let’s take the attendance the 49ers can expect every season. The Santa Clara stadium will have a capacity of 68,500. They’ll play eight regular season games and two preseason games, or 9+1 if the league ever gets around to moving to an 18-game regular season. That means that every year the team needs to 685,000 tickets to pay for that $72 million mortgage. Broken down per ticket, that’s $106.42 baked into the cost of every ticket. That’s 27.4% higher than the entire current ticket price.

Of course, the 49ers won’t be adding $106.42 to each ticket to cover the cost of the stadium. They’ll make it a more progressive payoff. The premium seats and suites will carry much of the burden. Sponsorships, naming rights, pouring rights, and other revenue sources will cover a piece. When I wrote an analysis in 2009 trying to suss out how the place would be paid for, the financing was fairly well separated, the public burden lower ($330 million then vs. $850 million now). Perhaps fans in some of the cheaper sections will only be stuck with $15-20 per ticket of stadium building costs. The truly interesting part hasn’t begun yet, as the team hasn’t announced prices for its lesser club and non-club seats, many of which will also have seat licenses attached. If those don’t sell, we may see a return of the dreaded OFMA. Of course, the Giants sold their seat licenses without much difficulty and a secondary market even thrived for a long period, so there are success stories to be found.

I still remain skeptical as to how to everything will be paid for, at least by the 49ers themselves. Having the Raiders onboard would help an enormous amount. Yet even if the Raiders had signed on at the outset, it’s unlikely that the 49ers’ seat license prices would be much different. They’d probably just pay down the debt earlier or plow the money into the team at different points. Without the Raiders, I wonder if it’s more sensible to have a domed stadium in Santa Clara despite the good weather. At least with a dome, it’s a more flexible venue that can hold all sorts of other events, including multiple Super Bowls and the NCAA Final Four. Then again, the Marion County (Indianapolis) Capital Improvement Board is expected to lose money at this year’s Super Bowl. Nevermind on the dome idea.

01.23.12
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News for 1/23/12

As usual, we’re in a quiet period leaving the January winter meetings and a month before pitchers and catchers report. At least we have FanFest coming up this weekend. Speaking of FanFest, if folks would like to meetup at FanFest, I think we can meet just inside whichever entrance they use, probably the Plaza Club entrance (lower) or East entrance (upper). I’d love to meet at a great restaurant or bar within walking distance, but… you know the problem there.

Now the news:

  • The Merc’s Tracy Seipel has a roundup of effect the shuttering of redevelopment will have on numerous South Bay redevelopment agencies, including San Jose’s. As has been written previously, SJRA has been winding down over the last year or so, making the shutdown less painful and abrupt than it is for other cities, many of whom are trying to extend the deadline from February 1 to April 15. While San Jose remains in an good position with regard to getting its planning and preparation together on a ballpark, its ability to acquire additional land for the ballpark is gone, leaving A’s ownership to take care of the rest.
  • Also in the Merc, columnist Scott Herhold makes the political calculation that if San Jose Mayor Chuck Reed continues to be aggressive if pushing for a pension reform referendum, he may find a lot of enemies of the ballpark in the form of public employee unions. Personally I know a few who are already opposed and are blaming the ballpark effort, so this is no joke. The simple fact of the matter is that with the unions providing givebacks and lower projected costs leading to a smaller budget deficit, the City is not in the kind of fiscal state of emergency that requires such drastic action on the Mayor’s part. Cooler heads should prevail.
  • St. Petersburg pols think a light rail system connecting their city with Tampa could help jumpstart attendance.
  • Apparently there is a Florida law which dictates that any stadia built with some amount of public funds requires those facilities to be used as homeless shelters when games aren’t being played. This includes huge football stadia, domes like Tropicana Field, even spring training ballparks. Now two legislators are trying to enforce that provision, which until now has remained dormant.
  • Chron’s Leah Garchik has an entertaining account of 49er fans being stuck on a bus in gridlock for three hours even though it was only going within city limits.
  • Added 12:07 PM – Lawrence Berkeley Lab has picked the site for its second campus: Richmond. The land was already owned by UC, so LBL needed to be bowled over to pick a different site in Oakland, Alameda, or Emeryville. In the end, that apparently didn’t happen. Sites proposed by Oakland included the Zhone property across 880 from the Coliseum, and the Oak-to-Ninth site east of Jack London Square.
  • Added 8:30 PM – The City of Oakland released a proposal that would layoff only 105 full-time employees as part of the redevelopment shutdown. That figure would be slightly more than half of the 200 layoffs that were expected.
  • Added 11:35 PM – The Santa Clara County Registrar confirmed that the 4,500 signatures gathered in a petition effort for a new referendum were good. This sets up a situation where the City Council, which has been firmly pro-stadium, will probably reject the petition effort, setting up a court battle. The interesting new twist to this saga is that the current Mayor is Jamie Matthews, a staunch opponent of the stadium plan. Matthews, who replaced Pat Mahan (proponent) last year, was merely a dissenting vote on the Council when the original vote passed in June 2010. Matthews seems emboldened enough now to turn the stadium effort into a real war. Correction 1/25 9:00 PM – Councilmember Jamie McLeod is a dissenter, not Jamie Matthews, who has been a longtime supporter of the stadium plan.

More if/as it comes.

01.10.12
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News for 1/10/12

Didn’t expect to have so much news this week, and it’s only Tuesday. Here we go.

  • MLB Commissioner Bud Selig is expected to accept a two-year extension to his current term, which expires after the 2012 season. If Selig looks at the A’s as unfinished business, then it’s good he’s staying on instead of throwing the A’s over the fence for the next commissioner.
  • U.S. Department of Transportation officials were expected today to recommend $900 million in federal matching funds for the BART-to-Silicon Valley Phase I extension, which would terminate at the San Jose Flea Market. The decision would then move to Congress to approve, which was characterized by Gary Richards as a “formality”.
  • During the Raiders press conference introducing new GM Reggie McKenzie, team owner Mark Davis fielded a few questions about the stadium situation. He maintained a similar stance to his father about stadium prospects: “We’re going to try to get something done here (in Oakland) but if we can’t we have to get something done somewhere.” Oakland, Santa Clara, and LA are under consideration, without Davis committing to any specific site. The hiring of McKenzie will allow Davis to focus on the stadium search. One thing I took away from the presser: Mark Davis is committed to owning the team in the long run and considers it his family.
  • Oracle is opening a new office in downtown San Jose, in the same building as accounting firm PriceWaterhouseCoopers. The office could have 265-440 employees. Oracle owns the building as part of its acquisition of BEA Systems.
  • SF Planning Commissioner Mike Antonini has been working with architecture firm HKS (Rangers Ballpark, Miller Park) and a financial services firm who could provide up to $600 million for the forlorn 49ers Hunters Point stadium project. Antonini is trying to raise $1 million from private sources to complete a study.
  • Oakland’s City Council is discussing (right now!) how to deal with the end of redevelopment. There is talk about a successor agency, which would be very limited in scope (affordable housing mostly). Oakland North has an excellent infographic explaining where the redevelopment budget goes. Oakland appears to have two choices: A) allow the successor agency to be created but not with enough money to properly operate, or B) let it expire completely and lose all control or powers normally attributed to redevelopment agencies. They have until Friday to make their decision.

More as it comes. Owners meetings start tomorrow, with the A’s not on the agenda. The Merc’s Tracy Seipel has an overview of the current situation.

01.07.12
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49ers release club seat license prices

Apparently the bye week is only for the players, because the 49ers front office has been busy. Aside from hammering down lease terms and dealing with newly energized opposition to the stadium project, the team has also taken the time to release pricing (via the Merc’s Mike Rosenberg) for their club “seat builder licenses.”  And boy, the prices are a doozy. Not as bad as what the Cowboys charged their fans, but considering the same Cowboys-owned company that market the Cowboys’ licenses was hired to sell the 49ers’, it stands to reason that the pricing models would be somewhat similar. Lower club seats on the 50 yard line will carry a $80,000 license fee along with a season ticket price of $3,750.

Ticket price based on 10-game season ticket package

In 2009 I took a stab at SBL pricing. I couldn’t have been more off. Prices for prime seat location licenses are more than five times what I guessed. Whether the market will actually bear those prices is up for debate, though the marketing firm must have done some research over the last six months to determine pricing. Mike Rosenberg’s article doesn’t mention financing for the licenses, but I expect that financing will be available. It’s just another way for the 49ers to make money on the stadium. At 9% over 20 years, the $80k license would cost $8,040 per year, or $795 per month.

Timing has to be taken into consideration. Would the 49ers be able to charge these prices if the team had racked up another sub-.500 record? Probably not. Because they have home field advantage and at least a decent shot against either the Saints and Packers, the fanbase is back – which means demand is back.

As is customary with ticket sticker shock, many fans will be priced out of the prime seats. The 49ers haven’t yet announced pricing for regular seats, so I’m curious as to how many of those will carry SBL fees. This pricing model could imply that the premium seat buyers will carry much of the freight for construction, which could drive down the ticket prices for other locations. On the other hand, it could mean that rising costs and debt have to be passed on to the public in the form of SBL prices. We’ll have to wait to see the prices on non-club seats to know for sure. I don’t think licenses will come with 80% of all seats like Cowboys Stadium, but I’ve been wrong on this already once.

01.07.12
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Herhold tracks down history of SJ stadium vote

Whether or not I agree with their work, Scott Herhold’s piece in today’s Merc is why I’m glad there are still veteran reporters and columnists at the Bay Area papers. Herhold takes the wayback machine to 1991, when another Merc employee, Susan Strain, led the charge for a referendum on any stadium or arena project of 5,000 seats or greater.

Strain, now in New Orleans, was then living in Hyde Park, a quiet northside neighborhood framed by the old City Hall and County Government Center to the west, 880 and 101 to the north, Japantown to the south, and light industrial businesses to the east. She and other Hyde Park residents objected to the possibility of a homeless shelter opening in their neighborhood (IIRC an emergency women’s and children’s service center opened instead). Frustrated by the lack of response by City Hall, Strain really got Mayor Tom McEnery’s attention by organization a referendum push, a requirement that still exists to this day. Though it’s short, the article gets Strain’s and McEnery’s sides of the story, and is a good read.

In hindsight, the referendum requirement has probably prevented multiple sports opportunities from happening in San Jose, by scaring off teams or their parent leagues looking to build or locate teams there. The leagues’ M.O. for the last several decade or so has been to avoid a vote as much as possible (Target Field, Marlins Ballpark), even when it involves getting into legally suspect territory regarding financing.

The actions leading up to the San Jose Arena vote should also provide lessons to all parties in the ongoing stadium debates in Santa Clara and San Jose. Petitioners looking to reopen the 49ers stadium deal on financial grounds had to compete with local IBEW members looking to dissuade the public from signing any petitions. The San Jose ballpark is already going to vote so it’s unlikely to follow the same script, but you can bet that labor will be out in force to support the project if there is any sign of it being in jeopardy.

P.S. – Speaking of the Niners, they’ll be paying $12.5 million to Cedar Fair to get the Great America operator to drop its lawsuit. All that for four Sundays a year? Well played, Cedar Fair.