Category Archives: News

05.19.12
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Asking for the moon

Thanks to a spectacularly bad lease negotiated by St. Louis pols, the Rams have the right to a “top tier” stadium as long as they stay near the Gateway Arch. This week, St. Louis found out just what “top tier” (top eight) means. The City gulped and tabulated just how much it’ll cost for the Rams to stay there: $500-750 million.

A PDF of the proposal was acquired by the St. Louis Post Dispatch. It’s worth viewing if you want to follow along with the rest of the post. The St. Louis Convention and Visitors Commission put together its own $124 million proposal (PDF), which mostly touts the incremental improvements that have been made over the past several years.

Mind you, that won’t pay for an entirely new stadium. Instead, two-thirds of the Edward Jones Dome would be blown out, including the roof. Only parts of the upper deck and one side of concourses would remain. The field would be moved slightly to accommodate new seating, and completely new seating decks and concourses would be built in the other two-thirds of the stadium.

Old Edward Jones Dome cross-section compared to new dome roof/seating deck arrangement

Edward Jones Dome sits in a very tight block in downtown St. Louis, hemmed in by the America’s Center convention facility to the west and N. Broadway to the east. Expanding the footprint of the stadium would wipe out N. Broadway, which happens to be half of a major thoroughfare. The extra space consumed by the fattened stadium would be used for new team locker rooms and premium amenities. The cross-section of the stand looks a little too much like Mt. Davis for my liking, especially the enormous upper deck. Field suites and field level clubs are a must-have.

Amazingly, the Rams’ proposal doesn’t include either a retractable roof or a Dallas-style center-hung scoreboard. The roof will have a panel that can slide open to let in more light, like a sunroof on a car. New scoreboards would be placed in the corners, replacing the end zone scoreboards that are not even three years old. I’m surprised by this. The team has the city over a barrel. They’re already asking for the moon, why not get some asteroids on the side while you’re at it?

I’ve never seen a game in person at the Trans World/America’s Center/Russell Athletic/Edward Jones Dome, so I can’t directly speak to how good a stadium it is. I’ve heard the field is poorly lit for some reason. I know it can get very loud inside. The concourses are wide, and the amenities fairly plush, befitting a $280 million stadium built in the mid-90’s. The top tier clause allows the Rams to escape the Gateway City after the 2014 season, which means the race is on to figure out a solution, or else owner Stan Kroenke could easily look elsewhere – like LA. The only thing that may give Kroenke pause is AEG’s insistence that it get a minority share of any relocated franchise in exchange for building the downtown LA stadium. Regardless, LA poses a significant threat, even though Kroenke is a born-and-bred Missourian.

The Rams don’t quite have the Mayflower trucks at the loading docks yet. Their proposal and one from the CVC will go to arbitration in the next year or so. Whatever the arbiter decides is the winning proposal, the County will have the option to commit to that package of improvements. If they do, the Rams will be locked in through at least 2025. If not, the Rams will have those trucks idling and ready to go.

As large and unnecessary as the Rams’ proposal sounds, it would be at best a top-four NFL stadium, surpassed technically by Cowboys Stadium and MetLife Stadium, and the AEG stadium if that comes to fruition. EJD and the Georgia Dome (1992) kicked off the boom era of new NFL stadia construction, so it’s not surprising that both were the first to be considered outdated by the league.

My question about any kind of NFL stadium expenditure, as usual, is How can anyone justify the cost? Let’s say that the project costs $700 million. Over 30 years at 7%, that’s $52 million per year in debt service. To make it worthwhile, the Rams and St. Louis would have to get an additional $100 million in new direct revenue every year. The stadium will compete with other domes for Final Fours and will continue to function as an extension of America’s Center, so that helps a bit. But most of the steady revenue will come from football games and related activities. To put it in perspective, the Rams are 30th among the 32 franchises in revenue at $228 million in 2011, according to Forbes. If they get another $100 million and apply it to 2011, they would catapult to #4 in the league, ahead of both New York teams. Does that seem likely, given the tiny St. Louis market and the Rams’ second banana status within the market? I doubt it.

05.18.12
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The illusion of pendulum swings

There’s been a wide range of reaction from Bud Selig’s non-update yesterday.

  • Gwen Knapp: “No decision means ‘no’ to the A’s. They aren’t getting the rights to San Jose, not yet, not soon, not even over Larry Baer’s stone-cold corpse.”
  • Mark Purdy: “And no action was taken — although Wolff’s quotes do indicate the blue-ribbon panel’s findings back up his contention that none of the Oakland stadium ‘proposals’ amount to anything.” (Purdy also brought up a potential antitrust case on KNBR.)
  • Ray Ratto: “So [the owners] see no compelling reason to hurry toward a decision they don’t want to make anyway.”
  • Art Spander: “The solution to all this is for Wolff, who wants nothing to do with authorities and business people in Oakland, a place he doesn’t live, to reach a compromise.”
  • Robert Gammon: “…it seems clear that the Giants’ presentation was more persuasive and that the rest of the league has no intention of overruling the Giants’ opposition to the A’s move.”
  • Jon Heyman: “Some progress is seen in that a significant amount of discussion is being dedicated to the A’s to the point where the talk has moved from committees to baseball’s Executive Council.”
  • Buster Olney: “The time has come for Oakland Athletics owner Lew Wolff to start firing off lawsuits in effort to move to San Jose — or sell the team.”
  • Ken Rosenthal: “Do not get distracted by any of this. The A’s focus is still on San Jose. The focus of the entire sport is on how the A’s can get to San Jose.”
All of that came from a few rather innocuous quotes from Bud Selig. At this point it doesn’t matter what Selig did or didn’t say – the quotes have been twisted so completely that anyone can weave their own “truth” from owners meetings.

Here’s what we knew going into the meetings:

  • There would be no official action taken on T-rights.

That’s it. Both the A’s and Giants made presentations, which some believe is encouraging and some don’t. Former Giants managing partner Bill Neukom was present at the meetings, presumably to plead the Giants’ case. It seems likely that both teams will continue to make presentations at future owners meetings until a decision is made.

The decision thing is the issue. The sad truth of the matter is that MLB doesn’t have to decide anything anytime soon, just as Lew Wolff doesn’t have to sell the team anytime soon. The A’s will stay afloat via revenue sharing through the end of the CBA, and as long as Wolff and Billy Beane don’t get out in front of their skis in terms of payroll, the team should continue to make money. In that short-term vein, the “best interests of baseball” may be to keep the status quo. You could easily say that Selig is kicking the can down the road, where his eventual successor will have to resolve the dispute. You might also say that the tossed off comment about moving outside the Bay Area is strategic one meant to incite at least a little panic. That may have worked in Miami and Minneapolis, but it’s not going to work here. It never has.

Eventually that short-term position will end and be replaced by a long-term, permanent solution. That’s when some kind of decision will have to be made. Unfortunately for us A’s fans, we have no idea when that might happen. There’s certainly no urgency on the matter. Maybe MLB is waiting for the Giants to retire debt, though the prospect of the team refinancing some of the remaining debt creates a gray area in its own right. The post-redevelopment world hasn’t shaken out yet, and won’t for at least several months.

Until some of these variables settle, it’s in baseball’s best interests to keep both Oakland and San Jose in play. For Selig to kill either option would be poor strategy on his part. San Jose boosters and politicians may be frustrated, but at least the city has most of its pieces in place. Oakland is finally getting some momentum thanks to Don Knauss, though it’s too early to tell if that momentum is real and sustainable. As long as a decision isn’t made on San Jose that shuts out Oakland, another lease extension at the Coliseum can be negotiated. This vague flexibility even opens up the possibility that Fremont could re-enter the picture, perhaps as soon as the next elected mayor takes office in 2013.

The wildcard here would be if San Jose decides to unleash the legal hounds. Again, this is where I think Selig’s M.O. comes into play. As long as Selig can say, “We’re still studying this,” there’s no specific decision to point to that San Jose can build an antitrust case around. Sure, they can make threats, but until someone files a case it won’t mean much.

Until then, what we’ve got here is a Mexican standoff. How do those usually turn out?

05.16.12
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Quick note about Twitter

We don’t advertise it much, but just in case you aren’t aware, we have a presence on Twitter: @newballpark. All articles are set to auto-tweet once published. Often I’ll retweet articles I find interesting, some of which I’ll write about and some I won’t. I also correspond with the Twitterverse on all subjects sports economics. If you want to be up-to-date, follow us on Twitter.

Now get back to work.

05.15.12
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Drama, more drama

While the City of San Francisco continues its schmoozing of the Warriors, Kings ownership is going to war with Sacramento. Apparently the Maloofs hired a former FBI agent to look into the signatures provided by supporters of ThinkBig Sacramento, a civic group whose focus is to keep the team in the capital city. That caused ThinkBig to retaliate, as they want the US Attorney General to investigate the Maloofs to see if they harassed those supporters.

And you thought the relationship between the A’s and Oakland was bad.

In addition, newly dug up documents show that the Maloofs and the NBA had a disagreement about terms the team was asking for and items they would commit to: collateral, gameday and municipal expenses. Naturally, the Maloofs balked at putting up any of that even though it’s standard practice in stadium/arena building these days. Buzz is building that they’ll apply for relocation as the 2012-13 season ends, and there’s no telling how awkward the situation will be between the team and fans at Power Balance Pavilion this fall.

It’s all so bizarre. Excuse me while I grab some popcorn.

05.14.12
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SF officially pursuing Warriors + LA Live observations

According to Matier & Ross, the City of San Francisco has sent a letter to the Warriors urging the team to work with the city on a new arena deal in SF. A month ago it was revealed that W’s ownership was looking at Piers 30 & 32, which were removed from the America’s Cup waterfront development plan due to cost. Nothing has changed to indicate the site isn’t the frontrunner, though the team could still work out a deal with the Giants in the China Basin/Mission Rock area as a backup plan.

There are height restrictions that will come into play, just as they did with AT&T Park. Given the City’s political will that pushed through the America’s Cup EIR, I have to think the stars would similarly align for the Warriors’ arena efforts.

It’ll be interesting to see if this motivates Oakland to ramp up its Coliseum City efforts. Given the number of events the arena holds annually (150-200), I suspect that keeping the Warriors is practically the linchpin in making Coliseum City work. With AEG in the picture, it’s possible that they may have a business plan to make the arena work without a team, probably by retooling the arena as the Bay Area’s premier large concert venue, like Sprint Center in Kansas City. Of course, making it “work without a team” is a subjective matter, as KC is paying through the nose in debt service while AEG is the one making money in the partnership.

LA Live was built out over several years, with Staples Center and the convention center as anchors

Between the Stadia EXPO and lunch at Philippe’s, I walked around downtown. I’ve never done that in LA, since for me the only reason to be there is an event at Staples Center. Oakland is trying to pattern Coliseum City as something similar to LA Live. That’s a tough one to duplicate, as I explained a few weeks ago. LA Live is a complex of numerous live venues, a multiplex, two luxury hotels, restaurants, all of it adjacent to Staples Center and the Los Angeles Convention Center. There’s always a lot of activity, even when it isn’t apparent.

Setting up for the "Battleship" red carpet premiere

As I was walking through the area, a crew was getting the rigging set up for the LA premiere of the action blockbuster “Battleship” (yes, inspired by the board game). It was 2:30 PM and people were already camping out, getting prime spots to view Rihanna and Brooklyn Decker as they walked the red carpet. Oakland got its brush with Hollywood fame when the Moneyball premiere was held at the Paramount last fall. It shouldn’t expect much more than that. Later this week Staples will hold six playoff games in five four days, including a doubleheader on Saturday. That’s not realistic for any arena in the Bay Area.

So what is realistic? If there are three major arenas in the Bay Area thanks to the Warriors crossing the bridge, the Oakland/Oracle Arena will suffer. There simply isn’t enough demand to fill all three venues regularly, and one will eventually turn into the “budget” arena to remain competitive. The best thing Oakland can do is everything possible to keep the Warriors in the Coliseum complex. I’m not sure what that will take, and I’m not certain that will be enough to overcome the cachet of San Francisco. For Oakland’s sake, I hope they put their best foot forward.

Update 6:43 PM – Oakland has responded with a statement reiterating their commitment to the Warriors. Curiously, it’s the first real indicator that Oakland is pushing for a new arena to replace Oracle Arena, something that has not shown up in public documents to date. Oakland’s advantage versus SF is that they shouldn’t require a brand new arena. What incentive is there for the W’s to build in Oakland if they have to pay for it?

05.11.12
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The no-threat threat

As of yesterday’s Minnesota legislature-approved stadium plan for the Vikings, Minnesotans have approved some $1.85 billion in new venues since 2005-06. Only a year ago it was believed that the Vikings drew the short straw as the University of Minnesota’s football program (TCF Bank Stadium) and the Minnesota Twins (Target Field) got funding before the recession kicked in. Maybe it’s a sign of a recovering economy, or merely another successful negotiating session by the NFL. In any case, from the looks of things the Vikings will be in Minneapolis for decades to come.

HKS-penned Metrodome replacement. Retractable roof optional, to be paid for by team.

Not that it wasn’t without some 11th-hour heartache. As the plan stalled in the legislature, Vikings owner Zygi fueled up the jet and took a meeting in Los Angeles, which was exactly the panic-induced catalyst the issue needed to move forward.

Three venues. $1.8 billion and counting. All three took enormous amounts of horse-trading in the legislature, and some politically iffy maneuvering to avoid public votes. Ugly as it was, it got done. That’s a major difference from how things are done in California, which is to say that here things are either done relative smoothly or not at all.

The Vikings’ staying leaves four teams with some kind of stadium project on the table:

  • Buffalo. No new stadium is being requested at this point, only a $200 million renovation to Ralph Wilson Stadium. Results from a recent phone poll suggest that the Bills should by ponying up a major share of the cost, which is permissible within the NFL’s new G-4 program. A study being readied by Populous which explains the costs and options in detail is due out later this year.
  • Jacksonville. With new ownership, talk of stadium changes or a new stadium has ceased. It’s not hard to see it ramp up again after the honeymoon period ends, probably after the 2012 season.
  • San Diego. The Chargers have absolutely nothing going on regarding a new stadium anywhere in the metro area. The region is immersed in grief over the tragic death of Junior Seau, and it’s going to take a while to recover. A capacity crowd may show up today at Qualcomm Stadium to honor former Charger great. As this subsides, the drama over what the Spanos family will or could do with the team will start up again.
  • Oakland. The Coliseum City study continues for now, and Mark Davis has indicated that he’d like for Dublin to be a backup plan, which is not a bad idea if Dublin is interested – which is questionable at this point. Past talk about the Raiders running out of money appears to have died down. Al Davis was always good about getting the best lawyers working for him, so it shouldn’t be any surprise that he would have a well-conceived succession and estate plan. After all, if there’s one thing Davis had in spades, it’s foresight.
  • St. Louis. The Rams have released a 15-item list of upgrades that will be required to put Edward Jones Dome in the “first tier” of NFL stadia, per their lease. The upgrade list, whose price tag could run $200-450 million, is expected to be released Monday. The onerous lease terms have the City by the short hairs, though it’s expected that the NFL will provide some G-4 funds to the Rams to sugarcoat the deal. At the top of the list is a retractable roof. To accomplish that goal, St. Louis should look to the Vancouver’s BC Place renovation project, which included both a novel retractable roof and a curtaining system for CFL and MLS games, plus a Cowboys Stadium-like centerhung scoreboard. The price for that project was $563 million, though it should be noted that as an older venue BC Place required far greater scope of work, especially because it was done in two phases sandwiching the 2010 Winter Olympics.

Of the four teams in “flux”, only St. Louis is in any kind of advanced stage of negotiations. Even then there’s still time as their window to vacate doesn’t open until 2015. The Raiders could leave after 2013, and I expect that they’ll use Santa Clara, Dublin, and maybe LA as leverage against Oakland/Alameda County to get the concessions they’re looking for, even if it doesn’t make any sense from the NFL’s perspective (loaning $400 million for two Bay Area stadia).

In other words, there are no immediate crises. One or two are somewhat looming. None of these situations requires the kind of effort that was made for the Vikings. The team’s lease expired after the 2011 season, creating a crisis scenario that propelled talks. As the other teams’ scenarios advance in the next year or so, we can expect to see more action on their plans.

05.09.12
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State bills Oakland $29 million for Henry J. Kaiser Center sale

Last summer, we followed the City of Oakland’s budget process with more attention than we normally would. The reason for the coverage was that the City was doing some financial trickery in order to make the budget work. In order to fill a $58 million budget deficit, Mayor Jean Quan tried to pass a parcel tax that would’ve covered half of that deficit. The parcel tax failed, which led to cuts. The City also sold the dormant Henry J. Kaiser Convention Center to the Oakland Redevelopment Agency for another $29 million. HJKCC is inoperable at the moment due to necessary repairs and retrofits, and it’s too expensive to run, making that $29 million a black hole.

Now Matier and Ross report that State Controller John Chiang is coming after that $29 million. Chiang has declared the land sale void, setting up a situation in which Oakland now owes the state $29 million. ORA is dead per legislation, however Oakland has set up a successor agency to continue projects already underway. It’s unclear what the City can do to plug this new-found gap. The property isn’t worth on the open market without either a discount to rehabilitate HJKCC. It couldn’t be demolished because it has historic landmark status. Some combination of additional asset sales and major cuts would also seem to be in order for the City. A major target could be the $3.5 million earmarked for the Coliseum City project, of which some percentage has already been spent.

The HJKCC situation is different from the Diridon ballpark land situation in San Jose, in that no money changed hands there. It was simply a transfer from one agency to another. Should Chiang go after the Diridon land in earnest, it would simply be auctioned off at the state’s discretion and they’d end up with the proceeds, with Lew Wolff potentially getting the land in a sale (though without the negotiated discount). In Oakland’s case, if HJKCC couldn’t be sold for the $29 million price or there were no bidders, the $29 million budget gap re-emerges. At this point there’s no telling what would have to be sacrificed to make ends meet. I have to think that the City has planned for this possibility, at least for the sake of Oakland citizens who may be adversely affected.

I thought it was strange that on other sites many were cheering news last week about land seizures because they could hurt San Jose’s ballpark efforts. The truth is a little more complicated than that, and on the surface, may be worse for Oakland. That’s why we looked at Oakland’s budget situation last year. It seemed unusual and ripe for a reversal. That chicken is coming home to roost.

Update 2:19 PM: Quick clarification on the HJKCC sale: $5.2 million was to be applied to this fiscal year and again to next fiscal year (2012-13), with the balance held in reserve.

05.09.12
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Wolff willing to meet with Knauss + Quan & Miley in Chron

From the end of Joe Stiglich’s recap of Tuesday night’s thrilling walk-off slam win (courtesy of Mark Purdy, I assume):

A’s owner Lew Wolff said Tuesday that he would be willing to meet with Don Knauss, the Clorox chief executive officer who is spearheading the latest effort to keep the team in Oakland. But Wolff, who is traveling in Europe, said he would spend most of that meeting outlining his unsuccessful efforts to build an East Bay ballpark.

“If they want to look at all that, I would do that,” Wolff said. “I would be delighted to meet with him.”

For the sake of argument, let’s say that they meet in mid-June. That’s after the owners meetings and before the All-Star break, and without knowing the two men’s schedules, probably enough lead time to schedule something. Wolff explained what he’s going to do, which is in all likelihood to give the presentation he gave MLB some time ago. Knauss will probably try to sell Wolff on Oakland. He may or may not bring up the Giants’ T-rights. He’ll bring up his Coca-Cola/Minute Maid experience. What will he have on hand to try to refute Wolff’s case against Oakland? Keep in mind that Wolff has been working on this stadium business for longer than Knauss has been at Clorox.

Coming out of this hypothetical meeting, expect both men to have their talking points. Wolff will explain that he’s tried everything he could. Knauss will probably say that circumstances merit a fresh approach. Beyond that, what should we expect? Prepared statements? Mini press-conferences? No one should expect some great solution to come out of meeting, or that Wolff will suddenly feel like selling the franchise.

Will Oakland backers continue their PR war for the next month? Interestingly, the thrust of this campaign currently goes over Wolff’s head – appealing to John Fisher and MLB, not addressing Wolff directly.

While most fans were reading the Tribune ad from early Tuesday morning, Oakland Mayor Jean Quan and Alameda County Supervisor Nate Miley penned their own op-ed in the Chronicle. From the piece:

Over the past three years, MLB has made it clear that any new A’s ballpark would require the public agencies to provide land, infrastructure and some parking while the team would finance construction. Under this type of public-private partnership, the city and county’s general fund would not be put at risk. The city and county already own the land, and only minor improvements to the infrastructure surrounding the ballpark are needed. There is ample land at the new ballpark Coliseum site to provide the team with development rights, which could assist with the financing. The parcel is large enough to meet Major League Baseball’s specifications.

That’s a curious selling point, because the reality of Coliseum City appears to be different, at least according to a case study published by the Airport Area Business Association in conjunction with Coliseum City principal JRDV and students at UC Berkeley’s Haas School of Business. From the study:

Oakland, Taking Control of Its Destiny

The Coliseum complex presents a unique opportunity to prepare a pioneering business model that generates revenue for both public and private interests. A winning plan to finance, build, and operate a new Oakland stadium will draw upon historical data and the successes of other urban cities across the U.S. in developing projects that revitalized their surrounding communities and invigorated local and regional economies.

The estimated community benefits amount to upwards of $1.3 billion in direct spending, tax collection, employment, and wage earnings. Nonetheless, can the City of Oakland and Alameda County really afford to go down this path again given that it is still repaying its previous Coliseum bond and loan debts of at least $145 million?

Can Oakland overcome the challenges and obstacles it faces, and make the new stadium a reality? Are the withdrawal of redevelopment monies, the negative perception of Oakland (and especially Deep East Oakland) by investors, and the soft commercial real estate market insurmountable? Can the City of Oakland and Alameda County garner the public support required to approve the necessary public financing and inspire investor confidence?

It’s funny, the PR campaign hasn’t mentioned much about the difficulties Oakland and Alameda County face. It’s also curious, though not surprising, that the study has no mention of the A’s as a future tenant at Coliseum City. It only considers the Raiders and Warriors. Quan and Miley want people to believe that putting in a new ballpark is as easy as adding a bedroom onto a house. It’s all part of the disjointed narrative that the Oakland lobby continues to push: no consensus on a site, all sites are great, no broad, honest public discussion of the obstacles any project faces.

Mile wide, inch deep.

P.S. – A snippet from today’s Oakland Tribune editorial gets the tone right:

The next step — and this will likely be one of the toughest ones — is for the city to demonstrate some uncharacteristic vision. It must grab this opportunity with a firm grip and hold on with all its might.

That will mean putting asunder petty bickering and other nonsense to come together in common purpose. Not just saying the words in a photo op, mind you, but actually doing it.

When was the last time the City of Oakland accomplished a major project that didn’t turn out to be a budget-busting mess marked by political infighting and legal drama?

05.08.12
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Ad/Open Letter to Fisher in today’s Oakland Tribune

The following letter was placed in today’s Tribune (PDF).

An Open Letter to John Fisher, Majority Owner of the Oakland A’s

May 8, 2012

Dear Mr. Fisher:

After five years of failed efforts to move the A’s out of Oakland, the time has come for you to sit down with Oakland and Alameda County officials to negotiate to keep the team in a world-class ballpark in Oakland. If you won’t do this, then, as long-time Oakland A’s fans, we’d ask that you please sell this once proud franchise to someone who will own and operate it as both a successful team and as a civic asset for our community.

Since moving to Oakland in 1968, the A’s have achieved tremendous success on the field, winning four World Championships, six American League Pennants, and 13 AL West division titles. The Oakland A’s have produced five Cy Young, seven MVP and seven Rookies of the year winners in Oakland – a far better record of success than almost any Major League team and certainly better than the San Francisco Giants.

Prior to your decision to buy the team, the people of the East Bay supported their A’s, regularly drawing in excess of 2 million fans a year while also receiving strong support from the business community. But your very public campaign to leave Oakland has taken a serious toll on the team’s ability to draw fans. Annual attendance has dropped 25% (from 1.9 to 1.4 million) in the five years since your management team proclaimed, “it’s out of the question” that the A’s will remain in Oakland. The drop-off is even worse if you go back to 2004, the year before you bought the team, when the A’s drew 2.2 million fans. Overall, during your ownership, attendance per game has dropped 33% from 27,000 to 18,000.

This decline in attendance following your ownership of the A’s comes at the same time the East Bay, the A’s territory, has continued to grow rapidly. In fact, the East Bay is one of the fastest growing regions in the area and is home to hundreds of large and growing companies including The Clorox Company, Kaiser Permanente, Safeway, Chevron, Pixar, Peet’s Coffee & Tea, Pandora, Dreyer’s Ice Cream, 24 Hour Fitness and Cost Plus to name just a few. And, the East Bay is also at the geographic center of one of the largest and most important television markets in the country.

And, while the market and the historic record of fan support make clear for all to see that the East Bay is a proven good baseball region, there is nothing that precludes the A’s from competing for corporate sponsorship and fans from Silicon Valley right now – other than, of course, the quality of the product on the field, commitment of the team to provide a good fan experience and the competence of management.

Above and beyond its demonstrated market capacity, the people of the East Bay reflect the mosaic that is California. It is one of the most diverse regions in the country and Oakland is perhaps the most diverse city in the country with large African-American, Latino and Asian-American populations. Baseball constantly talks about its commitment to diversity – and presumably such a commitment would apply to owners such as yourself embracing being in such a diverse market. Oakland and the East Bay’s diversity is a strength that the A’s management should be looking to benefit from and of which Major League Baseball should be proud.

We understand that you and your investors need to make a return on your investment. However, given what you paid for the team and its most recent Forbes magazine valuation, you will certainly achieve a very good return when you choose to sell the team. And, given that the East Bay has proven it is a good baseball market from a business perspective, you will be able to make even more money – and do the right thing as the steward of a civic asset that is so important to the region – by committing to three basic principles.

First, commit to actively work with the ongoing effort to build a new stadium in Oakland. This effort is well underway and making significant progress.

Second, commit to winning by investing in the team. To date, the enterprise value of the team has gone up; you make money through baseball’s revenue sharing model; and re-invest very little back into the product on the field.

And, third, commit to showing respect to the people of Oakland and the East Bay. Since you acquired the team, time and time again efforts have been made to disrespect the fan base and the broader community. Obvious corporate sponsors are never contacted. And, the fan experience at the ballpark is less than ideal as compared to other Major League venues.

Mr. Fisher, the time has come to do the right thing. Sit down. Talk. Agree to keep the team in Oakland where it belongs.

Respectfully,

Greg McConnell
President
Oakland Jobs & Housing Coalition

Mike Davie
Founder, BaseballOakland.com

Jorge Leon
President, Green Stampede

Joseph Haraburda
President & CEO
Oakland Metropolitan Chamber of Commerce

Sara Somers
A’s Season Ticket Holder Since 1988

05.07.12
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Capitol Raiders

No, I don’t mean the Raiders moving to Sacramento. I’m referring to the state’s raid on redevelopment agencies, which we discussed last week.

At issue is a matter of dates. The state contends that via its new redevelopment laws, transactions that occurred in 2011 between RDAs and third parties (developers) are up for review, and that those that were done after June 28, 2011 would be struck down. June 28 is notable because that’s the date that bill AB 1X 26 was signed by the Governor. (A companion bill, AB 1X 27, was also signed by Governor Brown, but was killed by the state Supreme Court in December, leaving no path forward for redevelopment as we knew it.)

Cities are saying that there is no implicit cut-off date because none was specified in the legislation. There are dates for when certain transition activities are supposed to occur, but those were not the “effective immediately” date the state is gunning for. The League of California Cities’ lawsuit was filed last July. October 1, 2011 was when the RDAs were supposed to wrap up all activities, but the lawsuit granted a limited stay, so the RDAs were able to continue operations to some extent. San Jose City Attorney Rick Doyle characterized the legislation as “rushed” when referring to the lack of a date. Now the cities are saying that the effective date is April 20, 2012, the date Controller John Chiang sent letters to affected cities ordering properties to be transferred to the state.

If October 1 is decided as the transfer date, both the SJDDA-Wolff land option deal (November 2011) and funding for the Coliseum City feasibility (March 2012) would be in jeopardy. In the land deal’s case, the property would be transferred to the state and would subsequently be sold or auctioned, preferably for as close to market value as possible. The key there is that Wolff locked in a discount based on the property’s use for a ballpark, a price that would be presumably lower than an open market price. If the state were to assume and sell the land, there would still be an opportunity for Wolff to buy the land. The market isn’t great in the Diridon area right now, but when speculation comes into play all bets are off. If the city refuses to put the ballpark  parcels on its transfer list, the state could sue to get the land, which would tie up the deal for some unknown amount of time. Eventually the land will be sold because the state needs to get proceeds for the state budget and for schools, so it’s a matter of when and how much as opposed to if.

In Oakland’s case, the problem is a matter of expenditure, not property. $3.5 million has been approved for the study, which is supposed to be concentrated in the Coliseum-Hegenberger-Edgewater area. If the state gets the funding for the study struck down, all work would have to be terminated and would remain incomplete, unless a third party came in and volunteered the funds for the rest of the study. Perhaps Let’s Go Oakland or Don Knauss’s group could front the money. The issue there is that both groups prefer waterfront ballpark sites over the Coliseum, so those precious resources may not be best spent on what is effectively a third option, and a bunch of stuff that is not related to a ballpark at all.

There’s also a third way that is emerging, though it’s definitely an edge case. The successor agencies that are taking over for the RDAs are county-based bodies that report to the state. Their boards ultimately decide how the assets get divvied up. Some counties have had their own redevelopment agencies that were also affected by the new law. In Sonoma County’s case, they’ve chosen to keep two redevelopment projects going that would normally have been turned over to the state because they felt the projects were worthwhile. There would appear to be a conflict of interest for in-county activities as opposed to city-county activities, which are more arms-length. Alameda County’s board could conceivably come to Oakland’s rescue because both are partners in the Coliseum JPA. At this point it’s too soon to tell if that will a matter of discussion.

Both the Oakland and San Jose situations are not quite doomsday scenarios (that already happened when 1X 26 was passed), but they create uncertainty and delay at the very least. For Lew Wolff it’s a matter of cost. If Bud Selig is looking to put off a decision until all of this shakes out, he certainly has reason to.