You may be wondering where I went since the EIR came out. Well, I buried myself in reading it for 2 weeks. I became increasingly disappointed in how so many of the mitigations and measures were being put off until later dates, to be instituted by other agencies. Then I woke up on New Year’s Day and realized that whatever I say about it, my words would not convince people unwilling to read them. So I stayed quiet and watched football instead. It’s very American.
Remember how in October, I wrote that we were reaching the end of non-binding season regarding Howard Terminal? I hate to inform you that end was delayed. Tonight, Oakland’s Planning Commission voted 6-0 to recommend certification of the Howard Terminal Final EIR. Chair Clark Manus reminded everyone early on that the vote wasn’t to certify the document as that could only be done by the City Council. That vote could happen as early as a month from now. Beyond the mealy-mouthed statements about how there are still many questions remaining and the hopeful speculation by the Commission and the clearly outnumbered project supporters during the hearing, what did we really get? I’ll tell you.
It was practice.
Throughout the four-hour session, the commission was peppered with commenters pleading to table the recommendation until further study could be done. The commission’s counter-argument was that the Draft EIR and Final EIR were done and complete, which should be enough for the limited CEQA scope of the commission. Of course, there were plenty of arguments from the assembled commenters that the EIRs were, in fact, not complete. The decision was made around 7 PM rather swiftly, which made me think it was a fait accompli. There was a little aside at the end, however:
Again, the commission approved a recommendation. The details – deals, covenants, agreements, litigation – are all off in the future. Perhaps they won’t actually happen until the EIR is certified and then the power of AB 734 kicks in. Once that happens, all of the aggrieved parties can file their lawsuits and get their pound of flesh from the project. You think CEQA is ugly, wait until various public and private entities line up to get whatever limited funds John Fisher decides is worth the cost of Howard Terminal. For years I hoped that the A’s would truly try to get ahead of the coming storm and work out mutually beneficial deals for the various ethnic and community groups, let alone the small and large commercial entities that work at the Port. I was so naive.
But I don’t think it’ll get that far. You see, I don’t expect these unresolved issues to magically resolve themselves in the next month. Or two-three months, or even nine months as the law limits negotiations. Instead, what will probably happen is what always happens in California when a government has a problem that is too massive and difficult to solve: they’ll put it to a referendum. The pressure from the lobbying groups and citizens will ratchet up, and the Council will do it to relieve some of that pressure.
Do you honestly expect anything different?
P.S. – For all the complaints about CEQA, it’s funny to hear the refrain from the commission members that they were bound by CEQA. CEQA allowed this project to be so tightly restricted in scope that in a way it’s above reproach. Complain about that!
Best moment of last night’s Alameda County Board of Supervisors meeting came shortly after Oakland Mayor Libby Schaaf presented her Howard Terminal pitch over Zoom. In the discussion that followed nearly 2 hours into the item and 5 hours into the meeting, questions came up about what the Supervisors wanted to do with the resolution at hand that night. Eventually it became a matter of semantics with a debate over whether the Supes were putting together a “declaration of intent” or a “declaration of willingness.” I started to chuckle at the absurdity of that display as the County Counsel tried to verify whether the language of the resolution properly referred to it being “non-binding” (it did). Here’s the relevant language:
Section 2. The Board hereby declares the non-binding intent of the County to contribute the County’s share of the incremental property taxes, inclusive of property taxes in lieu of vehicle license fees, that will be generated from development of the Waterfront Ballpark District at Howard Terminal into an EIFD to be formed over the project site for the purpose of financing affordable housing, parks, and other infrastructure of community-wide significance, for a period of 45 years and that the County’s commitment to contribute would not guarantee a specific amount, would solely be limited to contributing such taxes actually received.
And to put a finer point on it:
Section 3. The Board hereby finds that this declaration of non-binding intent to is not subject to CEQA because this action is non-binding, does not result in any discretionary approval or grant vested development rights, and does not commit the County to any definite course of action; accordingly, this action does not constitute a “project” under CEQA Guidelines.
Supervisor Wilma Chan declared support for the motion with a hedge, saying that the Board could easily go back on the non-binding vote. That stands in stark contrast to Board President and Supervisor Keith Carson, who said that he didn’t want to vote in that manner. In fact, he said that a non-binding vote once cast, is hard to walk away from. Debate aside, the question of a non-binding vote’s political power will be rendered moot soon as far as Howard Terminal is concerned. That’s because with Alameda County voting 4-1 to pledge its share of property taxes from the development, they’re now a party to this as long as the project continues to move forward. Let’s be clear on this point, however: last night was for all intents and purposes the last “non-binding” vote for Howard Terminal. Just about everything from here on it, whether it’s a decision taken by the City of Oakland, Port of Oakland, Alameda County, BCDC, or SLC, is very much a binding decision.
The takeaway is that it’s hard to play Kool and the Gang’s “Celebration” after all of this. The fact of the matter is that these were supposed to be the easy votes, the rubber stamps. They weren’t. There’s little reason to take a single item marked by its legal impotence and turn it into a 7.5-hour marathon session. The votes from this point forward only become more difficult, whether we’re talking about the EIR certification or the actual business deal to develop the land. Those will be make or break votes, the ones where truly tough decisions will have to be made. But first, the EIR.
Under the radar, Chan mentioned that the A’s, who are providing the loans for the infrastructure at Howard Terminal, will charge interest to the City and County for those loans. This should be interpreted a couple of ways. First, as the A’s are a private entity, they aren’t expected to be eligible for tax-free loans even if it’s for public infrastructure, which is mostly funded by municipal bonds. Here’s where I will have to defer to an expert on public finance, as it’s unclear where the private part ends and the public part begins. I also have no idea what would happen if, in the next 2-3 years, interest rates go up. Would that cause the A’s to back out of some part of the private financing pledge because it doesn’t pencil out compared to traditional municipal bonds. It’s worth considering the implications. Note that the current discussions have City and County pulling together to create a PFA (public financing authority) for infrastructure bonds.
Former City of Alameda Mayor and current Councilperson Trish Herrera Spencer spoke during the public comments period about a letter drawn up by the City of Alameda in support of the Howard Terminal project. It was nixed apparently because resoundingly negative feedback (43 comments against, 2 for).
Not to be forgotten is how the state of Washington put up hundreds of millions in infrastructure including the surface roads and ramps connecting the freeways to the Port. And we can’t forget the the big public subsidies in both stadiums. A better, more current example of this conflict is the SoDo arena proposal, planned for the same area to the south of the stadiums. It was harshly opposed by the Port of Seattle and died during the process, which allowed the existing arena (Key Arena/Seattle Center Coliseum) to be rebuilt as a NHL venue which opened this year, Climate Pledge Arena.
Alameda County also asked for the A’s to pay for a further Howard Terminal study whose scope is uncertain. A’s President Dave Kaval responded positively to that request. I think there’s already supposed to be a thorough economic impact study encompassing the regional impact. I’m not sure if Alameda County wants to help define or expand that.
There was also some confusion about who initiated the City’s request of the County to enter the EIFD. Kaval confirmed that the A’s did not make such a request, which apparently was a rumor dating back from earlier in the spring. The A’s also didn’t want the City to scrap the second IFD proposed at Jack London Square either. For better or worse, the City of Oakland has the reins now. The ball is fully in the City’s court.
The off-site cost estimate is currently $351.9 million and is the sole responsibility of the City, which is hoping a state windfall will help. Federal funds are looking less likely with each passing day. Memorize that number for future reference.
Responses to the public comments are coming. If the Final EIR drops before the December break, it will kick off a new comment period which will probably be extended like the Draft comment period was. After that, we’ll get proper breakdowns for mitigation cost estimates and alternative steps, if not wholesale changes in the plan. If everything goes well, there’s a chance it could all be approved by Opening Day. Given how this project’s only constant is its inability to stick to its timeline, I wouldn’t bet on it.
As usual, I took notes of what I felt was important. Read the 19-tweet thread to start, then read the rest of this post.
Like the Planning Commission hearing from April, the Design Review Committee hearing was chaired by Clark Manus. Unlike April, Howard Terminal in its current form is further along than a mere “napkin sketch.” That doesn’t mean there aren’t a host of issues to work out. Manus and the other commissioners on hand, Jonathan Fearn and Tom Limon, expressed hope and positivity over the project. Manus in particular is close to considering the Maritime Reservation Scenario, in a which a chunk of Howard Terminal has to be lopped off for a wider turning basin for container ships, a nearly foregone conclusion. All three pointed to very high building heights along the bay as cause for concern. One or two of the residential towers in particular would be the highest on the Bayfront, higher than anything similarly along the SF waterfront (or anywhere else in the Bay for that matter). These concerns nearly tripped up the Brooklyn Basin project until that was also approved with with mostly mid-rise structures.
For now, the big takeaways are the concerns from the DRC that building such a large, tall project along Oakland’s waterfront would effectively create a second downtown, competing with the existing downtown instead of complementing it. The other is the the shipping industry continuing to press for details on the expanded turning basin, which apparently needs a sizable buffer to protect ship traffic. Will that buffer be 500 feet as requested by industry, or 300 or less as requested by the applicant? We may not find out until the Final EIR is released.
The last thing that got serious attention was the still unresolved grade separation issue. City Planner Peterson Vollmann confirmed that the project still only has a pedestrian bridge in the plan with a vehicular bridge as an alternative. The trucking and rail interests are adamant that the vehicular bridge has to be included, even demanding it get built before anything else. Take a look at the map below, which shows the percentage of fans who will arrive on gameday based on intersection and mode (car, foot, bike). That’s SIX intersections crossing the existing tracks, only one of which is a promised grade-separated pedestrian bridge.
The project is being set up to have a bunch of details decided when the Final EIR is released and approved, which the City is projected towards the end of October. Since the A’s on the field are slipping out of the pennant race, some good news in October would be nice. Yet you should expect another series of fights. And hopefully next time there will be fewer arbitrary deadlines like the 7/20 City Council vote that was supposed to change everything.
Assuming the Maritime Reservation Scenario is built, the A’s will simply cram all of their planned development into the smaller footprint, about 37 acres. You know what that means: Taller buildings. Not under any significant discussion today was the ballpark itself, which is much lower than the ancillary development to the west.
The A’s played a short set at Petco this week. I couldn’t make it, though I really should’ve planned better because I could’ve had the unique doubleheader of an A’s road game and celebrating the birth of a nephew as my brother and his family live in San Diego. I mean, how often does anyone get to experience that?
(Update: Nephew was due Tuesday, not delivered yet which makes him technically a squatter)
While I’m not nervously waiting in San Diego this week, I was able to visit over the recent holiday weekend. While there I made my first visit Petco Park in seven years. The Padres were out of town, so no game. I had already taken the tour previously, so no tour either this time. Instead I walked around the Gaslamp District and contemplated it.
Much has been written about the Gaslamp, the mostly commercial area between the docks and Downtown. Redevelopment there started in earnest in the 1970’s with preservation efforts. The district had its share of urban blight which allowed city leaders to decide which building merited keeping or a bulldozer. As that was decided, the Gaslamp got swept up into the urban renewal craze. That led to redevelopment misses like the Horton Plaza mall and hits like Petco Park.
I started my trip on a SDMTS bus from my hotel in North San Diego to Downtown. The trip ended at Broadway and 10th Avenue, a half-mile walk from Petco Park. As I crossed the street I was greeted with the familiar scent of urine. Ah, maybe the East Village isn’t fully gentrified yet, I thought. The walk was otherwise pleasant with a slight downslope all the way to the ballpark. I got a snack and beverage nearby and planted myself in the Park at the Park, which based on my previous experiences changed for the worse. The park remains publicly accessible yet feels far more restricted due to many of the spaces within it being claimed for different types of private uses. When it first opened the Park also had a number of transients in it whenever I went, so I imagine that renting it out was just as much to keep out that element as anything revenue-related. Should Howard Terminal come to fruition, the A’s will have to figure out how to manage that element in what will be a much larger and more complex space, from the roof deck to the waterfront spaces beyond the playing field.
Petco Park arrived as the Gaslamp’s redevelopment went full blast. Some of that was boosted by a huge land giveaway to then-owner of the Padres, John Moores, and his development wing JMI Realty. Petco Park was completed in 2004 after securing $300 million in public funding. Moores also got a development rights to 24 blocks around Petco, which led to nearly 3,000 housing units, millions of square feet of retail and commercial space, and a separate 7.1-acre Ballpark Village to the east of the ballpark (note incorrect graphic in link). Getting to opening day was a bumpy road, as the project was rife with political scandal over illegal gift-giving and lawsuits.
The delays allowed SDMTS to catch up in terms of building infrastructure. The Blue and Orange Trolley lines were already in place a block east of the ballpark, but another plan was coming into place. To get more fans from the I-8 corridor all the way out to SDSU and beyond, MTS planned to extend the Green Line from the Old Town station East of I-5 and into Downtown. Eventually the line would terminate at the 12th Street/Imperial station, the same transfer hub for the Blue and Orange lines. Until then, Green Line users would have to transfer at Old Town to Blue/Orange Trolleys. The finished system downtown effectively creates a loop around all of Downtown San Diego, including the Convention Center and tourist attractions along Harbor Drive. In addition, a new Silver line historic trolley now runs that loop.
Infrastructure is a long game, though. While the Blue and Orange lines were already in place prior to the Padres’ 2004 Opening Day, the Green Line wouldn’t start operation until 2005. Its extension to downtown didn’t start service until fall 2012. The Green Line’s Gaslamp Quarter station is a mere Fernando Tatis, Jr. blast away from the third base gate, while the 12th/Imperial station is 800 feet away from the home plate gate. At least that’s better than nearly a mile, which is the distance to the Santa Fe Depot for Amtrak/Coaster trains (or Howard Terminal’s distance from BART for that matter).
The other aspect to the infrastructure long game was the BNSF’s active rail line west of the ballpark. Sandwiched between Petco and Harbor Drive, BNSF also had to make room for the Green Line expansion. To make it all work, vehicular access across Harbor Drive near the ballpark was limited to two intersections, 1st Ave and 5th Ave. Fencing was built all along Harbor to dissuade pedestrians from playing chicken with trains, though occasionally a train would stop in front of the ballpark, allowing for some interesting interactions. The idea is that mitigation measures should reduce those interactions as much as possible. A pedestrian bridge was built over Harbor, connecting the San Diego Convention Center and the Hilton Bayfront to Petco and the 12th/Imperial station. Besides the convention center and hotel access, the two facilities also housed more than 3,000 parking spaces.
The way Petco is situated, most fans won’t cross the tracks along Harbor Drive. They disembark at one of the Trolley stations nearby and walk safely to the ballpark. Or they take a bus or ride share to within the vicinity of Petco. Or they’ll park at one of the nearby lots in the East Village. There’s even a designated Tailgate lot, which seems inconceivable in a downtown area in 2021. Regardless of the method of travel, the average fan is unlikely to interact with a freight train due to how everything was planned. At Petco, the Trolley serves as a buffer surrounding the ballpark. Again, it’s well conceived and serves the City and County well. If you’re coming from SDSU, Santee, San Ysidro, or Mission Valley, you’re covered. The Trolley is in the midst of an expansion program, which will finally bring service all the way to La Jolla and UCSD. They’re also building express lanes on I-5 to benefit people who are less likely to take transit.
The EIR describes the mandatory grade separation for pedestrians, which is planned along Jefferson Street. The vehicular grade separation is practically a given at Market Street, especially if Union Pacific and the Federal Rail Administration demand it upfront as a condition of their project acceptance. Now that the City is taking responsibility for the off-site infrastructure, the grade separations are now the City’s problem. They will try to get money from the new federal infrastructure bill, of which a Senate version passed today with bipartisan support. Should Congresswoman Nancy Skinner succeed in competing for and securing the funds, the City will be part of the way there. To do it right they’ll also have to expand the fencing along Embarcadero. Remember how I pointed out that there are only two at-grade crossings near Petco? When you take away Jefferson and Market, Howard Terminal has *six* crossings to worry about. If this is to be done right, that fencing has to expand big time.
P.S. – The bus yard next to the Tailgate lot was once considered for a Chargers stadium.
P.P.S. – For more info on the history of the SDMTS Trolley system, check out this fine video.
We’ve seen a wide range of reaction pieces in the wake of the Tuesday’s City Council meeting in which the Council voted on their own proposal, not the A’s own plans. The A’s and MLB responded in the negative, which was to be expected. Since then, Howard Terminal supporters took the A’s choice to let their legal team review the City’s proposal and not dismiss it outright as a hopeful sign. Which was, well, also to be expected. The supporters are ready, bent over, crying to the A’s, “Thank you sir, may I have another?”
If Oakland wants to feed that appetite, it should be allowed to do so. It shouldn’t involve Alameda County in any part of it. I liken it to a recent college graduate who didn’t get the dream job right after graduation. Six months into the search, he has an opportunity to get a decent job, one that could give him a good income, pay back his loans, and move out of his parents’ house. All that’s required is a lengthy commute. He has a 2011 Honda Accord as his steed, but trusty as it is, it has 100,000 miles on it. He has designs on a Tesla Model 3. He tried to buy one earlier but found that without an income and a good credit score he’ll need his parents to co-sign the loan. Clearly he doesn’t need the Model 3, but it would make him feel good!
Alameda County, as the parents in this labored metaphor, want to empty the nest, downsize, and travel during retirement. That’s why they sold their half of the Coliseum. The City is holding onto their half despite historically having greater difficulty servicing their share of the Mount Davis debt. Alameda County knew when to call it a night. Oakland can’t do it. After the Tuesday Howard Terminal session, Council entered negotiations sell their half to one of two Black-led developer groups, with an upfront promise of a WNBA team at the vacant Oakland Arena and the future promise of a NFL stadium (AASEG) or a MLB ballpark (Dave Stewart/Lonnie Murray).
The City will give itself six months to evaluate either bid, then decide on one to enter one of those vaunted Exclusive Negotiating Agreements. The A’s surrendered their position when they shifted completely to Howard Terminal, but thanks to their agreement to buy the County’s half of the Coliseum, they will have their own say in the Coliseum’s future. Six months is fine as I wasn’t planning to cover that deal until the offseason begins.
With that pending distraction on the back burner, let’s take a look at what the City approved during the Howard Terminal session. Out of all the mostly nothingburger was one really important bit of news.
I don’t know what the City and the A’s spent much of the weekend negotiating, but for the City to say they’ll handle the responsibilities of the offsite IFD is a mind boggling bit of capitulation on their part. Let’s take a step back and consider what this really means for the project. First of all, the A’s are essentially not responsible for any of the needed transportation improvements outside Howard Terminal. They’ll handle the cleanup and grading of the 55-acres, sure. The grade separations and other rail safety measures? City’s problem. The transit hub? City. The ongoing cost of whatever shuttles have to be run between the BART stations and the development? Also the City. In a previous post I lamented how the Howard Terminal vision didn’t include the transportation infrastructure onsite. Now that chicken is coming home to roost. You can try to argue how much this tax or that assessment will help fund it, the fact is that it’s the City’s responsibility.
In that capitulation, Oakland still has the temerity to request Alameda County’s participation in the Howard Terminal IFD. Supporters are actually saying the County just has to turn on the faucet and let the tax increment come out. No big deal, right? But they’re forgetting that once the County opts in, they have to create their own Public Financing Authority to run the tax increment collection and governance of Howard Terminal. That’s on top of the existing jurisdiction of the Port. So City is asking County to help create its own Coliseum Jr. on the waterfront. Sounds like a great proposal for a party that wants to get out of the pro sports game, no?
Naturally, those infrastructure imperatives will compete with community benefits, which are still being negotiated at the moment, and because they are being tacked on are likely to be the last items in line to be funded if any funding is left over. Maybe in 20 years when the vision is developed and mature, and the collected tax increment catches up. The A’s proposal sets forth $450 million, which all parties will end up competing for like Oakland’s running its own civic funding reality show.
But there’s state and federal funding to be had, right? A Politico report points to $280 million made available by Governor Newsom that could be leveraged for the Port. The report focused on this phrase:
“improvements that facilitate enhanced freight and passenger access and to promote the efficient and safe movement of goods and people.”
What does that mean in the context of Howard Terminal? Expanded ferry service? Maybe, though that doesn’t help the existing fanbase much if at all as most of them aren’t on the water or have access to a ferry terminal. The proposal doesn’t include a new Amtrak station at Howard Terminal. Freight? By repurposing Howard Terminal for commercial and residential use, the A’s and City are taking freight out of the equation except for the possibility of providing funds for the grade separation. Which is great in theory, but doesn’t actually make the Port’s shipping operations more efficient or productive than the status quo.
As for federal funds? Republicans filibustered the first vote on the current infrastructure bill yesterday. It looks like the Democrats will take a shot next week, pairing the bill with a social safety net bill as they try to get it through the Senate. Will it provide the kind of funding this project needs? Tune in next week to see what comes out of the sausage grinder. Note that Congress has its own recess in a week, just like their counterparts in City/County/State government.
As Howard Terminal supporters look far afield for dropped coins to fund this boondoggle, I’m reminded of the lengths Oakland and Alameda County had to go to get the Coliseum complex funded initially. Some things don’t change. It also reminds me of former Mayor Jean Quan’s desperate attempts to get Coliseum City funded by the use of a controversial visa program and also by name checking the “Prince of Dubai.” It isn’t enough to do things on a manageable scale in Oakland. The thirst to become a big city never dies. It evolves into something more wretched, more complex. Who’s willing to co-sign this one?
Friday morning started off with great anticipation, as fans and the media eagerly awaited the City of Oakland’s version of a term sheet. As I wrote last week, the City and the A’s are working at cross purposes in trying to come to terms, as the A’s don’t want to stray too far from what they proposed while the City wants change enough of it for the City Council to pass it.
The term sheet with attachments dropped Friday morning at 9:15 AM. Reporters from all major Bay Area print and broadcast outlets swooped in to study it. Now keep in mind that the City is now dealing with two term sheets, the one proposed by the A’s during the spring and the version put together by City staff. While the A’s and City keep working to come to agreements on major deal points, the only big achievement so far is a consensus on a 25-year non-relocation clause, up from 20 proposed originally by the A’s.
The City’s term sheet entirely omits the offsite IFD (infrastructure financing district), called JLS though it doesn’t include Jack London Square proper. Instead the focus is on a single IFD at the 55-acre Howard Terminal site. From a passage standpoint this is the best move by the City, since the offsite IFD didn’t have broad support and likely wouldn’t withstand a vote of property owners to tax themselves. However, the A’s lobbied for the offsite IFD from the beginning and continue to push for it, turning the issue into a potential showstopper.
Casey Pratt from ABC7 and Brodie Brazil from NBC Sports California both interviewed A’s President Dave Kaval later in the day. Kaval didn’t budge much on the IFD stance, though Pratt caught Kaval not being forthcoming about the state of a potential short-term extension at the Coliseum. I started to feel uneasy at points in both interviews as I got the feeling that Pratt and Brazil were practically negotiating, but for what? The City has its own negotiating team, as do the A’s. Were they representing fans, who until now have been criminally underrepresented? Perhaps, though there are always dangers in turning this already public negotiation even more public. I understand wanting to give fans some nuggets of hope, but this isn’t the way to do it. It’s already a confusing mess, since if the resolution passes on Tuesday it will likely be rejected out of hand by the A’s. If it’s voted down, which the A’s prefer, the City will have to go back to the drawing board while the A’s will have license to look beyond Vegas in terms of relocation. Hell, they’ll have the freedom regardless of what happens on Tuesday. That Kaval already has a Vegas trip planned immediately after the vote indicates that Kaval and Fisher are anticipating either outcome.
What I find puzzling is that at some point in the past 3/6/12/18 months the City should have recognized the offsite IFD was a loser and proactively adjusted the plan accordingly, or at least pushed the applicant (the A’s) in that direction. Now City has a funding gap of $351.9 million and no clear path(s) to bridge it. Kaval mentioned in one of the previous public hearings that the A’s could get the ballpark built with only $22 million in infrastructure built prior to opening day. My guess is that $22 million would go only towards the fencing and other safety measures that would be required for minimal rail safety, though obviously that’s far short of the full grade separation wanted by Union Pacific and Amtrak.
The A’s chose to propose the ballpark with all of the virtually all of the needed infrastructure, especially the transit hub, located offsite. In doing so, they made the offsite part of the project much more expensive. The transit hub, which will cover a two-block stretch of 2nd Street, is likely to cost $50-100 million to implement. There are also the bridges to build for grade separation. If the A’s included the transit hub as part of the Howard Terminal IFD, they could’ve reduced the offsite cost while providing a reasons for the City to invest in the transit hub: efficiency and better packaging. The team probably didn’t go this route because they didn’t want a transit hub right next to their luxurious condo towers. The funny thing about that is that because they already conceded the western blocks of the site as a buffer against Schnitzer Steel, those blocks are set up well for office uses, parking, and a transit hub if they want it.
Even if the transit hub is relocated, the grade separations remain a priority, even moreso because of the refocused traffic. That $352 million cost doesn’t magically go away. As I leafed through the term sheet it struck me that the offsite infrastructure cost is about the same as the construction cost for PacBell/AT&T/Oracle Park (not adjusted for inflation). It never gets cheaper, and as the A’s keep dillydallying with sites and cities, the price will continue to rise especially if new requirements they didn’t anticipate 10 or 20 years ago are piled on.
Other cities will be talked about as the A’s and MLB grow more frustrated with Oakland. These days that’s par for the course. Just remember that there are a couple factors that will have sway that no candidate city can control. One is inflation, or the rising cost of construction. That’s partly explained by building more complex buildings than what used to be standard (see my visit to Globe Life Field as the most recent example). Places that need retractable roofs and comprehensive HVAC systems can add a cool $300-400 million off the top. That’s an equalizer for Oakland. The other factor is written into the MLB’s constitution.
As a team in one of the largest markets, the A’s agreed to be taken off revenue sharing indefinitely. When that occurred I complained that Oakland, while in the powerhouse Bay Area, is functionally more of a mid-market team like San Diego or team in the Midwest due to its inherent disadvantages in media and location. Regardless, the A’s have to play by big boy rules, so they get no quarter, no revenue sharing. That means that any move to a new market (Portland, Las Vegas, Vancouver) must be contemplated not only as a new market, but also a market that will require the A’s to go on revenue sharing due to yes, inherent disadvantages in media and location or market size. If MLB’s philosophy is to get franchises off revenue sharing as a necessity (call it small market welfare), moving the A’s to a much smaller market contradicts that notion. Ironically, crippling the A’s revenue picture a few years ago may be the one thing that saves the A’s for Oakland in the end. If only they can get a ballpark built.
P.S. – The Oakland Coliseum is about 16 acres in size. It’s huge. The Howard Terminal looks very close, maybe 14 acres. The packaging could be a lot better for 30,000 seats.
After the release of the Howard Terminal Draft EIR, I waited for the compiled comments to become available. Beneath the pleas from transit agencies and housing groups, there was a video provided by none other than Union Pacific (UPRR). The well-produced video comment is not much longer than a typical music video and comes with a highly professional voiceover.
Union Pacific continues to raise concerns over the project, saying that it will impact its operations. The chief problem is that when a train stops at UPRR’s yard to the west of Howard Terminal, it will often be stuck there for 10-45 minutes as a long train is effectively split into three parts to fit it into the tracks at the yard. After that switching activity is completed the train can be loaded or unloaded. Presumably, the train has to be reassembled to some extent in order to begin its next journey.
Okay, we knew that going in, nothing new, right? Ah, but there’s a twist. UPRR acknowledges that despite its concerns, the City of Oakland could plow ahead with the project anyway. If that happens, UPRR is prepared to make demands. The big ask, which I heard from PMSA’s Mike Jacob in a discussion with Zennie Abraham yesterday, is that UPRR will request that all construction traffic be grade separated from the active rail line before construction on the rest of the project begins.
It’s a reasonable request from a safety standpoint, one that I could see the Federal Rail Administration, Caltrans, and Amtrak supporting. If you’re going to reduce the risk of train-automobile or train-pedestrian/bike interactions, putting in a grade separation at Market Street (location not finalized) makes sense. The problem with that what we’re really talking about is putting in a big concrete bridge at Market, a piece of infrastructure that the A’s have been hesitant to commit to. As UPRR’s Robert Bylsma wrote in May:
Of course, a fully grade-separated entrance to the site that can handle trucks and heavy iron won’t be cheap. It’s not a showstopper, since if that’s the cost of doing business at Howard Terminal, that’s the cost of doing business. It does push a major project cost to the front of the line where it would compete with other line items. Plus there’s the visual issue of an eyesore bridge going up before the ballpark or anything else along the waterfront. During last week’s session, City staff still considered the vehicular grade separation an alternative, not a requirement.
With the separate vehicular and pedestrian bridges added to the project, the grade separation cost alone threatens to run into the $300 million range. There’s no surprise there. Good quality infrastructure costs money. When HT was considered 10 years ago for a ballpark, guess how much a new BART station at Market or Brush streets was estimated to cost? $250-300 million. I guess in hindsight I can see why A’s ownership is being so tightfisted about an item as fundamental in 2021 as affordable housing. Even if your budget is projected to hit $12 Billion, every $300 million counts.
It’s the early morning of July 8. In less than two weeks, the City of Oakland is scheduled to vote on a term sheet, which despite it being a non-binding document, could play a major role in determining whether the Oakland A’s remain the Oakland A’s. Will it be the term sheet submitted by the A’s? A term sheet written by City staff? Or a compromise version that incorporates key principles from both parties? Or will the parties reassess this mess of a situation, and punt?
Towards the end of today’s study session, Council Member Dan Kalb, who chairs the Community and Economic Development Committee, offered his assessment of how Howard Terminal has progressed since the beginning of the year:
Tonight I’m hearing from the optimists that this all smacks of negotiation in one form or another. Looking at it through Kalb’s (and the other City Council members’) prism, the view is much more chaotic. We are now to believe that the A’s provided their term sheet in January with every intention of getting it approved with minimal changes. Then, having not received much feedback early this year, the A’s publicly released the term sheet in April. City staff, with its divergent goal of getting a term sheet in place that would get enough votes for the Council to approve it – a markedly different goal from the A’s take-it-or-leave-it proposal – scrambled to get that passable term sheet in place. As of now it’s still not finalized. Once it is, if it is passed, it will go back to the A’s for their approval or markup. Or the A’s could find points to compromise and approve it, or dismiss it altogether.
That’s a wide range of outcomes to have at this artificially late stage of the game. There are major deal points that have not been agreed upon yet, chiefly the issues of affordable housing within Howard Terminal and the fate of the “offsite” IFD encompassing much of the area north of Howard Terminal and going west to Mandela Parkway and east all the way to Oak Street. I tweeted out a snap poll to gauge which was most important among the four main issues I identified.
The affordable housing question seems like the most cut-and-dried issue. Simply put, any major development in Oakland requires a percentage of it to be considered affordable housing. The target is 15%, though because Howard Terminal is under the Oakland Army Base redevelopment rules, the target at HT is only 8%. That equates to 240 affordable homes in the final buildout. A lowered goal should be achievable, right? Not for the A’s, who feel they’re already providing enough via tax increment from the development that could fund affordable housing elsewhere. That argument worked well 20 years ago when California’s housing crisis was less stark. Now it’s downright unreasonable to expect that a developer could go this route especially with the historically poor yields of finished affordable housing throughout the Bay Area.
To illustrate, let’s posit that a newer one-bedroom apartment at HT costs $2,300/month. Under one measure, affordable housing could mean that apartment costs a qualified renter $1,500/month, plus an $800 monthly subsidy paid by an affordable housing fund. That subsidy translates to roughly $10,000 per year, which multiplied by 240 units equals $2.4 million per year. I recognize I’m oversimplifying the problem with this illustration because I’m not tackling levels of affordability, but it should serve the discussion well. No matter how you slice it, that’s a hefty expenditure to be paid by tax increment, a developer, or a renter.
Next up, let’s look at the non-relocation clause. The City wants a term of at least 45 years, which would keep the A’s in Oakland for the next generation or two. The A’s are promising only 20 years, which they say is in keeping with other markets where, as Dave Kaval pointed out, the ballpark is often publicly financed (meaning the City is putting skin in the game). If the City isn’t directly subsidizing the ballpark, the A’s have less reason to take a longer than standard contract. From a practical standpoint, it’s rare to see relocation occur when the first lease term ends, mostly because a team has spent enough time and resources cultivating its home fanbase that it seems wasteful to pursue another so quickly. That generally holds true in baseball, where the last relocation was in 1972 (Washington Senators-Texas Rangers). In other sports it’s far more common, whether you’re talking about the Raiders or hockey in Atlanta. Usually whatever complaints a team has about its venue or market can be addressed by upgrading the facility or building elsewhere in the same market. The A’s sudden scorched earth campaign has sort of laid waste to Oakland, leaving Howard Terminal as the only desirable spot in the East Bay market.
The other major issue concerned the two IFDs or infrastructure financing districts. The A’s prefer two, one at the 55-acre Howard Terminal site and the offsite JLS site. City prefers a single IFD which would essentially be Howard Terminal with few surrounding parcels. City thinks the single IFD structure would be easier to get buy-in from Alameda County, which as you might have heard, isn’t exactly jumping for joy at the prospect. For their part, the A’s continue to say that they need both IFDs to ensure there’s enough tax increment revenue to cover all of the infrastructure and other costs. The problem with this is that without the JLS IFD there’s a major funding gap. As @hyphy_republic noted, City has identified Port-related sources that could backfill that need. Those would have to be studied thoroughly for their efficacy. As I started processing this detail, it occurred to me how ironic it is for the City go to the Port for funding while alienating Port stakeholders who are among the harshest critics of the proposal.
Lastly, there’s a question about the amount of community benefits in the package. The concern is that most of the money raised by tax increment usually goes straight to hard infrastructure in a straight line, or perhaps affordable housing. Other community programs may be more likely to be sacrificed in the event of a budget crunch or just plain old-fashioned value engineering.
Look, I have no idea if the term sheet will pass in less than two weeks. It might, and then in September the County could choose not to take part, wrecking the project. Again, someone could punt on 7/20 and hope MLB doesn’t accelerate relocation talks. All I know is that this project has now come up in three separate major public hearings in the last two months: the Oakland Planning Commission, the Alameda County Board of Supervisors, and now the Oakland City Council. In every venue there was serious tension and rancor between the governing body and the applicant (the A’s). You’re not going to just wipe it away by calling it negotiation. This is much deeper than mere negotiation. The City and the A’s appear to be at cross purposes, and if you throw the County into the mix, all three are. This is what I worried about when Howard Terminal was first proposed and when it came back to life. It’s an already complex set of circumstances made all the more complicated by the current regional economy. Maybe there is a breakthrough on the horizon. Judging from CM Kalb’s reaction, he was expecting a breakthrough sometime ago. It ended up being a mirage.
P.S. – The City has officially opened up discussions on its half of the Coliseum complex. I’ll save that discussion for another day.
P.P.S. – You read that right earlier and I almost forgot to mention it. During the hearding, the A’s filed a suit against Schnitzer Steel alleging a Clean Air Act violation. Now that’s some multitasking.