Category Archives: Oakland

05.31.12
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Tuman: Oakland should be like Brooklyn, not Detroit

Joe Tuman re-entered the public sphere in Oakland today with a scathing indictment of Oakland’s attempts (such as they are) to keep its pro teams in town. In an op-ed in the Tribune, Tuman called the Coliseum City project’s proponents in City Hall “depressing” and “in denial”. Those words could be important a five months from now, as Tuman is running for the At-Large City Council seat this year against Rebecca Kaplan. Both were also in the 2010 mayoral election, with Kaplan finishing 3rd and Tuman 4th to Jean Quan.

First, back to Tuman’s column. Tuman, who is also a professor of communications at SF State, compared Coliseum City (and indirectly, Victory Court) to China Basin and AT&T Park.

What did work in San Francisco is the new AT&T baseball park. But while we in Oakland admire that, we often overlook that economic redevelopment of SOMA (south of Market area) was under way before the new ballpark was planned or constructed.

It occurred because so many tech companies and startups wanted office and loft space in the less-expensive SOMA area.

Tuman absolutely nails it here. Yes, the Giants deserve credit for transforming a rundown section of San Francisco, but let’s remember that in 1997, the region was in the throes of the dot-com boom, epicentered only a few blocks from the ballpark site. That’s why when people ask, I say that South Park was just as important or more important than Pac Bell Park. Back then, SOMA was one of the last redevelopment frontiers in SF (remember the live-work zoning weirdness?). In most cities with new ballparks, the ballpark district is where you can find reasonably priced apartments, condos, and office space. In SF? Yeah, right.

Every so often I get a question from an East Bay citizen or fan about why companies from the SVLG couldn’t just support the A’s if a ballpark were built in Oakland or some such. I usually reply with an answer along the lines of, “You know how a San Jose stadium wouldn’t be convenient for you? Well, an Oakland stadium isn’t convenient for them.” Things are different from football, which plays the majority of its games on Sundays, or basketball/hockey, where the schedules aren’t as rigorous as MLB’s. Convenience is only one factor, with civic/regional pride and the attractiveness of the location are major factors. In the post-redevelopment era, with tax increment usage forbidden or severely curtailed, these redevelopment-based models need to be replaced with something more practical and smaller in scale (I’ll go into this more later tonight).

Tuman also goes on to point out how there’s no Airport Connector stop along Hegenberger which could be a focal point for transit-oriented development.

Zennie Abraham got Tuman to comment on Zennie’s blog about the A’s during his mayoral campaign.

Should Oakland Sue The Oakland A’s?

Tuman’s not in favor of using the legal process against the Oakland A’s, which seems to be threatening to leave Oakland every year, as he thinks it just encourages them to try harder to do so. But suing the City of San Jose is something Tuman’s willing to consider, as that municipality has worked to try to take the A’s away from Oakland, interfering with contracts between the parties in the process.

Tuman says he will be a friend to all of Oakland’s sports teams, but does not want to give away public money to retain them.  But he does leave tax increment revenue as an exception because of it’s market  generated nature.

Tuman isn’t anti-sports. He is realistic about the City’s interests and likelihood in keeping one or more of its teams, and frankly it’s good to hear this kind of talk. It’s a lot more honest than anything that’s been coming out of City Hall for the last few years. Now, Tuman probably isn’t going to beat Kaplan with her plucky attitude and infectious energy, especially on the campaign trail. (It’s a bit ironic that a communications professor is woefully behind on linking up with social media.) Still, a little more honesty and reason can’t hurt discourse. Honest discourse is exactly what Oakland needs.

Of course, the Brooklyn that Tuman refers to has itself succumbed to the allure of pro sports. Barclays Center will open this fall and the once-New Jersey Nets have already taken up the Brooklyn moniker replete with new colors and logos. Sometimes even Brooklyn can’t always be Brooklyn.

05.27.12
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A city’s predicament

I fear for Trib reporter Matt Artz’s email inbox, because it’s about to get pummeled.

In today’s edition, Artz tries to explain why Oakland’s three teams are varying shades of noncommittal with regards to staying at the Coliseum, or even in Oakland in general. For most of us who follow the situation closely, the information is pretty much old hat. Still, it’s good to read someone in the local media deal it as plainly as Artz did, even if the truth is unpleasant.

As Oakland fights to keep its teams, industry leaders say it’s hampered by the fact that its main lure was a site more attractive 40 years ago than it is today.

“I think that’s a real problem,” Smith College economics Professor Andrew Zimbalist said. “The times have passed it by.”

Exactly. No one questions how devoted or hardcore Oakland and East Bay fans are, they are among the best in the nation. Unfortunately, the business of pro sports has become such a high-stakes affair that economically, Oakland is practically a AAA market while San Francisco and San Jose/Silicon Valley are major league markets. Nowadays money trumps hardcore seven days a week.

Yesterday I was looking into how Orlando’s Amway Center was built, hoping to understand how it surpasses Oracle Arena in terms of amenities. Oracle does well in having four premium seating options: courtside seats, suites, and two different club options. Amway Center has an astounding seven options: courtside seats, founders suites, presidents suites, legends (party) suites, MVP tables, 4- and 6-person loges, and club seats. All seven options are priced specifically to target certain well-heeled demographics, whether they are big corporations, prominent small businesses, or rich people who simply want more elbow room. A future post will go into how all of this works. For now let me tell you that there’s no going back. All four North American pro sports leagues are multibillion dollar outfits. So are NASCAR and NCAA football.

Oakland Mayor Jean Quan talked Thursday about having a huge Cowboys Stadium-like facility in the Coliseum complex, to be co-anchored by a convention center. One thing she didn’t mention was the price tag for such a complex, or even just the stadium itself. Lest we forget, Santa Clara’s Stadium Authority is on the hook for $700 million of the 49ers stadium costs. Zygi Wilf and the Vikings will be paying 49% of the Metrodome’s $1 billion replacement, leaving the rest to public funding sources. Even if you buy the somewhat dubious argument that the 49ers are paying for the lion’s share of the cost (who runs the Authority, again?), Santa Clara had to put up $144 million in hard dollars initially. What price will Oakland/Alameda County have to pay to stay in the game? $200 million? $500 million? Quan cites the $200 million NFL G-4 fund, but that’s available to every team, every market. Any new stadium will cost at least $1 billion.

Also today, a sobering analysis by the Atlanta Journal-Constitution shows how cities struggle to make their money back even with glistening new stadia, characterizing these efforts as an “arms race”. Good thing that the leagues appear to be bedrock solid for the foreseeable future, because if they weren’t municipalities would be wading into their own “mutually assured destruction”. So dream big, people, because it’s not your money! Until there’s a price tag. Then it’s definitely your money.

05.25.12
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Mayors go on the offensive, Wolff to meet with Knauss on Friday

Oakland Mayor Jean Quan is having caviar dreams on a canned tuna budget.

Quan finally agreed to an interview with The Game’s Chris Townsend, though he had to travel to Oakland City Hall to do it. I listened to the exchange intently, looking for some semblance of consistent messaging throughout. For the most part the message was consistent, but probably not what the teams and fans are looking for.

Quan continued to tout Coliseum City as a massive development stretching over 500 acres that could attract 32,000 jobs, major hotels, corporations, and anywhere from one to four pro sports franchises. That’s right, four. When Townsend pressed her on what she meant by that, she said that the City was looking at teams outside of the current three tenants.

In the wake of the Warriors’ announcement that they intend to build a new arena in San Francisco, East Bay backers are already talking about luring either the Sacramento Kings or San Jose Sharks to Oakland. Oracle Arena is built for basketball, not hockey, so the Sharks are out of the question. The Kings are a more intriguing proposition since Oracle is miles ahead of ARCO/Power Balance in terms of modernity and amenities. However, you can bet that Joe Lacob and Peter Guber would fight tooth and nail to keep a second team out of the Bay Area. Even if the NBA were to allow it, the Lacob/Guber ownership group would get a tidy compensation check from whomever brought a team to Oakland. You can forget about that being the Maloofs since they’re broke. David Stern has also stopped Larry Ellison twice from relocating a team to San Jose, so you can glean from those vetoes that Stern considers the Bay Area a single-team market. Remember that Oakland’s gambit is to replace Oracle Arena with a new one if the Warriors stayed. There is zero chance of anyone building an arena in Oakland if the Warriors are in SF. They’ll just soldier on with the current arena, which again is a perfectly fine venue from a technical standpoint.

As for the A’s, Quan revealed a couple of things that are quite germane to Oakland’s efforts going forward. She seems fully committed to Coliseum City in whatever form it takes. When asked about a site in downtown Oakland, she said that if Clorox CEO Don Knauss wants to move in that direction and can figure out how to pay for the extra cost, it shouldn’t affect Coliseum City adversely. She didn’t exactly dismiss Howard Terminal or Victory Court, but by now she has to be fully aware of the nine-figure costs associated with either of those sites, which makes them quite difficult to develop. For that she deserves a lot of credit – Oakland’s advantages are that it has land and a potentially easier process to develop venues. The flipside to that argument is that Oakland’s not as desirable or coveted as SF or San Jose, so there’s a very good reason why it’s easier or more available.

Beyond that, Quan may be getting a bit too starry-eyed for her own good.

As long as we have one huge sports facility [plus] we will have a much bigger convention center than we currently have in downtown Oakland.

That sounds like a pivot to me. If Quan and the City are pivoting it’s probably no coincidence that AEG is on board to manage the complex and provide consulting for the next phase of the Coliseum, which would be to have something along the lines of what they are planning in LA: retractable roof stadium, arena, and convention center in one location. Maybe AEG will get a team to relocate there, maybe they won’t. What they can do is influence both LA and Oakland by shaping development there. It worked in LA, and it sure looks like it’s moving in that direction at the Coliseum. Two years I wrote about re-using the Coliseum for a convention center after teams vacated. It sounded preposterous back then, but it could make sense with AEG steering things. Though again, it’s important to note that AEG has never shown much interest in baseball. AEG could decide that it would be best to use as much available land as possible for a top-notch convention center. A large convention center can easily take up a greater footprint than two stadia side-by-side.

The “one huge sports facility” term has me intrigued. Now the thought of Cowboys Stadium doesn’t sound quite as far-fetched since it would be part and parcel with the convention center. The key would be the flexibility of the stadium. If you want to go full-bore crazy, Oakland should shoot for what Doha, Qatar is doing with one of its 2022 World Cup venues. Called Doha Sports City Stadium, it’s a retractable domed affair with movable seating decks and facilities built into the roof, not a mere steel or fabric shell.

Inside the 65,000-seat Doha Sports City Stadium, which is planned for a 2017 completion date.

The project picks up where Japan’s Saitama Super Arena left off, doubling SSA in size and scale (UNLV has a similar proposal to SSA). Let’s be clear about what DSCS is: $1.5 billion in state oil profits to be used for a showcase venue that could conceivably be used for a future Olympics gig. And if you think the picture above is nuts, save your jawdrop for the next image.

Exterior view. The stadium is only a part of the extremely large development, with ancillary features all under the "single" roof.

I suppose that the attitude here is that if this is going to cost $2 billion, might as well go all the way. Something like DSCS would certainly give Oakland the “one huge sports facility” that Quan alluded to.

…

Meanwhile in San Jose, the City is quietly building up its case and legal team for a potential attack on baseball’s antitrust exemption. The call for such a lawsuit has only gotten louder in the last several weeks as the team continues to languish with no direction in sight. San Jose is not going to sue as long as Lew Wolff continues to follow MLB’s process. The buzz will only get louder. I’ve even heard that legal proceedings may not cost the City much if anything. We’ll see if that actually happens. I wrote last week that as long as Selig doesn’t make a decision, there’s no trigger for a lawsuit since Bud Selig can say he’s continuing to study the matter. That could be a big reason why Wolff’s position has been “any decision is better than none” since either a yes or no could provide a jumping off point for Wolff.

Wolff supposedly met or is meeting with Don Knauss today, according to the Chronicle’s Susan Slusser. Maybe they’ll share Diamond Level seats for tonight’s Yankees game. Maybe Wolff will host Knauss in the owner’s suite. Knowing what we know about what both sides want, I don’t expect any earthshaking news. If I hear something I’ll be sure to update this post accordingly.

Update 5/26 7:37 AM – BANG’s Joe Stiglich has this regarding the Wolff-Knauss meeting:

A’s co-owner Lew Wolff confirmed that he met Friday with Clorox CEO Don Knauss, who has been outspoken about wanting to keep the A’s in Oakland.

Wolff declined to share what exactly the two discussed, other than to say he enjoyed the chance to talk with Knauss.

“I think we had a nice dialogue,” Wolff said. “We just exchanged some ideas. That’s all I want to say.”

There you have it. 

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BTW, I’ll be tailgating at today’s Yankees game. If you want to drop by and chat, reply here or via Twitter. I’ll provide location info once in the parking lot.

05.24.12
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Peter Guber talks to Tierney & Davis

Warriors co-owner Peter Guber went on The Drive yesterday, and the 20-minute interview that came out of it was the most entertaining bit of owner-speak I’ve heard in a long time. Guber is not like most co-owners, sitting in silence. He’s a Hollywood producer with showmanship befitting the town. A big-money player may work as the managing partner, whereas Guber appears to have a running mate-like role, selling the team’s concepts and working over the media. Joe Lacob, like Lew Wolff, has had some difficulty establishing a rapport with the local media and fans. For Guber this is old hat. However, Guber is taking on a similar role with the Dodgers, one that will take just as much effort if not more, so I can see why he wouldn’t be a managing partner of any one team.

Guber explained the process of selecting a San Francisco site, why Oakland was passed over (which will fall on deaf ears in the East Bay, I figure) and his history of ownership stints dating back to Mandalay Sports Entertainment, a conglomerate of minor league franchises including the model minor league team, the Dayton Dragons. Curiously, he considered the Warriors the only Northern California NBA franchise, a clear indicator that the Maloof family is more than one-foot-out-the-door in Sacramento. He even got in a little shot at the Maloofs:

GUBER: We believe – it’s a belief – that we’re going to turn it [the arena] into reality. We believe we can accomplish it. If we didn’t believe it, why would I take the energy and resources in the third act of my life and put it into something I thought was folly? No. All of us believe – Joe [Lacob], the different owners of the group, there’s a large group of intelligent owners – believe this is a beautiful, successful endeavor that we can bring to fruition. If we didn’t, I would go play poker in Las Vegas.

TIERNEY: Which casino by the way?

GUBER: Let me put it this way. Not. The Palms.

Guber went on to talk about how Larry Baer brought the Lacob-Guber team in to buy the Warriors. Guber indicated that Baer could have ended up as part of the ownership group, but dropped out during the process.

GUBER: When Larry Baer – yes, Larry Baer – called me at home in Los Angeles and said, “How would you like to buy the Warriors?” I said, “Great!” It fit my compass. I wanted to be able to get to a place within an hour, that I could go there regularly and be part of the community. Before, I had worked with Bob Piccinini to buy the Oakland A’s. In fact, closed the deal, made the deal with Billy Beane at my house, gave him a piece of the equity, negotiated the whole thing. Then, lo and behold, Bud Selig said “we’re going to do contractions” back in 2002 or 2004. “Let’s do contraction!” You know what contraction is? Not the same as what women have before they have a baby. This is what the league said they wanted to do with the teams. They wanted to get rid of Oakland and Minnesota. Ultimately, they made a deal with Lew Wolff about a year later. My partner (Lacob) went after that team as well. So Larry Baer said, “Let’s try to get the Warriors.” We went after the Warriors. Larry dropped out. Joe and I teamed up to buy the Warriors.

There’s a problem in Guber’s timeline. The contraction threat came with the 2002 CBA negotiations, which were the greatest threat for a work-stoppage since 1994-95. Contraction talk had started in 1999, and dragged on contentiously until August 30, 2002, when a deal was put in place that pushed out the contraction threat to 2006. The 2006 deadline passed without a peep, and contraction hasn’t come up in any substantive discussions since. The new CBA, which was finally made publicly available today, has language that the league won’t talk contraction until after the CBA expires in 2016. I digress.

Again, Guber talked 2002. But the Dolich-Piccinini group was knocked out in 1999, not 2002, a fact confirmed by Piccinini himself. Either the group was kept in play until 2002 as Guber said, or he has his dates mixed up. Piccinini is now also a part of the Warriors’ ownership group. He was also part of Jeff Moorad’s failed bid to buy the Padres. From the looks of things, Larry Baer was very active in getting the group as far away from the A’s as possible. Contraction died, which foiled the Giants’ attempt to get rid of the A’s via subterfuge. Now there’s simply no economic justification for it, and the price to contract two teams (estimated $1 billion) is too high for the owners and MLB to swallow.

The only question I have coming out of this is one I’ve had for the last few weeks: Why on earth is the City of Oakland working with the Giants and Larry Baer? Sacramento Mayor Kevin Johnson said yesterday that he is looking at the A’s situation closely, with Sacramento potentially there if something can’t be done in the Bay Area. Guess who’d love it if the A’s had no choice but to leave the Bay Area? Larry Baer.

Update 8:47 PM – Guber was referring to the “secret” 2001-02 negotiations done by his group, Mandalay, and Steve Schott. The group also included Bob Piccinini, which I was not aware of until the interview. At the time, Schott was pushing for a move to Santa Clara and was in discussions with the City Council. Because of the sale talks, the Council felt betrayed and terminated any further pre-development work. The ownership would have included, among others: Guber, Piccinini, Paul Schaeffer (Mandalay VP), and Billy Beane. It’s difficult to keep these ownership groups straight. 

05.21.12
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SF, Warriors set to announce arena deal

Just like that, Coliseum City is in jeopardy.

The interwebs are abuzz with reports that the Golden State Warriors and the City of San Francisco are going to announce a Pier 30/32 arena deal as soon as this week. The team has issued a non-denial denial, and the rumor appears to have multiple sources, which makes this news possibly the proverbial smoke that will lead to fire.

If true this is terrible for the Coliseum City project’s prospects. By virtue of an arena’s typical utilization, the arena part of the complex is a a major anchor that the project needs. Losing the Warriors removes at least 43 home games from the schedule, totaling 800,000 annual spectators. Oakland/Alameda County could refashion the arena to better attract more concerts and other types of events. The risk with that plan is that the old arena in Oakland and the new arena in SF will be only 11 miles apart, so they’ll be competing for exactly the same acts and events. The Warriors will have the advantage of new technology to make their venue superior and more flexible for staging. They’ll also have a great incentive to keep the arena as busy as possible since they’re footing the bill for the construction cost. This affects HP Pavilion to a degree as well since it will be overshadowed by its much newer competitor to the north. However, HP Pavilion is over 40 miles away, serving the South Bay. This sort of spacing is already evident in the Bay Area with Chronicle Pavilion in Concord and Shoreline Amphitheatre in Mountain View. The two major LA arenas (Staples Center, Honda Center) are also a good distance apart, allowing both to combine to serve the bulk of the LA market.

The W’s leaving means that the naming rights deal with Oracle, which runs through the 2015-16 season, has a very slim chance of being renewed. There’s little point for Oracle to do so, as the marquee tenant will be in the process of vacating while the arena itself will be at a competitive disadvantage compared to its competition across the bay. Even though Oracle CEO Larry Ellison lost out to the Lacob-Guber group when bidding on the Warriors two years ago, the SF Warriors brand should be more valuable than the GS Warriors, making a potential naming rights deal something that Ellison should consider.

Currently there’s about $95 million of debt outstanding at the Oakland/Oracle Arena. With each lease year completed $5 million comes off, leaving a shortfall of $70 million for the W’s to pay off if they leave at the end of the 2016-17 season. This amount would be payable by the team regardless of whether they played in SF or Oakland. This is because Oakland positioned Coliseum City as having a new arena to replace the existing arena. This effectively adds $70 million to the cost of the new Oakland arena because there’s little chance that Oakland/Alameda County will operate the new and old venues side-by-side. If you were Joe Lacob and you knew that you’d have to pay $70 million either way, why would you choose Oakland over SF?

This gets to the heart of Oakland’s problem in pitching Coliseum City to its tenants. All three teams want much greater revenues, and just as important, greater control over revenue streams and more independence from each either. They’ve been able to coexist with little friction over the last decade, but that didn’t come about without a good deal of previous strife as all three teams have had legal battles with the Coliseum Authority. Mayor Jean Quan has already put out yet another letter restating Oakland’s commitment to the Warriors, just as she did with the A’s. What she and the JPA need to do – which they haven’t done yet – is explain how Coliseum City will significantly increase each tenant’s revenues (W’s rank 13th according to Forbes) compared to other options. Instead we’re having discussions about whether or not Coliseum City can pay for itself, which is a major perception problem. Most of the City’s arguments have been about how Coliseum City will benefit Oakland, with little said about how each team will benefit. Only the Raiders part of the project has any traction, thanks to ongoing planning work designed around and with input from the team. Yet the Raiders continue to entertain options outside Oakland just in case Coliseum City doesn’t take off. All three teams and ownership groups know how difficult their respective plans are on their own. To tie feasibility and risk into other parts is unnecessary, even foolish.

SF has shown its willingness to speed up the environmental review process when needed, as it did with the America’s Cup project. A similar effort could be done for the Warriors’ arena, with the caveat that the impacts for an arena will be significantly different. The America’s Cup only occurs once every three years over a short, well-defined timeframe. An arena gets 800k visitors annually for NBA games plus another 500k or more for other events. Onsite parking at the W’s arena is expected to be only 1,000 spaces, leaving the team and city looking a few thousand more within the vicinity to meet demand. It’ll be a challenge to get the W’s arena approved and built. SF’s advantage is that it has successful precedents in AT&T Park and, coming soon, the America’s Cup. That’s experience that matters.

This new SF arena plan is in its infancy, so it’s premature to call this one “in the bag”. One thing’s for certain – the two parties are heavily motivated and appear to be making measurable progress. If only we could say that about an A’s ballpark…

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?

05.14.12
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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?

05.09.12
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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